SWOT Analysis of Fischertechnik

SWOT Analysis of Fischertechnik ABOUT THE COMPANY The name fischertechnik comes from an original construction toy brand, which was invented by Artur Fischer in 1964. Initially, this brand was intended to be a Christmas novelty gift in Germany for industrial client level engineers and buyers.It proved to be a massive success and thus, the company introduced its first building block construction toy in 1965. From there on, there has been no looking back. The official name of the whole group of companies is fischerwerke GmbH Co. KG. It is based in Waldachtal near Stuggart Germany and started operations officially from 1965. Fans usually refer to the company as FT or ft. The total turnover of the entire fischer group of companies is over 545 million Euros with over 3,800 employees worldwide. fischertechnik is one of the divisions in the group of companies, concerned with the design and manufacturing of innovative engineering based construction toys. The company has its operations spread over many countries in the world, 33 to be precise, in which the most significant ones in terms of presence therein, are United States of America (USA), Japan, and of course, the home country Germany. The company has production centers in 16 countries and distribution in over 100 countries. It is currently headed by Klaus Fischer (59), who is the owner and CEO of the entire fisher group. fischertechnik claims to produce world-renowned engineering-based construction toys, so as to foster interest in these subjects among the young which is why it is no surprise that the companys tag line is building blocks for life. Building blocks refer to the pieces or parts of the complete toy, which are usually marketed in a disconnected form. Such toys are called construction toys, since the purchaser of the product is expected to connect the parts in a logical manner so as to construct the complete model. This sort of marketing is very attractive, especially for young kids, who derive a sense of accomplishment from constructing such toys. And it definitely does kindle a scientific interest and encourage creativity in the minds of youngsters. In the following paragraphs, only the fischertechnik division of the fischer group of companies is discussed, and all the facts, figures, strategies and suggestions provided in the text are related only to this division. Product History and Present Scenario As mentioned earlier, the basic line of fischertechnik is the creation of construction toys, which consists of building blocks that can be connected together to form a certain toy model. However, this is a grossly incomplete description of the gigantic range and types of products that the company produces. Initially, the company started off with the basic construction toy model, invented by Artur Fischer. However, in the 1970s, the company started manufacturing on a large scale, models with large number of pieces or building blocks, of channel and groove design, in which pegs protruding from the sides of the blocks could be used to connect to other blocks and construct the complete model. Of course, original models were completely of a mechanical nature, with no electrical or electronic elements to perform any automatic control tasks. Soon, the company started producing sophisticated mechanical models such as trains and bridges, and even included relatively simple measurement devices to calculate various relevant parameters related to the toys such as angles and distances. These toys used mostly hard nylon as material for the pieces or building blocks. As time moved on, the company started manufacturing automotive vehicle models such as tower cranes, and included electric motors, power sources and gears to mobilize the same. These products were used primarily by engineers to simulate and teach industrial robotics. These products were further advanced by the incorporation of electrical and electronic components of the likes of micro-switches and photocells for the purpose of position sensing and feedback control. Later, the company launched its first basic electronic block called the Grundbaustein, which consisted of Op-Amps and Schmitt Triggers, so that Delay Line circuits could be built. In the later part of 1970s, electronic binary-logic modules such as OR, NOR, AND, NAND, Flip-Flops were also included so as to provide means for making elementary branching decisions. Around the late 1980s, CPU modules that could perform process-control were also included so that sequential movements could be pre-programmed. This was first execute d using the Lucky-Logic (LLWIN) software, developed by the company. Today, the company uses all state of the art technologies that the engineering and scientific world has produced in the fields of process control and automation, in a variety of its products. These products include ROBO TX Explorer kit and Robo-pro software (which is the successor to LLWIN), amongst many others. COMPETITION The major world-wide competitor of fischertechnik is Lego, which is far more popular and easily available in USA and even Europe. Although initially in the three major lines, namely Expert, Technic and Mindstorm, Lego was unable to match the technical and flexibility level of fischertechnik, but soon after the launch of Lego Mindstorms NXT in 2006, the former surpassed the latter in a number of technical areas such as color sensing. After this, Lego overtook fischertechnik in the production of the most advanced construction toy models in the world and the latter moved down to the production of less technical, simplified and fun toys, primary for educational purposes. However, on its own, fischertechnik is a huge brand and has a strong presence in the construction toy market all over the world and is much bigger than any other brand apart from Lego. ENTERING UAE: ADVANTAGES It is well known that UAE is one of the most prosperous countries of the world, and for the past few years, has been developing at a lightening pace. This pace continues to increase by the day. In general, the people in UAE are wealthy and have tremendous monetary resources, ready to be tapped and mobilized. Not only is the wealth tremendous, but the total population especially in the metropolitan cities like Dubai and Abu Dhabi is also very large. Thus, demand for all sorts of products in UAE is huge. This makes UAE an attractive market for a number of multinational corporations. A number of world famous brands have set up operations of production as well as distribution all over UAE, to tap this huge demand. And as time passes, more and more companies would continue to enter. Due to this huge monetary reserve in the hands of the common people, and a ready demand for all kinds of products, as mentioned earlier, a new trend amongst corporations working in all spheres of business has come about. This is, to start a new enterprise (for new entrepreneurs) or to launch a brand (for existing corporations) in UAE. This is no surprise, since the early sales figures of products of such is very large, and creates an impression in the minds of consumers everywhere in the world. Thus, UAE has become an extremely attractive location for the launch of new companies or products of existing ones. The aforementioned reasons are enough to imply that a brand, especially one as big as fischertechnik does not need to think twice before entering UAE. Of course, there are a number of pre-requisites and formalities that need to be fulfilled before business can be setup in the country. This is discussed in the next section. In the present section, we limit our discussion to the specific advantages and constraints attached to entering UAE. Regarding this, we discuss the kind of demand that is likely to be there in UAE by analyzing the present demand and import scenario in the toy industry, the kinds of consumers that can be targeted, and the kind of problems that the company would be likely to face. Due to the huge amount of developmental activities, migration has been tremendous in the UAE. Thus, there has been a population explosion in the UAE in the past decade or so. This is particularly true in the case of bigger cities such as Dubai and Abu Dhabi. The growing economy of the country has led to a fast increasing population rate, which has in-turn led to a huge increase in the demand for all kinds of products, which is the case with construction toy products as well. The total import of toys, which includes baby accessories in Dubai alone, was valued over 603 million Dirham in 2009. There has been an increasing demand for toys, as mentioned earlier, due to the great population in the country for the past few years, and this has led to a corresponding steady increase in the total import of toys in the country. It is interesting to note that in 2007 alone, the total rise in the import of toys was 16%. Another important indicator of the increase in demand for toys in UAE is the rapid decrease in the re-export of toys. However, what is significant to note here is that a major part of the demand for toys is met from import only, as there are hardly any local toy manufacturers in UAE. Companies like Lego and Toys R Us, have been selling their products in UAE, to take advantage of this deficit in local demand and supply. Thus there is great scope for foreign companies exporting into UAE. A smarter exercise, however, for such foreign companies would be to set up local production facilities, such as industrial plants, so that products could be produced domestically to avoid extra costs incurred during export of goods. This applies most appropriately to fischertechnik, because it is a very progressive company with a good financial standing and also because it has very little presence or popularity presently in the UAE. This lack of presence could be used as an advantage by fischertechnik, through, say for instance, a mega initial launch. However, a discussion of the implementation of this strategy is presented in detail later. Another very important point to be noted here is that presently most of the toys are imported by UAE from Asian countries like China, and a small portion is from Europe, USA and Canada. The total share in terms of import is approximately 90% from Asia and 10% from others. On top of this, there is presently, a great deal of diffidence in the minds of consumers towards purchasing Asian goods, since the quality and safety of such