Analysing the various Numerical Methods for Real Options - Free Essay Example

Sample details Pages: 19 Words: 5630 Downloads: 5 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? According to Mun(2006), Real Options(RO) is a systematic and comprehensive method used to value real tangible assets. The term RO, first used by Myers(1977), refers to the application of financial options theory to investment decisions made by firms (Krychowski and Que ´lin, 2010). RO has been of growing interest to the academic community as a promising approach to supporting investment decisions under uncertainty. Don’t waste time! Our writers will create an original "Analysing the various Numerical Methods for Real Options" essay for you Create order Pioneering scholars such as Trigeorgis(1996) and Copeland(2001), have contributed valuable work to topics on real option such as the RO value in resource allocation and capital budgeting. At the same time on the empirical side, RO analysis has been applied widely in a range of industries such as pharmaceutical drug development, oil and gas exploration and production, and the like. A survey of 4,000 CFOs published in 2001 by John Graham and Campbell Harvey found that 27% of the respondents claimed they always or most always used some sort of options approach to evaluating and deciding upon growth opportunities (Copeland Tufano, 2004). Compared with the traditional discounted cash flow methods which assumed that the future cash flows can be discounted by a single fixed rate, Real option analysis enjoys the merit of being highly flexible. Real option analysis incorporates the managers ability to actively respond to the unfolded uncertainties. It is noted by Hall (2005) that approximate ly 30 percent of the value of high-growth, high volatility firms can be attributed to the value of embedded options. Generally speaking, there are three main methods which are used as the tools to value the embedded RO. They are the Black-Scholes Model, the Binomial Model and Monte Carlo Simulation. Each of the method requires certain assumptions and can be best applied under specific situations. Primarily motivated by the usefulness of RO, after doing a general research on its background, I did further reading on approaches employed to value the embedded options. In this paper, my work can be divided into three parts. In the first section, a background on the real option analysis is presented. This includes an overview of typical categories of RO, the classical methods employed to value the RO and also the industrial practices of applying the RO Analysis. Additionally, a brief comparison between the traditional methods and RO is also presented. In the second section, I demonstra te the three methods in detail with elaboration on their assumptions and steps of analysis, as well as examples of application. In the final section, I conclude with a discussion of these numerical methods, including their merits and limitations as well as responses to some of the critics that RO analysis has incurred. I hope that this paper could serve as a motivator for further research. Literature Review Managers nowadays are facing a rather volatile environment because of the mixed effects of globalization, deregulation and technology break through (Krychowski and Que ´lin, 2010). RO helps them to make use the advantages of uncertainty and their flexibility. It has been crucial in the way that it helps the firm to identify, understand, value, prioritize, select, time, optimize and manage strategic investment and capital budgeting decisions (Mun, 2006). Similar to the financial option models, RO is useful both to evaluate an investment project and to determine the optimal investment timing (Krychowski and Que ´lin, 2010). The most common forms of RO, based on the division given by Copeland and Antikarov(2001) and Mun (2006), are : option to abandon, option to expand, option to switch, option to defer and sequential compound options. In detail, for example, an option to expand enables the management to expand into different markets, products, and strategies or to ex pand its current operations under the right conditions (Mun, 2006, p19). Multiple methodologies and approaches are used in RO to calculate the embedded options value. These range from using closed-form equations like the Black-Scholes model and its modifications, Binomial Models (for example, binomial lattices and binomial trees) and Monte Carlo simulations and other numerical techniques. Since this will be the main part of this paper, it will be illustrated in detail in the next section. Primarily used as a tool for strategic decision making in natural resource companies, in the recent decade, RO has been applied in a broader ranges of industries, including pharmaceutical drug development, oil and gas exploration and production, manufacturing, IT infrastructure, e-commerce and e-business, technology development, private equity, and the like ( Mun,2005). The following are some of the industry examples of applying RO. Equity According to Berger, Ofek and Swary (1996), a cons iderable proportion of equity value should be attributed to the equity holders abandonment option. They prove a median 11.5 percent difference between equity market value and the present value of cash flows for 7102 firm over a 6-year period horizon. By running a series of regressions the authors find an interaction between the market value/present value premium and variables which should be linked to higher values for the abandonment option. Natural resource When evaluating the investment projects for natural resource, Brennan and Schwartz (1985) isolate the disadvantages and inadequacies of the traditional DCF approach. Particularly, they point out that obvious deficiencies are due to the neglect of the stochastic nature of output prices and of possible managerial reactions to price changes. Price uncertainty is of central importance in many natural resource industries where price swings around 30 percent per year are usual. Under such circumstances the evaluation results obtai ned through replacing distributions of future prices by their expected values is likely to be misleading. Oil By extending the financial option theory, Paddock, Siegel and Smith (1988) develop a new method for the valuation of claims on a real asset, an offshore petroleum lease. The authors show us how to utilize an explicit model of equilibrium in the market for the underlying real asset, i.e. the developed petroleum reserves, with option-pricing technique to derive the value of a real option. At the same time, they specify a valuation problem in sufficient detail by using the oil leases as an example. This allows close reviewing of the many theoretical and practical issues involved in applying financial option valuation theory to RO. Gold In 1998, Kelly adopts an eight period binomial option approach to determine the value of a discovered but not yet developed gold mine, Lihir Gold Limited. In particular, she compares the value derived from the option model to what was obtai ned from the traditional method. The option approach appears to provide a more useful and reasonably accurate technique to assess the value of the gold mine. In 2002, Moel and Tufano conduct a research on the opening and closing events of 285 gold mines in North America from the year of 1988 to 1997. Strong evidence is found to support the conclusion that, compared with other methods, real (switching) options provide better explanations for the decisions on openings and closings of the gold mines. Manufacturing Newbhard, Shi and Park (2000) use a case-study to motivate the theoretical and applied research needed to support a real option framework for system changes in four major manufacturing transitions which are launch of new product, commercialization of RD product, site selection of new plant and restarting production of existing commodities. By presenting a framework, they quantify manufacturing changes, develop a real option model for these activities, value the options, identify the best scenarios and integrate these elements in order to monitor and manage the overall process. They also propose a general model for optimizing real option valuation based on typical RO models such as the Black-Scholes Option Model, the Binomial Option Model. They conclude that a model that incorporates flexibility and economic factors could effectively enhance companies manufacturing strategy. Unlike the traditional valuation approaches, such as the discounted cash flow (DCF) method which bases itself on a static environment, real option analysis takes into account the potential for possible future gains and incorporates active decision making. Thus it tackles uncertainty in a better way. Specifically, deterministic models such as DCF method bases itself on some rather flawed assumptions. It assumes that all the future outcomes are fixed and can be evaluated as individual cash flows. Even more unreasonable, it seems to give a Once for All solution which assumes on ce initiated, all projects are passively managed. RO, on the contrary, accepts the facts that projects are correlated and can be actively managed through its life path. By taking the fluid environment and managerial flexibility into account, RO provides value-added insights to decision making (Mun, 2006). Numerical Methods As I have mentioned in the previous section, multiple approaches have been employed by researchers and practitioners in RO. This part will introduce the readers to three common types of methods in RO, namely, the Binomial methods, the Black-Scholes Model and Monte Carlo Simulation, from the origins of them to present application examples. More specifically, a step-by-step binomial approach is used to analyzing a compound option problem in the case study with two different techniques, so as to offer a deeper understanding for the readers. As for the Black-Scholes and Monte Carlo Simulation, due to the word limit and time constraint, I used two simplified examples from Newbhard et al (2000) and Damodaran( 2005) in the hope that the readers could have a general sense of how the two methods work. Binomial approach Work by John Cox, Steve Ross, and Mark Rubinstein has led to the creation of binomial, or lattice, models that are built around decision trees and are ideally suited to real-option valuation. As it noted by Copeland and Tufano (2004), RO dont have to be a black box. Binomial methods, with its advantage of easy math and apparent illustration has make Real option analysis a more practical tool for manager in the new era. According to Brandao et al (2005), a binomial lattice may be viewed as a probability tree with binary chance branches, with the unique feature that the outcome resulting from moving up(u) and then down (d) in value is the same as the outcome from moving down and then up. This probability tree, also referred as decision tree, can be used in modeling managerial flexibility by incorporating the decision nodes which represent decisions the managers can make to optimize the value of the project. A three-step binomial tree is illustrated below in figure1. Before enterin g details about how to use the binomial method, it is worthwhile to make certain clarifications on the assumptions behind this approach. In their book RO, Copeland and Antikarov (2001) made the marketed asset disclaimer assumption (henceforth MAD) that the market value of a project is best estimated by the present value of the project without options. Additionally, if the movements in the value of the project without options are then assumed to change over time according to a geometric Brownian motion (GBM), then the value of options can be obtained through traditional option pricing methods. Generally, there are three essential steps that need to be gone through when a binomial