Strategic Initiative Paper free essay sample

In the present business condition, organizations must take vital activities to forestall the misfortunes and conquer the unpleasant economy we are right now confronting. Starbucks Corporation (besides, Starbucks) is known as one of the pioneers for the retail deals of cooked and claim to fame espresso. Starbucks is centered around making a point by point key and budgetary arranging that can take the organization to the following level. The point of this paper is to research Starbuckss endless supply of key and money related plans, and its effect on cost and deals and dangers related. Starbucks has a long-standing exertion in thical lead and worldwide duty. One of the significant endeavors is sourcing morally developed espresso. For instance, Starbucks Annual Report for the 2009 states that the Companys center is around morally sourcing great espresso, decreasing its natural effects, and contributing decidedly to networks. Starbucks Global Responsibility procedure and duties are essential to the Companys business system. We will compose a custom article test on Vital Initiative Paper or on the other hand any comparative theme explicitly for you Don't WasteYour Time Recruit WRITER Just 13.90/page (Starbucks Corporation, 2009, Annual Report). The vital arrangement incorporates the Shared Planet activity. Starbucks has started plans to make ecological ransformations to the companys strategic policies through the Shared Planet. These progressions incorporate purchasing morally exchanged espresso, which includes earth capable developed espresso and the moral treatment of espresso ranchers. Starbucks teams up with Conservation International to guarantee that the organization is meeting buying rules for socially, naturally, and monetarily dependable espresso. Starbucks Shared Planet additionally grasps preservation of the producers encompassing networks. For instance, Starbucks is focused on making earth clean water channel frameworks in the networks cap the espresso is developed. The organization has likewise dedicated to reusing and diminishing waste. Starbucks Initiative Plan expresses that continuously 201 5, the organization will serve 25% of its refreshments in reusable cups and present in-store reusing stations for the non-reusable cups. The organization is dedicated to diminishing vitality use by 25% in every single new store and getting half of the pre-owned vitality from sustainable power hotspots for all organization claimed stores before the finish of 2010. Continuously 2012, Starbucks anticipates lessening water use by 15% extensive. Acquiring LEED accreditation for every single new store all inclusive will start in late 2010. Such endeavors are estimable and give a strong stage to effective business. In any case, to be monetarily stable, Starbucks must consider money related parts of the previously mentioned activity and expenses related (Starbucks Corporation, 2010, Responsibility). In light of the previously mentioned data in regards to Shared planet one can without much of a stretch confirm that this activity is firmly lined up with Starbucks mission: to move and sustain the human soul one individual, one cup, and each area in turn (Starbucks Corporation, 2010, Our Starbucks Mission Statement). Be that as it may, imperative to note are relationship etween this activity and money related arranging of Starbucks. Sourcing morally developed and socially capable espresso has cost Starbucks $1. 28 for each pound in monetary 2005 as Starbucks paid $1. 9 for every pound of espresso on normal in monetary 2008 (Starbucks Corporation, 2008, Global Responsibility Report). At last, costs related have expanded expense of deals. For instance, cost of deals including inhabitance costs expanded to 41. 0 percent of absolute net incomes for the 13 weeks finished July 2, 2006, contrasted with 40. 6 percent in the comparing 13-week time of monetary 2005 (Starbucks Corporation, 200 6, Financial Release). In the equivalent money related discharge, Starbucks has expressed that the expanded expenses of deals are consequence of expanded expense of green espresso. Also in 2008, the expense of deals expanded to 43. 8% from 41. 9% in financial 2007. In any case, in this specific case the inhabitance costs were extra cost increment edge (Starbucks Corporation, 2008, Investor Relations). The expansion in cost of deals has critical effect on the absolute net incomes. Taking a gander at the Starbucks reports the all out net incomes have likewise expanded. For instance the all out net incomes have ascended from (in millions) $7,786. 9, $9,411. 5, to $10,383. 0 in years 006, 2007, and 2008 separately. Sadly, in year 2009 the complete income has dropped to $9. 774. 6, potentially consequence of the worldwide financial downturn (Starbucks Corporation, 2009, Annual Report). In light of the moderation techniques meant to lessen cost of deals, apparently Starbucks is focusing on diminished expense of deals and expanded incomes. As per the Starbucks Annual Report 2008, the organization has 583 million of procurement responsibilities which, along with existing stock, is relied upon to give a sufficient gracefully of green espresso through schedule 2009 (Starbucks Corporation, 2008, Annual Report). Furthermore, nine and five percent of the buy responsibilities from 2008 will be gotten in 2010 and 2011 separately. Essential to note about the previously mentioned is that the buy duties are based of fixed-value contracts where the cost of green espresso has been fixed by either dealer or Starbucks straightforwardly (Starbucks Corporation, 2008, Annual Report). The fixed cost agreements may represent distributed reports, which express that regardless of the rising costs of green espresso Starbucks won't increment offering cost to the customers (Morran, 2010). Such endeavors would set Starbucks separated from its rivals. For instance, J. M. Smucker raised costs a normal of 9% on its Folgers, Dunkin Donuts, Millstone and Folgers Gourmet Selections espressos. Kraft stuck to this same pattern with a climb on the cost of Maxwell House and Yuban brand espresso (Morran, 2010, para 3). This combined with the moral foundation and activity of Shared Planet will guarantee faithful after and shopper fulfillment. Dangers for any task or activity are inescapable. Be that as it may, if the organization can anticipate these dangers they have a superior possibility of wiping out the issue before it happens. Starbucks Shared Planet has hardly any dangers; as he vital arrangement is to turn out to be all the more naturally mindful. The hazard is that the organization won't have the option to execute the activity as arranged. Consequently, the expense of the battle and publicizing will have negative monetary effect, if the activity isn't fruitful (Starbucks Corporation, 2009). The Shared Planet is additionally committed to Material breaks in Starbucks gracefully of the espresso they lean toward can monetarily influence these endeavors (Starbucks Corporation, 2009). Besides, if the deals are not at a pinnacle and Starbucks can't make a benefit on the greater expense espresso; this will influence ts incomes and liquidity. The Shared Planet activity is likewise actualizing reusable cups (Starbucks Corporation, 2010, Responsibility). Albeit morally stable and a fantastic advertising move, this can increment the two expenses of the items and showcasing. The hazard related with this is clients may not acknowledge the new item or the cost increment to buy the new item (Starbucks Corporation, 2009). The previously mentioned dangers could bring about diminished deals and expanded expenses. This can seriously affect Starbucks monetary wellbeing, operability, and lessening onsumer certainty. Many hazard factors are outside the companys control. Be that as it may, if Starbucks foresees the conceivable hazard, creates moderation and alternate courses of action, the organization will have a superior possibility at discovering answers for potential issues recognized in this. By being proactive rather than responsive, Starbucks has put itself in a situation in the market to develop, grow, and exceed expectations with the Shared Planet activity. The Shared Planet has opened the entryway and permitted Starbucks to give an excellent green item at a reasonable market cost to their clients. The creation of great green espresso has expanded securing and product costs. In the course of recent years, the expense of deals for the green espresso has expanded 2. 8%. While this expansion in the expense of products is fairly critical, the prescience and capacity of Starbucks to limit this expansion has permitted Starbucks to build their general piece of the overall industry in this way expanding their income base by 25. 5% over a similar period. This exertion was a piece of the Starbucks alleviation plans and its capacity to make sure about fixed price tag contracts for the item through 2011. These ontracts will decrease the expense of the espresso acquisitions and stock and will additionally build Starbucks portion of the espresso advertise. Such activities have permitted Starbucks to be separate from its rivals and increment its part in piece of the pie. Besides, this sort of responsibility, to the two its speculators and customers combined with sound money related strategic approaches and monetary wellbeing have permitted Starbucks to be one of the business heads who has chance to develop throughout the following financial year and past.

School and Students Essay Example for Free

School and Students Essay Done By: Fariha Khan Yr: 8Australian International School ought to receive the all year tutoring process to help understudies. During long summer breaks, understudies overlook what they have realized. Not every person likes going during a similar time each year. Brief breaks help get training and permit understudies take rests in the ideal time without over pressurizing understudies. Along these lines, embracing all year tutoring in AusIS would support understudies and give better evaluations to them. In long summer breaks, understudies for the most part overlook what they realized the previous year. Kid’s recollections are slightly below average and for two-three months breaks, understudies would prefer not to audit what they realized and generally remain occupied with voyaging, having a ton of fun, playing or getting exhausted at home. In the event that the long summer breaks were made short and spread all through the entire year, it would enable understudies to recollect what they realized. â€Å"It is expected that shorter breaks assist understudies with holding data in this way less time should be spent on review,† Kathryn L. Cognac, instructor in the all year school, Jacksonville Florida Times Union. On the off chance that instructors would survey bits of data to understudies, at that point they would recollect the remainder of the data. Long summer breaks would influence all the difficult work of understudies all through the entire year. Along these lines, it would be extremely useful to understudies if the long summer breaks were made shorter and spread through the entire year, by this understudies will have the option to get up to speed to all the work and help them recall what they realized. Going simultaneously consistently isn't something everybody like. A few people like to go throughout the winter, since it is cold and you don't get worn out from long excursions. While for summer occasions you get worn out truly quick, and the climate irritates a great deal. It is exceptionally hot at that point and from the hotness a few understudies come down with bug. Numerous issues happen from the mid year excursions which influence the student’s life in all the ways (instruction, wellbeing, and so forth ). Along these lines, going in the mid year occasions wouldn’t be the supposition for everyone. In the event that the all year tutoring procedure would begin in AusIS, the weight of understudies would decrease and ideal measure of instruction would be advanced by the understudies. The long summer occasions are not constantly fun. It gets exhausting and in any event, irritating for certain individuals. After a major summer get-away, study begins to push in, and for quite a while you are in an extremely enormous weight, until another occasion thumps up. On the off chance that the break was spread around the entire year, understudies would get ideal measure of instruction and a decent occasion in the time required. This would likewise offer the chance to the understudies who don't prefer to head out throughout the late spring to go in later during the year. Along these lines, if the late spring get-away would be spread as the year progressed, it would assist understudies with getting less pressurized and study. At long last, I feel that all year tutoring would help understudies consistently. It would be better and come as advantage to understudies. Numerous issues are looked by the greater part of the understudies. Probably the most significant checked realities would come to be as understudies overlook what they realized the previous year. Going during summer isn’t what everyone would propose or follow. Brief breaks reduce the weight of understudies and help understudies to improve ideal measure of training. As, going to my point I recommend that AusIS ought to embrace the all year tutoring process which would come as advantage to understudies in wellbeing, instruction and voyaging way.

