Integrated Performance Management Through Effective Management Control

9 Integrated Performance Management through Effective Management Control WERNER BRUGGEMAN Performance measurement and performance management are vivid themes in the literature on management control. So, it is only natural that we investigate how this literature has contributed to the field of Integrated Performance Management. The purpose of this chapter is to describe how management control systems can be used to effectively manage company and business performance.First, we define the scope of management control and describe the link with organizational strategy. Then, we focus on the three elements of the management control system: (1) the management control structure; (2) the control process; and (3) the management control culture (beliefs systems). We will describe these three elements in greater detail and give an overview of the findings in mainstream contingency research studying the effectiveness of control systems in various environmental and organizational contexts.Manageme nt control defined Management control and the link with strategy Following Anthony and Govindarajan (1995), management control can be defined as a process of motivating managers to perform actions and activities in line with the goals and strategies of the organization. According to this definition, an organization is ‘under control’ when its members do what the management wants them to do. Management control comprises various tasks, among which are:Planning the future activities of the organization; Coordinating the activities of the various members of the organization; Communicating information; Evaluating this information; Deciding on the actions to be taken; and Influencing people to adapt their behaviour according to the company goals (Anthony and Govindarajan, 1995). Integrated Performance Management through Effective Management Control ? 153 From the definition above, it follows that management control plays a central role in managing the company’s perform ance and the implementation of its strategies.Therefore, it is of vital importance that management behaviour, which is stimulated by the management control system, is consistent with the strategy to be implemented (the so-called ‘intended strategy’ – see also Chapter 6). The starting points of the management control process are the mission, the vision and the strategies of the organization. We refer to Chapter 6 for a more thorough discussion of each of these concepts, but recapitulate them very briefly here. The mission of an organization is a description in general terms of the role of the company towards its stakeholders.It describes the reasons for the company’s existence, its strategic focus and values, as well as how the long-term goals should be realized. The goals are descriptions of the long-term desired future of the company. The mission and goals translate into strategies, which specify the way in which the vision aspired to should be reached. T he strategy in turn is translated into concrete performance objectives or targets. This is usually done through formalized action plans.Management control and goal congruence The purpose of management control is to maximize congruence among the goals of the organization, its various entities and its individual managers. This is called goal congruence. The way in which managers react to management control information depends to a large extent on their personal goals. For effective management control, it is important to be able to measure the impact of these motivators, because they largely determine the behaviour of people in an organization, as well as the desirability of the consequences of their behaviour.Business Management Study GuideThe management control system should be designed in such a way that, whenever managers take decisions that fit into their personal goals, these decisions should also be in the interests of the company as a whole. In other words, the management contr ol system must create the conditions to foster a feeling within the members of the organization that they can best realize their personal goals by contributing as much as possible to the realization of the general company goals.It is clear that the way in which managers are evaluated and financially rewarded for their performance plays a significant role in reaching ‘goal congruence’ (see also Chapter 13). Goal congruence is an important condition for effective performance management. The problem of goal congruence can be described in more detail in the following way. Corporate goals are translated into departmental goals, and in these departments people are working who also have their personal goals. A first problem that can arise is a lack of congruence between the corporate and departmental goals.For example, a department or division of a company can have a long-term vision that says it is desirable to stay small and be profitable (in other words ‘small is 154 ? The Integrated Performance Management Framework beautiful’). On the other hand, top management might be striving for a company goal of strong growth and therefore wants the division to grow. In this case, there is a lack of congruence between the different visions, and a number of meetings will have to be organized to align the goals and strategies.However, there is also the possibility that the division manager is opposed to the growth of his division because he is personally reluctant to make the required efforts. In this case, there is a conflict between the personal goals of the manager and the goals of the company. Role of management control in performance management Verifying whether the company (or the business unit or department) is on track is an important management function. Management control is an important instrument for motivating personnel to act in accordance with the goals and strategies of the organization.This motivation is one of the major driving force s of the performance and the value of the company. The management control system must be adjusted to the goals and the strategies of the company and it must be optimally aligned. The contribution of control to strategy implementation Robert Simons (1995) has outlined how management control can contribute to effective strategy implementation. In his book, Levers of Control, he introduced four key constructs that must be analysed and understood in order to implement strategy successfully: core values, risks to be avoided, critical performance variables and strategic uncertainties.Each construct is controlled by a different system, or lever, the use of which has different implications. These levers are: †¢ Beliefs systems, used to inspire and direct the search for new opportunities. †¢ Boundary systems, used to set limits on opportunity-seeking behaviour. There are three broad categories of boundary systems: business conduct boundaries, internal controls and strategic boundar ies. 1 †¢ Diagnostic control systems, used to motivate, monitor and reward achievement of specified goals.Diagnostic control systems attempt to measure output variables that represent important performance dimensions of a given strategy: critical performance variables. These factors must be achieved or implemented successfully for the intended strategy of the business to succeed. Diagnostic variables should be measured, monitored and controlled, but reporting on them to higher management is on an exception basis only, when a value falls outside a normal control limit and corrective actions must be taken. Interactive control systems, used to stimulate search and learning, allowing new strategies to emerge as participants throughout the Integrated Performance Management through Effective Management Control ? 155 organization respond to perceived opportunities and threats. As a fourth lever of control, these systems focus attention on strategic uncertainties and enable strategic r enewal (i. e. , emergent strategies). Figure 9. 1 Levers of control Source: Simons (1995: 159) Control of business strategy is achieved by integrating these four levers of control.The power of these levers in implementing strategy does not lie in how each is used alone, but rather in how they complement each other when used together. Two of the control systems – beliefs systems and interactive control systems – motivate organizational participants to search creatively and expand the opportunity space. These systems create intrinsic motivation by creating a positive informational environment that encourages information sharing and learning. The other two levers of control – boundary systems and diagnostic control systems – are used to constrain search behaviour and allocate scarce attention.These systems rely on extrinsic motivation by providing explicit goals, formula-based rewards and clear limits to opportunity-seeking. These four levers create tension between creative innovation and predictable goal movement. This tension requires managers of effective organizations to know how to achieve both high degrees of learning (innovation) and high degrees of control (efficiency) (Simons, 2000: 304). Levers of control and the organizational lifecycle Developing an integrated control system does not happen overnight. Managers of small entrepreneurial firms perform their strategic control 56 ? The Integrated Performance Management Framework rather informally. As the business grows larger, however, informal processes become inadequate. Simons (1995, 2000) illustrates how the levers of control can be successfully implemented as a business grows and matures (see Figure 9. 2). Figure 9. 2 Introduction of control systems over the lifecycle of a business Source: Simons (1995: 128) In their most recent book, Kaplan and Norton (2001) point out the importance of using the Balanced Scorecard (see Chapter 3) as an interactive control system.It is clea r from Figure 9. 2 that an organization must have some experience with other control systems before it can exploit the Balanced Scorecard in this way. Diagnostic systems, boundary systems, and internal control systems are all necessary, but they do not create a learning organization aligned to a focused strategy. Some Balanced Scorecard implementation failures occurred because organizations used their scorecard only diagnostically, and failed to get the learning and innovation benefits from an interactive system.The CEOs of successful Balanced Scorecard adopters succeeded because they use the scorecard interactively, for communication and to drive learning and improvement. They set overall strategy and then encouraged people within their organization to identify the local actions and initiatives that would have the highest impact for accomplishing the scorecard objectives. (Kaplan and Norton, 2001: 350) Management control versus task control Anthony and Govindarajan (1995) distingui sh management control, which ultimately is about implementing strategies, from strategic planning and control and task control:Integrated Performance Management through Effective Management Control ? 157 †¢ Strategic planning and control is the process of determining and evaluating the goals of the organization, and formulating or reformulating the broad strategies to be used in attaining these goals. Strategic control refers to the maintenance of the environmental conditions of strategies. Strategic control is used to evaluate the background of existing strategies and the environmental assumptions on which the strategies were formulated.It can also involve the reformulation of strategies. †¢ Task control is the process of ensuring that specific tasks are carried out effectively and efficiently. For example, internal audit and internal control are often associated with task control. Elements of a management control system In the previous paragraphs, we have described the i mportance of management control for strategy implementation and for performance management. In the remainder of this chapter, we go deeper into the details of the management control system and focus on its compounding elements.A management control system consists of three basic elements: (1) the management control structure; (2) the management control process; and (3) the management control culture. The first element, the management control structure, deals with the division of the organization into ‘responsibility centres’. A distinction needs to be made among the various types of responsibility centre, such as ‘revenue centres’, ‘expense centres’, ‘profit centres’, and ‘investment centres’. Determining the optimal structure is part of the task of management control.The second element in a management control system, the management control process, comprises the cycle of: planning for the expected input and output; mea suring the results; comparing plan to reality; and, finally, adjusting if necessary. The third element is the management control culture or the beliefs systems. This is the combination of communal values and behavioural norms, which determine the behaviour of managers and staff. Choosing an effective management control structure To manage an organization according to certain objectives, you must first choose an appropriate management control structure.A management control structure is the system of basic principles for the functioning of the organization or the organizational structure in which the management control will take place. Hellriegel, Slocum and Woodman (1992: 5) define the organizational structure as ‘the structure and formal system of communication, division of labor, coordination, control, authority and responsibility necessary to achieve the organization’s goals’. 