approach is adopted. Step1 Calculating the expected present value of the project at Time0 Step2 Obtaining estimates of the standard deviation of returns (or volatility of the project) by using a Monte Carlo simulation. Step3 Constructing a binomial tree to model the dynamics of the project value using the estimated parameters of the second step and add the decision nodes to model the projects RO. No matter what real option model is of interest, the basic structure almost always exists, taking the form: Inputs: S, X,, T, rf, b u= and d== P= Source: Mun, 2006 The basic inputs are the present value of the underlying asset(S), present value of implementation cost of the option( X), volatility of the natural logarithm of the underlying free cash flow returns in percent(,time to expiration in years(T), risk-free rate or the rate of return on a riskless asset(rf), and continuous dividend outflows in percent(b). In addition, the binomial lattice approach requires two additional sets of calculations, the up and down factors ( u and d). The up factor is simply the exponential function of the cash flow returns volatility multiplied by the square root of time-steps or stepping time (.The volatility measure is an annualized value; multiplying it by the square root o f time steps breaks it down into the time steps equivalent volatility. The down factor is simply the reciprocal of the up factor. In addition the higher the volatility measure, the higher the up and down factors. This reciprocal magnitude ensures that the lattices are recombining signs. The second required calculation is that of the risk-neutral probability, defined simply as the ratio of the exponential function of the difference between risk-free rate and dividend, multiplied by the stepping time less the down factor, to the difference between the up and down factors. In order to give the readers a more clear understanding on this, below is a case study of a sequential compound option problem. It represents a simplification of the real-world decision-making and its purpose is to illustrate the process by which a RO valuation is conducted using a binomial approach. Case Study A chemical company is considering a phased investment in a plant. There are three periods. In the beginning of year one, an initial outlay of $50 million is required to cover the cost of permits and preparation. At the end of that year, the firm has the choice to pay a commitment of $200 million to enter into the design phase. Once the design is finished one year later, the firm is believed to have a two year window during which to make the final investment in constructing the plant for $400 million. If the firm chooses not to make any investments during these two years, it can no longer to build the plant. For managers who think from the real-options perspective, this phased investment opportunity is a sequential compound option, for the execution and value of future strategic options depend on previous options. Clearly, the initial payment of $50 million allows the firm to have the option to go on with the project for one year. At the end of year one, it again faces the choice of whether or not enter the stage of design by investing an additional $200 million. As the result, the execution of the design phase gives the firm the option to construct the plant at the end of year three or at the end of year four for $400 million.The firm estimates that if the plant existed today it would be worth $550 million by using non-option valuation techniques such as the DCF. In applying Binomial method, basically there are two techniques. The one is the decision tree approach the other is the replicating portfolio technique. I will use both of them to analyze the above case and give some comments on these two techniques. Decision Tree Analysis Prior to analyzing this problem, we must make some assumptions concerning the uncertainty in the future value of the project. A common assumption regarding stock prices is that current prices already incorporate all relevant information available at this point in time, known as part of the efficient market theory. At the same time, future changes are the result of random and unpredictable shocks, which are modeled as a random walk. This assumption and other arguments facilitate the use of a Geometric Brownian Motion (GBM) to model the dynamic uncertainty associated with stock prices (Hull, 2003). The key parameters required to model the GBM are the initial value, $550 million in this example, the risk-free interest rate r, assumed to be 6% per year, and the volatility, denoted as, which is the annualized percentage standard deviation of the returns and is given as 18.23% here. The idea behind the calculation of the parameters used in the binomial approximation of the stochast ic process is relatively simple. If the value of the project is assumed to follow a GBM, then the estimate of its value at any point in time has a lognormal distribution. By equating the first and second moments of a binomial and a lognormal distribution, we can calculate the corresponding values of u and d, and thus Vu=Vu and Vd=Vd, for each branch of the binomial approximation to ensure that the discrete distribution approximates its continuous counterpart in the limit as t becomes small. Adding the convenient specification that u = 1/d to the equations for matching he mean and variance of the GBM yields u=. We then obtain the risk-neutral probability p ==. In this example, we model three periods and choose t = 1. Therefore, u = 1.2, d =0.83, and p =0.673. We emphasize again that only three parameters are needed to specify this discrete approximation to the GBM estimate of the evolution of the uncertain project value over time: the estimate of the current value of this project, th e volatility of the returns from the project, and the risk-free rate. For details associated with this binomial approximation, see Hull (2003). The same parameters can be used in a decision tree with binary chance nodes to yield an equivalent binomial tree for the project value, as shown in Figure 2 below. The value of the project is calculated via Vi,j =V0ui-jdj.For example in the right top scenario, the value of the project is $798 million which equates $550 million multiplied by 1.23. (Note: Values shown at each node in the tree are discounted Year 3 values, instead of the actual values at each point.) After approximate the project value according to the GBM, now we are going to value the Value of the Option to invest in this project. As you can see from the Figure3 below, we use the decision tree to model the option value in different time periods. Decision tree analysis works in the way that it models managerial flexibility in discrete time by constructing a tree with decision nodes. These nodes represent choices the manager can make to optimize the value of the project as uncertainties are resolved over the projects life. Note: represents a chance node in which the project can either move up or down with the probabilities of up=0.673, down=0.327 represents a decision node in which the firm can chose to invest or not denotes the termination of one possible case the line in bold shows the optimal investment strategy in different cases Lets suppose that at the end of year3, we arrive at the best scenario in which the project value is $798 million (See Figure2). If we choose to invest the extra $400 million, we will have an income of $223 million. Otherwise we will lose what we have paid for the preparation and design, say, $239 million. Rational managers will of course choose to invest. The same calculation applies in the scenario with the increase in first two years and a decline in year3. By multiplying the values obtained from the decision nodes with their up and down probabilities, we arrive at the option value in year2. Using this rollback method, finally we obtain the value of option at year0, which is $31million. Replicating portfolio technique Using the binomial model which adopts replicating portfolio technique also requires two main steps. First, we need to figure out the full range of possible values for the underlying asset, in other words, draw the event tree, as shown in figure4. Figure4 (It has to be noted that, unlike the numbers for the binomial tree which have been discounted to present value, the numbers I used here are the value in that specific period.) Secondly, our task is to calculate the possible values of the project as an option at each stage. It is a backward working process and we have to begin from the end. If we abandon the project, its value is zero. Otherwise, the value at the end of that year, year three, for example, is the difference between the value of the plant at the end of year three and the expense of building it. As you can see from the figure5, we have got three potential scenarios in which the projects incremental value at the end of year three is positive and one in which the costs of the project exceed the plants value, so the project value is zero. We now work back from the end of year three to determine the projects potential values at the end of year two. The decision rule is that in each scenario, the value will be the lar ger of the value of exercising the option by building the plant at that point for a cost of $550 million and the value of keeping the option window open-deferring the decision until the next period. The steps can be summarized in the followings and Figure5 serves as an illustration of the results. Step1: Calculate the potential final project values by subtracting the $400 million cost (from the event tree of Figure5). For the $314 million scenario at the bottom right of the event tree, the projects value is zero due to the cost is greater than the plant value. Step2: Obtain the potential end-of-year-two project values by comparing two calculation results. One is the value by exercising the project immediately, the other is the value if the project is kept alive by applying the replicating portfolio technique. Step3 ¼Ãƒâ€¦Ã‚ ¡Similar to step2, yet the number used to be compared with the value derived from replicating portfolio technique is $200 million, since immed iate exercise of the project is not possible. Step4: Calculate the starting project value of $81million. Since the initial required investment is $50 million, the project is profitable. The option value is the same as what is derived by the decision tree method, which is $31 million. Figure5 Some comments: As we can see from the above, the results obtained from Binomial Decision Tree and Replicating portfolios Techniques are largely similar. It is worthwhile to compare them briefly. The binomial approach is suggested by Copeland and Antikarov(2001), they emphasize the use of binomial lattices and replicating portfolios while Brandao et al( 2005) believe that the use of binomial trees is more intuitive appealing. The replicating approach bases itself on traditional option pricing methods, requiring that markets be complete. An important advantage of this approach to valuation is that the value of option can be calculated from market data. This eliminates the necessity of trying to estimate the probability q of an up move in the stock price. However, this approach is complicated by the fact that, for most projects involving real assets, no such replicating portfolio of securities exists, so markets are incomplete. Additionally, it is criticized for its computational cumbersomenes s especially in a multi-stage project. Black Scholes model With their article from 1973, Fisher Black, Myron Scholes, and Robert Merton were the first to give a closed form solution for the equilibrium price for a European call option, the Black Scholes Model (BS model). It has since been the basis for numerous studies and papers about the pricing of options and empirical testing