Impact Of Foreign Direct Investment

Impact Of Foreign Direct Investment The word investment can be defined in many ways according to different theories and principles. It is a term that can be used in a number of contexts. However, the different meanings of investment are more alike than dissimilar. Generally, investment is the application of money for earning more money. Investment also means savings or savings made through delayed consumption. According to economics, investment is the utilization of resources in order to increase income or production output in the future. An amount deposited into a bank or machinery that is purchased in anticipation of earning income in the long run is both examples investments. According to economists, investment refers to any physical or tangible asset, for example, a building or machinery and equipment. On the other hand, finance professionals define an investment as money utilized for buying financial assets, for example stocks, bonds, gold, real properties, and precious items. In general term, Investment means the purchase of goods which are invest and not used today, which will give benefit in future. The money you earn is partly spent and rest saved for future expenses. Instead of keeping savings ideal this money is invested to earn additional income this is called investment. When an asset is bought or a given amount of money is invested in the bank, there is anticipation that some return will be received from the investment in the future. (Meaning Of Investment, 2009 ). Investment by domestic residents (individuals, companies, financial institutions and governments) in the acquisition of overseas financial securities and physical assets. Overseas investment in financial assets, in particular by institutional investors, is undertaken primarily to diversify risk and to obtain higher returns than would be achievable on comparable domestic investment. Physical foreign direct investment(FDI) in new manufacturing plants and sales subsidiaries, or the acquisition of established businesses, prov ide the multinational company with a more flexible approach to supplying foreign markets. Interest, profits and dividends gained on these foreign investments count as invisible earnings in the balance of payments, though some of this income may be reinvested overseas rather than repatriated. (Christopher Pass, 1995). The income tax treatment of foreign investment income is frequently governed by Tax Treaties between the country of the investment owner and the state where the investment is situated. (Friedman, 2007 ).Foreign Direct Investment (FDI) An investment abroad, usually where the company is being invested in is controlled by the foreign corporation. A company from one country making a physical investment into building a factory in another country. The direct investment in buildings, machinery and equipment is in contrast with making a portfolio investment, which is considered an indirect investment. (Spaulding, 2004).Foreign direct investment (FDI) is a major driver of globalization. As investment patterns of multinational enterprises become more and more complex, reliable and internationally comparable, FDI statistics are necessary for sound policy decision making. The OECD Benchmark Definition of Foreign Direct Investment sets the world standard for FDI statistics. It provides a single point of reference for statisticians and users on all aspect of FDI statistics, while remaining compatible with other internationally accepted statistical standards. (OECD, 2008) . In the past decade, FDI has come to play a major role in the internationalization of business. Reacting to changes in technology, growing liberalization of the national regulatory framework governing investment in enterprises, and changes in capital markets profound changes have occurred in the size, scope and methods of FDI. New information technology systems, decline in global communication costs have made management of foreign investments far easier than in the past. (Spaulding, Foreign Direct Investment, 2005).In recent years, given rapid growth and change in global investment patterns, the definition has been broadened to include the acquisition of a lasting management interest in a company or enterprise outside the investing firms home country. As such, it may take many forms, such as a direct acquisition of a foreign firm, construction of a facility, or investment in a joint venture or strategic alliance with a local firm with attendant input of technology, licensing of intellectual property. (Graham, 2005). According to the benchmark definition of the OECD and World Investment Report 2009, a direct investment enterprise is an incorporated or unincorporated enterprise in which a single foreign investor either owns 10 percent or more of the ordinary shares or voting power of an enterprise (unless it can be proved that the 10 percent ownership does not allow the investor an effective voice in the management) or owns less than 10 percent the ordinary shares or voting power of an enterprise, yet still maintains an effective voice in management. An effectiv e voice in management only implies that direct investors are able to influence the management of an enterprise and does not imply that they have absolute control. The most important characteristics of FDI, which distinguishes it from portfolio investment, is that it is undertaken with the intention of exercising control over an enterprise. (GlobStat, 2009).Probably the most important role of FDI in a developing economy is the supply of capital, as capital deficiency is the fundamental problem in case of a developing economy. Capital formation depends on investment, which, however, implies sacrifice of consumption. (Zaidi, 2009). Developing countries  [1]  , emerging economies and countries in transition have come increasingly to see FDI as a source of economic development and modernization, income growth and employment. Countries have liberalized their FDI regimes and pursued other policies to attract investment. They have addressed the issue of how best to pursue domestic polic ies to maximize the benefits of foreign presence in the domestic economy. The study Foreign Direct Investment for Development attempts primarily to shed light on the second issue, by focusing on the overall effect of FDI on macroeconomic growth and other welfare-enhancing processes, and on the channels through which these benefits take effect. (Andru Pascal, 2002). The most profound effect has been seen in developing countries, where yearly foreign direct investment flows have increased from an average of less than $10 billion