Motivation and Team Case Study Essay

There are four Theories of Motivation. They are Expectancy Theory, Goal Setting Theory, Equity Theory, and Job Enrichment Theory. Each could be used, individually or all could be used in combination, to help motivate employees to perform their jobs to the best of their abilities to achieve the success they desire. When employees are motivated and feel appreciated they tend to care more about their jobs and become more productive, which in turn can help the business be more successful. In the case study of Two Men and A Truck and Mary Ellen Sheets the Expectancy Theory and the Job Enrichment Theory were used to motivate her to grow her business. Even though Mary Ellen Sheets started the company she knew that with hard work she could grow her business and make it successful. Mary Ellen Sheets also understood that if she applied herself and worked hard she would have the success she desired. Even though she made many mistakes she was motivated to continue on and make her business a success. To create high performing teams Mary Ellen Sheets established Stick Men University where her franchise owners and movers could learn the basics such as answering phone calls to the final handshake after the move is completed. There is also a two story house and a computer lab. In the two story house the movers are taught the proper ways to move, and in the computer lab franchise owners are taught to pay royalties electronically and communicate with other franchise owners about what is working and what is not (Jones, 2007).The University gave all employees and franchise owners consistency in what was expected as well the ability to communicate with other franchise owners. In the case study for Siemens and Klaus Kleinfeld the Expectancy Theory and the Goal Setting Theory are used. Kleinfeld was motivated and he helped motivate all of the workers to pull together to save their jobs. By working hard and applying themselves they were able to grow Siemens Medical into Siemens most profitable business. He had goals that required workers to work flexible  shifts and also to work weekends to speed up production. Kleinfeld created high performing teams by emphasizing common goals and creating opportunities for joint gain. A common goal was to save the medical division of the company and make it successful. Many of the employees fought the changes but eventually pulled together and made the division profitable. Creating opportunities for joint gain allowed the employees and the company to come up with ideas that allowed them to be more productive therefore saving their jobs. Depending on the situation, job, company, and employee one, two, or all of the motivation theories can be used to help motivate employees to become more productive. Also an employee that is motivated and challenged to perform better will usually be more invested in the company and be more willing to work harder to achieve the success they desire. Reference Jones. (2007). Motivating and Managing People and Groups in Business Organizations. In Jones, Introduction To Business: How Companies Create Value For People. McGraw-Hill Companies.

Global Environmental Issues Facing Climate Change Essay

By 2030, the urban population will reach 5 billion – 60 % of the world’s population.It is clear that the development of urban areas holds the key to many of the challenges we face in our interactions with the environment. Climate change has become one of the most challenging global environmental issues facing humanity.. Urban households, industries and infrastructures are key sources of greenhouse gases. Urban areas concentrate populations, economic activities and built environments, thus increasing their risk from floods, heat waves, and other climate and weather hazards that climate change is expected to aggravate. Many of our urban centres are in the very areas (e.g. coasts) that will make them more vulnerable to adverse climate change events. But beyond the obvious risks and vulnerabilities that climate change will bring to our urban areas, these same urban centres will, by necessity, play a pivotal role in our mitigation and adaptation efforts as well. Urban centre s are hubs of development, sources of innovations and policy responses to reduce the emissions of heat trapping gases and adapt to the impacts of climate change. It is this combination, within urban areas, of increased vulnerabilities along with increased opportunities that can incubate important synergies and resources for creating innovative adaptation and mitigation strategies. (UN-Habitat. 2006). Urbanizationis, in statistical terms, an increasing proportion of a population living in settlements defined asShow MoreRelatedGlobal Environmental Issues1118 Words   |  5 PagesEnvironmental issues are a major problem in our world, and all people need to recognize the need for our social obligations. The effect of humans on our planet has increased significantly over the years. Not only is the population constantly growing, there is â€Å"new technical power to dig deeper, cut faster, build larger, and traverse more quickly great distances in automobiles, trucks, and planes† (Brown, 2001). Severe environmental issues have appeared throughout the world as a result. It isRead MoreThe Importance Of Future Research On The Future1104 Words   |  5 Pagesfurther innovative studies in the emerging field of environmental sciences towards conservation, detect environmental controlling parameters, biological function of living organisms and their interaction with the environme nt, and develop new technologies to protect the environment and public health. My challenge is to get a more complete picture of these issues in the near future, which could help to resolve the problems of global climate change and use the CO2 and other greenhouse gases for beneficialRead MoreEnvironmental Issue Of Environmental Issues1746 Words   |  7 PagesJennifer Manfredi INRI 1015 4/18/15 Environmental Issues One of the greatest things which is being talked about presently is the growing concerns of scientists, environmentalists, and people of this planet when it comes to environmental issues. Environmental issues is something that is discussed frequently in the news, in politics, and in classrooms around the world. More and more we are becoming informed and aware of the current and ever facing environmental crises that are taking place aroundRead MoreGlobal Warming And Its Effects On The Global Climate876 Words   |  4 PagesOne of the major problems confronting today society is global warming. Everyone is talking about global warming, which is also known as â€Å"climate change† or â€Å"green is the new black†. However, like Mark Twain once said, â€Å"everyone talks about the weather but nobody does anything about it† (1897 P. 8) According to dictionary.com global warming can be described as â€Å"an increase in the average temperature worldwide believed to be caused by greenhouse effect.† We are the most responsible for this situationRead MoreClimate Change Is A Serious Problem1123 Words   |  5 PagesClimate Change is a Serious Problem to the Planet â€Å"Climate change is happening, humans are causing it, and I think it is perhaps the most serious environmental issue facing us.