Intermediation Process and the Allocation of Resources

Intermediation Process and the Allocation of Resources The importance of the financial system in facilitating economic development cannot be overstated. Banks and other financial institutions have a key role in the efficient allocation of resources and as such, sound financial systems are systemically important to the economic viability of a country. The Asian Financial crisis of 1997-98 brought home the significance of financial sector soundness by highlighting the consequences of underlying weaknesses in the financial sector and the negative impact that weak financial sectors could have on stakeholders, particularly the depositors. Sound financial system is therefore not only important for the welfare of the financial entities themselves, but it is also of vital importance to the growth of individual economies. In allocating resources in an economy, financial institutions must assess competing demands for funds and prioritize the analysis of risk. Improper decisions about financing activities, that is, which activities to finance and which not to finance, (depending on which activities will bring the best risk-adjusted return), can have a crucial negative long-term impact on economic prospects. Sound investment decisions are vital ingredients in fostering economic growth and development. These decisions therefore should produce feasible outcomes not only for the financial intermediary but also for the economy. Investment should be for productive purposes and should be deployed for the common good. Financial intermediaries should also have a harmonious relationship with the macro-economic space within which they operate. For example, in the nineteenth century, Britain was seen as the most successful economy and was the home to the worlds most successful financial centre at the time. This was not only due to the fact that London had developed expertise in assessing risk and in allocating financial resources efficiently, but also to the fact that the macro economic environment was conducive to the operation of financial intermediaries operating in the financial centre. The assessment of risk also assists financial institutions to be individually more competitive with their peers. This results in a more efficient process of capital allocation in addition to engendering more prudent practices. Financial intermediaries that can assess risk and allocate resources efficiently will outperform those less skilled in this regard. Effective competition should reduce borrowing costs and help to diversify financial risk within the economy. However, to ensure that banks are performing as intended, an effective regulatory framework must exist. The importance of adequately capitalized financial institutions to underwrite appropriate risks in their portfolios cannot be over emphasised. If financial intermediaries undertake too little risk, then potentially efficient projects may be starved of capital and if they undertake too much risk, then less efficient projects may consume capital that could be used for more viable projects. The role of regulators in providing effective oversight for the sector and be able to respond appropriately to changes in the financial environment becomes even more important. William J McDonough (1998) postulates that a nation must be able to mobilize domestic savings and other sources of funds that are needed to finance investment and other productive expenditures[1]. This requires the development of an effective banking system that transfers surplus funds of households and businesses to borrowers and investors. He further argues that, fair and impartial allocation of credit accommodates the economic development that results in improved national living standards. According to McDonough: financial intermediation is particularly important in the context of most emerging market countries given the relative scarcity of savings, a relatively under-banked population, and large-scale investment needs. The banking sector in emerging market countries also tends to be more concentrated and represents a larger share of the domestic financial system. Consequently, issues in the banking sector have an amplified effect on the economy and on the fiscal costs associated with bank rescues. Importantly, current developments in western economies are anchored in a robust financial sector development.. Consequently, the relationship between economic growth and financial sector health are now more closely linked than ever before. Some of these linkages or interrelationships are further explored in this thesis from the perspective of risk relationships. The demands of the changing business environment emphasize the importance of effective risk management practices in banking institutions. Financial intermediaries continue to face tremendous unrelenting pressures regarding pricing decisions, increase in service expectations from customers, regulators and shareholders. There is also a demand for more sophisticated products and services, new regulatory requirements, improved capital standards, more capital injection and the introduction of new technologies and systems. Technology is important in supporting new and flexible risk relationship structures in the areas of credit, market, liquidity and operational risk management. Advanced technologies are often used by intermediaries to identify, quantify and monitor risks. The employment of these technologies also comes with their own attendant risk exposures and as such significant investments and focus have been placed (particularly in recent times) on operational risk management issues from both regulatory and financial intermediary perspectives. Risk management must be seen as an integrated process and as such managing existing relationships, developing new relationships and leveraging the value of all risks relationships are critical to the management of overall risk exposures. It is important therefore that the approach which institutions and regulators take in managing risk, be relational. Both the qualitative and quantitative aspects of risk management must find consensus within the same framework. No longer should institutions view risk as an isolated and individualized structure with separate and mutually exclusive elements but risk should be managed as a system, which is intricate, collaborative and bound by mutual responsibilities. Banking Supervision The identification, assessment, and promotion of sound risk-management practices have become central elements of good supervisory practice. Risk management has evolved as a discipline that is driven both by the private sector (made up of banking institutions and other market participants) and public sector (especially Regulatory Authorities and Banking Supervision). The relationship between the private sectors interest in economic capital