Air France Internet Marketing

Air France‘s Case You have just been hired by Rob Griffin to help him better understand the effectiveness of Air France’s online sponsored search efforts. He has requested answers to the following questions: 1. Please calculate the effectiveness of each of Air France’s marketing campaigns across the 7 different publishers categories (3 points). Publishers| Avg. Cost per clicks| Tot. Clicks| Media Costs| Tot. Bookings| Tot. Revenue| Net Revenue| Net Rev per Cost | Avg. of Sales per Click %| Avg. of Trans. Conv. %| Yahoo-US| 2| 45,598 | $46,198| 662 | $882,289| $836,091| 18| 1. 5%| 183%| MSN-Global| 2. 15| 11,217 | $12,160| 129 | $145,524| $133,364| 11| 1. 15%| 113%| MSN-US| 2. 87| 10,808 | $16,098| 140 | $181,550| $165,451| 10| 1. 30%| 73%| Google-Global| 2. 22| 72,895 | $120,947| 797 | $929,550| $808,603| 7| 1. 09%| 43%| Google-US| 2. 38| 192,109 | $353,641| 1,550 | $1,745,482| $1,391,841| 4| 0. 81%| 41%|Overture-Global| 0. 8| 60,899 | $64,296| 372 | $430,085| $36 5,789| 6| 0. 61%| 24%| Overture-US| 0. 76| 119,323 | $141,976| 289 | $347,433| $205,457| 1| 0. 24%| 9%| Grand Total| 1. 9| 512,849 | $755,316| 3,939 | $4,661,913| $3,906,597| 5| 0. 77%| 57%| Based on the data above, we can see that: a. Yahoo-US leads for the most effective marketing campaign among 7 publishers based on the total net revenue per cost, Yahoo-US got the biggest value, 18, it means that every $1 that Air France spent they will receive $18 from their investment. The average of transaction conversion and average of sales per click of Yahoo-US also leads amongst the other publishers. b. Google-US got the biggest of total net revenue from the marketing campaign, almost US$1. million, and also had the biggest total booking number.But our opinion is, Google US did not do the marketing very effective, the money for the media costs that they spent are the biggest amongst the other publishers, and the total net revenue per cost ratio is only 4. c. Overture-US is the most ineffec tive in doing Air France marketing campaign, even though the average costs per click of Overture-US is the lowest, but the total clicks is the highest, it ranked the second highest amongst the other publishers, so it makes media cost of Overture-US igh and the total booking from the clicks is not in a good value, so we think that Overture-US have to improve their its campaign of Air France. 2. Should Media Contacts recommend the same exact strategy for Air France across all search engine publishers? Or would it be more effective to tailor each publisher strategy to maximize ROI (Please provide support for your answer) (3 points) . From our analysis with the data provided by DoubleClick. Inc. , publishers have their own strong point to focus on in order to maximize their net revenue and tailor strategy for each publisher will be the best option.Below, we will explain publisher’s performance in term of the following points: * Campaign All of the publishers earn lot of revenues from their â€Å"Air France Branded† campaign with modest click charges on average of $1. 82 and maximum clicks of 106,153 from Google-US, while â€Å"Business Class† campaign is not really productive to gain revenue as publishers lose money on this campaign. Click charges for â€Å"Business Class† campaign is ranged between $3. 76 (Yahoo-US) and $5. 39 (MSN-US) per click. Geo Targeted local search campaign has potential in using Google-US service.For example, In New York City, Google-US can get total of 3,167 clicks with 1. 39% transaction conversion rate. Compare with â€Å"Paris & France Term† campaign, it only gets 0. 35% transaction conversion rate with 29,039 clicks. In Contrast, Yahoo revenue for its Geo Target campaign is very low and loses money in 10 out of 13 cities in US. * Keyword Keywords that consist of â€Å"Air France† word are convincingly gaining more revenues than other keywords across all publishers. Google-US earns from th e â€Å"Air France brand†, but losing money on bidding European cities keyword like â€Å"Lyon†, â€Å"Bordeaux†, andâ€Å"Rome†.The use of phrase keywords also contributes to number of bookings like the phrase â€Å"DC to France Sale† which have the highest conversion rate compare to others. Different with Google, Yahoo has moderately earned more income from the words of city such as Florence, Paris and Rome. This may be resulted from the difference search methods that Yahoo mainly focuses on web contents keywords. Overture more likely to gain revenue in words that relate with cities in eastern part of Europe like Athens, Tunis, Amman. Overture loses money on broad unspecific words.Thus, Overture should focus on the exact keywords which have connection with flight and travel to eastern part of Europe. MSN-US and MSN-Global costs mainly derived from phrase keywords except â€Å"Air France Brand† keywords. For example, phrase keyword of †Å"travel to France† generates moderate number of 346 clicks, but none of the clicks succeed in sales conversion. Another example is â€Å"flights to Paris†, other publishers succeed in booking of positive net revenue with the keywords, while MSN-US and MSN-Global lose money. * Broad and focus keyword Broad keyword usually gains many clicks from the campaigns.By analyzing publishers’ performance data, we concluded that Yahoo-US, Overture-Global, MSN-US and MSN-Global are publishers that have strength in broad campaign keywords. Number of clicks for broad keywords represents minimum 90% of total clicks and generates higher transaction conversion rate than focus keywords. Google-US and Google-Global also have a huge clicks gained from broad keyword campaigns on the average of 74% and gain more revenues than focus keywords, but the transaction conversion rate is lower than that of their campaign have.Although broad keywords gain many clicks for its ads, it doesn†™t guarantee the increase of sales. 3. Based on your analyses, who do you feel are the most appropriate target customers upon whom Air France should focus their acquisition efforts (again, please provide clear justification for your answer) (2 points) Due to several reason related to market modification and AirFrance partnership, we can support that Business customer segment would be the most important target market.Indeed, because of the development of new low fare companies, the value proposition among the competition changed and gave another offer to the consumers. Ryanair by providing cheap price ticket attracted an important part of the price sensitive customers who use to travel with previous oligopolistic offer with higher price. The business customers are less sensitive to the price, because of less changing (except in case of travelling budget restriction), contracts and promotion with big companies. Ryanair, Irish company, was focused on intern European flight, taking ca re of 26 different destinations.According to Exhibit1, AirFrance first market was Europe thenit was followed by the North American Market. The mix of price sensitive loss market and intern European market loss pushed AirFrance to work more on its flight between Europe and other continent (Transcontinental flights). International and Transcontinental travelers are highly interesting target market. Therefore it is also important to specify this segment. Indeed, it should be the higher class, service and security sensitive customers.AirFrance provides a premium service compared to the competition. Based on our analysis, there is no or few people outside of USA (Google Global: Europe, Asia, Africa) making AirFrance generating net income for European keywords (Greece, Florence, Paris). The American providers, Yahoo-US and Google-US, are the biggest revenue generator compared to Global (Yahoo-Global and Google-Global), by the same time Appendix 1 shows that American customers are not pric e sensitive and will generate less profits for â€Å"cheapâ€Å" keywords.The partnership with L’Avion for business travelers between Paris and Newark (NewYork) was a logical result of the AirFrance marketing situation. Through customer base, AirFrance kept a stable business customer amount and lost a significant part of its price sensitive customers who finally shifted to other low-fareairlines. Appendix 1 Publisher Name| Avg. Cost per clicks2| Tot. Clicks| Media Costs| Tot. Bookings| Tot. Revenue| Tot. Net Revenue| Tot. Net Rev per Cost | Google – US| $2. 45 | 10479| $24,104. 59 | 33| $25,287| $1,182. 06| 0 | Google – Global| $2. 43 | 3465| $7,052. 0 | 20| $19,180| $12,127. 35| 2 | Overture – Global| $0. 72 | 1892| $1,538. 15 | 10| $15,207| $13,669. 20| 9 | Yahoo – US| $2. 33 | 1474| $3,786. 91 | 7| $7,057| $3,269. 79| 1 | Overture – US| $0. 78 | 6883| $6,774. 70 | 9| $10,230| $3,455. 05| 1 | MSN – Global| $3. 46 | 50| $174. 87 | 0| $0| -$174. 87| (1)| MSN – US| $4. 25 | 77| $252. 69 | 0| $0| -$252. 69| (1)| Grand Total| $2. 09 | 24320| $43,684. 81 | 79| $76,961| $33,275. 89| 1 | 4. Based on your answer to Question 3, what B2B acquisition partners would your team recommend that Air France consider? 2 points) Based on our group analysis there are 3 types of B2B acquisition partners that Air France should consider doing partnership with which are Yahoo-US, L’Avion. First partner, Yahoo-US, based on our group analysis from question 1 out result shows that Yahoo-US has the highest return on investment (ROI), the lowest cost per click and the lowest cost per booking. This is a good choice for Air France to engage in partnership in order to get the best ROI while at the same time minimize their costs in ads.Not only that Air France can get a lot of ROI back but they also have a high possibility in getting more sales from the click of users. Therefore our group recommended Yahoo-US for Air France to c onsider. Second partner, L’Avion, as of our target customer from question number three our group focus on business travelers. L’Avion only provides business-class service between Paris International Airport and Newark International Airport. This can be link to with Ryanair partnership because as our group mentions before that Ryanair has not yet a flight to USA where Air France is offering this route.By partnering with each other, both Air France and Ryanair can enjoy their profit from these group of business travelers which Ryanair already have a lot of loyalty customer with them. For example, if the customer from Ryanair wants to fly to United State they can use Air France service where profits can be shared between these two Airlines. Therefore, as our group has mention above, we believed that by partnership with these B2B business would eventually increase benefit and contributes to gain good market growth with good profit toward Air France and its partnership comp anies.