† This quote from Bill Nye illustrates the serious nature of climate change. Climate change is the most serious issue that is plaguing the world. Global temperatures have been increasing in recent years and it is clear that our climate is changing. Climate change is the change of temperature and weather in our environmentRead MoreEssay On The Future1090 Words   |  5 Pagesfor further innovative studies in the emerging field of environmental sciences towards conservation, detect environmental controlling parameters, biological function of living organisms and their interaction to the environment, and develop new technologies to protect the environment and public health. My challenge is to get a more complete picture of these issues in the near future which could help to resolve the problems of global climate change and use the CO2 and other g reenhouse gases for beneficialRead MoreClimate Change Is A Real Threat1105 Words   |  5 PagesClimate Change is a Real Threat â€Å"Climate change is happening, humans are causing it, and I think it is perhaps the most serious environmental issue facing us.† This quote from Bill Nye illustrates the serious nature of climate change. Climate change is the most serious issue that is plaguing the world. Global temperatures have been increasing in recent years and it is clear that our climate is changing. Climate change is the change of temperature of our environment. A majority of scientists suspectRead MoreHow Does the United Nations Support Environmental Sustainability?865 Words   |  3 Pages(Wikipedia). ‘Ensuring environmental sustainability’, climate change being one of the major factors, is one of the millennium development goals of the UN. The United Nations Environment Programme, UNEP, along with many organizations/agencies under the UN, collaboratively work towards achieving this goal. About the Chosen Aspect of Study ‘How does the United Nations support the millennium development goal of promoting environmental sustainability by limiting climate change in South and North AmericaRead More Norway and Its Climate Changes1054 Words   |  5 Pages Climate change is a major global issue and is a pressing issue in Norway as well. The country has ratified the Kyoto Protocol and signed on to other treaties regarding the state of the earth. Similar to its history, current climate changes may have adverse effects on the culture and economy of Norway. Two significant climate change issues in Norway are carbon dioxide (CO 2) emissions and the warming of the Arctic Ocean; both have important impacts on both Norway and the world. Climate changeRead MoreThe Changing Relationship Between Nature And Society1658 Words   |  7 Pagesweather patterns and devastating storms are abruptly putting an end to the long-running debate over whether or not climate change is real. Not only is it real, it s here, and its effects are giving rise to a frighteningly new global phenomenon: the man-made natural disaster.† (Obama, 2006). In this speech Obama spoke honestly and truthfully about the current situation society is facing with nature. In this paper I will be discussing numerous topics related to the natural environment. I will analyze

Enron Questionable Accounting History - 1364 Words

Enron: Questionable Accounting Leads to Collapse Enron, a provider of natural gas, electricity, and communications began when two large gas pipeline companies merged together in 1985. CEO Jeffrey Skilling, CFO Andrew Fastow, and Chairman Ken Lay worked diligently throughout the 1990s to build the company to be the largest most successful of its time. Having its name in Wall Street was becoming a norm for the company as it grew beyond all hopes and expectations. The company had become unstoppable as shares increased and partnerships became stronger. Believing so much in the company Business Ethics states, â€Å"Jeffrey Skilling went so far as to tell utility executives at a conference he was going to â€Å"eat their lunch† (Farrell, Fraedrich,†¦show more content†¦Business Insider states,† After his Enron retirement became worthless, Maddox and his wife Phyllis had to lease their suburban Houston home and move to an old family farmhouse in the East Texas town of Van. They also went back to work. Phyllis Maddox, a retired teacher, became a substitute teacher while her husband mowed lawns and pastures.† The reality that came soon after the company collapsed was not only felt by shareholders but by hardworking Americans as well. The loss of retirement funds set many individuals back and left them with literally nothing in return for so many prior years of hard work. Ways Enron’s bankers, auditors, and attorneys contributed to Enron’s demise. The Economist states, â€Å"In America, well-policed stock markets, fearsome regulators at the Securities and Exchange Commission (SEC), stern accounting standards in the form of generally accepted accounting principles (GAAP), and the perceived audit skills of the big five accounting firms, have long been seen as crucial to the biggest, most liquid and most admired capital markets in the world.† The controversial subject of who is to blame for Enron’s fraud able to stay hidden for such an extended amount of time is distributed among three top employees mentioned along with other close working individuals from other companies. The ways auditors, attorneys, and bankers contributed is by their lack of concern and ability to convince themselves the fraud was truly not happening among one ofShow MoreRelatedEnron And Its Impact On Corporate Business Practices1124 Words   |  5 PagesEnron Enron is a company infamous for one of the largest scandals in American corporate history. Over twenty thousand employees and thousands of outside investors had billions of dollars worth of shares in the company that positioned the company to be valuated at about 70 billion dollars with shares trading at about 90 dollars a share in 2001. However, from August to November 2001 Enron s stock value dropped to $0.26, and those who had invested in Enron lost billions of dollars within a coupleRead MoreThe Rise and Fall of Enron1532 Words   |  6 PagesMost of the world has heard of Enron, the American, mega-energy company that â€Å"cooked their books† ( ) and cost their investors billions of dollars in lost earnings and retirement funds. While much of the controversy surrounding the Enron scandal focused on the losses of investors, unethical practices of executives and questionable accounting tactics, there were many others within close proximity to the turmoil. It begs the question- who was really at fault and what has been done to prevent it fromRead MoreEssay about Enron: Who was at fault?1664 Words   |  7 PagesMost of the world has heard of Enron, the American, mega-energy company that â€Å"cooked† their books (Gupta, Weirich Turner, 2013) and cost their investors billions of dollars in lost earnings and retirement funds. While much of the controversy surrounding the Enron scandal focused on the l osses of investors, unethical practices of executives and questionable accounting tactics, there were many others within close proximity to the turmoil. It begs the question- who was really at fault and what hasRead MoreThe Rise And Fall Of Enron1008 Words   |  5 PagesIntroduction Enron began as an energy company in 1985. After the deregulation of oil and gas in the U.S., Enron lost its’ exclusive rights to natural gas pipelines. The CEO, Kenneth Lay then hired a consulting firm to reinvent the company in order to make up lost profits. He hired Jeffery Skilling, who was in banking, specifically; asset and liability management. Under the topic â€Å"The Beginning Presages the End†, C. William Thomas (2002) writes: â€Å"Thanks to the young consultant, the