Sample Review of Related Literature

Performance of Islamic banking in Pakistan

2009-07-05T05:11:00.001+08:00

Background and Literature Overview

There has been large scale growth into the Islamic banking in Muslim countries and around the world during the last twenty years as the performance growth is influenced by factors including the introduction of broad macroeconomic and structural reforms in financial systems, the liberalization of capital movements, privatization, the global integration of financial markets, and the introduction of innovative and new Islamic products. Islamic finance is now reaching new levels of sophistication. However, there has been presence of Islamic financial system with its identifiable instruments and markets is still very much at an early stage of evolution. Many problems and challenges relating to Islamic instruments, financial markets, and regulations must be addressed and resolved. In Islamic banking rules apply which differ from those in traditional banking as there consequences of Islamic banking for financial operations as there goes in examining in several Islamic procedures as being introduced by Pakistan's banking sector ever since the year 1985. Considering the drastic change in procedures, (Cornelisse and Steffelaar, 2008 p. 687) the effect of Islamization on the banking sector performance has been moderate. One reason for the reality, is that banks in Pakistan have consistently opted for financial instruments closely resembling interest based finance aside, certain behavior did have determined within large extent by the fact that these banking sectors are owned by the state of Pakistan (Cornelisse and Steffelaar, 2008 p. 687).

Objectives

The need to provide comprehensive comparative review of the literature on the Islamic banking sector in Pakistan, to discuss basic features of Islamic finance and banking, there is a need to introduce Islamic financial instruments in order to compare such to existing Western financial instruments and discuss the legal problems that investors in Pakistan can encounter. Indeed, there is importance of having in empirical assessment of performance of Islamic banking in Pakistan which there will highlight regulations, challenges and problems in the Islamic banking market. Thus, the main objectives is to review the growth of the Islamic banking on global basis, assess its performance based on latest financial data available, discuss its salient products/services, evaluate for departures from traditional Islamic principles, to offer suggestions for improvement based on the experience of the authors and evidence provided by literature studies in research area. Furthermore, the need to integrate several performance of Islamic banking in Pakistan, recognizing in certain banks in Pakistan, the assuming performance of the banking sector, the linking of reliable literature information towards banking performance will be imperative in this research denoting to research questions as well as hypothesis

Questions

What is performance? What constitutes Islamic banking performance?

What is an Islamic bank? How is organization of the bank formed according to framework/structure?

Any aspects of Islamic bank in Pakistan that implies to positive and or negative performance?

How is performance manifested in terms of management and control assumptions? Discuss

Hypothesis

H1: There is positive performance of Islamic banking in Pakistan

H2: There is negative performance of Islamic banking in Pakistan

Methodology

For the research method, the need for the study to demonstrate understanding of performance factors linked in the banking sectors of Pakistan, regarding organization and facts towards Islamic banking operations through the research process of collating cases from within Pakistan context as there may imply to performance measures and analysis in determining study factors that influence performance involvement of banks. The methodology will be in utilization of certain case study analysis allowing statistical variation of performance analysis of Islamic banks as well as the using of several secondary resources, the study endeavors to the application of awareness of stable financial performance of such Islamic banks and how methods assimilation is useful into the research practice. The Islamic banks will persist in taking the easy and risk adverse route and avoid profit and loss sharing contracts as the desire to withhold information must be negligible and systems must be put in place which allows efficient and open profit and loss share instruments to develop and be able to create suggestions as to how venture capital can be developed into Pakistan setting, without fear of banking operations collapsing or being restricted in the performance development.

Reference

Cornelisse, P. and Steffelaar, W. (2008). Islamic Banking in Practice: the Case of Pakistan. Development and Change Volume 26 Issue 4, Pages 687 - 699 Published Online: 22 Oct 2008, 2009 Institute of Social Studies

Cathay Pacific Literature Review Sample Chapter 2

2009-04-16T14:59:00.001+08:00

2 LITERATURE REVIEW

Loyalty programs

Loyalty programs have long been used as a mean of strengthening customer relationship. Programs are designed to fit in different industries, such as airline, hospitality and banking industries, to retain their customers by rewarding their loyalty, so as to boost companies' profits.

The concept of loyalty program started to appear in the 1950s, S&H Green Stamps and Raleigh cigarettes coupons adopted similar concept in encouraging repeat business; the more customers purchased, the greater the benefits. On May 1, 1981, Advantage as a frequent flyer program of American Airlines was launched. It was the first loyalty program introduced in airline industries, and was quickly followed by its competitors, such as United Airlines, Delta Air Lines and Trans World Airlines.

Frequent flyer programs offer members to redeem tickets, upgrade service class, or obtain free or discounted car rentals or hotel stays, or others products services through various linkages. Today, frequent flyer programs are everywhere, being recognized as one of the most effective and successful marketing tools.

However, do these marketing programs really built loyalty to the airlines? Or do they merely create a group of customers who simply want to be rewarded for their spending.

By identifying individual customers, frequent flyer programs designate customers with colorful names, for example, True-Blue, Executive Club, Flying Dutchman and Frequent Flyer, then differentiate members into groups, for example, the four tiers in The Macro Polo Club, so that each membership has its own exclusivity and distinctive features.

Modeling of frequent flyer program is very important to the success of a company. Should a company regard this program as a reward program? Or should it be a loyalty program? These questions also trigger the effectiveness of such program, and so as the sales generated through operating it. In the retail industries, according to the Center or Retail Management at Northwestern University, both business and consumers have recognized the value of loyalty programs. Only 12% - 15% of customers are loyal to a single retailer. But that small cadre of customers actually generate between 55% - 70% of company sales.

However, being able to identify individual customers, to measure and to understand their individual behaviors and desires is of great importance to the success of a loyalty program. Companies should also avoid developing loyalty programs with good intentions but unclear objectives.

In order to acquire new customers, retain existing ones and increase their spending through loyalty programs, products and services provided should be shaped with objectives, and have their characteristics identified apparently. Services are generally described as having four key characteristics: intangibility, simultaneity, variability and perish ability. Kotler, An strong, Saunders and Wong (1996) have given a contemporary definition of service in relationship management context: "A service is any activity benefit that one party can offer to another, which is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.". However, the airline industry definitely is a service provider; thus, loyalty marketing activities becomes part of service relationship management (RM). During the course of managing relationship in the service sector, it is crucial for marketers to understand it is to strengthen the bonds between the service provider and the customer rather than to increase the number of transactions (Gordon, 1998, p.10) that is the heart of RM.

Frequent-flyer programs alone cannot do trick for airlines

What are the essences to loyalty marketing for airlines?

Crosby and Johnson (2004), in American Marketing Association's Marketing Management, talked about one of their clients discovering that, through repurchasing and cross-selling opportunities, a mere 1% increase in its customer loyalty index could increase the revenue by as much as 5%. Indisputably, customer loyalty is an intangible corporate asset. Numerous research studies have pointed to the same fact that – an increase in customer loyalty can increase profitability. It is commonly accepted that the creation of loyal customers is the key to achieving consistently above-normal market performance. Remember, satisfied customers are not necessarily loyal ones. Consumer inertia and lack of choice in the market are often reasons why they are attached to a brand.

Before one could start manage this intangible corporate asset (i.e. customer loyalty), one must be able to identify and understand the causal relationship (i.e. cause-and-effect) between its brand and its customers:

· What are the touch points and attributes affecting customer attitudes and behaviors (attempts to rule out customers who are attached to the brand merely due to inertia)?

· What are the customers looking for in the products or services offered?

· How do these touch points and attributes influence vary over the different life stage of the customer relationship? Among different customer segments?

· How can we influence these touch points and attributes?

· What is loyalty? Repurchase, recommendation, sole source?

In causal relationship i.e. from various touch points to loyalty, there is a chain of effects attributes by different variables.

Apart from the above, marketers should also dig deeper into the role of emotions in order to fully understand the causal relationship and map a holistic landscape on customer loyalty. Behaviors, including purchase, are motivated by emotions. Emotions, motivations, motions as well as rational interact with one another. For instance, consumers are motivated to purchase if an emotional connection is established with the brand's promise. This rests with the emotional ability of consumers to grasp the benefits projected by a brand.

Strategically speaking, there are three-M's to the architecture of customer loyalty (Crosby and Johnson, 2004): Measure, Manage and Model – which help devise strategies for segmentation, distribution, pricing, positioning, communications etc.

Measurement – many companies are now adopting a simplified measurement on customer loyalty, some are now advocating surveys composed of only one or a few questions to assess the strength of customer relationships and provide direction and indication on how they might be approved. However this is like diagnosing the reasons behind a fever simply by taking the patience's temperature. Customer loyalty is too complex to be measured by a single measure. Customer loyalty is known to manifest itself in numerous ways, which all have economic consequences for the company including repurchase, recommend, sole source, etc. Measurement progress in the social sciences that multi-item indices tend to outperform single question indicators in terms of reliability and validity.

A survey is done recently by Wharton School of the University of Pennsylvania, it shows that most companies have made little effort to identify areas of non-financial performance, e.g. customer loyalty, that might advance their chosen strategy. Many companies avoid measuring such areas as they are hard to measure.

Measurement, although hard to perform, is a critical enabler to performance. Research was done to discern differences among companies that used strategic measurement to manage performance and those that did not found that measurement-managed organizations have much stronger results than other organizations: 1) about 83% of measurement-managed companies are in the top third of their industry vs. 52% for non-measurement-managed companies; 2) about 80% of measurement-managed companies realize a three-year positive return on investments vs. 45% for non-measurement-managed companies.

Right measures also critical. Customer measures must be in sync with your company vision, mission and strategy. This will help ensure alignment in the organization and a common focus on your strategy.

In order to maximize profitability, organization must align activities (e.g. advertising, communications, call centre, front line etc.) to the customer loyalty causal factors. A consumer-centric organization can ensure cross-functional alignment to the customer loyalty priorities. For instance, marketing, engineering, procurement, human resources and finance teams must get together to discuss and decide on the optimization of the company's resources in order to achieve customer loyalty.

Chapter 2 : Review of Related Literature : The Concept of Strategic Management

2009-03-12T06:44:00.001+08:00

Chapter 2

Review of Related Literature

Company Overview

The Concept of Strategic Management

Strategic management can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enables any organisation to attain its objectives. As this definition entails, strategic management gives emphasis on integrating management, marketing, finance, production/operations, research and development and computer information systems to achieve organisational success. The term strategic management is also used synonymously with strategic planning (David, 2001).

Strategic management is guiding an organisation relative to challenges and opportunities appearing in the contingent environment. This environment is composed of those external elements that most directly affect organisational goal achievement and new goal development. Thus, organisation system design and management should complement strategic actions taken for productive subsystems, as well as those providing output delivery and other support functions for the organisation. To the extent possible, the organisation bases its actions on strategic planning that, rather than a one-time effort, is an ongoing process of adaptation of original conceptions of mission, goals, structure, roles, and so forth relative to environmental dynamics (Siegel, 1992).

Furthermore, due to the existence of competitions within and outside the marketing arena, it is therefore very significant for a company to establish strategic management and set a strategic plan for its development and improvement. It is for the reason that the twenty-first-century realities of globalisation, rapid changes in technology, increasing competition, a changing workforce, changing market and economic conditions, and developing resource shortages all increase the complexity of modern management. Whereas strategic planning was a competitive advantage in the past decade, it is a necessity of global thinking in this century. Planning strategically is certainly a new requirement in the global business world. In order to survive the new business challenge, global thinking and practice must permeate all corporate activities. Successful companies are, of course, the first to consider the global marketplace as their arena for competition. According to David (1999), strategic management has become a vital part of most, if not all, organisations. "Almost all organisations of any reasonable size have some kind of strategic planning." More importantly, strategy implementation has been heralded as the key to corporate strategic success.

Potential Benefits and Limitations of Strategic Management

Strategic management can contribute significantly to organisational performance; however, its practice can have limitations. The statement means that although strategic management can consider as one of the most effective strategy to attain business goals and to gain an efficient organisational performances and functions, its practice can also have restrictions and limitations because of different factors that might affects the overall implementation of strategic management within a company. As mentioned, the whole concept of strategic management encompasses potential benefits and limitations.

Historically, the principal benefit of strategic management has been to help organisation formulate better strategies through the uses of a more systematic, logical and rational approach to strategic choice (Thompson & Strickland, 2003). One of the potential benefits of strategic management is it make sure that the organisation only follows one direction or path and that is towards the achievement of its business mission, objectives and success. Through the used of strategic planning as part of the strategic management concept, the company will be able to determine the best approach to be used in order to efficiently attain the said goals. In addition, strategic management is also beneficial in ensuring not only the success of an organisation but also its survival by adapting the whole organisation to changes in its environment and making sure that the organisation remains competitive (Drejer, 2002).

One of the advantages of strategic management is it enables a firm to proficiently identify how a certain organisation should deploy its resources in the environment and adapts the organisation to satisfy the long-term objectives of the firm. It is important to note that strategic management deals with several time spans. The organisation needs to be more than just competitive here-and-now. The competition for industry leadership is just as crucial to firms as is the competition for developing the right competencies in the right time. Thus, strategic management is also about integrating time horizons and activities related to all three kinds of competition. This often means finding those issues that should be kept invariant for the time being and adjusting other activities and issues accordingly (Pearce & Robinson, 2000).

Although strategic management encompasses many advantages and benefits for the organisation, strategic management has also some restrictions or limitations. One of the limitations of strategic management is it may not function well enough for the organisation without having a good and effective leader to initiate such approach. It is known that strategic management is a concept of determining and executing the most effective business approach, however, if the leader of such company do not have what it takes for implementing effectively the strategic plan formulated, then strategic management will not be successful as expected.

Strategic management is a process used in an organisation so as to develop essential goals and resources. It is a combination of impure, mixed and interactive process loaded with difficulty, both politically and intellectually. Strategic management and human resource are very much related to each other. Through the combined efforts of these two practices, several improvements can be attained, however, without an effective human resources, implementation of strategic management will not be possible (Boxall and Purcell, 2003). In addition, strategic management is a three way process (choice, analysis and implement), hence, if one of the three processes does not meet the company's expectations, then it will affect other process which can make the use of strategic management a failure for the organisation. It is important note, that in order to gain success through strategic management, the company must be strategic from the very beginning up to the last. When, one does not become successful, all other functions and operations within the organisation will be affected; hence can make the business to face its major downturn (Pearce & Robinson, 2000).

Generic Strategies

Successful strategy requires the firm to choose the markets in which its distinctive capabilities yield competitive advantage. But the adaptive,
incremental nature of strategy means that the starting-point is where the
firm is now. Strategy is the direction and scope of an organisation over the long term: which achieves advantage for the organisation through its configuration of resources within a changing environment, to meet needs of the markets and fulfil stakeholder expectations. The strategy answers both the questions "where do you want to go?" and "how do you want to ge there?" but the first question is answered when each industry set the goals and the second is answered when such industries plan the strategies. The traditional approach basically focused on the first question but the traditional approach gives equal importance to both of them. While developing a corporate strategy for the any profit organisation, the management have to keep in mind the demand of the customers and the marketability of the products and services offered.

These generic strategies are used by different organisation because of the potentialities that the management have seen with these strategy and the benefits it may provide. However, if the company should not strongly commit themselves with these strategies, like what Southwest Airlines and British Airways have done, then, instead of achieving competitive advantage within the marketplace, the industry might be at risk of falling.

These generic strategies are guiding an organisation relative to challenges and opportunities appearing in the contingent environment. This environment is composed of those external elements that most directly affect organisational goal achievement and new goal development. Thus, organisation system design and management should complement strategic actions taken for productive subsystems, as well as those providing output delivery and other support functions for the organisation. To the extent possible, the organisation bases its actions on strategic planning that, rather than a one-time effort, is an ongoing process of adaptation of original conceptions of mission, goals, structure, roles, and so forth relative to environmental dynamics. There are five different generic strategies that a business can choose.

These include cost leadership, differentiation, focused cost leadership and integrated cost leadership/differentiation. Each generic strategy helps the company to establish and exploit a competitive advantage within a particular competitive scope (Hitt, Ireland & Hoskisson 2003). By applying these strengths, three generic strategies are resulted: cost leadership, differentiation and focus (Johnson & Scholes 1997). The strategies used by the company include cost leadership, differentiation strategy and focused differentiation.

Cost leadership strategy is based upon a business organising and managing its value-adding activities so as to be the lowest cost producer of a product within an industry (Campbell, 2002). Cost advantage may achieve in terms of how product or services is designed or in terms of its quality. Differentiation strategy is based upon persuading customers that a product is superior to that offered by competitors (Campbell, 2002). The value added by the uniqueness of the product or services may allow the company to charge a premium price for it. However, the danger associated with differentiation may include imitation by competitors and changes in customer tastes.

