An Examination of General and Specific Motivational Mechanisms Essay Example for Free

An Examination of General and Specific Motivational Mechanisms Essay Luc G. Pelletier and Stà ©phanie C. Dion’s report entitled An Examination of General and Specific Motivational Mechanisms for the Relations Between Body Dissatisfaction and Eating Behaviors aims to examine the relationship of body dissatisfaction with eating behaviors through a study of the different models of regulation of eating behaviors used by women. The study mainly uses the Self-Determination Theory (SDT) as a framework for examination of socio-cultural pressures and the `thin-ideal` as factors for body dissatisfaction and, in turn, body dissatisfaction as a cause of eating-related problems like binge eating, dietary restraint, and bulimia. Lastly, the study also looks at two different levels of motivation to explain the differences in the responses of women to socio-cultural pressures regarding body image, which lead to a difference in eating patterns. These two are the general self-determination or a sense of self-determination toward ones life and self-determination towards eating. Negative body image and its causes and effects have been the subject of many studies during the past decade. Due to its popularity as a topic for research, many of its findings are well-known and accepted by society at present. Among these are the role of media, peers, family, puberty and others in reinforcing the thin ideal, the relationship of women’s perceived discrepancies between their body ideal and body image with their satisfaction with their own body and the effect of negative body images to women’s eating habits. However, a review of the existing literature about body image reveals many interesting and sometimes unexpected findings. The first among these is the main basis of this study, which is self-determination. Deci and Ryan’s Self-Determination Theory shows that the level of women’s general self-determination in life may serve as a shield against the effect of the pressure exerted by society for women to be thin. This is interesting because this will show how body-image can be approached as a cyclical issue when joined with the findings on how positive body image can lead to confidence then to a positive self-determination. Second, body image may have an effect on many positive qualities such as attractiveness, success and intelligence. This shows attractiveness as more than just a fixed variable. It is not merely affected by the physical attributes one is born with, but also by how one feels about these physical attributes. Moreover, it emphasizes the gravity of the consequences that either a positive or negative body image may cause. Its affects can extend onto many non-physical aspects of a person’s life. In fact, another research shows that pressures from society to be thin can change individual core beliefs as regards the importance of physical appearance compared with other values. Another interesting finding is that body dissatisfaction may be addressed by either self-reinforcement or by aiming to change one’s appearance. People are more familiar with the second approach, which includes exercising and dieting. However, it is interesting to find that grooming and other forms of self-reinforcement are also used. While these forms of self-reinforcement may have been admitted to be used by people to enhance their self-image, it is not easily identifiable to have a direct correlation to body image. Moreover, this type approach shows a more positive and less destructive way of addressing issues on body image.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Seven hypotheses were tested in the research. They are stated in the article as follows. First, general self-determination will be negatively associated with both socio-cultural pressures about body image and the endorsement of society’s beliefs about thinness and obesity. Second, socio-cultural pressures should be positively linked to the endorsement of society’s beliefs, which, in turn, will positively predict body dissatisfaction. Third, although body dissatisfaction is expected to positively predict both an autonomous and a controlled form of regulation of eating behaviors, it should lead mainly to a controlled regulation of eating. Fourth, the autonomous form of regulation of eating will be positively associated with healthy eating behaviors, whereas the controlled form of regulation will be positively associated with dysfunctional eating behaviors. Fifth, general self-determination should be positively associated with the autonomous form of regulation and negatively associated with the controlled form of regulation. Sixth, the autonomous regulation of eating behaviors will be positively associated with healthy eating behaviors and negatively associated with bulimic symptoms, whereas the controlled regulation of eating behaviors will be positively associated with dysfunctional eating and negatively associated with healthy eating behaviors. Finally, healthy eating behaviors should positively predict psychological adjustment, whereas dysfunctional eating should negatively predict psychological adjustment. These hypotheses aim to test the relationship of general self-determination, body image, body dissatisfaction, forms of regulation of eating behaviors, eating habits and psychological adjustment among each other. Methodology The study was done on 447 female students, ages 16 to 54 from two universities—the University of Ottawa and the Carleton University. Of these students 78.2% are taking undergraduate degrees from the University of Ottawa, 20% are graduate students from the same university, while the remaining 1.2% are enrolled at Carleton University. The researchers adopted several scales and indexes to test its hypotheses. Enumerated in the study are the General Motivation Scale (GMS), Teasing Assessment Scale, Body Dissatisfaction Subscale (EDI-BD), Regulation of Eating Behaviors Scale (REBS), Healthy Eating Habits Scale, Dysfunctional Eating (BULIT-R), Psychological Adjustment Index (PAI), Depressed Mood Scale (CES-D), Self-Esteem Scale (SES) and the Satisfaction with Life Scale (SWLS). The tests are composed of statements and questions, which the respondents assess using a Likert scale with around five to seven points for rating. The scales are usually divided in several