and the public sectors interest in regulatory capital should be identified and managed in a framework that ensures optimization. With regard to the management of risks and risk relationships, several key innovations have been made by the private sector over the years. These are evident in the way financial intermediaries have ordered their balance sheets to respond to various risk stimuli and impulses both internally and externally. Additionally, the private sector has been the driving force behind the development of sophisticated tools used to identify, measure and manage risk relationships. The public sector on the other hand, has been at the forefront in the development of best practice standards and principles used to guide financial intermediaries. For years, the public sector has been playing a pivotal role in preventing the total collapse of the entire financial systems in their capacity of lender of last resort. The regulatory and supervisory arms of the public sector have taken the lead in identifying emerging issues through their approach to supervision of financial intermediaries. Several regulatory bodies routinely performs on-site inspections and examinations as well as off-site monitoring and surveillance of banks and other financial institutions to assess risks and provide feedback to the financial intermediaries board and management. These reviews include the assessment of policies and procedures in place to guide risk management; the assessment of governance and internal controls and the assessment of capital adequacy, asset quality, earnings and liquidity and sensitivities to risks. Reviews could also include comparisons of peer institutions coupled with the establishment of guidelines that codify evolving practices. Yellen (2005)[2] argued that although banks and bank supervisors have different motives, which certainly can lead to differing views about the appropriate levels of risks, they also have a common interest in having accurate measures of risk and in focusing on the processes and techniques for identifying and managing risks. According to Alan Greenspan (2004),[3] the growth in the size and complexity of the largest US and foreign banking organizations, in particular, has substantially affected financial markets and supervisory and regulatory practices. He further states that authorities are required to focus more than before on the internal processes and controls of these institutions and on their ability to manage risk. According to Greenspan, the regulatory authorities must provide the industry with proper incentives to invest in risk-management systems that are necessary to compete successfully in an increasingly competitive and efficient global market.[4] The Basel Frameworks Over the last two decades, the system of bank capital standards has been the Basel Capital Adequacy Standard, known as the Basel I framework, which was established internationally in 1988. The Basel I standard came out of the banking supervision sub-group of the Bank for International Settlement (BIS). The Banking subgroup is made up of supervisors from the G10 countries. This group has been charged with the responsibility for setting bank standards around the world, which it does predominantly through the development and implementation of the Basel Core Principles for Banking Supervision. The Basel I framework was particularly geared towards credit risks in banking institutions and resulted in higher capital levels, a more equitable international marketplace and the relating of regulatory capital requirements to risk appetite and risk profile. The Basel framework is a dynamic one to which bank as supervisors continue to make important adjustments from time to time. For example, the 1988 Capital Accord was amended subsequently to incorporate a market risk component. Bernanke (2005)[5] argues that advances in risk management and the increasing complexity of financial activities have prompted international supervisors to review the appropriateness of the regulatory capital standards under Basel I, particularly for the largest and most complex banking organizations. Bernanke states further that supervisors recognize that some of the largest and most complex banking organizations have already moved well beyond Basel I in the sophistication of their risk management and internal capital models. The gap between the determinants of minimum regulatory capital (under Basel I) and the levels of risks that financial institutions were taking on began to widen, as risk relationships continue to become more complex and risk-management practices continue to evolve. Several innovations have sought to collectively reinforce this gap and indeed the relationship (regulatory capital/risk appetite) between the public sector and the private sector has also being mutually reinforced. These innovations have predominantly being originated by bankers in the private sector and not by Supervisors. Bankers and Risk Managers had developed models that encompass their processes, procedures, and techniques, including statistical models for assessing risks in their portfolios. These innovations by the private sector were seen as state of the art risk management tools which the public sector could use and as such Regulators began to leverage the risk management techniques that banks were using to address shortfalls in Basel I. This phenomenon helped to push the Basel Committee back to the drawing board to create the new capital adequacy standards for internationally active banks, known as Basel II. Bernanke (2006)[6] argues that the new framework links the risk taking of large banking organizations to their regulatory capital in a more meaningful way than does Basel I and encourages further progress in risk management. It does this by building on the risk-measurement and risk-management practices of the most sophisticated banking organizations and providing incentives for further improvements. When this framework is applied consistently across internationally active banks, Supervisors can easily identify shortfalls in the relationship between banks capital and risk levels. Banking institutions with capital levels that are not commensurate with their risk profile and risk levels would be subjected to closer assessment and monitoring. Additionally, Basel II has provided the Supervisor with an added tool, under the supervisory review process (Pillar II) to assess risks in the banking system. The new capital accord, Basel II, with its three pillars, will hopefully enhance and strengthen the process of risk management in banking institutions. Internationally active banks, and other banks and investment businesses in jurisdictions in which regulatory authorities deem it prudent to bring these institutions in scope, should expect significant revisions and modifications in their internal policies used to identify, measure, manage