Focus-differentiation strategy is aimed at a segment of the market fro a product rather than at the whole market or many markets (Campbell, 2002). The successful way using focus strategy is to tailor a broad of product or service development strengths to a relatively narrow market segment that they know very well. The risk may include imitation and changes in the target segments.

Experiential Learning Theory

In business strategies, it is important that the management must be able to identify the needs of the business. In this regard, the adaptive competency approach to needs analysis is based upon Kolb (1984) Experiential Learning Theory (ELT) which allows one to view the person (employee) and job in commensurate terms. The cornerstone of this approach is that learning, adaptation, and problem-solving processes are similar and that all jobs involve each of these processes. Therefore, if one describes both the person's adaptive skills and job requirements in learning terms, then one can identify and describe the adaptive or interactive processes that occur in the work setting.

ELT conceptualizes the learning process in such a way that differences in learner styles and corresponding learning environments can be identified. The application of the adaptive competency approach accepts the premise that typical needs analysis at the employee level portrays jobs in one set of terms (i.e., job specifications), and employees are thought of in another set of terms (person-trait characteristics).

To achieve a commensurate means of assessing business needs at the employee and job interaction level two critical assumptions underlie the adaptive competency approach: (1) that the person or employee be viewed as an adult learner, and (2) that the job context be viewed as a learning environment in which job performance necessitates some type of cycling through the ELT process (Sims, 1983).

Using ELT in business strategies, the management will be able to determine the specific needs of the company based on their learning styles. Through this, the outdoor development program will ensure that the employees are learning things within their potentialities and their capacities. Through this also, the company will also be able to identify which strategies will be suitable for the company.

Key Elements of Strategic Management

Strategic management is the process of specifying an organisation's objectives, developing policies and plans to achieve these objectives, and allocating resources so as to implement the plans. It provides overall direction to the whole enterprise (Abell, 1999). It can be "viewed as a set of theories, frameworks designed to explain the factors underlying the performance of organisations and to assist managers in thinking, planning and acting strategically" (Campbell, et al. 2002).

Strategic management can be thought of as having three main elements-strategic analysis, strategic choice and strategic implementation (See Appendix 2). First, strategic analysis is concerned with understanding the strategic position of the organisation. Secondary, strategic choice is the result of strategic analysis, which is to do with the formulation of possible course of action, their evaluation and the choice between them. Last, strategic implementation is concentrated on how the choice of strategy can be put into effect (Johnson & Scholes, 1997).

Strategic analysis includes developing a vision and mission to be achieved by the organisation, analysing and identifying an organisation's external opportunities and threats, determining the internal position of the company including its strengths and weaknesses and establishing long-term objectives. Strategic analysis means to know the overall position of the organisation within and outside the marketing environment. There are many ways in which a company can be able to analyse the overall position of the organisation internally and externally.

For the external analysis, an organisation can be analysed through the used of Porter's Five Forces Model or Political, Economical, Sociological and Technological (PEST) Analysis. The major concern of this analysis is to determine and present the level of the company to be geographically positioned in accordance with the degree of its external environment. And to be able to strategically analyse the internal position of an organisation, the management can use SWOT Analysis or Value Chain Analysis. Value chain is the framework for examining the strengths and weaknesses of an organisation, and for using the results of this analysis to improve performance.

On the other hand, strategic choice refers to the activity of an organisation which involves generating alternative strategies and choosing particular strategies to pursue. The degree of discretion or strategic choice an organisation has will be determined to a large extent by leadership style, national culture, commitment to past and continuing strategies, the success of certain symbolic actions, and the nature of its systems and processes (Gratton, et al, 1999). The perspective of strategic choice reverses the emphasis by concentrating on the responsibilities of the management teams in shaping the conditions and processes of the strategic management from both internal and external environment of an organisation. In addition, strategic action draws upon the social activities and strategic management concept to improve the view that any managerial actions can influence or affect performance. The range of strategic actions is very broad. In environmental context, strategic choice comprises the selection of the product/market realm in which a certain organisation will engage (Thompson & Strickland, 2003).

On the other hand, in organisational context, strategic choice involves the selection of the structures and allocation of the resources to be adopted within the chosen real. Further, strategic choice also involves activities for selecting the most appropriate strategy to be used by the organisation to stay competitive and survive in the stiff competition of the marketplace. Hence, it can be said that strategic choice is one of the crucial element of strategic management because the success of the implementation of the strategic management depends on how well and efficient the choice made by the management team.

Lastly, the third key element of strategic management is strategic implementation. Strategic implementation requires a firm to establish annual objectives, devise policies, motivate employees, and allocate resources so that the formulated strategies can be executed effectively. Strategic implementation includes developing a strategy-supportive culture, creating an effective organisational structure, redirecting marketing efforts, preparing budgets, developing and utilising information systems and linking employee compensation to organisational performance.

In addition, strategic implementation is often regarded as the action stage of strategic management. Implementing the most appropriate strategy means mobilising employees and managers to put formulated strategies and theories into practice. It is also considered as one of the most difficult and complex stage in strategic management because it requires personal discipline, commitment and sacrifice. Successful strategic implementation hinges upon manager's ability to motivate employees, which is more an art than science. Strategies formulated and analysed but not implemented serve no useful purpose (Miller, 1992).

It is said that each of the three key elements of strategic management is essential and that the used of these elements must be integrated with each other. If such elements will be treated as a discrete element or if one is separated from the other, it can be concluded that the organisation may not be able to achieve the main objective of using the concept of strategic management. It is said that strategic analysis, strategic choice and strategic implementation activities occur at three hierarchical levels in a large organisation: corporate, divisional or strategic business unit and functional. By using these three as interdependent with each other will make any business organisation have the competitive edge in the business arena (Hax and Majluf, 1996).

Approaches to Strategic Management

The concept of strategic management was developed to enable managers to align their organisations with the changing environment in order to achieve organisational goals and objectives (Liou, 2000). Today, strategic management has been associated with a variety of models and styles. The development of this concept is essential because it corrects the anxiety with strategy analysis in the early stage and gives special attention to strategic choice and strategic implementation in the later stage.

Strategic management may be viewed from three general perspectives: product-market strategy, competence-based strategy and the integration of the first two by means of the mission and the vision of the organisation. The product-market strategy perspective views the firm as a collection of product/market combinations (i.e., a portfolio). This view sees strategy as a matter of positioning the firm in its environment, either by selecting the optimal mix of product/market combinations or by positioning in relation to stakeholders.

Instead of viewing the firm as a collection of product/markets, it is also possible/feasible to view an organisation as a collection of resources or competencies. This view starts in opposite perspective from that of the traditional product-market. It assumes that a firm cannot be defined by the changing nature of its products and/or markets, but rather by its core competencies, which may be less likely to change in the long run. The rationale, then, is to generate competitive advantage by means of internal factors (i.e., technologies or core competencies). The next approach is core competencies which are considered to be a more appropriate term for describing what generates competitive advantage for a firm. These two views appear to be a duality. A core competence is a well-performed internal capability that is central, not peripheral, to a company's strategy, competitiveness, and profitability. The best-known explanation of core competence is provided by Prahalad and Hamel (1990): " core competencies are the collective learning of the organization, especially how to co-ordinate diverse production skills and integrate multiple streams of technologies".

On the one hand, they appear to be rather incompatible, but on the other hand, they are still two sides to the same coin: the organisation that must survive and prosper. This corresponds to the third view, which is a holistic view in the sense that it sees both product-markets and core competencies and attempts to integrate them for the benefit of the firm. The considerations so far make it possible to propose a division of strategic management into three sub decision areas: product-market strategy, competence-based strategy, and integration of the other two decision areas.

Literature Review on Management Techniques

2009-01-27T01:35:00.001+08:00

I. Literature Review

The literature review of this paper has been divided into two parts, primary research and secondary research. The primary research will take into consideration the differences of gender attributes with regards to the decision making processes in an organization. This means that the primary research will constitute studies that will constitute previous works on gender differences in decision making, particularly with reference to managers and other executive level personnel in the organization. A similar consideration will be taken on the specific reactions of these managers on situations where their decisions will be crucial in the organization. The secondary research will take into consideration the general studies regarding gender differences in the organization. The secondary research will try to establish the assumption whether there is indeed a gap regarding the attribute gender in an organization.

A. Primary Research

The context in which dilemmas are dealt with in a company comprise mainly of ethical issues. When managers are subjected to such a situation, their assessment to specific elements such as their economic and financial obligations to the company and the moral obligations to the individuals surrounding the organization is involved. (Corriher and Kohut, 1994, 32) Other studies have indicated that the existence of dilemma in the decision making process of managers is triggered by the complex changes that took place on the subject of managerial problems. (Hunt, Jennings, and Munn, 1996, 425) This indicates that problems involving management has considerably changed and evolved as organizational processes developed.

Other studies regarding management have taken a turn to gender difference in carrying out decisions for the organization. This account of the literature has been triggered by the fact that a lot of appointment of female managers has been taking place in organizations. A recent study of Corman, Lussier, McKinley, and Sonfield (2001, p165), they took a gender-comparative report on the decision making of male and female managers. Their study took on the strategic decision making of these managers. Nonetheless, their findings indicated that there are no clear differences among male and female managers with regards to the "situational" aspect of their strategic decisions. (p169) The authors indicated that these situational elements refer to the attitude of the managers towards innovation as well as risk-taking on their individual strategies. They indicated that the earlier studies claiming that women are more risk-averse are rejected in this context. Moreover, Corman et al (2001) further claimed in their study that the male managers have the propensity to acquire a higher satisfaction rate with regards to the business performance of the organization, particularly in relation to the strategic decision that they have made in the process. Other than that, the authors have claimed that there is no other differences that have emerged in the strategic decision making process.

However, other recent studies indicate that female managers may possibly acquire a "masculine" frame of mind when acquiring decisions especially when they are in a managerial position. The study of Sczesny (2003, 353) establishes this claim. Generally, the study claimed that female managers acquire a leadership role that seemingly defies the "prescriptive aspects of their gender norms. (p363) This means that the gender stereotypes are still present in the leadership role in organizations. It is not as much as there are differences in the context of male or female executives and managers, the Sczesny (2003) indicates that the masculine and feminine leadership differences are still present. This indicates that a masculine role in the context of leadership and decision making still is predominant, regardless of the gender of the manager. This is particularly true in a highly masculine organization. (Hofstede, 1984, in Herbig, 1994, p53) In this context, masculinity describes the level on which a society regards masculine roles and achievement. Moreover, this shows how gender is regarded in the said society. This shows that the major structures of the organization are dominated by male.

B. Secondary Research

In the working environment, several studies have indicated the differences among male and female part of the workforce. One example is given by the study of White (1999). His study tried to measure the level of ethical development of individuals with particular concern on gender. The study found out that female employees display a greater propensity to take more ethical courses of action as compared to their male counterparts. White (1999) indicated that there are specific consequences in having the said findings. One particular concern is that it has established that there is indeed a difference in the moral development in the context of gender. This difference consequently will reflect on the actual ethical behavior of the employees.

However, some doubt is given in this claim considering the fact that the issue of ethics and ethical behavior is subjective. On a recent study of Oldenburg (2005) the findings indicated that the gender of an individual have a considerable effect on how his/her behavior is interpreted. The work of Oldenburg (2005) noted that behaviors in which the ethical behavior is debatable, it is more likely that an individual will take into consideration the gender of the person. Thus, the stereotypical standards of socially accepted behavior between males and females are apparent in this context.

II. Conclusion

The study has taken into consideration several studies relating to the differences in gender, particularly in the decision making and behavior of male and females. This has been triggered by the evolution of the organization to a more diverse one, especially with the context of those acquiring executive roles and decision making duties. The discussion regarding the differences in behavior lies greatly on the assumption that there is indeed an actual gap with regards to how male and female react to specific situations. The studies indicated above that women would be able to react in a more ethical manner when they are subject to an organizational dilemma. With regards to the strategic differences in the decision making process, particularly with references to situations involving an organizational dilemma, the arguments above has indicated that there is no apparent difference.

Literature Review Sample on Alcoholism

2009-01-08T03:50:00.001+08:00

Review of Literature

Facts on Alcoholism

Alcoholism is also known as alcohol dependence and is considered a disease with symptoms such as craving or feeling a strong urge to drink; loss of control or not being able to stop once drinking has begun; physical dependence such as nausea, sweating, shakiness, and anxiety; and tolerance or drinking greater amounts of alcohol to "get high" ('National Institute on Alcohol Abuse and Alcoholism' 2006). Many people believe that drinking alcohol will and may ease their problems regarding their family, work and the society, but in fact, it would not. Acquiring alcoholism may lead to more serious complications and fatal illnesses that would cause the person's life.

Several think that alcoholism is a disease, and in fact, the National Institute on Alcohol Abuse and Alcoholism (2006) is supporting this statement. The Institute explains that the craving that an alcoholic feels for alcohol can be as strong as the need for food or water, and an alcoholic will continue to drink despite serious family, health, or legal problems. Moreover, like many other diseases, alcoholism is chronic, which means that it lasts a person's lifetime, usually follows a predictable course, and has symptoms ('National Institute on Alcohol Abuse and Alcoholism 2006). The risk for developing alcoholism is influenced by both the person's genes and by his or her lifestyle ('National Institute on Alcohol Abuse and Alcoholism' 2006).

It has been reported that alcoholism was first recognized as a disease in the 1930s by a group called "Alcoholics Anonymous", and since then, the American Medical Association has recognized alcoholism as a serious and chronic disease ('What is Chemical Dependency?' 2005). Alcoholism takes time to develop, but once it develops, it does not go away ('What is Chemical Dependency?' 2005). Cure is not available for alcoholism, but is treatable, and with proper treatment, an alcoholic will be able to reclaim his or her normal, satisfying lifestyle ('What is Chemical Dependency?' 2005).

It has been reported that the World Health Organization (WHO) estimates that there are about 2 billion people worldwide who consume alcoholic beverages and 76.3 million with diagnosable alcohol use disorders ('Global Status Report on Alcohol' 2004, p. 7). From a public health perspective, the global burden related to alcoholism and alcohol consumption, both in terms of morbidity and mortality, is considerable in most parts of the world ('Global Status Report on Alcohol' 2004, p. 7). Moreover, given alcohol's significance in world health, the World Health Organization has been developing a database since 1996, named the Global Alcohol Database, in its aim in providing a standardized reference source of information for global epidemiological surveillance of alcohol use and its related problems ('Global Status Report on Alcohol' 2004, p. 7). This database will be helpful for the organization to record the incidence of alcoholism worldwide. This is essential so the government can take action and responsibility in proposing or implementing programs to help lessen the incidence of alcoholism.

Similarly, in the United States, alcohol is still the number one drug problem, and affects adolescents, middle-aged people and senior citizens, and people of all races, religions, intelligence levels and professions ('What is Chemical Dependency?' 2005). In fact, there are approximately 18 million alcoholics in America ('What is Chemical Dependency?' 2005), and this high incidence affects many aspects in the society. In 1995, the estimated annual cost of alcohol abuse in the United States was $166.5 billion, where alcohol use disorders cost $56.7 billion more than the estimated annual economic cost of illegal drug use and $36.5 billion more than the estimated annual economic cost of smoking ('Impact on Society' 2006).

Effects of Alcoholism

Alcoholism presents a variety of effects, not only on the physical or biological aspect of an individual, but on the society as well. It has been reported that short-term physical effects of alcohol use include distorted vision, hearing and coordination, altered perceptions and emotions, impaired judgment and hangovers ('What is Alcoholism?' 1999). On the other hand, long-term physical effects of heavy alcohol use include loss of appetite, vitamin deficiencies, stomach ailments, skin problems, sexual impotence, liver damage, heart and central nervous system damage, and memory loss ('What is Alcoholism?' 1999). Long-term physical effects also include diseases and organ malfunctions. These diseases include brain damage, which varies from psychosis to permanent memory loss; cancer, such as in the mouth, esophagus, and stomach due to the irritating effects of alcohol; heart disease, such as an enlarged heart and congestive heart failure; liver damage leading to cirrhosis or scarring of the liver and liver cancer; ulcers that produces stomach and intestinal irritation; glandular problems in the adrenal and pituitary glands; and birth defects on women who drink alcohol during pregnancy ('What is Chemical Dependency?' 2005). This condition is known as Fetal Alcohol Syndrome or FAS ('What is Chemical Dependency?' 2005).

Aside from the diseases caused by alcoholism, it also presents psychological and psychiatric problems, which in turn determines social issues happening in the society, such as suicide, accidents, and crimes. Some of these problems include depression, which can be triggered by alcoholism and vice versa; anxiety, which occurs during attempted withdrawal; change in personality with loss of normal behavior and appearance; and hallucinations, which is an affect of alcohol withdrawal ('Alcohol Abuse, Alcoholism and Alcohol-Related Problems' 1997). These psychiatric problems often lead to social issues such as suicide, which is result of depression; accidents, being a result of drunk-driving; and physical abuse, which are the cause of a large portion of homicides, child abuse cases and other domestic violence cases ('What is Chemical Dependency?' 2005).