goods has been in question in the recent days. This further provides a good opportunity for foreign companies especially from Europe such as fischertechnik to enter the UAE markets, to establish themselves and beat a dying, or at least falling competition from their Asian counterparts. An analysis of the type of consumers who are most likely to purchase products of companies like fischertechnik is an extremely important pre-requisite for beginning or expanding operations into a new country. As mentioned earlier, the high population of UAE provides a huge pool of kids who are potential consumers of toys. However, there is a specific advantage connected to UAE in this regard. UAE is at the zenith of its development, and in the days to come, there will be a huge requirement of engineers and scientists in the country. Of course, it is best for any developing country, if this requirement is fulfilled domestically itself. Most parents in UAE, along with the government understand this present and future need, which is clearly exemplified from the fact that a number of excellent centers of technical education are have been set up over the years in the country. However, it is well known that simply providing good higher education is not enough. Kids have to be nurtured from a very young age, if this demand has to be met. For most parents, it is a dream to see their child become an engineer or a scientist because, and this is particularly true in UAE, they know that it would prove to be a prosperous career. This emotion can be utilized by fischertechnik for its expansion, the strategy for which is discussed later. Thus, to reach the ultimate consumers, i.e., young children, a route through their parents needs to be exploited. Thus, strategies have to be devised so that parents can be induced into buying the toys for their children. Another class of consumer consists of industrial level engineers and teachers who can use high-tech simulation type toy models, to provide for their employees and students respectively, better insight into the working of practical machines. For instance, teachers in a mechanical engineering class could use vehicle simulation toy models for showing the students the real working of such machines. This would make learning more effective and at the same time more enjoyable. Even for big companies, project relate discussions can be made more effective through simulation as well as modelling of the final project, for instance a model of a building when a construction project is being discussed. The existence of Free Trade Zones is a great advantage for any foreign company to setup operations in UAE. Many companies in various sectors such as networking, communications etc have already setup their business centers in UAE. These Free Trade Zones provide access to over 1.5 billion consumers in various countries of Africa, Asia and Europe, since ports in UAE are big trading centers and lie on many of the important trade routes of the world. This allows a great scope of future expansion of companies to nearby nations. However, this is just a secondary advantage of setting up operations in UAE. The Free Trade Zones have one hundred percent corporate tax exemption, zero taxes applicable on personal income, whether domestic or foreign, and no commercial levies. For a company having 51% domestic ownership there is no import duty applicable, however, companies having full foreign ownership are subjected to a 4% import duty. But this can be avoided through a collaborative setup or even through the setup of production centers within the country itself. There are no foreign exchange control or currency restrictions either. Apart from this, there is one hundred percent repatriation of capital as well as profit for foreign investors, which allows them to transfer their entire funds without any hassles. Such great incentives have been provided to foreign investors to speed up the process of development of the country through entry of huge amount of foreign capital. All these can be easily exploited by fischertechnik for its businesses in UAE. The legislative framework within the country is also very favorable for foreign investors. So, setting up of new businesses becomes an extremely simple process for most people. The laws regarding formal aspects of business setup or even expansion are very client friendly, which makes UAE an attractive location for new entrepreneurs since they do not have to face any obstacles. An example of the favorable laws is that companies can operate 24 hours a day, unlike those in most other countries. Plus, the regulation of businesses is extremely efficient which aims to protect the interests of all investors. Apart from the above, another huge advantage of expanding business into UAE is that the banking sector is very sophisticated and provides state of the art services and schemes to their clients. Such an ultra-modern and progressive banking sector has developed due to easing of laws are regulations for speeding up developmental activities in the country. The banking sector is highly confidential which ensures that all high risk financial matters are private. Also, the financial sector of UAE is extremely modern and provides all the best available products for corporations to use. For instance, corporations have easy access to modern financial instruments such as futures and options that can be used to hedge any risks arising in business. On top of this, a number of top financial consultancy firms and hedge funds have setup their offices in UAE, and provide services to other corporations. Thus, financial services of the best possible kind are easily available to companies. The stock mar kets in UAE are also extremely developed and provide easy access to all financial instruments and cheap and effective trading. Moving on to the infrastructure facilities available to companies, it is well known that UAE provides excellent and most diverse infrastructure available anywhere in the world. There are extremely sophisticated communication facilities available to companies. Apart from this, the security related services provided to corporate firms are also very advanced. All of the aforementioned advantages of expanding into UAE make it obvious that fischertechnik must enter the UAE markets as soon as possible, seeing the great benefits that it offers and the fact that till now these advantages have not been fully exploited by similar countries yet. FORMAL PRE-REQUISITES For performing business related activities in the UAE, any company needs to acquire a license. This license can be of three types namely, commercial, which is for all kinds of trading activities, industrial, which is for production or manufacturing activities and lastly, professional, for professional services and craftsmen. However, with regard to fischertechnik, only the first two types are of significance, since a major strategy for expansion would be to setup production and manufacturing activities in UAE, for which trading activities for purposes of hedging etc would be indispensable. Apart from this, the ownership of companies within UAE can be of two types. The first is partnership type of company, in which 51% of the ownership of the company is with a UAE national and the rest 49% is owned by the investor. Thus, for setting up such a company, fischertechnik would have to for a collaborative alliance with a domestic company in UAE. The second type of ownership is called Sole ownership, in which the investor has full control over the company. For this, the company has to setup its business within a Free Trade Zone only. There are, however, some restrictions on the type of business transactions that can be done outside the designated Free Trade Zone. For fischertechnik, a combination of the two ownership types would be most beneficial. For its production activities, it could form a joint venture company with another UAE based corporation, which performs a related business, while for its marketing activities, it could use the Sole Ownership type of company setup, and distribute its products through authorized dealers, since companies having Sole Ownership cannot directly sell their products in domestic markets. This sort of a combination would help fischertechnik in marketing its own brand, while maintaining steady production in collaboration with another company. SWOT ANANLYSIS OF FISCHERTECHNIK The SWOT analysis of fischertechnik is presented as follows: Strengths: fischertechnik has much significant strengths which are presented here one by one. Firstly, it is a huge brand, renowned all over the world, in the field of construction toys and is the best known brand specifically for constructions toys for educational purposes. It has an excellent record of financial performance in the past and has ownership of huge amount of monetary resources, which can be channelized into production and marketing related activities in business in UAE. This financial record gives fischertechnik excellent credit rating, which in-turn can help it to obtain local financing from domestic banks in UAE in the form of loans, very easily. This can help in hastening the start of business by quick setup of industrial and manufacturing plants as well as corporate offices. fischertechnik is the second biggest company in the field of construction toys, second only to Lego, thus it would not face competition from any other company in the area. Since Lego has very l imited operations presently in UAE, it would make fischertechnik an unsurpassable brand once it begins operations. It should be noted that although fischertechnik is next to Lego but the difference between the two is very less and if the former is able to establish a good image in UAE first, then the latter would not be able to overcome this image by entering the UAE market afterwards. Also, it is important to mention that fischertechnik is a very old company, 45 years to be exact, and thus has a pool of experienced and skilled staff possessing excellent technical expertise in the field of process control, which includes aspects of electrical, mechanical, electronics and computer engineering. The company uses the most sophisticated technologies in engineering and specifically in process control in its products, and the technical department, consisting of both experienced engineers as well as innovative minded freshers, who are recruited through an excellent selection