Foreign Exchange Risk Exposure On Toyota Motors Performance - Free Essay Example

The globalization phenomenon allows companies to internationally expand their sales and production activities. A consequence of this phenomenon, however, is the existence of foreign exchange rate exposure which can impact the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s profitability, net cash flow and market values. In the past years, several academic researches have been developed in order to explain and analyze how foreign exchange risk exposure fluctuations affect a multinational company or a purely domestic company value, and how this risk is influenced by the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s risk management strategy. Consequently, this dissertation aims to find some knowledge on these subjects for a specific company, Toyota Motor Corporation. By applying the capital market approach and analyzing three different periods, it is possible to conclude that Toyota Motor Corporation, in a crisis situation, was able to protect itself against some of the primary exchange rates fluctuations it is exposed to. Thus, the predictability of higher fluctuations allows the company to apply effective risk management strategies. Considering a ten year period, bilateral exchange rate fluctuations are more significant to the company stock returns than for other periods. However, being an exporting company, its coefficient for exposure is not consistent with the competitive advantage an exporter holds when its company home currency depreciates. It is consistent, however, when the broad currency index is considered. Additionally, the impact of foreign exchange risk fluctuations is small for company stock returns. This can thus indicate that exchange rate fluctuations donà ¢Ã¢â€š ¬Ã¢â€ž ¢t have a significant impact on company stock price returns. Since the beginning of the dissertation, it has been a priority, although with the intention of having an equilibrate life, make me establish important daily schedules to develop my work and make me understand that sometimes my dissertation could not be the number one in my priorities. At the moment, I have already finished my dissertation and of course I had invaluable support of several people. For that reason, I would like to express my gratitude and appreciation to all of them. Beginning with my advisor, Professor Dr. Gohar Stepanyan, I would like to give special thanks for her important inputs, helpful guidance as well as her valuable suggestions. Additionally, I would like to thank her for providing me the opportunity to work, in the dissertation, abroad of Portugal and the opportunity to develop my dissertation in an area related with the International Finance course that it have particular interest to me. Since the first class in which we have talked about exchange risk exposure, the subject has awakened in me a desire to put it practice in a real case. I also appreciate the help of Professor Dr. AntÃÆ' ³nio Borges de AssunÃÆ' §ÃƒÆ' £o regarding the type of data to use in my regressions. I also would like to show my gratitude to Professor Dr. Lars Kolte from Copenhagen Business School for his inputs and advices as well as his encouragement. My gratitude is also extended to the EspÃÆ' ­rito Santo Research Sectorial staff members, especially Tiago Lavrador, for their assistance with the data collection. Thanks are extended to the staff members of the Copenhagen Business School Library for their support during my project. Finally, my acknowledgments would not be completed without express my appreciation and gratitude to my family, especially my parents, parents-in-law and to RÃÆ' ºben Murargi, my husband, for their immeasurable support. They have been a constant source of strength and a brilliant help throughout times of adversity while trying to fulfill my goal. Cristina Maria de Jesus Marques Murargi, n º152109037 INTRODUCTION The globalization phenomenon has allowed the integration of national economies into the international economy, giving them easier access to information, goods and services through trade and foreign direct investment around the world. This process has been encouraging an increasing number of companies to start operating on a global scale, expanding their networks worldwide. In recent years, the number of multinational companies has grown in order to respond to the competitiveness experienced in the domestic market and explore new markets to produce or sell new products and services. Multinational companies, or purely domestic companies with a broad network, are exposed to several risks. An important risk that has a significant impact on the management of a company is the foreign exchange risk, due to the fact that it may affect the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s cash flows, value and performance. Nevertheless, besides the foreign exchange risk, many other risks affect companies, such as the interest rate risk. Several financial and operating instruments and techniques are being used and developed by multinational companies to handle these risks. However, in order to manage these risks, companies must know exactly what their risks are and how to measure them. With regard to foreign exchange rate exposure, several studies conducted in recent years have presented various risk management approaches in order to understand to what extent its fluctuations affect the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s value and performance. However, there is little consensus among the different studies, which indicates that exchange rates are complex and can affect and be affected by different factors. The most traditional approaches are the cash flow approach and the capital market approach. In this study, the capital market approach is used to assess, through quantitative methods, to what extent foreign exchange rate fluctuations affect the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s value. It is important t o note that several studies using quantitative methods found no statistical significance when trying to understand the impacts of foreign exchange fluctuations on the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s value. Thus, an explanation given for this fact was that the company was able to protect itself against foreign exchange rate fluctuations by means of hedging instruments and techniques. The main purpose of this study is to analyze the foreign exchange risk exposure of a multinational company using the capital market approach, and also to what extent the various assumptions underlying this approach produce different results. The choice of the multinational company was based on the following requirements: it had to be a public company operating in a competitive industry and could not be the subject of any other study in the same area. Accordingly, the Toyota Motor Corporation was chosen. Its main plants are located in Japan; it operates in the Automotive Industry and was the worldà ¢Ã¢â€š ¬Ã¢â€ž ¢s largest manufacturer in 2009. Furthermore, 61.4% of total sales to external costumers are overseas, which indicates that the company is likely to face considerable impacts from foreign exchange risk exposure. In order to achieve the main purpose of this study, Toyotaà ¢Ã¢â€š ¬Ã¢â€ž ¢s foreign operations are analyzed in a first phase to understand to what extent the company is internationalized. Moreover, this initial analysis also envisages the foreign exchange rate fluctuations against the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s stock price returns and their direct impact on its report accounts, as well as the hedging instruments used to handle the foreign exchange risk. In a second phase, the capital market approach is used to suggest that foreign exchange risk exposure could be measured as the sensitivity of stock price returns to exchange rate movements. This approach requires the implementation of statistical regressions. For this purpose, market, stock price and foreign ex change rate data were collected from 1999 to 2009. Considering the studies developed by different authors, regressions involve several hypotheses for the exchange rate variables, such as a Nominal Broad Index that is like a basket of currencies and several bilateral exchange rates, in order to understand which variables affect stock price returns. In this second phase, the quantitative method is applied to three different periods in order to compare how the company handles the foreign exchange risk. As this dissertation takes into account the investorà ¢Ã¢â€š ¬Ã¢â€ž ¢s point of view, it can help to understand how investors determine and quantify the exposure of their portfolio to the foreign exchange risk. Moreover, this approach allows comparing the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s exposure to foreign exchange rate fluctuations with that of competitors in order to understand the effectiveness of the hedging activities. To complement this study, this dissertation is organized under th e following sections: The first section is a thorough review of the literature on this subject. It explains why it is important that companies know how to handle the foreign exchange risk and presents the findings of past research. In the second section, the traditional categories of foreign exchange risk exposure are described, the effects of hedging the foreign exchange risks are shown and the most used analysis methods are discussed. The third section provides an overview of Toyota and an analysis of its foreign operations. The main purpose of this section is to support the interpretations that emerge from the regression results and this information is used as the basis for selecting the variables for the regression model. In the fourth section, relevant analyses are provided about the variables that may be a source of risk for Toyota and which were chosen for the regression model. In addition to this, it presents the hedging programs undertaken, the designated and un designated financial instruments used and the reasons why the company does not need to have financial instruments to hedge translation and economic exposure. The fifth section describes the methodology used. The reasoning, as well as the issues of each variable included in the model, is expressed in this section. It also presents the study time periods and data sources. In addition to this, it provides an analysis of the descriptive statistics for the data and different periods used in the model. The sixth section contains the regression results and provides an analysis and explanation of the findings. It also presents the limitations of the software used for the regressions and a brief analysis of the foreign exchange risk exposure of Honda and Nissan Motor Corporation. The seventh and last section summarizes the main conclusions of this study and presents some suggestions for further research. LITERATURE REVIEW The goal of creating a global business has, in the past years, been the fundamental reason behind the growth of multinational companies. Such an example is the registered growth in Japanese companiesà ¢Ã¢â€š ¬Ã¢â€ž ¢ exports. In 2000 and 2009, exports from Japanese companies amounted to 0.8%  [1]  and 10.8%1 of the GDP, respectively. An annual growth of 32.9% in foreign activity, for a nine year period, is one of many advantages that companies can obtain by opening themselves in many ways. Other advantages include the opportunity to diversify labor force, to enter new markets and sell more, to reduce transport costs and to benefit from economies of scale. This, however, also creates new