Significance of Personality Development for a Student

Recently, a student approached me seeking help to resolve his personal problems. He was finding it difficult to concentrate during classes and scoring even pass marks in the exams had become a herculean task. A casual enquiry revealed that he was almost starving and severely malnutritioned because of his dislike for the hostel mess food. He would skip breakfast, eat sparingly at night and satisfy his appetite instead at the night canteen with coffee and noodles. This case is not very different from the stories of hundreds of students I have had the opportunity to counsel in the past six years. I have always noticed that most of the students’ academic problems can be traced to imbalances in the personal lifestyle which is often taken for granted. Many parents and teachers fail to make this simple connection and also to impress upon students the need for a balanced lifestyle. Indian society and the education system must veer away from the obsessive focus on marks & ranks, if we want to unleash the full potential of our youth and allow them to grow in a more natural way, pursuing their inborn talents and interests. A host of common behavioural problems noticed in kids and adolescents can be prevented or cured if a foundation is laid at an early age towards holistic personality development. Multiple Intelligence In this article, I will make use of the concept of Multiple Intelligence developed by Dr. Howard Gardner[i], Hobbs Professor of Cognition and Education at the Harvard Graduate School of Education. Dr. Gardner talks of different aspects of intelligence possessed by every human being and why it is important to develop each one of them to achieve a balanced personality. I will also attempt to illustrate how Indian tradition has always emphasized on such all round growth of the human being through the knowledge systems like yoga, ayurveda; through schools of philosophy & spirituality like the darsanas or vedangas and even through classical art forms like music or dance. Physical Intelligence Lack of regular physical activity and regime is perhaps the biggest epidemic afflicting the students in India today. The rat race for marks and ranks leaves little time or motivation for the average student to go out and spend some time at the gymnasium or in the playground. The university campus where I reside has a massive playground, a well-equipped gym, a basketball court, a tennis court and to top it all, one of the biggest swimming pools in South India. And yet, hardly 500 students come out to play or exercise every day, out of the 5,000 strong student community on this campus. No wonder then that a majority of the students who approach me with problems of poor concentration, motivation in studies are those who belong to the couch potato category. Had Swami Vivekananda been with us today, he would have declared again what he told that group of emasculated youngsters who approached him with a request to learn the Bhagavad Gita under his guidance: â€Å"You will be nearer to heaven through football than by reading the Gita. † But there is a significant positive trend happening in schools and colleges across India. Just as the number of obese and overweight kids is on the rise, so is there a growing interest in systems of yoga. What better proof of this than the fact that the mainstream political class in Tamilnadu which takes pride usually in hating everything that is rooted in Hindu tradition, has been instrumental in making yoga compulsory across all schools in the state! Or consider for example the experience of the Vivekananda Kendra in popularizing Surya Namaskara amongst schools all over India, particularly in Madhya Pradesh. Students who have attended the Yoga Vargas or the Samskara Vargas conducted by the Kendra vouch for the marked transformation in personality that the regular practice Surya Namaskara has effected in them. There is palpable strengthening of will power and confidence in these students. Parents and Schools should therefore reconsider the unhealthy trade off which they ask students to make between the time given to physical activities and studies. Linguistic Intelligence Even a cursory look at the placement scenario in professional colleges makes it amply clear that all corporations today emphasize the need for good communication skills and they prefer recruits with better communication skills in English. Communication skill has a great impact on our interpersonal relationships. A person who can communicate effectively and clearly is less likely to create communication gaps which lead to serious misunderstandings. Good communication skills and proficiency in many languages improves one’s reach amongst peers and enhances one’s social acceptance and prestige. It is an interesting fact that great spiritual leaders like Swami Vivekananda were masters of the art of communication. India’s rich literary and oral heritage is yet another illustration of this point; our forefathers understood the significance of developing linguistic intelligence. Musical Intelligence The study and practice of music was considered as a sacred form of worship in Indian tradition – Naadopasana. Perhaps, music is the most beautiful facet of human civilization. Sri Ramakrishna was particularly fond of Swami Vivekananda’s melodious voice and his soulful singing. Sri Ramakrishna would attain Samadhi on listening to devotional music. I often come across students who are addicted to music. Many of them turn out to be class toppers! They listen to their favourite music even the night before their semester exams! We do not need an expert in music therapy to tell us this obvious fact that music not only relaxes the mind but also brings about far reaching physiological and neurological changes in the body-mind complex over a period of time. Interpersonal Intelligence How do you measure a person’s level of emotional maturity and growth? Primarily by the way he conducts himself in civilized society and the treatment he accords to others. Corporations today emphasize again on relationship skills which are considered critically important for an individual to rise in the hierarchy of the organization. A CEO with poor relationship skills is either a non-existent oxymoron or a disaster for the organization. All religious values are centred on building relationship skills on the basis of a spiritual understanding of what connects one human being to another. â€Å"The essence of religion is to be good and do good to others,† said Swami Vivekananda. The Mahabharata declares Ahimsa to be the greatest dharma because the rishis perceived that all life is interconnected. You cannot harm others without harming yourself. If this profound truth is impressed upon our students from a young age, there will not be much need for all the fuss we hear about value education today. Many social or national evils like corruption or caste discrimination are results of a lifestyle that seeks personal aggrandisement at the cost of and complete indifference to the plight of our fellow human beings. If only our education gives greater weightage to building relationship skills amongst students, the India of our dreams would not have to wait for the year 2020. Intrapersonal Intelligence Conventional psychology would look down upon an introvert as a person with poor relationship skills. Not today. Howard Gardner and new schools of thought have begun to understand the reason why Indians give such respect to Munis and Yogis who withdraw from the world. An introvert who spends much time trying to understand his deeper self will also become capable of understanding others from a compassionate viewpoint. Intrapersonal Intelligence is the new marker developed to give due weightage to this important aspect of our personality development and grooming. A person who runs away from his own self all the while trying to substitute his inner vacuum with external pursuits or superficial relationships is heading for a crisis. The extrovert’s sense of identity and esteem is highly dependent on others’ views of his personality. An introvert is a person who is striving to arrive at a state where he can feel good or be content without having to seek an external confirmation of his well-being. Logical Mathematical Intelligence (IQ) Development of Logical Mathematical Intelligence is often given disproportional weightage in the development of a student’s personality. While IQ does play a significant role in the life of every human being, what was perhaps overlooked till recently was that IQ alone does not make a person complete nor is it the only parameter for measuring a person’s potential for success or happiness in life. A person with a poor IQ may be more than compensated by a high emotional intelligence. This is the reason why we see many school dropouts becoming highly successful entrepreneurs in India where as many IIM graduates disappear into oblivion after getting an MBA degree! Conclusion We know through Swami Vivekananda’s writings that he considered two things to be of great importance in personality development: a) Preference to the ‘Heart’ over the ‘Head’ b) The role of the Guru in shaping a student’s personality and the importance of living in the proximity of the Guru or Gurugrihavasa. Swamiji’s views based on Vedantic wisdom have stood the test of time. All that is destructive in human civilization is a result of a sharp brain with an undeveloped heart. Human civilization suffers from an excess of materialistic IQ devoid of EQ and SQ. And the only place where a student can be systematically trained to nurture his EQ & SQ is at the gurukula under the supervision of a wise master. As a teacher, perhaps it would be self-righteous on my part to claim that a teacher plays the most vital role in a student’s personal growth. But, as a student of the school of life, I cannot but reiterate this eternal law – only a spark can ignite another spark, only life can inspire another life. Modern schools of thought like the Multiple Intelligence model discussed here further validate the wisdom that Vedantic knowledge and tradition have bequeathed to us through Atmavidya and the Guru parampara. (The author is Assistant Professor and Coordinator of the Cultural Education Programme at Amrita University in Coimbatore, Tamilnadu. He is a Trustee of the International Forum for India’s Heritage and Resource Person for the Human Excellence Project of the Bharatiya Vidya Bhavan Coimbatore Kendra. He is also a students’ counsellor for the Samvedna Helpline, a project of the corporate social responsibility wing of Tata Teleservices. )

Stairway to Heaven Analysis

Stairway to Heaven† is a song that appears to have a little bit of everything that one would look for in music. Although it is greatly varied with many tempos and rhythms, it still produces a sound that people find enjoyable and among the most popular. As mentioned before, â€Å"Stairway to Heaven† can be divided into a number of sections. The first section lasts for about the first two minutes of the song. In this section, the dynamic Is piano-like and the tempo is quite slow, ranging from largo to adagio.An acoustic guitar plays a phrase that Is repeated and continued as lead anger Robert Plant begins his vocals about fifty seconds Into the song. An electric guitar then changes the tune which Is repeated In a strophic form manner and also with an adagio tempo. In total, this slow-moving section lasts for about four minutes. The second section of the song begins with the introduction of drums to accompany the electric guitar and vocals. This section is faster than the f irst, having a moderator tempo.The previous tune is still played albeit with some variation and a more lively sound. This includes the vocals, which also move faster with the instruments and sing a variation of the first section's vocals. There is still a strophic form contained in the second section, although the chorus is represented by the instruments rather than singing. About five and a half minutes into the song, the rhythm and melody of the song changes again. This next section contains no vocals, only the sounds of electric guitar and drums.A guitar solo played In an allegretto-allegro form dominates the section, which Is somewhat syncopated In the first half. The second half of the section is more organized. With a rondo form presented as BACKED and played by two electric guitars. In addition, the dynamic has dramatically changed from the beginning; it is no longer a soft rhythm but more similar to a mezzo forte dynamic. The final section of the song brings back vocals and a much faster tempo than the previous sections.The guitar now plays a hard rock phrase that repeats itself in the background of the vocals. The guitar and vocals go back and forth in ABA form for about forty seconds. Then, in the closing seconds of the song, one guitar plays a flowing phrase while another accompanies It with Its win tune until the last line of the song Is sung In a slow and soft tempo. The song Is composed of several forms. One Is strophic form; while not having a textual chorus, the song contains an Instrumental phrase that acts like a chorus in the first half of the song.There are also many rhythm for more than a couple of minutes. For all the sections of the song, there is polyphony among the vocals and instruments. Robert Plant sings his lines as if they were independent of the guitars, only being consistent with the pace but not the withy or pitches. The sections of the song, though vastly different, tend to transition to each other very well. The guitar is res ponsible for providing a bridge to each section, quietly changing the tempo and tune in between sections.The song is entirely in duple meter. This is easier to tell in the first couple sections of the song, where the guitar plays one quarter note after another in an adagio tempo. It is also in major form, especially the last sections. Although the first half of the song is slow and soft, it would still be insider to be in major mode based on the definition of the major key in the Western world. The beat of the song is hardly present in the first half because of the soft notes of the acoustic and electric guitar.However, as the transition from acoustic to hard rock is made, the beat's presence is greatly felt during the guitar solo and the last section of the song. Guitar and drums are the dominant instruments used in the song. It contains both acoustic and electric guitar, not often seen in songs from the sass-ass. The drums are only present in the second half of he song, and its in troduction signaled the transition from alternative to rock. The acoustic guitar is played during the intro to set up the rhythm for the song and is continued during the first vocal lines.This paves the way for the electric guitar to play a different tune with the same quiet feel. Then, during the second section, it gets faster and begins to sound more like a rock song. As it goes on, it changes tempo and rhythm and is eventually played fast and with passion. In addition, one is able to determine which notes the guitar will play as it is more organized than the earlier parts of the song where it was playing all different notes with different pitches and tempo.

Coursework †Metamorphosis Essay

Gregor must work at a job he hates to pay off his family’s debts. The family is in debt, but he is the only one who has a job. While he wakes up early and goes on the train until late at night, his father has a leisurely life. Kafka writes, â€Å"for his father breakfast was the most important meal time in the day, which he prolonged for hours by reading various newspapers. † Instead of working, he is eating and reading newspapers for many hours. At this time, Gregor must work to support the whole family. Later, he finds out that the family has enough money to live on for a few years and maybe Gregor did not have to work so hard. Kafka writes, â€Å"with this excess money, he could have paid off more of his father’s debt to his employer and the day on which he could be rid of this position would have been a lot closer. † He is like a servant, and this is not natural for a family member. Changing into the insect is symbolic of being liberated from this life. Since he is now a bug and cannot work, he does not have to be responsible for paying off the family’s debt anymore. Instead, the family has to be responsible. Therefore, the metamorphosis is also symbolic of the family being liberated because they do not depend on Gregor anymore. They depend on themselves for support. After the change, the mother and sister must do the cooking and the family must all get jobs. Once that happens, the family quickly decides that they do not want or need Gregor anymore. They are independent and decide that Gregor is not an important part of the family. Question 2: If the story was set in contemporary America and Gregor was working two jobs, the plot would change in many ways. If he is working two jobs, it is probably because they are barely able to pay the debts. The family would already be working, they would not get new jobs so easily, and there would be no servant girl or lodgers. If Gregor had two jobs, the other family would probably be working too. This would change the plot significantly. If all the family is working, Gregor would not be the only one responsible for the debts. After the metamorphosis, the family would not have enough money. If they are already working and Gregor loses two jobs, the family would be more in debt every day. Also, in the story, the family starts working soon after Gregor is changed to an insect. However, today it is not so simple to get a job like in the story. If the family has to get new jobs, it would take a long time and their debts would be higher. In addition, there would not have been a servant in the story. Kafka writes, â€Å"The servant girl was now let go. A huge bony cleaning woman with white hair flying all over her head came in the morning and evening to do the heaviest work. The mother took care of everything else in addition to her considerable sewing work. † If Gregor was working two jobs, the family would not have a servant girl or cleaning woman. They would not have enough money and the family would do this work themselves. Also, the family gets rent from three lodgers. Today, lodgers are not so common so the family would be forced to find other ways to get money. The story does not say if the rent is a lot of money, but one of the family would have to get another job to replace the rent. Question 3: I researched â€Å"The Metamorphosis† and found two very good resources: 1. The Modern World. 16 Mar. 2007 . This website is a collection of information about Franz Kafka and â€Å"The Metamorphosis. † It has a biography, review of the story, and a collection of other resources like papers, research, and websites. 2. Bloom, Harold, ed. Franz Kafka’s the Metamorphosis. New York: Chelsea House, 1988. This is a book with many essays about â€Å"The Metamorphosis. † I read â€Å"Metamorphosis of the Metapho r† by Stanley Corngold and â€Å"From Marx to Myth: The Structure and Function of Self-Alienation in Kafka’s Metamorphosis† by Walter H. Sokel. In â€Å"From Marx to Myth: The Structure and Function of Self-Alienation in Kafka’s Metamorphosis,† Walter H. Sokel writes Gregor turns into an insect because he has self-contempt. Sokel writes, â€Å"Seeing himself as vermin, and being treated as such by his business and family, the traveling salesman Gregor Samsa literally turns into vermin† (105). I agree with the author when he says vermin represents the way Gregor is treated, but I do not agree that Gregor sees himself this way. Gregor does not like his job, but must go to work to â€Å"pay off my parents’ debt† to his boss. His family uses him because he can make money and pay off the debts. His boss uses him because he can make money for the company. Kafka writes about Gregor, â€Å"He was the boss’s minion, without backbone or intelligence. † He cannot even miss work if he is sick. He certainly is treated like vermin by his family and boss. However, I do not see that Gregor thinks he is vermin until after he turns into an insect. He seems to be proud that he supports his family.