Reality TV Influence Youth Behavior

Reality Television and how it can influence the behavior of youth and teens There is no doubt that when it comes to American youth television is one of the biggest influences by far. Many parents would love to say that their child does not watch that much TV but in reality they are spending a lot of time watching television or using media in some way. â€Å"The study by the Kaiser Family foundation shows that children ages 2-8 spend an average of 5 ? hours a day â€Å"consuming media† kids 8 and older spend even more time in front of the tube nearly 6 ? hours a day† (Kaiser Family Foundation, 2005 ). Astonishingly, more time is being spent with media then doing homework, studying or even spending time with family. A child’s retention of what they watch depends on the child’s attention span, how they would process the information and of course their own e experience however limited this may be. Reality television can affect the attitudes and behaviors of children all over the U. S. through its stereotyping, violence and cultivating false perception of reality. This differs from family to family and depends on the values instilled in the child. While media manipulates the minds of youth and teens, the value portrayed on reality television by reinforcing negative stereotypes and idealizes body image to be accepted as the norm. Stereotypes are unavoidable in media especially in reality programming. In my opinion the stereotypes depicted in media can influence the way youth see people in real life. Basing their opinion on what they have viewed on television. Often time’s television tends to stereotype genders and racial groups in a negative way. For example by watching the shows â€Å"Jersey Shore† and â€Å"Jerseylicious† you would think that young Italian people are only interested in partying, excessive drinking, promiscuity, name brand fashions and working out. That’s not the best image to enact to young people. With all the media used by youth in America is there any wonder why children stereotype what they don’t know? Adolescent females are easily swayed when it comes to messages about body image. A show such as â€Å"America’s Next Top Model† demonstrates that in order to be a model a person must be slender. Recent research indicates that there is a marked link between TV and watching, and negative body and eating disorders† (British Journal of Psychiatry) Young people are always concerned with what their peers will say. I went around my neighborhood and asked a few teens some questions about body image and the media. I ran into a group of five girls and asked them do th ey feel that body image is important and if so how important is it. After a few moments one of the girls named Kayla who was 15years old said yes with a smirk. My follow up question was â€Å"Why is it so important? † she answered without a moment of pause â€Å"Because when you see someone who is overweight you automatically think they don’t care about themselves, they have bad BO and I don’t want people to think that about Me. † This conversation went on for almost an hour as she informed of her workout routine. Later, that day I saw some young males at the skate park and asked them the same questions as the girls the answers were the total opposite. A young man named Martin who was14 was the only one willing to answer my questions. He said he didn’t think it mattered about his body image or his friends. He later stated he thought it was dumb but when I asked him if he would ever date a girl that was overweight a little ashamed he replied that he wouldn’t. It is no secret that boys and girls are different but prior to this research I thought that all teenagers had basically the same outlook on how they view their bodies. Unfortunately the shows that children and young people are exposed to are not in a realistic light. Children see that the actors and actresses have perfect bodies, hair, and skin and clothing this is not realistic but the need to be perfect remains prominent in our society. With the desire to be perfect it often leads to eating disorders and death. â€Å"The mortality rate associated with Anorexia Nervosa is 12 times higher than the death rate associated with all causes of death in females15-24 years old. †(American Journal of Psychiatry 1995) Instead of children being taught that beauty comes in all shapes, sizes and colors children are being pumped with the stereotypes that they identify in themselves. This is prominent in the African American community; it is often taught at a young age that if you are of darker complexion or have a curlier hair texture you are not as pretty as the lighter complexioned girl that you might know. It is assumed that the media is to blame for this way of thinking. Youth and teens are self conscious enough without these negative â€Å"airbrushed† and unrealistic images put forth in the media. Media is also being tied to the increasing violence in US children. Children are increasing anti-social and aggressive behavior, become less sensitive to violence and those who suffer from violence, children may view the world as violent and mean fearful of being a victim of violence. Children may desire to see more violence in entertainment and real life, and children will view violence as an acceptable way to settle conflicts. †( Buchanan, A. M. , Gentile, D. A. , Nelson, D. A. ,Walsh, D. A. , Hensel, J. 2002) Astonishingly, more time is being spent on watching television then homework which differ from child to child. A child’s interpretation of what they watch depends on of their attention spans, the way in which they process the information, and their own limited life experiences. Entertainment media exposure can negatively affect attitudes and behaviors of the American child through violence, cultivating false perceptions of reality and stereotyping. Continued concerns researchers are finding exposure to the media violence causes increased levels of aggression and violence in children. Experts even suggest that the evidence linking media violence to aggressive behavior is as strong as the evidence linking smoking to lung cancer. â€Å"Among 10 to 24 year olds, homicide is the leading cause of death for African Americans; the second leading cause of death for Hispanic and third leading cause of death for Asian/ Pacific Islanders, American Indians and Alaska Natives. †(CDC2010a) While most adults realize that media violence is fabricated, children are more vulnerable. A Pre-K student will not know the difference between reality and fantasy. It is suggested that children who identify with an aggressive hero they see on TV are more likely to be aggressive. â€Å"They learn that violence is effective, courageous, and socially except able and rewarded, and they get caught in the aggressive cycle. † (American Academy of Pediatrics, 1995) In a book titled â€Å"Reality TV† in an article Teenagers Identify with the Issues Presented in Reality TV Shows by David Hiltbrand suggests there two reasons why teenagers are able to identify with reality shows are because the shows are â€Å"short† and â€Å"often deal with relationships and rejection. So, with this basic recipe of making reality programming teenagers are being drawn into this toxic TV. Youth can easily relate to the emotions and situations of the reality show stars, like trying to avoid rejection by making friends and/or alliances. Also in the article, David Hiltbrand states that the top shows watched by teens are reality programs. There is lots of evidence that shows the effect of reality television on teenagers and the fact that reality television is greatly consumed by teenagers today. So, there must be something about reality shows that make them able to pull in such a large group of teens, and that would be the fact that they are able to identify with reality show characters which makes the reality show more enjoyable. This goes hand and hand with the cultivation theory. This theory can have a negative effect on teens about the real world. The Cultivation theory put simply suggests that exposure to large amounts of television will over time cultivate viewers perception of reality. A large amount of television watching is seen as â€Å"cultivating† this theory suggests that you would become more engrossed in television programming than in everyday life. The idea is presented to a passive audience, such as children often accept the ideas and therefore influence large groups into conforming behind the ideas. This gives the media a significant influence over youth audiences. †(Cultivation Theory and Research) Children of a young age usually don’t get to experience the world and don’t have many life experiences to refer to, but by the time they do are using the ideas and thoughts that have been given to them through the media. Television can also fill with a wealth of good and educational programming. Having different news stations with different points of view, quality reality shows such as â€Å"Downsized† or a show like â€Å"Too fat for 15†. But are young people rushing home to watch these programs. The teens that I talked to admitted that they had not seen the shows. Although I know the opinion of a few really doesn’t make the majority. Many researchers are telling parents monitor their child’s television and media intake. By monitoring what they watch you can also monitor the amount. In my own experience this message rings true I often monitor the programming my children watch because I know they are young and impressionable. In conclusion watching TV or consuming other forms of media does seem to have replaced dressing up or reading books as the favorite pastime for our youth. Yes, media can alter the thoughts of young impressionable minds if consumed in large amounts but if monitored by parents and by parents steering their children in the right direction media can be a be a powerful tool to gain information about the world. People often refer to reality television as the armpit of entertainment. This may be so but it is just that entertainment and as far as the values portrayed in them I wouldn’t exactly call them that. Television stations have found a â€Å"formula† to make money; it’s not always a positive message behind it but there are a few with a positive message out there. Instilling the values in your children while they are young would be the best way to avoid them wanting to take the messages from TV and applying them to everyday life.

La Vita E Bella

lAira G. ManaloAugust 31, 2012 COM31Mr. Edgar Garnace Life is Beautiful (La Vita e Bella) I believe that being free is a matter of choice. We are free because we want to be defined not by other people but ourselves. We make choices together with the thought of making a choice for the good of everyone. We exist not for other people to tie strings on our hands and feet and do the manipulation. I don’t exactly know what to feel about this film. It was a good laugh and a painful thing for me at the same time.Guido (Roberto Benigni) is such an optimistic human being, a positive father to his son Giosue (Giorgio Cantarini) and a loving husband to his wife Dora (Nicoletta Braschi), who he treated like a princess if I may have to mention. As for me, being a person who freaks out when things don’t go right, I have perfectly seen how Guido made life beautiful for his son and wife. It hurts me to see him hiding the truth from his son by reinventing the things that happens inside t he concentration camp.In the midst of that threatening situation, Guido manipulated his world and made life beautiful for him and his family. I think that is the very essence of the film, making life perfect for you, even if it really isn’t for the entire world. It is important that we find beauty even in the darkest and cruelest of places. Dora amazed me too. I will not forget how she willingly set foot into that train containing all Jewish people. I can see how strong her love is for her husband and son that she can give up her life just to be with them.I have seen her change from a spoiled girl who fell into Guido’s arms and turned out into someone braver and stronger, someone who thinks not much of her own sake anymore. This is where I would now start relating it to Existentialism. The very core of this philosophy is that â€Å"Existence precedes Essence†. It emphasizes the uniqueness and isolation of the individual experience in a hostile or indifferent uni verse and stresses freedom of choice and responsibility for the consequences of one’s own doings. It is just so ironic for me that a person like Guido is living in a world where freedom is the rarest of all terms.The Nazis have defined what living should mean for them, which I also think is very contradicting to the center value of Existentialism, which is freedom. A person defines himself and what he wants to make of himself. No one could ever define him as a person but only what he wants him to be. The Jews in this movie let the Nazis define the world for them, though I know they are left with no other choice but to keep responding to what these people want them to do, because if not, they will cease to exist.This is what Sartre called â€Å"Quietism. † The poor Jews let the Nazis decide for them because they are afraid to die, to get hurt, even if being shot to death while fighting for freedom would be a better death than be degraded by people of other race, in my o pinion. I have seen an authentic person in Guido. In his quiet ways he defined the world for himself. He fought for what he thinks is right and there he exercised his freedom.He tried to fight his way out of the hellish camp if not for himself but for his family, and this he thinks is right not for himself but also for those other people with him. Life is beautiful. It will be if you want it to be. When things are not going right for me, I know ranting won’t make them all right. I know that I always have the choice. I would always remember Guido who has found beauty in the ugliest of places. Because the man who can accept all the barriers and restrictions in life and is not afraid of them is free.