company createdRead MoreThe Smartest Guys Of The Room, Or The Most Unethical?1723 Words   |  7 Pagesscandals from ethical misconduct within Enron, the proper course of action was once questionable, but now revealed. Nevertheless, organizations continue to struggle with moral decision-making on a daily basis as they consider the cost of making such decisions. Throughout this paper, I will discuss the key components of the ethical decision making process, the connection between Enron, an d personal experience of making ethical decisions from employment history. Ethics are extremely importantRead MoreEssay on Analysis of the Enron/Arthur Anderson Scandal1558 Words   |  7 PagesEnron and Arthur Anderson were both giants in their own industry. Enron, a Texas based company in the energy trading business, was expanding rapidly in both domestic and global markets. Arthur Anderson, LLC. (Anderson), based out of Chicago, was well established as one of the big five accounting firms. But the means by which they achieved this status became questionable and eventually contributed to their demise. Enron used what if often referred to as â€Å"creative† accounting methods, this resultedRead MoreNorthern Natural Gas Company Management1225 Words   |  5 Pages Enron Corporation was once known as Northern Natural Gas Company, Founded in 1932 in Omaha, Nebraska as a provider of natural gas. Through its early stages, Northern Natural Gas Company was unsuccessful in their business venture. They experienced problems in persuading consumers to use natural gas to heat their homes because of fear that natural gas leaks lead to explosions. Thanks to the great depression, many people were taking the risk because of how relatively cheap natural gas was. As theRead MoreEnron Corporation: An Electivity and Natural Gas Company1621 Words   |  7 PagesEnron Corporation was formed in 1985 when Houston Natural Gas merged with InterNorth to create an electricity and natural gas company that would eventually become Enron. After Houston Natural Gas merged with InterNorth, the former chairman of Houston Natural Gas, Kenneth Lay, was appointed as CEO of Enron. The Chief Executive Officer of Enron, Kenneth Lay’s ultimate goal was to make Enron â€Å"the world’s greatest company,† but unfortunately he failed to achieve his goal. During the 1990s, Enron wasRead MoreThe Ethics Of Enron Oxley Act1309 Words   |  6 PagesThe Houston based c orporation of Enron was once considered a top company, until its demise from a complex accounting scheme. The company that was forced to declare bankruptcy and lay off many employees; also resulted in thousands of others losing a significant portion of their retirement funds that were invested in the company’s stock (Ferrell, Fraedrich, Ferrell, 2013). Additionally, the perceived scandal propagated concern of accounting practices of corporations and initiated new reporting practicesRead MoreOrganizational Culture, Management Philosophy And Ethics999 Words   |  4 Pagesorganization; from operations, marketing, and, accounting. No matter the size, industry or level of profitability of an organization, business ethics are one of the most important aspects of long-term success. According to Webster’s dictionary, ethics can be defined as the â€Å"rules of behavior based on ideas about what is morally good and bad† these rules influence every aspect of our societ y (Investopedia, N.D.) (Webster’s, N.D.). While sometimes overlooked, accounting plays a large role in many organizations

What Does The Fracking Process - 2769 Words

Unconventional in terms of oil and gas simply means low permeability rock where the pores are poorly linked thereby making it difficult for oil and gas to move through the rock. The development of unconventional reservoirs provides new challenges that might be overcome with new techniques and approaches This has radically changed perceptions of gas supply availability in the US and elsewhere by originating a revolution in the global gas markets. The revolution was made possible through advanced technological extraction of using a mixture of water sand and chemicals to fracture rock layers. These techniques have been known since the 1950’s but were only became fruitful in the 1990’s by producing shale gas in commercial quantity. Shale gas has been referred to as the future of gas supply with greater potential. However, it has been stated the fracking process can pollute ground water leading to environmental degradation. Thus the revolution has shown and given room for new innovations in the industry and created competitive, fair and equal chance of succeeding for other Countries that intend to adopt the pattern. It has been argued that Conventional oil production has reached its peak and is now on a terminal, global decline however, it must be noted that oil is not finishing anytime soon but certain forms of it are being experimented in terms of chemicals, geography, geological and economically. Others allege the era of oil is coming to an end. But certainly notShow MoreRelatedFracking Should Not Be Banned1526 Words   |  7 PagesFracking is a pressurized, chemically treated mixture of water and sand used to release and extract natural gas and petroleum from shale rock. The process involves a well drilled vertically to the desired depth, then turns ninety degrees and continues horizontally for thousands of feet into the shale believed to contain the trapped natural gas. A mix of water, sand, and various chemicals are pumped into the well at high pressure in order to create fissures in the shale through which the gas can escapeRead MoreThe Need, Risks And Impacts1396 Words   |  6 Pages FRACKING-â€Å"The Need, Risks and Impacts† Hydraulic Fracking, which is the extraction of natural gas which was earlier protected, has become a major problem today. It is an environmental as well as a health hazard. The large firms which are linked to fracking have tried to justify fracking by citing that the benefits of it outweigh the harm that it might potentially cause. But before buying that argument, it is important for us to understand if the idea of fracking is really good for a long term scenarioRead MoreHydraulic Fracturing And Fracking : A Controversial Topic Across The Globe1489 Words   |  6 PagesHydraulic Fracturing or Fracking, as it more commonly known, is a very controversial topic across the globe. In the United States, its status remains the same. Hydraulic fracturing is a method of oil and natural gas production. The process includes the drilling of pipes 1-1.5 miles within the earth. After that pipe is secured and has an impermeable layer around the pipe, a tool that creates small holes within the impe rmeable layer is sent down through the pipe. It creates holes in the pipe that allowsRead MoreThe Invention Of Our Modern Day Fracking1299 Words   |  6 Pagesof any treatment polluting an aquifer – not one.