and report on risks. Not only should improvements be seen in risk management policies, but the process and general procedural framework would also see improvements. In this regards, banks and other financial institutions should envisage changes in their system used to capture and report on risks. Under Pillar I, changes are expected I the risk weights assigned to the credit portfolios, particularly, residential mortgages and as such banks could see some reduction in charges as weights for some categories are reduced. The reporting of market risks and operational risks should also improve as banks garner more granular data on its expected losses and risk exposures. In preparation for the supervisory review process (Pillar II) to be conducted by the regulatory authorities, banks should see significant improvements in their risk management practices as they subject their internal capital adequacy models to greater levels of scrutiny to ensure that the capital cover is adequate for all the material risks identified, their risk appetite, and risk exposures. The use of stress testing on both the banks investment and credit portfolios under the pillar II process should also seek to strengthen the institutions approach to deal with adverse down turn and general deterioration in some macro economic variables in the economies in which the banks operate. This should push banks to increase capital levels to cushion expected losses. Pillar III implementation under the new capital accord should also foster greater improvements in the risk management, policies, processes, and procedures of banking institutions as banks become more transparent in their efforts to disclose more information on the profile of risks, risk exposures and capital levels to their stakeholders. The Sub-prime Mortgage Crisis The conditions that gave rise to the current sub-prime mortgage crisis provides ample evidence to support the pressing need for both private and public sector, financial institutions and supervisors, to understand the nature and nexus of risk relationships and regulatory capital. The crisis also provide an opportunity for financial institutions and regulators to explore the risk relationships and risk dynamics existing within and outside of financial intermediaries, as well as the impact that failure to properly identify and assess risk exposures in financial institutions can have on the global financial system and economic growth and development in a particular country. The ongoing economic problem resulting from the sub-prime mortgage crisis has manifested itself through liquidity issues in the global banking system. The credit crisis has its genesis in the bursting of the US housing bubble and the subsequent high default rates on sub-prime or other adjustable rate mortgages, made to borrowers with higher risk profile and lower income levels, instead of to borrowers who are considered prime borrowers with higher income and good credit history. Borrowers were encouraged to take up mortgages based on the attractive housing incentives that led them to believe that notwithstanding the long term trend of rising housing prices, they would be able to refinance these mortgages at more favourable terms in the future. During 2006 however, the prices of houses started to fall, albeit moderately and as such, the possibility of refinancing was becoming more remote. Consequently, the interest rates on the adjustable rate mortgages (ARM) that the sub-prime borrow ers were able to obtain began to reset at the higher rate resulting in a significant increase in defaults and foreclosures. In 2007, foreclosure activities increased by approximately 80 percent over the 2006 figures as nearly 1.3 million United States housing properties were subjected to foreclosure activities. Major banks and other financial institutions globally reported losses of approximately US $379 billion towards the end of the first half of 2008. The first set of financial institutions to be impacted was mortgage lenders that retained the risk of payment default (credit risk). Several third party investors were also affected, as mortgage lenders had passed on the credit default risks arising from the rights to the mortgage payments through mortgage backed securities (MBS) and collateralized debt obligations (CDO). Individuals, institutional investors and other corporate entities holding MBS or CDO were now faced with significant losses as the value of the underlying mortgage assets declined. The sub-prime mortgage crisis also exposed financial institutions to liquidity risks as lenders were forced to reduce lending activities or grant loans at higher interest rates. The higher interest rate loans restricted the ability of corporations to obtain funds through the issuance of commercial paper, thereby posing liquidity challenges for several institutions. As a result, central banks, in their role of lenders of last resort, were forced to take action to provide funds to the banking sector so as to stimulate the commercial paper market and to encourage the resumption of lending to borrowers with good credit profile. The rate at which economies grew was also impacted by the credit crisis as business investments and consumer spending were curtailed due to the general unavailability of loans or the high cost of loans in cases where it was available. The United States government responded by cutting the federal reserve interest rates as well as proposing its economic stimulus package which was passed by congress in February 2008. This was necessary to alter the risk exposure to the broader economy brought on by the credit crisis and the related downturn in the housing market. Research Problem and Hypothesis While the benefits of risk management and positive risk relationships have been increasingly recognized in financial sectors worldwide, this study postulates that (i) risk relationships have not been sufficiently explored in the region and current risk management practices in the Caribbean have not kept pace with international trends on financial risk management and (ii) levels of capital being held by financial intermediaries in the Caribbean could be deemed inadequate to mitigate risk exposures. It could also be argued that where there are high levels of risk exposures in financial intermediaries in the region, the impact of risk mitigating factors are low and risk management policies, processes and procedures are less than robust. Additionally, risk exposures and regulatory capital might vary according to core business activities, risk categories or geographic location. In recognition of the existence of these relational gaps and the need to bridge them, this study will introduce principles, procedures, approaches, models and concepts in risk management, and concentrate on those risks inherent in the financial intermediaries balance sheet