process, of fis chertechnik continuously work towards discovering new technologies and incorporating innovative ideas into its products. Apart from these, the company produces a wide range of products for many all age groups including children and adults. Lastly, it is relevant to mention that the company has tremendous managerial expertise and organizational stability. Weaknesses: Although fischertechnik has very few weaknesses, it is relevant to mention them here. Fischertechnik has very small presence in UAE. Its business operations in UAE are very limited and in the inaugural phase. Although its small presence can be used as an advantage, this discussion is presented in the next section. However, limited presence can prove to be disastrous if business operations are not established speedily. This means that if a company like Lego which is the major competitor of fischertechnik senses the slowness in establishment of business operation of the latter, through speedy operation it can surpass and destroy the competitive advantage of the limited presence of the same. Since fischertechnik is a German company, the core employees of the same may not be able to adjust easily to the corporate practices and consumer behavior of the domestic markets of UAE. As a solution to this, the company would probably resort to the recruitment of local staff. Another r eason for recruitment of local staff is that it is mandatory for foreign companies to maintain a certain percentage of local employees within the total workforce. However, this local staff would face difficulty in adjusting to the corporate practices of a foreign company. Of course, this problem would need to be solved through an effective Human Resource Management strategy on the part of the company, which is definitely not an insurmountable task for a company of the likes of fischertechnik. Opportunities: As mentioned earlier, due to the huge amount of developmental activities in UAE, there has been a population explosion in the country. This automatically implies that there is a huge demand for consumer goods such as construction toys, due to the existence of a large number of families. Apart from this, because of setting up of a large number of institutes of higher education in the recent past, the demand for simulation models as educational tools would also be high. This means that fischertechnik has huge scope of revenue generation by supplying this huge demand. Again, setting up of new businesses and expansion thereafter is very simple in UAE, due to the liberal trade policies followed by the government. This is because UAE is a liberal economy and is extremely committed to free trade. Thus, these provide significant opportunities to fischertechnik to begin its operations at an appropriately fast pace. Also, as given in detail in the next section, the limited prese nce of fischertechnik in UAE presently can be used as a significant advantage. Threats: The most important threat is that if fischertechnik is slow in setting up its initial operations, no matter how sound its business plan may be, its rival competitor Lego can detect its main intentions and adopt strategies to work fast and finish the competitive advantage of the former. This is also because Lego already has some presence in UAE and for expansion it would take less time as compared to the time fischertechnik would take to establish itself from scratch. Another major threat that fischertechnik is likely to face is that the core employees of the company, who are mostly German, would find it difficult to adapt to the local conditions and similarly, the local staff would not be able to adapt to the corporate practices of the company. This problem is extremely significant and if an effective Human Resource Management strategy is not adopted, it could destroy all scope of existence of the company in UAE. PESTEL ANALYSIS OF FISCHERTECHNIK The PESTEL analysis of fischertechnik is as given below. It consists of all the macro-economic factors that affect the growth of fischertechnik in UAE. Political Factors: The present political environment of UAE is conducive to the growth of any company, and fischertechnik is no exception to the rule. The company should take full advantage of the liberal regulatory setup, which promotes the development of the economy, which automatically implies the growth of the company as well. As mentioned earlier, various tax exemptions which include exemption on corporate as well as personal earnings, free trade zones etc clearly exemplify this pro-development attitude of the UAE government. Fischertechnik, being a huge company would obviously receive a warm welcome and special treatment from the government of UAE, since its presence in the market would greatly increase the overall development of the country. Economic Factors: The great financial record of fischertechnik would undoubtedly help its initial setup. The overall consumer attitude in UAE is excellent from the point of view of any company, and consumers are always looking to buy products of companies which are reliable and have a good past record. The worldwide brand image of fischertechnik would help it to take advantage of such consumer attitude. If the company pays attention and highlights that it uses local resources, generates employment and works in a manner keeping sustainability, the confidence of consumers is greatly increased. fischertechnik needs to use such a marketing strategy to promote itself so as to strongly setup its business operations in UAE. Social Factors: The population of UAE is diverse, especially due to the great amount of developmental activities going on in the country. Thus, the population consists of all types of consumers. But in general, the populace of UAE is pro-development and if the company keeps in mind not to delve into controversies that affect the religious or spiritual aspects of the life of the people of the country, a rapid growth rate is virtually assured. Technological Factors: Again, due to the tremendous amount of developmental work going on in the country, a number of companies have set themselves up in UAE. This has resulted in a near perfect competition in the domestic markets of UAE. Such competition always promotes the use of latest technology and to an extent, healthy sharing of technologies between companies engaged in the same business. With such a scenario in the market and with the strong technological experience of the fischertechnik, which is known to be a company that perpetually comes out with new and innovative products, there is no doubt that the company would be able to establish itself in UAE within no time. Legal Factors: As mentioned earlier, the pro-development attitude of the UAE government has resulted in a relaxed set of laws and regulations governing the corporate sector. In the past, fischertechnik has not been involved in any controversies that involve legal issues and need to maintain such a record during its operations in UAE. With many Asian toy companies facing legal problems presently, in light of allegations from various entities within UAE that the goods they have exported to UAE are not safe, it is the perfect opportunity for fischertechnik to once and for all destroy its competition by promoting itself as a safe toymaker. Environmental Factors: fischertechnik needs to adopt a pro-environment attitude that promotes sustainability. As a company that promotes science and engineering, it has already established its technological dominance over many companies in the same business. However, a business setup that keeps in mind the environment, which includes green building for its corporate offices and manufacturing facilities that have reduced carbon emissions etc, on the part of fischertechnik can go a long way in the growth of the company in UAE. WAYS TO ENTER: STRATEGIES After the completion of the pre-requisite formalities, the following strategies would be most effective for fischertechnik for its expansion in UAE. fischertechnik should begin its operations by setting up multiple manufacturing facilities and industrial plants at various locations in UAE. The number of corporate offices should be kept low and distributional activity should be outsourced to a large number of authorized dealers and distributors. Such a strategy for the initial setup of business would be very effective because it would remove any scope of import duty and the cost incurred in movement of goods from outside the country would be avoided. This has not been done by any of the toy companies including Lego in their operations in UAE and thus they have to incorporate the extra cost in the prices of their products. Therefore, fischertechnik products would be priced lower compared to others and this would provide a definite competitive advantage to the company. Complete financing should not be from the personal savings of the company and a large part of the financing should be obtained in the form of loans from banks and other financial institutions. This is because corporate savings need to be retained for payment of dividends etc and to take care of any sudden cash payment liabilities that may arise. Also, since UAE has an extremely sophisticated and well established banking system, the loans for setting up business are offered at lower rates, and are usually coupled with attractive and profitable schemes. This should definitely be exploited. The initial target locations should be the metropolitan cities of Dubai and Abu Dhabi. This is because they have the highest population density and thus the biggest pool of prospective consumers. Through multiple authorized dealers for distribution, the volume of products supplied to the cities should be high from the beginning itself. This would generate high revenue from the beginning and would also provide valuable information about the consumer behavior in the domestic market of UAE. After this initial phase, the subsequent targets should be smaller cities which include the capitals of the seven Emirates of UAE amongst others. Next, the strategy to be used to take advantage of the limited presence of fischertechnik in UAE currently is presented. The first aim should be the organization of multiple mega-launch events simultaneously across various parts of the two metropolitan cities of Dubai and Abu Dhabi. This includes large scale exhibitions and sale offers. For such events, special attention needs to