hereof. In essence, the model is a special case of the binomial model where the underlying asset is assumed to follow a continuous stochastic process instead of a discrete. Otherwise, it is based on the same underlying assumptions of no arbitrage and market replicating portfolio and that the movement of the underlying asset follows a lognormal distribution ( Copeland Antikarov, 2001) It has to be noted that variants of the BS model have been made, which relaxes some of these assumptions. BS models are based on calculus of stochastic differential equation which is highly complex. So unless one can find a modified BS model that fits one own specific situation, t he process of deriving a BS model that does is very cumbersome and complex. Benaroch and Kauffman(1999) provides a formal theoretical grounding for the validity of the Black-Scholes option pricing model in the context of the spectrum of capital budgeting methods that might be employed to assess IT investments. They also demonstrate why the assumptions of both the Black-Scholes and the binomial option pricing models place constraints on the range of IT investment situations that one can evaluate that are similar to those implied by traditional capital budgeting methods such as discounted cash flow analysis. Most importantly, they present the first application of the Black-Scholes model that uses a real world business situation involving IT as its test bed. In Yankee 24s case, Benaroch and Kauffman chose to use a procedural model called Blacks approximation because using the standard Black-Scholes model is not possible since Yankee possessed an American option on a dividend paying asset. Blacks approximation assumes the existence of an American call option that matures at time T, where the underlying asset pays a dividend D at time t, 0tT. To analyze the investment decision Yankee faced in 1987, they used interview data from senior managers to obtain specific the parameters needed by the Black-Scholes model such as the range of potential revenues, the distribution of revenues and the perceived variance or volatility of potential revenues. Their results of analysis are supportive of the decision Yankees senior executive made at the time-deferring the entry for three years. With option pricing as an analytical tool to evaluate the project, for the first time, the result of the quantitative analysis paralleled the actual decision made by Yankee. The Black Scholes model is a so called closed form solution, meaning that a value can be found with an equation using a set of inputs. The inputs in the BS model are the same as the binomial model, with dividend as t he one exception. The value of a call option( C) is calculated as: Source: Copeland Antikarov, 2001,p.106 Where and is the cumulative normal probability of unit normal variable and respectively. They are calculated as: ; Source: Copeland Antikarov, 2001, p.106 Other than the assumptions also applying to the binomial model mentioned above, the BS model has several other restrictive assumptions embedded (Copeland Antikarov, 2001 and Mun, 2002) which are: The option can only be exercised at maturity-it is a European option There is only one source of uncertainty It can only be used on a single underlying risky asset; ruling out compound options No dividends on the underlying asset The current market price and stochastic process of the underlying asset I known (observable) The variance of the underlying asset is constant over time The exercise price is known and constant over time No transaction costs To illustrate more clearly, below I used a simplified version of the example presented in Brennan and Schwartz(1985), applying option pricing theory to value a gold mine. Option to delay for a Gold Mine Consider a gold mine with an estimated reserve of 1 million ounces and a capacity output rate of 50,000 ounces annually. The price of gold is expected to grow 3% a year. The firm owns the rights to this mine for the next 20 years. It will costs $100 million to open the mine and the average variable cost is $250 per ounce; once initiated, the variable cost is expected to grow 5% a year. The standard deviation in gold prices is 20%, and the current price of gold is $375 per ounce. The riskless rate is 6%. The inputs to the model are as follows: Value of the underlying asset = Present Value of expected gold sales = $ 47.24 million Exercise price = Cost of opening mine = $100 million Variance in ln(gold price) = 0.04 Time to expiration on the option = 20 years Riskless interest rate = 6% Dividend Yield = Loss in production for each year of delay = 1 / 20 = 5% Based upon these inputs, the Black-Scholes model provides the following value for the call: d1 = -0.1676 N(d1) = 0.4334 d2 = -1.0621 N(d2) = 0.1441 Call Value = $ 3.19 million The value of the mine as an option is $ 3.19 million which is recognized as the mines embedded option. Monte Carlo Simulation : Because of the difficulty in obtaining the needed parameters for analytical models such as the Black-Scholes model, researchers find an alternative way to value RO by using an approximate numerical method such as Monte Carlo simulation. Monte Carlo simulation, named for the famous gambling capital of Monaco, is a very powerful methodology. For the practitioner, simulation opens the door for solving difficult and complex but practical problems with great ease. Monte Carlo creates artificial futures by generating thousands and even millions of sample paths of outcomes and looks at their prevalent characteristics. When modeled correctly, Monte Carlo simulation provides similar answers to the more mathematically elegant methods. Monte Carlo, in its simplest form, is a random number generator that is useful for forecasting, estimation, and risk analysis. A simulation calculates numerous scenarios of a model by repeatedly picking values form a user-predefined probability distribution, su ch as the normal, uniform and lognormal distributions, for the uncertain variables and using those values for the model (Mun,2005,p317-318). Boyle (1977) was among the first to propose using Monte Carlo simulation to study option valuation. Since then many researchers have employed Monte Carlo simulation for analyzing options markets (Figlewski (1989), Hull and White (1987),Johnson and Shanno (1987), Scott (1987), and Fu and Hu (1995)).What distinguishes this approach is its generality in being able to model imperfect market conditions which are difficult to be captured in other models. The Monte Carlo method proves to be most effective in situations where it is difficult to proceed using a more accurate approach (Boyle, 1977). Researchers share a common emphasis on the need for investigating practical issues related to efficiently approximating various option models via Monte Carlo simulation and including sensitivity analysis and Quasi-Monte Carlo simulation approaches (Boyle,1 977; Fu and Hu,1995; Birge 1994; Newbhard, Shi and Park ,2000 ). Example: For a manufacturing company A, market research revealed a demand for a new product. This new product will be sold for $100 each. The initial monthly demand for this product is 1,000 units with a standard deviation of ÃÆ' Ãƒâ€ Ã¢â‚¬â„¢ = 0.33. The product will be introduced over a four month period (T = 4). The monthly interest rate is constant at 1%. Suppose we let S= X = $100*1,000 = $100,000. To simulate the path followed by the state Variable S, we divide the life of the variable into four intervals If ÃÆ'Ã… ½Ãƒ ¢Ã¢â€š ¬Ã‚ t is the length of one interval, then the relation between the S values is given by Source: Newbhard, Shi and Park , 2000 Conducting 1,000 Monte Carlo runs of this equation gives an option value of $8,203, which is quite similar compared to the value of $8,155 obtained using the Black-Scholes method. Discussion The use of algebra distinguishes binomial models and enables the models to be built using standard spreadsheet software such as EXCEL. Binomial models can also be easily customized to reflect changing volatility, early decision points, as well as multiple decisions (Copeland, 2004). Another practical advantage is that because the transparency of the model, it could be understood and used by managers without very strong mathematical background. Binomial lattices, compared with close-form solutions, are easy to implement and easy to explain. Lattice can solve all types of options. They are also highly flexible but require significant computing power and lattice steps to obtain good approximation. It is important to note, however, that in the limit, results obtained through the use of binomial lattices tend to approach those derived from closed-form solutions. Managers might be skeptical about this method since the approximation to the value of project over time is based on GBM ass umption and the volatility was just among one of the parameters for this problem. It is reasonable to cast doubt on the derivation of the volatility in practice. As the BS model is a closed form solution and was developed for valuing financial option, many of the underlying assumptions I bound to be violated when dealing with RO. RO are more specific than financial options and need individual specifications. This is one of the binomial models most distinguished advantages and is therefore easier done using binomial model. Closed-form solutions are models like the Black-Scholes, where there exist equations that can be solved given a set of input assumptions. They are exact, quick, and easy to implement with the assistance of some basic programming knowledge but are difficult to explain because they tend to apply highly technical stochastic calculus mathematics. They are also very specific in nature, with limited modeling flexibility. Closed-form solutions are mathematically elegan t but very difficult to derive and are highly specific in nature. Although managers today are facing a more volatile environment, most of them still rest their decisions on deterministic methods such as the discounted cash flow method, which is static in nature (Krychowski and Que ´lin, 2010). In the end, RO are different from financial options. RO have problems in the implementation sector and empirical evidence shows that it is little used in practice. Whereas about 75% to 85% of firms use NPV for their investment decisions, only about 6% to 27% of them use RO1 analysis. Empirical studies on the implementation of RO are still rare, and research remains relatively silent on how to concretely apply RO theory (Krychowski and Que ´lin, 2010). More recently, the literature has warned about the limits of RO. These include three main shortcomings: Firstly, the framework does not apply to all investment decisions because not all investment decisions can be framed as op tions. Four main conditions have to be fulfilled in order for a decision to be appropriate for real option logic: irreversibility, uncertainty, flexibility, and information revelation. Secondly, it raises serious implementation issues. The identification and the valuation of RO both raise difficulties. The option theory has developed a vast variety of option valuation models, which rely on a number of implicit hypotheses and can lead to different results (Borison, 2005). Thirdly, it does not take into account behavioral and organizational biases. RO rests on the assumption that managers will follow a strict optional discipline, from the project inception to its implementation or abandonment. Identify and Define RO (1) Quantify Activities Related to Changes Related to Changes (2, 3) Choose Solution Method Binomial Model Underlying change is a binomial (discrete) process Black-Scholes Model Underlying change is a lognormal (continuous) process Monte Carlo Simulation When parameter Estimation is needed REAL OPTION ANALYSIS Source: Newbhard H. B., Shi. L, Park .C (2000) Conclusion