or risks associated with various elements of financial activities and environment. The writer will analyse the risk profile of financial intermediaries and their exposure to credit risks, funding/liquidity risks, interest rate risks and operational risk. The study also seeks to develop benchmarks for measuring risks in the region as well as a risk management scoring model with particular emphasis on the risk profile of Caribbean financial intermediaries. Sub-problems The first sub-problem is to ascertain the risk profile and relationship evident in financial intermediaries in Jamaica, Trinidad and Barbados, as well as those which may evolve consequent to the new Basel Capital Accord, Basel II, which is scheduled to be fully implemented by 2015 across all jurisdictions. The intention is to assess the risk profile and relationship in operation as a dynamic process and the likely impact of the capital accord on relevant financial entities. The second sub-problem is, using both the relevant and existing literature concerning risks, risk relationships and risk management and observation of current techniques, to ascertain throughout the course of the study, types of risk relationships that exist in credit, liquidity, interest rate and operational risk management in financial intermediaries. The third sub-problem is to provide the financial sector with a set of sound testable ideas that are systemically desirable and consistent with the future development of risk assessment. This will be done by reviewing the analyses outlined in the first two sub-problems, generating relevant model/framework of risk assessment, comparing the model/framework with real situation, identifying systemically desirable changes and documenting the results for the benefit of relevant stakeholders who are capable of applying change to the banking sector in general. Hypothesis The first hypothesis is that risk exposures (credit, liquidity, interest rate and operational risks) in financial intermediaries in Jamaica are relatively high when compared with Trinidad and Tobago and Barbados and could exhibit parasitic tendencies. This could impair the financial intermediaries ability to identify, measure, mitigate and monitor risks due to the fact that the internal control framework could be seen as less than robust. The second hypothesis is that there will be shortfalls in capital requirements specifically as a result of the introduction of the new Basel Capital Accord and more generally after taking account of specific risks not previously considered by financial intermediaries. The third hypothesis is that the cycle of analysis, application and testing will result in the implementation of rigorously defined early warning system for modelling and scoring risks and that this system will be adaptable to change, both outside and within the environment, and extendable to additional use. Justification for the Research Sound risk management practices, which include appropriate tools and techniques and the employment of relevant steps to assess risk exposure are at the heart of effective financial intermediation. However, many institutions are exposed to high levels of risks in their operations and few have put in place the relevant infrastructure to appropriately capture their risk exposures. According to the Government of Jamaica, Ministry of Finance (1998)[7]: the financial distress experienced in the mid nineties was in several ways due to the fact that many domestic financial institutions did not have the necessary risk and financial management capabilities to carefully assess the risk. As a result, they were left holding real estate and other long-term assets that could not be easily disposed of to meet their short-term obligations. The Ministry highlighted the fact that: banks in Jamaica tended to invest in enterprises that were outside the scope of their core business which had the following implication: The banks entered sectors in which their management did not have the requisite skills or expertise. The banks, when lending to related parties or parties under common control either (i) made poor and biased credit decisions; or (ii) invested in companies on less than arms length terms resulting in poorly secured loans. The banks, in many instances had fund investments in non-core businesses with short-term borrowing instruments with guaranteed high interest rates. As a result, many non-core business had to contend with an unsustainable capital structure that relied heavily on high cost loans with relatively short maturities[8]. Many studies have highlighted the risk management practices, including techniques and tools used to identify, measure, mitigate and monitor risks in industrial countries. However, few studies (note the researcher is not aware of any at the time of preparing this thesis) have sought to understand and explain the risk exposures, risk relationships and risk management practices in financial intermediaries in the Caribbean, particularly Trinidad and Tobago, Jamaica and Barbados. The study utilizes a novel approach to analyse risk exposures and risk relationships, which has not been evidenced in the literature generally and definitely not seen in research on risk management in the Caribbean region. The risk profile of financial intermediaries are analysed using ratio analysis and statistical techniques including the standard deviation and arithmetic mean coupled with a five-point scale response to determine risk relationships based on a biological science description. This study will document over a ten-year period, sectoral differences in risk exposure reflected in the balance sheets and income statements of commercial banks, merchant banks, trust companies and building societies in three Caribbean countries. The results of the research will provide a sound set of ideas for the management of risks in these institutions in emerging markets. It will also provide an enduring account of risk relationships and the implications of sound risk management practices in general. Thesis Outline and Methodology The study examines the risk management framework in emerging markets in the Caribbean region. The focus will be limited to three jurisdictions in the Caribbean region. These are Jamaica, Trinidad Tobago and Barbados. This paper takes account of four types of deposit taking financial institutions Commercial Banks, Trust Merchant Banks, Finance Companies and Building Societies. There are 8 financial intermediaries across the three jurisdictions. Elite interviews were also conducted with senior management in sixteen (16) financial institutions in Trinidad and Barbados. Interviews were held with select senior management executives in the financial institutions. Among the executives interviewed were CEOs, Senior Vice Presidents, Risk Managers, Credit Managers, Operations Managers and Treasury Managers. In