problems, challenges and demands. A multinational company is either a company with operating subsidiaries, branches or affiliates in more than one country, or a purely domestic company engaged in international activities (imports and exports). Some of the new problems and challenges these co mpanies face include an increased exposure to foreign risks, such as exchange rates, interest rates and commodity prices [Miller, 1998]. Moreover, the risks associated to exchange rates appear do to the contact with new currencies  [2]  . Exchange rates constitute one of the most important macroeconomic risks, which can potentially impact, positively or negatively, the companiesà ¢Ã¢â€š ¬Ã¢â€ž ¢ profitability, cash-flows and market value, due to exchange rate fluctuations. Consequently, in order to handle exchange risk exposure, companies can adopt several hedging tools. In the past decades, thanks to the increasing number of international trade activities and multinational enterprises, as well as the large currency fluctuations registered, the volume of research that tries to measure and analyze the impact of exchange rate fluctuations in multinational companies and their vulnerability to it has grown. However, produced results/conclusions have a mixed nature due to the com plexity of this subject. The main goal in this section is to understand, through previous researches, what types of companies are most affected by exchange risk exposure, the importance of hedging, several types of foreign exchange risk exposure, types of hedging activities depending on the foreign exchange risk exposure the company is facing and traditional approaches to measure exchange risk exposure. Exchange Risk Exposure of Multinational Companies vs. Domestic Companies Thanks to the phenomenon of globalization, as well as the increase in companiesà ¢Ã¢â€š ¬Ã¢â€ž ¢ foreign activities, several researches have been developed in order to give some input on what type of companies show a higher exchange risk exposure: multinational or domestic companies. The results of previous empirical studies suggest that only certain industries and/or companies are exposed to foreign exchange risk  [5]  . In the other hand, even a purely domestic company with importing or exporting activities is impacted by fluctuations in exchange rates. This idea is connected with competitive advantage; for instance, the products an exporting company sells abroad can still affect the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s value due to the effect of exchange rate fluctuations in competitors, suppliers and in customersà ¢Ã¢â€š ¬Ã¢â€ž ¢ demands. Muller and Verschoor (2006) concluded in their study that a companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s size is also an indicator of its foreign exposure. They found that a companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s lower dividend payout ratio results in a stronger short-term liquidity position and, consequently, a smaller hedging motivation and a higher exchange risk exposure. Other authors however, such as Choi and Jiang (2009), defend that multinationality is important for a companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s exchange exposure, but not in the popular notion that was mentioned. Some authors found evidences that foreign exchange risk exposure is actually higher and more significant in absolute magnitude for domestic companies, when compared to multinational companies. The existing explanation for this finding is the fact that multinational enterprises are more capable to effectively and easily use financial hedging and operational hedging in order to reduce their position against foreign exchange risk, and also to increase their stock returns. Additionally, these companies are more aware of foreign exchange risks. Dominguez and Tesar (2006) agree with this f inding and they also found that small companies, rather than large and medium-sized companies, show a higher exposure due to the same reasons. As a result, companies that donà ¢Ã¢â€š ¬Ã¢â€ž ¢t engage directly in international business but compete against foreign companies can be affected by exchange rate fluctuations [Dominguez, Tesar, 2006]. Dominguez and Tesar (2006) also found that the industry level may influence exposure. They suggest that exposure increases in highly competitive industries. In more competitive industries, however, an almost perfect pass-through can be expected since they are more aware of their vulnerability and are consequently better motivated to hedge foreign exchange risks, when compared with less competitive industries  [6]  . Regarding purely domestic companies, Pritamani, Some and Singal (2005) found that importing companies are more affected by fluctuations in exchange rates than exporting companies. Therefore, companies with importing activiti es should have more reasons to hedge exchange risk exposure. The Importance of Hedging Exchange Risk Exposure Hedging means taking a position when acquiring a cash-flow, an asset or a contract in order to protect the owner from losses and to eliminate any gain in the position hedged. Several researches indicate that currency risk management is very important to manage earnings and unexpected losses. Consequently, this should be done in order to reduce any impacts on the stockholderà ¢Ã¢â€š ¬Ã¢â€ž ¢s equity and to prevent value declines for the equity holder due to cash flow changes and unfavorable exchange rate fluctuations, respectively. Hedging currency exposure can therefore reduce some of the expected fluctuations in future cash flows and increase their predictability [Smith and Stulz, 1985]. It is believed that foreign exchange rate fluctuations impact à ¢Ã¢â€š ¬Ã…“financial decision-making in production, marketing, planning and strategyà ¢Ã¢â€š ¬? [Moffett and Karlsen, 1994]. It is therefore necessary to make contingent investments or develop long-term strategic plans and man agement perspectives in order to understand the volatility of foreign exchange. Companies can implement hedging tools based on policies that define when and how to hedge against foreign exchange risks. Hedging tools are not static mechanisms, companies are able to dynamically adjust their behavior in response to foreign exchange risks; for instance, a company can decide to hedge only part of their foreign transactions. To undertake these policies, the company needs to determine its risk tolerance and needs to understand the direction that the currency to which it is exposed is likely to take. A value maximization corporation that hedges its exposure to exchange risks can reduce the costs connected to financial distresses and taxes, as well as agency problems existing between shareholders and bondholders [Martin and Mauer, 2005]  [7]  . A possible reduction of financial distress costs allows investors to require lower risk premiums. Consequently, the company value increases [S mith and Stulz, 1985]. Therefore, as mentioned by Smith and Stulz (1985), à ¢Ã¢â€š ¬Ã…“hedging is part of the overall corporate financing policyà ¢Ã¢â€š ¬?. Moreover, Dumas and Solnik (1995) concluded that part of the return rate of an assetà ¢Ã¢â€š ¬Ã¢â€ž ¢s price is influenced by the foreign exchange risk premium. Thus, when a company implements risk management activities that decrease its foreign exchange risk exposure, the cost of capital is reduced. Some authors sustain that exposure management may not reduce total risk. Copeland and Joshi (1996) argued that anticipating hedging strategies is difficult given that so many other economic factors change when foreign exchange rates fluctuate. This is confirmed by Moffett and Karlsen (1994), who argue that the uncertain nature of future cash-flows hinders the implementation of long-term strategic plans and better investment decisions. It is also argued that risks connected to an inefficient hedging activity can increas e exposure [Hagelin and Pramborg, 2004]. Additionally, currency risk management usually consumes some of the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s resources, consequently lowering its expected cash-flow [Eitman, Stonehil and Moffett, 2010]. Therefore, companies need to know whether their hedging strategies are successful or not, and if they are relevant to shareholders [Hagelin and Pramborg, 2004]. Findings regarding the Vulnerability of Multinational Companies to Foreign Exchange Risk Exposure Hedging tools that handle exposure to foreign exchange risks are not simple and they donà ¢Ã¢â€š ¬Ã¢â€ž ¢t hold only a few complexities, since the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s exchange risk exposure correlates with its à ¢Ã¢â€š ¬Ã…“size, multinational status, foreign sales, international assets and competitiveness and trade at the industryà ¢Ã¢â€š ¬? [Dominguez, Tesar, 2006]. Adler and Dumas (1984) suggested that a companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s foreign exchange risk exposure can be measured by the stock pricesà ¢Ã¢â€š ¬Ã¢â€ž ¢ sensitivity to unexpected foreign exchange rate fluctuations. On the other hand, it could also be measured as the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s cash flows sensitivity to foreign exchange rate fluctuations. Considering that the main goal of this dissertation is to analyze economic exposure, it is important to note that several authors have developed researches that try to measure and analyze unexpected impacts of exchange rate fluctuations on companiesà ¢Ã¢â €š ¬Ã¢â€ž ¢ performances, portfolios and Industries. Nevertheless, these researches have produced mixed empirical results. Jorion (1990) found that only 15 of 287 US multinational companies were statistically significant concerning the impacts of exchange rate fluctuations in companiesà ¢Ã¢â€š ¬Ã¢â€ž ¢ stock returns. Additionally, the author detected that higher company foreign operations reflected higher exposure to exchange risks. Nevertheless, Bartov and Bodnar (1994) found that 208 of the companies with foreign operations that composed their sample were not statistically significant to the effect of US exchange rate fluctuations on companiesà ¢Ã¢â€š ¬Ã¢â€ž ¢ stock price returns. Additionally, other researchers have reached mixed conclusions using different methodologies, samples and alternatives for the main variables. The inconsistency in these results, therefore, doesnà ¢Ã¢â€š ¬Ã¢â€ž ¢t allow a sustainable conclusion on this subject. Recent studies, however, found evi dences that exchange rate fluctuations do have an impact in companiesà ¢Ã¢â€š ¬Ã¢â€ž ¢ performances. Such an example is the research developed by Dominguez and Teaser (2006), who found exposure to be statistically significant due to the effect of exchange rate movements on stock returns at Industry and country level. Some explanations have been pointed out by several authors for these mixed results. The registered contradiction can be explained by limitations concerning data, variables and methodologies used. Different researches develop different alternatives in order to determine foreign exchange risk factors and company values, which include different samples, the use of companies with less opened economies (USA) or more opened economies and different periods; all of these affect research. Bartram (2008) also explains that the use of stock returns to measure company value reflects the hedging position of companies, and the analysis is thus considering a lower level of risk ex posure. Crabb (2002) also suggests that these mixed results can reflect different financial hedging strategies on data or simply reflect noisy data. Additionally, Bartram