in the 1970s to a yearly average of less than $20 billion in the 1980s, to explode in the 1990s from $26.7billion in 1990 to $179 billion in 1998 and $208 billion in 1999 and now comprise a large portion of global FDI.. Driven by mergers and acquisitions and internationalization of production in a range of industries, FDI into developed countries last year rose to $636 billion, from $481 billion in 1998 but in south Asian developing countries in which India $1 23 billion of FDI inward and Pakistan $31 billion of FDI inward in 2008. (UNCTAD, 2009) History: Early Investment There have been international organizations engaged in trading activities as far back in time as 2500BC, with banks and churches also having formed international organizations throughout history (Allen, 1984). The appearance of the modern MNE, incorporating control over foreign production units, did not occur until the Nineteenth Century (Wilkins, 1977), but early resemblances to the modern MNE appeared in the 1600s and 1700s, when large trading companies from the UK and the Netherlands entered parts of Asia, the Indies and America  [2]  . The two largest enterprises were the British East India Company and the Dutch East India Company (Nicholas, 1988). These dominated the well-paid markets of spices, cottons and silks, and are credited as being the true pioneers of international commercial activities. Investment also later took place in the UK and French colonial territories of Latin America, Asia, Africa and Australia, with most investments being supply oriented, in the form of resource exploitation (Medard Gabel, 2003)  [3]  . International companies also emerged with the aim of colonizing foreign lands. One of the first was the London-based, British Virginia Company, Whose strategy was to profit from the development and colonization of Virginia in the US. Similar projects across North America were undertaken by the Dutch, the French and the Swedes. (Wren, 2006). It is generally accepted that the true birth of the modern multinational arose in Europe in the Nineteenth Century (Wilkins, History of FDI , 2004)  [4]  . Examples are the Cocker ill steelworks of England that set up in Prussia; Bayers of Germany that set up chemical plants in the US; and Nobels of Sweden that set up dynamite production in Germany (Tugendhat, 1981). However, it was not until the latter part of the Nineteenth Century that larger-scale foreign direct investment started to emerge. A major motivation for the spread of these firms was the increase in the protectionist behavior of countries, which in turn was a by-product of increased nationalism. As customers mostly-preferred goods produced locally, as opposed to imported goods, firms had to set-up abroad (John Micklethwait, 2003 ). Other important reasons for the upsurge in FDI and the growth of MNEs was the search for larger markets, as enterprises began to grow in size, and improvements occurred in transportation and communication, most notably the railways and telegraphs (Wilkins, FDI , 1998). These advances not only made it easier for parent companies to control their subsidiaries but to control them over longer distances. Up until the end of the Nineteenth Century, European firms dominated the MNE scene, but US multinationals were beginning to increase, both in number and size. Examples of US multinationals at this time include singers, which set up sewing-machine plants in Scotland, and the electrical-manufacturers Thomson-Houston, which set up in England (Attack, 1994). The increase in FDI at the turn of the Twentieth Century was halted in the inter-war period both by the destruction caused by the First World War and the threat of another war leading to discrimination against foreigners by the occupants of many countries. The First World War also resulted in European multinationals being forced to sell their pre-war investments, with political upheaval and border changes also impacting on cross-border activities (Dunning, 1983). Other factors leading to a worldwide fall in investment included the Great Depression of late 1920s and early 1930s and the substantial rise in inflation in Europe (Jones, 1995 ). By the time of the Second World War, the main stock of FDI was still held by the UK 40 per cent, while the US held 28 per cent (Jones Eric Lionel, 2000). However, after the Second World War a new wave of FDI began to emerge, arising mainly from the US. The factors behind this improvement in technology and Communication systems, greater economic and political stability, the formation of trading blocks and a more liberalized attitude from host governments (Hood, 1999). In the years after the Second World War global FDI was dominated by the United States, as much of the world recovered from the destruction brought by the conflict. The US accounted for around three-quarters of new FDI (including reinvested profits) between 1945 and 1960. Since that time FDI has sprea d to become a truly global phenomenon, no longer the exclusive preserve of Organization for Economic Corporation and Development (OECD) countries. FDI has grown in importance in the global economy with FDI stocks now constituting over 20 percent of global GDP. Pakistan History Soon after independence in 1947, Pakistan moved from a parliamentary system to a presidential one and then finally reverted to the original parliamentary system. Pakistan has a checkered history of trade liberalization and FDI promotion. Following some trade liberalization attempts in the 1960s, Pakistan qualified for Article VIII status at the IMF in 1970. Even by the mid-1980s there was still a long way to go in lifting quantitative restrictions QRs and reducing tariffs. From the mid-1980s, controls on foreign investment in manufacturing have diminished sharply, those for the service sector less so (Athukoralge, 2007) In spite of various bureaucratic controls, the government attitude throughout the 1950s and 1960s was favorable to private investment, the FDI regime was more liberal, although there was greater emphasis on joint ventures with minority foreign ownership and technology licensing than on FDI in fully foreign owned ventures. However, supremacy of the state and socialist ideology under a socialist government dominated policy in the 1970s. As a result, a large-scale program of nationalization of key industrial units and wide-spread control of domestic and foreign trade were instituted. The dismal economic outcome of the interventionist policies eventually paved the way for market-oriented reform. Reforms started slowly in the early 1980s as part of a widespread reform package in conformity with the World Bank