Going Big Is Not Always The Right Thing - 928 Words

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How Would You Describe Yourself Free Essays

How Would You Describe  Yourself? I am punctual, dependable and can be counted upon to finish what I start. I get a great deal of satisfaction from knowing that I have done something well and on time. For example, at my present job, I was given different work orders every day. We will write a custom essay sample on How Would You Describe Yourself or any similar topic only for you Order Now It was my responsibility to finish the orders and make sure they all met quality and safety standards within a specific deadline. On occasion, I had to familiarize myself with the product and the production process. I was always able to learn quickly and carry out my job responsibilities. Our company was known for making excellent processed food products. In 1990, it received an award for being on off Canada’s top companies in the field. I feel I can use the same skills and hard work to do well on this job too. I enjoy solving problems, troubleshooting issues, and coming up with solutions in a timely manner. I’m a creative thinker. I like to explore alternative solutions to problems and have an open mind about what will work best. honest driven esponsible social dedicated intelligent patient reliable friendly achiever Positive organized energetic ambitious bold Why Did You Leave Your Last Job? †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢ € ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. Where  Do You See Yourself 5 Years  from Now? Once I gain additional experience, I would like to move on from a technical position to management. I see myself as a top performing employee in a well-established organization, like this one. I plan on enhancing my skills and continuing my involvement in (related) professional associations. How Do You Feel About Working on a  Team? I enjoy working in a team environment, and I get along well with people. In my past work experience I prefer teamwork. Different team members contribute different perspectives and the synergy between team members can produce creative and productive results. Have you ever had difficulty with a supervisor how did you resolve the conflict? Describe the best job you’ve ever had Describe the best supervisor you’ve ever had How to cite How Would You Describe Yourself, Papers How Would You Describe Yourself Free Essays How Would You Describe  Yourself? I am punctual, dependable and can be counted upon to finish what I start. I get a great deal of satisfaction from knowing that I have done something well and on time. For example, at my present job, I was given different work orders every day. We will write a custom essay sample on How Would You Describe Yourself? or any similar topic only for you Order Now It was my responsibility to finish the orders and make sure they all met quality and safety standards within a specific deadline. On occasion, I had to familiarize myself with the product and the production process. I was always able to learn quickly and carry out my job responsibilities. Our company was known for making excellent processed food products. In 1990, it received an award for being on off Canada’s top companies in the field. I feel I can use the same skills and hard work to do well on this job too. I enjoy solving problems, troubleshooting issues, and coming up with solutions in a timely manner. I’m a creative thinker. I like to explore alternative solutions to problems and have an open mind about what will work best. honest driven esponsible social dedicated intelligent patient reliable friendly achiever Positive organized energetic ambitious bold Why Did You Leave Your Last Job? †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢ € ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. Where  Do You See Yourself 5 Years  from Now? Once I gain additional experience, I would like to move on from a technical position to management. I see myself as a top performing employee in a well-established organization, like this one. I plan on enhancing my skills and continuing my involvement in (related) professional associations. How Do You Feel About Working on a  Team? I enjoy working in a team environment, and I get along well with people. In my past work experience I prefer teamwork. Different team members contribute different perspectives and the synergy between team members can produce creative and productive results. Have you ever had difficulty with a supervisor how did you resolve the conflict? Describe the best job you’ve ever had Describe the best supervisor you’ve ever had How to cite How Would You Describe Yourself?, Essay examples

Emily Dickinson Essay Contest Example For Students

Emily Dickinson Essay Contest Emily Dickinson is one of the most well known poets of her time. Though her life was outwardly uneventful, what went on inside her house behind closed doors is unbelievable. After her father died she met Reverend Charles Wadsworth. She soon came to regard him as one of her most trusted friends, and she created in his image the â€Å"lover† whom she was never to know except in her imagination. It is also said that it was around 1812 when he was removed to San Fransico that she began her withdrawal from society. During this time she began to write many of her poems. She wrote mainly in private, guarding all of her poems from all but a few select friends. She did not write for fame, but instead as a way of expressing her feelings. In her lifetime only six of her poems were even printed; none of which had her consent. It was not until her death of Brights Disease in May of 1862, that many of her poems were even read (Chelsea House of Library Criticism 2837). Thus proving that the analysis on Emily Dickinson’s poetry is some of the most emotionally felt works of the nineteenth century. Miss Dickinson is often compared with other poets and writers, but â€Å"like Shakespeare, Miss Dickinson is without opinions† (Tate 86). â€Å"Her verses and technical license often seem mysterious and can confuse critics, but after all is said, it is realized that like most poets Miss Dickinson is no more mysterious than a banker. It is said that Miss Dickinson’s life was starved and unfulfilled and yet all pity is misdirected. She lived one of the richest and deepest lives ever on this continent. It was her own conscious choice to deliberately withdraw from society into her upstairs room†¦Ã¢â‚¬  (Tate 83). She kept to â€Å"only a few select friends and the storm, wind, wild March sky, sunsets, dawns, birds, bees, and butterflies were sufficient companionship for Miss Dickinson† (Loomis 79). She dealt with a lot both physically and psychologically and in the end she still came out on the top. So as Allen Tate best said it â€Å"in her own historical se tting Miss Dickinson is nevertheless remarkable and special† (82). Thomas Higginson said that â€Å"the main quality of her poems is that of extraordinary grasp and insight, uttered with an uneven vigor, which was all her own† (78). The works and phrases she uses shows that she was unconcerned with the fact that no one else could understand her poetry, but instead, she was satisfied by using mere words in order to fit her own ear (Higginson 78). Miss Dickinson’s poetry was strictly confidential and written without the purpose of publication and merely as a way of expressing her own mind (Bloom 2838). â€Å"Art forms were totally unknown to her, and nature was always viewed not in a cosmic way but in its smallest and most intimate forms† (Whicher 87). Allen Tate describes her biggest influence to be nature itself, and though she could not deal with the problems of society, she had such an attitude toward life that she was able to see into this character of nature more deeply than any other (84). Miss Dickinson’s poetry sty le contains â€Å"flashes of wholly original and profound insight into nature and life† (Chelsea House of Library Criticism 2841). â€Å"At first impression her tiny lyrics appear to be no more than the jottings of a half-idiotic school-girl instead of grave musings of a full grown, fully educated woman† (Monro 81). Miss Dickinson often writes out of habit allowing her poems to not require a point of view, but instead, they require for some of the deepest understanding, which allows her style to emerge even when she has nothing to say (Tate 86-87). Some consider her works to be the most original of her time, written with an unusual amount of emotion and often referred to as â€Å"†¦poetry torn up by its roots with rain, dew and earth still clinging to them† (Higginson 78). To others she was considered to be â€Å"intellectually blind, partially dead, and mostly dumb to the art of poetry† (Monro 81). It was best stated by Allen Tate when he wrote,