Cardiovascular Fitness (Designing an Experiment) Essay

Cardiovascular Fitness (Designing an Experiment) - Essay Example Cardiovascular Fitness (Designing an Experiment) Cardiovascular diseases have been associated to the increasing cases of obesity among children and adolescent as they approach adulthood (Olshanky and others 2005) cited in. However, little attention has been focused towards establishing the effect of excessive body fat and its negative impact on cardiac fitness (Rowland, 2007). Due to excessive fats there are high risks of coronary artery conditions such as renal-vascular diseases, hypertension and stroke coupled to other non-circulatory disorders. Body fatness and aerobic fitness are intertwined and have been reported as potential risk factors towards the health outcome of an individual (Goran and others 2000). Among the two factors, aerobic fitness has been reported as the primary factor determining future outcome of diseases (Goran and others 2000). However, it is important to understand the relationship between aerobic fitness and fatness towards establishing their role in causation of cardiovascular diseases. Cardiovascular risk has also been linked to weight and dissociated from the widely accepted norm that being fat and fit is acceptable in cardiac health. Excess weight in most cases may be associated with high levels of cholesterol and alteration in the cardiac function. 1.Ha: Excess weight affect cardiovascular fitness by increasing the pulse rate and recovery time. 2.Ho: Excess weight will not affect cardiovascular fitness The experiment involved two subjects who were selected from among the group. The inclusion criteria dwelt on involving subjects who had respiratory and/or circulatory conditions. Exercise which was part of the experiment may be significantly compromised in these individuals. Pulse rate for treatment I (with weight) and for treatment II (without weight) were taken before the start of the experimental exercise and entered in a table. The experimental exercise involved making the subject step up and down for three minutes at constant rate of 24-30 steps per minute on a low platform. Immediately the 3 minutes were over, the pulse rates were recorded again and entered into a table as raw data for further analysis. The pulse rates were taken from the radial artery. This was done by making a tally of the number of beats in 30 seconds and multiplying this value by two. Subsequent measurements were taken at intervals of 1 minute for another three times. 3. Result text The pulse rate before th e exercise was slow but it was elevated following the 3 minutes exercise in the two treatments. However, the mean pulse rate in treatment two was higher than in treatment one (see table 1). The trend in pulse rate indicates that individuals with excess weight will have high pulse rate and longer recovery time after exercise (see figure 1 and figure 2). Mean recovery time was higher in treatment II at 3.25 minutes as compared to treatment I with 2.50 minutes. Overall standard error from the mean (SEM) was observed to at the highest from pulse measurements taken after the exercise. This value was higher in treatment I than in treatment II. Overall all treatment I recorded elevated means in the measurements of pulse rate before and after the exercise than treatment II without weight. This trend was also replicated in the recovery time with

Corporate governance Essay Example | Topics and Well Written Essays - 3750 words

Corporate governance - Essay Example ehalf of all shareholders of the Company and hence is responsible for every matter related to the firm that is the establishment of the firm itself and then providing every possible help so that it can achieve every business and organizational objectives and that too under continuous guidance with proper review and timely counseling. The set of purposes for which the board has been established are: To approve and monitor various critical business and the corresponding financial strategies of the company thereby assessing every major risks which the Company might face and the ways through which it can be mitigated. To oversee processes that have been designed to ensure that the Company; its employees etc are very much functioning under the law of the land as well as the applicable laws and regulations and the Companys conduct manual that is applicable equally at all places. The company’s power structure has been clearly defined along with the responsibilities of the head of the company is in between the functioning of the board and the executives withholding the responsibilities of the various businesses, departments and projects of the company. The decision making is a joint work with none of the individual having superior powers of decision. The appointment of new directors to the board is being done after a formal, rigorous and transparent procedure. The appointment is being achieved while depending on the information that board are being supplied on periodic basis that too in form of skills and qualification which is most suitable as well as appropriate so that the complete board including the new individual will get enabled to form a unit while discharging its duties. All directors over here receive induction on joining the board and are regularly updated to refresh their skills and knowledge. Corporate governance and the associated system is quite necessary for ensuring better performance of the whole corporate entity so that shareholders interest

The important elements of marketing plan Essay Example | Topics and Well Written Essays - 750 words

The important elements of marketing plan - Essay Example Other important applications include informing the details of the company to the sales personnel, suppliers and others so that they become aware of company's goals and achievements. Feasibility study is an important phase in the development process. It enables the developer to have an assessment of the product being developed. It refers to the feasibility study of the product in terms of outcomes of the product, operational use and technical support required for implementing it. Economic Feasibility: It refers to the benefits or outcomes. We are deriving from the product as compared to the total cost we are spending for developing the product. If the benefits are more or less the same as the older system, then it is not feasible to develop the product. The development of the new product should greatly enhance the accuracy of the system and cuts short the delay in the processing of the product. The errors can be greatly reduced and at the same time providing great level of security. Hence, we do not need any additional equipment. Operational Feasibility: It refers to the feasibility of the product to be operational. Some products may work very well at design and implementation but may fall in the real time environment. It happens most of the time with feature films. It includes the study of additional human resources required and their technical expertise. Technical Feasibility: It refers to whether the product that is available in the market fully supports the present trend. It can be used to study the pros and cons of using particular kind of feature film for the development and it's feasibility. It also studies the additional training need to be given to the people to make the product work. A qualitative and quantitative research is must in developing an good feature film. Qualitative research is more of collecting data, conducting interviews, using documents and to understand and explain social phenomenon. Quantitative research involves is of development of natural sciences to study natural phenomenon. Survey methods, formal methods, econometrics, etc., are some of the examples of quantitative research. Qualitative research methods are more often used as it involves observation of data that helps in finding solutions to the problems. Qualitative research has been categorised into three categories named as positivist, interpretive and critical. Positivist research methods involves attempt to test theory that to understand the predictive element of the phenomena. It involves formal propositions, hypothesis testing, measuring of quantifiable variables, etc. In this type of research it is assumed that the objectives are given in reality and can be measured by their properties. Interpretive research method involves sharing of information and social constructions such as language. Interpretive method is used to understand the meaning of the given information that was assigned to the researchers. Critical research as the name implies concentrates more on the critical view of the subject. It highlights the critical viewpoint of the situation that has to be analysed. Implementation

Reforming the mandatory minimum sentencing policy Research Proposal

Reforming the mandatory minimum sentencing policy - Research Proposal Example The spread of mandatory minimum penalties for offences together with the great increase in the numbers of people in prison has led to those dealing with criminal justice to re-evaluate this age-old issue. The number of people in US prisons has increased by approximately eight hundred percent since the eighties and this has forced the federal prisons to operate at almost forty percent above their normal capacity (Reamer, 2003). Despite the fact that the US has only 5% of the inhabitants of the world, its prisons hold almost twenty five percent of all the prisoners in the world. There are more than half a million federal prisoners in United States prisons and almost half of all these prisoners have been locked up for crimes that are linked to drugs and abuse of various substance. Furthermore, about nine million more people go through the country’s jails every year while around forty percent of the forty percent of people previous held as federal prisoners and almost sixty percent of those formerly held as state prisoners are arrested again of have their supervision canceled only three years after they leave jail. The mandatory minimum sentencing laws oblige compulsory prison sentences of specific lengths for the individuals who are found guilty of particular federal and state offences. These rigid legislations may appear as quick fix solutions for crime but they destabilize justice through inhibiting judges from giving the punishments to individuals based on the circumstances of their crimes. These laws have resulted in the number of prisoners increasing exponentially and thus leading to overcrowded prisons, unreasonable costs to the taxpayers as well as diversion of funds from other areas such as law enforcement (Cole & Smith, 2013). Most of the sentences under these laws are applicable for crimes associated with drugs; however, they also target other crimes such as specific gun, pornography and economic crimes. The mandatory minimum

Banking Essay Example | Topics and Well Written Essays - 2500 words

Banking - Essay Example ing overtaken by Dutch giant ING for a measly sum of  £1, and exposing the risky environment in which equity corporations scale catastrophic limits in order to make a quick profit. At the heart of the devastating scam was a person with a huge appetite for risk-taking but hardly any accountability towards the bank, Nick Leeson. Overnight, the unscrupulous futures’ trader from London who was previously the poster boy for Barings’ high-growth earnings from Singapore’s premium monetary exchange, SIMEX (In 1993, he documented nearly 10% of the bank’s profits in futures’ trading), took special advantage of the bank’s vulnerability in not being able to hedge the risks that come with dealing in a concern as sensitive as this. This is what happened. Nick Leeson’s job as Chief Trader at SIMEX was to buy and sell the simplest kind of derivatives pegged to the Nikkei-225 stock exchange of Japan. This job entails the methodology of a skilled bookie who basically, bets on what people are likely to bet on in the future course. Despite booking profits on various occasions, some of Leeson’s predictions proved incorrect. The idea to fool the bank management in covering up details of unsuccessful tradings came from devising an unaudited bank account, called error account 88888, to fix  £20,000 goofed up by an inexperienced team member, which was later to serve as Leeson’s personal getaway in covering up failed investment strategies. Even as the entire audit team of Barings’ was kept in dark about what was the tip of the iceberg then, Leeson managed to document account losses which were initially at  £2 million in 1992 to an astronomical figure of  £208 million by 1994. The final blow