conditionality. Removal of restrictions on foreign investment was a major element of the reform program. Full foreign ownership of firms, with full freedom for remittance of profit a nd investment proceeds, is now allowed in almost all sectors of the economy (Athukoralge, FDI History of Pakistan, 2007). Independence in 1971, the Bangladesh government adopted a state-led import-substitution development strategy, which was far more interventionist than that of the united Pakistan. The new government nationalized a larger number of industrial enterprises owned by Pakistani entrepreneurs as well as all industrial enterprises with fixed assets exceeding a certain threshold level. The scope of the private sector was limited to small and cottage industry, and foreign investment was allowed only in collaboration with the public sector with minority equity participation. However, existing foreign investments (excluding those belonging to Pakistan) were spared from the sweeping nationalization drive. The socialist-oriented industrial policy of 1973 assigned a very minor role for the private sector, with some investment ceiling on new investment (Athukoralge, History of Pakistan , 2007). Foreign Direct Investment (FDI) has been a small but growing part of total investment in Pakistan. Data indicates that FDI in Pakistan has grown from $8 million US dollars in 1976 to $346 million dollars in 1993. During the same period, total gross fixed capital formation grew from $2.4 to $9.2 Billion dollars (international Monetary Fund). Nevertheless, excluding the non-capital part, FDI is even a smaller part of total capital formation in Pakistan than these figures reflect (Kaynak, 1999). General Musharraf vowed to make all out efforts to improve the deteriorating economic conditions in order to eradicate poverty and hunger in the country. The bank defined essential problem areas where urgent action is needed as: (1) Build investor confidence; (2) Structural change in fiscal policy; (3) Reduction in budget deficit to more sustainable level; (4) Address the national debt servicing issue; (5) Improve exports; (6) Population control; and (7) Improve human capital. Meanwhile, there is a very low flow of Foreign Direct Investment (FDI) into the country. The FDI peaked in 1996 to $992 Million and declined to $370 Million in 1999. Another report says that FDI amounted to around $600 Million in 1999; the figure is based on the difference between the amount of FDI stocks in 1998($9.2Billion) and 1999 ($9.8 Billion). However, this constituted 0.21 percent of FDI global flows ($4.7 Trillion). FDI stocks in Pakistan in 1999 represented 4.4 percent of its GDP (Mahmood, FDI History of Pakistan , 2001). Increased Foreign Direct Investment (FDI) increased to $3.5 Billion in the last financial year, according to GOP sources. The United Nations World Investment Report 2006 stated that Pakistan saw a 95% growth in FDI inflows in 2005 to reach $2.183 Billion (Mahmood, 2007). Impact of Foreign Direct Investment Attracting foreign direct investment (FDI) has become a key part of national development strategies for many countries. They see such investments as bolstering domestic capital, productivity, and employment, all of which are crucial to jump-starting economic growth. While many highlight FDIs positive effects, others blame FDI for crowding out domestic investment and lowering certain regulatory standards. The effects of FDI can sometimes barely be perceived, while other times they can be absolutely transformative. While FDIs impact depends on many conditions, well-developed and implemented policies can help maximize its gains. The resources in this list focus on the impact of FDI on: Economic growth: Foreign capital stocks combined with the widespread belief that FDI is beneficial for growth triggered a large body of literature on the determinants of FDI in the Central and Eastern European transition countries. The primary goal was to locate all relevant economic and political factors which could be beneficial for FDI inflows and, by extension, for economic growth(Neuhaus, 2005). Trade: The direct impact falls into two parts, namely an immediate effect emanating from the actual investment and the effects on the import pattern of the targeted enterprises. The former channel is generally limited to the imports of initial inputs of imported machinery and equipment (especially in Greenfield investment), or, where FDI is large compared with the size of the host economy, it may include the knock-on effect on aggregate imports from rising total domestic demand. The second channel, which essentially depends on the investors choice between imported and local inputs, has been studied extensively(OECD, Direct Impact of FDI on Imports, 2002). Employment and skill levels: In response to the AFL-CIOs (American Federation of Labor and Congress of Industrial Organizations) earlier claim that job losses result from the impact of runaway firms setting up labor- intensive operations in offshore locations, the US tariff commission analyzed then- new data on the foreign operations of US firms. It found that employment gains generated from associated exports of equipment and parts, etc. and expansion of supporting non-production jobs would be large enough to offset possible job losses arising from production displacement effects(Neil Hood, 1979). In response to the latest concerns of the US labor unions, 23 studies have investigated the impact of FDI on employment. All except one have concluded that it has a positive effect resulting in the net increase of jobs(Lee, 2002). Technology diffusion and knowledge transfer: Are of great importance for economic development, as the adoption of new techniques, machines, and production processes is a key determinant of productivity growth. Given that most research and development (RD) and innovation is undertaken in high income countries, most developing economies must rely largely on imported technologies as sources of new productive knowledge. This is not to say that no RD is undertaken in developing countries; a considerable amount of follow-on innovation and adaptation does occur there, contributing to the global stock of knowledge(Smarzynska Javorcik, 2006). Linkages and spillover to domestic firms: FDI spillovers: An increase in the productivity of domestic firms as a consequence of the presence of foreign firms in the domestic economy. FDI spillovers via horizontal linkages: An increase in the productivity of domestic firms resulting from the presence of foreign firms in the same industry. FDI spillovers via forward linkages: An increase in productivity resulting from