subscales with equal number of items based on the nature of the hypothesis being tested. They have been previously used in other studies and their reliability and validity have been tested. Results and Discussion The study was able to prove all six hypotheses. These hypotheses will be discussed in three groups. These groups are general self-determination and determinants of body dissatisfaction, general self-determination and forms of regulation of eating behaviors and consequences of the forms of regulation of eating behaviors on psychological adjustment. The last group will be divided into the association of autonomous and controlled eating regulation to healthy and dysfunctional eating habits and the relationship of eating behaviors with psychological adjustment. The first discussion group pertains to the first and second hypotheses. Findings show that general self-determination has a positive association with autonomous regulation of eating behaviors, while it has a negative association with controlled regulation of eating. In relation to this, general self-determination has a negative relation with socio-cultural pressures about body image and the endorsement of society’s beliefs about thinness and obesity. On the contrary, socio-cultural pressures about body image and endorsement of society’s beliefs about thinness and obesity have a positive association, while the latter is positively associated with body dissatisfaction. The cause for this result was explained to be that the more women perceived socio-cultural pressures about body image, the more they internalized societal beliefs about thinness and obesity, which causes them to have body dissatisfaction. However, general self-determination allows them to be more motivated to act according to their own values, rather than be pressured socio-cultural messages of thinness. People with general self-determination are more likely to measure self-worth based on personal growth, meaningful relationships and other intrinsic values, rather than by using extrinsic values such as physical attractiveness. The second discussion group relates to the third and fifth hypotheses. It was found that both autonomous and controlled eating behaviors are good motivational mechanisms and have a positive association to body dissatisfaction. However, the association of controlled regulation, which is ÃŽ ² = .74 is stronger than autonomous regulation’s ÃŽ ² = .14. In addition to this, it was found that general self-determination in life caused them to be self-determined in the regulation of their eating behaviors, which is a specific life domain. The third discussion groups relates to the fourth, fifth and sixth hypotheses. As for the fourth and sixth hypotheses, majority of women who are dissatisfied with their body image eat in a restrictive manner due to the motivation to reduce body dissatisfaction caused by internal pressures such as guilt or shame or external pressures such as media and parents about body image and the endorsement of beliefs about thinness and obesity. Controlled regulation has a positive association with dysfunctional eating behaviors and a negative associated with healthy eating behaviors. On the contrary, women with greater self-determination tend to have healthy eating habits because they have less probability of perceiving socio-cultural pressures about body image and internalize societal beliefs about thinness and obesity. Unlike its negative relation with dysfunctional eating behaviors, autonomous regulation has a positive relation to healthy eating behaviors. Lastly, as regards the last hypothesis, positive psychological adjustment are found have a positive connection with healthy eating behaviors. On the contrary, it has a negative relation with dysfunctional eating behaviors. The results of the study suggest that healthy eating behavior may be a necessary condition for global psychological adjustment. These findings may provide new approaches to understanding and treating body image-related issues and eating disorders. Having built the relationship between body dissatisfaction and eating disorders, specialists may focus on increasing self-esteem rather than emphasizing the evils of unhealthy eating habits. They may also begin looking at the motivational perspective introduced in the study and adapt treatment according to what motivates a woman to adopt weight control habits. Summary In summary, the results were interpreted to show that societal pressures and self-determination may be seen as competing factors that determine body dissatisfaction, with societal pressures as the cause for the endorsement of societal beliefs about obesity and thinness, while self-determination as the buffer against it. Both body dissatisfaction and self-determination have an effect on the kind of eating regulation a woman may adopt. This may result to either a healthy or dysfunctional eating habit among women. However, the authors offered an alternative explanation for the results. The explanation is actually a reverse of the second hypotheses. According to the authors, body dissatisfaction may have been the cause for women to endorse society’s belief, rather than the inverse, because such dissatisfaction may lead women to pay more attention socio-cultural pressures about body image.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Several other topics related to this area of research may be examined in the future. First, researchers can look at satisfaction or dissatisfaction caused by the body image formed relative to the body type of the person with whom a subject has constant contact with. Some people may feel less overweight when placed with obese people than when placed with thin people and vice versa. Second, researchers may delve into more deeply into other means women address body dissatisfaction such as exercise, and determine what factors cause women to choose a certain approach. This may also be related to general self-determination such that researchers may examine which between exercising or other means of addressing body dissatisfaction and dieting, or a combination of both, is used by women with different levels of self-determination. Lastly, the present study may also be replicated using different genders, attributes, and means of addressing body dissatisfaction. Very interesting results may arise from the study of gays and lesbians.