†(â€Å"Shooters-A Fracking History†). This statement may lead you to believe there is no need for concern, but there is a big pink elephant in the room. Arguments against these statements would prove futile, at a first glance, but understanding the true cost, to the environment and our safety could prove more valuable than the money earned. The beginnings of our modern day fracking process reside in a U.S. Patent No. 59,936, issued to a Col. Edward RobertsRead MoreThe, A Documentary By Josh Fox1296 Words   |  6 Pagesinformative film about the negative externalities that consumers have to incur since they live in close proximity to a hydrofracking facility. Throughout the film, Fox travels around the country and meets with families that have been negatively impacted by fracking companies moving into their communities. Due to the amount of pollution that hydrofracking can cause, many of the families that Fox meets with no longer have the luxury of clean water supplied through their faucets. GasLand really opened up my eyesRead MoreA Brief Note On Oil And Natural Gas1085 Words   |  5 PagesI. Slide One: Hydraulic Fracturing Think about what you may know about environmental issues today. Some of you may say global climate change. Others may conclude that pollution is a prevalent problem in the world today. Even more of you could declare that our biggest setback is the quickly dwindling natural resources in America and the world. What if I told you that there was an issue that encompasses these environmental issues as well as others? (Next Slide) II. Slide Two: Energy Issues TodayRead MoreGlobal Warming And The Negative Environmental Impacts1364 Words   |  6 Pagesdebated about topics surrounding global warming and human contribution is fracking. Fracking is the process of shooting a high pressure liquid into subterranean rocks in order for the gas to come out which is done usually to be able to sell gas at a cheaper price. Modern day fracking did not become popular until the 1990’s when a guy named George P. Mitchell combined hydraulic fracturing and horizontal drilling. Although fracking does make buying gas cheaper people forget to look at the negative impactsRead MoreThe Economic Report On Fracking, Is It Worth It?1465 Words   |  6 PagesWeekly Economic Report Fracking, is it Worth it? Ron Withall Business 630, Dr. Lynn Reaser SUBJECT Our dependence on foreign oil and natural gas has created a vulnerability affecting our national security and economic stability. Up until this past decade there was an appreciable decline in our oil and natural gas production in the US and we were tied to world market price fluctuations. Oil prices and natural gas prices rose and fell based on OPEC’s and other large oil and natural gas producers’Read MoreEssay on Natural Gas Fracking Risks1519 Words   |  7 Pagesis produced when trapped gas is released above ground. Hydraulic fracturing or fracking is a process that extracts natural gas from the ground. As harmless as the billion dollar producing oil companies would want us to believe, environmental groups, scientists, and average citizens have raised concerns about the negative impact of hydraulic fracking on the environment and surrounding communities. Hydraulic fracking is used in the natural gas drilling booms, like the one in Louisiana. â€Å"ModernRead MoreFracking Of The United States911 Words   |  4 Pages101 8 September, 2015 Fracking in The United States Fracking is a term that is used as a shorthand term referring to hydraulic fracturing. This is a type of drilling used for oil and natural gas within the Earth. Fracking has been used commercially for the last 65 years in the U.S... With the new technology advances in the field along with advanced hydraulic fracturing and horizontal drilling is responsible for the U.S. surging in the oil and gas production. Fracking is allowing the U.S. to

Uses of plant hormones in the commercial production free essay sample

Plant hormones can be utilized in the commercial agriculture of important crops such as grapes, pineapple, watermelons and strawberries. In the production of grapes the plant hormone gibberellin is used. Gibberellins are derivatives of gibberellic acid. They are natural plant hormones and promote flowering, stem elongation and break dormancy of seeds. The hormone is used to thin the flowers so as to minimize the competitive effect of early fruiting on vegetation growth. The hormone is also used to increase the berry size by 60%. Gibberellin has also been used to produce seed less berries. Abscisic acid can also be added as it increases the abscission of mature fruits and seeds but only at high concentration. In the production of pineapple the hormone auxin is mainly used. Auxin is the active ingredient in most rooting mixtures. These products help the vegetative propagation of plants. On a cellular level auxins influence cell elongation, cell division and the formation of adventitious roots. We will write a custom essay sample on Uses of plant hormones in the commercial production or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Some auxins are active at extremely low concentrations. Typical auxin concentration ranges from 0. 01 to 10 mg/L. in pineapple production exogenous application of auxin can alter fruit size and period f maturity. It increases the size of fruit and rate of maturity. Ethylene can also be used for controlled ripening of pineapples. In the production of watermelons the hormone ethylene can be used to control the flowering. It is used to stimulate the early production of female flower because melons usually produce male flowers before female flowers. Often male flower production is inhibited following the application of ethylene. This increases the number of fruits produced per plant. In the production of strawberries the hormone auxin is used to stimulate the growth of strawberries.

The Bee free essay sample

Your first word is yoga, said the proctor. Yoga? How was I to spell yoga? I recalled hearing this world many times, but I had never seen it written. I didnt positively know how to spell it, so I went with my instincts. Yoga, Y-O-G-A, I said doubtfully. Thats that is correct, replied the elderly man, as if even he was unsure of the words spelling. In the next few rounds, I spelled each word without the slightest hesitation. There were only ten contestants remaining. I felt the exaltation of possibly winning the spelling bee. I wasnt nervous anymore. I was relaxed and actually felt at ease on the overbearing stage. Okay. Your next word is ambiguity. Ambigooity, I thought what was ambigooity? A frantic rush hit me like a ton of bricks. Was I expected to spell a world that I could hardly pronounce? Its funny, but at the time I was unknowingly thinking of anything I could, except for the arduous task at hand. We will write a custom essay sample on The Bee or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page I had thought of the loving support my family had given me throughout my life, my two best friends, the time I had spent preparing for the spelling bee, and all my schooling up to that point. It is safe to say it was then that the world came to me. I had thought of the ambiguous case from my math course class. Was ambiguous a form of ambigooity, the word I was asked to spell? I figured it probably was, so I removed the -ous ending of ambiguous and added an -ity in its place. It seemed risky, but I was correct. So many substantial things had happened in just this one day, this one hour, that I realized it was unnecessary for me to be nervous about something for which I had thoroughly prepared. I will never think of giving up, because anything can happen, as it did that very day. The spelling bee had taught me so much already that the outcome seemed irrelevant to my life. Although I continued to do my best, my thoughts on success were different from the way I felt at the start. One does not necessarily need to be declared the winner in order to feel the thrills of victory within oneself. For me, it was not meant to be. The winner was a woman, of height five-foot-three.