Adolescent Alcoholism

Alcohol abuse and alcohol dependence are not only adult problems, but they also affect a significant number of adolescents and young adults between the ages of 12 and 20, even though drinking under the age of 21 is illegal (Califano 2000). According to a research done by the National Institute on Alcohol Abuse and Alcoholism, adolescents who begin drinking before age 15 are four times more likely to develop alcohol dependence than those who begin drinking at age 21 (Califano 2000). In addition, drinking at an early age can also be associated with alcohol-related violence, not only among persons under the age of 21 but among adults as well (Califano 2000).

It has been estimated that over three million teenagers are alcoholics, and several million more have a serious drinking problem that they cannot manage on their own (Califano 2000). This is why early treatment of alcoholism in adolescents must be done to prevent further damage on their lives. It has been mentioned earlier that alcoholism presents grave threats on the lives of many individuals, especially on the lives of many teenagers. These threats include accidents associated with drunk driving, and crimes. It has been reported that the three leading causes of death for 15 to 24 year olds are automobile crashes, homicides and suicides, and alcohol is a leading factor in all three (Califano 2000). While drinking may be a singular problem behavior for some, research suggests that for others if may be an expression of general adolescent turmoil that includes other problem behaviors and that these behaviors are linked to unconventionality, impulsiveness, and sensation seeking (Califano 2000).

It has been reported that binge drinking, often begins around the age of 13, tends to increase during adolescence, peak in young adulthood in the ages between 18 to 22, then gradually decreases (Califano 2000). Individuals who increase their binge drinking from the age of 18 to 24 and those who consistently binge drink at lease once a week during this period may have problems attaining the goals typical of the transition from adolescence to young adulthood (Califano 2000). These goals include marriage, education, employment, and financial independence (Califano 2000).

Moreover, alcohol use among adolescents has also been associated with considering, planning, attempting, and completing suicide (Califano 2000). Research does not indicate whether drinking causes suicidal behavior, only that the two behaviors are correlated (Califano 2000). Suicide is also related to depression and anxiety, for these behaviors somehow trigger alcoholics to result to suicide. In addition, these behaviors can also become severe with the influence of alcohol. This is why during the event of suicide, the alcoholic has already experienced severe depression and anxiety prior to the activity, including the fact that with the influence of alcohol, a person cannot make sound judgments.

Furthermore, the influence of peers can also be attributed to adolescent drinking. More often than not, adolescents become exposed to alcohol drinking through their peers. With this, the role of the parents becomes crucial in the discipline of their children. Proper guidance must be given to adolescents regarding drinking alcohol. Education also is important, for information regarding alcoholism and drug abuse must be give to adolescents for early prevention.

Parental Guidance and Influence

Califano (2000) reports that parents' drinking behavior and favorable attitudes about drinking have been positively associated with adolescents' initiating and continuing drinking. Children who were warned about alcohol by their parents and children who reported being closer to their parents were less likely to start drinking (Califano 2000). Lack of parental support, monitoring and communication has been significantly related to frequency of drinking, heavy drinking, and drunkenness among adolescents (Califano 2000). Harsh, inconsistent discipline and hostility or rejection toward children has also been found to significantly predict adolescent drinking and alcohol-related problems (Califano 2000).

Adolescent Drinking Study

In relation to this is the study done by Hill and Yuan (1999) regarding the familial density of alcoholism and onset of adolescent drinking. According to the authors, the purpose of the study was to assess the age of onset to begin drinking in relation to family history of alcoholism using survival analysis, and to examine the importance of selected risk factors in predicting outcome, using a Cox proportional hazards model analysis (Hill and Yuan 1999). The study examined 52 children and adolescents at low risk for developing alcoholism and 73 children and adolescents from high-risk families, with the ages of 7 to 18 years old and evaluated annually to provide 2.1 waves of longitudinal data concerning age of onset along with a number of predictors (Hill and Yuan 1999). These predictors include positive familial loading of alcoholism, extraversion, and manifest anxiety scores (Hill and Yuan 1999). It has been reported that a number of normal population studies have shown that initiation of drug use in adolescence follows a predictable pattern in which adolescents first use licit drugs like alcohol and cigarettes, before they try marijuana and illicit drugs (Hill and Yuan 1999). Furthermore, the identification of this sequence in adolescence, along with adult follow-up, has allowed for the determination that the earlier an adolescent begins to experiment with alcohol and cigarettes the greater the severity and persistence of problems with illicit drugs (cited in Hill and Yuan 1999). Excessive drinking during adolescence has also been found to be predictive of later problems with alcohol (Hill and Yuan 1999). In relation, a study done by Andersson and Magnusson in the year 1988 found that self-reported frequency of intoxication between the ages of 14 and 16 was predictive of being in Swedish registries for alcohol abuse in young adulthood. Similarly, the report of Grant and Dawson in 1997 shows that age of onset to begin regular drinking predicts the likelihood of adult alcohol dependence in a large population-based sample, further suggests the importance of determining the factors that predict initiation of drinking in youth.

With these findings involving the general population, the initiation of alcohol use in normal populations of adolescents may differ from that seen among adolescents who come from families with histories of alcohol and drug dependence (Hill and Yuan 1999). Moreover, the factors predicting onset in high-risk families may differ from that seen in the general population surveys of adolescents (Hill and Yuan 1999). This is why a study tracing the family histories of adolescents is important. It has long been known that a positive family history is one of the most powerful predictors of risk for becoming alcoholic (cited in Hill and Yuan 1999). Alcoholics with a family history of alcoholism in fact appear to have an earlier onset of problem-related drinking and an earlier onset of regular drinking, both of which appear to be highly correlated (cited in Hill and Yuan 1999). Therefore, it would just appear reasonable to predict that the children of alcoholic parents might become more susceptible for development of early-onset regular drinking and/or alcohol abuse compared to children of non-alcoholics (Hill and Yuan 1999). With these reasons, it is considerable to target to those children and adolescents in particular who have begun to drink earlier than their low familiar risk counterparts for specialized intervention and treatment (Hill and Yuan 1999). In addition, according to Hill and Yuan (1999), children of alcoholics are typically considered to be at greater risk for developing alcohol problems due to the presence of alcoholism in one or more members of their nuclear or extended family. However, these high risks children frequently come from multi-problem backgrounds (Hill and Yuan 1999).

With the information and problem in mind, the study conducted examined two major groups, namely, the high-risk group and the low-risk group. The high-risk group consisted of children and adolescents from high-density multi-generational alcoholism families, while the low-risk group consisted of children and adolescents with one of their parents coming from a "low-risk" target pedigree ascertained as part of a larger family study designed to assess the role of familial or genetic factors in the development of alcoholism (Hill and Yuan 1999). Furthermore, the socioeconomic status and family stability of the participants were also determined.

Results of the study indicate that there appears to be converging evidence that high-risk children not only drink earlier but also drink more during adolescence than do low-risk children (Hill and Yuan 1999). These findings are further proven by the examination of the quantity per occasion consumed by individuals who had begun drinking revealed risk group differences as well (Hill and Yuan 1999). Moreover, although the primary focus of the study is on intergenerational transmission of alcohol dependence, clarifying the patterns of use of other drugs such as marijuana, amphetamines, cocaine, opioids, hallucinogens and tobacco was also of interest (Hill and Yuan 1999). The tests revealed that among the 26 drinkers identified, seven came from low-risk families and did not report any drug use other than cigarette smoking (Hill and Yuan 1999). In contrast, 42% of the high-risk subjects who drank regularly also reported some form of drug use along with cigarettes (Hill and Yuan 1999).

In discussion, the study implies that high-risk children begin drinking earlier than low-risk children do, and its significance is that population-based samples have demonstrated that the risk for developing alcohol dependence can be predicted by the age of onset to begin drinking (cited in Hill and Yuan 1999). In addition, the strongest predictor for alcoholism is extraversion (Hill and Yuan 1999). Moreover, the results also suggest that the high-risk children will be likely to develop problems at a higher rate than other groups (Hill and Yuan 1999). With this information, it will be helpful to propose effective ways for treatment of adolescent alcoholics at an early age. This is to prevent more grave consequences on the lives of the adolescent alcoholics, such as discontinuing education, substance misuse, and committing crimes.

Ways of Motivating Treatment

At some point, many alcoholics will choose to become treated of their disease. This is why motivation of alcoholics, especially of alcoholic adolescents must be effective to propose treatment. Treatment at an early age will be beneficial so as not to result to worse consequences or events.

It has been reported that once a diagnosis of alcoholism is made, the next major step is getting the patient to seek treatment, and one study suggests that the main reasons alcoholics do not seek treatment are due to lack of confidence in successful therapies; denial of their own alcoholism; and the social stigma attached to the condition and its treatment ('Alcoholism' 2006).

Recognizing the Problem – It has been reported that the first and most important step in getting appropriate treatment for alcoholism is recognizing that you have a problem, and often, family members and close friends initiate treatment for the person with the addiction ('Alcoholism' 2004).

In addition, the alcoholic patient and everyone involved should fully understand that alcoholism is a disease, and responses to this disease are not character flaws but symptoms, just as pain or discomfort are symptoms of other illnesses ('Alcoholism' 2006). They should also realize that treatment is difficult and sometimes painful, just as are treatments for other life-threatening diseases, such as cancer, but that treatment is the only hope for a cure ('Alcoholism' 2006).

Role of Family and Friends – Another effective way for motivation are the intervention of family members, employers, and therapists, which can be very effective in motivating a person to quit ('Alcoholism' 2006). This can also help in reducing drinking over the short term ('Alcoholism' 2006). Moreover, even brief interventions from a primary care doctor and self-help information can be helpful in reducing harmful drinking, for studies report, that only regular follow-up and reinforcement will sustain quit rates and possibly even improve survival rates ('Alcoholism' 2006).

Personal Intervention Meetings – It has been reported that the best approaches for motivating a patient to seek treatment are interventional group meetings between people with alcoholism and their friends and family members who have been affected by the alcoholic behavior ('Alcoholism' 2006). Using this approach, each person affected offers a compassionate but direct and honest report describing specifically how the person has been hurt by their loved one's alcoholism ('Alcoholism' 2006).

Moreover, the family and friends should express their affection for the patient and their intentions for supporting the patient through recovery, but they must strongly and consistently demand that the patient seek treatment ('Alcoholism' 2006). Children may even be involved in this process, depending on their level of maturity and ability to handle the situation ('Alcoholism' 2006). With this interventions, the alcoholic adolescents can be helped by their parents and loved ones, and be guided regarding what they should do with their life.

Employer Intervention – For adolescents who are working, their employers can be also particularly effective ('Alcoholism' 2006). Their approach should also be compassionate but strong, threatening the employee with loss of employment if he or she does not seek help ('Alcoholism' 2006). Some large companies provide access to inexpensive or free treatment programs for their workers ('Alcoholism' 2006). These rehabilitation programs can be helpful for the alcoholics to realize their worth as individuals in the company. In this way, they can be motivated to undergo treatment and in turn, become productive.

Long-Term Treatment – This is when the alcoholic decides to participate in the treatment from the Alcoholics Anonymous. To achieve total abstinence as being done by the patients, the alcoholic aims to avoid high-risk situations and replace the addictive patterns with satisfying, time-filling behaviors ('Alcoholism' 2006).

Moreover, many alcohol treatment programs are based on the 12-step program, which is used in Alcoholics Anonymous, where the alcoholics are encouraged to be open and share experiences, but are not required to do so ('Treatment for Alcoholics' 2006). Those who are serious about quitting must seek out a sponsor, which help them through their recovery process, and this person is available to them in case they are having a weak moment or if they just need words of encouragement ('Treatment for Alcoholics' 2006).

Inspiring Words – It has been reported that alcohol treatment programs are designed to get the person back on track physically and emotionally, so that they can face their addiction and gain control of their lives ('Treatment for Alcoholics' 2006). Self-esteem and self-worth is greatly distorted by the addiction, so treatment interventions include group and individual therapy to get at the root of the trauma which may have caused the cycle to begin in the first place ('Treatment for Alcoholics' 2006). Inspiring words can be beneficial for the alcoholic adolescent to become motivated to undergo treatment. With this, the family and friends can help by talking frequently to the patient.

Drugs and Medication – The alcoholic must discover what causes them to drink, whey they cannot stop, and what counter measures they can use when these triggers occur ('Treatment for Alcoholics' 2006). Recovering alcoholics may also benefit from prescribed medications, such as anti-depressants or anti-anxiety drugs to help them control their physical symptoms of withdrawal, which can only be prescribed by a medical doctor or psychiatrist ('Treatment for Alcoholics' 2006). However, the parents or guardian of the patient must supervise the patient in administering treatment of drugs. In this way, the patient can be given the proper dose of the medication and can be ensured of proper treatment.

Preventive Measures

The saying 'an ounce of prevention is worth a pound of cure' is applicable in this situation. With earlier prevention and information, many adolescents will not be involved in drinking at an early age. With this, parents and guardians of the adolescents must take responsibility over them to inform them of the consequences of being an alcoholic.

It has been reported that one way to prevent adolescent drinking is to stay involved and interested in the teenager's life ('Alcoholism' 2004). In this way, the parents know the activities of their children, including their peers and their schedule in school. Another way is to talk openly to your children, especially to pre-teens and teens, about the widespread presence and dangers of alcohol and drugs ('Alcoholism' 2004). This will serve as a warning for them and information to prevent the incidence of alcoholism. Act as a role model and do not drink excessively or use other drugs or smoke ('Alcoholism' 2004). The adolescents will realize that their parents are good example of moral values, and not indulge themselves to becoming alcoholics.

With these, the parents can interact properly with their children and somehow monitor their behavior. The key concept in this issue is communication. With good and constant communication, parents and children can have a good and lasting relationship. This can help both parties to educate one another regarding life and become involved with the activities of one another. Good communication can help each other create a good environment for one another.

Methodology

A three-stage stratified sampling method will be used in this study. In the first stage of sampling, six cities will be stratified into eastern and western United States. In addition, three cities from the eastern part of the United States, namely, Mississippi, New York and Florida will be chosen, and three cities from the western part, namely California, Wyoming and Oregon, will be chosen for data gathering and comparison. In the second stage of sampling, one rural city and one city region will be randomly selected from each state. In the third stage of sampling, individuals will be randomly chosen from the selected city and only one participant will be selected from each household.

A total of 30 participants aged 13 to 20 years will be randomly selected from the population and will be invited to participate. This age bracket will be considered because at these ages, adolescents become exposed for the first time to alcoholic drinks or beverages. The socioeconomic status of the participants will also be considered, as with their classification, whether they belong to a rural or an urban city. Aside from these, the education of the participants will also be considered. Education is also a good basis for the knowledge of the participants regarding alcoholism.

Data will be collected in the participants' residential area, and during the visits, the participants will be asked to answer a questionnaire to obtain information on demographic characteristics, including age, sex, education, and occupation. Obtaining data through questionnaire will be easier for evaluation of the participants' exposure and interest in alcoholic drinks. The questionnaire that will be distributed to the participants will have 20 questions, and will be answered by each of the participants with the supervision of the researcher. In addition, a simple interview will be also be administered by the researcher to somehow interact with the participants.

From these questionnaires, a data will be generated and will serve as a survey on the exposure of the participants to alcoholic drinks or beverages. These data will be helpful in assessing their interest and opinion regarding treatment, if ever they will be diagnosed to suffer from alcoholism. The questionnaires will not only include questions regarding the participants' exposure to alcohol, but will contain questions talking about the common symptoms being experienced by alcoholics. These will be helpful for evaluation and examination of the participants. If ever the results will indicate a positive diagnosis for alcoholism as indicated by the symptoms listed in the questionnaire, then the researcher can refer the participants to a hospitals or rehabilitation centers for treatment.

To check the reliability and the significance of the study, statistical analysis will be also be used. Statistical tools will be helpful to assess the significance and the relationship of demographic factors and the data gathered from the participants. All the calculations will be weighted to evaluate and assess the interest of the participants for possible treatment. In this light, the researcher can assess if the treatments proposed to alcoholics are effective to motivate them to participate and undergo treatment.

Summary

The possible results of the study would somehow become helpful in the fulfillment of its aim to detect the earliest possible age of adolescents to become exposed to alcoholic drinks. This study can also assess the relationship of having a family history of alcoholism and its effect to adolescent alcoholism.

Potential implication of the study would include the evaluation of the researcher of the conditions existing among the adolescents in the United States. This study would also provide information and knowledge on adolescent alcoholism, which can be attributed to the adolescents' exposure or none exposure to alcoholic drinks or beverages. Another implication of the study also includes the development of more effective ways of treatment for alcoholics. These also include the improvement of the existing treatments, and the conceptualization of new ones to motivate the adolescents for treatment of alcoholism at an early age.