Jamaica, detailed surveillance were done of all the in scope financial institutions ie, commercial banks, trust and merchant banks and building societies. Reviews of annual reports and websites of all the financial intermediaries captured in the scope of the thesis were also done. The purpose of the review of the elite interviews and qualitative reviews of the websites, annual reports and other published data was to obtain information on four risk categories, particularly on the policies, procedures and processes in place to manage risk. Twenty risk proxies were used to calibrate risk exposure across four risk types in the financial intermediaries and the countries. These risk proxies were further reduced to eight based on their relative weights and significance as a risk-sensitive measure. Additionally, eight macro-economic variables were used to assess the economic environment within each country as well as to determine the extent to which these macro-economic variables were correlated with the risk proxies. Using a Likert-type index, correlation analysis and the results of the observation and interviews, the study developed risk benchmarks and risk scores, which were later used to determine risk relationships within financial intermediaries as well as within each country. The aim was to identify the risk relationships and to provide the managers of financial institutions and policy makers with an early warning system to calibrate and mitigate risks. The study analyzed the degree to which three major economies in the Caribbean region were exposed to credit, liquidity, interest rate and operational risks and the extent to which different countries are similar or different in light of these risk exposures. The paper sought to determine the level of risk exposures across four different financial intermediary types in three Caribbean jurisdictions. It expounded on differences and similarities in the risk profile of financial intermediaries and sought to determine which intermediaries are likely to have higher risk profiles. The paper also explored synergies and alliances between the four main categories of risk under study. These are credit, interest rate, liquidity and operational risk. It disaggregated proxies for risks based on risk types and highlighted risks drivers that are significant to different intermediary types or country. Lastly, the paper explored relationship between the critical elements and proposed a model for the scoring of risks. The relational perspective to risk management envisaged risk within three basic constructs namely, Symbiotic, Parasitic and Saprophytic as well as the nexus between these constructs and the internal control framework as measured by financial intermediaries policies, procedures and processes used to manage risks. The Saprophytic Construct At this level, risk is calibrated as being relatively low. Risks outcome are systemically pleasing and financial intermediaries are making meaningful contribution to the common good. Risks and reward can thrive within a conducive macro environment and the profile of institutions balance sheet and income statement contributes positively to the risk calibration outcome. A low level of risk exposure is usually attributed to a very robust internal control framework and more effective risk mitigation strategies. The Symbiotic Construct Within the Symbiotic construct, risk relationships are generally balanced. Risk is calibrated as moderate and the regulatory interest and the economic interest are neutral. Risk management is generally integrated and there is usually a connection between the process of risk identification, measurement, mitigation and monitoring. The profile of intermediaries balance sheets and income statements are viewed as risk-neutral relative to risk outcome and the internal control framework and risk mitigation strategies used by financial intermediaries are generally adequate. The Parasitic Construct Within this construct risks are calibrated as high or very high. There is usually adverse macro-economic condition in existence and there is disconnect between the regulatory interest and the economic interest. There is a general state of disharmony in the qualitative and quantitative approaches and disunity in the way that risk is generally managed. The risk profile of institutions balance sheets and income statements negatively impacts risk calibration outcomes. A hig

Howard Schultz Essay

Organization culture has been defined and studied in many and varied ways. Culture is defined as the set of key values, beliefs, understandings, and norms shared by members of an organization (Daft, 2012). The culture of an organization is going to play a big role in the success of the company. No matter how big or how small the company is, maintaining a culture that all employees can live by. Having all employees on board with the company’s mission will pay off a great deal in the long run. Starbucks is one of the premier coffee shops in the United States and their mission tell consumers what they do to maintain a huge customer base, to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time (www. starbucks. com). This paper will help consumers understand Starbucks’ organizational culture and the key leadership and management traits used to execute the business strategy. When people think coffee, they think Starbucks. Starbucks has become a hot commodity when it comes to consumers and their coffee. When people go to a Starbucks, they already know what they are getting, specialty coffee, great customer service and a nice cozy place to relax and just kick back. From the CEO on down to the baristas, Starbucks has developed a culture that sets them apart from other coffee shops around the world. Their success can be credited to the customer service. Anyone in a business knows that customer service is very important and can determine the success of a company. Starbucks thrives on ensuring that the baristas develop positive relationships with all customers. By doing this, customers will start to become loyal to the company. Loyal customers will keep Starbucks competitive in a market that a lot of people seem to be fond of because when people get up in the morning, nothing may be more refreshing then a cup of coffee. The Starbucks organization wants all its customers to feel like they are part of something special when they purchase a cup of Starbucks coffee. To help strengthen the culture, Starbucks focuses on being active in communities, in addition to their environmental responsibility, business ethics, open door policy, and their concern for the employees, customers, and stockholders, all these things make a strong positive organizational culture (Campbell, 2009). Within the organization, from the Starbucks executives down to the baristas, when it comes to maintaining the positive organizational culture that