PARTY PLATFORMS Essay Example | Topics and Well Written Essays - 250 words

PARTY PLATFORMS - Essay Example Democrats demand that the state meet all the funds required for education while Republicans are more inclined towards privatization of educational funding (2010 State Republican Party Platform, 12; Texas Democratic Party). Regarding giving education to all who are living in the United States, Democrats have a more flexible stand towards non-citizens (2010 State Republican Party Platform, 12; Texas Democratic Party). Democrats are for daytime juvenile curfew while Republicans are against it (2010 State Republican Party Platform, 14; Texas Democratic Party). Democrats also want the state to support community colleges, which Republicans disagree with, as they want the students and parents to fund community colleges (2010 State Republican Party Platform; Texas Democratic Party). b. Position II. On Immigration Democrats have a more lenient stand towards illegal immigrants than the Republicans (2010 State Republican Party Platform; Texas Democratic Party). Republicans declare that they are dead against â€Å"amnesty in any form leading to citizenship, or legal status for illegal immigrants† (2010 State Republican Party Platform, 20). But democrats want to have helpful legislation for legalization of illegal immigrants who want to stay (Texas Democratic Party).

Business Plan #3 Essay Example | Topics and Well Written Essays - 1250 words

Business Plan #3 - Essay Example In this kind of environment where employees are motivated, there is increased productivity, more inventions and creativity within the company, staff’s potential is unleashed as they can freely express their opinions and views and ensure that they have been taken seriously. Employees can change their negative attitude about the work and start working in a positive way. When employees are motivated, they have got the urge to stay longer at the organization instead of resigning. Motivated workers will hardly miss at the workstation and will not go for absenteeism as compared to demoralized workers. It is through motivation that the managers will improve the standard of weak performers in the organization. They will closely monitor their work; try to find if the underperforming staffs understands the job description they are doing. After this analysis, the manager will come out with the conclusion that best suites each staff. Managers have a responsibility of challenging their staff to achieve the best. This mechanism makes them as leaders, and role models to their juniors. When managers assign leadership roles to their juniors it really motivates them, and they have a desire to be like their managers and this really helps them to be confident at the workplace. Organizations where employees are allowed to have fun and organize retreats for themselves helps to break the monotony of the work and gives them to rejuvenate themselves. For example, inter - departmental parties, retreats or activities that bonds the staff to work as a family rather than more of workplace. It is important for senior staff to applause the efforts of their juniors. Through this, the junior staff feels appreciated and recognized. Applauding their efforts means they are rewarded by promotions or gifts. In a business setting, for example, in an audit firm, your staff will be mostly accountants. Due

Navajo Weaving Art Essay Example | Topics and Well Written Essays - 1250 words

Navajo Weaving Art - Essay Example The Insect People flew up into the second world, guided through a hole in the sky by a cliff swallow. The second world was a barren world inhabited by Swallow People. They decided to stay anyway, but after 24 days, one of the Insect People made love to the wife of the Swallow People's chief. They were expelled to the third world; the white face of the wind told them of an opening. The third world was a barren world of Grasshopper People. Again, the Insect People were expelled for philandering after 24 days. The red face of the wind guided them to the hole to the fourth world. This world was inhabited by animals and Pueblos, with whom the Insect People coexisted peacefully. The gods made people in human form from ears of corn, different colors of corn becoming different tribes. The Insect People intermarried with them, and their descendants eventually looked fully human. In time, the men and women argued and decided to live apart. But both groups engaged in unnatural sex acts, and eve ntually the women were starving, so they got back together. The gods were displeased by their sins, though, and sent a wall of water upon them. The people noticed animals running and sent cicadas to investigate. They escaped the floodwaters by climbing into a fast-growing reed. Cicada dug an entrance into the fifth world, which was inhabited by grebes. The grebes said that people could have that world if they could survive plunging arrows into their heart. The cicadas met this challenge (they bear the scars on their sides still), and people live in the fifth world today. (Terzoulin) The Holy People marked their territories through the found mountains the put four sacred mountains in four different directions: Mt. Hesperus in the north, Mt. Blanca in the east, Mt. Taylor in the south, San Francisco Peaks in the west, which through their interaction with the Navajo people, shared with them the means and ways of doing everday activities in life, "in harmony" with Mother Earth. "The Dineh believe there are two classes of beings: the Earth People and the Holy People. The earth People are ordinary mortals, while the Holy People are spiritual beings that cannot be seen. Holy People are believed to aid or harm Earth People." (Explore the Navajo Nation) On the contrary, the temporal side, which is supported by several anthropologists, historians and artists proposes that the weaving was a skill acquired by the Navajo Didine (people) from their interraction with the Pueblo weavers during the mid-17th century. (Bernstein) Economic situations during the Navajo's transfer to Bosque Redondo at Fort Summer after Colonel Kit Carson induced an adoption of General Sherman of the US' "scorched death", which was then later called "The Navajo Threat", and their exposure to trade and tourists while having problems in earning salaries all contributed to the eventual change in their weaving culture and style. (Anderson) When the Navajo got rugged under the US, they experienced sudden

The Rationale of the Supreme Court's Decision in Citizen United (The Essay

The Rationale of the Supreme Court's Decision in Citizen United (The Majority Opinion by Justice Kennedy) - Essay Example This research will begin with the statement that in the course of 2008 election, Citizens United, a conservative non-profit organization, produced Hillary: The Movies, a documentary criticizing Senator Hillary Clinton by then. The movie was considered by Federal Election Commission (FEC) as an electioneering communication due to the political nature of the movie and because Citizen United aimed at purchasing airtime on a video-on-demand service on a cable television. Thus, this movie was subject to laws governing the production of political advertisements as well as limitations on who may fund them. Citizen United prosecuted in federal court to capsize decision lost and appealed to the Supreme Court. When pronouncing their verdict, the majority maintained that political speech is crucial to a democracy, which is not less than truth due to the fact that the speech originated from a corporation. The majority also asserted that disclosure requirements of BCRA were constitutional as appl ied to Hillary: The Movie, with a reason that a governmental interest justified disclosure by offering the electorate with information regarding election-connected spending resources. They also maintained the disclosure rules for political advertising sponsors and it maintained the outlaw on direct contributions to candidates from organizations and unions. Books Llc asserts that in a separate compatible opinion, Justice Steven stressed the manner in which the court handles constitutional issues and its efforts to shun constitutional issues when at all probable. He asserted that here, the court lacked narrower grounds upon which to rule, apart from handling issues of the First Amendment personified in the case. Steven also argued that corporations are not members of society and that there are convincing governmental interests to control ability of corporations to spend money in the course of local and national elections. Even though majority rationale was right when it said that poli tical speech is crucial to a democracy as it influence electorates, it was not right for them to rule against Citizen United. This is because as far as First Amendment has to be observed, all citizens have constitutional rights to express themselves freely and freedom of speech.

Required to perform an Analysis of Variance using SPSS Essay

Required to perform an Analysis of Variance using SPSS - Essay Example The observed result is the level of sales in that locality in the fortnight following the appearance of the first advertisement. From the two way analysis of variance, it can be observed that the main effect length and media are significant. This is because the significant value of media is 0.000; the significant value of media is 0.0000 which are less than 0.05 level of confidence. This implies that there is significant difference in the main effects. The significant value of the interaction of main effect media and length is equal to 0.001 which is less than 0.05 level of confidence. This implies that there is significant difference in the interaction. The percentage of the value of sales volume accounted by the model is 78.4%. This is because that value of R-squared is equal to 0.784. From the mean comparison of the sales posted though the Tv or radio advertisement, it can be observed that the value of significant difference indicate that there is no significant difference in the mean sales of the given by either Tv or Radio. From the pairwise combination of medium and length, it can be observed that the combination of long length and radio form of advertisement give the least sales. This implies that the combination of advertisement of long length and radio is the one that cannot be used for

Forensic investigation Essay Example | Topics and Well Written Essays - 3250 words

Forensic investigation - Essay Example Despite this, forensic examiners have to go through many steps to get the valuable information from digital evidence without contaminating it. Therefore, Forensic examiner should have well defined manual that help them to understand the process and procedure that should be followed in order to avoid committing any mistake while they are dealing with the evidence. By protecting the evidences, the examiner builds a strong case and avoids dismissal of the case in the court. Challenges such as lack of sufficient research materials are encountered in the project. Despite this, the available material are sufficient to brainstorm on in order to realize the formation of a manual that will help a great deal in improving digital evidence testing in forensic laboratory. In the preparation of the manual, various contents of the entire project are taken into consideration. In the accreditation of any forensic lab under ISO 17025, the lab should have reliable manual and other facilities to ensure its tests results are reliable. For this to be achieved, the various steps involved in laboratory testing must be clearly outlined in a well understandable manner to ensure that they do not raise any ambiguity. In UAE, there is no international or national stander for manual, which can be used in Digital Forensic Lab. This has necessitated the conduction of such researches. The manual include the process that the examiner should follow when he receives case: check the investigator need, document everything about the case, fill chain of the custody, resized the evidence, and store it, make verification of tools and software. In addition, it analyzes images for the original hard drive by using different software and checks the MD5,... The paper tells that each Digital Forensic Laboratory should have a manual that the examiner can use to be able to handle the digital evidence without causing damage or alteration to the original evidence so that Court cases are rejected based on provision of insufficient digital evidence. The entire process of preparing forensic evidence includes protection, recognition, extraction, understanding, and documentation for computer evidence. To make it a success, examinations in digital forensic need some method and technique to collect the information from the evidence, software, or tools for acquisition and analysis, and protection of the digital device that is used as evidence in a court of law. Lab should create manual for technical procedure, examination, and verification. This has brought forward the need for preparing of a standard manual for use by various forensic investigation laboratories. In the investigations, the original evidence availed should not be altered under any co nditions. This ensures that the evidence provided is able to hold in the proceedings of the cases. To many people, their perspective is that the examiner should carry out his examination using the evidence itself. Contrary to this, the examiner should work on the image not on the original evidence and should protect the original evidence while he is doing the image so the original is not damaged or altered. Therefore, guidelines should be established for the examiner to be able to know how to receive, process, document, and handle evidence and work products associated with the examination.