This study also has several limitations. One of its limitations is that it covers only a small number of participants, and due to limited budget, cannot cover the entire United States for obtaining data. Another limitation, is that the survey does not represent the total population of the adolescents with the age of 13 to 20 years, due to the limited number of participants to be included. Another limitation is that this study would not obtain blood samples from the participants to examine their blood alcohol content. This can be helpful to assess the condition of the participants.

Literature Review Sample on Bullying

2008-10-13T19:40:00.001+08:00

Chapter 2

REVIEW OF RELATED LITERATURE

This part of the study will be discussing the relevant literature connected with the study of the bullying in high school. This part of the study accounts the works that has been published on a topic by accredited scholars and researchers. All this would allow the readers to map the field and position your research within the context. Moreover, this part of the study justifies the reason for research. This is closely connected with demonstrating that is known in the field. It is the knowledge of the field that allows one to identify the gap, which the research could fill. Concurrently, it allows the researcher to establish the theoretical framework and methodological focus.

Adolescents in High School

Adolescence is an especially dangerous time of life. The onset of puberty produces biological changes that are certainly unprecedented, if not scary. The adolescent's body changes visibly, and while his appearance continues to change, his concept of self changes as well. The reception he receives from others changes, in addition to the way he responds to them. The boundaries once conceived of as permanent are uncertain and must be reconfigured. The adolescent will begin to see himself as having sexual drives and may feel great anxiety surrounding sexual matters. And in response to this myriad of intense feelings and changes, the adolescent presents himself as omnipotent and totally in control, lest anyone misperceive him for weak, confused, and searching for an identity. When their identities and body images are unclear, adolescents are especially sensitive to the way they are seen by others, especially their peer group. Here especially, the actual self is constantly being compared to the ideal self, a representation of what is important and valued by a particular group. The conglomeration of these factors makes adolescence highly susceptible to the development of shame. Additionally, adolescence is a period of time in which conflicts with parents are abundant. These conflicts are developmentally appropriate, as the individual is torn between wanting to please his parents and wanting to separate and differentiate his identity from theirs. This experience of feeling such opposing emotions may add to an already overwhelming sense of shame. Adolescence is confusing, in part, because self-consciousness is increased and personal differences are muffled. The primary concern for adolescents is how a wide circle of significant people sees them. This is much more important than who and what they themselves have come to feel they are (Erikson, 1985). When individuals who are experiencing shame enter adolescence, these painful feelings are exaggerated. Shame alone is often debilitating and adolescence alone is often debilitating. Put together, the combination is intolerable and often combustible.

Furthermore, Erikson (1963) considers identity formation to be the cornerstone of adolescent psychosocial development. Josselson (1987) offers this definition, "Identity, then is a dynamic fitting together of parts of the personality with the realities of the social world so that a person has a sense both of internal coherence and meaningful relatedness to the real world" (pp. 12-13). An alternative to identity achievement is identity diffusion, which occurs when adolescents are not able to commit to definite life choices. Erikson (1985) stresses that at least some role confusion is a "normative and necessary" experience for adolescents, but it can lead to a more dysfunctional state, such as an inability to fully experience intimacy, if an individual remains unable to move out of this period of indecision. Erikson notes several assumptions about the nature of identity. First, although identity development is particularly salient during adolescence, changes can and do occur earlier, in childhood, and later, in adulthood. Second, successful identity development depends in part on how earlier tasks during the life span have been resolved. Third, optimal identity formation can occur only when adolescents take an active role in their identity search and experience a normative period of moratorium, when they actively try out different roles without making a definite commitment. Fourth, identity development cannot be considered solely an individualistic process. Exploration and commitment are based in part on historical and contextual factors. Fifth, identity is neither static nor unidimensional. Erikson (1963) cites five facets of identity - sexual, religious, political, ideological, and occupational - and believes that individuals redefine these identities throughout the course of their lives. One of the strengths of adolescents, according to Erikson, is their capacity for fidelity to individuals or institutions. Adolescents, as a result of their search for identity, may be eager to make a strong commitment, at least temporarily, to new belief systems. Even though the rationale behind these belief systems cannot always be articulated, it does not decrease the passion that adolescents are capable of expressing for individuals or ideas. This sense of commitment has been found to be an important part of ethnic (Phinney & Tarver, 1988) and religious (Markstrom-Adams & Hofstra, 1993) identity development, as well as global identity (Waterman, 1985). Fidelity, similar to commitment in many ways, also includes a focus on expressing pride in being affiliated with persons or institutions, as well as placing high value on keeping promises and being faithful (Kitchener, 1983). It could also be argued that the development of a personal sense of fidelity serves as a protective factor for adolescents.

Concurrently, Garbarino, Kostelny, and Dubrow (1991) argue that the formation of a strong ideological identity is an effective buffer against extreme stress, especially if that ideology is based on tolerance for others, even an enemy. Humans are meaning-seeking organisms without meaning they tend to get lost and succumb to self-destructive or to antisocial behavior or to madness" (p. 22). Thus, self-construed ideologies may buffer against negative outcomes, both psychological and behavioral. Although identity development during adolescence has been the subject of considerable study, Waterman (1985) maintains that several of its dimensions have not been fully explored. This has resulted from a tendency, in both Erikson's writing and in the research on identity (Marcia, 1980), to treat identity as a global descriptive quality. An. adolescent is said either to have a clear personal sense of identity or to lack one, with each state viewed as having distinct psychological concomitants. Grotevant (1986) suggests that the study of identity should examine specific content areas, in those different identity domains of an adolescent's life "come into focus" in different periods. Previous studies have reported that a strong sense of self-efficacy was associated with better coping with stressors (Bandura, 1997). Thus, a high level of self-efficacy may prevent a potential negative effect of stress experience on bullying behavior, in addition to having a direct effect. To explore whether perceived efficacy might have a modifying affect, however, the first step would be to examine whether there is any association between stress experience and bullying behavior. Similarly, perceived social support and influence on decisions that are made, may be of importance in how the pupils react to a stressful environment (Karasek and Theorell, 1990). These factors may thus act as buffers in a potential association between stress experience and bullying behavior. However, they may also have a direct influence on how the pupils behave. Perceived social support have been observed to be positively associated with psychosomatic health (Bru et al., 1998; Natvig et al., 1999) and may be related to behavior as well.

Violence and Aggression

Violence and undesirable behavior among school children have received increasing attention the last years. Different aspects of associations between aggression and self-perceptions have also been explored. Some studies (Olweus, 1997) have observed associations between high degree of self-esteem and bullying or aggressive behavior. In contrast, one previous study (DuBois et al., 1998) found that high levels of global self-esteem were associated with more favorable scores on measures of adjustment, with fewer emotional and behavioral problems. Other aspects of associations between aggression and self-perceptions have been explored as well. Children with an aggressive attitude have been observed to rate their personal competence higher than their teachers and parents (Hughes et al., 1997). This finding is consistent with conclusions in a previous review (Baumeister et al., 1996), stating that violent behavior is associated with unrealistic favorable self-views that is contradicted by other persons (Baumeister et al., 1996).

A personal factor that partly overlaps with that of self-esteem is covered by the concept of self-efficacy. Self-efficacy comprises both a general and a more specific measure. The scale of general self-efficacy covers aspects related to self-worth. In view of similarities with the concept of self-esteem, high levels of general self-efficacy among the bullies may be expected. As concepts, however, self-efficacy and self-esteem differ somewhat. While self-esteem is viewed as a global concept with aspects of self-worth, perceived self-efficacy refers to beliefs in one's capabilities to organize and execute the courses of action required to produce given attainments (Bandura, 1997). A general lack of such self-beliefs may negatively affect a person's reaction pattern or attitude. Thus, low scores on the self-efficacy scales may be related to aggressive or bullying behavior as well. We have not found any previous studies exploring whether self-efficacy beliefs are related to bullying behavior. However, previous school related studies (Zimmerman et al., 1992; Zimmerman and Martinez-Pons, 1990) have found that high self-efficacy beliefs for self-regulated learning and academic goals were associated with better achievements.

Bullying Behavior

Bullying behavior is one part of the problem of school violence, covering both less and more severe types of violent behavior. Bullying is characterized by an aggressive behavior that is carried out repeatedly over time (Olweus, 1997). Typically, the bully is perceived as stronger than the victim. Personality characteristics of the bullies seem to be an important factor in explaining the problem of bullying (Olweus, 1997). Pulkkinen and Tremblay (1992) found that the bullies were aggressive, non social, and hyperactive. On the other hand, Olweus (1997) has reported that some bullies may be insecure and anxious, as opposed to the typical aggressive bully, in particular those who do not usually take the initiative to bullying when acting in groups. It has been reported that some bullies are also victims of bullying themselves (Craig, 1998; Rigby, 1998).

Some studies have focused on environmental factors at school in explaining the problem of bullying behavior. Typical factors have been school size and class size (Batsche and Knoff, 1994) as well as competition at school (Olweus, 1997). However, no significant relationships between these factors and bullying have been observed. Few previous studies have focused on the pupils' perception of different aspects of the school environment as potential risk factors for bullying behavior. Stress experience has been focused on in relation to the health of the pupils (Natvig et al., 1999), but less in relation to undesirable behavior. There are different ways of coping with stressful environments. Lazarus and Folkman (1984) have distinguished two types of coping functions as ways of responding to stressful events. One form of coping is problem focused or through direct action. This aims at confronting problem events directly by trying to solve them. The other type of coping is in tended to deal with the emotions aroused by the stressful situations (Lazarus and Folkman, 1984). Finding adequate ways of coping might be difficult for school adolescents. While some pupils can find acceptable ways of reacting, other pupils may have bullying as a way of reacting to an environment that they perceive as stressful.

Bullies are children who start fights with, tease, pick on, and dominate other children (Pellegrini, 1998). Large-scale investigations of bully/victim problems have been conducted in Scandinavia, Great Britain, Italy, and Australia (Olweus, 1994; Menesini et al., 1997; Rigby, 1996; Whitney & Smith, 1993). These investigations, especially the Scandinavian and British studies, have sought to define bullying, determine the prevalence of bully/victim problems, examine the effects of bullying on children, describe the family relationships among bullies and victims, and finally, identify effective components of school-based bully/victim intervention programs (Olweus, 1994). The purpose of this study was to further examine the family relationships of school-age bullies. Previous studies have found that the family relationships of bullies tend to be troubled (Olweus, 1994). In particular, parents of bullies are hostile, rejecting, and indifferent. Oftentimes, parents of bullies use inconsistent discipline by combining hostility with laxness. When parents of bullies do punish for child misbehavior, their punishment of choice is usually some form of harsh power assertion combined with violent emotional outbursts (Olweus, 1994). Finally, most bullies have weak to nonexistent father figures (Berdondini & Smith, 1996).

Externalities of Bullying

Previous research examining family influences on the development of children's aggression, which includes more generally deviant behaviors such as cheating, lying, and destroying property in addition to bullying of peers, supports the conclusion that poor parenting skills play a causal role (Kandel & Wu, 1995). More research, however, is needed to identify the precise mechanisms by which family members and family processes influence children's aggression, and especially children's bullying or aggression with peers (Ladd, 1992). This study draws on three bodies of literature: The literature regarding children's bulling and victimization; the literature regarding family influences on the development of children's aggression; and the literature regarding family influences on children's peer relationships. Putallaz and Heflin (1990) proposed a model that accounts for direct and indirect parental influences on the development of children's peer relationships. Direct parental influences are those, which influence children's acquisition of social skills and social behaviors. Direct parental influences include parental modeling, conditioning, and coaching of children's social interactions. Parental modeling refers to behaviors that parents engage in to form and maintain interpersonal relationships with other adults; namely their spouses, relatives, and friends. Parental modeling also refers to behaviors that parents use to guide or control their children. Behaviors modeled by parents are observed by children and then imitated within the context of peers. The literature regarding the development of children's aggression and the literature regarding children's competence with peers are replete with findings that support a modeling theory for parental influences on children's peer relationships. Specifically, in comparison to parents of non-aggressive children, parents of aggressive children model incompetence in relationships because they are more likely to experience angry, emotional disagreements with their children, spouses, and other adults (Elder, Caspi, & Downey, 1986); they are more likely to solve parent-child conflicts by using physical punishment (Eron & Huesmann, 1990; Kandel & Wu, 1995); and finally, they, especially mothers, tend to be isolated and have few friends (Patterson, 1980).

A second type of direct parental influence on children's peer relationships involves conditioning. Specifically, children develop positive or negative associations with social interactions based upon the affective quality of their relationships with parents (Putallaz & Heflin, 1990). Previous studies demonstrate that children, whose parents are agreeable, warm, and affectionate, tend to develop competence with peers (Brody & Flor, 1998). In contrast, children whose parents are disagreeable, hostile, cold, or rejecting tend to be at risk for the development of aggression, including bullying peers, and delinquency (Sutton, Cowen, Crean & Wyman, 1999). Similarly, parent-child involvement, which refers to the amount of time and activities that parents and children share together, influences how children view social interactions. Children who spend considerable time with their parents, especially in activities that are perceived as fun and pleasurable, have more opportunities to experience parental warmth and affection than children who spend little time with their parents in shared activities. Children generalize the positive feelings that arise from shared activities with parents to social interactions with non-family members. In support of this notion, children's lack of involvement with parents has been related to children's aggression and deviancy (Loeber et al., 1998). Finally, a third type of direct parental influence on children's peer relationships is parents' coaching of children's interactional strategies with peers. A previous investigation of young children and their mothers found that the frequency of conversations between mothers and their children about peer relationships is related to children's social preference, or likeability (Laird, Pettit, Mize, Brown, & Lindsey, 1994). In addition, mothers in the same study reported that common topics of mother-child conversations involved giving advice to their children about how to initiate a friendship or deal with bullying. Other studies have found that the quality of advice that parents give to their children is related to children's peer competence. For example, mothers who suggest prosocial strategies for how to deal with hypothetical peer provocations and rebuffs tend to have children who are rated as less aggressive by teachers than mothers who suggest neutral or unfriendly strategies (Mize & Pettit, 1997).

Indirect parental influences on children's peer relationships deal with how parents influence children's opportunities for social interaction. Rubin and Sloman (1983) describe indirect influences as ways parents set the stage for children's social interactions. Indirect influences reflect how parents determine contexts within which children's peer interactions occur. These contexts include neighborhoods, day care programs and schools. Indirect influences also reflect how parents arrange children's social contacts by scheduling parties, allowing for visits with friends, and encouraging participation in organized extracurricular activities such as youth sports, scouts, and music lessons.

The Bully-Victim Relationship

In the context of bullying and peer victimization, empirical findings have uncovered different factors that may explain the occurrence of bully/victim problems at school. Alongside children's psychosocial functioning (Olweus, 1994), it was observed that social environmental factors, such as the peers (Smith et al., 1993), the school (Mooij, 1998), and the home environment (Smith et al., 1993), contribute to the risk of peer aggression and victimization at school. Outcomes studies of anti-bullying intervention programs, focusing on the school environment, revealed a diverse pattern of positive (Olweus and Alsaker, 1991), moderate (Smith and Sharp, 1994; Stevens et al., 2000), and low (Pepler et al., 1994) effects. Besides other factors, it was argued that the limited focus on the relationship of the family environment to children's involvement in bully/victim problems at school contributes to the maintenance of the problem behavior (Stevens et al., 2001).

Furthermore, previous family studies on bully/victim problems primarily focused on children's perceptions of family dimensions. This research revealed significant differences between bullies, victims, and bully/victims. Bullies perceive their family as less cohesive (Bowers et al., 1992) and experience more hostility (Oliver et al., 1994). Peer aggression was found to be associated with an avoidant attachment history (Smith et al., 1993). Moreover, bullies perceive a strong power imbalance between father and mother, the fathers being more powerful. A power imbalance was also observed between siblings and themselves, the siblings being more powerful (Bowers et al., 1992). According to the bullies, their family encourages less autonomy (Rican et al., 1993), lacks structure, and primarily adopts rules that reinforce aggressive behavior (Oliver et al., 1994). For boys in particular, an association was found between bullying and inadequate communication structures in the family (Rigby, 1994).

Victims perceive their families as characterized by high levels of cohesion (Bowers et al., 1992) and low scores on negotiation (Oliver et al., 1994; Rican et al., 1993). An association was found between victimization and ambivalent attachment relationships. Compared with a group of controls, victims of bullying reported that their fathers had more power than did their mothers. They perceived siblings as being slightly less powerful compared to themselves (Bowers et al., 1992). Furthermore, it was found that victims perceive small differences on parental monitoring compared to control children, thus revealing a less accurate monitoring style (Bowers et al., 1994). Clear differences were found between boys and girls. For boys, it was found that victimization is associated with a negative relationship with the absent father in single-parent families. Victimized girls reported more negativism and hostility (Rican et al., 1993) and a negative relationship with the mother (Rigby, 1993). It was found that the famil y encourages less autonomy in girls (Rican et al 1993). Bowers et al. (1994) identified a distinct family profile for the bully/victim group. The bully/victim group included children that have bullied others and themselves have been bullied as well. These families have low scores on cohesion, although these scores were not as low as the cohesion scores of bullies. Bully/victim children perceive a power-imbalance between father and mother, again showing fathers to be more powerful than mothers. However, compared to bullies, victims, or control children, bully/victim children reported having more power for themselves. Furthermore, bully/victim children perceive less accurate monitoring and warmth, but more overprotection and neglect. It was concluded that these families are distinguished by inconsistent discipline and monitoring (Schwartz et al., 1997;).