and Bodnar (2007) found that operational hedging activities help companies reduce their exposure and, consequently, have no statistical significance over the impact of foreign exchange rate fluctuations on companiesà ¢Ã¢â€š ¬Ã¢â€ž ¢ returns. Therefore, as suggested by Crabb (2002), a statistically non significant exposure to exchange rates can result from an efficient hedging strategy set in place by the company. Types of Foreign Exchange Risk Exposure The hedging decision depends essentially on the level of risk exposure, its magnitude and the magnitude of hedging that companies deem necessary. Companies should essentially hedge activities that put them in a position with a high level of uncertainty, i.e., risk exposure in the strategy field (competitive, input supply, market demand and technological risk) and fields of interest to finance and international business scholars (foreign exchange risk), [Miller, 1998]. Before initiating the hedging process, the company has to decide what exchange risk exposure to hedge and how. There are three traditional foreign exchange rate exposure categories  [8]  that impact companies and that have a specific managing method: the transaction exposure, the operating exposure and the translation exposure. Generally, these exchange risk exposures can be hedged through the use of derivatives and financial instruments, such as commodities, futures and forward contracts, options and swaps [Mi ller, 1998]. The main goal of this dissertation is to measure and to analyze how unexpected foreign exchange rate fluctuations affect a multinational company. Notwithstanding it is also important to understand how the other two types of exposure impact companies and the types of hedging mechanisms available to handle exposure, in order to reach a deeper analysis and optimal conclusions. Economic Exposure Economic exposure, also known as operating exposure, is an unexpected change in exchange rates that affects the present value of the company by changing future operating cash flows, arising from inter-company and intra-company activities [Eitman, Stonehil and Moffett, 2010]. The unexpected exchange rate fluctuations affect the expected future operating cash-flows changing the volume, price and/or costs of future sales [Moffett and Karlsen, 1994]. Economic exposure approaches the impact of long-term currency exposure and analyzes the health of a companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s business in the long run. The changes registered in the expected future cash flows depend of the change in the position the company holds in international competition  [10]  . Managing economic exposure involves all aspects of a company. Before establishing hedging policies, a company needs to measure its economic exposure. In order to do that a company should invest some resources in assessing its exposu re, i.e., identifying the set of environmental contingencies affecting and relevant to the creation of shareholder value [Miller, 1998]. This identification allows the assessment of alternative environmental scenarios and consequent adoption of improved strategic decisions by the company. This is the reason why identifying and measuring economic exposure can be complex and difficult, bearing in mind that environmental contingencies vary across industries and across companies within those industries. Moreover, some authors mention economic exposure as being subjective, since it is based in estimates of future cash flows. Hedging Strategies The main goal of economic exposure management is to anticipate and influence unexpected and unpredictable effects in exchange rates. This can be accomplished if a company diversifies and changes its international operating and/or financing policies. This diversity allows the company to react in an active or passive way. The company can diversify operations through sales, location of production facilities and raw material sources or inputs [Eitman, Stonehil and Moffett, 2010]. A company can expand its sales through subsidiaries distributed across different countries, bringing its products or services to new markets and taking advantage of economies of scale, being also capable of diversifying its exposure to foreign exchange risks. Flexible management policies allowing a faster sourcing of raw materials and components can easily mitigate this exposure if this adaptation considers the impact of exchange rate fluctuations in the company costs and revenues. Additionally, RD can also mitigate this exposure, allowing the cutting back of costs and enhancing productivity as well as product differentiation. Choi (1989)  [11]  pointed out that international investment is one of the major instruments in managing economic exposure. In the same line, Miller and Reuer (1998) developed a study that showed this exposure is considerably reduced with a higher and direct foreign investment by the company (foreign market entry mode). Additionally, Smith and Stulz (1985) found that mergers achieve results that are similar to hedging results. Consequently, a company may wish to diversify the location of its production facilities internationally in order to mitigate the effect of exchange rate movements. This mitigation is possible because the company measures its cash flows in different currencies. Thus, exchange rate fluctuations in all currencies the company is exposed to can be naturally offset as can, consequently, the gains or losses while the company still reacts c ompetitively. Diversification in financing is achieved by raising funds in more than one capital market and in more than one currency  [12]  . This method allows the company to reduce future cash-flow variability, to increase capital availability and to reduce costs, as well several risks, such as political risks. Allayannis et. al. (2001) observed that companies with geographical dispersion are more likely to use financial hedging strategies to lower their foreign exchange risk exposure. Accordingly, the use of exclusively operational hedging does not increase the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s value. However, if companies combine operational and financial hedging they will improve their value and, consequently, reduce exposure to foreign exchange risks. Companies can also adopt proactive policies (including operating and financing policies) to offset anticipated foreign exchange risk exposures. These policies allow a partial management of this exposure. The most generally employed are  [13]  : matching currency cash flows, risk-sharing agreements, back-to-back loans, currency swaps, leads and lags and reinvoicing centers. [Eitman, Stonehil and Moffett (2010)]. Transaction Exposure Transaction exposure measures gains or losses resulting from unexpected changes in future cash flows already contracted in a currency-denominated transaction [Martin and Mauer, 2005]. The uncertainty stems from the à ¢Ã¢â€š ¬Ã…“impact of exchange rate changes on the consolidated financial reportsà ¢Ã¢â€š ¬? [Friberg and Ganslandt, 2007] and the fact that it is not anticipated in any line item of a financial statement [Eitman, Stonehil and Moffett, 2010]. Thus, à ¢Ã¢â€š ¬Ã…“the uncertainty can be the specific quantity of foreign currency or the timing of cash-flowà ¢Ã¢â€š ¬? [Moffet and Karlsen, 1994]. Transaction exposure approaches foreign exchange risk exposure in the short-term. It is therefore easier to identify and to measure, allowing a greater effectiveness of hedging strategies to be expected. Hedging Strategies The exposure to foreign exchange transactions can be hedged by contractual, natural, operating and financial hedges. The company, however, needs to determine its own risk tolerance and its expectations concerning the direction the exchange rates will assume. Contractual techniques include hedges in forward  [17]  , policies that imply proportional hedging. A natural hedge is basically an unhedged position where the transaction is left uncovered. Crabb (2004) suggests that this is not a very good hedge because it doesnà ¢Ã¢â€š ¬Ã¢â€ž ¢t control variation over time and, consequently, companies cannot perfectly hedge their exchange rate exposure. An operating hedge means that the company will simply create an off-setting operating cash-flow (account payables, for instance). This hedge can also be implemented through several techniques, such as invoice currency, leads and lags in payment terms and exposure netting [Eun and Resnick, 2004]. Hedging through invoice currency allows the company to shift its foreign exchange risk exposure, invoicing foreign sales in home currency, or share foreign exchange risk exposure  [18]  , pro-rating the invoice currency between foreign and home currencies. Additionally, a company can also diversify its exposure to foreign exchange risks by invoicing sales in a market basket index [Eun and Resnick, 2004]. By hedging with leads and lags companies can accelerate or decelerate the timing of payments (receipts) made (received) in foreign currencies. This hedging strategy is efficient if a currency is expected to appreciate or depreciate against another [Eun and Resnick, 2004]. Finally, the technique of exposure netting suggests that a multinational company should not consider its deals in isolation, focusing rather on hedging the company in a portfolio of currency positions. This means that companies should consider overall payments (receipts) that must be done (received) after taking in account the opposite o perations that naturally hedge each other. To use this technique some companies have re-invoicing centers, separate corporate subsidiaries that serve the parent or related unit in one location and all foreign subsidiaries. The reinvoicing center receives the invoice between the subsidiaries, taking legal title of the good that manufacturing plants sells to distribution subsidiaries of the same company, managing all foreign exchange transaction exposure for intracompany sales [Eun and Resnick, 2004]. Additionally, the reinvoicing centers can guarantee the exchange rate for future orders  and also manage intra-subsidiary cash flows [Eitman, Stonehil and Moffett (2010)]. Financial hedging refers to the creation of an off-setting financial cash flow by either borrowing or lending in the currency the company is exposed to. The company can use some type of proactive policies such as back-to-back loans and currency swaps. A back-to-back loan occurs when two companies in differ ent countries coordinate themselves to borrow each otherà ¢Ã¢â€š ¬Ã¢â€ž ¢s currency for a specific period of time. They then return the borrowed currencies at an agreed terminal date. By hedging via currency swap, the company and a swap dealer agree to exchange an equivalent amount in two different currencies (for instance, a company enters a swap paying yens and receiving dollars) for a specified period of time. The swap dealer assumes the role of a middleman. A matching currency cash flow proactive policy can act like a financial hedge or an operational hedge. The first alternative to offset a long-anticipated and continuous exposure to a particular currency (i.e., the Japanese Yen) is to acquire debt in that currency (in Yens). Suppose the following exposure: A US Corporation exports goods to a Japanese corporation. The inflow of the Japanese Yen creates a foreign currency exposure. An hedging technique requires that the debt payments in Japanese Yens, which consist of the principal and the interests paid by the US Corporation to the Japanese Bank, act like a financial hedge by requiring a debt service, an outflow of Japanese Yens. As a