Discussion Assignment Example | Topics and Well Written Essays - 500 words - 14

Discussion - Assignment Example r to determine the admissibility for tax-exempt status the purpose in the corporate charter must be established, as well as, the way the company operates. Additionally, charitable institutions are exempted from sales and income tax, as well as, Ad valorem property tax. Charitable institutions are defined as institutions that do not have the capital, shareholders or capital stock. Additionally, they dispense help or charity to people who need and to people who apply for it. Charitable institutions do not make any profits or gains in a private sense to any individual who is connected to the institution. For charitable organizations to be exempted under the federal law, the institution must be operated and organized for charitable purposes. Additionally, none of the earnings made by the organization should insure for the purposes of benefiting the individual. For an organization to be exempted from tax the net earnings may not inure to the benefit of any corporation or individual. According to section 501 (c) (3) not all income tax is exempted, for example, in case the charity gets revenue from another business that are not related to charity then they are taxable. Therefore, the lessons I have learned from this module is that charity organizations are made for the benefit of helping people and in case they operate besides their charity work then their income is taxable. Additionally, property that is owned by the federal or state governmental hospitals is exempted from tax. In the case of Provena Covenant Medical Center V Department of Revenue, the medical center applied for tax-exempt status that was based on debt-collection amounts and tactics that the hospital offered. However, the Illinois Department of Revenue denied this application. On Appeal, the Supreme Court further denied the application on tax exemption stating that the Department of Illinois was correct in denying the religious and property tax exemptions because the hospital was charging uninsured

The Ritz Hotel Essay Example for Free

The Ritz Hotel Essay Despite the fact that rooms at the Ritz Hotel do not cost 2,000 Euros, employees of the Ritz are authorized to compensate guests up to 2,000 Euros for any problems they may have experienced.   Why does the Ritz have this policy?   There are primarily three factors that should be explored: one, the reputation of the Ritz, two, the costs beside room rate, and three, and the hidden costs.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   First, the Ritz is known the world-over for high class service.   It is the place to have your social event.    The name has carried great weight for many years now, and the reputation of the Ritz is not something the hotel owners would like to have tarnished.   Established in 1906, this year marks the 100 year celebration of this world-class hotel.   As part of the celebration, and as an example of the level of service the Ritz offers its clients, the Centennial Celebration includes pick-up from the Airport in the new Rolls Royce, accommodations for two nights, a bottle of champagne, Theater Tickets, Dinner, Salon Treatments, and complimentary membership to the Ritz Club for the length of the stay. The Ritz is â€Å"puttin’ on the Ritz’ for its 100 year celebration.   The reputation of the Ritz creates its value in the marketplace.   As a place for high society, elegance, and comfort, it has a name and reputation to live up to.   One of the primary ways reputations are maintained is through word-of-mouth.   Considering the fact that if a guest has a negative experience, they are ten times more likely to talk about it, it is therefore in the Ritz’s best interests to maintain a positive word-of-mouth cycle.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Second, additional costs which guests incur aside from the room rate can cause management to raise the level of compensation higher than the rate of the room.     For example, there may be phone charges, room service charges, movie charges, wet bar charges, laundry or dry-cleaning, and the list goes on.   These are only the costs the guest may incur inside the hotel.   Additionally, there is the cost of travel and transportation.  Ã‚   As a world-class hotel, the Ritz recognizes these as valid reimbursable expenses.   If the Ritz is at fault for some inconvenience to the customer, the customer will also incur additional expenses remedying the problem.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Finally, the hidden costs to the Ritz.   The first has already been mentioned – the word-of-mouth advertising.   It is essential to the Ritz to maintain positive word-of-mouth advertising.  Ã‚   After a customer leaves the Ritz, it is impossible to communicate with them further, or to make amends.   One of the worst things that can happen for the Ritz is an unhappy customer leaving.   Therefore, the service staff at the Ritz has the permission to compensate the guests up to 2,000 Euros. The Ritz must review this policy and the history of compensations to make sure the policy is not being abused.   Abuse of the policy is a hidden cost to the Ritz itself.   However, with proper oversight, this cost can be minimal.   One more factor to take into consideration is the costs of damage to a customer’s personal belongings.   If a designer suit is taken in for dry-cleaning and is destroyed in the process, it is possible that the value of the suit could actually exceed the 2,000 Euros authorized for compensation.   Based on the level of the guests, it is quite likely that their personal items may be of high value.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Finally, the management of the Ritz must weigh its risks.   How likely is it that compensation up to 2,000 Euros would be provided for a guest?   Based on the high level of service provided at the Ritz, including the level of training received b each employee, it is highly unlikely that a guest would have such a negative experience that only 2,000 Euros would satisfy them.  Ã‚   Therefore, the Ritz has even created a buffer zone for its employees. Not only are they authorized to meet the guests expectations, despite problems, they can even exceed the guests expectations.   If the guest found a mouse in the bathroom, rather than simply refunding the room rental rate, the employee can also give the customer 500 Euro for emotional duress.   Ultimately, it is in the Ritz’s best interests to satisfy their guests to the best of their ability.   If monetary compensation can help them achieve this goal, they should use this tool as long as it works for them.

Diversity and Difference in Early Childhood Essay Example for Free

Diversity and Difference in Early Childhood Essay Personal interest: My first awareness of racial identity and diversity occurred when I was in Year 3. Having being raised acknowledging acceptance of people of racial or cultural difference my thoughts of children of colour were positive and impartial. However, one day a boy in my class of Sri Lankan descent got into trouble with another student, but only the Sri Lankan boy was asked to go to the principal’s office. During our lunch break he came over to a group of us and told us that he thought he was the one that got into trouble ‘because he was ‘black’’. I remember thinking to myself, ‘why would he get into trouble just because he was black? ’ It was in fact that both boys went to the principal’s office, just on separate occasions. This was my first memory of someone thinking that they were being singled out or getting into trouble due to belief of skin colour dissimilarity and racial stereotypes. I’ve been aware of racial diversity ever since. Now that I have an opportunity to be a part of children’s learning and development I want to learn more about diversity and make a difference in children’s perspectives of themselves and others. Discussion: As educators in early childhood, it is crucial that we acknowledge and respect that children’s personal, family and cultural histories shape their learning and development. The increase in racial, ethnic, and cultural diversity in educational centres is reflected in many early childhood classrooms. Although the diverse composition of early childhood classrooms may bring challenges, it also introduces many opportunities for educators, parents, and children as we need to value and appreciate difference and variety as a positive attribute in all educational and social environments (Ashman and Elkins 2008). As adults, being ‘different’ is a decision to make a personal statement; such as deciding to change a hairstyle, get a tattoo or by wearing alternative clothing. It is one thing to be different by choice, and another for a child to discern themselves as being different based on their physical features, cultural of religious differences. One of the most stimulating aspects of early education is observing and supporting young children as they develop their individual identities. This development takes place within different social contexts where issues relating to human diversity and difference impact significantly on children’s understandings and ways of being in the world. Arguably, our education begins when we are first able to detect causes and consequences, and continue to form the basis of our identity, behaviours and knowledge of the world around us. Glover (1991) in the early 1990s found that as 2-3 year old children became aware of difference they simultaneously develop positive and negative feelings about the differences they observe. For example, racial awareness impacts on their perceptions of skin colour and on their preferences in the social relationships they initiate and foster with other children. An Australian study conducted by Palmer (1990) exemplifies how preschool children were able to make negative judgements based on racial characteristics of young Aboriginal children. Children were reportedly saying ‘You’re the colour of poo†¦ Did your mum drop you in the poo? ’ This observation suggests that children as young as 2 years old are becoming aware of diversity and differences of others, and these judgements children are making are often affecting their ability to make sound judgements of others as their perceptions of reality are distorted. Although Palmers study was conducted in 1990, there has been a significant increase in racial awareness since the 1980s of the importance of early childhood education policies, practices and curriculum aiming to positively reflect the diverse cultural identities of children and their families. Today, the embracing of children’s lives is a central focus of the different philosophies which foster early childhood education in Western society, such as the ‘anti-bias curriculum’ which emerged from the United States (Derman-Sparks and the A. B. C. Task Force, stated in Robinson 2006 p 2) and also in the perspectives of Reggio Emilia. In Australia there has been a broadening of cultural influences which has been referred to by Ashman (2008) as ‘the cultural mosaic’, which refers to those who have migrated maintain their homeland traditions while embracing the new norms, values and practices within the country. Furthermore data collected by the Australian Bureau of Statistics (2008) show that around 25% of Australians were born in other countries, nearly half the population has direct links with relatives born overseas, and over 2. 5 million people speak a language other than English at home, which should clearly illustrate to educators that learning developmental experiences need to be appropriate for multicultural children to be involved in. As stated by Robinson (2006), the early childhood years are fundamental years in the growth and development of a child’s cognition, language, social, emotional and physical competence. Early childhood educators are in an ideal position to make a positive difference in the lives of children and their families. My emerging philosophy would be to teach children to be critical thinkers specifically about prejudice and discrimination to encourage children to develop the skills to identify when something they have said or done is unfair of hurtful to another. Also to model the behaviours and attitudes I would want children to develop, particularly in situations that can either promote prejudice or inhibit a child’s openness to diversity. Furthermore, I would aim to expose children to role models from their own culture as well as to those from other cultures to encourage appreciation of their own cultural identity, as well as different cultures. As professionals who work with families, our willingness to talk openly about identity and to help foster a positive sense of self in children can make an enormous difference in affirming the rich diversity within our community and help children form bridges across cultures and traditions. The more that children have a solid grounding and understanding about who they are and where they came from, the more they learn to value differences of cultures different from their own, and the closer we get to building a world of respect of multicultural differences. Ashman, A F, Elkins J 2008, ‘Education for Inclusion and Diversity’, 3rd edn, Pearson Education, Frenchs Forest, NSW. Davis, B M 2009, ‘The Biracial and Multicultural Student Experience: a journey to racial literacy’, Corwin, Sage Ltd, USA. Glover, A 1991, ‘Young children and race: a report of a study of two and three year olds’, Australian Catholic University, Sydney. Pulido-Tobiassen, D, Gonzalez-Mena, J 2005, ‘Learning to Appreciate Differences’, Early Childhood Today, vol. 20, issue 3, viewed 2 April 2011, retrieved from Victoria University Database. Robinson, K 2006, ‘Diversity and Difference in Early Childhood Education’, Bell and Bain Ltd, Glasgow, viewed 1 April 2011, retrieved from Ebrary database.