Compare and contrast the state-building strategies Essay Example

Compare and contrast the state-building strategies Essay Brief 123345 Compare and contrast the state-building schemes of autocratic provinces and that of rentier monarchies in the Middle East and North Africa. Which type of province is more stable? Use a instance survey for each type of province to exemplify your statement The followers will compare and contrast the province edifice schemes of the autocratic provinces and so rentier monarchies in the Middle East and North Africa. After the two types of governments have been compared and contrasted, decisions and observations as to which type has the best province edifice schemes and therefore offers the highest degrees of stableness will be outlined. The autocratic provinces of the rentier monarchies of the Middle East and North Africa have common factors in their histories, societies and economic systems and spiritual beliefs. On the other manus, there are factors that have contributed to the differences between the autocratic provinces and rentier monarchies being greater than merely being down to them holding different province edifice schemes. Whilst some of the provinces in the Middle East and North Africa have a long history other provinces are more recent creative activities. As will be outlined below province edifice schemes were needed through out the Middle East and North Africa as a effect of the prostration of the Ottoman Empire and de-colonisation by the European powers, particularly Britain and France. As a point of mention province edifice can be seen as the effort to obtain a permanent population, a defined district and a authorities capable of keeping effectual control over its district and of carry oning international dealingss with other states’ ( Evans A ; Newnham, 1998, p.512 ) . We will write a custom essay sample on Compare and contrast the state-building strategies specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Compare and contrast the state-building strategies specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Compare and contrast the state-building strategies specifically for you FOR ONLY $16.38 $13.9/page Hire Writer The Middle East and North Africa have factors that have had a strong influence on province edifice whether in autocratic provinces or rentier monarchies. The strongest links between all the provinces in the Middle East and North Africa with the exclusion of Israel, is Islam. The provinces in the Middle East and North Africa have found it hard to set up any signifier of authorities that has been to the full representative, to the full democratic and that has been able to happen an effectual balance between secular authorization and the Islamic communities within each province. The terminal of the Ottoman Empire and the subsequent backdown of France and Britain from the part left behind provinces that were either ruled by dictators or one party regulation and the rentier monarchies. These provinces have the differentiation of being unrepresentative and autocratic ( Akbar, 2003, pp. xvi-xvii ) . The relationship between Iran and autocratic provinces or the rentier monarchies of the Midd le East and North Africa is non ever easy to specify and it either strengthens or destroys these governments. Islamic fundamentalist motions seeking to transform their states in to truly Islamic provinces can be found across the part endangering the stableness of what fundamentalists would see as illicit governments. The most successful fundamentalist group was that led by Ayatollah Khomeini who gained power in Iran after tumbling the rentier monarchy of the Shah ( Choueiri in Eatwell A ; Wright, 2003, pp.270-71 ) . As a whole the Islamic influence has been stronger in the Middle East than in North Africa, where provinces such as Egypt, Tunisia and Algeria have had to make up ones mind whether to put the greatest accent on being African or Islamic. The stableness of the provinces in the Middle East and North Africa have besides had to take into history patriotism, socialism and liberalism when organizing their province edifice schemes ( Deegan, 1996, p.21 ) . The state chosen as the instance survey for the ways that authoritarian provinces have a province edifice scheme in the Middle East and North Africa will be Iran, although prior to 1979 it would hold made a good instance survey for rentier monarchies. Iran has long history as a state and at assorted times has been a great power. As Persia, Iran took portion in major wars against the Greeks, the Romans, and the Byzantine Empire. Iran was one of the first topographic points to be conquered by Muslims in the 7Thursdaycentury and Islam has been a cardinal portion of the province since ( Lewis, 1995, p.36 ) . Iran became and remains the state with the largest Shia Muslim population, a fact that both the Shah and the radical government that overthrew him have emphasised ( Mansfield, 2003, p.15 ) . Persian Shah portraying themselves as the guardians of the Shia religion was non a creative activity of the 20Thursdaycentury Shah in the efforts at province edifice, although they did utilize it for that intent. The Safavid dynasty attempted to vie with the Sunni Ottoman Empire from the 16Thursdaycentury ( Lewis, 1995, p.114 ) . Persian independency was at times threatened by Britain and Russia, due to the British controlling India and the Russians spread outing their imperium. It was, nevertheless, the British that gave the Iranian’s greater prosperity by utilizing oil to power the Royal Navy’s ships merely before the First World War. British influence in Iran was strong plenty to coerce a alteration in the dynasty of the Shah. As British power declined the Persian government turned to the United States for arms engineering and aid with modernization, which the United States agreed to provide to procure oil supplies ( Aburish, 1997, p.79 ) . There had been much bitterness in Iran that the British made more money out of Persian oil than the Iranians did. The Iranians nationalised the Anglo-Iranian Oil Company in 1951 with the United States step ining to halt the British from taking military action. Once the United States pulled off the remotion of the Prime Minister Mossadeq, the Shah relied on his confederation with them to keep his clasp on power. As a province edifice scheme it finally failed ( Akbar, 2003, pp.244-45 ) . The Shah deluded himself that his government was popular, non gaining that the confederation with the United States and his efforts at modernization would finally take to his autumn from power ( Keay, 2003 p. 461 ) . As for the Americans they put Persian oil in front of the Persian people in their support for the Shah. That is the usual American attitude to the governments of the Middle East and North Africa, back up the pro-American regimes no affair how they run their states ( Painter, 1999 p. 80 ) . Ironically plenty, the autocratic province edifice scheme in Iran would alter under the leading of a adult male that believed patriotism was yet another signifier of political and moral debasement from the West, Ayatollah Khomeini. Khomeini asserted that Iran was free to support itself, yet that patriotism if directed against other Muslim states is contrary to the baronial Qu’ran’ ( Khomeini, 1981, p.302 ) . The Persian government regarded itself as the first true Islamic State and was to construct itself up by distributing radical Islam across the Islamic universe ( Hobsbawm, 1994 p. 454 ) . Once in power the province edifice schemes of the radical government in Iran was straightforward plenty. Khomeini and the government merely stated that the autocratic nature of their government was required for them to set up and keep Iran as the world’s foremost Islamic State. Khomeini and the other Ayatollahs were non corrupt, greedy, and evil sovereign like the Shah or the male monarch of Saudi Arabia. They were non secular minded swayers like Nasser in Egypt or Saddam Hussein in Iraq. The biggest selling point of the government was non that it was autocratic but that it was the righteous regulation of the imaums that would do Iran a beacon of virtuousness throughout the Muslim universe. The government was implementing Islamic jurisprudence as it should hold ever have been implemented ( Mernissi, 1993, pp.24-25 ) . The Persian government bases its political legitimacy upon its spiritual legitimacy. The government as the defender of true Islam against the benign influence of Western broad democracy and the lip service of Islamic states no affair whether they were autocratic provinces or rentier monarchies. The Ayatollah Khomeini and his government used propaganda and censoring both as a province edifice scheme and a agencies to export the constructs of extremist Shia Islam. In a sense internal propaganda was non needed as the Persian Revolution and the government that emerged from it was what the bulk of Iranians wanted. The Iranians were glad to see the terminal of the greedy and corrupt shah’s regulation, with his unpopular efforts at modernization and secularization. The anti-American stance of the government was a successful portion of its province edifice scheme, anti-American sentiment meant that it gained popular support across the Middle East and North Africa even though the autoc ratic provinces and rentier monarchies feared the effects of the revolution ( Aburish, 1997, p.41 ) . Interrupting the links with the United States that the Shah had maintained was popular, yet no government with the spiritual and ideological mentality of Khomeini could digest such links. Any hopes that the United States may hold held of retaining those links were broken by the Tehran surety crisis. The Persian Revolution shocked many other states ; it raised frights of farther revolution, which peculiarly concerned the Americans, the Soviet Union and Iraq ( Hobsbawm, 1994, p. 453 455 ) . For the United States the loss of a friendly government in Iran was a sedate loss in military, political, and economic footings, for that government to be replaced by a extremist Islamic government intensified those loses ( Keay, 2003 p. 389 ) . It was Iraq that unwittingly gave the Persian government a encouragement for its province edifice scheme by motivating an rush in patriotism. Patriots feelings had been running high due to the revolution and the subsequent surety crisis with the United States, the Iraqi invasion of 1980 meant that every loyal Iranian supported the government, whilst for the government it further justified the remotion of the leftovers of resistance within the state. The Iraqis had expected a fleet triumph due to the convulsion caused by the Persian Revolution and the purge of the shah’s protagonists in the Persian ground forces and their replacing by the Revolutionary Guard. Given that the initial advantages that Iraq had in the ready supply of weaponries from the United States and the Soviet Union in peculiar, the Iranians did really good to drag the war on until 1989. The Persian government used the war with Iraq to speed up its province edifice scheme, Iranians were exhorted to contend on s piritual and loyal evidences, those of supporting their state, whilst get the better ofing the evil Saddam Hussein and his Sunni Muslim compatriots. The Persian government found it comparatively easy to enroll voluntaries to contend Iraq, mentioning to their dead as sufferer. The Persian government continued the war despite its homo and fiscal cost as it believed licking would destroy its province edifice scheme and even stop the government itself ( Deegan, 1996, p.204 ) . The war itself transformed the Revolutionary Guard from an unequal reserves into an effectual combat force that guaranteed the internal stableness of the radical province ( Davies, 2003, p.195 ) . By the clip the war against Iraq had finished and despite the decease of Khomeini in 1989 the province edifice scheme of radical Iran had achieved stableness. The biggest menace to its endurance could stem from its difference with the United Nations over its atomic programme ( Dean, 2004 p.22 ) . This difference is soon being used to bestir anti-American feelings in Iran, yet the government may hold to see the possibility of an American led invasion, particularly whilst President Bush remains in office. Whilst Iran is confronting economic countenances and even military onslaught, it is utilizing rhetoric for onslaughts on Israel plus suicide bomb onslaughts on Britain and the United States. Iran has declared that it has squad of self-destruction bombers available ( Sunday Times, 16 April 2006 ) . Iran has enriched U quicker than the United Nations and United States expected which merely increases their uncertainness over Persian