the foreign presence among the supplies of the industry in which the domestic firm operates. FDI spillovers via backward linkages: An increase in productivity resulting from the foreign presence among the customers of the industry in which the domestic firm operates. These spillovers may take place among domestic firms but are more likely to occur with foreign affiliated firms given their linkages with large foreign parent companies. In the case of horizontal spillovers, there are not such incentives and firms would rather protect their intellectual assets rather than risk technology leakage to competitors (OECD, FDI spillover, 2008). Types of Foreign Direct Investment By Direction Inward FDI: Inward foreign direct investment is when foreign capital is invested in local resources. Inward FDI is encouraged by: Tax breaks, subsidies, low interest loans, grants, lifting of certain restrictions The thought is that the long term gain is worth short term loss of income Inward FDI is restricted by: Ownership restraints or limits Different performance requirements Outward FDI: Outward foreign direct investment, sometimes called direct investment abroad is when local capital is invested in foreign resources. Outward FDI is encouraged by Government-backed insurance to cover risk Outward FDI is restricted by Tax incentives or disincentives on firms that invest outside of the home country or on repatriated profits Subsidies for local businesses Leftist government policies that support the nationalization of industries (or at least a modicum of government control) Self-interested lobby groups and societal sectors who are supported by inward FDI or state investment, for example labor markets and agriculture. Security industries are often kept safe from outwards FDI to ensure the localized state control of the military industrial complex. By Target Greenfield Investment: Direct investment in new facilities or the expansion of existing facilities. Greenfield investments are the primary target of a host nations promotional efforts because they create new production capacity and jobs, transfer technology and know-how, and can lead to linkages to the global marketplace. The Organization for International Investment cites the benefits of Greenfield investment (or in sourcing) for regional and national economies to include increased employment (often at higher wages than domestic firms); investments in research and development; and additional capital investments. Criticism of the efficiencies obtained from Greenfield investments includes the loss of market share for competing domestic firms. Another criticism of Greenfield investment is that profits are perceived to bypass local economies, and instead flow back entirely to the multinationals home economy. Critics contrast this to local industries whose profits are seen to flow back e ntirely into the domestic economy (Easson, 2004). Mergers and Acquisitions: Transfers of existing assets from local firms to foreign firms takes place; the primary type of FDI. Cross-border mergers occur when the assets and operation of firms from different countries are combined to establish a new legal entity. Cross-border acquisitions occur when the control of assets and operations is transferred from a local to a foreign company, with the local company becoming an affiliate of the foreign company. Unlike Greenfield investment, acquisitions provide no long term benefits to the local economy even in most deals the owners of the local firm are paid in stock from the acquiring firm, meaning that the money from the sale could never reach the local economy. Nevertheless, mergers and acquisitions are a significant form acquiring firm, meaning that the money from the sale could never reach the local economy. Nevertheless, mergers and acquisitions are a significant form of FDI and until around 1997, accounted for nearly 90% of the FDI fl ow into the United States. Mergers are the most common way for multinationals to do FDI (Jonathan Jones, 2006). Horizontal FDI: It refers to FDI in the same industry in which the organization in the home nation. Vertical FDI: It refers to the FDI by an organization in order to sell the outputs of domestic firms to the investment which provides inputs to the domestic organization (Misra, 2009). Backward Vertical FDI: Where an industry abroad provides inputs for a firms domestic production process. Forward Vertical FDI: Where an industry abroad sells the outputs of a firms domestic production. By Motive: FDI can also be categorized based on the motive behind the investment from the perspective of the following firm: Resource-Seeking FDI Investments which seek to acquire factors of production those are more efficient than those obtainable in the home economy of the firm. In some cases, these resources may not be available in the home economy at all (e.g. cheap labor and natural resources). This typifies FDI into developing countries, for example seeking natural resources in the Middle East and Africa, or cheap labor in Southeast Asia and Eastern Europe (Cohen, 2007). 1.3.3.2 Market-Seeking FDI Investments which aim at either penetrating new markets or maintaining existing ones. FDI of this kind may also be employed as defensive strategy; it is argued that businesses are more likely to be pushed towards this type of investment out of fear of losing a market rather than discovering a new one .This type of FDI can be characterized by the foreign Mergers and Acquisitions in the 1980s by Accounting, Advertising and Law firms (Cohen, Market-Seeking FDI , 2007). 1.3.3.3 Efficient-Seeking FDI Investments which firms hope will increase their efficiency by exploiting the benefits of economies of scale and scope and also those of common ownership. It is suggested that this type of FDI comes after either resource or market seeking investments have been realized, with the expectation that it further increases the profitability of the firm. Typically, this type of FDI is mostly widely practiced between developed economies; especially those within closely integrated markets (Cohen, Efficiency-Seeking FDI, 2007). 1.3.3.4 Strategic-Asset-Seeking FDI A tactical investment to prevent the loss of resource to a competitor. Easily compared to that of the oil producers, whom may not need the oil at present, but look to prevent their competitors from having it (OECD, Strategic-Asset-Seeking FDI , 2002). 