The Phenomenon Of Globalization Big Brands Marketing Essay

The Phenomenon Of Globalization Big Brands Marketing Essay INTRODUCTION All big brands around the world are now shifting towards the phenomenon of globalization. A product is no more confined to geographical boundaries. Globalisation calls for global marketing strategies being implemented around the world to resonate the brands identity and its image to target customers. A synonymous marketing strategy is cost-effective and this is the strategy applied by many big companies around the world. However, experts also say that this is not always a wise strategy because consumer behaviour around the world varies from culture to culture and from nation to nation. For instance, an American consumer will react and respond differently as compared to a Nepalese consumer. Thus, while implementing global marketing strategies, a wiser move would be to tweak it, customise it, and to relate it with the local consumer behaviour. Similarly, few international big names in Nepal have only implemented their global strategies and are not probably exploiting the huge potential they have. One such case is that of Red Bull in Nepal. Since the entrance of this drink in Nepal, it has done well enough to survive in the Nepalese market as compared to some of the other energy drink brands. Red Bull has implemented its global marketing strategy such as unconventional method without really evaluating its effects on the customer loyalty in Nepal. Thus, the question still remains whether the customer loyalty is influenced by Red Bull in Nepal that uses global unconventional marketing strategies. Statement of problem Red Bulls marketing strategy around the world is to use unconventional strategies that involve guerilla stunts and buzz generating tactics to communicate to their customers. Guerilla marketing is based on below-the-line (BTL) activities where brand recall is created through events and stunts that are mostly related to sports (X-games), parties, adventure and music. The sports Red Bull supports are ones that are not popular in Nepal. Formula one and X-games are not really popular. Similarly, Red Bull does a lot of promotional events at discotheque to enhance its brand. But this is not applicable in Nepalese situation because we dont have any such type of place. This is where the problem lies for Red Bull in Nepal. Like everywhere, the strategy depends on unconventional marketing which is not applicable and does not relate to the Nepalese culture and tradition. For example, how many people in Nepal would be interested in free style football? Hence, if they conduct a sports event based on free style football, still many people who are unrelated to these events will not consider joining there. Also, the idea of X-games that involve moto (motorcycle racing), skiing (ski big air, skier cross), snowboarding, snowmobile, Inline skating, skateboarding, and car racing are not played in Nepal. Thus, any event based on these games would be absolutely useless here. We do not have well organised night clubs and discotheques, as already described. These areas are the best places where most of Red Bulls promotions and selling would take place around the world. Red Bull also conducts a lot of its adventurous events around the world in deserts and mountainous areas. In these contexts, security is the prime issue. One would also argue Red Bull should use above-the-line (ATL) methods of promotions (e.g. television, print and radio) to communicate to a larger audience. The bottomline here is that Red Bull Nepal is not considering the local culture and consumer behavior and is blind ly implementing its global marketing strategies to communicate with its customers. That is why the current research has been done to find out the effectiveness of Red Bulls global unconventional marketing strategy, for example BTL method, in customer loyalty in Nepal. Aim and Objectives Aim The current research was conducted to find out the effectiveness of Red Bulls global unconventional marketing strategy (e.g. BTL strategy) in customer loyalty in Nepal. Objectives To analyse the situation of consumers in energy drink Do they consume energy drink? Are they aware of energy drinks available in markets? Do they prefer any energy drinks? To analyse the factors that affect potential target market of Red Bull in Nepal. Do gender, age-groups, marital status and income of consumers have any effect on Red Bull market in Nepal? Analysis of the Red Bull brand in customer loyalty What consumers think about Red Bull quality? Why consumers think Red Bull was unique among drinks? What consumers think about Red Bull brand? Will Red Bull consumers keep on purchasing it on future? Will Red Bull non-consumers consider purchasing it on future? To analyse the effectiveness of Red Bulls marketing strategy in customer loyalty in Nepal? Will sampling affect customer loyalty? Will promotion events affect customer loyalty? Any suggestion in enhancing customer loyalty? Justification of the study At the end of this study, our research will help understand the effectiveness of Red Bulls global unconventional marketing strategy (e.g. BTL strategy) in customer loyalty in Nepal. In addition, this study will be important to analyse the Red Bull brand in customer loyalty. A detailed report would be generated regarding consumer behavior, preferences, attitudes, reactions, lifestyles, and characteristics which would help us prepare an in-depth analysis on our research objectives. An exciting prospect of this project would be to find out to what extent Red Bull possesses the ability to reach markets and reach consumers as using unconventional marketing strategies limits their reach and opportunities. Lastly, the study will generate recommendations that will be crucial in Red Bull marketing strategy in future. Scope of the study The study comprises of conducting a research in different parts of Kathmandu targeting individuals and groups (principally university and college students, celebrities and media related persons) falling into our target criteria in order to find out the effectiveness of Red Bulls unconventional marketing in Nepal. The research also involves interviews with industry experts to gain their viewpoints and comments on the matter which was important to understand about Red Bull markets in this country. CHAPTER-2 LITERATURE REVIEW Unconventional marketing In the corporate world, the term marketing simply refers to activities carried out by organizations or individuals in order to generate awareness capture interest and boost sales. There are mainly two strategies to generate marketing, for example conventional and unconventional marketing. The first, conventional marketing, a traditional marketing technique, mainly refers to the use of media or ATL activities for the purpose of promoting the brand. These conventional methods comprise of television advertisements, print advertisements in newspapers, magazines, broadcasts on radios, billboards or hoardings and other sources of media. Unlike conventional marketing, the unconventional marketing refers to all those forms of marketing that require lower budgets and more time, imagination, creativity and a lot of energy rather than monetary support. Compared to conventional marketing that lacks an interaction between the organization and the end user, unconventional strategy is more interact ive with customers and gets them really engaged with the activity itself. Examples involve public interceptions, random giveaways or free sampling, and publicity stunt (PR). Unconventional marketing is synonymously used as guerrilla marketing, buzz marketing, public relation tactics, viral marketing, social media, BTL in various literatures. This marketing campaign is principally interactive with consumers who are unexpectedly targeted in unexpected places. Therefore, this campaign is aimed at generating buzz and viral marketing via a unique, engaging and thought-provoking ideology (Romane Knight, The Best Guerrilla Marketing Strategies, http://marketingnotesja.hubpages.com/hub/The-Best-Guerrilla-Marketing-Strategies (Blog), accessed on 21 September 2012). While both forms of marketing result in increased awareness, persuasion and education of the brand, unconventional marketing helps build a bond between the brand and the customer. The Exforsys Inc. website (2011) states that unconventional marketing is an experiential marketing which appeals to the emotions. The customer develops an emotional attachment to a brand, product, person, or idea. Therefore, unconventional marketing greatly enhance the customer interaction in order to gain valuable insights and consequently enhance loyalty. Customer loyalty When a company or a business organisation is opened, it is aimed to generate and retain a loyal customer who would continuously attach with the company in the context of its long-term cost-effective business. The ideology of retaining a long term relationship with brand loyal, i.e. the customer who has the continuous requirement of the same product is called customer loyalty. Customers will leave the company or organisation if it is not aimed at curomer loyalty. Various explanations have been found regarding customer loyalty in literatures. Sivadas and Baker-Prewitt (2000) said there is an increasing recognition that the ultimate objective of customer satisfaction measurement should be customer loyalty. Anton (1996) described satisfaction is positively associated with repurchase intentions, likelihood of recommending a product or service, loyalty and profitability. In 1997, Guiltinan, Paul and Madden (1997) said that satisfied customers are more likely to be repeat (and even become l oyal) customers (Guiltinan, Paul and Madden 1997). While these statements indicate that customer satisfaction is one of the factors of customer loyalty, customer dissatisfaction does not always lead to a reduction in loyalty. For example, even dissatisfied, some customers may be loyal because they dont expect to get any better service even if they did change (Reichheld 1996). In addition to customer satisfaction, brand loyalty may be another factor which may play in customer loyalty. Sometimes, customers can also feel a sense of loyalty and emotional attachment to a particular brand (Fournier 1998). However, the relationship of the brand with a customer is a two-way process in which it is not concerned how a customer feels to a particular brand, and this association is just preference or proclivity (Peppers and Rogers 2004). Customer Acquisition The assurance phase Customer Development The education bonding phase Customer Commitment The sales phase Customer Retention The continuation activity phase Customer Loyalty Cycle Satisfaction Satisfaction Satisfaction Satisfaction S2 S1 S3 S4 Figure 1: Customer Loyalty Cycle as a Business Model used by the Scuba Schools International (SSI) Dive Centres. They acquire students and convert them into loyal customers. S1: Step 1, S2: Step 2, S3: Step 3 and S4: Step 4 (Adapted from http://divessi-indo.com/acquisition/systems.php, accessed on 24 September, 2012). Finally, price may be one of the determining factors of customer loyalty (Fisher 2001). For example, good pricing is an important factor in encouraging customer loyalty (Abratt and Russell 1999). In contrast, if a customer is loyal to a brand, he/she will not care of future price changes (Clark et al. 1995) indicating price may not play a role in customer loyalty. While customer loyalty depends on different factors, the process of customer loyalty is not an easy task in business. The process of customer loyalty can be achieved in 4 steps (Figure 1). The first step is called the assurance phase in which customer is acquired via different marketing or business strategy. Then, customers are made satisfied and then, they are given different trainings and education programs to keep them bonded. This is the education and bonding phase and is the second step of customer loyalty. Again, the customers are made satisfied and customers make commitment in the sales phase or third phase. The satisfaction to customers is continued and customers will stick to the same brand or the same company in the continuation and activity phase. This is quite important to keep the customers retention. The cycle is repeated followed by customer satisfaction. Therefore, customer satisfaction may be one of the important factors in customer loyalty (Figure 1). Measuring marketing effectiveness Companies spend billions of dollars annually on marketing. Because of increasingly competitive markets, firms strive to produce higher and higher profits. This leads to calls for justifying the marketing expenditures (Rust et al 2004). Powell (2002) states that marketing effectiveness is the quality of how marketers perform their marketing activities in order to optimize their expenditures and achieve both short and long term goals. The difference between marketing effectiveness and efficiency is explained by Rust et.al (2004) as they state for example, that price promotions may be efficient in delivering short-term revenues and cash flows but ineffective in the long run if it is destroying profitability and brand equity in the long run. Figure 2: The Chain of Marketing Productivity (Adapted from Journal of Marketing 2004, vol. 68, pp. 76-89). The Chain of Marketing Productivity is a conceptual context that can be utilized for evaluating marketing effectiveness (Figure 2). This model explains the effects of certain marketing actions of a firm on its position and standing in the market. Rust et al (2004) believe that every firm must have a business model which is used to track the effectiveness of marketing expenditures in influencing the knowledge, beliefs and emotions of the customers that ultimately leads to purchase behaviours. They stress on the fact that marketing efforts such as advertising and product improvements help in building long term assets such as brand equity. These long term assets are leveraged to deliver profitability in the short run. Customer thoughts, beliefs and feelings that lead to purchase behaviours are usually measured through non-financial measures such as attitudes and behavioural intentions. These non-financial measures drive financial performance measures like sales, profits and stock values in the short and long runs (Rust et al 2004). Behaviours Hoyer and Macinnis (2009) states that consumer behaviour reflects the sum of all consumer decisions from acquisition to disposition of goods, services and experiences. Behaviour of the consumers is a dynamic process reflecting acquisition, usage and disposition activities. The questions of what, why, how, when and how much to acquire, use and dispose a particular offering can have a major impact on how strategies for marketing and communications are developed. In order to produce, communicate and provide appropriate goods and services, marketers need rich insights on consumer behaviours and what they value (Hoyer Macinnis, 2009). Marketing efforts such as communications and promotions have a long term impact on consumer behaviour. In recent years, consumers have become more price- and promotion-sensitive over the time because there is a lot of information and choice available to them. This is why more and more companies are attempting to influence consumer behaviours through marketing efforts such as promotions and communications (Mela, Gupta Lehman, 1997). Sales Revenue Sales revenue numbers are the most objective measures of marketing effectiveness. Financial benefits, such as sales, from particular marketing efforts are assessed in numerous ways. One traditional method is the Return on Investment (ROI) which is the relative return that is obtained from the required expenditure. Financial impacts like these affect the firms financial position in terms of profit and cash flow. However, these methods are controversial and ineffective if relied upon solely. This is because most of marketing efforts are played out in the long run; there effects cannot be observed in the short run, while methods such as ROI only assess short term effectiveness of marketing efforts. A better usage of such methods must incorporate future cash flows so as to predict and determine the long run marketing effectiveness (Rust et al 2004). Brand Equity Brand equity is a relatively new concept which has developed from the past two decades as core marketing concept. It suggests that brand value can be derived from the discounted cash flows received from the sale of products/services as a result of associations of the brand with those products/services (Rust et al 2004). Rust et al. (2004) further cite Tybout and Carpenter on the enormous brand equity of Home Depot which was the US$84 billion in 1999. This shows that even though there may be a short-term divide between ROI and marketing efforts, it may not be completely ineffective due long laSting value offered through brand equity. Elements of brand equity such as customer lifetime value, brand awareness, associations and recognition can be determined by recognizing prevailing perceptions regarding the brand and functional as well as emotional value propositions that the brand provides (Dunn Halsall, 2009). The impact on customers and resultant developments in valuable assets such as brand and customer equity influence a brands market share and revenue, hence, enhancing its competitive position in the market. Long term benefits of these assets can increase customer responsiveness to brands and its extensions, willingness to pay premiums, referrals, increased usage rates, lower after sales support costs, customer retention and loyalty. All of these factors reflect a larger market share to be enjoyed by the brand with guaranteed greater profitability (Rust et al 2004). There is a wealth of means to measure market effectiveness. Methods to evaluate marketing tactics and impact of marketing expenditures provide the necessary tools to affect the practice of management and to bring further credibility to marketers. From an accounting standpoint, marketing productivity must be categorized into modifications in financial assets as well as intangible assets such as brand equity (Rust et al 2004) . Red Bull-History Red Bull is a popular energy drink that had been manufactured since the early 1962 by the TC Pharmaceutical Co., in Thailand by Chaleo Yoovidhya. The name of the company was subsequently changed into Red Bull Beverage Co. Ltd. It was introduced into the Europe by the Austrian guy Dietrich Mateschitz, who found out that one of the Thai energy drink called Krating Daeng (Thai: Red Bull) was good at soothing the Jetlag. He finally realized that the Asia has a wide potential market for Energy Drinks and there was no such kind of product available in the West or the Europe. In 1984, he established an Austrian company called Red Bull GmbH that sold about a million cans in 1987. Consequently the sale was expanded to other countries like the UK, Germany, Switzerland and others (http://www.fundinguniverse.com/company-histories/red-bull-gmbh-history/). Throughout the world, it is the leader in the energy drinks market and has about 70% of the market share and has annual sales of billion dollar s (Data Monitor, Red Bull GmbH, 2004). Red Bull-Branding When introduced to the markets of the world, very few believed in the successful potentiality of Red Bull as a brand and product. The mere concept of energy drink was brought into inception by Red Bull and most believed that such a confined product category of energy drink was not required when you had other options such as tea or coffee as energy boosters. Beardwood (2010) remarked that Red Bull might be a slightly safer alternative to alcohol. Although there are negative assumptions related to Red Bull brand, it has now become the leading energy drink manufacturer around the world. Regani in 2006 believes that the soul reason of the success of Red Bull in marketing is due to its audacity to think out of the box and its trend setters rather than followers (Regani (2006). Red Bull-The brand While considering Red Bull as a brand, it reflects energy, enthusiasm, active life, trend setters, adventurous and everything that is about youth and its whereabouts. When a person is found to consuming Red Bull, the image created in mind is a cool and trendy one and that is the kind of positioning they have achieved as a brand. All brand managers at Red Bull maintain that the positioning of Red Bull will never change no matter what the situation is, as that is what Red Bull, as a brand has thrived on. Red Bull is more about the brand than the product itself. According to Gschwandtner (2004), it is not Red Bulls sales strategy that helps it sell like hot cakes around the world, but it is its innovative branding strategy that has helped it become the number one energy drink name of the world. Red Bull-Marketing strategy across the world Red Bull as a brand is rebellious in nature and it certainly proves the kind of unconventional marketing strategy it has chosen. They absolutely refuse to advertise and use some of the conventional modes of promotions such as billboards, banner advertisements, taxicab holograms and blimp in a way that many brands would opt to do. Even their TV spots are very different from others. Played only on niche channels, they are merely sketches of a mysterious Austrian artiest that tries to amuse the audience more rather than educating them. They completely pursue unconventional marketing techniques to build the brand that majorly includes buzz generating tactics, event-based marketing, hiring brand ambassadors, supporting student projects, free sampling and others. Rather than going on mass, Red Bull targets underground style with BTL activities. It aims to produce viral buzz by paying college going students, disc jockey (DJ)s and young opinion leaders to host events and parties where the drink can be served. These are the sort of parties Red Bull encourages its ambassador to lead or organise as it aims to associate its brand with such events. Therefore, strong Red Bull branding can be observed at club, cafà © and discotheque where young crowds are mostly present. Red Bull does not spend on advertising and flashy celebrity endorsement. They hire hip youngsters, students and unconventional sports athletes to endorse their brand and promote it. These not only cost less but are also more effective as they are closest to the target market and know the required consumer behaviors. Besides that Red Bull organize and sponsor extreme sports events like the X-games and freestyle football which against complements their strategy of unconventional marketing. Campaigns Their campaigns are mostly based on organizing events that are associated with the brand. These events usually include unconventional sports, parties, student based events and exhibitions. They use such events to heavily brand their product using all kinds of aesthetics and tools. Plus, they also sample at these events to generate product trial and to let their target consumer experience the functionality of Red Bull. Their most recent campaign was the world tour of free style biking champion Kenny Belaey who was taken to all Red Bull operating countries where he performed stunts at different schools, colleges and universities. This event was used to build an impression for Red Bull as an adventurous, outrageous and unique brand. Sampling was also conducted at all stunt venues. Before the tour of Kenny Belaey, Red Bull organized the Free Style footballing competition all around the world where youngsters flaunted some cheeky skills to win the major prize of going to the World Cup in South Africa. Publicity stunt/buzz generating tactics The main motive of Red Bull behind using unconventional and unique marketing strategies is to generate or create people talking about them that gradually support to promote them. They aim to create a buzz through their events that is why they do not prefer using the conventional modes of communication (e.g. TV, radio and print media). Red Bull aims to create a viral fever through its events where people are amazed by the activities they perform and talk about it. The message spreads like wild fire that is the thing each Red Bull brand manager or brand ambassador targets in all its operating countries. Main motive is to do something so outrageous and unique, that people keep talking about it. Therefore, the brand is both getting the required mileage and developing a customer base for itself. A small example of how Red Bull tried to generate a buzz was the high jump that their hired athlete attempted from the tallest buildings in all the Red Bull operating countries. Media was invited to the stunt and heavy Red Bull branding was exhibited. There was great hype and anticipation because of such an outrageous attempt being made by a person. People kept talking about it and there was a certain buzz about this stunt. The venues for the stunt were heavily branded with Red Bull aesthetics to demonstrate that it is Red Bull who owns the event. The stunts were successfully completed in all Red Bull operating countries with the media heavily publishing it on TV, print and radio. The amazing factor was achieved as people were talking about it and this was exactly what Red Bull wanted to achieve with this stunt. In this context, it might not be selling the product through these stunts but it is actually developing the brand as an adventurous and unique one and also that it is creatin g a buzz about Red Bull which is basically the target and aim of the Red Bull brand manager or ambassador at the closing of the event. Endorsements Red Bull does not really rely on celebrity endorsement as that is not its style. What it does is acquiring sports teams around the world and supporting them as its official sponsor. The following endorsements are currently made by this brand: Red Bull is the official sponsor of all X-games conducted around the world. This endorsement complements their marketing strategy of being unconventional. All venues and player dresses are Red Bull branded and heavy sampling is done at these events. Red Bull has acquired two football teams around the world. One plays in the Major League Soccer in the United States of America and is known as the New York Red Bulls (http://www.newyorkredbulls.com/), accessed on 25 September, 2012). The other one is in the Austrian Football League and is known as Red Bull Salzburg (http://www.austria-salzburg.at/, accessed on 25 September, 2012). Both the teams have their kits branded with Red Bull. Red Bull Salzburg even have their stadium named after Red Bull and is called the Red Bull Arena. One can easily notice the heavy branding of Red Bull at the stadium. This is an effective plan that involves the heavy media coverage of football all over the world. Red Bull owns a Formula One team which has been doing incredibly well since the acquisition took place (http://www.formula1.com/news/headlines/2010/5/10796.html, accessed on 25 September, 2012). The car and the drivers dress are completely branded with Red Bull logos. This is again a very effective because Formula One racing gets a lot of coverage around the world and gives Red Bull the required mileage in its target audience. Red Bull endorses the major stars in unconventional sports and gaming. A stand out example is Kenny Belaey who has been supported by Red Bull throughout his career as a free style biker (http://www.tribalzine.com/?Kenny-Belaey-after-the-success-of, accessed on 25 September, 2012). Sampling through brand ambassadors Another strategy of the marketing by Red Bull is the contract with brand ambassadors at schools, colleges and universities to represent the brand at social events and hangouts. These brand ambassadors are given cartoon/s of Red Bull to sample at parties and spots where Red Bull might be needed. These situations occur when students are in mental or physical stress due to various reasons, for examples sports events or time of academic examinations. The idea is to hire cool college going students to represent the brand amongst its intended target market. Another promotional strategy is involved in educating consumers. Red Bull organises travel in by its staffs in a car that carries large cans of Red Bull. The Red Bull staffs target those individuals who lack energy and wishes of energy. Then, the staffs give a free can of Red Bull to these people. This strategy seems to be successful during the introduction of Red Bull into public. Red Bull-Establishment in Nepal and structure Red Bull was finally launched in Nepal in 2002 and since it has been a leader in the market with relatively lesser competition. Red Bull was brought to Nepal by S.M. Chawla Company that only handled distribution of Red Bull initially. When the headquarters in Dubai assessed the sales in Nepal, they decided to officially start their operations in an office of their own. In 2004, Red Bull Nepal was established with three functional departments namely Marketing, Sales and Finance. Red Bull is currently being operated in Kathmandu with the Asian head office being in the United Arab Emirates (Figure 3). It has set up its premises in all three cities where distribution and marketing operations are executed. The current organizational structure of Red Bull Nepal is shown in Figure 3. Figure 3 : The current organizational structure of Red Bull Nepal. Marketing The current organizational structure of Red Bull Nepal is governed by Asian Head Office. This office primarily plans and executes BTL promotional activities for Red Bull. Understanding the consumer need and coming up with activities to fulfill them is one of their most important tasks. Pre- and Post- event communications of all promotional activities are also taken care of by this office. Each city has one marketing head and three Student Brand Managers hired from popular universities to work as a team. Marketing department also handles communication via social media like Facebook and others. Sports and Events This is a dedicated team that plans around the year activities based on sports and other functional events. Red Bull conducts all its marketing through guerilla style and that is why this department has its special importance. They primarily plan and execute accompanied by collaboration with the marketing department. Finance Finance Department consists of a precise and dedicated full-time team member. The finance team distributes the budget for executing the marketing activities. This department also looks after the wage control system. The team also maintains and keeps track record of monthly sales. This department submits the monthly reports of sales performance to the head office in Dubai. Communication This department handles all the pre- and post-event communication of Red Bull events and activities through all media that include TV, print, radio and social media. This strategy is similar to the idea of communication in unconventional marketing of Red Bull brand to its audience. This department actively stays in touch with people in the media to disseminate news about everything that Red Bull is doing not just in Nepal but also around the world. Sales Since Red Bull