purposes, they do non believe that Iran merely has peac eable purposes for its atomic programme ( Al-Ahram, 13 –19 April 2006 ) . The rentier monarchy chosen as a instance survey is Saudi Arabia. Arabia contains the two holiest metropoliss in Islam, Mecca and Medina ; hence, how it is ruled, and who regulations it has ever held great significance for Muslims across the Earth. Arabia’s geographical place every bit good as its spiritual position has made it the most prized plus in the Middle East and North Africa. The British successfully orchestrated Arabian rebellion against the Ottomans, which led to the formation of the Arabian land under the control of the Saud dynasty. Since so the chief province edifice schemes have revolved around holding a more conservative less extremist Islam internally, whilst being happy to advance extremist Islamic political orientation to the remainder of the Middle East, North Africa, and beyond. Such an attack may hold apparently helped the stableness of the province but it is seen as lip service by Islamic fundamentalists and is non precisely popular with the United State s who ignore it merely because they need Saudi oil ( Esposito, 1999 p. 15 ) Ibn-Saud was the first swayer of Saudi Arabia and his policies for province edifice proved extremely effectual, if non ever popular with the Saudi people. Ibn-Saud started by settling the kingdom’s boundary lines. District was lost to Iraq, yet gained from Kuwait. Ibn-Saud delegated disposal and patroling to the tribal heads, although he ensured that his ground forces was strong and effectual. Saudi Arabia’s province edifice owed a great trade to Ibn-Saud shrewdness and personal prestigiousness ( Mansfield, 2003, p.186-87 ) . The Saudi’s built up the land without upsetting Britain, which was the dominant power in the Middle East during the inter-war period ( Lewis, 1995, p.344 ) . Prior to the find of big oilfields, the Saudi monarchy was non abundantly affluent ; it had to acquire by through doing money out of the pilgrims that went to Mecca and Medina. It was the find of huge measures of oil that made the province edifice scheme successful, it brought wealth to the big royal household and paid for royal castles, plus a good equipt ground forces. Although, a strong ground forces was considered critical for province edifice, the Saudi monarchy has ever been careful to hold the backup of Britain and particularly the United States ( Akbar, 2003, xvii ) . Hand in manus with military and fiscal links with the United States, the Saudi monarchy has frequently tried to keep up to day of the month engineering as portion of its province edifice attempts. The relationship with the United States provides the Saudi monarchy with the bulk of its military equipment and is the biggest consumer of Saudi oil. Since the Gulf War of 1990-91 the Saudi government believes it has boosted its security due to the presence of American armed forces within the state. However, a strong relationship with the United States is no longer a province edifice scheme that enhances the stableness of the government. Even before the United States established bases in Saudi Arabia the Saudi government had felt the demand to hold specialist anti-terrorist units to protect the oil refineries and the royal household. Outside of Israel it has some of the best-trained units in the Middle East and North Africa ( Davies, 2003 P 163 ) . In fact the presence of United States mili tary in the Arabian heartland of Islam has prompted terrorist onslaughts on both American and Saudi marks within the land and generates internal and external resistance to the Saudi government. In many respects the Saudi government has miscalculated in leting a big American presence into their state. Ibn Saud, for case, may hold taken British and American money plus arms, yet he neer allowed any Western military bases within the land as it was beyond the picket for many Muslims to believe that Mecca and Medina could be controlled by non-Islamic provinces ( Cameron, 2003 p. 140 ) . Paradoxically the stableness of the Saudi monarchy could be the victim of one of its other province edifice schemes, the publicity of extremist Islamic motions abroad. The Saudi government has attempted the complicated reconciliation act of friendly relationships with the West, advancing itself as the defender of Islam, whilst back uping extremist motions, and advancing the Palestinian cause against Israel. These schemes are evidently contradictory in many respects, whilst maintaining good dealingss with the West and back uping those that aim to destruct Israel, a province that the United States has strongly backed since its creative activity in 1948. The Saudi government has tried to cover up its contradictory schemes through repression and censoring ; it besides tries to strip unfriendly parts of the Saudi imperativeness of any information at all ( Aburish, 1997 p. 362 ) . For the Saudi government there can be no allow up in inhibitory steps and censoring as it believes that a rela xation of its controls would rush the death of the government itself. Journalists can be detained without charge for showing positions that the government disfavors. Journalists nevertheless likely have a better opportunity of being released than ordinary Saudis ( Arab News 15/4/2006 ) The Saudi government has funded extremist Islamic groups for decennaries, particularly those stand foring the Palestinians. The Saudis besides bankrolled at assorted times other provinces in the Middle East and North Africa such as Syria and Iraq that had larger armed forces that could be used against Israel. The Saudis financed the Iraqi war attempt against Iran, as it feared the rise of extremist Shia groups in the Middle East. The publicity of extremist causes was aimed at beef uping internal and external support for the government whilst debaring unfavorable judgment of its relationship with the United States. The publicity of extremist Islamic philosophies had the consequence of escalating resist ance to the monarchy within Saudi Arabia with a inhibitory response by the government ( Akbar, 2003 p. 208 ) . The human rights record of the Saudi government is far from being the best in the Middle East and North Africa, yet it is barely criticised by the United States, although human rights misdemeanors are frequently used as an alibi to take action against more openly anti-American governments. The state of affairs over human rights demonstrates the moral corruptness and lip service of the Saudi government whilst besides demoing up American dual criterions. That is a combination that farther undermines the Saudi monarchy and strengthens anti-American feelings ( Cameron, 2002 p. 167 ) . The administration that threatens to turn over the province edifice scheme of the Saudi government is one that is led by a Saudi whose household has near links with the royal household, and has many Saudi members, Al-Qaeda. Al-Qaeda was amongst many of the extremist Islamic groups formed to contend against the Soviet Union’s invasion of Afghanistan. Al-Qaeda received Saudi support every bit good as American arms and preparation, although after the Soviet backdown from Afghanistan, it looked for farther struggles to contend in. Al-Qaeda respects any Islamic province or single Muslim that supports the United States as being legitimate marks for being attacked and even advocates the overthrow of governments if possible. For Al-Qaeda the presence of American forces in Saudi Arabia is the perfect stalking-horse for contending a war against the United States and the Saudi monarchy, the worst confederates in the Middle East and North Africa ( Akbar, 2003 p. 159 ) . Al-Qaeda therefore is the best illustration of how the Saudi regime’s province edifice scheme of advancing radicalism has backfired severely. The Saudi government possibly has no alternate but to go on its inhibitory internal steps and its close links with the United States. The importance of oil to the United States will intend that the Americans will go on to back up the Saudi government as it would see the remotion of the Saudi monarchy as being even more black to American involvements than the Persian Revolution ( Keay, 2003 p. 389 ) . Therefore, there are similarities and differences between the province edifice schemes of autocratic provinces and rentier monarchies in the Middle East and North Africa. Both autocratic provinces and rentier monarchies claim to set up their provinces on the footing of being Islamic provinces based on Islamic rules and ideological mentalities. Authoritarian provinces and rentier monarchies alike promote themselves as the defenders of Islam and morality and often use the defense mechanism of Islam as a stalking-horse for internal repression and censoring. In Iran both the Shah and the radical government after 1979 used the defense mechanism of Shia Islam as a province edifice scheme. The radical government could utilize that scheme more convincingly after being attacked by Iraq in 1980. The Saudi monarchy besides claims to be defender of Islam, particularly as Mecca and Medina are within its boundary lines. The shah’s government collapsed due to his efforts to modernize the sta te and the close links with the United States. The radical government has invariably shown anti-American rhetoric, which has proved popular domestically and besides in many parts of the Middle East and North Africa. The West frights Iran for its sensed combativeness and alleged support for terrorist groups. Internally the government seems secure. The biggest menace to its stableness could be the difference between itself and the United Nations and the United States over its atomic development programme. There is a strong possibility of economic countenances and military action being taken against Iran. However, the United States would happen Iran far more hard a state to suppress and get the better of than Iraq. Saudi Arabia’s stableness, like that of other rentier monarchies is surely non guaranteed. The Saudis need the Americans to vouch their security and their prosperity. However, it is the links with the United States that promote the internal and external resistance to the Saudi government. Al-Qaeda, an administration that owes so much to Saudi Arabian radicalism could keep the key to whether the Saudi monarchy survives or perishes. It would be a error to presume that the province edifice schemes of autocratic provinces and rentier monarchies have brought long-run stableness to the government. Rentier monarchies are likely somewhat more stable than autocratic provinces yet take off United States support from them, or if faced with a revolution with the same strength of the Persian Revolution and that stableness could stop overnight. The stableness of autocratic provinces depends on how good they maintain internal repression, deny any efforts at meaningful democracy and finally if they avoid struggle with each other or the United States. Bibliography Aburish S K, 1997A Brutal Friendship – the West and the Arab Elite, Indigo, London Al-Ahram Weekly online,Explosive proclamation Iran s declaration that its scientists have successfully enriched U took the West by surprise, writes Marian Houk 13 –19 April 2006 Akbar M J, 2003The Shade of Swords – Jihad and the Conflict between Islamand Christianity, Routledge, London and New York Arab News.com -Saudi journalist arrested for knocking Saudi spiritual extremism, 15/4/2006 Cameron F, 2002US Foreign Policy after the Cold War, Routledge, London and New York Choueiri Y,Islam and Fundamentalismin Eatwell A ; Wright ( 2003 )Contemporary Political Political orientations2neodymiumEdition, Continuum, London Davies B, 2003Terrorism – Inside a universe phenomenon, Virgin Books, London Dean, J W, 2004 Worse than Watergate the secret Presidency of George W. Bush, Little, Brown and Company, London Evans G A ; Newnham J, 1998The Penguin Dictionary of International Relations, Penguin, London Esposito J.L, 1999The Islamic MenaceOxford University Press, Oxford Hobsbawm E, 1994 -Age of Extremes The Short Twentieth Century 1914-1991Michael Joseph, London Keay, J 2003Sowing the Wind – The Seeds of Conflict in the Middle EastJohn Murray, London Khomeini I, 1981Islam and Revolution, Mizan Press, Berkeley Lewis B, 1995The Middle East – 2000 old ages of history from the riseof Christianity to thepresent twenty-four hours, Phoenix Press, London Mansfield P, 2003A History of the Middle East 2neodymiumedition, Penguin Books, London Mernissi F, 1993Islam and Democracy – Fear of the Modern World, Virago Press, London Painter, D S, 1999The Cold War – An International History,Routledge, London Sunday Times Persian self-destruction squads ready to hit US, British marks, April 16 2006