second alternative, the US Corporation can seek potential raw material or component suppliers in Japan as a substitute for an American or another foreign company. This alternative grants the US Company both an operational cash inflow (the receivables) and an operational cash outflow (the payables) in Japanese Yens. This alternative is called an operational hedging. In a final alternative, the US Corporation can pay its foreign suppliers in Japanese Yens, if the suppliers have a Japanese Yen shortage in their multinational cash-flow network (currency switching). Translation Exposure Translation exposure, also known as accounting-based exposure, results from the translation of foreign subsidiaries financial statements, stated in their foreign currency, into the parentà ¢Ã¢â€š ¬Ã¢â€ž ¢s reporting currency in order to prepare consolidated financial statements. This exposure can potentially increase or decrease the ownerà ¢Ã¢â€š ¬Ã¢â€ž ¢s equity and net income, due to exchange rate fluctuations [Moffet and Karlsen, 1994]. The difference between translation exposure and transaction exposure is that the former doesnà ¢Ã¢â€š ¬Ã¢â€ž ¢t have direct cash flows effects. Like the transaction exposure, translation exposure is easily identified and hedged [Friberg and Ganslandt, 2007]. However, finance literature suggests that companies shouldnà ¢Ã¢â€š ¬Ã¢â€ž ¢t worry about this exposure and, consequently, shouldnà ¢Ã¢â€š ¬Ã¢â€ž ¢t hedge it, since its gains (losses) tend to be irrelevant, to have little direct impact on companiesà ¢Ã¢â€š ¬Ã¢â€ž ¢ cash flows, and to be poor estimators of real changes occurring in companiesà ¢Ã¢â€š ¬Ã¢â€ž ¢ value. Nevertheless, the work by Nydahl (1999), Hagelin and Pramborg (2004) found a significant reduction in foreign exchange exposure by hedging translation exposure. A possible explanation offered by the authors is that translation exposure approximates the exposed value of future cash flows from operations in foreign subsidiaries. Thus, reducing translation exposure will reduce economic exposure at the same time. Eitman, Stonehil and Moffett (2010) and Eun and Resnick (2004), however, suggest something different and defend that while reducing translation exposure managers usually change the transaction exposure amount, and vice-versa, being sometimes very difficult for a company to offset both at the same time. Hedging Strategies There are two existing methods to hedge translation exposure: balance sheet hedge and derivatives hedge. Balance sheet hedge is used to remove the mismatch determined between assets and liabilities for same currency. This hedging strategy allows the increase or decrease of assets or liabilities both in the parent company and any of its subsidiaries, in order to remove the exposure to exchange rate fluctuations. A loan can acts as a balance sheet hedge. Derivatives hedge is an action that involves the speculation of foreign exchange rate fluctuations. Such an example is the companiesà ¢Ã¢â€š ¬Ã¢â€ž ¢ attempt to hedge in the forward market (the use of forward contracts with maturity of the reporting period to manage accounting numbers). To be successful in this technique, however, a company needs to predict the future exchange rates, and that is a difficult task. Measurement of Exchange Rate Exposure The main goal of this section is to explain two of the primary frameworks used in measuring foreign exchange risk: the capital market approach and the cash flow approach. These are important frameworks since they measure foreign exchange risk and allow its diversification. Both address different questions and have different applications. The capital market approach is applied in order to understand the impact of overall foreign exchange risk exposure on a companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s value. This framework approaches exposure from a decision makerà ¢Ã¢â€š ¬Ã¢â€ž ¢s point of view (analysts, investors and portfolio managers), whose primary interest is to maximize value. The cash flow approach is used when there are concerns about specific conditions in a company. In other words, it is used in a corporate point of view (company executives, employees and bondholders), where the sensitivity of different cash flows provides information for risk management and corporate planning purpo ses. Additionally, even though it is less direct, this approach can have implications in assessing a companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s value  [19]  . Capital Market Approach Adler and Dumas (1984) and Miller (1998) determined the exchange rate exposure as the elasticity of the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s value with respect to exchange rate fluctuations, which can be obtained by regression, under the assumption that a companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s market value is the à ¢Ã¢â€š ¬Ã…“present value of all future cash-flowsà ¢Ã¢â€š ¬?  [20]  . Therefore, the following regression quantifies the assetà ¢Ã¢â€š ¬Ã¢â€ž ¢s sensitivity of the company to foreign exchange rate fluctuations, net of hedging effects: Where is the total return of the company i at time t, is the total exposure elasticity of the company I, is the change percentage in an exchange rate variable, defined as the price of foreign currency in home currency at time t, and represents the white noise error term. Improvements were made since then. Several researches have included the returns of a market portfolio. This inclusion controls macroeconomic influences and reduces residual var iance in regressions [Bodnar and Wong, 2003]. The precision and definition of the exposure are thus improved, essentially thanks to its natural flexibility characteristic and to looking forward in forming its expectations. Another advantage is that future cash flow implications of foreign exchange rate changes would be rapidly imbedded in stock returns due to readily available information and high level market efficiency, incorporated by this methodology [Martin and Mauer, 2005]. In this approach, the exchange risk exposure affecting a company results from the exchange rateà ¢Ã¢â€š ¬Ã¢â€ž ¢s volatility effect on the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s value when global markets react excessively to foreign exchange rate movements. This is considered the traditional approach to estimate exposures: Where, is the total return on market portfolio, is the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s beta concerning market portfolio and is the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s residual exposure elasticity  [21]   . This residual exposure reflects returnsà ¢Ã¢â€š ¬Ã¢â€ž ¢ fluctuations that can be explained by exchange rate movements after market returns are taken in consideration [Dominguez and Tesar, 2006]. Residual exposure seems to overcome the disadvantage of total exposure, meaning it allows the distinction between the effect of exchange rate fluctuations and macroeconomic shocks in the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s value (stock price returns). The market return variable of the regression implies that different market portfolio constructions have a different impact on exposure estimates, thanks to the size effect in exchange rate exposure. This can represent a problem in this model12. Additionally, considering that this approach allows an understanding of the risk level an investor faces when market returns are incorporated, the investor can optimize his risk level and his returns and, consequently, diversify his portfolio. Cash Flow Approach This approach examines the impact of exchange rate fluctuations on companies by measuring its impact on the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s cash flow. This method is of interest to company managers, who want to understand how foreign exchange risks impact cash flow volatility  [22]  . This cash flow modeling approach, however, is not so flexible because it derives from historic data. This is a past-oriented approach focused on the impact of exchange rate volatility on current cash flows. Therefore, it does not include expectations and it doesnà ¢Ã¢â€š ¬Ã¢â€ž ¢t measure the total impact of exchange rate movements on a companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s value. Besides, it is difficult to incorporate complex data in this model, such as competitive reactions and the impact of market parameters and structure. Moreover, since this method doesnà ¢Ã¢â€š ¬Ã¢â€ž ¢t have readily available cash flow data  [23]  and doesnà ¢Ã¢â€š ¬Ã¢â€ž ¢t easily access information, it is only efficient in det ermining exposure for specific situations. This methodology allows the understanding of à ¢Ã¢â€š ¬Ã…“past exposure patterns and permits a decomposition of exposure into short-term and long-term componentsà ¢Ã¢â€š ¬?. This decomposition allows to understand the nature of existing exposures and, consequently, to know the nature of the exposure, and the company is able to evaluate the effectiveness of its hedging programs and efforts [Martin and Mauer, 2005]. This means that it is possible to know if the risk exposure the company faces stems from financial and/or accounting cash flows. Furthermore, it has the advantage of distinguishing between transaction and the hedging for economic exposure [Muller and Verschoor, 2006]. Some authors, such as Martina and Mauer (2005), assume that this approach is a more accurate measure for translation and transaction exposure given that cash flows derive from accounting figures. This cash flow methodology is based on the following regression; several researches add variables for other macroeconomic risks (such as interest rate, inflation and company- and Industry-specific variables): Where represents the cash flow variable. Capital Market Approach vs. Cash Flow Approach Considering all mentioned advantages and disadvantages for each approach, some authors assume that the best one depends on the intended point of view. Consequently, if one intends to have a model that includes expectations and the total impact of exchange rate fluctuations on a companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s value, Griffin and Stulz (2001) suggest the capital market approach because it potentially allows the understanding of foreign exchange exposure  [24]  . At least two studies tried to identify the best method. The study developed by Bartram (2007)  [25]  shows that the exposures based on the cash flow approach are similar to the exposures based on the capital market approach. They only differ in about 10% of all cases. Additionally, this study indicated that in the long term accounting measures became worse proxies for economic exposure. Martin and Mauer (2005) achieved two different empirical results. In the first place, the authors found evidences of the capital market approachà ¢Ã¢â€š ¬Ã¢â€ž ¢s strength, because in this sample 25% of the banks  [27]  , which means readily-available information may be the most accurate. The authors suggest that greater disclosure can improve statistical significance detection by the capital market. As a conclusion of their study, they support that the main advantage behind the cash flow approach is the ability to reveal the nature of the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s exposure and, consequently, the effectiveness of the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s hedging strategies. The authors therefore believe that, considering the advantages of the cash flow approach, the capital market participants can benefit from the information achieved through this method.