Comparing and Contrasting Fruits and Junk Food Essay -- comparison com

Comparing and Contrasting Fruits and Junk Food To many people, especially children, the word snack implies thoughts of chocolate and sugar; however, in the early twentieth century, people relied on fruits to fulfill their desire for a between-meal snack. It was even a privilege to some children to receive an apple or a banana from their parents as an after-school snack. Unfortunately, children today prefer junk foods like candy bars. However, popular preference is not always the best way to go. Fruits, such as apples and grapes, are better snacks than candy bars because they are healthier, better tasting, and more satisfying. Fruits are much healthier than candy bars. First of all, fruits have fewer calories and less fat than any candy bar. For example, a medium size apple has eig...

Importance and Benefits of Educational Research Essay -- Education

Importance and Benefits of Educational Research â€Å"When a student is ready, the teacher appears† is an ancient Buddhist proverb that is packed with wisdom (Smith, 2002). No matter how hard a teacher tries, if the student is not ready to learn, chances are good he or she will not bet. Luckily, students are present in the classroom because they want to be. Introduction When school-age children first enter the classroom, there is apprehension and uncertainty. What they have learned from informal education generally started within the home, or a non home-based learning environment. Whereas for most adults, being out of the classroom for even a few years can make going back to school intimidating. If they have not taken a class in decades, it is understandable that they would have some degree of apprehension about what it will be like and how well they will do. It is the job of the educator to listen carefully for teaching moments and take advantage of them. Therefore, it is imperative for an educator, at whatever level of their teaching capacity, to be culturally aware of differences that are present within the classroom, have the ability to embrace and enhance the educational environment, even when challenged with perceived multicultural barriers. Due to the multi-nationality, language-based classrooms that apparent within the educational realm, it is imperative to incorporate unlimited possibilities to review the information presented. No one student learns alike, therefore, a variety of different deliveries are needed to impact student retention, as well as content knowledge. Theory of Learning Learning is a lifelong activity. Learning occurs intentionally in formal instructional settings and incidentally through experience.... ...eting of the American Psychological Association, Washington, D.C. Driscoll, M. P. (2005). Psychology of learning for instruction. (3rd ed., pp. 3-4, 317-320). Boston, MA: Pearson Education, Inc. Nieto, S., & Bode, P. (2008). Affirming diversity: The sociopolitical context of multicultural education. (pp. 424-425). Boston, MA: Pearson Education, Inc. Smith, M. K. (2002). Malcolm Knowles, informal adult education, self-direction and andragogy, The Encyclopedia of Informal Education, www.infed.org/thinkers/et-knowl.htm. Venezia, C., Venezia, G., Cavico, F. J., & Mujtaba, B. G. (2011). Is ethics education necessary: A comparative study of moral cognizance in Taiwan and the United States. The International Business and Economic Research journal, 10(3), 17-28. Retrieved from http://search.proquest.com/docview/862378382/135B025F94D739B0295/6?accountid=45844

Understanding Mathematics Essay -- Math History Learning Papers

Understanding Mathematics This paper is an attempt to explain the structure of the process of understanding mathematical objects such as notions, definitions, theorems, or mathematical theories. Understanding is an indirect process of cognition which consists in grasping the sense of what is to be understood, showing itself in the ability to apply what is understood in other circumstances and situations. Thus understanding should be treated functionally: as acquiring sense. We can distinguish three basic planes on which the process of understanding mathematics takes place. The first is the plane of understanding the meaning of notions and terms existing in mathematical considerations. A mathematician must have the knowledge of what the given symbols mean and what the corresponding notions denote. On the second plane, understanding concerns the structure of the object of understanding wherein it is the sense of the sequences of the applied notions and terms that is important. The third plane-understanding the 'role' of the object of understanding-consists in fixing the sense of the object of understanding in the context of a greater entity, i.e., it is an investigation of the background of the problem. Additionally, understanding mathematics, to be sufficiently comprehensive, should take into account (apart from the theoretical planes) at least three other connected considerations-historical, methodological and philosophical-as ignoring them results in a superficial and incomplete understanding of mathematics. In an outstanding book by P. J. Davis and R. Hersh, The Mathematical Experience, there is a small chapter devoted to the crisis of understanding mathematics. Alas, this fragment focuses only on the presentation of the d... ...an't learn mathematics without its thorough understanding. My postulate is that, in the process of teaching mathematics, we should take into account both the history and philosophy (with methodology) of mathematics, since neglecting them makes the understanding of mathematics superficial and incomplete. Bibliography 1. Philip J. Davis & Reuben Hersh, The Mathematical Experience, Birkhà ¤user Boston, 1981. 2. Izydora DÄ…mbska, W sprawie pojÄ™cia rozumienia, in: Ruch Filozoficzny 4, 1958. 3. John R.Searle, Minds, Brains and Programs, in: Behavioral and Brain Sciences 3, Cambridge University Press 1980, p.417-424. 4. Danuta Gierulanka, Zagadnienie swoistoÅ›ci poznania matematycznego, Warszawa 1962. 5. Roger Penrose, The Emperor's New Mind, Oxsford University Press 1989. 6. Andrzej Lubomirski, O uogà ³lnieniu w matematyce, WrocÅ‚aw 1983. Understanding Mathematics Essay -- Math History Learning Papers Understanding Mathematics This paper is an attempt to explain the structure of the process of understanding mathematical objects such as notions, definitions, theorems, or mathematical theories. Understanding is an indirect process of cognition which consists in grasping the sense of what is to be understood, showing itself in the ability to apply what is understood in other circumstances and situations. Thus understanding should be treated functionally: as acquiring sense. We can distinguish three basic planes on which the process of understanding mathematics takes place. The first is the plane of understanding the meaning of notions and terms existing in mathematical considerations. A mathematician must have the knowledge of what the given symbols mean and what the corresponding notions denote. On the second plane, understanding concerns the structure of the object of understanding wherein it is the sense of the sequences of the applied notions and terms that is important. The third plane-understanding the 'role' of the object of understanding-consists in fixing the sense of the object of understanding in the context of a greater entity, i.e., it is an investigation of the background of the problem. Additionally, understanding mathematics, to be sufficiently comprehensive, should take into account (apart from the theoretical planes) at least three other connected considerations-historical, methodological and philosophical-as ignoring them results in a superficial and incomplete understanding of mathematics. In an outstanding book by P. J. Davis and R. Hersh, The Mathematical Experience, there is a small chapter devoted to the crisis of understanding mathematics. Alas, this fragment focuses only on the presentation of the d... ...an't learn mathematics without its thorough understanding. My postulate is that, in the process of teaching mathematics, we should take into account both the history and philosophy (with methodology) of mathematics, since neglecting them makes the understanding of mathematics superficial and incomplete. Bibliography 1. Philip J. Davis & Reuben Hersh, The Mathematical Experience, Birkhà ¤user Boston, 1981. 2. Izydora DÄ…mbska, W sprawie pojÄ™cia rozumienia, in: Ruch Filozoficzny 4, 1958. 3. John R.Searle, Minds, Brains and Programs, in: Behavioral and Brain Sciences 3, Cambridge University Press 1980, p.417-424. 4. Danuta Gierulanka, Zagadnienie swoistoÅ›ci poznania matematycznego, Warszawa 1962. 5. Roger Penrose, The Emperor's New Mind, Oxsford University Press 1989. 6. Andrzej Lubomirski, O uogà ³lnieniu w matematyce, WrocÅ‚aw 1983.