1.3.3.5 Political Oppositions to FDI In the late 1960s and early 1970s foreign direct investment became increasingly politicized. Organized labor, convinced that foreign investment exported jobs, undertook a major campaign to reform the tax provisions which affected foreign direct investment. The Foreign Trade and Investment Act of 1973 (or the Burke-Hartke Bill) would have eliminated both the tax credit and tax deferral. The Nixon Administration, influential members of Congress of both parties, and well-financed lobbying organizations came to the defense of the multinational. The massive counterattack of the multinational corporations and their allies defeated this first major challenge to their interests (Finance, 2006). 1.3.3.6 Private Foreign Investment Few areas in the economics of development arouse so much controversy and are subject to such varying interpretations as the issue of the benefits and costs of private foreign investment. If, however, we look closely at this controversy, we will find that the disagreement is not so much about the influence of MNCs on traditional economics aggregate such as GDP, investment, savings, and manufacturing growth rates (though these disagreements do indeed exist) as about the fundamental economic and social meaning of development as it relates to the diverse activities of MNCs. In other words, the controversy over the role and impact of foreign private investment often has as its basis a fundamental disagreement about the nature, style, and character of a desirable development process (Todaro, 1989). Components of FDI The components of FDI are equity capital, reinvested earnings and intra-company loans: Equity Capital Equity in unincorporated entities, non-cash acquisition against technology transfer, plant and machinery, goodwill, business development and similar considerations control premium and non-competition fee (Components of FDI, 2004).The foreign direct investors net purchase of the share and loans of an enterprise in a country other than its own. Reinvested Earnings The part of an affiliates earnings accruing to the foreign investors that is reinvested in that enterprise. Intra-company Loans (Other Capital) Short or long-term loans, trade credit, suppliers credit, financial-leasing, financial derivatives, debt securities from parent firms to affiliate enterprises or vice versa. In the case of banks, deposits, bills and short-term loans are not included. 1.5 Benefits of FDI: The economic benefits of FDI are real, but they do not accrue automatically. To develop the maximum benefits from foreign corporate presence a healthy enabling environment for business is paramount, which encourages domestic as well as foreign investment, provides incentives for innovation and improvements of skills and contributes to a competitive corporate climate. The net benefits from FDI do not accrue automatically, and their magnitude differs according to host country and context. The magnitude of the benefits from FDI depends on the efforts of host countries to put in place the appropriate frameworks but even less-well performing countries may benefit, inter alia by using FDI as a supplement to scarce financial resources. The factors that hold back the full benefits of FDI in some developing countries include the level of general education and health, the technological level of host country enterprises, insufficient openness to trade, weak competition and inadequate regulatory frameworks. Conversely, a level of technological, educational and infrastructure achievement in a developing country does, other things being equal, equip it better to benefit from a foreign presence in its markets (OECD, Benefits of FDI, 2002) The Perceived Benefits of FDI A Zero-Sum Game: As with international trade, it is argued that the free movement of investment capital increases the aggregate sum of global wealth. FDI is not a zero-sum game. If capital is allowed to flow where its owners consider it can be employed most efficiently, then the highest return on capital will be achieved. Restrictions upon FDI necessarily result in the inefficient utilization of capital. This does not, of course, mean that everyone necessarily benefits from FDI- simply that the total benefit should outweigh the total detriment. Nor, of course, does if assume that capital will always be used efficiently- though it is assumed that restrictions upon FDI flows will result in less efficient utilization than if those restrictions did not exist. If one accepts that FDI produces a net benefit in global terms, then everyone should be happy so long as that benefit is shared fairly among the host country, the home country, the firm that undertakes it, and those persons most clo sely affected by the activities of the firm- its shareholders, customers, suppliers and workers (Easson, Benefits of FDI, 2004). FDI from the perspective of home countries: FDI is gen

Lesson 6

Key Question 6 a) The opening Act of King Lear evidently portrays Lear’s downward movement as it coincides with Aristotle’s structure of Greek tragedy. The play begins with Lear, a hero of noble birth and ruler of Britain, in an ordered society soon to be disrupted by a fatal flaw that is the result of his excessive pride. His journey from the ordered to the disordered world becomes apparent after he hands his land over to his two elder daughters and banishes his youngest daughter Cordelia from the kingdom.The initial situation began when Lear asks Cordelia, â€Å"What can you say to draw / A third more opulent than your sisters? † (I i 87-88), in which she answers â€Å"Nothing, my lord† (I i 89). This demonstrates Lear’s arrogance and triggers the rash decision he makes that would greatly impact the tragic events that follow. At the end of the scene, his two elder daughters immediately work to conspire against him so that he would be left with no power at all. Goneril says to Regan that they â€Å"must do something, and i’ th’ heat† (I ii 311).This foreshadows Lear’s impending downward movement and begins the reversal of his fortunes as things go from bad to worse. Lear’s recognition of the truth and the existence of his tragic circumstance becomes slightly clear to him when he wonders whether he has lost his mind and cries out â€Å"O let me not be mad, not mad, sweet heaven! † (I v 46). Act I leaves off at this stage where Lear is about to suffer tremendously before further stages of recognition, retribution, and restitution occur later in the play. ) In Act I of King Lear, references to the principle motifs of nature and the unnatural, sanity/madness, and â€Å"nothing† all reinforce the downward movement of Lear’s perception of his own identity. Lear’s Fool constantly tries to warn him of his mistake in a series of riddles, puns, and songs: â€Å"The hedge-s parrow fed the cuckoo so long / That it had it head bit off by it young† (I iv 221-222). Referencing