Empirical work that investigated the perception of parents on bully/victim problems is limited. Olweus (1980) carried out in-depth interviews with parents of victims and bullies. Research questions were related to parenting style and parental interaction with their children. For the fathers and mothers of bullies (only boys), Olweus (1980) found high permissiveness toward aggression, harsher discipline, and power-assertive child-rearing methods. In bullies' families, he also observerd more negativism toward the child. For parents of victimized children (only boys), the interview outcomes revealed close contacts with and overprotection by the mother. Moreover, there was more negativism and a weak identification between son and father. Nonetheless, no studies are known on family characteristics of bully/victim problems using data from multiple reporters within 1 family (parents and children). Previous studies showed that reports of family interactions primarily show the perception of each respondent (Langhinrichsen et al., 1990). Consequently, it would be fruitful to involve parents' and child's perception directly in the study. Differences between family members in their perceptions of family characteristics were found in several earlier studies. They reveal only moderate congruence between parents and children (De Bourdeaudhuij and Van Oost, 1998). It also has to be taken into account that questionnaires have to be completed independently by family members. Questionnaires are often completed at home and sent to the researchers afterwards. This procedure undoubtedly leads to congruence scores between family members, which are unrealistically high (De Bourdeaudhuij and Van Oost, 2000). From this it could be argued that more research is needed to investigate characteristics of bullies' and victims' families including both the viewpoint of parents and the child. An important question is whether and how parents and children's perceptions on family characteristics are related. The family dimensions included in this study were derived from the previous perception studies on family correlates of bully/victim problems. It focused on general dimensions of family functioning and general child-rearing practices. In addition, problem-solving strategies of children and their parents in hypothetical bully/victim conflicts were included as a more specific measure of family interactions, In a previous study, Barrett et al. (1996) asked anxious, oppositional, and non-clinical children and their parents to interpret and provide plans of action for ambiguous scenarios. They found evidence of family enhancement of avoidant and aggressive responses in children.

Although dramatic acts of school violence are relatively rare, ongoing aggression and victimization are serious problems that arise in schools on a daily basis. For instance, research has found that 10-20% of kindergarten and elementary age children are repeatedly teased, threatened, or attacked by their peers (Leff, Kupersmidt, Patterson, & Power, 1999). A pattern of perpetuating milder forms of aggression or being the victim of such aggression in the preschool and elementary age years is associated with a number of difficulties in the elementary and middle school years (Kochenderfer & Ladd, 1996). Even more striking is the finding that early aggressive behavior is highly correlated with later aggressive behavior (Huesmann, Eron, Lefkowitz, & Walder, 1984) and is predictive of later antisocial behavior, including physical aggression, criminal behavior, and spouse abuse (Huesmann et al., 1984). Further, there is strong evidence that many severely antisocial youth exhibit a "life-course" development of aggression in which their childhood acts of aggression progress from being somewhat mild (bullying, teasing, and annoying others), to more serious (repeated physical fighting, gang membership), to extremely serious (assault, robbery, rape) (Moffitt, Caspi, Dickson, Silva, & Stanton, 1996). Thus, it is imperative to direct prevention and early intervention efforts to lessen the milder forms of aggression that occur frequently in the elementary schools and that can lead to more serious acts of aggression and outbreaks of school violence among middle school and high school students.

Even though school aggression has become one of the most pressing societal concerns, aggression statistics, research, and prevention/intervention efforts are difficult to evaluate due to a host of methodological difficulties (Tolan & Guerra, 1996). For instance, many prevention/intervention programs do not employ sound research designs such as a group design including a random assignment procedure, adequate sample size, and sufficient follow-up assessment. Second, many programs do not utilize a multi-method outcome evaluation protocol (Weisz & Hawley, 1998) or adequate procedures to assess treatment integrity and acceptability (Moncher & Prinz, 1991). Further, very few programs provide structured and user-friendly manuals and handouts (Moncher & Prinz, 1991), which may greatly affect the integrity and generalizability of the program. Thus, methodological considerations have limited the usefulness of many initiatives within the schools.

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Review of Related Literature on the Human Resource Function

2008-10-01T12:15:00.001+08:00

REVIEW OF RELATED LITERATURE

In the last decade, the HR function has increasingly become a target of criticism. The criticism is that the HR function is too bureaucratic, controlling, too operationally focused, reactive and powerless. Brief and Weiss (2002) says that HR indeed has not kept up with developments elsewhere in organizations. They say that HR professionals have become numb by the monopoly position they long enjoyed. The role of HR can become a very important one, that of a strategic business partner responsible for the return on investment in personnel and organization. To a lesser extent than before, human resource (HR) plays a purely operational, administrative and service delivery role. Administration and execution remain important but a considerable part of these activities will be automated or outsourced to external suppliers. HR then becomes more a distributor than a producer of services. Another part of the HR activities will disappear through new technology applications. HR-information systems for example, take over routine tasks by automating the processing transactions and administration. Further, personnel itself will more and more be able to retrieve information from and change information in databases.

Human Resources (HR) are an exciting function, which offers many opportunities for individuals to contribute to the business. At all levels of the company, HR professionals support leaders and leadership teams in the creation of business strategies and in ensuring the resources are ready and available to deliver those strategies.

Nevertheless, human resources (HR) seems to be losing ground in a majority of organizations (Saint-Onge, 2001). In most cases, human resources appear to be playing a secondary role at a time when this function should be more in demand and more valued. The HR function continues to be criticized for not moving with the times. The forces of the market have radically altered the 'employment contract', yet the people management practices do not seem to have followed suit. In the face of all this, the human resources function is often perceived as slow to adapt to the new realities of the market place. The traditional structures of HR inherited from the industrial era are not appropriate for the business challenges companies currently face. In this context, HR must evolve to successfully take on a key role in formulating and implementing the organization's strategy for generating capability.

Organizational Culture

Any organization, may it be profit oriented or not-for-profit, the most vital asset is its personnel. And for these organizations to maximize their assets, they should manage the employees' working condition with intelligence and efficiency (Ulrich, 1998). They must be allowed to be involved in making work-related decisions to further enhance the organizational structure (Delaney & Huselid, 1996).

Furthermore, the structure of tasks among the employees strengthens the organizational performance (Wilson, 1989). It is therefore necessary to understand the employees for the organization to be effective (Schneider, 1983). The development, building, motivation, enhancement and enrichment of the employees of any organization largely depend on the leadership, mandate and vision of the organization (Rainey & Steinbauer, 1999).

In the case of an international organization, it is very challenging to run its day-to-day operations in a smooth fashion. There is a whole area of human resource management that the organization has to consider especially when it consists of different nationalities. People make or break the organization. Therefore, it is important for any organization to be proactive with regard to their employees' needs and requirements.

According to Barbeschi (2002), the process of making an organization is simultaneously the growth and maintenance of relationships among individuals who are working towards a common goal and the actual accomplishment of tasks, individually and collectively. In any organization, there exist two dimensions (Barbeschi, 2002). The technical dimension includes elements that are generally visible but hard to decipher like the control systems (recruitment mechanisms, administrative rules and procedures, etc.), structures (departments and divisions and physical facilities), and techniques and procedures (performance, working methods).

The cultural/political dimension is more intangible and strategic in nature. This dimension explains the assumption about the essence of the Secretariat's culture. It includes rituals and myths, symbols and games. Due to the common behavior, an internal integration within the organization is developed. In a sense, all cultural learning reflects the original values of individuals and their sense of what ought to be as distinct from what is. According to McEwan (2001), culture is inseparable form the nation of human society which makes defining it a complicated task. As a result, there are many definitions for culture. Czinkota et al (Cited in McEwan, 2001) define culture as "an integrated system of learned behavior patterns, characteristic of the members of any given society". In addition Hofstede (1991) identifies culture as "collective programming of the mind".

Culture is an important factor in understanding organization, because for any organization to operate effectively it must for some extent have a general set of believes and assumptions. Because understanding the term of the culture metaphor helps organizations to be aware of how employees are thinking about the organization phenomena, and to recognize how different attitudes, value and beliefs affect the workplace. Understanding and assessing the national culture and organization's culture can mean the difference between success and failure in today's fast changing organizational environment. Cultural assessment can provide measurable data about the real organizational values and norms that can be used to get management's attention. Though, it can be said that the basic assumption, values and norms drive practices and behaviors. Hence when a culture is created it becomes a driving force for the shape and scope of the organization.

Researcher Hofstede (1980) has developed the framework for national culture. While the respective merits and drawback of different framework are widely discussed, the Hofstede basic module of culture can be seen as a helpful framework to illustrate the major issues that need to be considered in change process.

Culture environment is one of the important principles that influence the organization. Hostfede (1991) identifies that there are four dimensions that differentiate cultures at a national level (power distance, individualism-collectivism, masculinity-femininity, uncertainty avoidance), which help to understand that people arrive to organizations with their own national culture.

Therefore, it is only necessary to understand the relation between organization itself and its culture. For that reason Hall (1976) identifies two classifications of culture that have an impact on business activity, the "High Context Culture" and the "low context culture". The high context culture have a very high prevailing homogenous view on nationality, religious values and beliefs (Hall, 1976). Such culture can be found in Japan and Arab countries; the context of communication is more valued such as body language and gestures. However in the low context culture, communication context is more of formal written records, such culture can be found in the UK and USA.

Many studies about international organizations have been undertaken. However, a brief review of the literature about the sociology of international organizations indicates that these studies which have been conducted mostly by former employees of such organizations and were largely undertaken by white males who have tended to belittle the role of staff members from developing countries.

These authors have suggested that employees of international secretariats, hailing from developing counties are responsible for incompetence and inefficiency in these organizations as they are employed due to the principle of equitable geographical distribution and not because of their competence, qualifications and experience.

Organization Behavior

According to Brief and Weiss (2002), organizational behavior is an area of inquiry concerned with both sorts of influence: work organizations on people and people on work organizations. The organizations in which people work affect their thoughts, feelings, and actions in the workplace and away from it (Brief & Weiss, 2002). Likewise, people's thoughts, feelings, and actions affect the organizations in which they work.

The central problems in organizational behavior are influenced by changes in organizations themselves (Goodman & Whetten 1997). Although researchers have reported the durability of such traditional categories as work motivation and performance, absenteeism and turnover, climate and culture, and groups and leadership, other recent commentaries report more substantial shifts. The time frame used to review a body of research is probably the greatest determinant of whether we observe change or stability. For example, Kunda's (1992) investigation of trends in managerial thought ranged from the 1870s to the present and reported alternating cycles of rational and normative thinking among managers and scholars predicated on the degree of expansion or contraction in the economy of the time. From their starting point in the 1950s, Goodman & Whetten (1997) noted an adaptive quality in the field's work that shifts attention toward particular applied problems firms face within a given decade.

Diversity and cross-culture HRM

Diversity training remains the primary method used to facilitate behavior change (Combs, 2002). However, existing diversity training is perceived to have failed, calling for a new diversity leadership focus to improve diversity performance.

Research suggests that situations reflecting serious overt and subtle discrimination continue to exist in the work environment. Grossman (2000) suggests that in spite of organizational efforts to manage diversity very little has changed in the experiences of culture, ethnicity, race, and gender groups.

Organizational leadership has opted, most frequently, to use diversity training to bring about a positive diversity climate. Diversity training infuses the organization with information and seeks to change the behaviors of employees related to diversity. In many cases the perception is that diversity training has not met expectations as a mechanism for alleviating the work environment of discrimination and prejudice (Caudron, 1999). As a change strategy, diversity training has been labeled ineffective (Flynn, 1998; McKee & Schor, 1999) Many suggest that such training does very little to promote a positive diversity climate. And, at best, diversity training programs, as currently constructed, result in only short-term suspension of discriminatory behaviors and often create more trouble than they resolve (Hemphill & Haines, 1997).

In the 15 years since the publication of Workforce 2000 (Johnston & Packer, 1987), diversity has emerged as an increasingly important issue in management circles. Diversity, workforce diversity, and managing diversity are now frequently used terms in and about business, and managers have been presented with a plethora of materials in the popular press on how to handle a diverse work force (Ferris, Frink, & Galang, 1994). The persistent messages about the need to address the phenomenon of a changing workforce and consumer base have motivated managers and organizations either to create internal diversity training programs or to hire consultants to sensitize employees to differences in race, gender, culture, religion, age, sexual orientation and abilities (Harter and Kirby, 2003). While 75 percent of Fortune 500 companies have already instituted diversity-training programs, at least another eight percent are in the planning stage, and small companies are also beginning to plan diversity programs.

Prior to the emergence of this notion of diversity management in the 1990s, issues of workforce composition were usually addressed through one of two approaches: affirmative action or valuing differences (Thomas, 1994). While affirmative action refers to requirements, often legally mandated, to change organizational demographics and remedy past situations where minorities and women were passed over for jobs and promotions, the approach of "valuing differences" is intended to be ethically and morally driven and encourages organizational members to appreciate differences. But as Wheeler (1995) notes regarding these approaches, "one of the primary problems was that they were not clearly connected to business objectives" (p. 9).

A primary business objective is being profitable, and managers must explain and justify business performance and decisions in light of this objective (Toulmin, Rieke, & Janik, 1984). Subsequently, a movement has emerged to make a business case for addressing the increasing diversity of both the workforce and the consumer base, and this approach is reflected in the popular literature surrounding diversity initiatives. Carnevale and Stone (1994), proponents for addressing diversity based on a business rationale, begin their article by saying, "Welcoming diversity is directly connected to the bottom line" (p. 24). As further evidence of such an orientation, a report entitled "The 'bottom line' organization benefits of diversity training: What's in it for us?"), outlines the importance of managing diversity for profitability (Wheeler, 1995).

The views on effective management of diversity in general, and cultural diversity in particular, are scattered and it is hard to find a common line of agreement among the earlier writers. In one stream, there are writers arguing that a culturally mixed work force holds a potential competitive advantage for organizations (Cox and Blake, 1991; Mandrell and Kohler-Gray, 1990). In another stream are the writers who stress that similarity helps to develop cohesion which, in turn, is related to the success of a group. There are some other authors whose position lies in the middle of these streams (Adler, 1991).

International HRM

As an increasing number of organizations seek to operate in foreign markets, it is vital that management practitioners develop a better understanding of, and sensitivity to, the impact of different national settings on the management task. In the field of cross-cultural management/organization, scholars have sought to assist practitioners in achieving this by conducting research that has generally been guided by two key questions: (1) what is general and universal in the management of organizations; and (2) what is peculiar or specific to one nation or culture?

To date, there have been a series of review articles of the cross-cultural management/organization literature that have given a detailed picture of the nature of the research undertaken to answer these two questions. In addressing these issues, researchers have described the conceptual, theoretical, and methodological problems encountered and the solutions proposed. However, no equivalent review exists of the literature concerning comparative and international HRM.

Rapid changes in forces affecting the global workforce, differences between countries related to labor-management relations, and increases in the incidence of multinational corporate (MNC) activity have resulted in significant attention to international human resources management (Overman, 1994). Not only are labor relations affected by domestic change, but also the impact of global production has added another complex dimension for those firms choosing to compete internationally. Innovative global competitors, such as BSN Group, have developed approaches for effective labor-management relations at the international level. However, even innovators continue to have concerns over loss of managerial flexibility and authority (Campbell, 1989).

International labor relations is concerned with all aspects of the employment relationship in a global context (Poole, 1986). In every industrialized nation there are three labor relations "actors" with varying levels of common interests: employers and managers; workers and their unions; and the government (Dunlop, 1958). Recently, international joint ventures have begun to replace the wholly owned subsidiary as the most widespread form of U.S. multinational investment (Shenkar & Zeira, 1987). These joint ventures demand heightened attention to labor relations since the constituent owners of the joint venture may have significantly different prior experiences with labor relations in their home countries. The relative lack of familiarity of MNC managers with local industrial and political conditions have oftentimes needlessly worsened conflicts that a local firm could have resolved because of its familiarity with the host country and its labor sector (Prahalad & Doz, 1987).