158 ? The Integrated Performance Management Framework Elements of a management contro l structure When defining the management control structure, the following questions must be answered: What are the various departments in the organization? †¢ What are the responsibilities of the various department managers? †¢ How are the activities of the various departments coordinated, and what are the coordination mechanisms? Defining the departmental structure In organizing for effective performance management, the company may choose a functional organization structure, a multidivisional structure, a matrix organization or a network organization structure. When choosing the functional organization structure, the tasks are grouped based on the functional specialty to which they belong.Traditionally, the following departments are presented in the organizational chart: ‘Sales and Marketing’, ‘Engineering’, ‘Production’, ‘Distribution’, ‘Purchasing’ and ‘Finance’. An organization can also be co ntrolled within a multidivisional structure, which is a structure based on products or markets instead of functions. If based on products, we have a product-oriented department structure. The sales, development, production and purchasing activities with regard to a certain product are concentrated in one, individual department. On the other hand, the organization could also be structured around markets.In this case, all tasks that deal with a certain geographical market are grouped. The multidivisional structure groups management tasks in divisions, each of which focuses on a certain product or geographical area where the products are sold. Division managers are responsible for the daily operational decisions within their division. Top management no longer wants to engage itself in daily problems, but instead focuses on the important strategic decisions (e. g. , investment decisions, acquisitions and divestments). When designing a multidivisional structure, the business unit concept can be taken as a starting point.In this concept, the organization is structured around strategic business units or SBUs. An SBU is an operating unit of a planning focus that groups a distinct set of products or services sold to a uniform set of customers, facing a well-defined set of competitors. Many companies have a combination of functional and product- or market-oriented structures in their organizational structure. They prefer to work in a matrix organization. On the horizontal line, we find an R&D manager, a production manager, a financial manager and a purchasing manager.On the vertical line, we see the various business or product line managers. They are responsible, first of all, for the marketing and sales of their product line, but they must also take care of the coordination between the various functional departments. Staff members in the various functional departments are thus led by two managers. Integrated Performance Management through Effective Management Control ? 159 Defining the responsibility of managers After determining the department structure by which the organization will be controlled, it is important to define the responsibilities of each department.A department or an organizational unit, led by a manager with clearly specified responsibilities, is called a responsibility centre. An organizational structure is therefore a hierarchy of responsibility centres. Delegated responsibility demands appropriate authority. When assigning the responsibility for a specific output to a certain department, this department should also have control over its output. So, responsibility requires the existence of ‘controllability’. Delegated responsibility also requires an appropriate ‘accountability’.A manager is considered to be ‘accountable’ when he or she is assessed according to the realization of his or her objectives. In other words, performance is monitored, and if his or her performance turns out to be b ad, management will take the necessary actions. A responsibility centre is not only assessed on its output (which result has been achieved? ), but also on its input (how many inputs were used? ). In general, a responsibility centre should be assessed on two basic criteria: efficiency and effectiveness. Efficiency is the relation between output and input.The more cars that are made in a car manufacturing company with the same production costs, the more efficient the operation is. The cost per unit (i. e. , the total production cost divided by the number of units produced) is therefore an efficiency norm. Effectiveness expresses the extent to which the realized output is aligned with the goals and strategies to be realized. It could be that the sales department has become more efficient by selling more with the same people, but that the sales efforts were focused on markets in which the company has chosen not to be active for strategic reasons.In this case, the sales efforts were not effective, i. e. , they did not contribute to the realization of the corporate strategy. When designing a management control system, one must determine what efficiency and effectiveness mean concretely for each department and how these can be measured. Assigning responsibilities to the departments means determining the right performance measures. The responsibilities of the manager can be divided into financial, strategic and operational responsibilities. Performance measures must be defined for each of these responsibility areas.We call them financial, strategic and operational performance measures. With regard to the financial responsibilities, we can distinguish among the following types of responsibility centres: expense centres, revenue centres, profit centres and investment centres. †¢ Expense centres are departments that are responsible for the costs they have made (input), but whose output is not measured in financial terms. In a functional organization structure, typic al expense centres are the production department, the R&D department, the purchasing department and the financial department.Staff functions are also usually controlled as expense centres. 160 ? The Integrated Performance Management Framework †¢ Revenue centres are departments in which the output, but not the input, is measured in financial terms. Typical revenue centres are the sales departments. Their management task is not concerned with the costs incurred; instead, they strive to reach a turnover objective. †¢ In a profit centre, the manager is responsible for the costs and also for the revenues of the department. Thus, the ‘profit centre’ manager receives a profit report for his or her department. In investment centres, the profit as well as the investments (‘assets employed’) are measured. The department manager has the authority to take investment decisions and is also responsible for the profitability of the investments made. A typical per formance measure for investment centres is the return on investment (ROI). Regarding strategic responsibilities, a manager’s task not only involves realizing financial goals; the manager and his or her team may also be charged with contributing towards realizing the competitive strategy of their division and the general strategy of the company.For example, the general company strategy may be concerned with growth in all business units and with global operations. Choosing and formulating this strategy may be the work of general management, but translating it into the business unit may be the responsibility of the division manager. The division manager may also be responsible for defining and developing a competitive advantage (in the areas of quality, flexibility and customer service, for example) for his or her business unit. The manager may be responsible for constantly tracking the evolution of customer satisfaction and adapting the competitive strategy in time to this evol ution.When strategic responsibilities are also delegated to a lower level in the organization, the manager responsible should be evaluated with regard to the level of success of the chosen strategies. Performance measures must be determined for this as well. The method of the Balanced Scorecard (see Chapter 3) may be of help here. Finally, regarding operational responsibilities, it is obvious that managers of responsibility centres are also responsible for managing daily operations. A number of ‘key performance measures’ can be defined for this, which are followed up closely by top management.The division manager may be asked to realize objectives with regard to inventory levels, processing times, products out of specification, revision times, etc. Restriction of responsibilities and freedom of action Each responsibility centre is restricted in its activity by a number of rules and procedures. Rules are formal expressions of the behaviours that are permitted and not per mitted to the members of a department. Procedures are descriptions of steps to be followed in executing a task or in making decisions.Rules and procedures provide a detailed specification of the kinds of responsibility and freedom of action the responsibility centre has or does not have. They indicate how the responsibilities and freedom of action are restricted. The Integrated Performance Management through Effective Management Control ? 161 indicated restrictions can be expressed in a positive or negative way. Positive responsibility restrictions describe what the responsibility centre manager may do. Negative restrictions describe what the manager is not allowed to do.Some restrictions relate to responsibilities, others are involved with the manager’s freedom of decision. The freedom of an individual in an organization can also be restricted by general codes of behaviour, which result from existing laws, statutory provisions and ethical values. These are meant to prevent t he potential mix of personal and company interests (e. g. , they indicate in what way confidential information should be treated). Restriction of responsibilities and freedom of action are all part of the boundary systems of a company.These are ‘explicit statements embedded in formal information systems that define and communicate specific risks to be avoided’ (Simons, 1995: 112). Coordination mechanisms When the department structure and the responsibilities of the various departments are defined, rules must be set up with regard to the actions between departments as well. The responsibility for realizing the global company goals and strategies cannot be split up into independent partial responsibilities. Departments and divisions must cooperate in various areas.Therefore, it is important that rules with respect to this cooperation be defined that motivate the managers maximally to target their efforts towards realizing the global company goals. There are two important kinds of rules that coordinate actions between departments: (1) formal coordination mechanisms (task forces, standing committees, integrating managers); and (2) transfer price systems. Choosing the optimal management control structure Designing the management control structure involves a number of choices. The decision can be made to manage in a functional structure or in a divisional tructure. Within a divisional structure, the divisions can be structured around products, markets, business units, or a combination of these. One can also choose to work in a matrix organization. Then, a choice must be made regarding the degree of delegation of responsibilities. A department can be led as an expense centre, a revenue centre, a profit centre or an investment centre. The responsibilities of these centres can be restricted in various ways, and cooperation between departments can be coordinated by several coordination mechanisms and rules regarding transfer prices.In some companies, manage ment control is characterized by a detailed set of formal rules, centralized decision power, limited delegated responsibilities and a strict hierarchy of authority. Such a structure is called mechanistic. At the other end of the spectrum, we have the organic organizations. They are characterized by few rules, decentralized power of 162 ? The Integrated Performance Management Framework decision, group decision-making, broadly defined functional responsibilities and a flexible application of the hierarchic relations.We can now ask the question: Do optimal choices exist? In order to answer this question, we must first define what makes a management control structure optimal. The answer to this question can be found in the description of the task of management control: the objective of management control is to motivate managers maximally to realize the corporate goals and to implement the strategies. So, a management control structure is optimal when it maximally stimulates the desired goal-oriented behaviour and minimally leads to undesired (or dysfunctional) behaviour.To be able to choose a management control structure, one must predict what the effect of the choice will be on the management behaviour and whether the expected effect is desired or not. For example: †¢ A company that wants to realize a competitive strategy of flexibility (custom-made work) in its business units wonders if it is optimal to manage the departments in a functional organization structure, in which the sales department is responsible for the turnover and the production departments (as expense centres) are responsible for the price of the products made.To be able to answer this question, we need to know to what extent the production managers are inclined to handle specific customer demands in a flexible way when the price of the products is the most important performance measure. †¢ Universities lead their faculties and departments as discretionary expense centres with respect to educational activities. In the short term, the deans and department heads are responsible for the costs of their faculties and departments, and not directly for the number of students and the revenues.As a consequence, the professors are not motivated to have many students, and they organize very few (if any) activities to influence and increase the number of students in the short term. Faculties and departments could also be managed as profit centres. The question is: What would be the effect on the management behaviour of deans, chairmen and professors? Would they act in a more commercial way? Would they lose their interest in research? Would this lead to overly aggressive competition among universities and, if so, is aggressive competition a corporate strategic choice within educational policy?To be able to make an optimal choice of management control structure, good insight into the strategy that is to be realized is crucial. The choice of the management control structure mus t be aligned with the strategic choices of the company. Knowledge of how managers will be influenced by certain structural choices is also important. One can learn from one’s own experience or from the experiences of other companies. In most cases, companies learn from their own experience. Setting up a management control structure is a dynamic process. The key is to look forIntegrated Performance Management through Effective Management Control ? 