Marginal cost curve Essays

Marginal cost curve Essays Marginal cost curve Essay Marginal cost curve Essay Marginal cost curve A curve that graphically represents the relation between the marginal cost incurred by a firm in the short-run product of a good or service and the quantity of output produced. Diagram: Marginal cost curve. * The MC curve is generally increasing. This is due to the decreasing  marginal productivity  of   labour. (Referred from econ econmodel. com downloaded on 14th May 2013). b. ) The Average Cost (AC) The average cost is the total cost divided by the number of units produced. Average cost curve – The graphical representation of average cost.Diagram: Average cost curve. The AC curve is U-shaped. This is because the ATC is made up of AVC, which is increasing, and AFC, which are decreasing. At low production quantities the decline in AFC dominates, but eventually the increasing AVC overwhelms the average costs. c. )The Average Fixed Cost (AFC) A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses that have to be paid by a company, independent of any business activity. It is one of the two components of the total cost of a good or service, along with variable cost.Average fixed cost curve A curve that graphically represents the relation between average fixed cost incurred by a firm in the short-run product of a good or service and the quantity produced. Diagram: Average Fixed Cost Curve: * AFC curve is always declining with quantity. This is because the same amount of fixed costs  is being averaged over a growing quantity of output, leading to a decline in the curve. * (Referred by web. pedia http:// www. amosweb. com downloaded on 14th May 2013). d). The Average Variable Cost (AVC) A cost that change with the change in volume of activity of an organization.Average variable cost  (AVC) is an  economics  term that refers to a firms  variable costs  (labour, electricity, etc. ) divided by the quantity (Q) of  output  produced. Variable cost s are those costs which vary with output. Diagram: Average variable cost curve: * The AVC is decreasing when it is above the MC curve and increasing when it is below the MC curve. This is because AVC is essentially the average of the marginal  costs of each unit of output. This will lead to an increasing or a U-shaped AVC curve. (Referred by http://en. wikipedia. org downloaded on 14th May).Answer 2. ) Relationship between the law of diminishing returns and the concept of economies of scale: * Law of diminishing returns. The tendency for a continuing application of effort or skill toward a particular project or goal to decline in effectiveness after a certain level of result has been achieved. The law of diminishing returns say that each time we do something to receive a benefit, the benefit will be less and less. (Reference – Michale W. Newell, Marina N, Grashina : The Project Management). * Features. The main features of this law are as follows:- . ) Only one variable inp ut is varied and all others are held constant. 2. ) No change in technique of production. 3. ) Variable proportions production functions. It means more of a variable factor can be used with the constant input of the fixed factors. 4. ) All units of variable factor are homogeneous. 5. ) Adequate or standard doses of variable factor are applied. * Explanation. The law of diminishing returns means that the productivity of available  declines as more is used in  short-run production, holding one or more inputs fixed.This law has a direct bearing on  market supply, thesupply price, and the  law of supply. If the productivity of a variable input declines, then more is needed to produce a given quantity of output, which means the cost of production increases, and a higher supply price is needed. The direct relation between price and quantity produced is the essence of the law of supply. Total Product Curve: The curve labelled TP in the top panel is the  total product curve, the t otal number of goods produced per hour for a given amount of labour.The increasing slope of the TP is attributable to the law of diminishing marginal returns. Marginal Product Curve: The Marginal curve indicates how the total production of goods changes when an extra worker is hired. The negatively-sloped portion of the MP curve is a direct attributable to the law of diminishing marginal returns. Average Product Curve: The  average product curve indicates the average number of goods produced by workers. The negatively-sloped portion of the AP curve is indirectly caused by the law of diminishing marginal returns.As marginal product declines, due to the law of diminishing marginal returns, it also causes a decrease in average product. * Arleen J. Hoag,  John H. Hoag(2006), Business and Economics, pg. 122 (London: World Scientific Publishing Co. Ltd. ) Returns to scale,  in economics is the quantitative change in output of a firm or industry resulting from a proportionate increas e in all inputs. If the quantity of output rises by a greater proportion- e. g. , if output increases by 2. 5 times in response to a doubling of all inputs- the  production process  is said to exhibit increasing returns to scale.Such economies of scale may occur because greater efficiency is obtained as the firm moves from small- to large-scale operations. Decreasing returns to scale occur if the  production  process becomes less efficient as production is expanded, as when a firm becomes too large to be managed effectively as a single unit. Brit britannica. com downloaded on 19th May 2013. According to Leibhfasky, †Returns to scale relates to the behaviour of total outputs as all inputs are varied and is a long run concept. * Explanation:In the long-run, output can be increased by increasing all factors in the same proportion or different proportions. Ordinarily, law of returns to scale refers to increase in output as a result of increase in all factors in the same p roportion. Such an increase in output is called Returns to Scale. * Aspects of Returns to Scale. As in the case of returns to a factor, there are three aspects of returns to scale, viz. (1) Increasing Returns to Scale, (2) Constant Returns to Scale, (3) Diminishing Returns to Scale. 1. Increasing return of scale:-Every firm tries to earn more and more profit by multiplying its output.Initially production increases at faster rate than increase in the input. It is evident from the following schedule that by doubling additional labour and capital, output increases from 16 units to 25 units. It shows that inputs increased by 100%, whereas capital increased by 150%. By doubling, production increased from 25 to 60 showing that input increased by 100% but the output increased by 140%. this shows the law of increasing return. Thus, any percentage increase in inputs is causing a greater percentage increase in output. Increasing returns to scale are thus operative.The main cause of its operat ion is that when scale of production is increased then due to indivisibility of factors such as labour, tools, implements and machines, division of labour and specialization and many types of economies are available. On account of these economies, proportional increase in returns is more than the proportionate increase in factors of production. All these economies are only internal economies as these are related to the scale of production of the concerned firm. 2. Constant Return to Scale:-If the scale of production is further increased, it is found that the both input and output increase at equal rates i. . , at the same percentage. Thus increasing the production, the increase in output remains constant i. e. , 100%. * This situation arises, when after reaching a certain level of production, economies of scale are counter-balanced by diseconomies of scale. In mathematical terminology, that production function which reflects constant returns to scale is called Linear and ‘Homo geneous Production Function’ or homogeneous function of First degree and is important in elucidating Euler’s Theorem in distribution.This function states that if labour and capital are increased in equal proportion then output will also increase in the same proportion. 