Let’s Move

Tina Allen Mrs. Garton English 101 24NEV 6:30-9:15 3 Dec, 2012 Let’s Move Our society has changed over the past 40 years. Everyone is busier with their families, church, careers, sports or other extracurricular activities. We have become so busy it is easier to grab food on the go, between children’s schedules, personal responsibilities, or whatever the situation. Cooking and family meals do not happen as often, if ever. The effects of continuous eating on the run are hazardous to our health. Consistent greasy foods can clog arteries, high salt intake causes blood pressure problems, and the biggest effect of all is obesity.Webster’s Dictionary defines obesity as a condition characterized by the excessive accumulation and storage of fat in the body. Over the past 40 years, obesity has quadrupled. Obesity has become one of the most dangerous health risks in the United States. Our future children eat more unhealthy food, and get less exercise in today’s socie ty. The First Lady, Michelle Obama, has championed the social program â€Å"anti-obesity campaign† which is aimed at children, families, schools, and the food industry. This campaign is aimed to improve the food in schools. According to Janie Duffy , OPAA! ood manager for the Nevada R-5 school district, this year marked the debut of new federal requirements for school lunches. Under the new rules, there are five meal components: meat or meat substitute, grain, fruits, vegetables, and milk. Duffy reported that under the new guidelines, food costs more. She also reported that more children are bringing their lunches from home. Joy Hawks a Nevada R-5 board member said, â€Å"It’s a matter of redirecting kids to try different things. † However, in the 1950’s, ‘60’s, ‘70’s, and even in the ‘80’s obesity was not a major issue.The children were taught to use their imagination, and enjoy the out doors. Being overweight was n ot one of the leading health issues. The Nevada R-5 school district did fix nutritious meals with the five basic food groups. Of course, there was not all the electronics that are available today. The people used their imaginations more, families rode bikes on the weekends, or they spent time with family. Obesity was not an issue. Parents cooked healthy nutritious meals at home, and families had their dinner schedule, which never wavered.According to NHANES, National Health and Nutrition Survey, obesity began rising in the early 1990’s. The surveys are designed by: Gender, Age, Socio Economics, Racial/Ethnic, and Geographical Characteristics. However, several different variations have to be factored into the surveys. We are all designed different. Therefor every person’s BMI, Body Mass Index, is different. Biological and genetic influences also aid in obesity. Constant body weight can be maintained only if energy intake and expenditure are properly balanced over ong pe riods of time (Woods & Seeley, 2005).

The Credit Rating Agencies, Their Role in the Financial Crisis?