163 both well-motivated and dysfunctional management behaviours in the existing structure. Ultimately, the process should yield new ideas for improving the structure to promote the desired behaviour and eliminate the dysfunctional behaviour. Experiences from other companies can also be helpful. A significant part of the literature on management control focuses on research of the general tendencies and patterns in management behaviour in various types of management control structure.A general conclusion is that there is no management control structure that is optimal for all control situations. The optimal management control structure depends on the situation. The research that studies which management control structure best suits which type of environment is called ‘contingency research’. This contingency research has focused on two major contingency variables: (1) the environment; and (2) a firm’s strategy.Study of the first contingency variable has helped identify the appropriate structures to fit the levels of uncertainty in the environment (Burns and Stalker, 1961; Lawrence and Lorsch, 1967; Galbraith, 1973; Drazin and Van de Ven, 1985). Structure is generally discussed in terms of mechanistic versus organic approaches to organizing, and it is believed that more organic structures are best suited to uncertain environments. These are structures that focus on ‘clan control’, i. e. , social control coordinated by integrative mechanisms such as task forces and meetings.Contingen cy research also shows that management control structures should be well suited to the company’s chosen strategy. Different strategies may require different control structures. A popular typology deals with the strategic mission of business units, which may vary from a ‘build’ strategy, to a ‘hold’ strategy, a ‘harvest’ strategy and, finally, a ‘divest’ strategy. The objective of a build strategy is to increase market share and production volumes, while a hold strategy tries to protect the existing market share and maintain the current competitive position.A harvest strategy focuses on maximizing cash flow and profit in the short run, even if this is at the expense of market share. Last, the divest strategy concerns the decision to withdraw from a certain business. Other strategy typologies that are often used in the management control literature come from Porter (1985) and Miles and Snow (1978) (see Chapter 6 for more infor mation). Evidence from the strategy/organizational design research suggests that for strategies characterized by a conservative orientation (defenders), harvest and cost leadership are best served by entralized control systems, specialized and formalized work, simple coordination mechanisms, and directing attention to problem areas (Miles and Snow, 1978; Porter, 1985; Miller and Friesen, 1982). For strategies characterized by an entrepreneurial orientation (prospectors), build and product differentiation are linked to a lack of standardized procedures, decentralized and results-oriented evaluation, flexible structures and processes, complex coordination of overlapping project teams, and directing attention at curbing excess innovation. 164 ?The Integrated Performance Management Framework Designing an effective management control process Phases in the management control process The management control process can best be represented by a closed loop control cycle (see Figure 9. 3). Th e process starts from the strategy of the company, from which the action programmes are derived. Once the programmes are set up and approved, their financial implications for the coming year can be expressed in a budget. At the end of the budget period, the actual performance is measured and compared to the budget.The results of this analysis are then reported to top management and used in the evaluation of the efficiency and effectiveness of the responsibility centres concerned and their managers. The management control process thus starts from strategic planning and target setting and consists of the following five phases: Figure 9. 3 The management control process Integrated Performance Management through Effective Management Control ? 165 †¢ †¢ †¢ †¢ †¢ Planning action programmes (programming); Preparing the budget; Executing the plan; Measuring performance, following up the budget and reporting; and Evaluating and rewarding.Important design parameters o f the control process When used in an appropriate way, the budgeting process may motivate managers to improve performance. The motivating impact of the budget is influenced by the following parameters. The level of management commitment to budget targets First of all, companies may use the budget to assess the financial impact of their strategic action plans. In this case, budgeting is primarily used as a feed forward control mechanism and its primary function is to support the planning process (‘budgeting for planning’).Budget targets are an indication and show the direction in which the company wants to go, but managers do not feel a strong pressure to realize the targets. Budget targets can also be seen as commitments for the managers. In this case, the budget is used for control. Top-down versus bottom-up budgeting Budget targets may be imposed topdown by executive management (in consultation with the division managers, or not). Besides this, there is also a bottom- up process, in which each division sets up its own budget, yet within the general goals and directions of the company.The global company budget is then formed by combining the various sub-budgets. The level of participation during the budgeting process When setting up a budgeting process, an important parameter is the level of participation managers may have in the target-setting process. We can talk about participative budgeting when subordinate managers participate in the budgeting process and in defining the budget objectives. Participative budgeting involves back-and-forth communication between superiors and subordinates – they share information and converge on a mutually acceptable budget.It is generally agreed that involvement in setting up the budget leads to higher acceptance than when the budget is imposed fully from the top. Moreover, it is assumed that participative budgeting has a positive effect on the commitment of the division managers who have to realize the b udget later on. The difficulty of budget targets It is necessary to think about guidelines regarding the degree of difficulty in realizing the budgets (‘goal difficulty’). Certain companies have a policy of realistic budgets, where the budget objective will be accepted if it most probably can be reached.Other 166 ? The Integrated Performance Management Framework companies prefer challenging budgets, where top management expects the division managers to work very hard. The basic assumption behind challenging budgets is that managers can always achieve more with their team than they think they can. The task of top management is to stimulate managers to try to excel themselves over and over again. In this situation, managers who submit realistic budgets are evaluated poorly beforehand and a more challenging budget is imposed on them from the top.Whatever the budget philosophy, a budget can be accepted if it holds sufficient task content, i. e. , if the team in the departme nt will have to exert a lot of effort to realize the budget. As a general rule, the set targets ought to be realistic but challenging. This means that they may not be set unattainably high, which results in frustration and manipulation of data, but they may also not be too easily achievable, because then most of the performance stimulus disappears. Tolerance for budget slack It should also be verified whether or not the budget is too pessimistic.Some managers may be inclined to build a certain ‘slack’ into their budget. The phenomenon of budget slack occurs when a manager submits a budget in which a certain ‘buffer’ is built in so that the budget objectives are relatively easy to reach. Indeed, in a participative budgeting process the tendency might exist to ask more than one strictly needs to cover oneself against unforeseen circumstances or out of fear that top management will reduce the budget by a certain amount.For example, if the purchasing department fears that it will no longer be able to buy raw materials at the prices that were budgeted in the past, it can ask for extra means for this part of the budget. It can also be that managers prefer not to set the budget standards too high in companies where their bonuses are calculated on the degree to which they have reached their budget objectives. In all these cases, the general interests of the company are not respected because, by building in budget slack, the company funds are not optimally allocated.Fairness in budget target setting When assessing the budget, one should verify whether the task content of the budgets of the various departments are of equal value. The budget negotiation process is not only a vertical negotiation process in the organization, it is also a process of comparing the planned efforts of the various departments. Dynamic managers, who always work with challenging budget objectives, may become demotivated when they discover that other departments are tole rated when they exert less effort (i. e. , make less profit or be less productive).However, equally balancing the task content of the budgets of the various departments presents difficulties because the management problems may differ widely per department (e. g. , different management functions, product groups, markets, etc. ) and the concept ‘task content’ is difficult to measure objectively. The task content of a budget depends on the experience of the manager and his or her team. There is also a certain Integrated Performance Management through Effective Management Control ? 