3. Decreasing Return of Scale:-The increase in percentage of input is more than the output. In the following diagram, with every increase in input i. e. , 100%, output increases at lesser than 100%, showing the law of decreasing return of scale. S. A. Siddiqui (2006), Managerial Economics and Financial Analysis, pg. 107 (New Delhi: New Age International Publishers) Returns to scale are thus diminishing.The main cause of its operation is that diseconomies outweigh economies of scale, e. g. unwieldy business, indivisible factors becoming inefficient and less productive, difficulties of control and rigidities due to large managements, higher cost of skilled labour, price of raw material going up, high tran sport charges, etc. (Reference – TR Jain and OP Khanna, Business Economics p. 142). Answer3. ) (a) ‘In the real world there is no industry which conforms precisely to the economist’s model of perfect competition. This means that the model is of little practical value’.Perfect competition: (1) buyers  and  sellers  are too numerous and too small to have any  degree  of  individual  control over  prices, (2) All  buyers and sellers seek to maximize their  profit  (income), (3) buyers and  seller  can freely  enter  or leave the  market, (4) all buyers and sellers have  access  to  information  regarding  availability, prices, and  quality  of  goods  being traded, and (5) All goods of a particular nature are  homogeneous, hence substitutable for one another. Also called  perfect market  or  pure competition. (Reference:   businessdictionary. om downloaded on 19th May 2013. ) Diagram for perfect com petition: (Referred by economicshelp. org downloaded on 19th May 2013). A perfect competition is unrealistic as many of its conditions are quite difficult to fulfil. Especially no barriers to entry, is very rare as even start up cost can act as a significant barrier. While other conditions like perfect information and identical products are though possible not common. Apart from these there are many other conditions like no transportation cost which is again highly rare.The example of perfect competition would be in agriculture. Identical products (fruits, vegetables, etc. ), and not really need any advertising. There are no barriers to enter. It is the most realistic example, in reality perfect competition does not exist. (Reference: khan academy). (b). Short Run Price and Output for the Competitive Industry and Firm: 1. Short Run Equilibrium of the Firm A firm is in equilibrium in the short run when it has no tendency to enlarge or contract its productivity and needs to earn maxi mum profit or to incur minimum losses.The short run is a period of time in which the firm can vary its productivity by changing the erratic factors of production. The number of firms in the industry is fixed since neither the existing firms can leave nor new firms can enter it. 2. Short Run Equilibrium of the Industry An industry is in equilibrium in the short run when its total output remains steady there being no propensity to enlarge or contract its productivity. If all firms are in equilibrium the industry is also in equilibrium. For full equilibrium of the industry in the short run all firms must be earning normal profits.But full equilibrium of the industry is by sheer accident for the reason that in the short rum some firms may be earning super normal profits and some losses. Even then the industry is in short run equilibrium when its quantity demanded and quantity supplied is equal at the price which clears the market. Roger A. Arnold,(2005,08) Economics, 8th ed. (USA: Thoms on Learning, Inc. 2008) In the short run the equilibrium market price is determined by the interaction between market demand and market supply. In the diagram shown above, price P1 is the market-clearing price and this price is then taken by each of the firms.Because the market price is constant for each unit sold, the AR curve also becomes the Marginal Revenue curve (MR). A firm maximises profits when marginal revenue = marginal cost. In the diagram above, the profit-maximising output is Q1. The firm sells Q1 at price P1. The area shaded is the economic (supernormal profit) made in the short run because the ruling market price P1 is greater than average total cost. Not all firms make supernormal profits in the short run. Their profits depend on the position of their short run cost curves. Some firms may be xperiencing sub-normal profits because their average total costs exceed the current market price. Other firms may be making normal profits where total revenue equals total cost ( i. e. they are at the break-even output). In the diagram below, the firm shown has high short run costs such that the ruling market price is below the average total cost curve. At the profit maximising level of output, the firm is making an economic loss (or sub-normal profits) The Effects of a change in Market Demand In the diagram below there has been an increase in market demand (ceteris paribus).This causes an increase in market price and quantity traded. The firms average revenue curve shifts up to AR2 (=MR2) and the profit maximising output expands to Q2. Notice that the MC curve is the firms supply curve. Higher prices cause an expansion along the supply curve. Following the increase in demand, total profits have increased. An inward shift in market demand would have the opposite effect. Think also about the effect of a change in market supply perhaps arising from a cost-reducing technological innovation available to all firms in a competitive market. Reference: tutor tutor 2u. net downloaded 19th May 2013. (c) The long-run perfectly competitive equilibrium for the firm:-  ¦ Economic profits bring entry by new firms. The industry supply curve shifts rightward and reduces the market price. The fall in price reduces economic profit and decreases the incentive to enter the industry. New firms enter until it is no longer possible to earn an economic profit.  ¦ Economic losses lead to exit by existing firms, which shifts the industry supply curve leftward. The price rises, and the higher price reduces economic losses.Firms exit until no firms incur an economic loss. Firms change their plant size if it increases their profits. D=P= MR = AR - the firm maximizes its profits. P = minimum short-run average cost (SRAC) The firm’s economic profit is zero. P = minimum (LRAC) - the firm’s plant size cannot be changed in order to increase its profits. Frank Machovec, (2003), Perfect Competition and Transformation of Economics, (New York: Taylor;am p; Francis e-Library, 2003). Answer 4. ) MonopolyA pure monopoly is a single supplier in a market.For the purposes of regulation,  monopoly power  exists when a single firm controls 25% or more of a particular market * Less Efficient:- * ABCPM :-Supernormal Profit (AR-AC) Q * Shaded portion:- Deadweight welfare loss (combined loss of producer and consumer surplus) compared to competitive market * Higher Prices:-Higher Price and Lower Output than under Perfect Competition. This leads to a decline in consumer surplus and a deadweight welfare loss * Allocative Inefficiency. A monopoly is allocative inefficient because in monopoly the price is greater than MC.P ;gt; MC. * Productive Inefficiency A monopoly is productively inefficient because it is not the lowest point on the AC curve. * X Inefficiency. It is argued that a monopoly has less incentive to cut costs because it doesnt face competition from other firms. Therefore the AC curve is higher than it should be. * Supernormal P rofit. Leads to an unequal distribution of income. * Higher Prices to Suppliers   A monopoly may use its market power and pay lower prices to its suppliers. E. g. Supermarkets have been criticised for paying low prices to farmers. Diseconomies of Scale   It is possible that if a monopoly gets too big it may experience diseconomies of scale. higher average costs because it gets too big   * Charge higher prices to suppliers. Monopolies may use their supernormal profits to charge higher prices to suppliers. Economic organisation(2013) Website:- economicshelp. org/microessays/markets/monopoly. html 2More Efficient:- * Research and Development. Monopolies can make supernormal profit; this can be used to fund high cost capital investment spending. Successful esearch can be used for improved products and lower costs in the long term.. * Economies of scale. Increased output will lead to a decrease in average costs of production. These can be passed on to consumers in the form of lowe r prices. If a monopoly produces at output Q1, average costs (AC 1) are much lower than if a competitive market had firms producing at Q2 (AC 2). * Monopolies Successful Firms. A firm may become a monopoly through being efficient and dynamic. A monopoly is thus an efficient. For example Google has gained monopoly power through being regarded as best firm for search engines.Tejvan R. Pettinger, Economic Dictionary,(UK: Economics Blog, 2013)Retrieved from:- economicshelp. org/microessays/markets/advantages-monopoly. html Answer 5. ) Economic governance in Australia has undergone radical changes since the 1970s. Many of these changes are associated with the market-oriented policies collectively referred to as ‘microeconomic reform’. Broadly speaking, microeconomic reform can be defined as government policies or initiatives aimed at improving the performance and/or the efficiency of industries or sectors in the economy (Forsyth 1992).Remarkably, such a quest for efficiency was not a major policy focus for much of the twentieth century in Australia. However, since the 1970s, growing pressure on the economy, together with evidence of widespread inefficiency, saw microeconomic reform become a key aspect of economic policy in Australia. The era of microeconomic reform in Australia may be divided into three main phases, with a degree of overlap. In the first, deregulatory, phase, the main focus was on rationalising public intervention in private sector markets, with the object of ‘getting prices right’.In the second phase, referred to here as the ‘privatisation’ phase, attention shifted to market-oriented reforms of the public sector, including corporatisation and competitive contracting as well as privatisation. In the third ‘competitive regulation’ phase, the idea of deregulation was replaced by regulation designed to produce, or simulate, competitive market outcomes (see also Parker this volume). The central argum ent of the chapter is that each of these phases was associated with the prominence of particular institutions and with specific tendencies in economic governance. In particular, whereas he governance models associated with the privatisation phase, the private corporation was taken as the ideal model of public sector governance. By contrast, in the competitive regulation phase, governments have relied on increasingly intrusive systems of regulation to control both public and privately-owned monopolies Privatisation often appears to be driven by political expediency and ideology rather than by economic theory. This dislocation between theory and practice led Kay and Thompson (1986) to declare privatisation in the United Kingdom a ‘policy in search of a rationale’.In fact, there has been significant economic research on optimal ownership in the past 20 years, including the comparison between government and private ownership. This work provides the basis for understanding b oth the success and failure of privatisation. Three Causes of Privatisation: Performance in privatisation must be judged on a case-by-case basis. Three key privatisations in Australia have been the Commonwealth Bank, the partial privatisation of Telstra and the privatisation of the Victorian electricity system. How do these privatisations ‘stack up’ against the theory? 1. The Commonwealth BankIn the 1940s and 1950s the Commonwealth Bank was the central banker for Australia. The Reserve Bank of Australia took over this role in 1959, placing the Commonwealth Bank in a similar position to a number of highly regulated private banks. Deregulation of the Australian banking sector in the 1980s meant that there was little if any special role for State-owned commercial banks, and the Commonwealth bank was privatised in three tranches during the 1990s. The first sale of 30 per cent of the Bank in 1991 was the first large privatisation by share float in Australia and it set the be nchmark for future sales, such as the sale of GIO and Qantas.Overall, it is likely that the Government sold the Commonwealth at a discount to its true market value (Harris and Lye 2001). But in terms of 17economic welfare it seems clear that the sale of the Commonwealth Bank made perfect sense. The bank operated in active competition with private banks and its functions were essentially identical to those private competitors. In fact, given the tendency for politicians to seek short-term electoral kudos by railing against the banking system, it is likely that continued government ownership of the Commonwealth Bank would have opened it up to political exploitation in the 1990s.In economic terms, the privatisation of the Commonwealth Bank was clearly sensible policy. 2 Telstra Telstra was formed in 1992 by the merger of Telecom Australia and the Overseas Telecommunications Corporation (OTC). Both of these were fully owned by the Commonwealth Government. Telecom Australia controlled Au stralia’s domestic telephone network while OTC controlled overseas telecommunications. In the late 1990s, 49. 9 per cent of Telstra was sold by the Government in two tranches. This partial privatisation is the largest by value in Australia, reaping over $30 billion for the Commonwealth. 1At first blush, the sale of Telstra might appear similar to the sale of the Commonwealth Bank. After deregulation in July 1997, Telstra competed vigorously with privately-owned carriers. Since then, Telstra has lost market share in both domestic long-distance calls and overseas calls. Telstra also currently faces vigorous competition in mobile telephony. 