Health Economics of Medicine Essay Example | Topics and Well Written Essays - 2000 words

Health Economics of Medicine - Essay Example The value of Health Economics is indispensable in a society. Its scarcity is a primary concern especially among countries without ample resources to provide healthcare (Culyer, 1989). Another major issue that makes Health Economics important is the mode of distribution. There have been situations showing lack of logistic strategies that effectively deliver health to major recipients. Finally, the sustenance of supply and allocation of health care makes Health Economics valuable. In ensuring both the necessities are satisfied, costs have to be incurred consistently. It is the spending capacity of countries that decide supply and distribution of healthcare. According to Fuchs (1996, pp.1-24), the level of expenditures incurred by governments in healthcare delivery has increased precipitously. The sudden rise in cost can be attributed to intellectual advances, greater availability of information, and the ever-increasing demand for such service. The dedication of government spending to health care services results to various economic sacrifices. Aside from health, there are pressing needs that the society needs to acquire. Concentration in healthcare looms problems such as forging quality education and the generation of sustainable income through investments and government spending. Direct costs of delivering healthcare involve purchase of medicines, establishments of medical institutions, and hiring of personnel knowledgeable of health services. Other costs also include research and development, which at present is the most critical item being propagated by governments. Moreover, the government needs to incur indirect costs such as building of infrastructures to ensure that transportation and communication improves healthcare delivery. Furthermore, the marginal cost of health care needs to be evaluated. Unlike the total cost, which is simply an aggregate, marginal cost

Mental health issues and the impact of healthcare Research Paper

Mental health issues and the impact of healthcare - Research Paper Example The terrible experiences in their combat missions upset the psychological stability of individuals (Miliken et al 2007). As these people retire from their combat missions they struggle to relieve themselves from the horrific experiences of war. The memories of the horrors and the cruel experiences of war change the mind of the post-war personalities, making them psychologically weak and vulnerable to mental problems. The issue has been selected because mental health problems and increasing healthcare cost is becoming a big curse to the veteran population in Spokane, Washington/Spokane County and surrounding areas (How Trends in the Health Care System, 2008) (Sebastian and Bushy, 1999). . It has become quite unaffordable for these veterans to access the necessary healthcare assistance as healthcare costs are booming up without any control. State budget deficits and federal cuts result in reduction in Medicare and Medicaid programs. Essential medical services and medications are unaffo rdable for them. Veterans in the areas are devoid of proper health care coverage (Barlett et al. 2004). The number of people in the Spokane County and surrounding areas who are without insurance is increasing every year. The unfortunate veterans in these areas are unable to afford the health insurance programs offered for people. People have become increasingly vulnerable to chronic diseases (Sacia and Dobson, 2003). This ill-privileged group also has high mortality rate and negative health outcomes (Sacia and Dobson, 2003). The increasing mental healthcare problems suffered by the returning veterans and the lack of access to the healthcare facilities have pushed Spokane County and surrounding areas to grave healthcare catastrophe (Barlett et al. 2004). Healthcare service must be made more affordable to these negatively privileged people in the Spokane County and surrounding areas. As far as Spokane County and surrounding areas are concerned the need of the hour is nothing but a bet ter healthcare coverage for the returning veterans in the areas. The entire healthcare expense of these individuals must be cover by the healthcare system. Healthcare services offered by the healthcare system should be a boon to all people, especially the returning veterans of the society who are under various mental problems. A solution to the issue of Spokane veterans would be easily affordable healthcare facilities. The ‘single payer’ health care system can support the healthcare needs of Spokane people. Service of universal healthcare is a boon to all people of Spokane, especially the negatively privileged veterans in the society. It can effectively solve the healthcare issues of veterans. People with mental sickness should be given free (or affordable) health care services. Mental healthcare services must be provided at no or meager charge. The entire healthcare expense of mentally ill people must be covered by the healthcare system. They should not be allowed to b other about co-payments or deductibles. Healthcare services offered by the healthcare system should be a boon to all people, especially the mentally sick individuals. This typical example of the returning veterans in Spokane County explains the importance of social capital in extending the healthcare facilities to the weak sections of the community. Unless there is sufficient social capital

The Snows of Kilimanjaro by Ernest Hemingway Research Paper

The Snows of Kilimanjaro by Ernest Hemingway - Research Paper Example 191). In other words, Hemmingway’s The Snows of Kilimanjaro tells a story about writing and somehow links this story to human themes. To demonstrate the point, Becnel and Bloom (2009) draw attention to the following passage narrated by Harry and taken from The Snows of Kilimanjaro: We must all be cut out for what we do, he thought. However, you make your living is where your talent lies. He had sold vitality, in one form or another, all his life and when you affections are not too involved you give much better value for the money. He had found that out but he would never write that, now, either. No, he would not write that, although it was well worth writing (Hemmingway 2003, p. 12). Becnel and Bloom (2009) noted that from Harry’s perspective, he acknowledges that during his life as a soldier, writer and husband married into wealth he has been â€Å"selling vitality† his entire life (p. 191). Therefore Harry is able to connect the demands and passions in life via three seemingly unrelated factors: marriage, the military and writing. The connection begs inquiry in to how each of these factors relate to selling vitality. It is therefore first necessary to understand what Harry means by selling his vitality. Looking further into The Snows of Kilimanjaro some guidance can be found in the following excerpt: He had destroyed his talent himself – by not using it, by betrayals of himself and what he believed in, by drinking so much that he blunted the edge of his perceptions, by laziness, by sloth, by snobbery, by hook and by crook; selling vitality, trading it for security, for comfort (Hemmingway 2003, p. 11). This excerpt informs that selling vitality means sacrificing one’s own talents and ambitions in favour of security and at times in favour of other human frailties: laziness, greed and other exigencies of human weaknesses. In many ways these human exigencies are seductions and inevitably forced Harry to trade the vital elements of his life for greater comforts (Bush 1995, p. 26). Arguably, Harry was unable to succeed at or find complete satisfaction via marriage, soldiering and writing because he had sought comfort and security rather than the art of mastering each of these factors. The selling of vitality from Harry’s perspective thus informs that Harry sold or surrendered something of significance in his marriage, soldiering and writing. He therefore loses something of importance in each of these life roles. That something must be passion as, he suggests that a man must make his living where his talent lies and for Harry, his talent lies in trading vitality or sacrificing his real ambitions in favor of shortcuts to comfort and security. The suggestion is therefore that Harry’s life is disingenuous or at the very least the reader can form the opinion that Harry is only superficially happy as he has sacrificed what he really wants out of life for comfort and security. He has also allowed his pursuits to be compromised by the seductions that lead to or command shortcuts. His marriage into wealth may perhaps demonstrate the point best as he has obviously succumbed to a shortcut to material possessions or the seductions inherent in sloth. Soldiering would obviously provide Harry with material for his