167 psychological insight involved here.Some managers, along with their teams, feel more quickly swamped with work than others. In any case, clear imbalances in the performances of the various departments need to be eliminated as quickly as possible. For instance, in a profit centre structure, where all divisions are making profits and a certain division is constantly in the red, a thorough restr ucturing plan must be set up in the short run to make the department profit-making as fast as possible. Tightness of budget control With regard to following up the budget, a choice can be made between tight and loose control.The tightness of the control is determined by the degree to which restrictions are imposed on the freedom of subordinates and emphasis is placed on reaching the predefined objectives. In most cases, it is assumed that tight control provides more certainty that the people in the organization will act as is expected of them. This can be done by determining the activities in detail, by following up very accurately the results of the departments, and by exerting pressure on the responsible managers to adjust quickly potentially unfavourable anomalies. With tight budget control, it is frequently (e. g. monthly) verified whether the real costs and revenues are in accordance with the planned short-term objectives. Undesired anomalies in the budget are not tolerated and must be eliminated quickly. The advantage of tight control is that managers become more aware of the importance of costs and profitability, and they actively seek ways to eliminate inefficiencies. However, tight control may also have undesired dysfunctional effects. Focusing on short-term results too intently may encourage managers to organize actions that optimize profitability in the short term, but that are disadvantageous in the long term.For example, in order to reach its budget figures, the purchasing department may decide to buy cheaper, but qualitatively inferior, raw materials. However, this may lead to significant quality problems in production and possibly to lower quality end products, which result in losing the goodwill of the customers. When the emphasis is primarily on reaching budget objectives in the short term, managers may also not be motivated to make the strategic investments that are necessary for the long-term survival of the company.Moreover, excessively tig ht budget control may lead to building in ‘slack’ when setting up the budget objectives or to playing accounting tricks to artificially boost the short-term results. On the contrary, with loose budget control deviations from the budget that arise in between are overlooked by top management, and there is a trust that potentially unfavourable anomalies will be eliminated by the divisional managers at the end of the budget period. The budget is used more for communication and planning, and there is less pressure to undertake immediate short-term actions to adjust the results.The use of budget performance in rewarding managers When setting up the budget, for managers of responsibility centres it is required that the 168 ? The Integrated Performance Management Framework proposed objectives be realized (although we know some companies that start paying bonuses when only 80 per cent – and even 60 per cent – of the budget target is realized). At the end of the yea r, the actual results are compared to the planned objectives and are further analysed by means of variance analysis.In this way, the budget is an ideal basis for evaluating the performances of the responsible managers. Managers who succeed in realizing the proposed objectives must be rewarded for their good performance. This reward may be of a financial nature (e. g. , bonus, salary increase or other financial advantages), but the reward may also be more focused on non-financial motivators, such as promotion, extension of responsibilities and recognition. A bonus for performance relative to the budget can be determined subjectively or by formula.To be effective, the reward system must be designed in such a way that it optimally motivates the managers to act in accordance with the corporate goals and strategies. Optimizing management control process policies A management control process (and more specifically, the budgeting process) is effective when it motivates managers on the vari ous levels of the organization to perform actions in line with the organizational goals and strategies. From contingency research on management control, evidence suggests links between strategy and the characteristics of the management control process.Defenders, and companies with conservative, cost leadership strategies, find cost control and specific operating goals and budgets more appropriate than entrepreneurs, prospectors and companies with product differentiation strategies (Simons, 1987; Dent, 1990; Chenhall and Morris, 1995). Chenhall and Morris (1995) have found that tight control is suitable for conservative strategies; they also found tight control in entrepreneurial situations but, importantly, operating together with organic decision styles and communications.Some research has been focused on the relationship between the chosen competitive strategy and the management control process. Differentiation strategies are associated with a de-emphasis on budgetary goals for pe rformance evaluation (Govindarajan, 1988). Govindarajan and Fisher (1990) found that product differentiation with high sharing of resources (between functional departments) and a reliance on behavioural control was associated with enhanced effectiveness.Bruggeman and Van der Stede (1993) found that business units implementing differentiation strategies based on a make-to-order strategy preferred loose control in budgeting, while business units with a cost leader strategy or a differentiation strategy based on standard products found tight budget control more suitable. They also found that bottom-up budgeting and a commitment to budget targets was considered optimal for all competitive strategies. Overall, Van der Stede Integrated Performance Management through Effective Management Control ? 169 2000) has shown that product differentiation strategies are associated with less rigid budgetary control, but this is also associated with increased budgetary slack. It has also been suggeste d that bonus systems must be suited to the strategy. Anthony and Govindarajan (1995) suggest that formula-based bonus determination approaches should be used with a harvest strategy and that subjective bonus determination is optimal for build strategies. Contingency research has also found relationships between characteristics of the management control process and the level of uncertainty in the environment.Companies operating in an environment of unpredictable change require an appropriate set of control process characteristics. Uncertainty has been related to performance evaluation characterized by a more subjective evaluation style (Govindarajan, 1984; Moores and Sharma, 1998), less reliance on incentive-based pay (Bloom, 1998), non-accounting style of performance evaluation (Ross, 1995), and participative budgeting (Govindarajan, 1986). As environmental uncertainty increases, using more participative budgeting increases performance. In contrast, when environmental uncertainty is low, participative budgeting ecreases performance. In situations where environments are stable and predictable, there is little informational benefit from participation because superiors have sufficient information to develop budgets. Companies may also operate in a hostile, difficult environment. This is an environment that is stressful, dominating and restrictive. Environmental hostility has been associated with a strong emphasis on meeting budgets (Otley, 1978). Hostility from intense competition has been related to a reliance on formal control and sophisticated accounting, production and statistical control (Khandwalla, 1972; Imoisili, 1985).The optimization of target-setting approaches seems to be related to task complexity. Locke and Latham (1990) found that difficult goals lead to higher performance, but this effect is moderated by task complexity. The result leads us to expect that performance will be higher when managers are invited to work towards challenging targets, exc ept when the performance task is too complex. The appropriateness of bottom-up budgeting has been associated with information asymmetry between superiors and subordinate managers (Shields and Young, 1993).When subordinates have much better information about their business than their superiors do, bottom-up budgeting leads to more accurate budgets, arising from the use of the subordinates’ better information. When top-down budgeting is used in the case of high information asymmetry, subordinates may reject the budget because it is not consistent with their information. Top-down budgeting is beneficial in situations where superiors have sufficient knowledge about the subordinate’s activities being budgeted. 170 ? The Integrated Performance Management FrameworkThe role of beliefs systems The management control culture is the third and final part of the management control system. Managers’ behaviours and actions are not only influenced by structural and procedural e lements, but also by the formal beliefs systems in the organization. Simons defines beliefs systems as ‘the explicit set of organizational definitions that senior managers communicate formally and reinforce systematically to provide basic values, purpose, and direction for the organization’ (Simons, 1995: 34).Beliefs systems are an important element of an organization’s corporate culture. The corporate culture is the set of values, beliefs and norms of behaviour shared by members of a firm that influences individual employee preferences and behaviours (Besanko et al. , 2000). Ouchi (1980, 1981; Ouchi and Johnson, 1978) considers culture as an alternative control system in the organization. He introduces the idea of clan control, by which he means control through an internal system of organizational norms and values. Culture influences the behaviour of individuals.Individuals who value belonging to the culture will align their individual goals and behaviours to th ose of the firm and pay more attention to selfcontrol. A culture that is intensively held by most employees is called a strong culture. Culture can support a company’s competitive advantage (Barney, 1986). It is supportive when the values espoused by the culture are very much in line with the chosen direction and the performance objectives of the firm (e. g. , a company with a product leadership strategy where all employees love to change things and learn from new experiences).In this case, we talk about a ‘high performance culture’. In other words, the culture is clearly aligned with the strategy of the firm. Of course, the opposite also holds. If there is a cultural misfit, culture can also be a source of persistently poor performance. This occurs when the values underlying the firm’s culture are in conflict with the chosen strategic direction. For example, a culture stressing efficiency, stability and routine behaviour will not support the implementatio n of a flexibility strategy. In this case, culture may be a barrier to change and managers will experience a ‘low performance culture’.So, it is important that the majority of the employees believe what top management believes. It is the task of management control to define a set of common beliefs. It frequently happens that top managers have explicitly expressed the vision, the mission, the goals, the key values and the strategies of the firm, but lower-level managers and employees do not share the underlying beliefs. Goal statements about creating shareholder value are experienced as ‘grand terminology’ when employees do not feel the passion of working on value-creating projects.A strategy of highquality products will not succeed if all employees are not convinced that they should work to ‘zero defect’ and do their work ‘right the first time’. Many flexibility strategies fail because people do not like ‘to change their Inte grated Performance Management through Effective Management Control ? 171 Figure 9. 4 The origins of unhealthy corporate cultures Source: Kotter and Heskett (1992: 145) 172 ? The Integrated Performance Management Framework plans. ’ In general, successful strategy implementation needs beliefs systems supporting the chosen strategy.The beliefs of employees and managers may be hard to change, but they can be influenced by training sessions, by inspiring leadership, and by demonstrating the success of the new strategy and successful strategic projects. John Kotter and James Heskett (1992) have written a book about corporate culture and performance in which they propose a stepwise approach to the creation of a high-performance culture and focus on the origins of healthy and unhealthy corporate cultures. Their ideas are presented in Figure 9. 4 and Figure 9. 5. Figure 9. 5 The creation of a performance-enhancing culture Source: Kotter and Heskett (1992: 147)Integrated Performance Ma nagement through Effective Management Control ? 173 Conclusion Control and evaluation is the fourth component of our Integrated Performance Management Framework. In this chapter, we have shown the important role of management control for strategy implementation and for performance management. Developing an appropriate management control system is a prerequisite for effectively managing an organization. On a broader level, Simons (1995) has shown that control of business strategy is achieved by integrating four levers of control.These levers create tension between creative innovation (emergent strategies) and predictable goal movement (intended strategies). This proves the crucial role of control in the strategy implementation and performance management process. We then focused our attention on the three basic elements of the management control system: (1) the management control structure; (2) the management control process; and (3) the beliefs systems. We have analysed optimal manag ement control structures and processes from a goal congruence perspective.That is, we have investigated how to design a management control structure and process that maximally stimulates goal-oriented behaviour and leads to minimal dysfunctional behaviour. Attention is also paid to how strategy affects the choice for a particular management control system. It is clear that management control also interacts with the organizational behaviour component. From Chapter 10 on, we investigate this fifth component in greater detail. Note 1 Business conduct boundaries are those that define and communicate standards of business conduct for all employees.Like the Ten Commandments, they specify actions that are forbidden. Internal controls are the policies and procedures designed to ensure reliable accounting information and safeguard company assets. Strategic boundaries define what types of business opportunity should be avoided, thereby drawing a box around the opportunities that individuals a re encouraged to exploit. Strategic boundaries are installed to ensure that individuals throughout the organization are engaged in activities that support the basic strategy of the business (Simons, 2000: 289).