has been laid out for all employees, Starbucks separates themselves from many other coffee shops. The Starbucks management team has not based their success off of several things. Within the company the stores offer things that not many restaurants offer, such as Wi-Fi, exotic styles of coffee and a comfortable place to relax and enjoy a hot or cold coffee beverage. These things differ from other coffee spots in the world, so it makes Starbucks very unique. The innovative coffee styles that Starbucks uses attract the traditional coffee fanatic, as well as a new customer base. The styles of coffee will maintain customer loyalty and loyalty is one of Starbucks main focuses. The dedicated customers consist of business professionals and students. These are the individuals that Starbucks employees will see the most. The environment is made for them as well. For example, business men and women may go to Starbucks for lunch. It is comforting, quiet, and the store gives off a positive vibe. For students, it gives them a chance to indulge in a good beverage as well as take time out of their day to kick back and read a book or even catch up on a few homework assignments, whatever the case may be Starbucks offers an environment that others do not. To some consumers, having the coffee may just be a bonus; they really enjoy the environment Starbucks offers. According to brand expert Priya Raghubir, â€Å"Starbucks stands for coffee; it’s converted that into an experience, â€Å"People really have gotten to know Starbucks as the quintessential coffee shop, where they can sit and be welcome over a cup of coffee† (Shayon, 2013). As discussed previously, customer satisfaction is very important to the brand and company. Making customers feel at home by making Starbucks a cozy environment and providing free Wi-Fi keeps customers happy and keeps customers coming back. The management team coming up with these concepts really puts what they are trying to do as a company in prospective and also gives consumers an idea of what their company culture is. Throughout the company there are different management positions. It is the job of this team to attain organizational goals in an effective and efficient manner through planning, organizing, leading, and controlling organizational resources (Daft, 2012). Within the Starbucks culture one of the main focuses is the customers. With that being said a good management competency to have is communication. This is a very important skill to have because at Starbucks employees are constantly dealing with customers. Even at the executive level of management, communication is even more important because these are the individuals that are making the decisions that could affect the entire company as a whole. When those decisions are made they need to get communicated down to the baristas and everyone else in between. Communication fits perfectly within this company’s culture. Communicating things from the top to bottom tells all the employees what the main purpose of the company is. Communication helps maintain the culture throughout the whole company as well. For an organization like Starbucks were the focus is to keep customers coming back, the employees must communicate with them at a level that employees from other coffee shops just are not use to. With how Starbucks operates as a whole, they have made themselves the place to buy coffee, which they are not really known for. They are recognized for their great communication with the customers, with other employees, and the management team, and the goal is maintain this level of professionalism so the new and existing customers re-enter a Starbucks and always get the same exact experience no matter the location. â€Å"We’re not in the coffee business. It’s what we sell as a product but we’re in the people business hiring hundreds of employees a week, serving sixty million customers a week, it’s all human connection† (Gallo, 2012). Chief Executive Officer Howard Schultz is the man behind how this culture was developed; he is the one that drives the bus today. Back in the 1980’s Schultz had a vision to enhance the way people drink their coffee and he did just that. Starbucks coffee speaks for itself; it is the culture Schultz put in place that makes Starbucks unique and a nice environment to be in. Starbucks opened its first store March 30, 1971 with more than 17, 000 locations around the world (Gallo, 2012). Without Schultz, this company would not be what it is today. Since the early 70s the company has managed to emerge as a premier coffee in the world, and in the 80s with Schultz at the helm. In 2000, with Schultz not in the mix, things did not go as well as expected when he resigned. Eight years after his resignation; he was appointed as CEO again to help the company from the downward spiral they were on. Schultz stressed that is was going to take a lot to get Starbucks back to where they needed to be. It is clear that Schultz made a big impact on Starbucks when he was CEO, and when he was not CEO, the company took a bit of a plunge. Without Schultz, over time it seems like Starbucks may have not lasted. Answering the question, would Starbucks achieve long-term sustainability as a global leader in the coffee industry without Howard Shultz, the answer would have to be no. Just in a short period of time, the company managed to get away from the culture Shultz brought to the company. As an organization, it is their job to live up to the culture that was put in front of them. There have been many times in business where new leaders are appointed and they just do not live up to the expectations. This is a problem that can be fixed if communication is sustained as well. All companies develop or have a culture set in place already. Management plays a key role in developing and ensures that the culture is maintained. Starbucks is an organization that thrives off their culture and this is the reason why they are successful in the business world. They have set themselves apart from other coffee shops by focusing on things other than just the coffee, like the customers, the environment, and for business professionals and students, the Wi-Fi. The organizational culture at Starbucks may not be the best, but they are making a strong case for the organization. References Campbell, A. (2009, November 09). Organizational culture. EZine Articles, Retrieved from http://ezinearticles. com/? Organizational-Culture&id=3203513 July 23, 2013 Daft. (2012). Management. (10th ed. ). Mason, OH: Cengage Learning. Gallo, C. (2012). Starbucks ceo: Lesson in communication skills. Forbes, Retrieved from http://www. success. com/articles/1272-rekindling-the-heart-soul-of-starbucks? page=2 July 23, 2013 Shayon, S. (2013, March 08). [Web log message]. Retrieved from http://www. brandchannel. com/home/post/Starbucks-Customer-Loyalty-030813. aspx July 23, 2013 .