An in-Depth Analysis Essay Example for Free

An in-Depth Analysis Essay Volume 5, September 2010 The International Journal of Research and Review 51 An In-depth Analysis of the Entrepreneurship Education in the Philippines: An Initiative Towards the Development of a Framework for a Professional Teaching Competency Program for Entrepreneurship Educators Maria Luisa B. Gatchalian Miriam College Abstract This research paper is a descriptive study, which aims to identify the training needs of entrepreneurship educators and practices in entrepreneurship education in the Philippines. Focus Group Discussion (FGD) and one-on-one interviews are conducted using structured and unstructured interview guides, which revealed the respondents’ answers, thought patterns, expressions and insights on an array of questions pertaining to entrepreneurship education in the Philippines. The result shows that students assign the highest importance to the personal qualities of entrepreneurship educators (e. g. human and motivating, etc. ) and teaching methodology and delivery (e. g. innovative and interactive) among other qualities (e. g. educational attainment). Entrepreneurship educators ascribe most importance on personalized, experience and project-based learning. However, they assert that this teaching practice should be complemented by a manageable class size, program support facilities and teaching skills enhancement (e. g. , mentoring, etc. ) among others. The school administrators play an important role in setting the direction and progression of the entrepreneurship program in their respective institutions against the background of numerous challenges in managing resources to support its needs. This study highlights that entrepreneurship education in tertiary level is best achieved through a well-designed curriculum, effective teaching model grounded on personalized and experience-based learning, and strong institutional support. Keywords: teaching and learning needs, entrepreneurship education, and tertiary level. Introduction Entrepreneurship education is a recent trend in new course development as against the traditional courses that have gained formal recognition in higher-level institutions. Entrepreneurship courses are now finding their way into formal education as subjects or full degree courses in the tertiary level. Unlike traditional business courses, which have developed and evolved over many decades in universities all over the world in conjunction with active practicing business operations, formal entrepreneurship teaching in the tertiary level is a relatively young course. Professional development of entrepreneurship educators, however, is not as institutionalized as the development of teachers for traditional business courses. MBAs and PhDs in general business and in management fill the faculty rooms of colleges and universities, but educators who hold masters and doctorate degrees in entrepreneurship are rare. Even teaching information and resources are not well known or are not available in many schools, making it difficult for budding entrepreneurs to find the sources they need. Entrepreneurship education is, by nature, highly experiential and interactive. Course requirements are mostly output and result oriented,  © 2010 Time Taylor International ? ISSN 2094-1420 Volume 5, September 2010 The International Journal of Research and Review 52 prototype development, hands-on training and other practical applications that require mentoring and close monitoring of students’ progress at each developmental stage. Teaching college teens to become entrepreneurs takes a different set of skills, insights or sensitivity and teaching approaches to connect, motivate and engage them to. The uniqueness of the student needs and the course requirements entails specific teaching skills to match both. One of the perceived tools to address and match these needs is to first conduct an assessment of the qualities, competencies, methods and techniques and other factors that are important to students, educators, and school administrators. There are new challenges of the learning dynamics of emerging youth in the 21st century. Among them are the uses and matching of modern communication technologies with appropriate teaching methodologies, which the new generation is well adapted to but a good number of educators are not. These are only a few examples of the specialized skills and knowledge that are needed to upgrade entrepreneurship training in the tertiary level. Likewise, course management and its administration are also faced more than ever, with challenges and limitations that behoove everyone to deal creatively with. The study is grounded on the premise that if the educational system is to breed entrepreneurs as the future economic movers, it is but appropriate that the learning source, or the educators should be well equipped and sensitive to their needs and learning dynamics who are ? nolonger-children but not-yet adults.? In the Philippines, the Commission on Higher Education (CHED) has pushed the formal integration of entrepreneurship education pursuant to Republic Act No. 7722 as embodied in Memorandum Order No. 17 (CMO # 17) Series of 2005 – Curriculum Requirement for Bachelor of Science in Entrepreneurship (BS Entrepreneurship). This document contains the new academic and developmental thrusts of the Entrepreneurship Programs and Courses in the Tertiary Level. It is also important to note that based on the CHED directory in the National Capital Region, there has been an increase in colleges and universities offering business and entrepreneurship courses. Some have indicated the integration of entrepreneurship in their schools, as a full course leading to a degree, a track, or as a major subject. There are already concerted efforts in the government and the private sector to advance entrepreneurship education as a long-term solution to economic advancement. It follows then that the future offering of the course on entrepreneurship will increase, and programs will take on a newer form as it evolves and develops over time. One of the concrete efforts to meet these new challenges is the formation of Entrepreneurship Educators of the Philippines (ENEDA). The main thrust of the organization is to assist all its members in accessing or actually developing for their immediate use all the relevant knowledge and skills needed in teaching college students to become  © 2010 Time Taylor International ? ISSN 2094-1420