Poems from different cultures Essay

I am writing about a poem called ‘I Am Not That Woman’ which was written by an Asian poet called Kishwar Naheed. The poem is about how cruelly women were treated by men in the past and how they have become nowadays. It is time for them to ‘flower free’.  Women are expressed as really special in the poem. The poem shows that men do not realize the true identity of women. They regard them as something to trade with or use them for their house work. They do not know that in a way women are much better then men as the poet clearly highlights ‘my voice cannot be smothered by stones’. The poem shows that it does not matter how much men try to torture or hide the women the women will never loose their beauty, their ‘motherhood’ and their ‘loyalty’ because they are more special than men. The poem is mainly targeted at the fathers and the husbands because in the past and even in the present many Asians think of their daughters as a burden and want to get rid of them as soon as possible. The poet clearly mentions this in the first two lines of the fourth stanza ‘I am the one you married off to get rid of a burden’. This shows that even fathers are cruel to their daughters. Naheed then further on says to the fathers ‘not knowing that a nation of captive minds cannot be free’. This could mean that the Asian men only think about confining their women to the house and never think about letting them free. The verse could also mean that the father’s mind stays captive if he forces his daughter to marry someone. Basically he stays in depression or tension; he does not get his peace of mind by forcing his daughter to marry someone. The repetition of the word chastity shows that the woman believes in virginity. She is modest and is not like the woman on the posters ‘half naked’ and she emphasizes that by saying at the end ‘No, no, I am not that woman’. The end line shows that although Naheed believes in freedom she does not believe in woman being used for advertisements. She thinks that women are meant to be mothers and not some business advertisers. They are supposed to be loyal to their husbands and free from all outside marriage sexual acts as it is mentioned in the last stanza ‘†¦my chastity, my motherhood, my loyalty’. We learn from the poem that husbands were really cruel to their wives. They believed in confining their wives to their kitchens because they thought that that was the right place for the women. The men believed that the men should ‘roam free as the breeze’ whilst the women ‘hid in walls of stone’. They did not ever think that woman had the right to live a life outside their house and the men would ignore them if they ever argued for freedom. The men believed that their traditions were everything. They had to follow their customs or else they would be regarded as really bad in the society. The poet shows the woman point of view about that idea ‘†¦crushed with the weight of custom and tradition†¦Ã¢â‚¬â„¢ this shows that the woman were crushed or in other words ignored when they told their husbands that they wanted freedom. The women had no right to speak against the traditions of their husband’s. The poet further on says to the husbands ‘not knowing light cannot be hidden in darkness’ which shows that even after all the cruelty the woman went through she still knew that the women are something very special. They are not affected by the torture and the ignorance of some men. The word ‘I am’ is repeated at the beginning of every stanza which could mean that the poet is trying to emphasize to the men that she is the one that they had tortured. She is the one that they had hid in their walls of stone but know she has become free. She is free from the captive of the men that had tortured her and they can do nothing about it now. She is trying to make them realize that they cannot abuse someone for too long. One day they would become free and they would fight for their justice whilst the tortures would just watch and be surprised. I think that the poem is very well presented and it gives a very clear image about how cruel the men were to the women in the past. They had no respect for them. They would just trade them for their chastity not knowing that women were supposed to be respected and honoured. The poem shows to us that women can fight for themselves as well but they don’t because they want to be loyal to their husbands.  The poem does not have a proper rhyming scheme but it does have a few rhyming words in some of the stanzas. It has a steady rhythm all the way through and the poem is written in simple language. This lets the poet express her message clearly and fully to the people.

BHS 328 B.S. Health Sciences Team Building (Mod 4 CSA) Essay

BHS 328 B.S. Health Sciences Team Building (Mod 4 CSA) - Essay Example Therefore, effective communication is the key to successful teambuilding (Howard, 1961). Virtual teams are the ones, most prone to become the victim of the barriers of communication, as they hardly communicate face to face which is usually considered the best to pass your message across. a) In virtual teams, there are hardly any meetings that take place and in this case, the correspondence solely took place through emails. They met twice a week; however, most of their communication occurred over the internet. Over the past months, the communication between the four members of the team has significantly depreciated. They has been confusion in the air, the members don't feel comfortable working around with the other members of the team. They don't trust each other anymore possibly because of certain events and lack of interest on the part of some members. However, this situation is worsening. They have started accusing each other over laziness and the tone has become increasingly intimidating and the environment unfriendly. There is evidence that suggests that the attitudes of the team members towards each other are not suitable for better communication between them anymore. There might be various reasons that have introduced this air of uncertainty, distrust and unfriendliness among the group members. One might be that they must not have been able to convince their ideas through writings on the email. Sometimes, expression is required verbally in order to get your idea across. Secondly, the mood in which the two people communicating is not clear because there is no proximity and visual exposure between the two. This can adversely affect the idea that is communicated across. The reason for this is that non-verbal cues are considered equally important to get the right idea across (Harry 2001). The distance might have also triggered expectations from the other members to work more. When you are not meeting regularly to accomplish a certain task, you tend to procrastinate and delay the work. This habit might have triggered the accusations of laziness on the part of the workers. Muddled messages can also be termed as a barrier to effective communication in this case. The people working together through emails might not be able to get their idea across in the right aspect. There is hardly any listening that is taking place in this kind of virtual team. They hardly meet to discuss their ideas together; therefore, a very important aspect of effective communication, degree of listening for understanding, is nullified here. b) According to Kepner and Trogue, Problem solving and decision making are two different developments that require different actions. Problem solving is basically rectifying an error or blunder that has occurred and therefore, is a very important process that the managers have to look into. Decision making is another kind of process that is an activity related to the actions that are expected to happen in the future. Problem solving is something that needs to follow a proper process. It is very important to diagnose the right kind of problem, because if you incorrectly diagnose the problem, it can lead to the birth of other major difficulties (Harry, 2001). Therefore, one needs to follow each and every step in the right spirit to effectively diagnose the problem. The first thing that is needed to be done in this case is to clearly define the

Recent Trends Of Staycation In Europe Essay Example | Topics and Well Written Essays - 2500 words - 1

Recent Trends Of Staycation In Europe - Essay Example The understanding of vacation is to rest or have a break from our daily routines. It is usually that we opt for going to someplace which is relaxing, which makes us stress-free, which regenerates energy in us so that we can resume working enthusiastically with no obstacles after we are back. It actually means to rest, keeping aside all tensions. This is what we think when going for a vacation but in a staycation, we opt for staying back home and spend time at home. It means that we are trying to find out some ways to spend the vacation at home as we could do if we were to go out somewhere. Here it means people find out ways of relieving stress being at home and make different arrangements for spending their holidays (About.com). People here have rather found out many new, different, innovative ideas about spending their holidays and having good leisure time. Some put off their mobile phones, some keep their computers shut, some opt for gaming, some party around, and many more things. People arrange friendly meetings, plan for dinner every weekend and some relax by reading books or listening to music at home. People also do creative works like painting, crafting etc. People in the UK are more influenced with a staycation. Many cities here started realizing that there can be a number of things done to spend the holidays whilst staying back home. People came up with many ideas and literally enjoyed them. It was not only people but also different clubs and restaurants that came up with many ideas to relax and amuse people. So there was a study done which showed amazing results that people were responding well to these ideas (Carey 2008). One thing that is a plus point here, that staying back at home for holidays reduces one’s workload of planning which we would have done if we're to go out for holidays. This not only reduces tension but is also a good money-saving policy.

Principles and Practices of Effective Leadership - Critical Thinking Essay

Principles and Practices of Effective Leadership - Critical Thinking Mod 1 - Essay Example Both business leaders are globally recognized as the icons in their unique United States market segments. Bill Gates implemented a task oriented leadership style, demonstrating effective leadership. Task-oriented leadership style focuses on behavior that prioritizes accomplishment of assigned tasks and responsibilities (Carroll, 2008). Under the task-oriented leadership style, Bill Gates focused on creating more and more new products for his established company, Microsoft. Whenever, Bill Gates was able to successfully create strong popular demand for his new products and services in uncharted computer-based market segments, Bill Gates would do everything in his power to retain the newly gained market segment position. As a busy executive, Bill Gates prioritize generating higher interest in developing, selling, and other management and marketing functions of his Microsoft Company. The task-oriented leadership style includes Bill Gates’ holding regular meetings with his line and staff employees and managers. Bill Gates would reprimand subordinates who did not meet established goals and objectives on time. Bill Gates’ task-oriented leadership style pushed the line and staff employees and managers to prioritize meeting prescribed organizational goals and objectives. The leadership style ensures Bill Gates that all his prescribed organizational goals, visions, missions, and objectives are eagerly met by the subordinates and managers. Under the task-oriented leadership style, Bill Gates assigned each employee specific tasks and responsibilities. Similarly, Donald Trump implements the autocratic leadership style, demonstrating effective leadership. The leadership style focuses giving specific instructions on what should be done. The employees are not allowed to contribute their opinions or recommendation to the decision making process (Daft, 2010). Donald Trump is very effective using the autocratic leadership

Relationship between oil price rise and the recession in modern world Essay

Relationship between oil price rise and the recession in modern world economy - Essay Example This paper is one of the best examples of analysis of the quantitative relationship between oil prices and economic recession. Conceptual framework advocated by different economists were evaluated and three models for understanding the impact of oil price fluctuations were assessed. These models, despite differing approaches, converge to the same conclusions. For this study the AS/AD model has been chosen in preference to those developed by Mankiw and Blanchard and Sheen. The present situation of change in oil prices was assessed and there is an attempt in the paper to predict what the sharp increase in oil prices is likely to lead to for the major economies of the world. Increases in oil prices have been held responsible for recessions, periods of excessive inflation, reduced productivity and lower economic growth in the past. As the development rates of the world economy reach all time highs the recession that another oil price hike may cause will be difficult to control by traditional methods, since simultaneously interest rates are already very low and further tightening of money supply would yield very marginal results. While the demand for oil has risen, this is primarily due the push by emerging economies like China and India, the dependence of the economy on oil has reduced considerably with the strengthening of the IT and services sectors. It is concluded that the rise in oil prices will definitely result in an across the board change in prices and thus inflation rates will continue to be high.