Since labor relations vary greatly from country to country, MNC managers find the human resource approach, or strategy, used in one country to be ineffective or of limited value in another country (Prahalad & Doz, 1987; Bean, 1987). However, labor relations are important because they directly determine labor costs, productivity, and ultimately, profits. If labor and management do not have good relations, the cost of doing business will be higher than otherwise (Hodgetts & Luthans, 1997). Therefore, given the rapidly changing global marketplace and the differences between the expectations of organized labor and management of MNCs, the management of international labor relations will be a major challenge facing MNC managers in the 21st century (Williams, 1994).

The extent to which the practices and processes of human resource management (HRM) can be transferred from one country to another has been the subject of considerable debate. This question is of special interest to multinational corporations (MNCs) when they seek to establish HRM processes spanning different cultures and countries (Adler, 1991; Schuler et al., 1993). It is a question that has also aroused considerable interest among those researching HRM practices at MNC subsidiaries (e.g., Beechler and Yang, 1994; Hannon et al., 1995; Rosenzweig and Nohria, 1994).

Furthermore, There is an increasing demand for extensive, reliable, and informative research into comparative and international HRM and this has made business organizations and government research funding bodies more willing to fund research in the area. Moreover, both state bodies and business organizations have become more amenable to comparative/international HRM researchers, perceiving that there are now considerable benefits to granting them greater levels of access and cooperation than they might hitherto have deemed acceptable.

At a deeper level, an increasing awareness of the importance of HRM in the international business arena has seen a growth in two distinct strands of literature. First, there is a growing body of work that seeks to determine practical implications for managers. This type of work focuses on functional activities where they relate to the management of employees in multinational organizations (Bae et al., 1998; Brewster, 1993; Gertsen, 1990; Harish et al., 1998; Martin and Beaumont, 1998; Tung, 1990; Tung and Miller, 1990). It is of considerable value because it continues to push the boundaries of our knowledge and understanding of comparative and international HRM forward in a meaningful, though technocratic, sense.

Second, there has also been growing recognition that, although a focus on HRM-specific activities in multinational firms is of considerable importance, this does little to extend the conceptual/theoretical boundaries of HRM (Ferner, 1994; Kochan et al., 1992). Consequently, a whole series of studies have sought to provide new models, theories, and alternative understandings of, for example, the linkages between business strategy and comparative/international HRM (Festing, 1997; Kamoche, 1996; 1997; Kobrin, 1992; Millman et al., 1991; Schuler et al., 1993; Taylor et al., 1996), problems of control and autonomy in the management decision-making process that underlies international HRM (Edwards et al., 1993), comparative HRM research (Boxall, 1995; Chiu and Bu, 1990; Harzing and van Ruysseveldt, 1995; Teagarden et al., 1995), and the role of ethnographic, case study material in researching international HRM (Ferner, 1997).

Altogether, to suggest that research in comparative and international HRM has failed to progress and adds little to our understanding of this key facet of management is to deny the recent growth of research activity in the field and the significant advances in knowledge made by the resulting literature. Indeed, and as Scullion (1995, p. 377) noted, "it can be argued that considerable progress has been made, given the relatively recent emergence of the discipline." Accordingly, we would contend that the "marginal" tag is no longer tenable. As the articles in this issue indicate, research in this area has become a legitimate and valuable field of inquiry.

Considering the above features of an international organization, it is important to have an effective people management within the organization. However, it is important first to consider the culture of an organization.

Leadership

Leadership is a key issue in the development of groups, organizations and nations. The study of leadership plays a crucial role in the behavioral and management sciences. It is generally accepted that good leadership is essential to the functioning of an organization. It may be useful to think of the leadership process as the interaction between the situation, the leader, and the followers. Leadership is a behavior so it is defined as a function of the leader's personality (Ratzburg, 2001).

If the leader's skills, and motivations to fulfill certain felt needs, are combined with his or her personality, then these factors contribute to leader behavior. Theoretical work on leadership was developed throughout the century, starting with `trait theory', through to theories which focus on the way leaders use and exploit power, theories which explore behavioral approaches, others which look at contingencies, and finally those which consider situational aspects.

Leaders in a culturally diverse organization must not be biased towards a particular culture. It is important that the leader avoids racism and other acts that offend his/her employees. Further, a leader in this kind of environment must be sensitive to the needs unique to a specific employee.

Motivation and Empowerment

In managing people in a culturally diverse organization, as in any organization, the manager must first satisfy the needs of the employees. Motivational theories dealing with the needs of employees fall under the general rubric of Content Theories of Motivation (Ratzburg, 2001). Content theories state that employees' behaviors are a function of the workers' abilities to satisfy their felt needs at the workplace. A basic assumption of all need theories is that, when need deficiencies exist, individuals are motivated into action in order to satisfy them. The best known of the Content Theories of Motivation is Maslow's Hierarchy of Needs. This is based on the assumption that people are motivated by physiological, safety, social, ego and esteem, and self-actualization needs. These needs are ranked, according to the order in which they influence human behavior, in hierarchical fashion.

        Empowerment is a technique for improving employee satisfaction, which is being undertaken by many organizations. It involves responsibility and authority for decisions affecting the workplace, downward through the organization. In an international organization, employees need to be  equally empowered. This empowerment results to an increased competence, self-esteem and self-respect, which are very important to one's well being.

        Moreover, creating an environment in the workplace that results in employees feeling better about themselves when they are in it results in love of their work. A work environment that constantly raises an employee's self-esteem, above that  she/he experiences anywhere else in their life, will be where she/he most desires to spend their time and yields very high employee satisfaction with their job and costs next to nothing. People do more of what they enjoy and less of what they don't enjoy. The results also show that people who enjoy working are more productive.

               Creating such a work environment is the responsibility of all corporate or organizational leadership. There are no schools that teach how to create such an environment and very, very few training programs that result in the behaviors necessary to do so. While a very small number of managers of people have found and refined the skills that produce such a high satisfaction environment, these are skills that anyone can learn and master through conscientious and consistent practice.

Empowerment refers to the process of gaining influence over events and outcomes of importance to an individual or group (Fawcett et al. 1994). This definition recognizes the primary purpose for adopting this construct: enhancing people's control over their lives (Rappaport, 1981). It recognizes that empowerment endeavors should consider those domains important to a particular individual or group and facilitate a process that eventually leads to realized control and influence in those domains (Rapapaport, 1981). Some organizations ignored the person-environment interaction and the critical role that both individuals and contextual characteristics play in the empowerment process, which result in risking the implementation of ill-fated empowerment initiatives.

When assessing the interaction between culture and empowerment, it seems useful to identify and understand those subcultures that might engender a work environment more or less empowering than the larger organizational system (Wilkins & Dyer, 1988). By seeking these diverse subcultures, we can potentially elicit the unanticipated opportunities for empowerment present within a potentially disempowering, larger organizational context.

        Aside from motivating and empowering their employees, managers should enable them to develop their self-management capabilities. Developmental  feedback seeking is the extent to which one seeks feedback on performance and development needs. Individuals need to understand themselves, their strengths and weaknesses, developmental needs, and performance in their current environment.

Sample Literature Review on Advocating Knowledge Management

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Chapter 2 REVIEW OF RELATED LITERATURE

This part of the study shall discuss the aspects of Knowledge management and its role as an integral factor in the success of an organization. The discussions on this portion of the study are based on studies and articles inclined on advocating KM.

Knowledge Management (KM)

Knowledge management is a discipline best described as a continuing process that focuses on the creation of business performance improvements--centered on people and not technology. (Han, 2001) While technology enhances the feasibility of transferring knowledge between people, knowledge management includes creating and sharing knowledge as an organizational asset to drive the business. Moreover, The value proposition of knowledge management states that there are fundamental business reasons and expected benefits for pursuing this process approach. There are gains the organization can achieve by using knowledge management to measure results, such as creating an Intranet and knowledge repositories.

Furthermore, the concept of knowledge management concerns the creation of structures that combine the most advanced elements of technological resources and the indispensable input of human response and decision-making (Raisinghani, 2000). The notion of knowledge management is nothing new. Corporations have always had some process to synthesize their experience and integrate it with knowledge acquired from outside sources (Sarvary, 1999). However, not until recently have scholars and practitioners alike become increasingly attracted to the science of applied knowledge within organizations. This movement is unique in combining information technology theory with pioneering work on models of learning organizations (Senge, 1994).

On the other hand, Parikh (2001) posits that data are merely raw facts collected from business transactions and activities, and that data must be structured into a meaningful, composite model to become information. Once information is created from such constitution of pure data sets, it is able to filtered through a relative model of understanding. Thus, knowledge is created only as information is interpreted and evaluated from a contextual mental model. Because individuals and companies as wholes have different mental models (Senge, 1994), the knowledge gleaned from the same compilation of information can differ greatly, not only in quality but also in applicability. Knowledge management thus differs from information management because the former implies a persistent, intentional effort of extracting from available information what is critical for business success, while the latter is more concerned with making critical information available in a timely and consistent manner to end-users within the organizational structure. Knowledge management is therefore the creative mining of information from diverse sources with the purpose of business opportunities in mind. As a firm works diligently toward perusing its information assets through the multitude of perceptual filters available, high-impact, matchless gems are unearthed, which have the potential to substantially affect the bottom-line.

The distinction between tacit and explicit knowledge is critical to understanding the working mechanisms of knowledge management. Lubit (2001) observes that explicit knowledge is codified and stored in the "organizational memory" and is available to employees throughout the structure. Conversely, tacit knowledge is personal knowledge possessed by an employee that may be difficult to express or communicate to others. Because a population of employees possesses a theoretically infinite number of mental models, or ways of perceiving information, tacit knowledge is often individualized and highly specific in scope. Lubit (2001) argues that it is this knowledge that is often difficult to disseminate to others in the context of the workplace, but it is also invaluable to propagate because it is a unique asset that is very hard to copy by other firms. Hence, given this premise, it can be logically understood that tacit knowledge can form the basis for competitive advantage, but to do so it must become manifest in the real world and utilized to actualize the strategic agendas of the organization. Ideally, a firm can better manage its intellectual capital base by uncovering the tacit knowledge of its employees and turning that into explicit knowledge, available to others (Erickson & Rothberg, 2000).

Moreover, Stonehouse et al. (2001) noted that the concept of knowledge management has evolved from research on organizational learning. They argue that it is simply the next phase of an evolutionary process of strategic frameworks that seek to explain how an organization may generate superior performance relative to the competitors in its market. Earlier approaches centred on the competitive position of an organization within its industry. Subsequent attention was focused on the creative mastery of an organization's core competencies to achieve competitive advantage. Currently, the concentration is firmly upon effectively "working" knowledge to produce the fruits of fiscal gain, as reflected in the company's financial statements and stock price. Concurrently, Senge (1994) contends that the only construct within grasp of an organization, which will produce lasting, sustainable advantage, is the usable knowledge produced from purposeful, well-orchestrated learning by all employees within the firm. This collaborative effort toward an openness to learning and new ideas creates a culture of excitement and creativity, which forms the basis for the organization as a learning organism synergistically created by the steadfast efforts of individual employees committed to this underlying philosophy.

Most investigation into knowledge management has been concerned with capturing the knowledge embedded inside of the heads of individual employees (Nidumolu et al., 2001). This "within" approach is certainly a substantial place to begin the challenge of developing a thriving knowledge base, but appears to be less than holistic in its efforts. The vast expanse of knowledge outside the traditional boundaries of the company may prove just as useful (Gold et al., 2001). Nevertheless, the challenge of capturing functional knowledge in the midst of overwhelming information availability remains elusive (Oder, 2001). If a company is bathed in the true spirit of learning (Senge, 1994), it will develop structures and processes which create a balanced and complementary effort toward combining knowledge acquisition from inside and outside of the firm.

Knowledge Management as a Strategic Tool

The fundamental objective of any corporate Knowledge Management program is to support the achievement of strategic business objectives. In other words, the "starting-point" for KM is to understand what the organization's business objectives are. (Hauschild et al, 2001) Many KM projects fail because they are treated as technology-projects. In order to be successful, KM must not be an end in itself, but must be a strong enabler to achieving real business results.

Moreover, consequent to understanding the basic strategic objectives, the next step is to identify key drivers including Knowledge Capabilities that are vital to achieve these business objectives. (Hauschild et al, 2001) This is followed by a Knowledge Inventory. This is characterized by an identification of what knowledge capabilities currently exist - and where or with whom. At this stage, a Knowledge Map may be prepared. This is described as a graphical representation of the business objectives, critical knowledge capabilities to achieve them and where or with whom they reside in the organization. The Knowledge Inventory and Knowledge Map enable identification of the organization's Knowledge Assets and where & how they can be accessed, Knowledge Gaps and definition of strategies & initiatives to bridge the gaps, which could include the implementation of appropriate IT tools to support knowledge-sharing & collaboration both within the enterprise and in the extended enterprise - including customers, partners and suppliers - to help the organization make better decisions. Another is the formation of communities of practice by experts in each of the critical knowledge-capabilities identified earlier. In addition to that is the sharing of relevant best practices, case studies, lessons-learned, etc. from both internal & external sources.

Effective KM will enable the organization to become nimble and make well-informed business decisions. A key-objective of KM is to ensure that the right knowledge is available with the right person at the right time in a "consistent and systematic" manner to enable timely decision-making. (Hauschild et al, 2001) An organization's Knowledge Map must be a living organism that is updated continuously as Knowledge Gaps are filled, new Subject Matter Experts are identified or new Knowledge Capabilities are defined.

Critical Success Factors of Knowledge Management

This part of the chapter shall be taking into account the aspects that consequently lead to the success of a KM program. One of these factors is technology. KM technology solutions provide functionality to support knowledge sharing, collaboration, workflow, document-management, to mention a few, across the enterprise and beyond into the extended enterprise. (Hahiran, 2002) These tools typically provide a secure central space where employees, customers, partners & suppliers can exchange information, share knowledge and guide each other and the organization to better decisions. The most popular form of KM technology facilitation is the knowledge-portal on the corporate intranet and extranets where customers, partners and/or suppliers are involved. Common technologies used for knowledge portals include standard Microsoft technologies or Lotus Notes databases. There are also vendors that provide specialized tools for collaboration, indexing & retrieval of content, Decision Support / Business Intelligence, Document-Management, just to mention a few. A company must choose a technology option that meets its KM objectives & investment plan. While technology is a key enabler to KM, it is important to ensure that the technology solution does not take the focus away from business issues and is user-friendly and simple to use. Many companies have made the mistake of expending a disproportionately high portion of their KM effort & resources on technology - at the cost of people-involvement or strategic commitment - resulting in zero or very limited business results. It is also important to remember that users of the KM system are subject-matter experts in their respective areas of specialization and not necessarily IT experts.

Another success factor is the KM processes. These include standard processes for knowledge-contribution, content management such as accepting content, maintaining quality, keeping content current, deleting or archiving content that is obsolete; retrieval, membership on communities of practice, implementation-projects based on knowledge-reuse, methodology & standard formats to document best-practices & case studies, etc. It is important for processes to be as clear & simple as possible and well understood by employees across the organization. (Hahiran, 2002)

Furthermore, the biggest challenge in KM is to ensure participation by employees and other members of the extended organization in the knowledge sharing, collaboration and re-use to achieve business results. In many organizations, this requires changing traditional mindsets & organizational culture from "knowledge-hoarding" to "knowledge-sharing" and creating an atmosphere of trust. This is achieved through a combination of motivation/recognition & rewards, re-alignment of performance appraisal systems, and other measurement systems. (Hahiran, 2002) A key to success in Knowledge Management is to provide people visibility, recognition and credit as "experts" in their respective areas of specialization - while leveraging their expertise for business success.

And lastly, a Knowledge Management program cold be considered successful when it has a sustained strategic commitment. Strategic management has a key role to play in promoting the desired behaviours both through example and by constant communication across the organization of the strategic importance it attaches to KM. (Hahiran, 2002) A key to success in KM is for top management to provide sustained strategic commitment to KM. KM initiatives in several organizations have failed because KM was a fad for a short while - and attention was then diverted to the "next big thing".

While all four are critical to build a learning organization and get business results from KM, a majority of organizations worldwide implementing KM have found it relatively easier to put technology & processes in place, whereas the "people" and "sustained strategic commitment" components have posed greater challenges. (Hahiran, 2002)

In relation to the success factors of KM, a variety of measures of ROI from KM has also been proposed. Many of these measures focus on attaching a value to an organization's intellectual capital. (Hauschild et al. 2001) However, to keep KM "implementation-oriented" and focussed on "real business results", it is more important to have a set of measures that are directly related to achievement of business results. A combination of lagging, such as actual business outcomes, and leading measures such as performance drivers that would lead to business outcomes should be used.

It is also important to remember that effective KM is an enabler for competitive success, market-intelligence, customer-knowledge, better & quicker decision-making, etc. (Hauschild et al. 2001) All these are key to survival in business, but the exact contribution of KM to these may be difficult to measure in quantitative terms. Organizations that have successfully implemented KM for business results do not focus on theoretical measures - but use a combination of quantifiable and subjective measures to evaluate KM success.