McDonalds Operation Management

McDonalds Operation Management In todays business environment, operations management is used by companies not only to be competitive, but also to ensure that their objectives are met at a cheapest cost. This will consist of a set of planned activities that would convert various inputs into goods and services. This report provides an analysis of McDonalds and organisations Operations Management, Operational Strategy, process and product design, Supply Chain Management, inventory control, JIT and Total Quality Management which include all the different processes and techniques to enhance the value of products and services that McDonalds provide to its customers at the acceptable cost. McDonalds is the global fast-food service retailer. The company have more than 32,000 restaurants and serve more than 60 million people in more than 100 countries every day. More than 80% of McDonalds restaurants worldwide are franchised and operated by local people. When Richard and Maurice McDonald opened their first restaurant they developed the idea of an assembly line where a reduced menu could be cooked cheaper and quicker, which would lead to a higher turnover of customers. The history of McDonalds began with founder, Ray Kroc. He managed the franchising of the McDonalds restaurant concept. By 1961 Ray Kroc was running the whole plan. The only thing the McDonald brothers did was run their one restaurant, and receive 0.5% from the larger company. The expansion of the McDonalds brand was not something they were really interested in. Ray Kroc, on the other hand, was. He wanted to put a McDonalds restaurant in every state in America which he eventually did. Kroc took over McDonalds company, at a cost of 2.7 million dollars. Anyone who wanted to open a McDonalds restaurant had to pay Kroc around a thousand dollars and then 1.9% from the annual takings of the restaurant. He then passed 0.5% of the takings onto the McDonald brothers and kept the other 1.4%. It is estimated that if the McDonalds had continued to receive their 0.5% it would have been worth around two hundred million dollars by the year 2000. The McDonalds chain has not been without its problems. There was the famous McLibel case the longest running libel case in British legal history. Also the discovery that some beef products were used in the preparation of their french fries, which resulted in the company paying compensation of 10 million dollars to Hindus, Sikhs, and vegetarians. There have been various criticisms of the McDonalds Corporation, ranging from the source of their meat, to the treatment of workers in the restaurants (BBC, 2005). McDonalds Restaurants UK Limited is owned subsidiary of the U.S. parent company and opened its first UK restaurant in Woolwich in 1974. There are now 1,200 restaurants operating in the UK which, despite representing only 4% of the total number of McDonalds restaurants worldwide, contribute 7% of global profits, making the UK a very important financial market for McDonalds shareholders. (McDonalds Corporation, 2008) This report will present the operational strategy of McDonalds and also how the processes and products are designed in the company. Furthermore the report explains the flow of materials and information between the operations within the McDonalds supply chain and also what type of inventory management is used in the Company, moreover report underlines importance of lean management, just-in-time and other systems that are incorporated in the Company. In addition report introduces Total Quality Management and its importance within McDonalds operational process. 3. Operational Strategy Operations strategy concerns the pattern of strategic decisions and actions which set the role, objectives and activities of the operation. (Slack et al, 2004. p.67) The main objective of company in the operational area is that the production process was as effective as possible. In other words, when using the same assets the company produce the maximum amount of high quality product which satisfies customers. Companies can achieve these results through the use of tools such as: reducing costs, improving product quality, punctual delivery, speed of response, product flexibility in adapting to individual customer requirements, resistance to fluctuations in demand, advanced technology and excellent customer service. The listed tools relate to the operational strategies, which by focusing on the production process on certain key elements can give a measurable competitive advantage. To achieve these objectives McDonalds create a balance between customers needs and minimising waste. Demand is forecasted and stock is controlled so that products do not have to be thrown repeatedly. McDonalds is a global company, but they operate locally. Currently, McDonalds wants to be perceived as a modern company that cares about customers and ecology. They offer fast-serve meals, such as: breakfast, salads, vegetables and dairy products. In their restaurants people can buy regional products, including Rice burgers served in Taiwan, Japan shrimp, coconut milk in Brazil. 3a.Three dimensions of operational strategy process Value: McDonalds sells nearly millions of burgers every day. Jobs are systematic and repetitive in everyday processes. In order to produce so many burgers every employee have assigned particular job in which they have to ensure that the quality and taste of the products is the same all the time. Varieties: McDonalds offer a wide choice of menu items such as: breakfasts, salads, fruits and vegetables and also kids meals to satisfy customers demands. McDonalds menu concentrates on five main ingredients: beef, chicken, bread, potatoes and milk. The main menu items are: the Big Mac and French fries which is one of the main sellers along with local offers and new products that consumers want. Whether its McWraps in Europe, Angus Burgers in Australia, or McCafà © specialty coffees and smoothies in the U.S., company is strategically enhancing menu to attract new customers. Variations McDonalds process is so well organized that it can meet the changing capacity, anticipation for what the customer might demand, ensuring flexibility. Demand for products are calculated using store-specific historic product mix data from the last two years, store-specific and national causal factors for example dates of events such as national promotions and school holidays, information from store managers about factors that might affect demand, e.g. road closures or local events and promotions. 3b. Performance objectives Performance objectives are related to operational processes and their basic function of fulfilling customers needs. There are five performance objectives: Quality Most customers are looking for high quality. Every organisation wants to provide error free products for their customers and gain competitive advantage. Quality objective leads to certain actions and policies in operations to provide a service that the customer wants. McDonalds serves a variety of nutritious, high-quality food products including salads, fruits, and vegetables. At McDonalds the employees are trained to prepare and present meals according to very specific procedures that are strictly enforced, especially in the preparation and handling of raw and cooked products. For example, the ten-minute holding time for sandwiches ensures maximum quality and freshness to each customer. This means that if the products are not sold within ten minutes from the time of their preparation, they are discarded. McDonalds meets all the hygiene specifications, including hand-washing procedures. McDonalds succeed on the feedback from the customers to continuously improve the quality service. Speed: Speed is all about how long customers wait before receiving their service organisation increasing the availability of their products or services if the waiting time is minimised. The Operations process is so well designed at McDonalds that every customer who comes is served quickly. The company have preparation time set for burger and other menu items so that the order is delivered within 3-4 minutes. Even during the busy hours the staff members ensure that the order is delivered on time to the customer. Dependability: An organisations processes have to consistently meet a promised delivery time for a product or service. McDonalds has a more dependable process for the customers by offering the meals on time. They have qualified workers to deliver products on time every one of them have assigned particular job. McDonalds has predictable opening hours during the weekdays and weekends, the products on the menu are available constantly during any time of the day. Flexibility: Refers to elasticity of the processes and change in the variety of products or services making operations more flexible to changes in customer requirements. As customer tastes change, McDonalds needs to increase the range of new products it offers. McDonalds offers a lot of flexibility to meet customer preferences. It offers a balanced collection of culturally relevant menu items in the markets, for both adults and kids and is maximizing the choices. McDonalds has a multiple trained staff in order to be flexible. It maintains shift based system of work among the crew members allowing them to be flexible enough in the work they do. Cost: Refers to minimizing the cost of the process, leading to a cheaper service. The best way of lowering cost is to focus on the customer requirements i.e. fulfilling the quality objective in both product design and operation, as a way of eliminating rework and waste. Operations should focus on getting the supplied service right. It should be also co-ordinated with processes like information systems which help reduce errors. McDonalds have a well planned cost control strategy. The restaurant has a well established low cost supply chain. They adopted Just-In-time strategy that reduces the cost of unnecessary storage and waste. Food can be sold at a lower price because the price does not absorb the costs of unsold food. Ultimately this means lower costs for McDonalds. They ensure efficiency and speed in distribution and very good food processing technology system. McDonalds has employed the value meal strategy which allows customers to buy a sandwich, French fries, and drink at a discount when purchased together. Thus, it is observed that all operations objectives are connected. If quality is improved, cost is also reduced, thus time is also improved and which in turn leads to more flexibility. Thus by starting with quality, along with time reduction the other objectives are directly attacked by taking unique actions for that objective, as needed. Hence, a series of such actions will then result in continuous improvement of all four operations objectives at the same time. (Schroder, 2007 p. 24-25) 3c. PEST Analysis: The success of any organisation depends upon the various external and internal factors which are beyond the control of an organisation. These factors are called Environmental factors. These environmental factors basically include four areas namely Political, Economical, Social and Technological and the analysis of these factors is called PEST analysis. To overcome the problems created by these factors the businesses come up with various strategies. Political Factors: Politics play very important roles in the functioning of the business. It is very important for a firm to know the existing political factor within it is operating. What sort of laws and legislation exist in the country and what are the future prospects. This is quite important to know because these factors will determine the strategy required to sustain and work without problems. Government policy can have a major impact on the operation of a business. The political and public debate on obesity and other health issues negatively affected fast food sales. In recent years, McDonalds has been facing legal trials of possibility in breaking the health legislation by providing unhealthy foods to customers. This had made some damage to McDonalds image. However, McDonalds has already been trying to introduce healthier foods on its menu such as salads, fruits and milk for the kids. Economic Factors: Similarly it is important for a firm to know the economy of the country it is operating within. The factors like unemployment, minimum wages, exchange rate, interest rate, economic growth inflation rate etc are quite important for a firm to know. Economic factors might affect it. If the economy of the country is not good then the number of McDonalds customers can decrease. Economic factor can influence the potential profit of a business. One of the economical forces which may influence McDonalds is the change in interest rate. Most of McDonalds restaurants are franchises, therefore, franchisees would suffer on their borrowing if interest rate increases. Social Factors: Social factors include the demographic and cultural aspects of the environment. Social factors play important role in a business. The business has got to respect the culture it is operating in. For example it cannot sell beef products in a hindu community and pork products in a Muslim community. Apart from that the business has got to know the taste and preference of its customers. The fast food industry has been hit by negative publicity in recent years due to the increasing amount of diabetes, unhealthy food and childhood obesity. In order to overcome the problems, McDonalds has been introducing healthier foods and educational programmes to bring a healthier environment. McDonalds also has been heavily contributed in the charity events in order to make contribution to the society. Technological Every organisation must monitor developments in technology. These can affect the production methods employed by the organisation. Due to the increasing importance of internet, regional planners work with restaurants and by communicating with them on a regular basis via email and telephone. McDonalds also have a friendly use website with more details and information available 4. Process design Process design is the process by which some functional requirements of people are satisfied through the shaping or configuration of the resources and/or activities that comprise a product, or a service, or the transformation process that produces them (Slack et al 2004, p.94). The process should be designed to deliver the products in the best possible way. Before design the process every manager should ask some questions, e.g. what process should give to customers? How much flexibility do customers want? How much will they pay for the products? (Waters 1999, p. 65). Each restaurant is headed by a Restaurant manager who is