the nature of animals in that song, the Fool is telling Lear that his two daughters resemble a traitorous â€Å"cuckoo† who betrays the one who raised them.This emphasizes the eventual downward movement of Lear’ perception of his own identity as a father who is so â€Å"loved† by his daughters. When Lear leaves Goneril’s castle and is preparing to visit his other daughter Regan, he prayed to heaven that he would not go crazy: â€Å"O let me not be mad, not mad, sweet heaven! Keep me in temper, I would not be mad! † (I v 46-47). Lear’s fear of going insane from his daughter’s betrayal demonstrates another downward movement of Lear’s perception of his own identity.Also, references to the motif of nothingness occur when the Fool is speaking to Lear in the presence of Kent. The Fool asks Lear, â€Å"Can you make no use of not hing, Nuncle? † (I iv 133-134), in which Lear responds, â€Å"Why, no boy. Nothing can be made out of nothing† (I iv 135-136). This is foreshadowing Lear’s inevitable downfall because he would soon have nothing to make use of since he has chosen to hand all of his formal authority over to his two daughters who do not actually love him.It appears that Lear’s perception of his positive, all-powerful identity is about to lead him into a tragic breakdown in the way the three motifs of nature and the unnatural, sanity/madness, and â€Å"nothing† are referenced throughout the first Act of the play. c) Lear calls upon his three daughters and announces that he intends to divide his kingdom among them, promising the greatest share to the daughter who declares that she loves him the most.Goneril begins with her speech telling Lear that she loves him â€Å"more than words can wield† (I i 57) and Regan makes a request to receive the same value of fortune s as her sister, telling Lear, â€Å"I am made of that same mettle as my sister, / And prize me at her worth. In my true heart / I find she names my very deed of love† (I i 71-73). Both daughters’ speeches, filled with exaggerated flattery and blatant lies, earn each one a generous portion of the kingdom, while Lear decides to banish his youngest daughter Cordelia for not flattering him as the sisters did.As a result, Kent intercepts to warn Lear, â€Å"Reserve thy state, / And in thy best consideration check / This hideous rashness. Answer my life my judgment† (I i 151-153). Kent stakes his life on his opinion that Cordelia is actually the most loyal of the three daughters and begs for Lear to reconsider his rash decision, but he too gets banished by Lear, showing us how Lear is causing his own downward movement due to his excessive pride. Goneril later insults the foolishness of Lear giving away his powers, when she tells Oswald â€Å"let him to my sister, / Whose mind and mine I know in that are one, / Not to be overruled.Idle old man, / That still would manage those authorities / That he hath given away† (I iii 15-19). This shows Lear’s downward movement as Goneril treats him poorly and is certain her sister will treat him the same way. The Fool also reminds Lear of his terrible decision in handing his fortunes over to his daughters. When Lear begins to realize his own mistake, the Fool tells him in a riddle that a snail has a house â€Å"to put ‘s head in; not to give it away to his daughters, and leave his horns without a case† (I v 31-32).All of these situations demonstrate the inevitable downfall of the noble King Lear as his two daughters conspire to strip him of all his remaining power and fortunes. Key Question 9 In an ordered society, both justice and mercy are fundamental. However, in many circumstances they cannot be simultaneously applied. On its own, justice is more essential than mercy in order t o maintain a civilized society. With a system of justice, we could prevent future crimes from taking place, maintain people’s rights and freedom, as well as prevent society from plunging into a state of destruction.With a justice system in place we could take preventive measures against future crimes and laws being broken. If people are punished for the crimes they commit, there would be fewer crimes and less mayhem in the world. People who demonstrate no mecy or remorse for the harm they inflict upon others deserve to be punished, otherwise they will continue their wrongdoings. In Act IV of King Lear, when Cornwall dies from the injuries inflicted by the servant during Gloucester’s blinding, Albany interprets his death as divine retribution.He cries out â€Å"This shows you are above, / You justicers, that these our nether crimes / So speedily can venge† (Iv ii 79-80). Since Cornwall has been punished for blinding Gloucester he can no longer harm other characte rs. Cornwall carried on with his evil intentions until he received his punishment (his own death) which finally put an end to his actions. Society requires a justice system in order to maintain people’s rights, freedom, and equality. In the play, Edgar, Cordelia, and Kent are three characters who have been treated unfairly and were left with no opportunity o prove themselves innocent. Cordelia is fortunate to have her own freedom after leaving the kingdom and marrying the Duke of France. However, Edgar and Kent were left to fend for themselves in order to survive and be accepted by others. When Edgar runs into his father Gloucester, he cries, â€Å"Who is ‘t can say ‘I am at the worst? ’ / I am worse than e’er I was† (Iv i 24-26). Edgar, who must disguise himself as â€Å"poor mad Tom† (IV i 27) in order to be accepted, considers the condition he is in as being the worst ever, compared to anyone else.These characters should be able to s tand up for themselves and voice their opinions without being wrongly punished when it is not what other people want to hear. Edgar and Kent are left to suffer from other people’s mistakes because there is no righteousness in the way they were treated. In an ordered society, everyone deserves to have their own freedom of speech and be treated as equal, regardless of their opinions on different matters. Social justice can ensure that every individual receives the same treatment.An all-merciful society would lead the world to a state of ultimate chaos and destruction. Human existence would constantly be threatened by the dangers of society without a proper system of justice. Regan and Goneril continue to pose as a threat towards Lear and those who are on his side. When arguing with his wife, Albany points out that â€Å"If the heavens do not their visible spirits / Send quickly down to tame these vile offenses, / It will come, / Humanity must perforce prey on itself, / Like mo nsters of the deep. (iv ii 46-49). Albany implies that if the gods do not quickly bring justice everyone will eventually turn against each other, so without someone serving justice to all the evil people, humanity would be threatened by our own human race. Justice would prevail over mercy. In order to maintain a civilized society, people should receive proper punishment and suffer the consequences for their crimes so that we can prevent further crimes in the world, promote freedom and equality, and prevent tyranny in the world.If the Lear universe had a system of justice in place much like in our world today, many of the events leading to the tragic ending could have been avoided. Justice, in all aspects, makes a better resolution than mercy and will continue to serve to make society safe and secure. Works Cited Shakespeare, William. King Lear. Toronto: Signet Classic Shakespeare, 1998. Well expressed but a bit overstated! Justice involves more than punishment so the concept of just ice that you were working from is skewed. 