End of Studies Thesis What is the role of the credit rating agencies, which part did they play in the recent Financial Crisis and how can their efficiency be improved? Thesis Supervisor – David Menival Emmeline Beauchamp – Cycle Franco- US – March 2013 Acknowledgments I would first like to thank RMS and especially the CESEM to have taught me a lot, helped me to grow and open up and gave me this incredible opportunity of studying two years in the United States. None of this phenomenal experience would have been possible without them.I would also like to thank Northeastern University for allowing me to discover a new culture and a different educating system. It also had a tremendous role in my future accomplishment and professional career. In addition, I would like to thank all the professors I had during these four years of studying, whether it is at CESEM or at Northeastern University. They made this journey even more profitable and enjoyable. I would also like t o thank David Menival, my thesis supervisor, who accepted to work with me on this project.Finally, I would like to thank my parents for always supporting my choices and being next to me when I needed them. They have been my guides and models in life and have always encouraged me to be better and push myself. Table of Content Introduction4 I. Credit Rating Agencies: Role and methods5 1) History5 2) Role and methods7 3) The Issuer-Payer model 9 II. The Credit Rating Agencies and the Financial Crisis: is the thermometer responsible for the fever? 12 1) Background of the financial Crisis12 2) Credit Rating Agency are not fully responsible†¦ 14 ) †¦But they could have done better17 III. What is next? 20 1) Lessons learned from the crisis 20 2) Regularization of the existing Credit Rating system 21 3) A new rating system23 4) Creation of new Credit Rating Agency24 Conclusion26 Exhibits27 Bibliography32 Introduction A credit rating agency is a company whose role is to evaluate th e default risk of a borrower, whether it is a private or public company or a State. Since 1909, when Moody’s emitted its first rating, the role of the Credit Rating Agencies has considerably evolved and the methods used have improved.Even though their ratings do not constitute buying or selling recommendations, they rapidly gained an almost â€Å"biblical authority†. Since the 1980’s, the credit rating agencies have, indeed, become a reference for investors that want to determine the creditworthiness of an entity. Their ratings influence investors’ behaviors and they are indirectly involved in the future of a State or company. After several economic meltdowns and the recent financial crisis, the three big Credit Rating Agencies have been the center of attention.Is their methodology appropriate to evaluate the creditworthiness of an entity? Does the issuer-payer model insure the best transparence? Their role and implications in the crisis have been meticul ously examined and their functioning system has been questioned. Although their role in the crisis in undeniable, are the only responsible of the crisis? The system was defaulting and the predictions of the credit rating agencies turned out to be wrong. Which modifications should we bring to the system to make it more transparent and efficient?These are the questions we will try to answer throughout this thesis. I. Credit ratings agencies: role and methods Credit Ratings agencies, entity still little known outside the financial communities two years ago, found themselves at the center of attention with the subprime crisis. If everyone more or less gets, now, familiar with what a credit rating agency is, people usually do not know what are the origins of this business, its rationale and its financing model. 1) HistoryThe influence of the three main credit rating agencies (Moody’s, Standard & Poor’s and Fitch Ratings) was build step by step since their inception, in the early 1900’s. Historically, the ratings issued by the agencies did not have more value than the ones given by analysts or economic experts. They acquired this particular status when legislators and regulators attributed them a bigger place in their systems. The development of railroads companies marked the origin of these â€Å"Big Three†. These railroad companies were indeed fluctuating and needed nvestments to set up their infrastructures. As investors were concerned and questioned their capacity to reimburse their debts, Henry Varnum Poor published, in 1860, some financial information regarding the creditworthiness of those companies in order to help investors make their decision. Later on, in 1900, John Moody would also start publishing economic data on these companies and finally, in 1909, J. Moody gave his first ratings about railroad companies in â€Å"Moody's Analyses of Railroad Investments† by attributing a letter to each of them; the credit rating was born.This system was progressively adopted by others credit rating agencies such as Fitch Publishing Company, founded in 1913 by John Knowles Fitch, which would later be known as Fitch Ratings. Finally, Less than thirty years later, the credit rating agency Standard & Poor’s is created after the merger of the Standard’s Statistic Bureau and the Poor’s Publishing Company. The development of the ratings is stimulated by several factors. First, its goal is to offer a service for investors by providing useful information that will help them in their decision-making process.In addition, the relative large size of the American territory discourage investors to search for information, they would rather pay for it than waste time looking for it. Moreover, the repercussions of the 1929 financial crisis and the consequences of the World War II, giving supremacy to the Economy of the United States, also favored the expansion of the concept of rating. In 1970, after the ba nkruptcy of Penn Central Railroad, the first doubts regarding the independence of the credit rating agencies appeared. This was the first time that the reliability and seriousness of the ratings were questioned.In order to reestablish the value of the ratings, the SEC (Securities Exchange Commission) created, in 1975, the â€Å"Nationally Recognized Statistical Rating Organization† (NRSRO) designation. The goal was to standardize and formalize the ratings regarding brokerage firms and banks with their capital ratios. At that time, seven agencies obtained the NRSRO designation. In 1990, after several new mergers, the number of NRSRO was only of three: Moody’s investor service, Standard and Poor’s and Fitch Ratings. In 2003, the Canadian agency Dominion Bond Ratings service Ltd also ained the status of NRSRO, followed by A. M Best Company in 2005. In June 2003, after the disorders caused by the bankruptcy of the company Enron, the regulation of the credit rating a gencies and their NRSRO status needed to be examined. Multiple reports on the role played by the agencies in this case were published. Even though investors lost faith in them, they all agreed that they should keep the NRSRO status. In 2006, after years of critics toward the credit rating agencies, the functioning rules of the NRSROs were modified and the Credit Rating Agency Reform Act was promulgated.The objective was to regulate the internal decision process of the credit rating agencies while forbidding the SEC to control the rating system of NRSROs. Right after, in 2007, three more companies were added to the list of NRSROs: Japan Credit Rating Ltd, Rating & Investment Information Inc. and Egan-Jones Rating Company. Since April 2011, the list of agencies that received the NRSRO status counts ten names (See Exhibit 1, page 27). Finally, in July 2010, the Dodd–Frank Wall Street Reform and Consumer Protection Act reinforced the control over the ratings’ practices.Thi s included a reduction of the conflicts of interest regarding the ratings of structured products and decreased dependence on ratings. It also allowed investors to sue a credit rating agency in case of fake or reckless rating. For decades, the three main agencies, Moody’s, Standard and Poor’s and Fitch Ratings, have been controlling the market, as high barriers to enter exist. The major ones are the importance of the reputation and the investors’ confidence in their ratings. Since their creation, these agencies have distinguished themselves with a particular role and specific methods. ) Role and Methods The Credit Rating Agencies evaluate the creditworthiness of debtors. Ratings can concern a company as well as a particular emission or securitization or any financial debt. They are usually solicited by the debt issuer but can also be attributed, if non-requested, after collecting public information. Credit Rating Agencies enjoyed a good reputation and an essentia l role in the financing of economies. Over time, regulators, for practical reasons, tried more and more to impose the use of the notation in the investors’ financing.This long-term trend follows upon the systematic financing by the market, whether it is in a simple formulation taking the shape of debenture or assimilated loans or new products where the risk of defect is difficult to comprehend because it is diffuse in complex financing methods such as the securitizations. Credit Rating Agencies have the role of processing the information for financial markets. They synthesize the information for market needs and the investors seemed to excessively grant their confidence to this information.Investors pay close attention to any modifications in ratings or to any entities placed â€Å"under observation†. The ratings issued by the credit rating agencies have a trustworthy value. Since investors usually do not take the time to look for information regarding a company or a S tate, they based their investment choices upon the rating given by the credit rating agencies. Therefore, the role of the credit rating agencies is essential. Basically, these agencies summarize all information available about a company or State and turn it into a rating that will then influence the future of an entity.However, it is necessary to underline that the ratings given are not buying or selling recommendations, they are only an evaluation of the creditworthiness of an entity, at a defined time, and statically calculated. Next to this informative participation, credit rating agencies contribute to the management of portfolios by giving advice to the investors via the medium-term orientations emitted with the rating. If a company tries to finance itself, the received grading will be determining for the conditions of the operation.Whether it is by financing through banks or by issuing bonds on the market, the more the grade will be raised, the more the company will be able to find cheap funds at low interest rates. On the other hand, a bad grade will imply higher interest rates and difficulties to find financing. The difference of levels between both interest rates will constitute the risk premium. This problem becomes particularly important for companies or States located within the â€Å"speculative† category. Major institutional investors do not want, indeed, to take the risk and, therefore, do not invest on these kinds of values. However, the rating is ot fixed and fluctuates throughout the life of the bonds. A decrease of the rating can lower the price of the bond. Likewise, a raise of the rating can be associated to an increased price of the bond. In order to correctly determine the default risk, Credit Rating Agencies use diverse quantitative and qualitative criteria that they translate into a grade. Credit Rating Agencies distinguish two types of ratings: short and long-term; the traditional rating that applies to loans emitted on the mar ket and the reference rating that measures the risk of counterparty for the investor represented by this issuer.When evaluating the financial risk, credit rating agencies first take into consideration purely financial numbers such as the profitability, the return on investment, the level of cash flows and debt, the financial flexibility and the liquidity. More and more, the agencies integrate non-quantitative elements such as the governance, the social responsibility of the company and its strategy. It is also necessary to highlight the fact that the rating is usually associated with medium-term orientation, allowing to better estimate the future trend regarding the quality of the issuer.In some cases, a borrower can be placed â€Å"under observation†. The main steps in a company’s life (mergers, acquisitions, big investments†¦) are indeed, likely to influence and modify their structure. Credit rating agencies, subject to preserving the confidentiality of the rece ived information and avoiding cases of insider trading, can have insider information on the financial state and the future prospects of the analyzed issuer, while reducing the cost of collection and data processing. They distinguish themselves from financial analysts, who, in principle, only have access to the public information.Even if they can benefit from insider information on behalf of issuers, they are dependent on the information provided by these issuers. Each Credit Rating Agency possesses its own rating system. In broad outline, grades are established from A to D with intermediary levels. Thus, the best grade is AAA, then AA and A for Standard and Poor’s or Aa, A, etc. for Moody’s. In addition, we can also find intermediate ratings; a â€Å"+† or a â€Å"-â€Å" but also a â€Å"1† or a â€Å"2† can indeed be added to the grade (e. g. AA+, A-, Aa2, etc. ).This allows a better and more precise classification of borrowers. These different ratings can be divided in two groups: the first category, â€Å"High Grade† includes all ratings between AAA and BBB and the second category, also known as â€Å"speculative†, for inferior grades. (See Exhibit 2, page 28) The biggest advantage of this system is to provide information at low costs for potential investors. Thanks to an easily understandable grade, but incorporating a vast amount of information, investors can quickly have an idea of the creditworthiness of a borrower.The ratings issued by these agencies are a more and more useful tool in the decision-making process of investors looking for relevant information. Current regulation obliges them to certify published information. As we have previously seen with the United States or Greece, the market strongly reacts and sometimes irrationally to any modification of a rating or to a simple announcement of a hypothetical revision. Credit Rating agencies have a real influence on markets. The impact of their dec ision on issuers and investors is decisive.On the contrary, an excessive reaction was completely predictable in front of their incapacity to forecast the financial crises of these last decades. 3) The issuer-payer model For more than half a century, investors that paid to obtain financial information about loan issuers financed the credit rating agencies. Thus, companies, local communities, States were given a rating, without asking for one or without their consents, but to answer to requests from bankers or investors that were holding these funds.Naturally, these â€Å"non-requested† ratings were only based on public information concerning such or such company. The Credit Rating Agencies sold their publications to bankers and capital holders who were looking for potential adequate investments. In addition to selling these â€Å"manuals†, the credit rating agencies could also offer others services to investors (weekly information about financial results of rated compan ies, actualization of the ratings, recommendations and advices of purchase and/or sell).However, the agencies will lose some profits as some investors managed to have the information and the manuals without paying for them. As from the beginning of the 1970s, Credit Rating Agencies started to charge their services to the issuers of bonded debt. This is the issuer-payer model. These issuers of debt (Companies or communities looking for investment) began to more and more directly solicit the agencies in order to obtain a rating. They believed that this rating would reassure investors during a slowdown of economic growth.Thus, from now on, it is more often the issuers of debts that will request a rating from the credit rating agencies to get an evaluation from them that would allow them to access to credit. This approach contributed widely to consolidate the place of the Credit Rating agencies and â€Å"to legitimize† their intervention. In fact, this translates well a swing of the balance of power between those who look for funds to invest in industrial projects and those who hold funds, while waiting for the best yield at the slightest risk.In a world highly regulated by finance, where pensioners and holders of capital are in a strong position, and where industrial and direct investors are in a position of requestors, it is now, more often, issuers who wish to borrow and will ask to be noted, that will pay the credit rating agencies for their services. This shift from an investor-payer model to an issuer-payer model compromised the independence of the credit rating agencies. In fact, in 2011, only 10% of the revenue of the agencies came from funds’ holders who wanted to know more about the validity, the risk and the potential profitability of an investment.From now on, the ones looking for capital are the ones financing 90% the credit rating agencies. The â€Å"issuer-payer† model strongly modifies the situation of the credit rating agencie s. In this situation, the rating agency is used, and paid, by the market player who wishes to be noted to then be able to hope to obtain capital on â€Å"financial markets†. The question of the independence of the agency in its rating process is then very directly put: the rating agency will be inclined to note well a company which pays her to then try to obtain capital in good conditions on behalf of miscellaneous â€Å"investors†.However, the market has faith in this independence since a credit rating agency has to protect its reputation, and thus an agency could not take the risk of over evaluating one of its customers by fear of losing its credibility and thus all business. Credit Rating Agencies seem, indeed, more and more subjected to conflicts of interests, which decrease their reliability. The issuers pay the agencies to be noted, while credit rating agencies need the revenues from these same issuers. Besides, more and more often, the credit rating agencies mix two activities: consulting and rating.Therefore, in addition to evaluating a company, an agency also advises on current operations. A study for the SEC in 2008 revealed that some analysts from certain agencies participated in meetings between investors and issuers in which commission and rating were fixed. These conflict of interest generated criticisms and accusations against credit rating agencies and especially during the recent financial crisis. As the credit rating agencies were essential and indispensable to any players on the market that wanted either to invest or to find capital, they were at the heart of the upheaval.II. The Credit Rating Agencies and the Financial Crisis: is the thermometer responsible for the fever? In order to determine the responsibility that the credit rating agencies have in the financial crisis of 2008, it is necessary to understand how the crisis happened, which events punctuated it and what has been the behavior of the rating agencies throughout t he crisis. 1) Background of the Financial Crisis Everything started when the American housing market suddenly collapsed after a steady rise in the 2000 years.To finance their consumption and acquisition of a house, American households did not hesitate to get into very high debts. The market was booming so there was a trust in the ability to get its money back with a substantial profit. As counterparty, they pawn their properties. This was a guaranty for banks to be paid because if the borrower could not reimburse what he owed, his property would be sold to honor his debt. When the phenomenon grows and affects a large number of households, the sale of their property causes the collapse of the value of the property.The downturn of the housing market was reinforced by the subprime system. Since 2002, the American Federal Reserve, which encouraged easy credit to boost the economy, allowed millions of households to become homeowners thanks to premium loans called subprime, with variable interest rates that can reach 18% after three years. These interest rates are fixed according to the value of the property; the greater the value, the lower the rate and vice versa. That is what happened when the housing market collapsed in the United States in the beginning of 2007.Households, lacking of ways to reimburse their debts to lenders, have caused the bankruptcy of several credit institutions that could not repay themselves since even when taking on the property, this one has a lower value than initially. Finally, banks were also touched by this phenomenon. They have indeed been numerous to invest in these lending institutions. Nevertheless, today, invested funds are gone. In order to compensate these losses on the housing market, banks were forced to sell their shares, leading to a decrease of their values on the financial markets.The crisis quickly expanded in Europe, where major European banks such as Dexia in France and Benelux or IKB in Germany lost a fair part of th eir investments. Besides, the bankruptcy of several European banks led to a confidence crisis on European financial markets. Banks have doubts about each other’s contamination by the subprime crisis and therefore, to be cautious, refused to lend money. Since international banks are linked to each other through financial agreements, the crisis rapidly extended, to reach Asia during the summer 2007.Only one solution seemed conceivable for banking institutions to face this lack of liquidity: sell their shares and bonds. This fast and quick intervention caused a sharp drop in stock value and all the European stock markets were affected (See Exhibits 3 and 4, page 29-30). In order to appease the crisis on the markets but also to bail out banks, the American Federal Reserve (FED) and the Central European Bank (CEB) decided to inject liquidity in the monetary system, hoping to gain back the confidence of investors to help stabilize the situation.On 9 August 2007, the CEB acted first by making available 94. 8 billion euros to banks, followed shortly by the FED which injected $24 billion to appease the spirits of investors. However, markets initially misinterpreted the message, considering their involvement as a sign of weakness. The next day, the CEB injected again 61 billion euros and the FED, $35 billion, but the markets felt down again. Finally, on August 13, 2007, the same action was repeated and the monetary market as well as stock markets around the world kept their heads above water.While it seemed like the financial crisis was faded away at the end of 2007, a second wave of crisis appeared from the banking sector at the beginning of 2008. This was due to the creation of new products such as residential mortgage-backed securities (RMBS), Asset-backed Securities (ABS). In fact, credit risk, such as subprime mortgages, were pooled and backed by other assets, more or less risky, in Collateralized Debt Obligations (CDO) (See Exhibit 5, pages 31). These clust ers of scattered debts were then sold on the stock exchange by the issuer, like shares of a company could be given up.This results in the transfer of the risk of non-payment from issuers of mortgages to financial institutions: in particular banks, major consumers of CDO. In order to invest on the CDO market, some financial organisms went even further and created Structured Investment Vehicles (SIV) that did not have to respect the usual rules of prudence of the banking system. This amplified the risks taken and losses impacted on the performance of the bank. Other new products were also created such as Credit Default Swap (CDS), an insurance contract between two entities against a risk faced by one of two entities, such as the non-payment of a debt.The price of the CDS reflects the confidence in a particular issuer of a debt and is the basis for determining the value of the product of the debt. The crisis took a new dimension on September 15, 2008 with the bankruptcy of Lehman Broth ers and AIG (narrowly saved by the Fed), as well as several American and European banks (HBOS in United Kingdom, Fortis in Europe, Dexia in France and Belgium, etc. ). This international and financial crisis still has repercussions on today’s stock markets and the end of the tunnel seems far away. The question raised here is the role played by the Credit Rating agencies in the crisis.Are they the only ones to blame for everything that happened? Are the actions intended by the rating agencies responsible for the crisis? 