responsible for the daily operation and customer interaction. The crew members carry out the basic operation at the restaurant and ensure the customer satisfaction. The Process at McDonalds starts with the customer order and then after receiving the order, the design must be completed and delivered. With this operations process, McDonalds aims to be able to deliver a reasonable product within reasonable time. The nature of the work is to provide customers ordered products within few minutes. The order placed by the customer is taken by one of the crew members operating at the tills, as the order is entered into till, a message is passed on to the appropriate crew member in the kitchen for the preparation of the order. In food preparation McDonalds have their own strategy and standards; the Crew members cook burgers on a grill that heat both sides of the burger in a little less than four minute where the Patties are batch cooked in advance. The hamburger buns toaster time is slightly less than one minute to give it a brown texture and slightly crusty, the assembling of hamburger is done by laying out the toasted bottom, spread mayonnaise, add grilled beef, on top lettuce and onions close it with the toasted top and is wrapped and placed into the Universal cabinet ready to be sold to customers. Finally the customer is asked for the mode of payment to complete the transaction. The process flow in McDonalds: Customer order Toast bread product Cook frozen products Place product in packaging Add ingredients Holding Cabinet (Wrapped burgers are kept max 10min) Delivery to the Customer Having a well planned process design, McDonalds is able to produce and service including customers specification maintaining their quality, reduce the customer waiting time at the counters. They have dependable crew members and resource for on-time delivery of products and service. The flexibility is achieved by processing a wide variety of products and changing the cost of the items and lowers their processing costs by eliminating waste in terms of preparing the burgers in bulk. 5. Product design The objective of designing products and services is to satisfy customers by meeting their needs and expectations. This enhances the competitive advantage of company (Slack et al, 2004 p.129) McDonalds product design concentrates on maintaining consistency in how products are prepared as well as what raw-food components are used. They serve a variety of products, sandwiches with beef, fish, and chicken products, menu also include salads, fruits and dairy products. The quality is ensured through standardized and careful employee training efforts. The Company frequently introduce new products and a reason for this is that customers are demanding more choice. McDonalds menu concentrates on five main ingredients: beef, chicken, bread, potatoes and milk. The companys main menu lists is offering: the Big Mac and French fries, which still exists as a major seller. A Big Mac consists of a bun, two beef patties, lettuce, cheese, pickles, onions, sauce and a small amount of seasoning. The restaurant will only combine these items just before the customer orders. Other standard product names come from the McDonalds convention of adding a Mc to a particular item. Although McDonalds is a global company, they operate locally. In restaurants people may buy regional products, including Rice burgers served in Taiwan, Japan shrimp and coconut milk in Brazil. Ethical considerations about product design could be that in order to minimise the negative comments about unhealthy food, increased amount of diabetes and obesity among children the Company introduced healthier foods in their menu. They purchase from suppliers that ensure the health and safety of their employees and the humane treatment of animals. The company is also trying to minimise the impact on environment. 6. Supply chain management Supply chain management is the management of the interconnection of organisations that relate to each other through upstream and downstream linkages between the different processes that produce value in the form of products and services to the final consumer (Slack et al, 2004, p. 445). SUPPLY CHAIN PLANNING AND CONTROL Coordinated delivery of products and services from the supply chain Demand The market Customer requirements Supply The operation Operations resources Required time, quantity and quality of products an services Figure 1. Supply Chain planning and control Supply chain management is concerned with managing the flow of materials and information between the operations, which form the strands chains of a supply network. (Slack et al,2004, p. 444). McDonalds ensures its suppliers follow the exact standards of quality, value and cleanliness set by them. When it comes to tracing the products ingredients, great emphasis is placed, so McDonalds are able to control every link in the supply chain. Wherever possible, McDonalds tries to use suppliers who are based in the UK, as they prefer them, but saying this, they still have to meet McDonalds exact product and hygiene standards. All of their European sold beef is supplied from Europe and the great majority of their British sold beef is sourced from Britain. McDonalds has developed a supplier quality index (SQI) by which all suppliers are measured. It allows the company to monitor performance of suppliers across the many agricultural and non-agricultural products and services purchased (Food Chain Centre, 2003). In 2004, McDonalds introduced a specialist central stock management function known as the Restaurant Supply Planning Department. This team communicates with restaurant managers on a regular basis to find out about local events. The team builds these factors into the new planning and forecasting system called Manugistics to forecast likely demand of finished menu items, for example Big Macs. Raw materials include the buns, beef patties, paper cups, salad ingredients and packaging are delivered to the restaurants between 3 and 5 times a week. At any time, a restaurant will have a range of products ready for sale, for example Big Macs, fish and side salads. At McDonalds, all raw materials, work-in-progress and finished products are handled on a First In, First Out (FIFO) basis. This means raw materials are used in the order they are received. Therefore stock is always fresh because products are sold in the order they are made. Ongoing communication between the central Restaurant Supply Planning team and individual restaurants helps to manage the stock more effectively. This team of regional planners works with around 80 restaurants each and communicates with them on a regular basis via email and telephone. Any factors that could affect the number of customers visiting an individual restaurant need to be logged with the team. These are taken into account in calculating the forecasts. Supply Planners work with the stock control system, to ensure enough raw materials leave the McDonalds distribution centres. This ensures that restaurants can produce the meals required for the level of demand forecasted. Supply Planners working for McDonalds include range of causal factors in the calculation of their forecasts, so that based on past performance they can predict future demand for each restaurant. McDonalds Restaurant Managers need to ensure that the data they enter into the system is as accurate as possible. For example, each day Restaurant Managers record opening and closing stocks of key food items. They record all other items weekly (McDonalds Corporation, 2008). Vertical integration the degree to which an operation chooses to own the network of processes that produce a product or service. The strategy of expanding on the supply side of the network is called backward (upstream) vertical integration, and expanding on the demand side is called forward (downstream) vertical integration (Slack et al, 2004 p. 169, 779). McDonalds has practiced a backward (upstream) vertical integration, by replacing most of its suppliers. It has done so for two reasons, 1) To reduce costs, and 2) To ensure that they make top quality products. One of the coffee suppliers of the Company is Distant Lands which have its own coffee farm. In this example vertical integration reduces the risk of delayed delivery (dependability). 7. Inventory management Controls Inventory planning and control compensates for the differences in timing between the supply of an operations products and services and the demand for them (Slack et al 2004, p. 405). There are 5 types of inventory: BUFFER INVENTORY compensates rapid variations in supply and demand. ANTICIPATION INVENTORY is used when changes in demand are big but relatively predictable. It is also used when supply changes are large. DE-COUPLING INVENTORY creates the chance for independent scheduling and processing speeds between process stages. PIPE LINE INVENTORY exists because material cannot be transported right away between the point of supply and the point of demand. CYCLE INVENTORY occurs when one or more stages in the process cannot supply all the items it produces at the same time (Slack et al 2004 p.411-412). McDonalds method of keeping burger lanes full during peak periods is a recognizable example of a pull system in a service application. McDonalds has made billions of hamburgers using elements of just-in-time, from the time of order from the customers to the payment from them; the burgers or the meals are ready to be consumed. If they are later than the time ordered, customers will be dissatisfied. So it is important for McDonalds to use the JIT process in order to keep quality and satisfied customers. Just-in-time means producing goods and services exactly when they are needed. Lean production system is the western term for Toyota Production System. Lean operations and just-in-time planning and control aim to meet demand right away, with perfect quality and no waste. Lean operation means waste elimination in order to create operation that is faster, more dependable and that produces high quality products and also operates at low costs (Slack et al 2004 p. 518, 519). There are two major pillars of lean production system. One is Just-in-Time system and other is Kaizen. Kaizen is a Japanese term for continuous improvement involving everyone managers and workers alike. Kanban is a Japanese term for card or signal, it controls the transfer of materials between the stages of operation. (Slack et al, 2004 p. 533, 653) McDonalds use lean production system and minimise waste by accurate stock management and by developing correct demand forecasts so that products do not have to be discarded. McDonalds is an example of a JIT system, they doesnt begin to cook its orders until a customer has placed an order. McDonalds is able to make their products fast enough thanks to technology they use, eg. bun toaster. The Company provide fast service and at the same time the finished products are not placed in inventory for long time. The major benefit of using just-in-time system for McDonalds are good quality food at a lower cost and also better quality customer service. This higher quality customer service is the ability to actually produce faster. Without this ability, McDonalds ordering costs would be higher because the costs associated with ordering would be the loss of customers tired of ordering fast food that really isnt fast (Atkinson 2005). 8. Total Quality Management (TQM): Total Quality Management is a philosophy of how to approach the organization of quality improvement. This approach puts quality at the heart of everything that is done by an operation and including all the activities within the operation (Slack et al, 2004, p. 722). Feigenbaum defined TQM as; An effective system for integrating the quality development, quality maintenance and quality improvement efforts of the various groups in an organisation, so as to enable production and service at the most economical levels which allow for full customer satisfaction(Cited in Slack et al, 2004, p.720). McDonalds goal is simple: to give customers high quality products anywhere in the world and maintain high standards of service. Every member of the organisation must be involved from the highest executive to the crewmembers of McDonalds. The commitment to quality must be instilled into everyone from the moment they join McDonalds in every dimension of the organisation, e.g. Operation, Finance, Marketing, Human Resources, Health and Safety and Food Safety The basic principles of McDonalds are: 1. Putting the customer first by making sure all customers are fully satisfied with McDonalds, predicting and fulfilling their needs, exceeding their expectations, by using market research to find out what they want, they aim to surprise you with their quality, choice and service and making sure that all service standards are met. 2. Making continuous improvements by reducing costs, maintain good ordering procedures in all restaurants. 3. Aim for zero defects do it right first time, it can be very expensive putting it right afterwards. Prevention is better than cure. This requires rigorous quality testing and control so that defective products are spotted immediately. The advantages of using TQM: Every individual in McDonalds is responsible for quality Quality becomes the focus for all activities Everything McDonalds does is designed to satisfy their customers. This can lead to a greater market share and also increased profit The disadvantages for using this system are: Requires well-trained, responsible staff, this could cost more money for training each employee. Some of the employees can be resistant to change Gives visible effects in the long run 9. Conclusion. Operation management function exists in every organisation. It is concentrating on achieving the processes of transformation of raw materials into a finished product. Moreover effective operation management enhances performance in the process. McDonalds Corporation is one of the most known companies in the world. In their operational strategy company decided to reduce costs, improve product quality, punctual delivery of their product to customers and continuous performance of all operational aspects of company. All departments of organisation and every employee have to work together to ensure that the strategy reaches its objectives. All the processes in McDonalds reflect the needs of the customers and products are designed taking into account high quality, speed of service and cost. McDonalds working together with suppliers that fulfil all the standards of quality set by the company. To satisfy customers needs of fast served quality products their strategy incorporated just-in-time system. As a result the restaurant is serving fresh food in a short time.