45/50

Research: Decision Theory and Pilot Testing

Chapter 4 Terms in Review 1. Some questions are answerable by research and others are not. Using some management problems of your choosing, distinguish between them. When management wants to find out which method of a production process is the most efficient in terms of operational productivity we can use research to provide usable results. When management wants to know if now is a good time to take on debt for equipment upgrades is, research may not be able to provide usable results.Due to the extensive number of variables affecting financing decisions research will likely not be able to assist in this decision. The current market conditions, economy, interest rates, industry competition, and many other items require a type of analysis that research can not provide. 2. Discuss the problems of trading off exploration and pilot testing under tight budgetary constraints. What are the immediate and long-term effects? The text discussed that often pilot testing is not done to both reduce costs and also to reduce the total research time.Not conducting pilot testing can then immediately progress the research process or reduce the total cost of the research but it can possibly have negative long-term effects. By not conducting pilot testing your research results may suffer because the proper information is not being gathered. A pilot test often provides indication of problems with the data gathering process. There may also be an overall increased cost with no additional benefit when no pilot testing has been completed.The pilot test can not only indicate incorrect information be gathered but can also provide some indication as to whether the proper research questions have been asked. When the research questions being asked do not answer the true management questions then the conducted research will be useless. Useless research is a wasted expense. Pilot testing can indicate whether more in-depth research is required thus providing a possible cost reduction or a better justification for proceeding with a higher cost project. 3.A company is experiencing a poor inventory management situation and receives alternative research proposals. Proposal 1 is to use an audit of last year’s transactions as a basis for recommendations. Proposal 2 is to study and recommend changes to the procedures and system used by the materials department. Discuss issues of evaluation in terms of (a) Ex post facto versus prior evaluation, and (b) Evaluation using option analysis and decision theory. Both of these proposals are going to be quite difficult to evaluate.The need of the research will determine which method will be followed. Ex post factor or after-the-fact evaluation will determine the total cost of each proposal after the research studies are completed. This makes it quite difficult to determine whether the research is providing enough benefit to make it worthwhile until after the cost has been incurred. Thus for either of these systems it may be a better decision to proceed with a prior or interim evaluation method.Under this method the research is designed in stages and an ex post facto evaluation is performed at the end of each stage. Then a determination is made deciding if enough benefit has been generated to proceed to the next stage thus allowing management to get results while also controlling cost. Option analysis may also be used to evaluate the two proposed studies. With option analysis the studies are designed in a very explicit manner thus allowing an organization to compare estimated costs (based on prior research approximations) versus an expected benefit.Management will then select one proposal over another depending on the cost benefit ratio and current need. Decision theory allows management to make decisions based on defined criteria. Each criterion consists of a decision rule and a decision variable. The selection process then consists of analysis determining which proposal either increases the decision variable or which follows the decision rule. This information is considered with a choice being determined by the rules and current management need.

Samuel Taylor Coleridge Romanticism - 1065 Words

Samuel Taylor Coleridge s Rime of the Ancient Mariner is a poem which forged the beginnings of the romantic era in which Coleridge lived. Whilst still containing vivid imagery characteristic of the romantic era, its ballad form and its internal archaisms reflect another more ancient period of literature, though no specific one. Part three of the poem entails the mariner recounting the crew s thirst and the sighting of the ship, which turned out to be a form of ghost ship which carried Death and the personified nightmare Living Death. Death and Living Death gambled with dice and Living Death won, upon which it instantly became night and the entire crew bar the mariner died, though not before cursing him with their eyes. The Rime of the†¦show more content†¦The rhyming pattern returns to abcb and thus returns to the most common rhythm in the poem, returning the tale to normal time. The first line seems slower than the following three, as it contains elongated vowel sounds in o ne, after and moon, and the repetition of one seems to draw out the anger felt by the crew at the mariner. The sixteenth stanza details the death of the crew members. In line three there is internal rhyme in the words thump and lump, as well as alliteration in lifeless lump. This, coupled with the repetition of the word one in the fourth line, creates the sense of swift brutality surrounding the crew members deaths as the sounds are quite abrupt and decisive. This