be given to the ambience of the same, through the use of attractive banners, posters and pamphlets. This should be coupled with an attractive exhibition of toys, which would include the best products of fischertechnik. Special toys, exclusively for consumers of UAE could also be prepared. A good looking inaugural event is very important to make an impression in the minds of consumers. This effect is much more effective on kids, who would be the ultimate consumers of fischertechnik products. To cater to the special needs and demands of the consumers, a survey should be conducted before these events to find ou t the same, so tha SWOT Analysis of Fischertechnik SWOT Analysis of Fischertechnik ABOUT THE COMPANY The name fischertechnik comes from an original construction toy brand, which was invented by Artur Fischer in 1964. Initially, this brand was intended to be a Christmas novelty gift in Germany for industrial client level engineers and buyers.It proved to be a massive success and thus, the company introduced its first building block construction toy in 1965. From there on, there has been no looking back. The official name of the whole group of companies is fischerwerke GmbH Co. KG. It is based in Waldachtal near Stuggart Germany and started operations officially from 1965. Fans usually refer to the company as FT or ft. The total turnover of the entire fischer group of companies is over 545 million Euros with over 3,800 employees worldwide. fischertechnik is one of the divisions in the group of companies, concerned with the design and manufacturing of innovative engineering based construction toys. The company has its operations spread over many countries in the world, 33 to be precise, in which the most significant ones in terms of presence therein, are United States of America (USA), Japan, and of course, the home country Germany. The company has production centers in 16 countries and distribution in over 100 countries. It is currently headed by Klaus Fischer (59), who is the owner and CEO of the entire fisher group. fischertechnik claims to produce world-renowned engineering-based construction toys, so as to foster interest in these subjects among the young which is why it is no surprise that the companys tag line is building blocks for life. Building blocks refer to the pieces or parts of the complete toy, which are usually marketed in a disconnected form. Such toys are called construction toys, since the purchaser of the product is expected to connect the parts in a logical manner so as to construct the complete model. This sort of marketing is very attractive, especially for young kids, who derive a sense of accomplishment from constructing such toys. And it definitely does kindle a scientific interest and encourage creativity in the minds of youngsters. In the following paragraphs, only the fischertechnik division of the fischer group of companies is discussed, and all the facts, figures, strategies and suggestions provided in the text are related only to this division. Product History and Present Scenario As mentioned earlier, the basic line of fischertechnik is the creation of construction toys, which consists of building blocks that can be connected together to form a certain toy model. However, this is a grossly incomplete description of the gigantic range and types of products that the company produces. Initially, the company started off with the basic construction toy model, invented by Artur Fischer. However, in the 1970s, the company started manufacturing on a large scale, models with large number of pieces or building blocks, of channel and groove design, in which pegs protruding from the sides of the blocks could be used to connect to other blocks and construct the complete model. Of course, original models were completely of a mechanical nature, with no electrical or electronic elements to perform any automatic control tasks. Soon, the company started producing sophisticated mechanical models such as trains and bridges, and even included relatively simple measurement devices to calculate various relevant parameters related to the toys such as angles and distances. These toys used mostly hard nylon as material for the pieces or building blocks. As time moved on, the company started manufacturing automotive vehicle models such as tower cranes, and included electric motors, power sources and gears to mobilize the same. These products were used primarily by engineers to simulate and teach industrial robotics. These products were further advanced by the incorporation of electrical and electronic components of the likes of micro-switches and photocells for the purpose of position sensing and feedback control. Later, the company launched its first basic electronic block called the Grundbaustein, which consisted of Op-Amps and Schmitt Triggers, so that Delay Line circuits could be built. In the later part of 1970s, electronic binary-logic modules such as OR, NOR, AND, NAND, Flip-Flops were also included so as to provide means for making elementary branching decisions. Around the late 1980s, CPU modules that could perform process-control were also included so that sequential movements could be pre-programmed. This was first execute d using the Lucky-Logic (LLWIN) software, developed by the company. Today, the company uses all state of the art technologies that the engineering and scientific world has produced in the fields of process control and automation, in a variety of its products. These products include ROBO TX Explorer kit and Robo-pro software (which is the successor to LLWIN), amongst many others. COMPETITION The major world-wide competitor of fischertechnik is Lego, which is far more popular and easily available in USA and even Europe. Although initially in the three major lines, namely Expert, Technic and Mindstorm, Lego was unable to match the technical and flexibility level of fischertechnik, but soon after the launch of Lego Mindstorms NXT in 2006, the former surpassed the latter in a number of technical areas such as color sensing. After this, Lego overtook fischertechnik in the production of the most advanced construction toy models in the world and the latter moved down to the production of less technical, simplified and fun toys, primary for educational purposes. However, on its own, fischertechnik is a huge brand and has a strong presence in the construction toy market all over the world and is much bigger than any other brand apart from Lego. ENTERING UAE: ADVANTAGES It is well known that UAE is one of the most prosperous countries of the world, and for the past few years, has been developing at a lightening pace. This pace continues to increase by the day. In general, the people in UAE are wealthy and have tremendous monetary resources, ready to be tapped and mobilized. Not only is the wealth tremendous, but the total population especially in the metropolitan cities like Dubai and Abu Dhabi is also very large. Thus, demand for all sorts of products in UAE is huge. This makes UAE an attractive market for a number of multinational corporations. A number of world famous brands have set up operations of production as well as distribution all over UAE, to tap this huge demand. And as time passes, more and more companies would continue to enter. Due to this huge monetary reserve in the hands of the common people, and a ready demand for all kinds of products, as mentioned earlier, a new trend amongst corporations working in all spheres of business has come about. This is, to start a new enterprise (for new entrepreneurs) or to launch a brand (for existing corporations) in UAE. This is no surprise, since the early sales figures of products of such is very large, and creates an impression in the minds of consumers everywhere in the world. Thus, UAE has become an extremely attractive location for the launch of new companies or products of existing ones. The aforementioned reasons are enough to imply that a brand, especially one as big as fischertechnik does not need to think twice before entering UAE. Of course, there are a number of pre-requisites and formalities that need to be fulfilled before business can be setup in the country. This is discussed in the next section. In the present section, we limit our discussion to the specific advantages and constraints attached to entering UAE. Regarding this, we discuss the kind of demand that is likely to be there in UAE by analyzing the present demand and import scenario in the toy industry, the kinds of consumers that can be targeted, and the kind of problems that the company would be likely to face. Due to the huge amount of developmental activities, migration has been tremendous in the UAE. Thus, there has been a population explosion in the UAE in the past decade or so. This is particularly true in the case of bigger cities such as Dubai and Abu Dhabi. The growing economy of the country has led to a fast increasing population rate, which has in-turn led to a huge increase in the demand for all kinds of products, which is the case with construction toy products as well. The total import of toys, which includes baby accessories in Dubai alone, was valued over 603 million Dirham in 2009. There has been an increasing demand for toys, as mentioned earlier, due to the great population in the country for the past few years, and this has led to a corresponding steady increase in the total import of toys in the country. It is interesting to note that in 2007 alone, the total rise in the import of toys was 16%. Another important indicator of the increase in demand for toys in UAE is the rapid decrease in the re-export of toys. However, what is significant to note here is that a major part of the demand for toys is met from import only, as there are hardly any local toy manufacturers in UAE. Companies like Lego and Toys R Us, have been selling their products in UAE, to take advantage of this deficit in local demand and supply. Thus there is great scope for foreign companies exporting into UAE. A smarter exercise, however, for such foreign companies would be to set up local production facilities, such as industrial plants, so that products could be produced domestically to avoid extra costs incurred during export of goods. This applies most appropriately to fischertechnik, because it is a very progressive company with a good financial standing and also because it has very little presence or popularity presently in the UAE. This lack