New Zealand Early Childhood Education Learning Theories link with Essay

New Zealand Early Childhood Education Learning Theories link with Teaching - Essay Example Each story reflected the teachers’ chosen pedagogy. In â€Å"Learning From Very Young Children†, the teacher’s role was that of a co-learner. Muellar Tokunaga’s (2006) story illustrated a social constructivist pedagogy. Vygotsky (1978) believed that children’s intellectual development is influenced more by social context than by individual experiences. His theory places a great deal of emphasis on effective social interaction. Interactions are likely to go through a process called intersubjectivity. This is when two people are engaged in a task and begin from different understandings but with interaction, comes to an agreed, shared understanding. This is usually manifested when children initially debate opposite arguments but upon more understanding of the concept because of listening to each other’s opinions, will both end up seeing the concept in one direction. In Muellar Tokunaga’s story, she and the children eventually saw the same things in their imaginative play as it progressed to a smooth, seamless episode of a common experience. Because the play experience was so fulfilling and productive, Muellar Tokunaga, a relatively new teacher as of the time of writing gained inspiration in taking on a teaching philosophy that takes into account children’s ideas when planning the curriculum. ... 44). It is not easy letting go of the reins of control and passing it over to little children’s hands, however, Muellar Tokunaga (2006) found wisdom in it. She allowed herself to be enmeshed in the children’s world of imaginative play and saw for herself how rich an experience it was not only for the children but for her as well. Accepting their invitation to glance into their world was a privilege she gladly enjoyed, as she learned that much of what they play and think about is a reflection of their culture and daily life. Consideration of this culture reflects an Ecological pedagogy which is also very strong in the Te Whaariki curriculum. Muelluar Tokunaga gives much emphasis to the cultural orientation of her students as she believes in â€Å"the importance of an open mind and awareness of cultural influences and behaviours should not be overlooked† (p. 45). This is manifested in equitable dialogues and sharing of stories with each other. To her, the significa nce of such dialogues lies not only in fostering feelings of mutual respect, love, belonging and responsibility for each other but on the practical side, it helps in â€Å"negotiating daily curriculum content in early childhood education†. The teacher in Patterson, Fleet and Duffie’s (1996) story, â€Å"Lambs’ Tails† shares an opposite story. Her role in the story was that of an interviewer who kept trying to elicit stories from her student, Bernie. She would have wanted the same privilege granted to Muelluar Tokunaga when the children invited her into their world, but with Bernie, Patterson et al.’s teacher overwhelmed the boy with too much enthusiasm about his world that he did not let her in. It

The Social, Economic, and Political Situation of Kuwait post Gulf War Essay

The Social, Economic, and Political Situation of Kuwait post Gulf War 1990-1991 - Essay Example Even before the Gulf War, Kuwait was facing some political conflicts with Iraq regarding territory occupation, oil, and debts. However, the political system and foreign relations of Kuwait altered after Iraq’s invasion, along with a constant fear of another attack from Iraq. The Gulf War also had a significant impact on Kuwait’s social conditions, especially on the role of women and Shiites, attitudes regarding Palestinians, and social welfare of the people. Although Kuwait gained victory from Iraq within days of the invasion, the social, political, and economic situation of Kuwait post war was a far cry from the situation that existed before the war (Ashkanani, Hadi Ridha., Shears, Jane. 21; Czinkota, Michael R., Ronkainen, Ilkka A. 618; Crystal, Jill. 176; Isiorho, Soloman A., Gritzner, Charles F. 85, 94, 95; Fasihuddin; Omar, Abdullah; Shenon, Philip; Finlan, Alastair 83, 84; Cordesman, Anthony H 14, 15; Al-Mughni, Haya; Federal Research Division 83; Cushman Jr, John H.). Before the Gulf War, in the eighteenth and nineteenth centuries, the economy of Kuwait was mainly based on trade. It gained a lot of maritime advantage through trade with Asia, Africa, and Europe because of its strategically located natural port. The dependence of Kuwait’s economy then shifted to pearl diving in the nineteenth and early twentieth century. The reason for this was also the gulf, which provided natural pearl banks for harvesting by merchants and sailors. Closely linked to pearl diving was the emergence of the shipbuilding industry, as well as fishing. Trade and maritime occupations remained important monetary sources for Kuwait’s merchant class and foreign orientation till 1990. However, this economy was not enough to provide for most of Kuwait’s population, especially those outside the merchant families and ruling families. Pearl diving slowly began to decline, and came to a sudden halt in the 1920’s due to the Great Depression and Ja pan’s manufacture of an alternative for natural pearls (Federal Research Division 84, 85). Nevertheless, Kuwait’s economy got a chance to thrive when petroleum was discovered in its region in 1938. Its drilling was disrupted as a result of the World War, but then resumed in 1945. Kuwait further got an opportunity to prosper when oil was explored, produced, and exported in the 1950’s. A lot of revenue was gained due to the high demand of oil by foreign countries, and this revenue was used to improve Kuwait’s economy. Industries, social and physical infrastructure was built, along with much spending on the social and economic welfare of Kuwait’s people. This period between 1960 and 1980 was known as the ‘construction boom’, and became a magnet for large number of workers, especially from Iran, South Asia, and Arab countries. The strategic location of Kuwait’s gulf, and its enhanced communication and port facilities, contributed to an expansion of re-exports, trade, and many other commercial activities (Federal Research Division 85; Fasihuddin). However, the invasion and take over by Iraq led to various adverse economic consequences for Kuwait and disrupted its continuous economic development. The first thing Kuwait’s economy had to face was the hefty costs incurred as a result of the war. When Kuwait’s rulers had gone in exile, they had drawn down from Kuwait’

Political Political science Essay Example | Topics and Well Written Essays - 500 words - 1

Political Political science - Essay Example After 1979 revolution, Iranian government started to stop United Nations to inspect Iranian nuclear program by saying that Iranian nuclear program is for electricity purposes so there is no need for the United Nation inspection team to visit the nuclear sites. The US government thinks that Iran should stop working on its nuclear program because it does not need to develop its own nuclear capacity. If we read the latest news dossier regarding Iranian nuclear program and threats to the world’s peace, we come to know that in March 2006, United Nations Security Council discussed the issue of Iranian nuclear program to set up Iran’s conformity with the terms and conditions of Nuclear Non-Proliferation Treaty. In July 2006, Security Council said that International Atomic Energy Agency was not able to provide any assurances regarding peaceful use of nuclear technology by Iran. Therefore, in December 2006, Security Council made a resolution to block Iran’s import and export of sensitive nuclear material. Looking at the behavior of Iranian government, the world’s powerful nations pressurized Iran and urged that it should reveal the nature of its nuclear program during six-party talks in Geneva. In November 2009, the hea d of the United Nations nuclear agency urged Iran to be as much cooperative as possible and suggested that it should send uranium abroad for enrichment purposes. â€Å"Tehran initially accepted but then rejected an offer for an interim solution under which it would ship some uranium out of the country for enrichment† (New York Times). Iran suggested to review the deal and said that it will continue enrichment of uranium in Iran instead of sending it abroad. In December 2009, US warned Iran of new significant sanctions in case of not sending the uranium outside for enrichment purposes. In February 2010, UN inspectors declared that they have evidences related to Iran’s suspicious nuclear activities. Despite of all warnings and sanctions,

The Social Construction of Facts and Artefacts Coursework

The Social Construction of Facts and Artefacts - Coursework Example In technological writings or introduction of technology by historians, there has been reports and history of successful technologies and the failed ones are not included due to which, it seems that all technology is beneficial. Technological artifacts exist as social constructs. Science, as well as technology, can be understood as the social construct. EPOR (Empirical Programme of Relativism) has helped to construct science as a social construct. EPOR also represents the efforts of sociologists to understand science as a social construct. EPOR is a well-structured program and the empirical research related to EPOR is in an extensive extent while on the other hand, there is SCOT (Social Construction of Technology) for which there is not enough empirical research done. SCOT helps in the development of a multidirectional model for technological developments to construct artifacts of technology as social constructs. The members of one social group regard a technological artifact as having a single meaning socially. While thinking about the existence of a technological artifact as having a single meaning, there are many concerns such as whether the artifact has some relevancy for the members of a group and whether that social group is homogeneous or heterogeneous. For each social group, the artifact has a different social meaning and a different relevancy. Every social group has the different set of problems associated with an artifact and for each problem, there are separate solutions. Both the approaches EPOR and SCOT act similarly in explaining about science and technology relatively. Sociology of technology is underdeveloped than the sociology of science. EPOR approach accommodates sociology of science with interpretative flexibility which means that the sociologist of science has to indicate towards various interpretations of scientific findings and that various aspects of nature are not restricted to only one forced interpretation.  

Corporate Culture is Core Competitiveness Essay Example for Free

Corporate Culture is Core Competitiveness Essay Placed in rough sea, survival of the fittest, many companies are still competitive through the development of hundreds of years; the root of the reason is that they have their own corporate culture. Well, what’s the corporate culture? Corporate culture refers to the shared values, attitudes, standards, and beliefs that characterize members of an organization and define its nature. Corporate culture is rooted in an organizations goals, strategies, structure, and approaches to labor. Not only does the corporate culture have its own characteristics, but most importantly that corporate culture is their core value which is the first core competitiveness. The corporate culture itself is kind of wisdom, it can’t be copied; it has deep historical accumulation and precipitation. Such as that â€Å"Respect and best service† is one of IBM’s core values that are why we call IBM as â€Å"Big Blue†. If we mention blue and everybody knows it is IBM, which culture influences those people’s thinking and doing, even wherever they go, they feel proud of that they are or they were in the Big Blue. The corporate culture just likes blood in the body, can’t be seen but can feel it and envision it. Regardless of the size of enterprises, large or small, they have their own management mode. However, experience management or system management, even other kind of management, all of them will definitely rise to the cultural management in the end. Corporate culture is the source of core competitiveness, which can create the enormous amount of cohesion, drive and creativity. The business leaders are also the best founders of corporate culture and implementers. They setup the suitable culture which can give employees a great sense of satisfaction in the spirit level and cause a strong sense of belonging. With similar thinking and shared goals, creativity can flourish and create a strong and powerful source of competitiveness. Economic globalization is a trend; the competition is no longer just in products but in who has a stronger corporate culture, which can cover in the market, all aspects of the talents and customers. Once the clients accept your culture and would like to do the business with you, and then we can say that corporate culture plays the role and changed to be a strong competitiveness. So I think corporate culture will be the necessity of the enterprise management in the future.