stanza introduces a slightly apocalyptic tone, appearing frequently in romantic poetry as a result of the expectations of an apocalypse aroused by the French Revolution. After the apocalypse it was expected that the world would begin anew, and restore its relationship with God, which may be indicative of Coleridge s own feeling of longing and alienation from God. The seventeenth stanza describes the souls leaving the crews bodies. In this stanza the rhyming pattern changes to abab, serving to make this stanza more conclusive as it ends part three. In the third and fourth lines there is a continued simile, of the souls passing the mariner by like the whiz of his cross bow. This emphasises the speed at which the souls left and the mariner s powerlessness to stop it fromShow MoreRelatedThe Troubled Souls Of Burdened Authors In The Late Eighteenth1602 Words   |  7 PagesThe troubled souls of burdened authors in the late eighteenth through late nineteenth century permitted Romanticism to be recognized as the different development that characterized disaster and sentimentalism as the justification for delightful motivation. Authors amid this time were considered to be furious with no health to the spirit. Because of the substance that most sentimentalists showed, it is stated that most were sincerely and mentally aggravated. The unwillingness i nside every spirit canRead MoreThe Rime Of The Ancient Mariner878 Words   |  4 PagesThe Rime of the Ancient Mariner is a poem by the English poet Samuel Taylor Coleridge. Coleridge and his friend, William Wordsworth, put together a collection of their work called Lyrical Ballads. It contained Coleridge’s famous poem Rime of the Ancient Mariner. This collection is widely recognized as the initiation of the shift towards modern poetry and British Romantic literature. Although the poem’s deliberate use of antiquated language differed from romantic poetry’s use of modern languageRead MoreBirds of Joy and of Death are Poetic Symbols737 Words   |  3 Pagesby Samuel Taylor Coleridge, and The Raven by Edgar Allen Poe, the symbolic message takes the form of a bird. A comparison of the symbolic meaning of the individual birds is needed to further understand what message the author intended to display within each story. In both tellings, the birds’ coming signifies a change. In The Rime of the Ancient Mariner, the albatross comes and suddenly a path opens up in the ice in front of them, conveniently letting them escape from sudden death. Samuel TaylorRead Moreâ€Å"Love† by Samuel Taylor Coleridge Essay1114 Words   |  5 PagesThe poem â€Å"Love† by Samuel Taylor Coleridge has many different literary devices that make it such a great romantic piece of work. Things like syntax, theme, tone, metaphors, imagery and personification are just a few devices that help make this poem popular. Syntax in this poem is very obvious. In poetry, word order may be shifted around to meet emphasis, to heighten the connection between two words, or to pick up on specific implications or traditions. The syntax in this poem can be shown in eachRead MoreWilliam Wordsworth s The World Is Too Much With Us ``966 Words   |  4 Pages I invited William Wordsworth due to his literary works and the influence that he held on literal romanticism. This, he did with published works such as the prelude that was considered by many to be the crowning achievement of English romanticism. Romanticism was a movement that started as a counter to the Industrial Revolution as can be seen in the works of Wordsworth. For example in the poem â€Å"The World is too much with Us†, he states that humanity is losing touch with nature and all it encompassesRead MoreEssay on Kubla Khan: A Miracle of Rare Device1330 Words   |  6 Pages Samuel Taylor Coleridge’s poem â€Å"Kubla Khan† is a masterpiece of ambiguity; from its inception to its meaning. â€Å"Kubla Khan† is a poem of abundant literary devices; most notably these devices include metaphors, allusions, internal rhyme, anthropomorphism, simile, alliteration, and perhaps most of all structure. But the devices that Coleridge used to create â€Å"Kubla Khan† is at the very least what makes this poem provocative; Coleridge’s opium induced vision and utopian ideals combined with his literaryRead MoreClose Critical Analysis of Coleridges Frost at Midnight1716 Words   |  7 Pagesgenerally regarded as the greatest of Samuel Taylor Coleridges Conversation Poems and is said to have influenced Wordsworths pivotal work, Lines Composed a Few Miles Above Tintern Abbey. It is therefore apposite to analyse Frost at Midnight with a view to revealing how the key concerns of Romanticism were communicated through the poem. The Romantic period in English literature ran from around 1785, following the death of the eminent neo-classical writer Samuel Johnson, to the ascension of QueenRead MoreThe Romantic Movement Of William Wordsworth And Samuel Taylor Coleridge Essay1427 Words   |  6 Pagesfeelings for the love of poetry by conveying nature in their writings. Nature is considered an authoritative characteristic that motivates poets to write subjective poems that reflect on solidity and God. William Blake, William Wordsworth and Samuel Taylor Coleridge were amongst the Romantic poets who published revolutionary Lyrical Ballads that illustrate the association of human relationships with nature (ADD CITE). According to (ADD SOURCE HERE), these famous poets were categorized by the transformationRead More Coleridges Romantic Imagination Essay2896 Words   |  12 PagesImagination      Ã‚  Ã‚  Ã‚  Ã‚   The concept of the romantic imagination is subject to varied interpretation due to the varied and changing perceptions of romantic artists. There are several ways through which the concept of the romantic imagination in Samuel Taylor Coleridges poetry can be perceived. This difference in perception is a result of the readers personal interpretation of the subject matter, which varies from person to person. Therefore, the focus of this analytical discussion will be based uponRead MoreHow Is ‚Äà ºThis Lime-Tree Bower My Prison‚Äà ¹ Reflective of Romantic Ideologies?1041 Words   |  5 PagesSamuel Taylor Coleridge’s poem, â€Å"This Lime-tree bower my prison† is one of the most quoted examples of romanticism. Throughout the three stanzas, many romantic ideologies can be identified including aspects such as the romantic’s view towards nature, the power of the imagination and the emphasis on the individual. Romanticism emerged against a time of increased urbanisation and industrialisation, where people sought instead an immersion in nature instead. Coleridge’s poem exemplifies many of