of presence could be used as an advantage by fischertechnik, through, say for instance, a mega initial launch. However, a discussion of the implementation of this strategy is presented in detail later. Another very important point to be noted here is that presently most of the toys are imported by UAE from Asian countries like China, and a small portion is from Europe, USA and Canada. The total share in terms of import is approximately 90% from Asia and 10% from others. On top of this, there is presently, a great deal of diffidence in the minds of consumers towards purchasing Asian goods, since the quality and safety of such goods has been in question in the recent days. This further provides a good opportunity for foreign companies especially from Europe such as fischertechnik to enter the UAE markets, to establish themselves and beat a dying, or at least falling competition from their Asian counterparts. An analysis of the type of consumers who are most likely to purchase products of companies like fischertechnik is an extremely important pre-requisite for beginning or expanding operations into a new country. As mentioned earlier, the high population of UAE provides a huge pool of kids who are potential consumers of toys. However, there is a specific advantage connected to UAE in this regard. UAE is at the zenith of its development, and in the days to come, there will be a huge requirement of engineers and scientists in the country. Of course, it is best for any developing country, if this requirement is fulfilled domestically itself. Most parents in UAE, along with the government understand this present and future need, which is clearly exemplified from the fact that a number of excellent centers of technical education are have been set up over the years in the country. However, it is well known that simply providing good higher education is not enough. Kids have to be nurtured from a very young age, if this demand has to be met. For most parents, it is a dream to see their child become an engineer or a scientist because, and this is particularly true in UAE, they know that it would prove to be a prosperous career. This emotion can be utilized by fischertechnik for its expansion, the strategy for which is discussed later. Thus, to reach the ultimate consumers, i.e., young children, a route through their parents needs to be exploited. Thus, strategies have to be devised so that parents can be induced into buying the toys for their children. Another class of consumer consists of industrial level engineers and teachers who can use high-tech simulation type toy models, to provide for their employees and students respectively, better insight into the working of practical machines. For instance, teachers in a mechanical engineering class could use vehicle simulation toy models for showing the students the real working of such machines. This would make learning more effective and at the same time more enjoyable. Even for big companies, project relate discussions can be made more effective through simulation as well as modelling of the final project, for instance a model of a building when a construction project is being discussed. The existence of Free Trade Zones is a great advantage for any foreign company to setup operations in UAE. Many companies in various sectors such as networking, communications etc have already setup their business centers in UAE. These Free Trade Zones provide access to over 1.5 billion consumers in various countries of Africa, Asia and Europe, since ports in UAE are big trading centers and lie on many of the important trade routes of the world. This allows a great scope of future expansion of companies to nearby nations. However, this is just a secondary advantage of setting up operations in UAE. The Free Trade Zones have one hundred percent corporate tax exemption, zero taxes applicable on personal income, whether domestic or foreign, and no commercial levies. For a company having 51% domestic ownership there is no import duty applicable, however, companies having full foreign ownership are subjected to a 4% import duty. But this can be avoided through a collaborative setup or even through the setup of production centers within the country itself. There are no foreign exchange control or currency restrictions either. Apart from this, there is one hundred percent repatriation of capital as well as profit for foreign investors, which allows them to transfer their entire funds without any hassles. Such great incentives have been provided to foreign investors to speed up the process of development of the country through entry of huge amount of foreign capital. All these can be easily exploited by fischertechnik for its businesses in UAE. The legislative framework within the country is also very favorable for foreign investors. So, setting up of new businesses becomes an extremely simple process for most people. The laws regarding formal aspects of business setup or even expansion are very client friendly, which makes UAE an attractive location for new entrepreneurs since they do not have to face any obstacles. An example of the favorable laws is that companies can operate 24 hours a day, unlike those in most other countries. Plus, the regulation of businesses is extremely efficient which aims to protect the interests of all investors. Apart from the above, another huge advantage of expanding business into UAE is that the banking sector is very sophisticated and provides state of the art services and schemes to their clients. Such an ultra-modern and progressive banking sector has developed due to easing of laws are regulations for speeding up developmental activities in the country. The banking sector is highly confidential which ensures that all high risk financial matters are private. Also, the financial sector of UAE is extremely modern and provides all the best available products for corporations to use. For instance, corporations have easy access to modern financial instruments such as futures and options that can be used to hedge any risks arising in business. On top of this, a number of top financial consultancy firms and hedge funds have setup their offices in UAE, and provide services to other corporations. Thus, financial services of the best possible kind are easily available to companies. The stock mar kets in UAE are also extremely developed and provide easy access to all financial instruments and cheap and effective trading. Moving on to the infrastructure facilities available to companies, it is well known that UAE provides excellent and most diverse infrastructure available anywhere in the world. There are extremely sophisticated communication facilities available to companies. Apart from this, the security related services provided to corporate firms are also very advanced. All of the aforementioned advantages of expanding into UAE make it obvious that fischertechnik must enter the UAE markets as soon as possible, seeing the great benefits that it offers and the fact that till now these advantages have not been fully exploited by similar countries yet. FORMAL PRE-REQUISITES For performing business related activities in the UAE, any company needs to acquire a license. This license can be of three types namely, commercial, which is for all kinds of trading activities, industrial, which is for production or manufacturing activities and lastly, professional, for professional services and craftsmen. However, with regard to fischertechnik, only the first two types are of significance, since a major strategy for expansion would be to setup production and manufacturing activities in UAE, for which trading activities for purposes of hedging etc would be indispensable. Apart from this, the ownership of companies within UAE can be of two types. The first is partnership type of company, in which 51% of the ownership of the company is with a UAE national and the rest 49% is owned by the investor. Thus, for setting up such a company, fischertechnik would have to for a collaborative alliance with a domestic company in UAE. The second type of ownership is called Sole ownership, in which the investor has full control over the company. For this, the company has to setup its business within a Free Trade Zone only. There are, however, some restrictions on the type of business transactions that can be done outside the designated Free Trade Zone. For fischertechnik, a combination of the two ownership types would be most beneficial. For its production activities, it could form a joint venture company with another UAE based corporation, which performs a related business, while for its marketing activities, it could use the Sole Ownership type of company setup, and distribute its products through authorized dealers, since companies having Sole Ownership cannot directly sell their products in domestic markets. This sort of a combination would help fischertechnik in marketing its own brand, while maintaining steady production in collaboration with another company. SWOT ANANLYSIS OF FISCHERTECHNIK The SWOT analysis of fischertechnik is presented as follows: Strengths: fischertechnik has much significant strengths which are presented here one by one. Firstly, it is a huge brand, renowned all over the world, in the field of construction toys and is the best known brand specifically for constructions toys for educational purposes. It has an excellent record of financial performance in the past and has ownership of huge amount of monetary resources, which can be channelized into production and marketing related activities in business in UAE. This financial record gives fischertechnik excellent credit rating, which in-turn can help it to obtain local financing from domestic banks in UAE in the form of loans, very easily. This can help in hastening the start of business by quick setup of industrial and manufacturing plants as well as corporate offices. fischertechnik is the second biggest company in the field of construction toys, second only to Lego, thus it would not face competition from any other company in the area. Since Lego has very l imited operations presently in UAE, it would make fischertechnik an unsurpassable brand once it begins operations. It should be noted that although fischertechnik is next to Lego but the difference between the two is very less and if the former is able to establish a good image in UAE first, then the latter would not be able to overcome this image