An efficient leader

An efficient leader Every organisation, be it big or small needs an efficient leader. And for an institution like Cardiff Business School, which has more than 50 taught courses and staff of more than 120, the challenges and responsibilities are even higher. Thus, the Director has to have certain specific leadership qualities. Leadership is a process of influencing others to achieve organizational goals, creating a vision for others and having the power to translate the vision in reality. A leader must be able to convince the co-workers, employees and subordinates that whatever work they will do not only affect the productivity of institution but also will help themselves. A leader needs to have a visionary approach and innovative ways of solving problems and dealing with tough situations. Leadership as described by Stogdill, 1950 is: The process of influencing the activities of an organized group in its efforts toward goal setting and goal achievement (Buchanan). Stogdills definition has three key components: It defines leadership as an interpersonal skill in which the leader tends to modify and shape the behaviour of others. Leadership is a social context where the members of group are followers or subordinates. It emphasises the effect of leadership in the achievement of institutional goals. In the process of selection of the Director for CARBS, there are certain key factors or elements which the candidate must possess; Honesty and Integrity are amongst them, a leader whose actions back up his words and words that are congruent with his action, is a man of integrity and thus liked by all. Keeping his words and being true to his values is very necessary for the leader if he wants his subordinates to follow him and support him in his vision of success. A leader is responsible to carry out the culture of ethics and values in the institution and because he is a leader, he has to set up an example from himself first. Values and integrity for an educational institution is vital, nobody wants to wake up one with a profitable institution that does not have a soul. I consider my life worth nothing to me . . . if only I may finish the race and complete the task . . . The Disciple Paul Acts 20:22. The Director has to be a leader with a vision and well defined purpose for his team and subordinates. Working without purpose can only be defined as mindless and heartless drudgery. The leader should always have his aim, goals and objectives very clear and he should direct integrated efforts to achieve the goals. The leader must be able to make the subordinate believe that the purpose he is working for is worth contributing to and by the time it will end he will be proud of the fact that he did. Lying is done with words and also with silence. Adrienne Rich. The Director has to communicate very clearly, effectively and efficiently in order to qualify as a good leader. The best ideas of the world will go useless if they are not communicated properly. Communication also includes being a good listener, orator and having an empathetic attitude. If there was no appropriate communication of overarching ideas, mission, and vision, many of the corporate would not have existed today. In todays competitive environment, the leader has to be well versed with all varieties of communication forums. Woolfe, Lorin. The Bible on Leadership From Moses to Matthew-Management Lessons for Contemporary Leaders. New York: AMACOM/American Management Association, 2002. Print. http://www.wisdomquotes.com/cat_communication.html