The Struggle of Nora Helmer - 1328 Words

The Struggle of Nora Helmer In the play, A Doll House, Nora Helmer is a house wife who experiences an unexpected event with her husband, Torvald, which led to a whole new understanding of her life and what she was going to do with it. Nora would always try to do anything that she could to please her husband so that she would always keep him happy towards her and never give him a reason to leave her because she felt that she loved him so much and she would not know what to do without him. Nora would constantly lie to make sure that Torvald was happy and she would make sure that he would not find out. At the beginning of the play, Nora was being accused by Torvald of eating macaroons and she stated â€Å"You know I could never think of going†¦show more content†¦Torvald was trying to cover up and say that it was not his fault that they had not had a serious talk because if they would have had a serious talk, it would just get Nora into problems that he has in his life. This r eally made Nora realize that their relationship was not real and that they did not truly care for each other and their problems like a normal couple would. Nora had also come to the conclusion that she has â€Å"lived by doing tricks† (III) for Torvald all of her the years that she has been with him and she was tired of it. This is showing that Nora is claiming that she felt like Torvalds doll wife and that she was always just there for fun for Torvald and not for being in a serious relationship with him. This made Nora realize that she was never happy when she lived with Torvald and that she wanted to leave and start a whole new life. The letter, the fighting, and Nora taking off her costume were all part of the journey that Nora had taken to realize that she was never happy with her life when she lived with Torvald and that she was ready for everything in her life to change. Torvald tries to convince Nora that she cannot leave the house because she has duties to take car e of him and her children. Nora responds to Torvald by stating that she has â€Å"other duties equally sacred† (III) and Torvald questions what could be more important in her life other than himself and the children, so she explainsShow MoreRelatedIndividualism Vs Society, A Doll s House1589 Words   |  7 PagesIndividualism vs Society, â€Å"A Doll’s House† Struggle In the 19th century Victorian society, individuals were expected to follow strict generalized standards for what is considered, acceptable conduct. With his play, â€Å"A Doll’s House†, Ibsen captures conflicts, especially for women, to abide by the standards placed by society. While Nora the main character at first seems to fulfil her role as the perfect mother and wife, she is eventually divided between her obligations as a woman, and her need toRead MoreThe Transformation of a Woman - Ibsens a Dolls House1437 Words   |  6 Pagescharacter of Nora Helmer is a woman who undergoes a profound life revelation that results in her becoming a woman with a belief structure and understanding of self that is far ahead of her time. At the beginning of the play, Nora thinks as a woman of her era; her identity is formed as her father’s daughter and continued as a wife to Torvald Helmer. At the end of the play Nora â€Å"discovers her individuality then walks out on h er husband† (Ramsden). A primary theme of the play is that Nora is a dollRead More Henrik Ibsens A Dolls House Essay1050 Words   |  5 Pagestraditional household. The first element of dramatic tension in the play is introduced when Nora demonstrates this inconsistency when she lies to Helmer about having eaten macaroons, Helmer: Has my little sweet-tooth been indulging herself in town today, by any chance? Nora: No, how can you think such a thing? It displays the way in which Nora is not always entirely honest with Helmer in order to maintain the inferior and obeying image he has of her. It indicates that all is notRead MoreA Dolls House, by Henrik Ibsen1539 Words   |  7 Pagesconveyed through the characterization of Torvald and Nora, diction, stage directions and structure in two integral scenes. Henrik Ibsen’s A Doll’s House conveys the story of a wife’s struggle to break away from the social norms of late nineteenth century middle class Europe. Throughout the play, Ibsen focuses on Nora’s characterization and experiences and thus this leads the reader to perceive her as the protagonist. On the other hand, her husband, Helmer – also referred to as Torvald, is revealed asRead MoreA Doll s House By Henrik Ibsen1487 Words   |  6 Pagesalongside the predominant story. Henrik Ibsen’s A Doll’s House takes place after a woman, Nora, illegally takes a loan. She then struggles to hide it when the lender, Krogstad, threatens to reveal her crime to her husband, Torvald Helmer. Dr. Rank appears to play a minor role in the story but his illness is a highly underrated element. Dr. Rank plays an important role in A Doll’s House through his companionship with Nora, his illness and his choices. Ibsen’s elaboration of Doctor Ra nk’s role is vital asRead More A Doctor In The House Essay971 Words   |  4 Pagesbetween Nora and her husband. Nora confides in Dr. Rank, involving him in secrets and everyday conversation. For instance, Rank is the first character to be let in on Noras secret plan to take Helmer on a quot;vacation,quot; supposedly paid for by her father. Also, Rank refers to Christine Linde as quot;a name I have often heard in this house,quot; when Helmer is virtually unaware of Lindes existence (Ibsen 542). The quote further indicates Rank and Nora share things in which Helmer is not includedRead MoreA Dolls House by Henrik Isben1646 Words   |  7 Pagesthe character, Nora. Nora is a woman, whose whole life is ruled by either her father or husband. Nora Helmer, tries hard to perform the roles expected of a woman, which, however, has led to her sacrifice of individual ideals and fulfillment of personal freedom. Ibsen reveals Nora’s grasp of independence through his use of symboli sm, irony, and development of characters. Nora’s first impression of the audience is being an obedient, money-loving, childish wife. In the first act, Nora seems to justRead MoreA Doll s House By Henrik Ibsen929 Words   |  4 Pagesstory appears moderately innocent and light-hearted, there is much conflict. The conflict present midst scenes does not simply exist between the multiple characters, which exists between Helmer and Krogstad for example, but in the character’s thoughts. Nora has faced much difficulty in hopes of her husband, Torvald Helmer, not discovering her long-kept secret. Through her trial of not allowing Torvald to achieve this knowledge, she begins to mentally break; she contemplates suicide, but runs away fromRead MoreHenrik Ibsen’S Play, â€Å"A Doll’S House†, Follows The Life1144 Words   |  5 PagesHenrik Ibsen’s play, â€Å"A Doll’s House†, follows the life and struggles of a married couple in the 19th-century. The play encompasses elements l ike the sacrificial role of women and gender roles that are still prevalent and pertinent in society today. In the play, Nora Helmer, the leading female character, goes to immeasurable lengths to find purpose in her life for the family she has devoted herself to. The characteristics that Mrs. Helmer embodies and the experiences she undergoes in the play, morphRead MoreA Doll s House By Henrik Ibsen1135 Words   |  5 PagesKate Chopin, the two protagonists named Nora Helmer and Edna Pontillier depict feminist ideals during the Victorian era in their struggle for independence, both sexually and emotionally. Nora and Edna are feminists in the late 1800s, trapped in an era and a society dictated by men. Both works parallel together and are significant because they show how Edna and Nora awaken, as their roles and self-realization progress in their respective families. Edna and Nora are emblematic of many women of this era

Analysis Of The Book The Hearth - 1674 Words

Joice Guirgis Per.3 Mr.Lloyd’s Honors English 1 The Hearth The Salamander Entry 1 Guy Montag is a 30-year old fireman in this dystopian world. There is not much stated about his looks but we can infer that he is certainly a fireman based on the quotes such as, With the brass nozzle in his fists, with this great python spitting its venomous kerosene upon the world, ....all the symphonies helmet numbered 451 on his stolid head, and his eyes all orange flame with the thought of what came next, he flicked the igniter and the house jumped in a gorging fire that burned the evening sky red and yellow and black. (Fahrenheit, 3) and his black bettle-colored helmet and shined it; he hung his flameproof jacket (Fahrenheit, 4). We can clearly see in the beginning of the book that he is conformed into his society during his conversation with Clarisse when she asks about the firemen s job in the past and he says what everyone else says, How oddly you say that. No. Houses have always been fireproof and she asks if he ever read the books he burns and he again says, That s ag ainst the law. he never talks to people and never notices anything new than what all the people do and does the same thing they do. He meets Clarisse McClellan who changes his thought process a little that leads to his change in part 2 of the book. He feels unhappy once she leaves as if He wore his happiness like a mask and the girl had run off across the lawn with mask (Fahrenheit, 12).Show MoreRelatedFahrenheit 451 - Part I Discussion Outline (w/ Analysis and Questions)1089 Words   |  5 Pagesï » ¿FAHRENHEIT 451 PART ONE DISCUSSION I. SYMBOLISM THEMES i. Overview — Part I: â€Å"The Hearth and the Salamander Part One of Fahrenheit 451 is titled â€Å"The Hearth and the Salamander†, referring to the floor of a home’s fireplace – the foundation – and the lizard-like amphibian with a fantastical history. These are two very symbolic things to our protagonist, Guy Montag. 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Weak and overwhelmed with grief, the speaker tries to overshadow his sorrow by reading curiously obscure books. Narrated in first person, the poem conveys the speaker’s shift from weary, sorrowful composure to a state of nervous demise as he recounts his strange experience with the mysterious black bird. Awakened at midnight by a sound, he opens the door, expectingRead MoreThe Yellow Wallpaper By Charlotte Perkins Gilman1667 Words   |  7 Pagespostpartum depression. Gilman became involved in feminist activities and her writing made her a major figure in the women s movement. Books such as â€Å"Women and Economics,† written in 1898, are proof of her importance as a feminist. Here she states that women who learn to be economically independent can then create equality between men and women. She wrote other books such as â€Å"His Religion And Hers† which is about a religion fr eed from the dictates of oppressive patriarchal instincts. 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The following sections of this BookRags Literature Study Guide is offprint from Gales For Students Series: Presenting Analysis, Context, and Criticism on Commonly Studied Works: Introduction, Author Biography, Plot Summary, Characters, Themes, Style, Historical Context, Critical Overview, Criticism and Critical Essays, Media Adaptations, Topics for Further Study, Compare

Illegal Downloads and the Affect on the Film Industry free essay sample