Filipino Psychology Essay

Sikolohiyang Pilipino – The History of Philippine Psychology The psychology of, about, and for the Filipinos was born out of the need to establish a discipline which is responsive to the needs of the Filipino people. [pic] Generally, to some extent, it had been considered a given until a few years ago that when one talked about psychology, one meant the psychology of Americans. Asian psychology had been unrecognized, or at least, unacknowledged worldwide. The Zeitgeist in Asian Psychology. Through the years, however, there was an awakening, a realization, by Asian psychologists that western concepts and theories were irrelevant and inapplicable when applied in the Asian context. They began to question the appropriateness of letting western social scientists describe and predict Asian behavior, without consideration for the differences between the Asian and Western cultures. Thus was born the need for an Asian psychology, a psychology arising from one’s own experiences. With it, there was a movement as well by Filipino psychologists of the need to have their own identity. History of Sikolohiyang Pilipino, or the â€Å"Psychology of, about, and for the Filipinos† Psychology as an academic discipline in the Philippines started in the early 1900s when the U. S. colonized the country. Scientifically, it was generally viewed as a continuation of the development of psychology in the West. In the early 1970s, however, there came a turning point in the lives of Filipinos. It was a period marked by a high degree of nationalism, brought about by the declaration of the Martial Law. It was ironic that the father of Philippine Psychology was, at that time, a recent Ph. D. graduate of Northwestern University in the U. S. It was precisely his Western education that made Sikolohiyang Pilipino founder Virgilio Enriquez realize the need to have a psychology based on the experience, ideas, and orientation of the Filipinos. Together with three other colleagues—Prospero Covar (anthropologist), and Zeus Salazar (historian), and Alfredo Lagmay (psychologist)—they helped establish the foundation for a psychology of and for the Filipinos. Enriquez had been a professor of Psychology in the University of the Philippines in Diliman in 1963, but left in 1966 for the U. S. to pursue a Ph. D. in Social Psychology. From there, he watched the disenchantment of young student activists in the Philippines over the deteriorating political and social conditions of the country. When Enriquez returned to the Philippines in 1971, he embarked on a research study with Lagmay into the historical and cultural roots of Philippine Psychology, which included identifying indigenous concepts and approaches. Four years later, he chaired the first national conference on Filipino Psychology. In this conference, the ideas, concepts, and formulations of Sikolohiyang Pilipino were formally articulated. Sikolohiyang Pilipino in the University of the Philippines. When Enriquez returned from the States, he and a few other colleagues translated foreign articles to Filipino. The students were also strongly encouraged to write their papers in this language instead of in English, which had been (and still is) the medium of instruction in the University. Gradually, more and more members of the faculty were convinced to use the Filipino language in teaching Introductory Psychology. The main problems they encountered in the use of Filipino in teaching psychology, especially in its initial years, included the lack of materials written in Filipino and the lack of a technical vocabulary. These challenges were solved by translations, compilations of local materials, and choosing the appropriate words from the local dialect. There were times when the technical term was retained when there was no equivalent in Filipino. This did not work out because Enriquez realized that the translation failed to express a truly Filipino psychology. Other factors were the difficulty of expressing or explaining some Western concepts and theories in Filipino, the negative reactions of students who sometimes felt that their skill in speaking and writing in Filipino was inadequate, and the students’ lack of fluency in the language. However, there were observable benefits as well brought about by the use of Filipino in teaching psychology. Among other things: †¢ It created better rapport between teacher and students †¢ There was a more relaxed atmosphere in the classroom †¢ The students’ confidence grew in expressing their opinions, thoughts, and actual experiences †¢ A different perspective, which was more Filipino, was introduced into the course †¢ Indigenous concepts were discovered; and. †¢ The scope of topics discussed became broader with the addition of information from local materials and experiences. Class discussions also became more concrete in relation to Philippine reality. Psychology became related intimately and significantly to the everyday life of the people. Most importantly, with the birth of Sikolohiyang Pilipino, a psychology with a Filipino orientation was developed. The Status of Sikolohiyang Pilipino Now. Sikolohiyang Pilipino continues to thrive, despite the death of Enriquez in the early 90s. Its proponents continue to advocate for a psychology that is truly responsive and reflective to the needs and the unique situation of the Filipino people. For more information about Sikolohiyang Pilipino, read an SP proponent’s paper on Indigenous Filipino Values. Reference: Enriquez, V. (Ed. ). (1990). Indigenous psychology: A book of readings. Quezon City: Akademya ng Sikolohiyang Pilipino. Copyright Ma. Aleah Taboclaon.

Genetics, Disease Counseling - 4765 Words

Genetic Disease Diagnosis, Screening and Treatment Advocacy and Decision Making in Genetics Competencies for Contemporary Nursing Issues (GNT1) Juanita Allen Janette Barney Western Governor s University Task 3 724.2.5-03-08 724.2.6-02-09 Mr. and Mrs. Trosack have recently been told through chorionic villus testing, that their unborn child has Tay Sachs disease.As the case manager there should be several appropriate members identified for an interdisciplinary team to obtain information for the Trosacks initial visit. Those team members include, a high risk obstetrician, or perinatologist, obstetric nurses, a geneticist, a social worker, and or genetic counselor who specializes in such genetic diseases, and it would be†¦show more content†¦In order to review their inherited genetic risks and help them understand and provide counseling according to their specific needs the genetic counselor should know the Trosacks have already established that their unborn child has Tay Sachs disease and based on those needs they should be provided with appropriate guidance and counseling as they progress through their pregnancy. The discussion should include what causes genetic disorders, and