by entering the UAE market afterwards. Also, it is important to mention that fischertechnik is a very old company, 45 years to be exact, and thus has a pool of experienced and skilled staff possessing excellent technical expertise in the field of process control, which includes aspects of electrical, mechanical, electronics and computer engineering. The company uses the most sophisticated technologies in engineering and specifically in process control in its products, and the technical department, consisting of both experienced engineers as well as innovative minded freshers, who are recruited through an excellent selection process, of fis chertechnik continuously work towards discovering new technologies and incorporating innovative ideas into its products. Apart from these, the company produces a wide range of products for many all age groups including children and adults. Lastly, it is relevant to mention that the company has tremendous managerial expertise and organizational stability. Weaknesses: Although fischertechnik has very few weaknesses, it is relevant to mention them here. Fischertechnik has very small presence in UAE. Its business operations in UAE are very limited and in the inaugural phase. Although its small presence can be used as an advantage, this discussion is presented in the next section. However, limited presence can prove to be disastrous if business operations are not established speedily. This means that if a company like Lego which is the major competitor of fischertechnik senses the slowness in establishment of business operation of the latter, through speedy operation it can surpass and destroy the competitive advantage of the limited presence of the same. Since fischertechnik is a German company, the core employees of the same may not be able to adjust easily to the corporate practices and consumer behavior of the domestic markets of UAE. As a solution to this, the company would probably resort to the recruitment of local staff. Another r eason for recruitment of local staff is that it is mandatory for foreign companies to maintain a certain percentage of local employees within the total workforce. However, this local staff would face difficulty in adjusting to the corporate practices of a foreign company. Of course, this problem would need to be solved through an effective Human Resource Management strategy on the part of the company, which is definitely not an insurmountable task for a company of the likes of fischertechnik. Opportunities: As mentioned earlier, due to the huge amount of developmental activities in UAE, there has been a population explosion in the country. This automatically implies that there is a huge demand for consumer goods such as construction toys, due to the existence of a large number of families. Apart from this, because of setting up of a large number of institutes of higher education in the recent past, the demand for simulation models as educational tools would also be high. This means that fischertechnik has huge scope of revenue generation by supplying this huge demand. Again, setting up of new businesses and expansion thereafter is very simple in UAE, due to the liberal trade policies followed by the government. This is because UAE is a liberal economy and is extremely committed to free trade. Thus, these provide significant opportunities to fischertechnik to begin its operations at an appropriately fast pace. Also, as given in detail in the next section, the limited prese nce of fischertechnik in UAE presently can be used as a significant advantage. Threats: The most important threat is that if fischertechnik is slow in setting up its initial operations, no matter how sound its business plan may be, its rival competitor Lego can detect its main intentions and adopt strategies to work fast and finish the competitive advantage of the former. This is also because Lego already has some presence in UAE and for expansion it would take less time as compared to the time fischertechnik would take to establish itself from scratch. Another major threat that fischertechnik is likely to face is that the core employees of the company, who are mostly German, would find it difficult to adapt to the local conditions and similarly, the local staff would not be able to adapt to the corporate practices of the company. This problem is extremely significant and if an effective Human Resource Management strategy is not adopted, it could destroy all scope of existence of the company in UAE. PESTEL ANALYSIS OF FISCHERTECHNIK The PESTEL analysis of fischertechnik is as given below. It consists of all the macro-economic factors that affect the growth of fischertechnik in UAE. Political Factors: The present political environment of UAE is conducive to the growth of any company, and fischertechnik is no exception to the rule. The company should take full advantage of the liberal regulatory setup, which promotes the development of the economy, which automatically implies the growth of the company as well. As mentioned earlier, various tax exemptions which include exemption on corporate as well as personal earnings, free trade zones etc clearly exemplify this pro-development attitude of the UAE government. Fischertechnik, being a huge company would obviously receive a warm welcome and special treatment from the government of UAE, since its presence in the market would greatly increase the overall development of the country. Economic Factors: The great financial record of fischertechnik would undoubtedly help its initial setup. The overall consumer attitude in UAE is excellent from the point of view of any company, and consumers are always looking to buy products of companies which are reliable and have a good past record. The worldwide brand image of fischertechnik would help it to take advantage of such consumer attitude. If the company pays attention and highlights that it uses local resources, generates employment and works in a manner keeping sustainability, the confidence of consumers is greatly increased. fischertechnik needs to use such a marketing strategy to promote itself so as to strongly setup its business operations in UAE. Social Factors: The population of UAE is diverse, especially due to the great amount of developmental activities going on in the country. Thus, the population consists of all types of consumers. But in general, the populace of UAE is pro-development and if the company keeps in mind not to delve into controversies that affect the religious or spiritual aspects of the life of the people of the country, a rapid growth rate is virtually assured. Technological Factors: Again, due to the tremendous amount of developmental work going on in the country, a number of companies have set themselves up in UAE. This has resulted in a near perfect competition in the domestic markets of UAE. Such competition always promotes the use of latest technology and to an extent, healthy sharing of technologies between companies engaged in the same business. With such a scenario in the market and with the strong technological experience of the fischertechnik, which is known to be a company that perpetually comes out with new and innovative products, there is no doubt that the company would be able to establish itself in UAE within no time. Legal Factors: As mentioned earlier, the pro-development attitude of the UAE government has resulted in a relaxed set of laws and regulations governing the corporate sector. In the past, fischertechnik has not been involved in any controversies that involve legal issues and need to maintain such a record during its operations in UAE. With many Asian toy companies facing legal problems presently, in light of allegations from various entities within UAE that the goods they have exported to UAE are not safe, it is the perfect opportunity for fischertechnik to once and for all destroy its competition by promoting itself as a safe toymaker. Environmental Factors: fischertechnik needs to adopt a pro-environment attitude that promotes sustainability. As a company that promotes science and engineering, it has already established its technological dominance over many companies in the same business. However, a business setup that keeps in mind the environment, which includes green building for its corporate offices and manufacturing facilities that have reduced carbon emissions etc, on the part of fischertechnik can go a long way in the growth of the company in UAE. WAYS TO ENTER: STRATEGIES After the completion of the pre-requisite formalities, the following strategies would be most effective for fischertechnik for its expansion in UAE. fischertechnik should begin its operations by setting up multiple manufacturing facilities and industrial plants at various locations in UAE. The number of corporate offices should be kept low and distributional activity should be outsourced to a large number of authorized dealers and distributors. Such a strategy for the initial setup of business would be very effective because it would remove any scope of import duty and the cost incurred in movement of goods from outside the country would be avoided. This has not been done by any of the toy companies including Lego in their operations in UAE and thus they have to incorporate the extra cost in the prices of their products. Therefore, fischertechnik products would be priced lower compared to others and this would provide a definite competitive advantage to the company. Complete financing should not be from the personal savings of the company and a large part of the financing should be obtained in the form of loans from banks and other financial institutions. This is because corporate savings need to be retained for payment of dividends etc and to take care of any sudden cash payment liabilities that may arise. Also, since UAE has an extremely sophisticated and well established banking system, the loans for setting up business are offered at lower rates, and are usually coupled with attractive and profitable schemes. This should definitely be exploited. The initial target locations should be the metropolitan cities of Dubai and Abu Dhabi. This is because they have the highest population density and thus the biggest pool of prospective consumers. Through multiple authorized dealers for distribution, the volume of products supplied to the cities should be high from the beginning itself. This would generate high revenue from the beginning and would also provide valuable information about the consumer behavior in the domestic market of UAE. After this initial phase, the subsequent targets should be smaller cities which include the capitals of the seven Emirates of UAE amongst others. Next, the strategy to be used to take advantage of the limited presence of fischertechnik in UAE currently is presented. The first aim should be the organization of multiple mega-launch events simultaneously across various parts of the two metropolitan cities of Dubai and Abu Dhabi. This includes large scale exhibitions and sale offers. For such events, special attention needs to be given to the ambience of the same, through the use of attractive banners, posters and pamphlets. This should be coupled with an attractive exhibition of toys, which would include the best products of fischertechnik. Special toys, exclusively for consumers of UAE could also be prepared. A good looking inaugural event is very important to make an impression in the minds of consumers. This effect is much more effective on kids, who would be the ultimate consumers of fischertechnik products. To cater to the special needs and demands of the consumers, a survey should be conducted before these events to find ou t the same, so tha