The youngest consumers hold favorable attitudes towards illegal downloading which is grounded in a norm of copyright infringement and belief in the Internet as free. Finally, it was found that affinity for the recording artist serves to moderate intentions to download illegally. Overall, the results have implications for measures to counter digital piracy and to encourage willingness to pay. Furthermore, they question the long-term viability of the subscription-revenue streaming business model. 2- MASC. Dissertation Theodore Gillette As the MPH continues to replace the compact disc (CD) as the preferred format, demand for digital music has grown tremendously. In 2010, the market for digital music accounted for approximately 47% of total US music shipments, up from Just 9% n 2005 (Friendlier, 2010). Consumers have access to an array of download stores, music streaming services, and Internet radio websites. Music streaming services in particular have attracted considerable attention.In Sweden, two of the worlds largest record labels generate more revenue from Spottily, than they do from any other source (Landfall, 2011). We will write a custom essay sample on Illegal Downloads and the Affect on the Film Industry or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page These trends are not confined to European or American music markets. Baud, Chinas largest online search company, recently signed a deal with rights holders to license music on its website for both free download and streaming :While, 2011). The surge in popularity has led some to believe that the digital music market represents the recording industry next sustainable business model, along Ninth diversification into live events and merchandise.However, relatively little is understood about the consumer who uses a combination of legal and illegal sources to acquire music a la carte. In the decade prior to the Internet, the music industry Nas relatively healthy overall with worldwide sales peaking in 1998 (Bam, 2010). Since then, peer-to-peer (POP) networks such as Anapest have contributed to the decline in sales of CDC. There is some disagreement about the extent to which file sharing has negatively impacted the recording; however, evidence points to copyright infringement as a signifi cant factor. The digitization of music effectively removed the industry monopoly on high-quality reproduction so that illegal copies were of equal standard to the original (May, 2007). Concomitantly, the intangible nature of digital music has resulted in new consumption practices. Efforts to counter digital piracy have primarily used legal mechanisms to dismantle POP networks and prosecute file sharers. More recent measures include educational and awareness campaigns. Nonetheless, the dismantling of Limier in 2010 marked the demise of POP networks and emergence of new sources of pirated content (BPI, 2010).With the piracy on the willingness to pay for music in a digital format and the willingness to subscribe to a streaming music service. This study conducts a detailed examination into the attitudes of consumers and social norms which influence intentions to purchase digital music or to download it for free. It examines perceptions towards the pricing of digital music, the extent to which consumers are willing to pay for a subscription streaming service, and whether legal repercussions have served to encourage consumption.Previous research has sought to establish a direct link between POP network usage and demand for CDC. This study employs a broader definition of illegal downloading to include new forms of copyright infringement. Secondly, it analyses attitudes and norms towards copyright Infringement, to establish the underlying determinants for intentions to download music illegally. Finally, it considers the relationship between consumers treatment of music as a cultural object and digital technologies.Whilst the Internet is often cited as an example of a genuine gift economy, the inescapable dynamic of tension mains between abundance and scarcity in the market place (Ansell, 1999, p. 155). A political economic framework is used to understand attempts to recommended a good in the digital environment through expanded notions of copyright and digital rights management technologies. The implications for the consumer relative to the position of power of the record labels are also discussed. The study aims to contribute to the understanding of the existence of a social norm of copyright Infringement amongst the youngest consumers.It aims to establish why consumers Mould be willing to pay for digital music, and in doing so, provide insight into the sustainability of a subscription-revenue business model. In the shift to the digital age, one without physical artifacts, the analysis of consumption will become a strategic resource for those operating in the cultural industries (Molten Ordain, 2003). Although the focus of analysis is on the music business, insights may be applied to other cultural industries that have experienced a transition to the digital environment (Molten et al. 2003). .4- MASC. Dissertation Theodore Gillette LITERATURE REVIEW File Sharing and Music Sales Firms operating in the music industry employ an unusual business model. The product supplied to the market is unique in that it is a purely symbolic good (Scott, 1999). Record companies aim to recoup investments in less profitable ventures by maximizing the return on an extraordinarily successful release. The inherently volatile and unpredictable nature of the industry renders it prone to concentration so that relatively smaller firms remain marginal (Betting, 1996).Through repeated consolidation, the business has grown to become a global industry dominated by a small number of large corporations and with a number of small racket is characterized by the big four record labels of Universal Music Group, Manner Music Group, MI, and Sony Music Entertainment. Owing to uncertain market conditions and a bungled private equity buyout, the landscape is prone to change as Citreous has recently put MI up for sale (Sweeney, 2011). Digital technologies were at first beneficial. The invention of the CD created a boom as music collections were modernized from vinyl records (Bam, 2011).The most recent significant development was the creation of the MPH digital audio encoding format by the Motion Picture Experts Group (MPEG) in 1993. By compressing data so that files are small and easily transferred, MPH technology altered the way music is distributed and consumed. Although the industry has a history of change associated with the introduction of new formats, the MPH was exceptional. Through POP networks such as Anapest, individuals could download files directly from each others computer, thus making the core scarce good of recorded music infinitely replicable (Bam, 2010, p. 77). Digital media consequently transformed not only the cultural object, but also empowered the consumer relative to the music industry (Poster, 2010). Streaming technology constitutes the latest development in the distribution of music. The technology uses buffered play, rather than downloading an MPH direct to the computers hard drive (Fox, 2005). Therefore, the consumer is able to listen to music, but does not retain possession of it. Although still in development, cloud-based music services are digital lockers that store content for individuals to access from any device.The impact of these services for rights holders and consumers remains to be seen. Illegal file sharing is often cited as the cause of decline in the industry rotational revenues sourced from CD sales. It is difficult to prove direct causation between the two; however, a number of studies have made forays into the phenomenon. Huh and Pang (2003) conducted one of the earliest econometric studies into the relationship between piracy and demand for music. Their examination of sales data over the 1994-1998 period showed that demand for CDC decreased with piracy.The study contributes to the understanding of the trade-off between positive demand-side externalities and the negative effects of piracy, but is of limited use today since it does not address digital piracy. Lessee (2004) provided an alternative explanation, arguing that sales decline is partly attributable to the overall number of CDC released. It is correct that a decline in the number of albums released has occurred. However, Lessee fails to fully consider that the decline is explained by lower demand for the good and subsequent lower revenue available for investment in future releases (Liability, 2005).Other than this oversight, Lessee (2004) contributes a valuable framework for the analysis of different segments of POP network users. Firstly, a minority use file sharing as a convenient way to exchange legitimate content. Secondly, the network also provides a means to acquire copyrighted material that would otherwise not have been purchased and would not have gained any recognition. Thirdly, Lessee (2004) outlined purchasing music for files acquired over POP networks or downloading in general. In practice, it is likely that first group is extremely small given that almost all content shared on POP networks is pirated.The second group has the potential to spread the reputation of an unknown artist, but would nevertheless infringe copyright law. The third group is one of the most controversial and is often cited as a benefit of POP networks. Indeed, sampling constituted Anapests (unsuccessful) defense under the principle of fair use against A Records Inc. (Landau, 2002). On one hand, file sharing has the potential to increase the aggregate quantity of music purchased. Ritz and Wallflower (2006) put forward the most convincing argument in favor of sampling.By matching buyers preferences with products, POP networks result in purchases that compensate for any negative effects of copyright infringement. One question the authors fail to address is whether this result holds true for all record labels, regardless of size. It is more likely that sampling would only benefit small Independent labels whose artists have little previous name recognition. An article by Blackburn (2004) concluded that file sharing reduces sales for well-known artists relative to unknown artists.From the perspective of the largest labels, sampling constitutes a weak argument in favor of POP networks due to the sheer quantity and scope of copyright infringement committed. Indeed, Monitor-Pone and Quadrant- Garcia (2006) found no evidence of a positive effect of piracy on demand for music. Ere final group is the focus of analysis for this study because their behavior has the greatest impact on sales of digital music. Many scholars have reached the conclusion that copyright infringement has had a negative effect on the purchase of music (Rob Wallflower, 2006; Center, 2006; Liability, 2008; Wallflower; 2009).In contrast, a study put forward by Borehole-Gee and Strumpet (2007) is most widely cited for reaching the opposite verdict . Despite its merits however, the study suffers from a number of flaws that raise questions about the conclusions made. Specifically, Liability (2007) made a powerful critique of Borehole-Gee and Strumpet (2007) analysis, highlighting a number of serious inconsistencies in the methodology and representation of findings. The majority of overall research has sought to establish a relationship between piracy and demand for music in a physical format.To date, Analogue (2009) conducted one of the few studies on the relationship between digital piracy on the demand for digital music. POP file sharing networks are no long as popular as they once were. Recent evidence points to file hosting websites as an increasingly popular source of digital music and other pirated content. Thus, this study employs a more comprehensive definition of illegal downloading in an attempt to contribute to the understanding of the relationship between digital piracy and emend for digital music. Copyright in the Digital Age Copyright protection is highly important to the music industry and to the creative industries as a whole. An understanding of the basic workings of copyright is necessary to comprehend the Impact of illegal downloading on the record label and the expansion of intellectual over original forms of intellectual production or intangibles and gives the holder the right to exploit the work through licensing its copying in return for compensation Jar, 2005). The mechanism allows the record label to produce an artists work and ell it for a profit.The MPH can be taken as an inherently political technology through the embodiment of power in copyrights, as the format is objectified as an article of intellectual property (Sterne, 2006, p. 830). The rise in popularity of POP networks meant that copyright infringement occurred on a massive scale through unauthorized copying and distribution of the work (Yard, 2005). Digital piracy poses a serious challenge to the indust ry business model that fundamentally depends on a cycle of per-unit pricing and copyright law enforcement (Lesson, Webb, French, rift, crew, 2005). Record labels and stakeholders have collectively pursued a variety of protective, educational, and repressive measures in an effort to stem the flow of digital piracy smarter, 2011 a). In the United States, the music industry is represented by powerful actors such as the Recording Industry Association of America (ARIA) which sued Anapest in 1999 for copyright infringement. Litigation has also been brought against individual users of file sharing networks, resulting sometimes in excessive penalties due to the nature of copyright law (Barker, 2005). These measures in tandem have curbed digital piracy to a degree.A study by Patriarchates, Lowercase, Copal, Marksmen (2006) found that legal threats from the ARIA discouraged participation in file-sharing networks, but that prevalence of music files on these networks largely remain. More recently, the 2010 Digital Economy Act effectively mandates I-J Internet Service Providers to take a greater role in tackling copyright infringement (Smar ter Eng, 2011). Developments in intellectual property rights have taken place over time, but could also be considered a reactionary