18Unlike banking, however, telecommunications involves a key natural monopoly element, the customer access network (CAN) that provides the ‘last link’ in the telephone network between a switch and a customer’s phone.Telstra owns the CAN and its private competitors rely on Telstra providing them access to the CAN in order t o compete. Telstra could eliminate its private competitors outside the CBD areas of Australia if it refused them the right to either originate or terminate calls using the CAN. Telstra faces a wide range of regulations, including retail price controls, procedures for setting wholesale access prices and rules to prevent any anticompetitive behaviour. This regulation has been modified over the past five years and in 2001 the Productivity Commission recommended further reform of Telstra’s regulatory regime (Commonwealth of Australia 2001).In 2002 the Federal Government investigated and rejected reforming Telstra by accounting separation to ‘isolate’ the CAN. The partial privatisation of Telstra failed to adequately recognise the source of market failure- the natural monopoly CAN. Neither did it establish appropriate procedures to deal with this problem. One solution might have been vertical separation of the CAN from the rest of Telstra. The CAN could have remained in public ownership with open access while the remainder of Telstra could have competed with other telecommunications companies. Alternatively, the management of the CAN could have changed.For example, the CAN could be 19jointly owned by a number of licensed carriers. These carriers would have a mutual obligation to maintain the CAN but otherwise would compete. The sharing of infrastructure facilities between competing firms sometimes occurs with gas pipelines. Discontent with the partial privatisation has made it politically difficult to sell the remainder of Telstra. In the absence of a restructured approach to the CAN, further privatisation will simply mean ongoing costly regulation. Such regulation will continue into the future as the CAN grows in importance for data rather than voice telecommunications traffic. The Victorian electricity system The creation of a National Electricity Market (NEM) was a key part of the Hilmer reforms. This market involves generators competing to s ell power into a grid connecting South Australia, Victoria, New South Wales and Queensland. The proposed construction of BassLink will connect Tasmania to the NEM. Privatisation is not required under the NEM but private generators are able to compete with government-owned facilities. The Kennett Government in Victoria decided to sell the State’s electricity assets to the private sector.Privatisation was preceded by vertical and horizontal restructuring, including the creation of five distribution/retail companies, five competing generation businesses and a single transmission business. The total proceeds of the privatisations in the mid-201990s were approximately $22. 5 billion; second only to Telstra in terms of total revenue raised. 22By separating competitive generation from natural monopoly elements, like transmission and distribution, the Victorian electricity privatisations avoided the issues of access and competitive abuse that have dogged telecommunications.Further, s ome measures of performance, such as the reliability of the distribution, have significantly improved. 23 However, both transmission and distribution have limited scope for competition and these prices need ongoing regulation. As noted earlier, this regulation has been contentious. Political interference still occurs, as both generation prices are capped under the NEM and maximum prices for power to households are set. For example, in 2001 the Victorian Government rejected recommended increases in household power prices, leading to comparisons with the Californian electricity crisis and oncerns over the long-term viability of distributors/retailers if they are unable to pass on increased wholesale electricity prices to customers. 24 The shift to a national market has also required modifications, for example, in the face of claims of price rigging by generators. 25 Further, it is not clear that long-term competition between State-owned electricity systems and private systems is viabl e. While generation and retailing can be open to competition, a preferred approach might have been to retain public ownership of transmission and distribution lines. 1Rather than heavy-handed profit-based regulation, the ongoing operation and maintenance of these facilities might have been handled through private contractors, with the relevant governments setting transmission and distribution charges to cover cost. At the same time, electricity experience shows that privatisation is not a cure for short-term political interference in key infrastructure assets. (b). The privatisation process has slowed in Australia. But this is to be expected. Most of the obvious privatisations have been completed and both politicians and bureaucrats are realising the limitations of a naive approach to privatisation.Public pressure against privatisation has grown. Despite the Federal Government’s preference for privatising the remainder of Telstra, such a policy is currently unpalatable to the electorate. Similarly, in New South Wales attempts by senior politicians to push for electricity privatisation have been thwarted by public opposition. While privatisation in Australia is not dead, it is ‘on the nose’. The current public backlash against privatisation is a direct consequence of its naive application. Some privatisations have not worked.While these sales have raised short-term revenue for the government, they have not resulted in improved social welfare because they have not carefully considered any sources of market failure and dealt appropriately with these failures. 22At the same time, the underlying motivations for privatisation remain relevant. Government still feels the need to reduce fiscal pressures and public–private partnerships (PPP), where the government ties the private development of infrastructure assets to long-term government funding, represents a new face of privatisation.Thus privatisation continues, but under another name. Aus tralia requires an integrated approach to privatisation and regulation. Private ownership with regulation is simply one of a number of options for dealing with market problems and public policy needs to recognise the costs and benefits of alternative options. This means that some previous privatisations might need to be radically re-evaluated. For example, it might be desirable to restructure Telstra with current private shareholders owning the potentially competitive assets, while the government retains the CAN.It also means that some privatisations should proceed, such as the sale of the NSW electricity generation facilities, while some other assets, such as the Victorian electricity transmission system, might better be returned to government ownership. Finally, it means that governments should not be allowed to use privatisation as an expedient source of funds. An alternation to government accounting is required so that privatisation revenues cannot be used to prop up a governmen t budget. While this reform has already started, with analysts focusing on ‘underlying’ deficit figures that remove privatisation revenues, it needs to be formalised.Privatisation and regulation are all about incentives- and the first incentives that need to be fixed are those facing our politicians.