Ethics Bank Bailout

This paper explores the ethics of bank executives receiving large bonuses despite the fact that they received a bailout. I identify the utilitarian and deontological implications of these executives’ actions. This paper also examines if the executives deserved the bonuses, did the banks need a bonus, and how the banks should have been regulated by the banks.Keywords: bailout, utilitarian, deontologyEthics of Bank Bailout BonusesCurrently the economy is still in â€Å"The Great Recession† largely due to the fallout caused by banks. Banks caused this fallout by giving out home loans to unqualified borrowers.  The banks approved loans they know could not be repaid by the borrower because of the terms such as adjustable rates.These home loans started defaulting; which started a domino effect of bank failures, further driving the economy into a downward spiral. In came the government, armed with astronomical sums of money determined to rescue these large financial institut ions. Enrich, Hilsenrath, and Solomon (2009) state that 700 billion dollars of taxpayer money was used to bailout these banks under the Troubled Assets Relief Program (TARP).It wasn’t long after these bailouts that these banks continued to reward the executives with large bonuses. Should have these top executives of these major banks that received the bailout money been allowed to receive large bonuses? I say definitely not because it was wrong under the provisions of utilitarian ethics which I believe should have been applied in this situation. These executives were at the helm when these banks failed. Bonuses should be rewards for success not compensation for a title or position. If these banks had enough money to give bonuses then the question of do they really need a bailout should be asked.Furthermore, this bailout money did not belong to the banks to give out as they pleased, it belonged to the taxpayers and the money should have been accompanied by stringent regulation s imposed by the government. A bonus is normally given as a reward for production or as an enticement for favored behavior or performance. On Wall Street a bonus is an equivocal right with no strings attached. Success or failure does not matter. Being an executive in the country’s most powerful financial firms is justification enough to entitle them to a bonus. This is the methodology that these institutions follow.Executives used deontological ethics because they focused on their rights and entitlements as executives. They decided their rights to large bonuses outweighed the importance of righting the economy which affected the entire country. Meanwhile, these are the same executives that were in charge when many American’s retirement plans and investments were depleted or completely wiped out. These were the same executives that oversaw an industry that gave out home loans with impossible repayment terms. It can be argued that the banks caused the entire financial wo es that are still present today.Instead of the institutions terminating their executives for not stopping their organization’s misdeeds they were rewarded. These bank executives drove their institutions to the brink of demise. Yet, they were still rewarded with multi-billion dollar bonuses. How could this be justified or ethical? According to Freifeld (2009), Citigroup Inc. , Merrill Lynch & Co. and seven other U. S. banks paid $32. 6 billion in bonuses in 2008 while receiving $175 billion in taxpayer funds through TARP. That means that almost 20% of the government’s bank bail-out to these banks was used on bonuses for their institution’s executives.The question has to be asked, â€Å"Could the bank bailout have been 20% less to these banks? † An even more interesting question would be, â€Å"Did these banks really need the bank bail-out money? † These executives took an ethical egoistic approach by accepting these bonuses. Andre and Velasquez (198 9) explain that three steps to apply utilitarianism to any situation to decide a moral course of action. The first step is to identify all the course of actions that are available in a situation. The second step is to determine all the beneficial and harmful consequences of each course of action for everyone affected by the action.Finally, the third step is to select the course of action that provides the greatest benefits after the costs have been taken into account. Let’s apply this theory to the bank executives and their choice to receive a large bonus. First step would have them identify all their course of actions available to them, which was to take or leave the massive bonus. Secondly, was to determine all the beneficial and harmful consequences for each course of action for everyone affected by taking or refusing the bonus. Those affected by the taking or leaving the bonus include the executive, the financial institution, and the taxpayers.The beneficial consequence o f taking the bonus for the executive is a very large sum of money. The benefit to the financial institution and the taxpayer is none. The harmful consequence to the executive would be obvious, which would be the loss of a tremendous amount of money. The harmful consequences for the financial institution would be loss of capital that could be used somewhere else more productive and the loss of the government’s confidence. The harmful consequence of the executive taking the bonus would be an increased budget deficit which may lead to higher taxes and loss of federal program funding.Finally, weighing the consequences using the utilitarian theory the greatest benefit would be for the executives to refuse the bonus. The right decision for these bank executives would have been to take a utilitarian ethical approach and not accepted their bonuses. These bonuses hurt the government and the people of the United States by costing the bailout more money than necessary and creating a lar ger deficit. Thus, the act of the executives taking their bonuses was morally unethical under the theory of utilitarian ethics because the consequences were more harmful for the greater population.Instead, these executives prioritized their needs and wants higher than the needs and wants of the people. Financial executives were following the ideology of deontology when they made their decision to take their multi-billion dollar bonuses. According to Alexander and Moore (2008) deontology is based from the word â€Å"duty. † I believe that these bank executives felt it was their duty and entitlement to take the bonus. Also deontologists believe in following the rules even though the act may be considered the right thing to do even if it produces bad consequences (Alexander & Moore 2008).They were not breaking the rules or law when they took their bonuses because there were no regulations or rules against them doing so. They followed the rules and it produced the bad effect of c reating a larger than necessary bailout amount. On the other hand however, the government made the bank bailout loan on good faith. Utilitarian ethics were applied in the decision to give out the loan because they feared the banks would ultimately fail without the money. The choice was made out of consequence. The consequence of failing banks would be a country with an even worse economy and completely ruined financial sector.Thus, the government acted and followed utilitarianism’s theory of the greatest good, for the greater amount of people. The government should have not rushed to give the money to the banks without devising stricter regulations. Restrictions were placed on some executive compensation for participating banks, but did not limit salaries and bonuses (Despite Bailout 2008). If the government had placed limitations regulating excessive bonuses this could have been avoided. Executives would have been able to follow either consequential or deontological ethics b y following these limits imposed.Instead the government through legislation did not impose sanctions against bonuses as part of TARP. By failing to do so they left the door open for banks and executives to make ethical choices on their own. I explored the utilitarian and deontology implications of the bank bailout bonuses. I found that the bank executives should not have taken the bonuses after receiving bailout money from the government by using the utilitarian theory because ultimately the consequences were more harmful than good for greater population. I also explained why executives should not have received the bonuses based on their and their institution’s performance.I also questioned whether the bank bailout money was necessary because the banks had enough money to give out large bonuses. Also discussed was the idea of the government imposing stricter sanctions with the TARP legislation forbidding large bonuses. I also stated that the bank executives could have been et hically right under the pretense of deontology. Deontology’s theories revolve around duties, rules, and obligations (Waller B. , 2008). Therefore, the bank executives felt they had the right and duty to an enormous bonus as heads of multi-billion dollar financial institutions. They also followed the rules by accepting the bonuses.