Furthermore, Pfeffer & Sutton (2000) describe three approaches that move organizations from adopting an almost mindless reliance on things past that impede action in the present: building a novel sub organization liberated from the passive ways of being, making it difficult—sometimes by drastic means—to adhere to the old ways, and building an organization in which employees constantly question precedent. The leaders of the firm must take the reins in galvanizing and maintaining a persistent effort towards an organizational culture of purposeful activity and knowledge application. This may be done by clearing articulating new expectations for firm employees, and by socially and fiscally rewarding pro-initiative behaviour change, while penalizing lagging efforts toward organizational proactivity.

Learning from knowledge application involves post-analysis and critical process evaluation. Such evaluations lead to managerial learning regarding what knowledge initiatives actually produced tangible business results. This learning is difficult and often neglected by firms, but it is very important to maintain the wellspring of knowledge (Parikh, 2001). This cycle of knowledge implementation and critical review helps bridge the gap between the possession of theoretical knowledge and the actual application of such. In this sense, the speculative ideas regarding what will impact the bottom-line are empirically tested in the real world. This is yet another crucial steps in moving from obscure conceptualizations to refined knowledge that can impact business decisions. Knowledge management should ideally provide relevant knowledge to help knowledge workers make appropriate decisions to determine organizational actions (Parikh, 2001).

Knowledge Management as an Advantage

Among the central measure of organizational effectiveness is the creation and continuance of a measurable competitive advantage. Many broad initiatives such as efficiency, core competency advancement, actualization of customer-centric products and services, and limitation of the fixed costs of doing business can help to achieve a sustainable competitive advantage within the marketplace. Knowledge management is a targeted expertise designed to impact productivity and innovation in profound ways. It represents a new technology that is changing the competitive landscape of contemporary business (Sarvary, 1999). Knowledge management may exploit supply-side or demand-side economies of scale (Ofek & Sarvary, 2001). In the former case, the role is to reduce the operating costs of the firm, while in the latter case its role is to create added value to customers by appreciably increasing product quality. Thus, the effective management of knowledge understandably has the capacity to deeply impact the way a firm does business from the minor details of daily operations to the broadest strategic decision-making processes. There always exists better ways to transform inputs into outputs through the refinement of processes. Both academics and business practitioners alike are beginning to grasp the power of knowledge in helping to do so.

The science and art of knowledge management can be understood as a sequential framework of purposeful activity designed to produce tangible management decisions and resulting organizational activities, toward the ultimate purpose of producing gains in net income and market share. Knowledge management is a strategic process, which implies the goal of differentiation from competitors such that a sustainable competitive advantage is forged. One stage in the process may require the input of several other phases to galvanize its movement toward a usable "knowledge product", appropriate in supporting concrete decision-making and business action. In addition, the methodologies subsumed in each phase are presented as discrete activities unique to that step in the process, but in reality often overlap considerably. (Yli-Renko et al., 2001) In this manner, the deliberate business behaviours that constitute the essence of any given stage may be strikingly similar to those of other steps, depending upon the specificity of the circumstances under which a firm operates.

Furthermore, the dissemination of salient knowledge is surmised to impact the formation of competitive advantage. The two most cited mediating factors for ensuring proper dissemination of knowledge are communication facilitation and organizational culture development. Buckman (1998) argues that one of the central purposes of knowledge management and sharing is to facilitate communication across all of the organization's boundaries, so that the entire company works together to address given business challenges and seize covert opportunities. In this way, knowledge managers need to look at specific tools and tactics that will encourage collaborative and productive exchange between employees. Managing knowledge flow is a crucial step in moving the asset of quiescent knowledge into actualization (Fahey & Prusak, 1998). With efficient dissemination of knowledge, the company's ability to make impacting decisions increases dramatically, because individuals throughout the firm gain access to important strategic ideas, rather than merely retaining this knowledge within the ranks of high-level management. By giving employees access to each other, rather than going through vertical channels of upper management, those with the most current knowledge can share it with those who will benefit most from it (DeTienne & Jackson, 2001). This improves the organization's ability to make rapid decisions and execute them effectively.

On the other hand, Pfeffer & Sutton (2000) maintain that to create a culture appropriate for transforming tacit knowledge into communal, explicit knowledge fear-based approaches to management must be abandoned. Despite the burgeoning literature within the field of leadership about the need to reconceptualize the control orientation of management and replace it with one that emphasizes facilitation and coaching, management practice remains dominated by control impulses (Beech & Crane, 1999). A key in overcoming tendencies of employees to hoard knowledge or to remain cautious in sharing ideas with others is for management to take the lead in creating an environment of understanding, shared control, compassion, and learning. All ideas set forth in good faith and backed by rational analysis should be reinforced as beneficial to the company's efforts to create a cauldron of strategic innovation, even if such shared knowledge does not immediately produce resounding results.

Synthesis

The chapter discussed the aspects of KM as a required factor for the efficient fulfillment of an organization's goals. Moreover, the discussions above posit that knowledge movement is pervasive. Whether it is defined in terms of learning, intellectual capital, knowledge assets, intelligence, expertise, insight or wisdom, it consummates to one assertion, enhance the management of the organization or perish. Initiatives in industry, education and government are trying to tackle the same problems, issues and opportunities. Moreover, the discussions suggest that the immeasurable must be measured. Traditional financial accounting mechanisms fail to calculate/calibrate the most important resources of the firm - its intellectual capacity. Instead, current mechanisms treat people as liabilities or expenses instead of assets. The business case must be defined in order to justify necessary investment strategies in the human and social capital of the firm.

In this light, a collaborative research base must be established. There is minimal research activity for service functions or the services industry of the economy. There is minimal government funding and few consortia, which are non-industrial in mission. Enterprises are embarking upon individual R&D efforts when a collective degree of research - on a pre-competitive basis - is essential for establishing a solid foundation for the future of the industry. Likewise, initiatives must be designed as 'middle-up-down.' Top down leadership continues to be essential for management because traditional hierarchical structures will not disappear overnight. Grass roots activities, which are networked, can have the insight for change validated by those closest to the point-of-sale. Oftentimes, those closest to service delivery are not the people empowered in an organization. The middle-up-down approach is described as a way to balance and integrate the best of both methods.

Similarly, the discussion above suggests that in order to achieve success through KM, insight is being gleaned rapidly. For those who embrace change as reality, there is little time to be spent on barriers. The future is far more exciting to create. In each profession, those who were deemed philosophers and futurists are being sought for counsel on business operations. What was theory yesterday is fundamental to business survival tomorrow. There is a cumulative effect between and among disciplines as leaders seek to understand the principles and policies of one another. Indeed, the field has become sufficiently sophisticated to warrant the benchmarking of best practices for even further dissemination and leverage.

Nevertheless, the implementation of the KM program takes many forms. The variety of new titles and program initiatives vary company-to-company due to the uniqueness of each corporate culture. New titles range from novel verbiage to re-labeling of traditional functions. There are many ways to configure the knowledge puzzle and leadership can come from any level, function or position in the company. Furthermore, management architectures are useful, but should not be limiting. A frame of reference is essential in order to scrutinize and interconnect the variables. However, exploration of the factors leads to identification of new variables and interconnections, which are fundamental to the business. The frame provides a way to organize the discussion and fuse the diverse values within the company culture. The process must be dynamic - not static - in order to capitalize upon new business opportunities coming from unserved markets and unarticulated needs.

In addition, the discussions above also state that the nature of 'the collective' must be understood and harnessed. Enterprises are now defined as including multiple stakeholders: suppliers, partners, alliances, customers and - in some cases - competitors. These infrastructures are a combination of evolving, ecological systems and carefully premeditated schemes for profitable growth. The combination is what is of most value. Attention must now focus upon the definition of the whole and the interconnections of the pieces. Moreover, one could not discount the importance of technology. Technology is integral to the successful functioning of the knowledge enterprise. Similar to the misconceptions of computer-based education, artificial intelligence and the early renditions of groupware, there is confusion as to the appropriate role for the supporting technology. The 'productivity paradox' explains why there has not been a commensurate economic return for the investment on technology investments, but it does not provide a path forward for the ideal technical solutions. This will take some time and considerable trial-and-error.

Recent literature also states that the knowledge phenomenon must be managed and not left to providence. As incomplete as the systems might be, some influence and control is better than nothing at all. There are the inevitable unexpected forces, which cause a major shift in orientation. Management must be understood as both a science and an art in order to reap optimal advantage. The objective of KM is to support the achievement of business-objectives. Both knowledge-contributions/ sharing as well as re-use need to be encouraged and recognized at the individual employee level as well as the company level. This is best done by measuring and rewarding knowledge-performance. Sustained strategic commitment and a corporate culture that is conducive to knowledge-performance are vital for success in Knowledge Management. Measures used to evaluate success in KM must be related to business results.

References:

Beech, N. & Crane, O. (1999). High performance teams and a climate of community. Team Performance Management, 5 (3), 87-102.

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Beijing Novartis Pharma Ltd. Literature Review Sample

2008-10-01T11:20:00.002+08:00

REVIEW OF RELATED LITERATURE

This portion of the study shall discuss the data collected from secondary sources such as journals, articles and other literature that would establish the effects of the reforms in China with respect to the marketing strategies of Beijing Novartis Pharma Ltd.

GENERAL REFORM IN CHINA

China has done remarkably well since the beginning of the economic reform movement in 1978. (Wu, 1996) Between 1979 and 1995, China's GDP grew at an average annual rate of 9.5 percent. China's exports grew even faster and China now ranks among the world's top 10 exporting economies. The economic boom is very much due to the market-oriented reforms and opening up to the outside world. In the meantime, China also faces a series of knotty problems. Amongst them, significant inflationary pressure and the prevalence of corruption is the most vexatious. The spectacular achievements of China's economic reform and development owes to an unusual strategy of reform, namely, "reforming and growing out of the established system" or an incremental strategy for short.

Initially, the reform measures were oriented towards delegating decision-making power and relinquishing benefits to lower levels in the state sector. (Wu, 1996) As in the former Soviet Union and the Central European countries, these "gradualism" measures did not work in China. Since late 1980, the focus of China's reform had shifted from the urban state sector to rural areas. Pioneering this effort was the introduction of the "household contract system." Within two years, household farming replaced the People's Commune. Since then, China tried a new and unusual reform strategy. Three aspects characterized the spirit of that strategy such as encouraging the development of non-state economy; integrating the domestic market with international market through opening policy; and pioneering reforms in coastal areas and promoting the development of the interior regions.

In addition, this new strategy proved to be correct and effective. From the point of view of the entire economy, however, the "incremental reform" is a tactical arrangement. (Wu, 1996) Moreover, reform in the state sector has been lagging behind. These results in consequences such as the exacerbation of state enterprises financial conditions; the persistent pressure of inflation; widespread corruption and rent-seeking activities; and the widening gap between the rich and the poor. In addition, the severe inflation in 1988 and political unrest in 1989 slowed the pace of reform. Confronted with such a situation, Deng Xiaoping advocated a new upsurge in the reform drive in 1992. In November 1993, China concluded a new reform strategy of "overall advance with focal breakthrough" and started to "storm the heavily fortified positions." Moreover, the "focal breakthrough" refers to the expected progress in the reform of the state sector, while "overall advance" refers to the building of a market system as a whole. Likewise, a new wave of economic reform has been launched and gives priority to the state sector. These include the building of a new taxation system suitable for a market economy; reforming the banking system; changing the state-owned enterprises into independent corporations; and reorganizing the social security system.

Moreover, the Chinese Government undertook a more recent economic reform. After fifteen years of negotiations, on November 10, 2001 at the World Trade Organization (WTO) Ministerial Conference in Doha, Qatar, WTO members formally approved the accession package for the People's Republic of China (China). China became a full member, the WTO's 143rd, on December 11, 2001.

China's entry into the WTO will make China's door even more open. Both foreign investment and foreign trade are expected to increase. (Chow, 2000) Foreign firms will begin to penetrate China's financial and telecommunication sectors. Trade will increase in both directions and Chinese tariffs will be lowered and Chinese goods will have better access to world markets open to members of the WTO. Using foreign competition to stimulate the domestic economy is a major objective in seeking to join WTO, as explicitly stated by Premier Zhu Rongji. The Chinese government is well aware of the economic and social-political costs and benefits of joining WTO. While it is pursuing institutional reforms in state-owned enterprises and the banking and financial sectors, it is aware that the reforms and the accompanying globalization of the Chinese economy have to proceed in an appropriate speed. If foreign competition enters China too rapidly, adjustments by Chinese producers and enterprises may be too severe to be socially desirable. The harmful effects of foreign competition are monitored by putting into practice gradually the reduction of import tariffs and the admission of foreign competition in the financial and communication sectors.

In addition, there are three sets of forces that determine institutional changes in China. (Chow, 2000) These are the role of the government, incentives generated in the market sectors and inertia inherent in economic institutions. In the last twenty years the government has guided the changes in economic institutions. In the future the government will remain active, especially in the following areas. First, science/technology and education for the betterment of the economy was stated to be the main theme of his tenure when Premier Zhu Rongji responded to a question raised during his first press conference in March 1998. Second, the building of infrastructure, in connection with the plan for Western development in particular, will be of top priority. Other areas of serious government attention include the improvement of technology in agriculture, environment protection, social welfare system, health care and housing reform. There will be plenty of opportunities for foreign investors to invest in all these areas. Secondly, concerning the market forces we can expect that private enterprises, joint ventures and foreign owned enterprises, under a better legal system and in an improved economic environment with China a member of WTO, will contribute positively to growth in the next two decades. These enterprises will play the role of township and village enterprises in serving as the most dynamic sector of the economy. They also will provide competition to the state and collective enterprises, making them more efficient. Thirdly, inertia will prevent economic institutions from changing rapidly. Institutional inertia comes from lack of information, lack of knowledge, social and political pressure affecting economic decisions and simply persistence of customs and habits. Inertia explains the difficulties encountered in reforming the state enterprises and the banking system. One most important problem common to both institutions is the lack of well-trained managers and staff. The second element of inertia is the tendency to retain the old ways of doing things. In many state-enterprises that have been changed to share-holding companies, the shareholders still elect the same governing people to the new board of directors and there is no change in management. One can explain this partly by political and social pressure, another element of inertia I have just mentioned. Therefore we cannot expect that Chinese state enterprises and banks can be changed to modern institutions in a few years simply by enacting new laws. The reform of these institutions will be a slow and gradual process as it has been in the past, but continued progress there will likely be.

Moreover, WTO membership will eliminate the acrimonious annual trade review that U.S. Congress holds. In addition, it will deny other countries the ability to discriminate against China on trade matters. (Chow, 2000) WTO membership will allow China to be heard in the international economic arena and to enjoy the privileges, like having access to the WTO mechanism for trade disputes. There will be a shot in the arm for Chinese goods with free access to world markets. The main beneficiary will be those industries in which China has competitive advantages, like textile, home appliances, bicycles and motorcycles, food, and toys. Likewise, there will be restructuring in the economy and many jobs will be created in those industries that have the ability to capitalize on the opportunities to export to the world markets. China will be forced to upgrade its economy to international standards and eliminate unacceptable practices. These include respect for intellectual property, free access to markets, non-discriminatory and unfair practices, and respect for the rule of law. In addition, one main beneficiary is Hong Kong, which traditionally serves as a conduit between China and the rest of the world. The China boom will enable Hong Kong to sustain and increase its economic role. Chinese consumers will enjoy the fruits of a capitalist economy, with more choice of goods and services. In addition, prices will be lower and customer service will improve with more competition.

Nonetheless, in the proliferation of open markets, many state-owned enterprises that were used to the centrally planned economic system would be eliminated. (Chow, 2000) They are struggling with archaic machinery and old production methods, shoddy products, disregard for customers, heavy debt, and a stubborn, undisciplined, old workforce. They will be unable to survive with open competition. Chinese farmers, who lack modern farming techniques, machinery, and economy of scale, will be overwhelmed by foreign agricultural produce. A high tariff wall currently protects them. Furthermore, enormous labor restructuring will happen that is unprecedented in the modern world. Labor will migrate from rural to urban centers to seek job opportunities. Many millions of employees in the lower skill categories, including a high proportion of older people, will be jobless without skill retraining. At the same time, there will be shortage of people needed to fill New Economy positions, like IT, telecommunication, law, finance, foreign trade, biotechnology, etc. Many industries will be affected. One of the biggest industries to suffer in China will be the car industry. It is protected by high tariffs and lacks the economy of scale to be competitive. It will be attacked by imports at cheaper prices and better quality. Under WTO rules, tariffs will eventually be eliminated, and there will be no requirement for export quota and transfer of technology for local production. China will be under pressure to develop its own technology. Likewise, WTO membership will require changes in the structure of China's economy, in the relationship between government and industry, and in government structures, procedures, legal and regulatory frameworks. These changes will take some time. However, the benefits for China will be substantial. China's export industries will obtain secure and predictable access to foreign markets, generating further jobs and economic growth. Liberalized investment rules, a more transparent regulatory framework, and better export market access will attract foreign investors, and the technology and jobs they bring. Greater competition within China will improve economic efficiency and productivity in the long run.