measure by the creative industries in response to the threat posed by piracy. Under pressure from the recording industry, Congress passed The Copyright Term Extension Act (known as the Sonny Bono Term Extension Act) in 1998, which extended copyright protection for an extra 20 years (McClure Burbank, 2003). On a global scale, the US government has worked to extend copyright interests. For instance, the 1994 TRIPS Agreement obliges WTFO members to abide by a set of intellectual property standards giving maximum protection to rights holders (Yard, 2005). The Digital Millennium Copyright Act (TDMA) implemented in 1998 is the most Ninety disputed of such legislation.Controversy surrounds the acts curtailment of the fair use provisions of the 1976 Federal Copyright Act. Through the prohibition of circumvention, the DACCA affects the very use of technologies (Gillespie, 2004). By shifting the focus of regulation from use of the work to regulating access, the act constitutes a broad overreach that severely limits fair use rights (Boucher, 2002, p. 36). Nonetheless, the practice of rights management is not entirely unforeseen. For technology to consumer CD and DATA recorders which prevented second-generation digital copies (McClure, 2003).Rights management practices have also been applied to the distribution of digital music. Formed in 1998, the Secure Digital Music Initiative SIDES) attempted to implement digital rights management technologies such as Intermarrying to bring a secure standard to music distribution on the Internet (Sylvan, 2000). More widely recognized, the tunes music store (launched 2003) used a proprietary digital rights management (DRUM) system Fairly to encrypt music files, until the format was exchanged in favor the MPH in 2009 (George Chanced, 2006).Now that music streaming services have been widely adopted, new questions are raised about technical and legal constraints placed on the consumers. In many ways, the expanded notion of copyrights has lost sight of its original purpose. Rather than providing artists with incentives to create, its primary purpose is to generate revenue for the record label (Dollars, 2000). It remains to be seen Nether consumers perceive this negatively and whether it ultimately affects intentions to purchase digital music. Piracy is as much a function of the boundaries of the law, as it is of the actual behavior committed.Overvaluation which has occurred effectively incriminates a large part of the population (Lessee, 2004). Underlying the industry response to piracy was an implied right to re-assert commercial copyright in a set of relations that were deregulated (Reek, 2005). As such, the music industry could be perceived as attempting to appropriate the digital economy by reintroducing communication (Terracotta, 2000, p. 35). Digital Piracy: Attitudes and Norms As a relatively recent development, only a small body of research exists on the behavior of individuals who pirate digital content.Kong, You, Lee, Sin, TTS (2003) examined consumers intentions to purchase pirated CDC. Their Nor demonstrated that the social cost of piracy, anti-big business attitude, and the Individuals ethical framework played key roles. Contemporary explanations of the actors that underpin intentions to illegally download borrow from earlier studies on software and digital piracy. Digital audio and software are similar products since both possess some of the same characteristics as a public good, such as non- calculability and non-rivalry (Sundials Martin-Barbers, 2007).Copal, Sanders, Patriarchates, Augural, and Wagner (2004) constructed a model based upon ethical determinants of software piracy, with an emphasis on deontological and consequential influences. Has and Shies (2008) take a different approach altogether. Rather than focusing on intentions to pirate content, they measured whether attitudes towards intellectual property and perceived risk are drivers of a consumers Unwillingness to pay (WET) for innovated software. Importantly, the results show that social norms had strong positive influences on WET, whereas prosecution risk did not Issue Shies, 2007).Furthermore Aching and Sane (2009) find that income, risk perception, and ethics influence WET for digital music. According to attitude functional theory, people hold motivations that serve to fulfill utilitarian, value- McClure, and Spooky (2008) utilize the theory to assess motivations behind unloading behavior amongst college students. The majority of research however has applied the theory of planned behavior to examine intentions to download music illegally. Corona and AAA-Raffle (2008) showed that attitudes towards intellectual property, perceived risk, and previous behavi or, influence intention to pirate digital content. Wang, Chem., Yang, and Afar (2009) combine the theory of planned behavior Ninth social identity theory. The results suggest that intentions to download pirated music do not have a significant impact on the intention to purchase music in a physical format. Furthermore, the study highlights the significance of idolatry as a moderating influence. Wang McClure (2010) employ a combination of three theories to provide a more detailed understanding of the attitudinal and normative factors of individuals who download pirated movies and software.The study finds that both multiple motivations and normative considerations are influences, in contrast to previous research that focused solely on utilitarian motivations. Finally, lamellar Hellebore (2010) find that the subjective probability of legal threats and morality were significant determinants of illegal downloading. Comparatively little is understood about the role of subjective norms on intentions to pirate digital content and willingness to pay for non-pirated music.File sharing is widespread with a significant proportion of Americans having used the technology (Lessee, 2004). An argument can be made that individuals do not perceive the act to be illegal because norm has emerged through repeated practice across the population, such as with cannabis use (Reek, 2005). In this way, individuals may recognize illegal file sharing as a theft but would not consider it a crime (Belletrist, 2008). Some pirates even attain cult status, such as members of the Pirate Bay website which provides links to torrent files.Sift Giving and Consumption Practices Ere aforementioned has focused predominately on the behavior of individuals who download pirated content. Studies that focus on intentions to upload material should also be considered. Becker and Clement (2006) focus on the motivations of users who upload copyrighted material and suggest that the act of gift giving could stem from altruism, reciprocity, or an obligation to the network itself. POP networks function on he basis that individual users share their music collection.Building on classical theories of gift giving, Giggler (2006) claimed that Anapest contained key characteristics of a gift giving system, including social distinctions, norms of reciprocity, and rituals and symbolisms. Most recently, Bam (2011) recanted file sharing from an illegal practice to one embedded in participatory culture, and in doing so, undermined the traditional distinction between the producer and the audience. Although the theory of gift giving provides insight into marketed exchange, the theory is limited in certain respects.The interconnectedness of POP networks is perhaps not as extensive as previously thought. A large proportion of users free ride off of the files provided by a relatively small number of individuals. Furthermore, the explanatory power of participatory culture is challenged as piracy on the Internet shifts away from POP networks to De- personalized means of sharing. The gift system contributes an important concept to investigation of the consumption of digital music, whether through streaming services or downloading.The notion of the Internet as an example of gift system is paramount (Ignite, Hanging, Penmen, Chant, 2009). For example, the open source software movement is regarded as an example of a genuine culture of gift giving and as a counter to the hegemonic forces of production. Ansell (2004) rightfully cautions that further research is needed into the structure of power that underlies the movement, such as its elitist creators for instance. Indeed, neither open source nor Creative Commons licenses operate outside of the mechanisms of traditional copyright (Smarter, 2011).With the concept of the gift economy, this study will Investigate the notion of intangibles as free an d the notion of the Internet as free Feldman Needle, 2006). Lesson et al. (2005) argues that the crisis facing the industry is the result of the emergence of a quasi-gift economy of music since the mid-sass and broader cultural forces that have affected the role of music within society. Consumers arguably do not attach the same value to digital music as they do to the physical product (Steven, 2010). A small body of work focuses on the effects of the digitization of music on consumption practices.McClure (2005) argues that ownership of intangible music is intensified through desires for compacting, immediacy, and customization. Despite being intangible pieces of software, Sterne 2006) believes that individuals treat Amps as cultural artifacts. This has lead some to argue that new pleasures emerge in obtaining access and consolidating a database of music files (Burbank, 2008). Recent research finds that young people may derive satisfaction from the process of accessing and organizing a large music collection Skibob, 2009).Finally, descriptive norms on POP networks can explain excessive consumption behaviors that result in the hoarding of pirated music (Largos and Kim, 2007). Conceptual Framework and Research Objectives At an overarching level, this paper investigates the extent to which scarcity is reproduced in the distribution of digital music and the consequences for consumers. Ere political economy analysis situates the distribution and consumption of music Nothing the context of capitalism 11 petting, 1996).Political economic theory places an emphasis on power relations that label. Specifically, Lessons et al. (2005, p. 186) model of the networked economy outlines the complex network of relationships between producers, distributors, and consumers and effectively demonstrates the power commanded by record impasses. The recent surge in popularity of music streaming services necessitates the need for inquiry into the technology, especially as it is taken to constitute the industry latest business model.Although not directly referring to the recording industry, Ansell (1999) pertinently wrote that the dialectical relationship between scarcity and abundance present in capitalism is manifesting in new ways with the centralization of the Internet. Music distributed online as a service rather than as a product, gives the intellectual property rights owner distinct advantages in imprison to the traditional relationship between buyer and seller (Burbank, 2008, p. 248). Despite frequent claims about the demonstrating power of the Internet, inequality remains in the digital environment.An integration of an ana lysis of the structures of power with concern for symbolic form, would revivalist the political economy approach and allow for a better understanding of the dynamics of digital music distribution and consumption (Ansell, 2004). The theory of planned behavior has substantial explanatory power in the investigation of intentions to perform certain behaviors. Prior research has demonstrated that the theory can be systematically applied to studying the underlying attitudes and norms of individuals ho engage in digital piracy.According Zen (1991), intentions to perform behaviors of different kinds can be predicted from attitudes, subjective norms, and perceived behavioral control. Attitudes are determined by the individuals views towards an object, whilst social norms refer to perceived social pressures. This study will use the two concepts as an analytical framework for study of the consumption of digital music. The first theme to be investigated surrounds the consumption of digital music room legitimate paid and non-paid sources.The objective is to analyze the relationship between attitudes of the consumer and intentions to purchase digital music, or to use a legal outlet such as a streaming service. Secondly, the paper seeks to determine whether consumers are willing to pay a subscription for a streaming service. Thirdly, this study seeks to establish the effectiveness of legal repercussions on willingness to pay in an attempt to analyze devices that have the potential to encourage consumption. .12- Ere second theme to be investigated pertains to norms and attitudes towards illegal unloading.