Impact of Green Marketing on Young Consumers

Impact of Green Marketing on Young Consumers INTRODUCTION This study provides an overview of green marketing (is also known as ethnical and environmental marketing), the impact of green marketing towards the young consumers in Malaysia. The first part covers section on research problem, research objectives and research questions. RESEARCH BACKGROUND Throughout the twentieth century, many technologies and business practices have contributed to the destruction of the very ecological systems on which the economy and life itself depends, including toxic contamination, depletion of fisheries and forests, soil erosion, and biodiversity loss (Ottman et al.,2006). Many companies and consumers are beginning to respond to programs to help conserve the Earths natural resources, and green marketing is making a comeback (Ottman et al., 2006). Business management researchers Stuart Hart and Mark Milstein argue that the emerging challenge of global sustainability is catalyzing a new round of creative destruction that offers unprecedented opportunities for new environmentally sensitive innovations, markets, and products (Ottman et al., 2006). The progress of environmentalism in a country has significant role in changing consumers purchase behaviour as well as changing companys strategies to more environmental friendly. According to Kotler and Armstrong (2008), the first wave of modern environment and quality of life by environmental group and concerned consumers whereas second wave which passed law and regulations governing practices impacting the environment. At the moment, environmentalism waves is merging into a third and stronger wave in which companies are accepting responsibility for doing no environmental harm by adopting policies of environmental and sustain environment and produce profit (Kolter et al, 2008). PROBLEM STATEMENT The emerging trend of Go Green in the global is becoming more significant to the society in line with the growing awareness of global warming is accelerating, and the perception that it is posing a serious threat to humanity and the worlds environment (Star Publications (M) Bhd, 1995-2011). According to Our green world research report 2008 survey conducted by global insight and information group TNS, United Kingdom and other European countries are showing high interest in adopting changes in lifestyle and behaviour in the past to benefit the environments. The environmentalism in Asian countries especially for Thailand and Singapore are even more distinct through the society adaptation in environmental protection and green purchases through the effort of governments. On the aspect of eco-friendliness of habits and behaviours only 8% of Malaysian respondents responded they have changed their behaviour in a great deal to benefit the environment (Nabsiah Abdul Wahid et al, 2011). Despite the social adaptation of environmental consumption is rising, research indicates that many green products have failed because of marketers myopic focus on their products greenness over the broader expectations of consumers or other market players (such as regulators or activists) (Ottman et al., 2006). On the other hand, Tully and Schonfeld (1994) found that young consumers showing high concerned with social issues, particularly environmentalism. Many products are begin to tailored to suit young consumers as this group is representing a new generation of consumers with a strong potential impact on the type of goods and services offered in the market (Tan Lau, 2009). It is undeniable that young consumers play a relatively important consumers segment in the market as many researchers have been studying the behaviour and consumption patterns of this group which are the future marketing planners, policy makers and the new educators of the new economy. Therefore, the research is striving to find out how young consumers in Malaysia aware of green marketing? Does green marketing effectively changes the adaptation of green purchases among young consumers? RESEARCH OBJECTIVES The objectives of this study are as following: To review the concept of green marketing in consumer market. To analyse the environmental awareness, attitude and knowledge of young consumers in Malaysia. To evaluate the way that young consumers aware of green marketing. RESEARCH QUESTION What is the concept of green marketing in consumer market? What are the extent of environmental awareness, attitude and knowledge of young consumers in Malaysia? How the young consumers aware of green marketing? SIGNIFICANT OF STUDY The study aims to contribute the understanding of how young consumers perceived about green marketing in Malaysia. The research will examined the level of awareness of young consumers towards green marketing whether it will leads to positive environmental knowledge and attitude in making purchases. At the end of research, it is believed to provide some insights to green marketers regarding how they can expand their operation in Asia especially in Malaysia (Elham Rahbar and Nabsiah Abdul Wahid 2011). LITERATURE REVIEW Green marketing Green marketing is defined as holistic marketing concepts where in the production, marketing consumption and disposal of products and services happen in a manner that is less detrimental to environment with growing awareness about the implications of global warming, non-biodegradable solid waste, harmful impact of pollutants etc (Tariq Ahmad, 2010). Kotler Armstrong (2008) defined it as an organized movement of concerned citizens and government to protect and enhance peoples living environment. The concept is starting to popularize in many countries and companies as a cognitive persuasion strategies to involve environmental costs into the consumers decision process (Suplico, Luz T, 2009) especially in their purchases of goods and services. Marketers always coined the term ecological marketing, green marketing, environmental marketing, eco-marketing and sustainable marketing (Coddington, 1993, Fuller, 1998 and Ottman, 1998) as a label of the greenness of their product and services. Despite many agree with the powerful function of green marketing, green products is still remained as niche goods attributed to marketers selling strategy which only to committed ethical consumers without the aid of mainstream marketing techniques (Josephine Pickett-Baker and Ritsuko Ozaki, 2008). Thus, many companies has started to include green concept in advertising as a way to connect consumers with their environmental friendly product and services. Green advertising Green advertising is known as environmental advertising which include popular terms such as recyclable, environmentally friendly, ozone safe and biodegradable (Clare DSouza Mehdi Taghian, 2005). Consumers response towards green advertising may turn out to be effective when the products meet their needs and aligns with their values (e.g saving money on fuel and increasing childrens safety) (Josephine Pickett-Baker Ritsuko Ozaki, 2008). Some consumers response negatively towards the messages in green advertising due to the credibility of green advertising is relatively low (Kilbourne, 1995) which is insufficient for attitudes change towards the advertisement leads to changes in brand attitudes (Gorn 1982; Lutz, Mac Kenzie and Belch, 1983; Mitchell and Olson, 1981). However, the study of Davis (1993) revealed that consumers weak response to environmental advertising is not the consequence of consumers unwillingness to take action and change their behaviour to purchase green products; rather consumers are unwilling to change their purchase behaviour given the manner in which green products have been promoted and advertised (Elham Rahbar and Nabsiah Abdul Wahid, 2011). However, many authors believe advertising works well when it tries to appeal to those values that drive consumer decision processes (Josephine Pickett-Baker, Ritsuko Ozaki, 2008) Hawkins et al. (1998) explain how the emotional content in advertisements increases attention, a critical step in the perception process. Emotional messages may be processed more thoroughly and remembered better as a result of increased alertness. It is reasonable to assume that advertising green products using emotional content would be more successful (Josephine Pickett-Baker Ritsuko Ozaki, 2008). Mendleson (1994) even commented that marketers should emphasize the ecological knowledge in their organizations, their products and their advertising in order to achieve the goal of changing the consumer purchasing behaviour (E lham Rahbar and Nabsiah Abdul Wahid, 2011) Young consumers Generation Y is the prevalent group of young consumers born between the years of 1980-1994 (Halstead, K, 2006 cited in Tee, 2007) which has greater purchasing power than any prior generation and it will heavily influence markets in the near future (Martin and Turley). Gen Y learns to shop at young age will eventually shape their shopping behaviour as adults (Ward, as cited in Halstead K, 2006). Therefore, it came as no surprise that many marketing and promotional efforts are targeted at this group of growing young consumers (Tan Lau, 2009) from consumer acceptance of unethical consumptions). Pratt et al. (1983) in their study found that young consumers often differ from elderly consumers in terms of their moral thinking (Tan Lau, 2009). This group of people are more open minded and strongly influence what happens in their homes (Josephine Pickett-Baker and Ritsuko Ozaki, 2008) Young consumers purchase decision According to Kotler and Armstrong, consumer purchase decision involves three major components: inputs, process and output (). The input consists of both internal and external influences. The output component involves the purchase behaviour and the post-purchase evaluation. The process component involves the psychological field such as motivation, perception, learning, personality and attitudes (Kotler Armstrong, 2008 cited in Luz T. Suplico, 2009). The study followed the proposed model of consumer decision-making process used in Luz T. Suplico (2009) that involves inputs, process and the output. Inputs will include environmental attitude, knowledge and the extent of awareness to green marketing (Peter Olson, 2009 cited in Luz T. Suplico, 2009). The expected output is the whether the consumers choose to purchase the product. Green consumption Green consumption defined as contradicted as consumer concerns about the environment do not necessarily behave in a green way in general, or in their purchasing (Josephine Pickett-Baker Ritsuko Ozaki, 2008). Green consumption began when consumers purchase behaviour is influenced by environmental concerns (Shrum, McCarty Lowrey, 1995 cited in Clare DSouza Mehdi Taghian, 2005). Study found that people who are environmentally conscious do not necessarily behave pro-environmentally: for example, people might throw rubbish away when most people around them do so (reactive process, as opposed to intentional decision making (Ohtomo and Hirose, 2007 cited in Josephine Pickett-Baker Ritsuko Ozaki, 2008). In most cases, consumer will experience an improvement of environmental quality only when major sectors of the global population pursue generalized green consumer behaviour. Thus, the perceived individual customer benefit might not be a sufficiently powerful motivation to green purchasing (Belz and Dyllik, 1996 cited in Patrick Hartmann, Vanessa Apaolaza Ibà ¡Ãƒ ±ez, 2006). Environmental Awareness Environmental awareness and behaviours were found to be influenced by values, attitudes and knowledge (Haron et al, 2005). German scholars of Pakistan have added that the buyers level of awareness will affect attitude to environmental protection, the attitude of the environmental protection will affect the attitude of his green lifestyle, people with positive attitude of green lifestyle will involved in the purchase of green product and consumption activities (Juan Zhang, 2010, p.178). Unfortunately, in the case of Malaysia, the environmental awareness is still very low from the view of the importance of separating household solid waste and involvement in recycling programmes (Haron, S.A., Palm, L. Yahaya, N., 2005, p.428). Environmental Attitude Attitudes are the most consistent explanatory factor in predicting consumers willingness to pay for green products (Chyong et al., 2006 cited in Tan, Lau, 2010, p.30). Consumers product purchasing decisions are often based on their environmental attitudes (Irland, 1993; Schwepker and Cornwell, 1991 cited in Tan Lau, 2010). Environmental attitude is defined as the individuals value judgement of environmental protection which taps the individuals cognitive assessment of the value of the environmental protection (Lee, 2008 cited in Nabsiah Abdul Wahid et al, 2011). However, the demand and attitudes for green products is likely to be uneven across different market segments and cultures (Ottman Peattie, 1992 cited in Elham Rahbar and Nabsiah Abdul Wahid 2011) which need to be closely study. Environmental Knowledge In numerous studies, knowledge is an important factor in consumers decision-making process. Cohen (1973) commented that green marketing activities had play an important influence on increasing consumer knowledge and in shifting consumer into purchasing green products (Elham Rahbar and Nabsiah Abdul Wahid, 2011). Findings of Gendall et al reveals that men tended to have more knowledge than women; younger people tended to be more knowledgeable than older people; and the higher the level of education, the higher the level of knowledge (Haron, S.A., Palm, L. Yahaya, N. 2005, p.428). However, they concluded that generally the overall level of knowledge of Malaysian teenagers is low, especially among those studying in the arts stream compared with those studying in the sciences stream. (Haron, S.A., Palm, L., Yahaya, N., 2005, p.428). Bradley et al. (1999) commented that environmental education is able to create environmental awareness and promote environmentally responsible behaviour (c ited in Tan, Lau, 2009). Malaysian government has been promoting sustainable consumption practices among the public in various strategies. Social advertising is one of the approaches of Malaysian government to educate and foster environmental concern among the public (Haron et al., 2005). HYPOTHESIS Referencing from the existing literature, it is thus hypothesized that: HI: Green marketing has a positive H2: H3: RESEARCH METHODOLOGY THEORETICAL FRAMEWORK Independent Variable Dependent Variable Impact of Green Marketing on Purchase Behaviour of Young Consumers in Malaysia Environmental Awareness Environmental Attitude Environmental Knowledge RESEARCH DESIGN For the purpose of this study, descriptive research will be undertaken using quantitative methodology to examine the impact of green marketing on young consumers purchase decision, environmental awareness, attitude and knowledge. SAMPLING DESIGN Target Population The target population for this study will be the under graduate, graduate and postgraduate students age ranging 18 to 25 years old. The reason of choosing individuals above this age is because they are familiar with purchasing of products and are also empowered in their decisions for choosing the right items between many available choices, therefore, considerate to environmental issues in their purchasing behaviour (Elham Rahbar and Nabsiah Abdul Wahid, 2011). Sampling Technique In this study, cluster sampling is deployed as it is a type of probability sampling where a random of subgroups is selected and all members of the subgroups become part of the sample (David A. Aaker, V. Kumar, George S Day, Robert P. Leone, 2010). By using probability sampling technique, the research findings can be generalized to the target population with a specified level of confidence (Hair et al., 2007). The advantage of cluster sampling is able to enhance sampling efficiency improved by decreasing cost at a faster rate than accuracy. The limitation of cluster sampling is resulted in relatively imprecise samples, and it is difficult to form heterogeneous cluster because, for example, household in a block tend to be similar rather than dissimilar (David A. Aaker, V. Kumar, George S Day, Robert P. Leone, 2010). Sampling location The questionnaire survey will be conducted in four private colleges or universities in Klang Valley in order to enhance the results of the findings. Sampling size The sampling size involved in this study will be 400 participants either in private colleges or universities in Klang Valley. DATA COLLECTION The data collections of this study consist of primary data and secondary data. Primary data will be collected through the distribution of questionnaires. James P. Neelankavil (2007) stated that secondary data collection is an important step in the research process because it is the key to accomplishing low cost research programme. The secondary data is retrieved from different websites, newspaper, magazines, journal articles database such as Emerald insight and Anglia Ruskin e-library which is both permanent and available in a form that may be checked relatively easily by other (Denscombe, 1998 cited in Saunders, M., Lewis, P. Thornhill, A., 2007). However, the secondary data might fails to provide the information that appropriate to answer the research questions or research objectives will result in invalid answers (Kelvin, 1999 cited Saunders, M., Lewis, P. Thornhill, A., 2007) PILOT STUDY According to Zikmund, et al (2010) the questionnaire has to be pretested to ensure the respondents understand the intended meaning of the questions as well as checking the problems attached in the wording and measurement. Thus, pilot study will be conducted by circulating 200 questionnaires among universities or colleges which the result is important to check the reliability and suitability the instrument. MEASURES The questionnaire will be divided into four sections. The first section will include demographic information which adapted from the study of Fong (2006) on environmental orientation of consumers in Malaysia (Nabsiah Abdul Wahid et al., 2011). The second section include the The third section of the questionnaire measuring on the respondents environmental attitude, the respondents environmental awareness and respondents green purchasing behaviour based on a 5-point Likert scale (1 = strongly disagree, 5 = strongly agree) and (1 = never, 5 = always) is used in the study of Nik Abdul Rashid and Elham Rahbar and Nabisha Abdul Wahid. DATA ANALYSIS For this research, the data will be processed using statistical techniques which include factor analysis, descriptive analysis, and multiple regression analysis. Factor Analysis Factor analysis which is one type of multivariate analysis is used to define the underlying structure called factors among the variables in the analysis (Hair et al., 2007). Factor analysis will performed using the all the variables in this study to test whether the concept is correctly theorized. Descriptive Analysis Descriptive analysis involved summarizing and transforming the data into an understandable and interpretable mode (Zikmund et al., 2010). Descriptive analysis will be utilized in most parts of the analysis using mean and standard deviation of variables to help researchers understand the respondents perception of variables and other detailed analysis that were performed (Elham Rahbar and Nabsiah Abdul Wahid, 2011). Multiple Regression Analysis Multiple regression analysis will be performed to analyze the relationship between a dependent variable and independent variables and addressed hypothesis (Coakes and Steed, 2001; Hair et al., 1998 cited in Elham Rahbar and Nabsiah Abdul Wahid, 2011). The control variables to be analyse included age and educational level of respondents whom constantly influenced by environmental knowledge (Haron et al, 2005). LIMITATIONS There are few limitations in this study. Firstly, the main limitation is the study will opened for colleges or universities students in Klang Valley only. Therefore, the result may not be appropriate to generalize finding to all young consumers in Malaysia. TIME SCALES REFERENCES Afzaal Ali, Athar Ali Khan, Israr Ahmed Waseem Shahzad, 2011. Determinants of Pakistani Consumers Green Purchase Behavior: Some Insights from a Developing Country. 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