Free Essays on La Vita E Bella

Questo film di Roberto Benigno mostra la forza dello spirito umano, anche quando la morta e sicura. L’azione succede in Italia nel mille novecento trentanove. Il personaggio principale si chiama Guido. Guido e una bella persona perche cerca sempre di fare contenti tutti quanti. Per esempio, lui aiuta sua moglie quando le parla con l’altoparlante in campo di concentrazione. Dice che l’ama e che s’incontrano nel suo sogno per andare al cinema. Quest’azione, ha fato molto contenta Dora. Lei l’ama tanto che ha deciso di andare con lui e loro figlio al campo di concentrazione. Prima del campo di concentrazione quella famiglia era molto felice. Loro avevano una libreria dove il piccolo figlio chiamato Joshua aiutava sua padre. Quando loro arrivano al campo di concentrazione, Guido cerca di divertare suo figlio. Guido persuade Joshua che il campo di concentrazione e un gioco. Il Pappa dice a Joshua che se fa tutto ch’e necessario, loro guadagnano punti. E con mille punti, loro vincono. Per esempio se Joshua sta zitto e si sconde (perche tutti i babini sono occisi in ‘gas chambers’) lui guadagna dieci punti. In tutto il film, la musica e ripetuta ma bella. In particolare, c’e una canzone che Andrea Bocceli canta e bellissima. Anche le immagini sono molto forti. All’incomincio del film, la prima volta che Guido e con Dora ci sono molti fiori, e sono molto belle. Comunque, quando arrivano al campo di concentrazione, la prima cosa che vedono sono uomini magri e ammalati in uniformi molto sporchi e rigati. Questo film era molto tristo, ma io lo raccomando a tutti quanti.... Free Essays on La Vita E Bella Free Essays on La Vita E Bella Questo film di Roberto Benigno mostra la forza dello spirito umano, anche quando la morta e sicura. L’azione succede in Italia nel mille novecento trentanove. Il personaggio principale si chiama Guido. Guido e una bella persona perche cerca sempre di fare contenti tutti quanti. Per esempio, lui aiuta sua moglie quando le parla con l’altoparlante in campo di concentrazione. Dice che l’ama e che s’incontrano nel suo sogno per andare al cinema. Quest’azione, ha fato molto contenta Dora. Lei l’ama tanto che ha deciso di andare con lui e loro figlio al campo di concentrazione. Prima del campo di concentrazione quella famiglia era molto felice. Loro avevano una libreria dove il piccolo figlio chiamato Joshua aiutava sua padre. Quando loro arrivano al campo di concentrazione, Guido cerca di divertare suo figlio. Guido persuade Joshua che il campo di concentrazione e un gioco. Il Pappa dice a Joshua che se fa tutto ch’e necessario, loro guadagnano punti. E con mille punti, loro vincono. Per esempio se Joshua sta zitto e si sconde (perche tutti i babini sono occisi in ‘gas chambers’) lui guadagna dieci punti. In tutto il film, la musica e ripetuta ma bella. In particolare, c’e una canzone che Andrea Bocceli canta e bellissima. Anche le immagini sono molto forti. All’incomincio del film, la prima volta che Guido e con Dora ci sono molti fiori, e sono molto belle. Comunque, quando arrivano al campo di concentrazione, la prima cosa che vedono sono uomini magri e ammalati in uniformi molto sporchi e rigati. Questo film era molto tristo, ma io lo raccomando a tutti quanti....

Impact of Industrial Revolution Essay Example | Topics and Well Written Essays - 750 words

Impact of Industrial Revolution - Essay Example However, despite the great attention that I have accorded to the subject, I feel a bit discouraged by the score attained in the assignment previously. My understanding of assessment evaluation as such a paper is that the most important factors that are considered are together with the language competence, proper understanding of the question, the quality of the materials used as well as the ability for a student to express ideas fluently and cohesively. In my personal evaluation of the previous paper written (on impact of industrial revolution), I would reason that my command for English as the formal language of communication is unquestionable. I have a proven command in communication in language as would be justified through the excellent sentence structure, excellent spellings as well as the ability to interlink the points in a logical manner. Besides the ability to write and communicate in English, I have proven capacity to extract information from other written materials and com prehensively relate it to produce such a good flowing and informative paper as that previous paper. Among other strengths that I would be certain of are the capacity to effectively understand an examiners intentions through understanding the question. In this regard, I therefore feel that the assignment was handled effectively and perfectly to warrant a better grade than accorded. However, as it is famously said, man is to error, this position does not refute the possibility of having great weaknesses, which would explain my poor performance. Having studied in detail the question and the skills to tackle such an assignment from my teacher, I stand to be corrected on the weaknesses that I have shown in the assignment. In particular, I highly appreciated the comments from my teacher concerning my assignment. He justifies my poor performance through pointing out certain weaknesses that are portrayed in the paper in general. The comments points out to the first issue that would have led to my poor performance would have been the low quality picture used in the analysis. The picture was not clear and thus presented a problem to any person analyzing it. Besides the weakness of the picture, it was also farfetched from the core idea behind the essay. This would point out to the possibility of poor understanding of the question or task. This points to a possible weakness in my comprehension of that particular task and hence the adoption of a rather wrong approach while addressing the question posed. The comments from the teacher show that my tackling of the industrial revolution was very broad and never warranted the use of the picture as used. The referencing also fell short of expectation in that few sources are sited compared to the breadth of the topic, which would imply the application of other materials, which are not captured. This is a weakness concerning professional academic practices. It is also poor to cited the source of the picture and have the source not referenced again. These weaknesses among others led to the poor performance in the paper as shown by the lecturers comments and would therefore be attributed to personal weakness. Nevertheless, according to my opinion, my weakness is not wholly on poor understanding of the question posed but on the centrally the weakness is in having much of the information I want to write but fail to appropriately present it.

The Service Blueprints to Determine the Services Level Essay

The Service Blueprints to Determine the Services Level - Essay Example The fundamental concept of marketing that is used to model the service marketing involves the philosophy of customer orientation. In this case, the customer is considered to be useful in determining what the organization’s activities are and their purpose in life. The principle states that all activities carried out within an organization are basically for the good and benefit of the customers.The philosophy of service marketing involves taking into consideration the interests of the customers, maximizing and satisfying their needs and wants. The purpose of service marketing is to generate profits that can enable the company to run its operations in the right manner. The blueprint of a service is based on facts such as illustrating the actions and time involved when undertaking different actions of service for an individual or an organization. The actions involved in service delivery have an execution time that is allocated to it in order to enhance a certain level of toleranc e within an organization.This process entails the determination of the customers’ needs and later on looks for factors aimed at ensuring that the internal objectives of a business are met within a stipulated period of time. It also involves describing the activities that are used to design and manage services such as schedule, project plans, detailed representations, design plans and service platforms for an organization.The importance of the process in the marketing mix is that it determines how a service should be created and how it will be delivered to the customer to meet their needs and requirements. The major characteristics of the service process in the marketing mix include divergence, complexity, service location, customer participation as well as the service itself which may be technology or process based.