International Accounting Standards (IAS) 37 Requirements

International Accounting Standards (IAS) 37 Requirements Introduction Since IAS 37 is published, companies obeying by international standards can solve the difficulty of how to recognize and measure provision, contingent liability and contingent asset. It provides an explicit direction for companies to disclose incurred transactions associated with liabilities. However, probable or possible such words are involved many times in this standard which can allow options and creative accounting for companies on whether to recognize it as a provision on the balance sheet or a contingent liability under the notes. This will further mislead investors decisions. Thus in this essay, we will re-evaluate it and give an in-depth understanding of it. This report will first give some background of IAS37, and what the major requirements of this standard are and why those requirements are important. Furthermore, the report will critically evaluate the IAS37 from aspects of 1) options allowed; 2) applicability of this standard internationally; 3) opportunities for creative accounting; 4) the weaknesses of this standard; 5) how this standard can be improved. 2. Background of IAS 37 The International Accounting Standards Committee (IASC) issued IAS37 Provisions, Contingent Liabilities and Contingent Assets in September 1998. It replaced parts of IAS10 Contingencies (IAS37 BV2008) and became operative for annual financial statements covering periods beginning on or after 1 July 1999 (IAS37, BV2008). Before the announcement of IAS37, different countries use various ways to verify their provisions, which bring the problem of inconsistency. Some enterprises confirm their provisions, depending on whether to undertake current obligation or not. While some other enterprises are according to managers willingness of proceeding future payments to confirm their preparations. Therefore, the results are: Different types of business enterprises have different classification of provisions, so it creates inconsistency. This jeopardizes comparability of different enterprises financial statements. It provides the opportunity for certain enterprises to manipulate their profits. For example, the cost should be recognized in the period but may be moved to other period to confirm; the cost should be confirmed in future but may be moved to the current period. Therefore, to achieve the balance of profits in each period is one of purposes of this regulation. Some enterprises include some liabilities that do not meet the conditions of the requirements into their balance sheet. This apparently damages the current financial situation of the company. The objective of this standard is to ensure that appropriate recognition criteria and measurement bases are applied to provisions, contingent liabilities and contingent assets and that sufficient information is disclosed in the notes to enable users to understand their nature, timing and amount (International Financial Reporting Standards (IFRS), 2009). The key principle of IAS37 is that a provision should be recognized only when a liability exists. Planned future expenditures are not recognized as provisions or contingencies, even if the board of directors has authorized them. 3. IAS 37 Major requirements An entity should recognize a provision as a liability based on the following three criteria met simultaneously: (a) there is a present obligation or more likely than not that a present obligation exists at the end of the balance sheet date as a result of an obligating event; (b) it is probable (i.e. more likely than not; i.e. 50%95%) that an outflow of the economic benefit of the entity will exist; (c) the amount of the outflow can be estimated reliably (IAS37 BV2008). If the first criterion is met but it is possible (i.e.5%-50%) NOT probable that an outflow of economic benefit of the entity exists and the amount of the outflow cannot be measured reliably OR if possible obligation exists and the outflow of the economic benefit of the entity is not remote (i.e. 0%-5%), then contingent liability will arise. In respect of contingent liability an entity should disclose it instead of recognizing unless the possibility of the outflow of the economic benefit of the entity is remote (IAS37 BV2008). As regards a contingent asset, it should be just disclosed as well as contingent liability, unless the amount of the inflow of the contingent asset is virtually certain (i.e.95%-100%). When the inflow of the contingent asset is virtually certain, then it is appropriate to be recognized as an asset on the balance sheet (IAS37 BV2008). When recognizing a provision, the amount of the outflow of the economic benefit of the entity should be based on the best estimate, i.e. this amount should be the same as the entity needs to pay to settle the obligation in due course (IAS37 BV2008). When measuring a provision, things such as, risks and uncertainties, discounted provisions (if time value of money is material), changes in the law or other cases which can affect provisions, should be taken into account but do not take into account gains from the expected disposal of assets (IAS37 BV2008). When reimbursement happens, an entity recognizes it if it is virtually certain and the amount recognized should not be more than the amount of the provision. The reimbursement should be recognized as a separate asset in the balance sheet. If the reimbursement and the expense relating to a provision are sustained in the same reporting period, then the expenses disclosed in the comprehensive P L can be netted off by the amount recognized as a reimbursement (IAS37 BV2008). The provision should be reviewed annually and adjusted according to latest best estimates. Changes in the provision can only be used for its original intention (IAS37 BV2008). Provisions-three specific applications mentioned by this standard, namely: future operating losses, onerous contracts, restructurings. With regard to future operating losses no recognition should be made as a provision. In terms of onerous contracts, the unavoidable cost in excess of the benefit which can be received by the entity should be recognized as a provision. In related to restructurings, restructuring costs should be recognized when the criteria for provisions are met (IAS37 BV2008). 4. The importance of IAS37 requirements According to Deloitte, IAS37 aims to ensure that recognition of provisions, contingent liabilities and contingent assets are made by using the best methods and measurements, to ensure that users of financial statements receive adequate and appropriate information for investment decision-making processes. In addition, IAS37 aims to ensure that it only deals with the real obligation in the financial statements and future expenditure, even if excluded from recognition by the responsible board. The importance of taking the criteria into account, when the entity recognises the provision, is to prevent any unnecessary provision from being recognised in order to enhance the entitys value in subsequent periods in unsubstantiated ways, leading to provision of unreliable information to financial statement users (ACCA, 2009). The importance of the liability and asset disclosure requirements could be viewed as returning to the Conservatism Principle in accounting which advises on ignoring profits not yet achieved, taking all expected losses into account and not registering potential gains until they occur. In other words this requirement prevents an entity from providing unrealised profits and subsequent information that might mislead users. IAS37 provides guidelines regarding best estimates of provisions associated with its objectives, aiming to provide an appropriate way of measurement in order to represent sufficient and appropriate information. The standard requires the entity to take into account estimating process risks, uncertainties and other elements in order to achieve the best estimate for the provision. Following this requirement can prevent unrealistic values being reported in the entitys financial statement. The requirements for solving the problem of reimbursement and illustrating the three specific applications are equally comprehensive, so that accountants know how to resolve them. Otherwise, it is likely that each entity might adopt its own method of troubleshooting which differs from others when facing such cases in reality, resulting in a lack of comparability among entities. In these instances investors may be misled when making investment decisions. In summary the importance of IAS37 is that it is i ntended to reduce the possibility of deliberate misstatement of an entitys provisions, contingent assets and liabilities. 5. Critical Evaluation of IAS 37 5.1 Options allowed In the measurement of IAS 37, there are several ways to measure provisions in order to make best estimate. Owing to these different ways, companies could control the amount of their provisions. All the information about provisions, such as amount and timing, are realized and disclosed by the companies. So a company could make the number of provision larger on the balance sheet when it is making a profit during the period. In addition, a company could calculate the number of provision smaller to make sure their balance sheets still look good when it is losing money during the year. This is an option that companies can change a number from their balance sheets showing different operating conditions and improve financial performance. In this way, decisions of investors could be misled, because investors of a company will not be possible to discover a present obligation or the estimation of the amount of the payment, companies could use this potential option to hide their real operating condition and make creditors and shareholder believe the companies are performing well. In the second place, contingent liabilities are disclosed in the financial statement, especially in the notes, while provisions are disclosed in balance sheet as provisions are recognized as liabilities. It is absolutely sure that balance sheet will be paid more attention by reports users than notes. In order to make balance sheet attractive, the company will prefer to disclose adverse cases as contingent liabilities in the note on which the information appears less transparent. This action may affect investors decisions. And this kind of action may not be discerned because in general, both provisions and contingent liabilities are uncertain in timing or amount. This is another option under IAS 37 that companies could use to produce an advantageous financial report for them. 5.2 Applicability of IAS37 Internationally Companies from more than 100 countries have been required or permitted to use IFRS since 2001. Meanwhile, remaining countries, such as Japan, have established timelines for harmonization with IFRS. (IASB, 2010)However, IAS 37 may face some difficulties when being applied world widely. Owing to the different cultural attitudes, companies may not voluntarily disclose information about contingent liabilities and contingent assets in notes of their financial reports in some countries whose residents are secretive, such as Switzerland and Japan. On the contrary, Companies from transparent countries will disclose more detail information about their operation. Additionally, some countries have more requirements about provisions, contingent liabilities and contingent assets than IAS 37 does. Because their accounting profession, as well as accounting standards, is well developed. For example, Securities and Exchange Commission (SEC) of America has special requirements about companies who use IAS37 instead of GAAP. First, more information about recognized provisions need to be disclosed with further details about the nature, types and amounts being reported. Additionally, other provisions should be labelled and explained. Second, provisions recorded for estimated product returns, when recognizing revenues, are required to be given in more detail regarding the amount and location, and whether they are properly disclosed. SEC also considers the exact amount of this kind of provision that should be included; the amount when the financial period began and ended, followed by the amount made and used during the period. Third, it is strongly recomme nded that all information about estimated provisions and liabilities should be disclosed clearly. Fines and losses owing to currency allocation and pricing about forward sales, disclosure about these provisions and contingent liabilities is necessary (Deloitte, 2009b). In these countries where the accounting profession is fully developed, companies maybe prefer to use their own accounting standards. The application of IAS 37 could be easier in counties where accounting profession is less developed, such as Russia and Japan. 5.3 Opportunities for creative accounting The essential rule of accounting is to be true; however creative accounting can occur and may be caused by human error, lack of professional ethics, squalid motives and so on. Simply put, the aim of creative accounting is to artificially state profits. Methods of creative accounting can be considered in four aspects: 1. Options give companies opportunities to make creative accounting. Provisions should be reflected in balance sheet but contingent liabilities only be disclosed in the notes. People focus more on balance sheet than the notes. Therefore, accounts may prefer to disclose some contingent liabilities rather than recognise the provisions. 2. Many accounting items need estimation and anticipation. Especially in IAS37, the items are full of uncertainty and arbitrariness. Although IAS37 makes rules for measurement, overrating or underrating still happens. As we mentioned before, the options allowed companies to control the amount of provisions. For instance, when a company wants to calculate the prospective pension liability, they will employ an actuary who should be familiar with the inside background and control the valuation on the basis of the financial performance. 3. A common method of creative accounting is artificial transactions which can be reflected in the balance sheet. This case needs assistance from other entities, for example, supposing entity A pretends to claim indemnity from entity B, so they can form contingent assets and recognise them as assets. 4. Creative accounting also plays tricks on real transactions, for example, suppose an entity has a contingent liability ofà ¯Ã‚ ¿Ã‚ ¡50,000, the accountant may disclose this item in the next year to guarantee the financial situation in that year (Amat et al. 1999). 5.4 Weaknesses of IAS37 There are no prevalent problems existing in IAS37, however, it still has limitations which were discussed at the April 2009 IASB meeting. Inconsistency with other standards, especially the probability of recognition criteria; Liabilities are recognized only if it is probable that there is an outflow of economic benefits according to IAS37 (IAS37 BV2008, p.5) .Contrarily, other standards, such as IFRS 3 Business Combinations, have no requirement to use probability recognition criteria for contingent liabilities when an entity is in a business combination (Deloitte, 2009d). This inconsistency is potentially confusing. The unclarity on explain identification of liabilities. The term contingent liability is used to describe varies things. Specifically, it is puzzling to use one term to represent both possible obligations and unrecognised present obligations in the practical examples (Broad, 2006, p.14). Since the existence of the present obligation is the fundamental feature of a liability, it is misleading to describe a possible obligation as liability even with a adjective contingent .And it is contradictory to use contingent liability to represent a present obligation. However removing it from the standard may hide some potentially significant risks, such as litigation, illegal acts, and environmental laws. These items do not satisfy the definition of liabilities because they are uncertain on the balance sheet date but they are useful for decision making. IAS37 is ambiguous when measuring a single obligation. It is universally interpreted that the most likely outcome may be the best estimate of the liability when measuring a single obligation, (IAS37 BV2008, p. 17).This is contrary to the current settlement notion which states that expected value should be the base when entities measure all liabilities, which may mislead. Basically, the estimation technique of expected value has more merits since it obtains information about the range of possible cash flows and reflects new information about a liability as that information becomes available (Broad, 2006, p.19). The term provisions is useless and there is an existing risk if eliminated. At present, the standard defines a provision as a liability of uncertain timing or amount (IAS37 VB2008, p.10) therefore it is another form of liability. However, the difference between a provision, other liabilities and the new analysis of contingent liabilities is vague. The standard does not offer adequate explanation on how to distinguish them, for example, the uncertainty about timing or amount relates to cash flows .So it is difficult to recognize a liability for a product warranty. In other words, there is a choice between a provision and a contingent liability. 5.5 IMPROVEMENTS In order to improve the standard IAS37, several suggestions can be made: Eliminate the probability of recognition criteria. Eliminate the label contingent liability, and update the guidance in order to help entities to identify liabilities. Attention should be paid to potential liabilities in various scenarios in which a transaction embodies the nature of a liability. The IASB panel should publicise and add new applications to the IAS liability standards to help entities apply it to special cases. Clarify that entities should establish basic measurements of all liabilities based on expected value, not on most likely outcome Eliminate the terminology provision and replace it with another phrase such as non-financial liability which is important to make a clear distinction between liabilities. A clear disclosure need to be established 6. Conclusion ISA37 improves accounting standards as there were no specific regulations or provisions previously (Houillon, 1999). Therefore, the key principle for ISA 37 is the recognition of provisions. It requires that a provision should be recognized when the following conditions are met simultaneously: there is a present obligation or a present obligation exists at the end of the balance sheet date as a result of an obligating event, there is a probable outflow of the economic benefit and the outflow can be estimated reliably. Within these stipulations, IAS37 ensures recognition is made using appropriate measurements and provides valuable information for users of financial statements. Most countries in the world now apply IAS 37 but it may still face some difficulties when being applied globally. IAS37 gives companies options to choose whether recognise provisions or disclose contingent liabilities. Furthermore, some items in IAS37 need estimation and anticipation and provide opportunities fo r creative accounting, for these reasons, IAS37 is not perfect. The inconsistency with other standards and vapoury explanations of liabilities and constructive obligations provide the basis for some suggestions to improve ISA37. The probability of recognition criteria may be eliminated. Meanwhile, we probably need to pay some attention to potential liabilities and update the guidance in order to help entities to identify liabilities.