MEDICAL REFORM IN CHINA

On December 9th, 1996 China held its first national conference on health in Beijing. At that event President Jiang Zemin and Premier Li Peng lauded the accomplishments of China's health care system of the last 40 years boasting that China had lowered its infant mortality rate from 200 to 31 deaths per 1000 live births and raised life expectancy from 35 years to 70 years. (Wong and Gabriel, 1998) President Jiang Zemin emphasized the importance of the country's health in relation to its economic and socialist development and urged the people to create a competent health care workforce. Premier Li Peng advocated government leadership in shaping the nation's health care system and advocated reform as the country's impetus for health care development. These were not new themes for China's leadership. Indeed, one of the most notable achievements of the Maoist era (from 1949 to 1976) was the dramatic improvement in access to health care for China's citizens, particularly those living in the rural areas and the urban poor. Health care provision was greatly decentralized and diffused throughout the countryside and city neighborhoods during the Maoist era. The rapid economic growth that epitomized the first stage of the post-1949 Chinese society can be, in part, attributed to the decision of the Chinese government to "democratize" health care, with "barefoot doctors" and health clinics widely available to segments of the Chinese population that had never had such access before.

China is the most populous nation in the world with a population of approximately 1.25 billion people. (Wong and Gabriel, 1998) The population is distributed over 22 provinces, 5 autonomous regions and 3 metropolitan municipalities under the central government. The provinces, which possess a high degree of fiscal independence, are themselves divided into 2182 counties (averaging 400,000 residents), 47,000 townships (averaging 18,000 residents) and 740,000 villages (averaging 1000 residents). The urban population has grown substantially since the 1960's. From 1960 to 1992 the urban population climbed from 19% to 28%, and is expected to increase further to 35% by the year 2000.

With the entry of China to the World Trade organization, it also entails a number of changes in the health industry of China. First, the World Trade Organization (WTO) entry will speed up the ongoing restructuring of China's pharmaceutical industry and its health care reform. Second, regulatory changes stemming from WTO accession will lower tariffs on imported drugs and bring welcome market opening in some areas. Tariff on imported medicine are to drop from the current average of 14 percent to between 5.5 to 6.5 percent by 2003. Moreover, other changes will be less predictable. For instance, private insurers will be allowed to offer services after WTO entry. This complements an existing trend where individuals are being made responsible for a portion of their healthcare costs. This is likely to depress demand for healthcare in the short term, as people bear the true price of their healthcare. Private insurance could counteract this, as it will focus on higher quality services and drugs.

Moreover, the State Council in 1998 formulated the new healthcare policy for employees working in cities and towns, and thus kicked off the reform to the medical insurance mechanism. The objective of the reform is to provide a remedy to the existing ailing medical insurance system. It includes three principles: wider coverage and lower state/employer contribution; shared contribution by state/employer and employee; separation of drug from medical service.

The reform will impact mainly five aspects of the pharmaceutical companies: Financial, Supply chain, End user, Reimbursement and Marketing. The reform is to aim at reducing medical expenses, particularly drug fee. The state very possibly will impose price limit to drugs. Chances of Novartis will be forced to cut the price for some existing products, which are the biggest contributors to the sales and bottom line of the company. Also, the price reduction incurred by the reform will bring huge pressure on the financial control of Novartis. Elizabeth Barnes said that Without doubt, a financial objective will be a key objective and this will influence the type of pricing strategies used. (Barnes and McClelland, 1997) Moreover, Kotler and Armstrong (1997) also said Marketers need to know the laws affecting price and make sure that their pricing policies are defensible. Soon other players in the supply chain will feel the impact. Every member of the supply chain will be under tremendous stress in terms of stock management, account receivable and cost management, etc. to protect the shareholder value, operation margin and cash flow.

The level at which the price of a product is set has to be a careful balance between the cost of production and the price that wholesalers, retailers and consumers are prepared to pay (Barnes and McClelland, 1997). Price will become a sensitive issue after the implementation of the new healthcare reform. Competition among wholesales and retailers will be intensified. Their margin will fall significantly and this will lead to consolidation in distribution. This trend will lead to the rise of powerful super-wholesalers, which will have bigger national coverage, deeper penetration into retailers and better services. Also, the trend of wholesales consolidation, hospital alliances and retail chain stone operation will result in a smaller voice of Novartis in the supply chain. The end user-patients also will be motivated to control their medical expenses, and will have higher awareness of health and drugs. In reimbursement aspect, due to this reform, each province or municipality will only develop one catalog. There won't be city-specific catalog any longer. The good part about it is that pharmaceutical companies will be able to focus resources in their marketing efforts. However, the barrier of entry will be higher. Competition among pharmaceutical companies will be increased, and winning the support of government officials and the recognition of the review committee has been more critical than ever. Therefore, product entry into the catalogs is the key to the survival and future growth of pharmaceutical companies. The biggest involvement in a foreign market comes through direct investment – the development of foreign-based assembly or manufacturing facilities. Generally, a firm develops a deeper relationship with government, customers, local suppliers, and distributors, allowing it to better adapt its products to the local market. Finally, the firm keeps full control over the investment and therefore can develop manufacturing and marketing policies that serve its long-term international objectives. (Kotler and Armstrong, 1997, p544)

Due to the reform, the marketing strategy of Novartis has to be changed to adapt the situation. Managers, of course, need to evaluate the situation, since in certain circumstances the best policy is to keep still, to merge into the background. (Barnes and McClelland, 1997)

THE PHARMACEUTICAL INDUSTRY

Among the top industries of China is the pharmaceutical industry. In an article by Li (2000), he stated that the industry is growing at a relatively high rate. He asserted that the total production of China's pharmaceutical industry valued 113.79 billion yuan in the first half of 2000, 22.3% higher than that of the same period 1999. This included industrial value-added of 28.025 billion yuan, up 24.5% and 5 percentage points higher in year-on-year growth rate. In contrast, the national average growth in industrial value added was 13.3%. Furthermore, if divided by ownership types, enterprises in all sectors reported positive growth except for some collectively owned ones. The state-owed and state-controlled enterprises turned out a total value-added of 10.117 billion yuan, up 5.5%; share-holding companies, 8.183 billion yuan, up 110%; overseas-funded companies, 5.885 billion yuan, up 0.94%; and collectively owned and private ones, 3.027 billion yuan, down by 6%.

In addition, Li (2000) as well stated that the pharmaceutical industry's sales volume is climbing up steadily. He posited that the total sales of pharmaceutical products in the country topped 73.18 billion in the first half of 2000, 14.2% higher than that of the same period in 1999. If divided by types, one can see that the growth in sales of medicine and Chinese patent medicines is higher than average, reaching 16.4% and 17.1%, respectively. Of the 31 regions at provincial levels in the country, 26 reported positive year-on-year growth in the pharmaceutical product sales in the period, where the companies accounted for 83.87% of the total recorded. Similarly, 19 out of the 26 regions posted growth rates above the national average. The coastal area contributed greatly to the total growth and the regions of Shanghai, Guangdong, Jiangsu, Shandong and Beijing accounted for 54.4% of the total sales. Likewise, the period from January to June in 2000 also saw noticeable growth in external trade of pharmaceutical products. The total turnover in period of January to May reached 2.472 billion US dollars, up 14.8%. The total exports valued 1.485 billion dollars, up 14.5%; imports, 987 million dollars, up 15.1%.

Furthermore, the industry also displays an apparent improvement in production and sales. (Li, 2000) In fact, 92.7% of the country's pharmaceutical products were marketed in the first half of 2000, 2.7 percentage points higher than in 1999.

On the other hand, it is also apparent that the profit of pharmaceutical enterprises is on the rise. (Li, 2000) The sales revenue of the pharm enterprises in the country reached 61.82 billion yuan in the Jan.-May period on 2000, up 20.3%, which include profit of 4.148 billion yuan, up 23.5%, rocketing based on the growth achieved in 1999. Enterprises in East China reported a total profit of 2.877 billion yuan, up 32.8%, and the regions of Tianjin, Beijing, Jiangsu and Shandong reported growth rates of over 30%.

In correspondence to China's accession to the WTO, the pharmaceutical sector as well experienced its effects in terms of restriction and competition. The newly implemented Pharmaceuticals Control Law has brought about a long-sought transformation of China's medicine industry. (Lao, 2001) The revised law went into effect on December after two-and-half-year deliberation since the amendment to the Pharmaceuticals Control Law was officially launched in October 1998. It was perfectly timed to bring the domestic pharmaceutical industry in line with WTO rules. Moreover, the economic and social changes following China's WTO entry have brought about many new demands for the pharmaceutical sector. Therefore, the Chinese government has performed 'major surgery' on the former Pharmaceuticals Control Law. In the said law, the number of provisions nearly doubles the amount in the original law; only two provisions remained unchanged.

Moreover, observers have pointed out that the domestic pharmaceutical industry will face great challenges after China's WTO accession. (Lao, 2001) It is necessary to keep the administration of high-quality medicine in line with the international standards if domestic pharmaceutical enterprises are to participate equally in global competition with their foreign counterparts. Statistics show that China had about 3,700 medicine producers in 1990, but the figure shot up to over 7,500 in 1998, and only 87 enterprises or workshops gained Good Manufacturing Practice (GMP) certification. Moreover, with the implementation of the new law, some 6,300 domestic pharmaceutical enterprises will be required to abide by GMP standards before the end of 2004.

Meanwhile, the new law will treat foreign medicine equally with domestic brands by stopping the practice of examining the imported medicine of each group and shifting the focus to market supervision. (Lao, 2001) Furthermore, the amended law has simplified the administrative approval procedures and established the regulations over the imported medicine's examination and registration, which both meet the demands of China's WTO entry. In addition, the influence of the new law on China's medicine industry has been felt since it was passed by the Ninth National People's Congress Standing Committee last February of 2001. The new law stipulates that the medicine sales should follow international conventions and meet China's needs. The establishment of medicine chain stores has become a common practice throughout the country.

NOVARTIS AND THE CHINESE HEALTHCARE REFORM

The 1990s mark the first decade in which companies around the world must start to think globally. Time and distance are shrinking rapidly with the advent of faster communication, transportation, and financial flows. Products developed in one country are finding enthusiastic acceptance in other countries (Kotler and Armstrong, 1997).

Nowadays China is the most potential market for the foreign investors since China was accepted as a member of WTO. However, the foreign investors should be aware that the understanding the public policy implications of a particular marketing activity is not a simple matter. As Kotler and Armstrong (1997) pointed out that marketing decisions are strongly affected by developments in the political environment. Nations vary greatly in their political-legal environments. He also identified four political-legal factors should be considered in deciding whether to do business in a given country, and one of them is government bureaucracy. The host government runs an efficient system or reform and this will direct influence the corporate strategies of foreign companies.

Beijing Novartis Phama Ltd is a Swiss Pharmaceuticals Company to set joint venture in China in 1984. Novartis has its target products to good selling in China and also has many potential marketing opportunities in every region in China. Meldrum and Mcdonald (1995) pointed out that a major concern for any producing organization is how it can best make its products be available to the market place. In China, there are no private physicians, almost no private hospitals and clinics. The majority consumption of an ethical medicine is from state owned hospitals. Every hospital has its own pharmacy. According to government reimbursement policy, ethical medicine in reimbursement list can be reimbursed. However, there is a condition, only the ethical medicine prescribed by hospital doctors and bought in hospital pharmacies can be reimbursed. So that it is critical for any ethical medicine to get into hospital list. Hospital is the battle of competition. The tradition sales practice of a Chinese local pharmaceutics company is to sell its products to distributors without its own hospital sales team. They do less academic and professional promotion. Every organization needs to audit the environment(s) in which it operates, and for this will require a sophisticated research activity. (Barnes and McClelland, 1997)

In order to specify the effects of the healthcare reforms of the Chinese government to the marketing strategies of Beijing Novartis, the study will be focusing on the buying behavior of the consumers as well as the product pricing of the company. Korhonen (1999) provided several basic pricing theories and their assumptions. Among these include the cost-derived pricing, competition-based pricing, and value-based pricing theories. In Cost-Derived Pricing, as it's name implies, cost is the major factor that determines the price of a product. Hence the price of a product is found by the cost of production and a profit margin. In Competition-Based Pricing, the importance is given to the prices of similar products on the market. On the other hand, the Value-Based pricing approach focuses on customers by the way they perceive the value of a product.

Perner (2000) on the other hand refuted the common view of the concept of the word price as synonymous to a monetary amount. However, this measure leaves out an important piece of information on what exactly is taken in return of that monetary unit. One could only be certain that consumers often tend to respond strongly to price increases, and particularly when certain thresholds are reached. Thus, a more complete definition of price is provided as:

Resources given up
Price = _____________________
Resources received

In the above formula price is defined as the percentage one acquires from the resources received and given up. Moreover, the numerator is usually stated in financial terms and the denominator is stated in terms of some other quantity. Moreover, price can be used in several ways to attract customers. (Perner, 2001) The first is through

quality signaling. In this method, some manufacturers and retailers use price as a signal of quality. The other method is by value positioning. In this method, certain brands and retailers position themselves as providing value--that is, reasonable quality at a low cost.

On another study by Perner (2001) provided importance of consumer behavior in marketing strategies. According to the study, consumer behavior is the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society. Behavior occurs either for the individual, or in the context of a group or an organization. Moreover, consumer behavior involves the use and disposal of products as well as the study of how they are purchased. Product use is often of great interest to the marketer, because this may influence how a product is best positioned or how we can encourage increased consumption. He added that consumer behavior involves services and ideas as well as tangible products.

Kotler (1980) on the other hand provided several factors that would influence the consuming behavior of buyers. Among these factors include the cultural, social, and personal factors. Among the cultural aspects include the culture-values, perceptions, and preferences that are the most fundamental determinant of a person's wants and behavior; subcultures-nationalities, religions, racial groups, geographical regions; and the social class-hierarchically ordered divisions in a society; members share similar values, interests and behavior.

On the other hand, social factors that affect the buying behavior of the consumers of a product includes the reference groups-all groups that have an influence on attitudes or behavior; the family, which is the most influential primary reference group; and the roles and statuses, which Kotler defined as the activities a person is expected to perform and the status associated with each. (Kotler, 1980)

And lastly, Kotler (1980) stated that the personal factors include variables such as the age and life-cycle stage-people buy different goods over their lifetime. Another is the occupation and economic circumstances of the consumer as well as his/her lifestyle. The latter is defined as the pattern of living as expressed by activities, interests, opinions. Moreover, another personal factor is the personality and self-concept-personality characteristics that influence buying behavior of the consumers. The psychological factors such as the motivation of the consumer to purchase a need; the perception of the consumer towards a product; learning as related to the experiences of the consumer, and their beliefs and attitudes based on the thoughts and favorable, or otherwise, evaluations of a person towards a certain merchandise.

In consideration of the above review, the study would be using the above theories on examining the effects of the healthcare reforms of the People's Republic of China to the marketing strategies of Beijing Novartis Pharma Ltd. It will use the theories of Perner and Kotler to measure both of the marketing strategies of Novartis particularly on its pricing and its consumer's buying behavior.

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Chow, Gregory. (2000) China's Economic Reform and Policies at the Beginning of the 21st Century. Perspective, Volume 2, No. 1.

Elizabeth Barnes & Bob McClelland, (1997) Marketing, An Active Learning Approach. Blackwell Business Publishing

Korhonen, Jessica. (1999) Utilising Pricing Theory as a basis for the Financing of a New Web-Service. Swedish School of Economics and Business Administration.

Kotler, Philip & Gary Armstrong, (1997) Marketing, An introduction. Fourth Edition, Pitman Publishing.

Kotler, Philip. (1980) Marketing management: analysis, planning, and control. Englewood Cliffs, N.J. : Prentice-Hall.

Lao, John. (2001) China Incorporates Pharmacy into WTO Rules. People's Daily. Available: http://english.peopledaily.com.cn/200112/08/eng20011208_86194.shtml. [Accessed 03/31/03]

Li, Jun. (2000) An Analysis on Current Pharmaceutical Industry in China. Investment in China (Monthly Report), No. 7.

Mike Meldrum and Malcolm McDonald, (1995) Key Marketing Concepts, Macmilian Business Publishing

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Wong, Brian and Satyananda Gabriel. (1998) The influence of Economic Liberalization on Urban Healthcare Access in the People's Republic of China. Nanjing University, Nanjing, China.

Wu, Jinglian. (1996) The Trends Of China's Economic Reform. The Chinese Academy of Social Sciences and the Development Research Center of the State Council, People's Republic of China.