2) The credit Rating Agencies are not fully responsible†¦ Ever since the crisis, the credit rating agencies have been easy targets to blame for what happened in 2007 and the years after. Effectively they did not anticipate the downturn of the market, they continued to attribute good rating to banking institutions already hurt by the crisis with an increasing book of bad loans or bad papers that banks will have to deleverage.Many criticisms have been emitte d about toward them. However, it is important to point out that they are not the ones and only responsible for what happened. They did not have power over a lot of factors that went wrong, and for that they cannot be the only to take the fault in the financial crisis. The thermometer could not be responsible for the fever. First of all, they are not responsible for the bankers or mortgage brokers who gave loans unwisely. These institutions lacked of common sense and thinking when offering credits.Banks and managers perfectly knew that unemployed borrowers would never be able to reimburse their mortgages. They have, indeed, disproportionately opened the gates of credit by taking for guarantee, when they did take some, the increase of real estate prices or their trust in the growth of the economy. They thought that they could make benefits if the debtor did not pay, as they believed that they could force the sale of the house for a higher price. However, real estate prices always end up going down and the economy is fluctuating.In an attempt to reduce the risk of these new kinds of loans, banks used securitization; they transformed these loans and resold them on the stock market. Therefore, mortgages securitizers are also to blame. Some companies such as Washington Mutual, Morgan Stanley or Bank of America were mortgages originators as well as mortgage securitizers, other like Goldman Sachs, Lehman Brothers and Bears Stearns bought mortgages directly to subprime lenders and pooled them together to resell them to investors. However, as soon as a debtor was not able to pay back his mortgages, the security became toxic and had no more value.Nevertheless, this was not the last step. Some banks would buy and bundled mortgage backed-securities into collateralized debt obligations, composed of different levels of risk. The creators of these new financial products are also responsible for the crisis. They bet against these risky CDOs by using credit default swap. (See e xhibit 5) Government Sponsored Enterprises (GSEs) could also be blame for what happened. They indeed, control the mortgage market. When a bank or a mortgage broker wanted to take off his books a loan, it could sell it to a GSE, which led to a higher number of mortgages.Fannie Mae and Freddie Mac are the two major GSEs. Alone, they own or guarantee half of the current mortgages. With their â€Å"government status†, investors can buy those bonds while asking for a low interest rate in return, as federal government bonds have the safest credit rating in the world. As long as debtors paid back their mortgages, Fannie Mae and Freddie Mac would be able to pay their creditors too. However, as these loans where often given out, even to people we knew could not reimburse, GSEs had to assume the risk. Therefore, we could also say that investors could be blamed for the role they played.They bought and invest in financial products they did not know about. They should have conducted resea rches about what they were purchasing and should have known these were subprime and meant a higher risk of non-payment. However, we have to see the bigger picture. At that time, banks received pressure from higher instances to encourage homeownership and so, to grant loans to the poorest population. The government wanted households with a less comfortable life to be able to buy their own house. The pressure that was put on the banks â€Å"forced† them to give mortgages to debtors that would ikely not pay back. This being said, borrowers are also responsible for contracting loans that they pertinently knew they could not afford. Moreover, the credit rating agencies are also not responsible for the debt of the countries. They have often been accused to do be the reason for the deficit of some countries such as Greece. Nevertheless, Greece has always had a huge deficit. They never had a break-even budget in 150 years, and governments from left to right parties systematically lai d about the finance of the country.In addition, the national sport is not the Greco/Roman wrestling or the Marathon but how to avoid paying taxes; nothing in which the rating agencies were involved. Furthermore, regulators could have also done a better job to prevent the crisis. In the United States, several regulators exist and each of them has a specific area of expertise. The regulation of the banking sector is shared between the Federal Reserve (Fed), the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (which guarantees the deposits of bank customers) and the Office of the Thrift Supervision (OTS).There is also The Securities and Exchange Commission (SEC) that is responsible for the supervision of stock exchanges. The Financial Industry Regulatory Authority provides the regulation of brokerage activities. Finally, the Commodity Futures Trading Commission (CFTC) insures the regulation of futures and options markets. This various regulato rs could have acted to appease the situation. The SEC could have, indeed, regulate lending practices at banks and force them to keep more capital reserves in case of losses.The Federal Reserve could have contained the housing bubble by setting safer mortgages lending standards, which it failed to do and especially when Alan Greenspan who was the head of the FED, refused to improve the examination of the subprime mortgage market. Finally, according to the Financial Crisis Inquiry Report, executives in the main investment banks did not hold enough capital to be fully protected against losses. Some companies, such as Lehman brothers or Citigroup would just hide bad investments off their books.It is mainly a problem related to the liquidity crisis that led to the bankruptcy of Lehman Brothers. Lehman Brothers, indeed, financed itself on the short-term and lend on the long-term. When the source of the financing dried up (banks did not trust each others by fear of not being paid off), Leh man found himself stuck and was enabled to face its commitments. If the credit rating agencies were not responsible for the mortgage originators or securitizers, the creation of the CDO, the regulators or the executives of the investment banks, they surely played a tremendous role in the crisis ) †¦But they could have done better The credit rating agencies are responsible for a lot in the financial crisis. Several aspects of their business as well as the actions they have done have been pointed out as the main cause of the crisis. First of all, the pertinence of their business model was questioned, among others the oligopolistic situation of the market and the conflict of interest created by the issuer-payer model. The â€Å"Big Three† (Standard & Poor’s, Moody’s and Fitch Ratings) generate 95% of the $6 billion market that the rating business represents.These three agencies dominate the market and adopt similar methodologies and practices. The business mod el of the rating agencies establishes itself on the independence and the credibility granted by the financial markets and the authorities of supervision. That is why, in the absence of statutory reforms and / or of the desertion of numerous customers, the leadership of the â€Å"Big Three† will be maintained, protected by strong barriers of entry (reforms difficult to set up and loyalty of issuers often connected to the heaviness of the rating process).Besides, the oligopolistic situation is strengthened by a consolidation, on the initiative and thus for the benefit of the â€Å"Big Three†. So, Fitch acquired in June 2000 the fourth American rating agency, Duff and Phelps, and in December 2000 Thomson BankWatch. At the beginning of 2006, Fimalac gave up 20 % of Fitch Group (who, herself, holds Fitch Ratings, Fitch Training and Algorithmics, this last company having been acquired in 2005) to Hearst Corporation. Likewise, the French subsidiary of Standard & Poor’s acquired ADEF (Agency of Financial Evaluation).Another reason why the credit rating agencies played an important role in the financial crisis is because of the conflicts of interest they were facing with the issuers. If some say that these conflicts of interest were of minor importance since there are always conflicts of interest in relationships, in that case, it had serious consequences on the global economy, as they are one of the causes of the subprime crisis in 2008. It is, indeed, the issuer that pays the rating agency so that this one estimates its capacity to pay off its debt.It is thus relevant to wonder about the partiality and the objectivity of the rating agencies which find themselves â€Å"at the same time judge and judged† and which can be inclined to note well its customers to keep their market share. Besides, the transparency that the rating agencies show in their methodologies and during their changes of ratings is unreliable as far as these sudden reversal s seemed to have destabilized the markets. The three major credit rating agencies also contribute to worsen the financial crisis by their practices. They were, indeed, a key factor in the financial meltdown.They attributed a rating to every products offered on the stock market. Even mortgage-related securities received a good grade, which made it easier to market and sell them. As we have seen previously, the ratings that they gave had an almost â€Å"biblical authority†, so investors trusted the rating agencies to be fair and to give relevant grade to each product and did not conduct further investigation regarding their investment. Credit Rating Agencies were necessary to the mortgage-backed securities market; each actor in the process needed them: The issuers, to approve the structure of their deal – The banks, to determine what capital to hold – The investors, to know what to buy Since 1970, when the credit rating agencies got the status of NRSRO, the SEC de cided to base the capital requirements for banks on the grades given by the rating agencies. This is also included into the banking capital regulations as the recourse rule, which allows banks to hold less capital for higher-rated securities. The SEC also prevented money market funds to buy securities that did not receive ratings from at least two NRSROs.Without these good ratings, banks would not have been able to place these financial products so easily onto financial markets, and the investors would have never bought them. Theirs ratings helped the market to go up rapidly and their downgrades between 2007 and 2008 wreaked havoc across markets and firms. These ratings, especially the ones for the mortgage-backed securities, appeared to have been very optimistic. But what we could observe, throughout the crisis, is the gregarious reflex of the credit rating agencies.They usually agreed on the ratings and when one of them downgraded a security, a company or even a State, the others would usually follow and did the same thing. As we have seen, the Credit Rating Agencies have indeed played an important role in the financial crisis. However, they are not the only one to blame. Thus, we can say that the thermometer is not responsible for the crisis but it could have given a better temperature of the situation. III. What is next? As we discussed, the credit rating agencies have been criticized a lot during the crisis and some flaws of them have been pointed out.In order to improve their efficiency, it is important to understand what we have learned from the crisis and then propose a better regulation or an alternative to the Big Three. 1) Lessons learned from the Financial Crisis The first lesson learned from the crisis is the impact of the globalization of financial markets. This has linked countries together in a greater extent than they were before. That is why, in today’s economy, any crisis that hits a main country or group of countries will have reperc ussion on all other countries. The financial crisis of 2008, started in the United States with the subprime bubble.Then it grew bigger and affected the rest of the world almost immediately compared to the 1929 crisis which also had worldwide impact but more gradually. We have to keep into consideration this new factor and realize that globalization plays an important role in the current worldwide economy. In addition, a country and its financial system need to be better prepared to face the crisis, in order to limit economic and financial damages. This means having a sound and well-regulated environment, keeping its inflation rate low, its exchange rate flexible, and its debt position sustainable.By doing that, a country would limit its vulnerability in front of any financial crisis. Moreover, the country should use fiscal and monetary policies to be able react quickly in case of external shocks. Another lesson learned is the question of the financial supervision. The global crisis is a crisis of confidence, which must impose rules on investment in the financial market, such as CDS (Credit Default Swaps) and short-selling of securities, clearing of OTC derivatives to reduce risks, CSD (Central settlement and Depository) regulation to protect investors and also Hedge Funds transparency.In macroeconomics, monitoring means imposing laws and rules on a structure with what is called the invisible hand. In our case, the invisible hand is the World Bank and the International Monetary Fund and the States, which have full power to intervene and better regulate transactions in the financial markets. This crisis also revealed some weaknesses regarding risk planning. Research based on various methods, including country case studies, confirmed that the more the planning is important, the more the quality of the financial services of a country is raised and more the financial intermediation is efficient.The planning of the risks led a certain number of countries to revise t heir financial structures to adapt itself to the global economic transformations. Finally, we can say that every good thing comes to an end, positive times do not last forever and the end is most likely going to be painful. In today’s financial system and global economy, we cannot avoid financial crisis, we can just hope that enough efforts will be done to improve our financial system and to limit the impacts of future crisis on our economy.If we focus on Credit Rating Agencies, to have a sound environment, it is worth considering a better regularization of our existing Credit Rating system, a new and improved rating system or the promotion of totally new credit rating agencies. 2) Regularization of our existing Credit rating system After the dysfunction of our system translated for instance into the collapse of Lehman Brothers, the disappearance of famous institutions such as Bear Sterns or Merrill Lynch, G7 members stressed the financial industry to improve its functioning mode and enhance the regulation.Several critics have indeed been directed to the credit rating agencies regarding the methodologies used by those agencies (including the growing place of the so-called political factors), the lack of transparency of their decisions, the rudimentary explanation accompanying the changes in notation, the moments selected to realize their announcements of ratings and finally, the potential conflicts of interest. All these aspects need to be taken into consideration when aiming to regulate the rating agencies. Various reform proposals have been recommended.Among them, you find some proposing the suppression of the government’s influence over this industry, or even the creation of a completely government-sponsored rating entity. However, the final goal is the accuracy of the credit rating. The first main step toward a better regulation happened in 2006, when a new section to the Securities Exchange Act has been added. The objective was to â€Å"imp rove rating quality for the protection of investors and in the public interest by fostering accountability, transparency, and competition in the credit rating industry† (ANNUAL SEC REPORT, supra note 22, at 16).The market is an oligopoly; the Big Three set the tone for the rest of the industry. Encouraging competition should give more choices to investors, at a lower cost and with better quality ratings. Several rules were added along the way, especially in 2009, when the SEC’s new rule addressed conflicts of interest, fostered competition and required detailed disclosure. For example, a NRSRO could not anymore issue a rating in which it had advised the bank or the issuer for the structure of the product.Another change emerged from the Dodd-Frank Act, in 2010, where a whole chapter has been dedicated to the rating agencies: â€Å"improvements to the regulation of the Credit Rating Agencies†. The Dodd-Frank Act qualified the agencies as â€Å"gatekeepers† f or the debt market and that is why they needed â€Å"public oversight and accountability†. This meant reducing the investors’ reliance on ratings by limiting references to NRSRO ratings from rules, increasing the liability exposure, maintaining and informing on the structure of the ratings, as well as filing control reports yearly.However, both of these new reforms showed weaknesses, particularly in addressing the conflicts interest coming from the issuer-payer model, or the oligopoly. As mentioned before, several proposals would appear more efficient to answer these problems. The first proposal would be the elimination of the NRSRO status, which would remove any regulatory reliance on the ratings. This would also drive prices down as there would be an increasing competition, but it would also improve the rating quality and the innovation.Nevertheless, this proposal would lead to a total revision of the entire bank regulatory system and could also increase the pressure to satisfy issuers. The second proposal was to create a totally government-sponsored rating industry. This would make the rating a public good, eliminating any conflicts of interest due to the issuer-payer model. Although appealing because it resolves one of the main critics emitted during the financial crisis, it does not say who is going to pay for the subsidization.Finally, another more recent proposal called â€Å"disclose or disgorge† asks for the agencies to disclose the quality of the ratings they give, which means disclose to the public when a rating is â€Å"low quality† or disgorge benefits made with the rating. However, charging penalties would increase the barriers of entry on this market and discourage potential NRSROs. The rating business faces two major problems, the oligopolistic situation of the market that is being maintained by an increased regulation that secures the Big Three, and the issuer-payer model that fosters the conflicts of interest.Even though several reform proposals have been suggested, none appears to be totally conceivable. 3) A new rating system We have seen that a lot of reform proposals exist in order to enhance and increase regulation of the rating system. These proposals, indeed, reveal that some aspects of this business need to be improved. Eventually, a new rating system is worth considering. First of all, we have realized already touch based, throughout this analysis that the business model of the credit rating agencies needs to be modified, especially the issuer-payer model.The fact that the issuer is the one that pay the agencies for their ratings creates a conflict of interest that has to go away to insure an accurate and objective rating. In order to solve this issue, a new model is necessary. A possible idea to get there would be to make, not the issuer, but the investors (the ones that want to know the rating of a company or an entity) to finance the credit rating agencies. It is indeed them that need to know the rating of an entity, so it would be fair for them to pay in order to know what they are investing in.This would solved the problems related to the conflict of interest as rating agencies will not be tempted to give a good grade just to satisfy the client and avoid loosing profits. This was actually the model that existed before 1970, when the issuer-payer model was established. The shift to a model investor-payer would constitute a deep change for the whole rating industry but would eliminate the conflicts of interest. Another change that would be conceivable would be to set up a â€Å"rating planning†. The credit rating agencies should emit their grading at a known rhythm.Therefore, companies or States would know when they would be rated. For example, every January 1st, they could give their ratings for all entities. This would avoid sudden downgrades as we saw during the crisis, where rating agencies lowered the rating of a company right before it went bank rupt. Furthermore, to improve the accuracy of the ratings, a distinction between the rating of a company and a State should be made. In fact, Credit rating agencies do not evaluate the same thing when rating a country or a firm.That is why different ratings should be given according to the nature of the entity. Finally, this new rating system should have a better transparency of ratings. As this has often been reproach to the agencies, it is clear that we need to improve it. In order to get more transparency in the ratings, the credit rating agencies should be forced to make public some criteria that contributed to the rating process. In addition, when an entity is downgraded, there is ever a clear explanation.An explicit and standard comment should go along with the new ratings to explain the cause of the downgrade or upgrade. All these improvements should be made to obtain a more transparent and accurate rating. These changes could lead to more efficient and regular ratings where conflicts of interest would be inexistent and where the distinction between entities would improve the relevance of the ratings. 4) Creation of a new credit rating agency Finally, another solution that arises would be the creation of a new rating agency.This proposition is particularly discussed in Europe. The arguments called in favor of the creation of a European rating agency are multiple. It would be a question, first of all, of introducing more competition into a sector that is today dominated by three major actors. Standard and Poor's, Moody’s and Fitch Ratings are indeed sharing more than 90 % of the market, a situation which confers to the members of this â€Å"Big Three† a tremendous capacity of influence. To create a new rating agency would be a way of having a bigger diversity of points of view.The trust that would be granted by the investors to a new European agency would depend however on its capacity to avoid the criticism sent to â€Å"Big Three† in terms of independence and conflict of interest. It would also be necessary to specify the status of the new agency: a public or a private organization? A public rating agency could face the mistrust of the investors, who could doubt its independence towards public authorities and States, which it would have the mission to evaluate. On the other hand, a private agency would look like a non-profit foundation.The rating agency would be financed by the investors who would use its notations, and not by the entities emitting the financial products, which would allow guaranteeing its independence. Nevertheless, the future prospects of such a structure remain uncertain: to what extent would it be able to impose itself in front of â€Å"Big Three†, in a sector where the experience and the reputation of the institution play a determining role? In addition, a history of ratings would be necessary to evaluate the evolution of an entity and a strict method is mandatory for accurate rat ing.A new rating agency would not be able to have all of these factors before several years. To conclude, it is not easy to find the best solution to improve the current rating methods. Different regulations have been tried, all presenting good points but also flaws. However, what we need to enhance is clear: better transparency, a more accurate rating and a suppression of the conflicts of interest. Conclusion The role of the credit rating agencies in today’s economy is crucial. They evaluate the creditworthiness of an entity, influencing investors and interest rates.However, during the crisis, their role has been criticized. Several factors can explain their controversial position. The oligopolistic situation of the market, their supposedly trustworthy evaluations given by their NRSRO status, as well as the conflicts of interest coming from their issuer-payer model are the main causes of the critics emitted toward them. Recently, the American justice even pressed charges aga inst the rating agencies for their role in the crisis and asked for five billion dollars. Nevertheless, even if the credit rating agencies are the ideal responsible, they are not the only ones to blame.Now that the crisis revealed the different flaws of their system, we can only improve them going forward. Several regulations have already been approved and others are still under consideration. Other ideas to enhance the rating system include a new financing model, by perhaps considering going back to the investor-payer model, a better transparency of their rating, by showing the criteria used for their ratings, and a distinction between a company or a security and a State, which are two completely different entities.Lastly, we can wonder if the Credit Rating agencies still have as much influence as they used to. For instance, when downgrading both the United States and France, the repercussions were minors even nonexistent. The lost of their triple A did not bring the interest rates up as it should have, since today the interest rates are historically low in both these countries. Exhibits Exhibit 1 – Credit Rating Agencies with the NRSRO designation Exhibits Exhibit 2 – Rating systems of the Big Three Source: â€Å"Credit rating – Wikipedia, the free encyclopedia.   Wikipedia, the free encyclopedia. N. p. , 7 Mar. 2013. Web. 13 Mar. 2013. ;http://en. wikipedia. org/wiki/Credit_rating;. Exhibits Exhibit 3 – Important facts about the crisis Exhibits Exhibit 4 – Evolution of market indexes from August 9 to 16, 2007 Index| Evolution| Dax (Germany)| -4,42%| Dow Jones (USA)| -5,95%| Nasdaq (USA)| -6,16%| FTSE 100 (United Kingdom)| –  8,37 %| CAC 40 (France)| -8,42%| Nikkei (Japan)| -10,3%| Exhibits Exhibit 5 – Residential Mortgage-backed securities These tranches were often purchased by CDOs These tranches were often purchased by CDOsSource: The financial crisis inquiry report: final report of the National Commis sion on the Causes of the Financial and Economic Crisis in the United States. Official government ed. Washington, DC: Financial Crisis Inquiry Commission :, 2011. Print Bibliography * Dupuy, Claude . â€Å"La crise financiere 2007-2008 – Les raisons du desordre mondial – C†¦. † francetv education – la plateforme des parents, eleves et enseignants. N. p. , n. d. 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