THE GLOBALIZATION OF PRODUCTION Essay Example | Topics and Well Written Essays - 7000 words

THE GLOBALIZATION OF PRODUCTION - Essay Example In fact globalization, in the sense of participation of the world communities in exchange of culture, thoughts, theory, and trade has been there for several centuries. Yet the concept of globalization has undergone radical changes in the past century. Now it stands for something more than just the diffusion and osmosis of the economic, social, and political theories, practices, and technologies. Now every country is as much part of globalization as globalization has become a part of every country. Globalization is as much a universal phenomenon as it is an internal phenomenon. It is not only the exchange of knowledge or adoption of better technologies. The meaning of globalization is not only limited to the idea of modernization or imitating a certain culture or practice. Globalization in itself has become a culture in its own rights and it has managed to bring the world closer. Now events happening at a distant geography are part of the local affair of the people. The development of technology has paved the way for this massive spread of cultural and economic activity. The amount and nature of interaction has changed fundamentally in the past century due to the rapid technological advancement that the world has seen. There has been an immense development in the world of technologies. Transport and logistics have developed substantially. The modes of communication have become extremely complex yet the diversity and speed that has been achieved was beyond imagination for the past generations. The entire world has come under a single network, which has facilitated social and cultural exchange, political interaction, and economic participation to a large extent (Globalization, n.d.). Free trade as a mode of development has gained wide popularity in the context of globalization and the volume of trade in the world is huge. The global market has become a very important force for the economic development of any country and all the countries is in the world are expose d to a certain extent or the other to the climate of the global market. The global markets have a tremendous influence on the financial status and the economic policies of a country. Therefore the sovereign states have to consider the global scenario during the construction of their economic plans. The emergence of advanced transport and communication system has revolutionized the factor markets. The factors of production are now able to transcend the geographical and political borders of a country at ease. This has made the nations follow the terms of the global markets and the supremacy of the nation states has given way to the domination of a handful of enterprises called the transnational corporations. Globalization has also led to the transformation of the multinational corporations to transnational corporations. These transnational corporations have become one of the major players of the global economy. They control a large chunk of the global markets. However their management and capital are not tied to any country. They are managed internationally, from various parts of the world wherever they have a location advantage. Similarly they can also shift their capital and other factors to places where they can have a factor market advantage. Therefore their production and marketing strategies adopt a global perspective. The transnational corporations therefore cater to the global market by operating globally.

Scientific Revolution And Secularism

Scientific Revolution And Secularism In the 17th century, Europe had undergone a drastic change in science, philosophy and politics. With new innovations in science, the world began to demystify and doubts began to disappear as new discoveries were being accomplished and questions about the anatomy, evolution and mankind were being answered. The Scientific Revolution was an indirect cause of the growth of secularism in Western Europe during the 17th century. Scientists attempted to address issues of humanity and the universe, furthermore through new discoveries they challenged preconceived notions. Galileo Galilei, William Harvey and Sir Isaac Newton were among the many scientists who, through experimentation and analysis, arrived at some of the most important scientific developments in history. Galileo Galilei was an astronomer and a physicist, born in Pisa, Italy and studied at the University of Pisa. He accumulated mathematical and scientific evidence to support the theories Copernicus held of a heliocentric universe, a theory which defied the Church and went against Aristotles theory of destiny and a divine plan. Galileo started performing controlled experiments such as rolling balls down slopes and measuring their speeds, he showed that motion could be described mathematically (Newman, 2002, p.72). Galileos physical experimentation had liberated people from confinement of religion and had initiated questioning of the Churchs views. His findings had influenced such philosophers as Locke, Machiavelli and Hobbes who had composed modernistic theories of humans and governments which had little to no room for religion and opinions of the Church. Galileo had challenged three major aspects of the Churchs beliefs, one being that there is unification between celestial and terrest rial mechanics and that the universe is subject to change. The second being his mathematical approach to reasoning which was in sharp contrast to divine revelation as the source of truth and the Church as authority of judgment. Galileos last aspect that challenged the beliefs of the Church was his support of the heliocentric cosmology, essentially diminishing the geocentric worldview of importance of humans and the idea of scattered stars with no pattern (Ardent, 2004). By remodeling the telescope, Galileo had since allowed people to visualize and experience these scientific discoveries. He disproved many long-held assumptions made by the Catholic Church during his time, and through his experimentations encouraged a new train of thought which in turn resulted in the beginning of secularism. Similar to Galileo, William Harvey had made significant discoveries which contrasted the views of the Church. Harvey was an English physician who was not satisfied with divine power as an explanation for the workings of the human body (Newman, 2002, p.73). His discoveries in human anatomy were one of the most significant achievements in physiology and medicine in the 17th century, but his work had opposed the Creation Story, which led to skepticism of the Bible. Harvey had made the discovery that humans and animals only had a limited amount of blood by cutting open the vein of an animal and allowing it to pour out (Bhatia, 2010). This was considerably different from the previous thought of blood being a natural spirit where it flowed out to vital spirits in the heart and animal spirits in the brain (Bhatia, 2010). Harvey did not burden himself with these theories but took it upon himself to solve the mysteries of the human body, separating fact from fiction and eluding the beliefs of the Catholic Church. Distinguishing that the heart was a pump and not a filtration plant where blood simply just passes through (Newman, 2002, p.74) had created a whole new way of thinking, people now knew how the heart worked and were beginning to doubt the thought of a divine plan and God creating humans, which brought about thoughts of evolution. In 1642, Sir Isaac Newton combined the knowledge of Galileo and Harvey, along with his own, to create yet another breakthrough in science which resulted in the growth of secularism. Newton accurately described the movements of objects in the solar system and how they move under the influence of universal gravitation (Bhatia, 2010). Newton had further influenced secularism by his discoveries in science, his Three Laws of Motion stated: if no force acts on an object, it will remain at rest or maintain its constant motion in a straight line every change of motion or acceleration is proportional to the force that caused the change and inversely proportional to the objects mass for every action force, there is no equal reaction force in the opposite direction. (Newman, 2002, p.73). These Three Laws of Motion had allowed people to make sense of their actions and the actions of the objects they use on a daily basis. Newton had explained things with concrete evidence, along with certain things that had only been explained in biblical texts which allowed more of a separation between government and religion. Science and technology having liberated men from the superstitions of religion, now guaranteed continuous process. (Genovese, 1997). He showed that God does not make everything happen, which caused people to stray from the belief of divine power and use science as a way of explaining the world. Newtons scientific enhancement, along with the works of Harvey on human anatomy and Galileo in astronomy and the universe, had truly boosted the growth of secularism in the 17th century. Through scientific analysis, these three scientists created new thoughts and theories that challenged the assumptions of mankind made by the Catholic Church. It was the beginning of a new era of thinking, an era where evolution of mankind and the universe were proved with scientific evidence and not holy texts. The Scientific Revolution had significantly affected the growth of secularism in the 17th century and has continued to affect secularism in the 21st century, as people still question and doubt Gods existence, faith and religion.

Barbarians at the Gate :: Business Management Studies

Barbarians at the Gate Barbarians at the Gate is a story of the largest takeover in Wall Street history. Ross Johnson turned CEO of a company, which was the product of three merged companies, Standard Brands, RJ Reynolds, and National Biscuit Company (Nabisco). The newly formed company’s, called RJR Nabisco, stock began to fall and never recover. Johnson along with Shearson executives planned a leverage buyout (LBO), in which a brokerage firm (Shearson) would borrow money from banks and buy up all the outstanding shares from the stockholders to turn the company private. The problem with this is that the company would be put into jeopardy of other companies that can outbid the parent company, which would lead to a takeover. The higher the bid would lead to a bigger debt and lesser profits for the owners of the firm. One of the six accounting principles that was discussed in the book was the expense principle, which helps determine performance of a company by measuring the outflows and inflows of resources. The matching principle guides the recognition of expenses, so good matching will ultimately lead to a better measure of performance. When KKR exercised due diligence of RJR Reynolds, they could not figure out â€Å"other uses of cash† in the statements obtained. â€Å"The initial projections they had obtained from RJR Nabisco was a heading ‘other uses of cash.’ Beside it was a row of figures stretching out ten years, each year ranging from 300 to 500 million dollars. Was it cash flowing in or out? Should he add it? Subtract it? Ignore it?† (Barbarians 369).