Evil Hour in Columbia by Forrest Hylton Essay

Forrest Hylton in his book Evil Hour in Columbia, describes the historical background of Columbia in the context of the re installation of Alvaro Uribe as the president. He emphasizes how the current government has a nexus with the drug cartel. How the current government uses systematic displacement, murder and terror to further the interest of the drug interest group and capitalists interest. When Alvaro Uribe Velez became the president of Columbia on 7th August, 2002, the outlaws became powerful. Uribe’s father has suddenly found wealth, power and influence in the mid 1970s as a political broker. Uribe Sierra was connected to the influential family that joined the upwardly mobile contrabandists to form the infamous Medellin cartel. When he attended a meeting of the drug cartel at Napoles, he was removed from the post as a mayor of Medellin. When his father died in 1983 and left behind a huge debt Alvaro Uribe took charge. As the governor of Antioquia, between 1995 and 1996, formed close alliances with Pedro Juan Moreno Villa, the main importer of potassium permanganate a chemical important for the manufacture of cocaine. Forrest Hylton explores the conflicts that are currently harming Colombian lives, property, communities and region. Hylton shows a sense of hurry, a rush to convey how control, property and power have been appropriated by a few powerful persons who have used the weapons of terror, subjugation and financial depredation to maintain their position. Forrest Hylton systematically builds the case against Alvaro Uribe. He traces Uribe’s record as the governor of Antioquia. He is reputed to have supported the anti-guerilla militias who rendered homeless 200,000 peasants. In the banana export enclaves there was a spate of murders when he became the governor. The author’s plea reaches desperation when Alvaro is elected for the second term on May 28, 2006. The author is hurt by the jubilation of the US state and other allies at the election of Uribe. He feels an urgency to convey his apprehensions to the reader. It seems that Hylton is perturbed by the re election of Uribe because of the negative impact on the society and economy of Colombia. Hylton’s plea is well intentioned. He does not want the social struggles to continue, he does not want a state that supports the narcotic carte, he does not want to support the amalgam of the government and illegal perpetrators or crime nor does he want the exploitation of the majority of the people of Colombia. He is making a plea for an end to the exclusionary social fabric that is supported by the capitalist countries. Â  One of the reasons why Hylton makes a plea is that Colombia is a country where normal forms of confrontation and struggle are difficult. Trade unionism is perilous; in 2006 alone there were 70 deaths of trade unionists. A large number of workers who show opposition are killed. The killings of the worker leaders have been engineered by military and paramilitary forces. Capitalist’s interests are held culpable for dispossessing the Colombians of their land and property (Hylton 35). The modus operandi is to displace people from mining regions and appropriate their property. According to Hylton the effect of this domination on the economy is disastrous. Sixty four percent of the population lives below poverty line. A large proportion of the population cannot afford food, health requirements of the population are not met and employment is scarce. Health care and education is available only to the elite. On the other hand the US government depreciates the Columbian society for having a ‘tendency towards violence’. Hylton feels that such explanations are unjust as neither history supports such explanations nor does the behavior of people in neighboring countries give credence to these claims. The Columbian model Hylton feels has been adapted in Iraq and Afghanistan and may be adapted in different countries that use counter terrorism. Hylton chronicles his account from 1848 when there was popular political system and Colombia was one of the leading Atlantic democracies. He describes in great detail the century and half since then and the downturn from that point and the resistance against the negative forces. His book is a plea for a socially mindful political system, a documentation of the futile attempts to do so and the growth of officially backed narcotics alliance and its ‘paramilitaries’. Hylton is trying to draw the attention of the world on the brutal acts of repressions, the wasting of the Columbian agricultural system and the proliferation of coca for the production of cocaine. To sum, Hylton in his book Evil Hour in Columbia points out the social and economic frustration of Columbia with the election of Uribe. He feels that this will perpetrate a regime that is backed by and controlled by the drug lobby on one hand and the capitalists on the other hand. He points out that Uribe has a despicable past. In the past his government has caused displacement of peasants and murders. His installation as the president causes apprehension that Columbia is doomed to another period of exploitation, deprivation and poverty. Reference: Hylton, Forrest, Evil Hour in Colombia, Verso London and New York, 2006.

The United States Military Intervention Essay - 1091 Words

Today, people, including many I respect, are asking, Vince, why haven t you called for action in Aleppo? My question is the same as it s always been: What, exactly, do leftists want to do in Syria? Do they want a No-Fly Zone? If so, do they understand that such an action is considered an Act of War? Are people willing to deal with those consequences? Do leftwing activists want the U.S. to increase its military presence in Syria? Do they want the U.S. to keep arming so-called rebel forces? Are leftists actually calling for further military intervention in Syria? Am I processing this correctly? Already, over 12 nations have bombed Syria, with horrific results. Are we asking for more bombs, but from different planes? What principles are activists operating under? Remember, the U.S. military, like all military forces in the world, is a force for death and destruction - that s it. The U.S. military is incapable of saving people. The point of the U.S. military is to destroy and kill. Yet, I keep getting emails from people saying, We have to do something! Yes, let s do something. Let s build political movements that can actually oppose the U.S. Empire. Let s cut the U.S. military budget by 90% - and that s just the beginning. Let s stop selling arms to everyone on the planet. Let s stop supporting brutal regimes. Let s stop the drone strikes and the special forces operations in Africa and elsewhere. Let s end the war in Afghanistan. Let s get out ofShow MoreRelatedU.s. Military Intervention During The War Of The United States Essay1995 Words   |  8 Pagesoption is direct military intervention. Current American-led airstrikes have exclusively focused on ISIS, however, the current Russian intervention can provide clues as to whether earlier Amer ican air strikes against Assad would have impacted the conflict. 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