what that means to the Trosa ck couple specifically, including dominant, recessive and x-linked disorders. However, recessive disorders should be fully discussed in this case. Another topic to include in the discussion are what genes and chromosomes are, and the relation to Tay Sachs disease. The genetic counselor should have a great deal of experience in dealing with specific genetic diseases, including Tay Sachs disease. They would be able to provide a list of support groups and or families they could refer the Trosack s to in order for them to relate to others who have been through the process before. This type of assistance is chosen as part of the interdisciplinary team to assist this couple, especially Rita in understanding what they will be going through and what emotions to expect in the process. It willShow MoreRelated Genetic Screening is Necessary Essay1679 Words   |  7 PagesGenetic Screening is Necessary You are sitting in the counselors office, waiting. You are staring at the walls, trying not to think about what you are considering, but still thinking about it. Will I get cancer? Do I have the gene that will increase my likelihood of getting cancer ? My grandmother had cancer. Two of my aunts have had cancer. What about me? If I have this test, what happens then? The door opens and in walks the counselor. Time to find out about genetic screening. GeneticRead MoreDna Knowledge And Its Effects On The Human Of Individuals And Their Families1681 Words   |  7 Pagesrights to have children or not have them if their genetic characteristics include some kind of inherited disease (Fernà ¡ndez, 2009). In the 1940s and 50s, the genetic counseling gained popularity, creating the prenatal diagnosis and the therapeutic abortion, a form of abortion that became legal in the 60s in many countries (Fernà ¡ndez, 2009). Since 1970, eugenic practices are widespread across genetic diagnostic techniques, embryology, and molecular genetics that have had a spectacular development by implementingRead MoreI Am Working As A Family Health Nurse And Counseling A Married Couple Essay1054 Words   |  5 Pagescaring for families who need genetic counseling, it’s essential that the nurse understands and considers the family’s values, background, beliefs and behaviors. This information is valuable when setting mutual goals, developing car e plans and choosing interventions (Andrews and Boyle, 2016). In this post I will imagine that I am working as a family health nurse and counseling a married couple who are seeking my advice because they are both carriers for Huntington’s disease. As a nurse it’s my responsibilityRead MoreThe Case Of Jennifer And Jianshe Li952 Words   |  4 Pagesthe central nervous system, which is linked to genetics. I would recommend they ask the specialist how the pregnancy could affect Jennifer. Would the pregnancy be detrimental to her health? I would suggest getting a second and a third opinion. Would the fetus survive if it was afflicted with the disease? These are questions that only a specialist in neurology would be able to answer. I would help them look for a specialist who is familiar with the disease; consequently, it would be beneficial to findRead MoreGenetic Counseling : A New Field Emerging From An Intersection Between Genetics, Medicine, And Psychology1249 Words   |  5 PagesGenetic counseling is a new field emerging from an intersection between genetics, medicine, and psychology. As with most counseling, genetic counseling is a process of communication intended to help individuals and their families. However, for genetic counselors, they must also be able to comprehend medical information, including the management for various disorders. These individuals must also have an in-depth understanding of how heredity contributes to the risk and occurrence of disorders. TheyRead MoreThe Function Of The Msh2 Protein986 Words   |  4 Pagesmutation that leads to the disease is passed down from parent to child. Each parent has a 50/50 chance of passing the disease down to each of their children. As stated in Wikipedia, â€Å"Hereditary nonpolyposis colorectal cancer (HNPCC), sometimes referred to as Lynch syndrome, is inherited in an autosomal dominant fashion, where inheritance of only one copy of a mutated mismatch repair gene is enough to ca use disease phenotype† (https://en.wikipedia.org/wiki/MSH2). Today we use genetic testing for diagnosingRead MoreGenetic Testing And Mental Health Disorders1039 Words   |  5 Pages There are genetic components that are being identified in the diagnoses of mental health disorders associated with Huntington’s disease through human genome and family research. Diagnostic and presymptomatic testing is available by discovering a gene mutation for Huntington Disease (HD) and prepares persons who are at risk for Huntington Disease (HD) to ask for genetic testing. A multi-visit protocol is enacted when HD genetic testing is offered through HD testing centers, followed by educationRead MoreWhat Is Mutation? What Is a Gene Mutation? Discuss Sickle Cell Anemia (Its Cause, Effect, and Treatment) B) What Are Mutagens and Their Effects? C) What Is Genetic Counseling? Discuss the Advantages and Disadvantages of This Procedure.873 Words   |  4 Pagesmutation is present throughout a persons life in virtually every cell in the body. Mutations t hat occur only in an egg or sperm cell, or those that occur just after fertilization, are called new (de novo) mutations. De novo mutations may explain genetic disorders in which an affected child has a mutation in every cell, but has no family history of the disorder. Acquired (or somatic) mutations occur in the DNA of individual cells at some time during a persons life. These changes can be caused byRead MoreDiabetes : Diabetes And Digestive And Kidney Diseases882 Words   |  4 Pagesnumber of adults with diabetes has increased immensely from 5.5 million to 19.6 million (Centers for Disease Control and Prevention [CDC], n.d.). Diabetes global prevalence research by Wild, Roglic, Green, Sicree, and King (2004) predicted that, the total number of people with diabetes will rise from 171 million in 2000 to 366 million in 2030. Diabetes has many causative factors that encompass genetic, lifestyle, and environmental categories. Diabetes can vary in different individuals in correlation Read MoreEssay Muscular Dystrophy717 Words   |  3 Pagestreatment of, and cure for Muscular dystrophy since its discovery in 1886, by Dr. Guillaume Duchenne. Muscular dystrophy is a hereditary disease, affecting thousands of people every year, two-thirds being children between the age of birth through adolescents. Muscular dystrophy can also occur with no family history of the disease. Muscular dystrophy is a degenerating disease, in which the skeletal muscles degenerate, lose their strength, and cause increasing disability and deformity. Muscles attached