The Concept Of Childrens Day

The Concept Of Childrens Day Universally, Children s Day is celebrated on 20th November, every year. This date was chosen as a day to celebrate childhood. Prior to 1959 Children s Day was universally celebrated in the month of October. This was first celebrated in the year 1954, as decided by the UN General Assembly. Basically this day was instituted with the sole aim of promoting communal exchange and understanding among children, as well as to bring about beneficiary action to promote the welfare of children, all over the globe. The date 20th November, was chosen as it marks the anniversary of the day in 1959, when the Declaration of the Rights of the Child was adopted by the United Nations General Assembly adopted. In 1989 the Convention on the Rights of the Child was signed on the same date, which has been sanctioned by 191 states, ever since. However, while 20th November is universally celebrated as Children s Day, in India this day has been preponed to 14th November, the date the marks the birth anniversary of independent India s first Prime Minister Pandit Jawaharlal Nehru. The reason why his birthday has been chosen for the celebration of children is because of his love and passion for children. Pandit Nehru is also regarded as the country s special child to have been the first Prime Minister, after her long struggle for independence. The day is marked with a lot of activities for children. But the fact remains that only a section of the country s children actually have an opportunity to celebrate their existence. Schools organize events and activities that their students thoroughly enjoy, but there is an entire populace of young ones that are left ignored on this special day the downtrodden street children. Instead of celebrating it with pomposity in schools and clubs and hotels, why not bring a difference into the lives of children who are unprivileged. While celebrating being a child, the fortunate ones should be reminded about their good fortune to have all that they are endowed with, while there are others who can barely feed or clothe themselves. Thus, while this day was globally instituted to provide children with basic Rights, maybe one can make a difference to a child s life by doing something special. Parties and celebrations happen all the time, but how about taking the fortunate children to homes that shelter street children and have them befriend those kids, donating clothes, toys, stationery, books, etc. Another way of celebrating this day differently would be to have your children, whether as teacher or parent, organize a party for some underprivileged children. In fact, if this is done in every neighborhood, imagine how many smiles there will be across the nation. Childhood is about innocence and playfulness. It is about joy and freedom. Maybe on this day you can make your own child sign up to sponsor the education of an unprivileged child, either through an NGO dedicated to educating and providing better living conditions for street children, or maybe you could do so for your employee s child. Celebrating Children s Day is about giving children the right to enjoy and grow into healthy and educated citizens of the country, and if you can teach your child the value of sharing with others what they are lucky to have, then not only your child will grow into a responsible human being, but also another child who otherwise could have ended up being a delinquent, had it not been for your thoughtfulness. As mentioned earlier, Childrens day in India is celebrated on Pandit Nehrujis birthday as a day of fun and frolic, a celebration of childhood, children and Nehrujis love for them. As a tribute to his love for children, Nehrujis birthday is celebrated all over India as CHILDRENS DAY Children are the future citizens of the country. The future of the country depends upon the present children. If the children do not develop in a proper way, the countrys future will be ruined. This was rightly realized by our late Prime Minister Jawaharlal Nehru. So, he advised the people to stop observing his birthday on the 14th November and to observe this day as the childrens Day. Since 1956 the 14th November is every year, observed in India as the Childrens Day. Advantages: On the Childrens day the neglecting people will get an opportunity to think of the future of their children. The whole society will think of its duty and responsibility towards the children. They will think of what have been done for the children in the year past and what should be done for them in the year coming. Because children are the future citizens of the country and the future of the country depends upon the present children. People will know that every individual in our society has a sacred duty towards the children. How this day is observed: Every year on the 14th November the Childrens Day is observed everywhere in our country. People gather in meetings to discuss over the future of the children. They discuss over how to build children as the ideal citizens. They discuss about how to make the child healthy physically, mentally and morally. Because if the students be not properly built, the future of the country will be in ruin. So, they take pledge not to neglect their children. The Childrens Day makes them realize that child is the father of man. On the Childrens Day, the children are given new garments and rich food. They are given picture books. Conclusion: Children are the future of our country. They are the future of our nation. So, every individual should realize the importance of the Childrens Day. Childrens day is celebrated in India on 14th november every year with a great celebrity. It is celebrated on the birthday of Jawaharlal Nehruji who loved and was loved by children. He was called as Chacha ji by children However, while 20th November is universally celebrated as Children s Day, in India this day has been preponed to 14th November, the date the marks the birth anniversary of independent India s first Prime Minister Pandit Jawaharlal Nehru. Childrens Day is an event celebrated on various days in many places around the world. International Childrens Day is celebrated on June 1 and Universal Childrens Day is on November 20.[1]Other countries celebrate a local childrens day on other dates. The reason why his birthday has been chosen for the celebration of children is because of his love and passion for children. Pandit Nehru is also regarded as the country s special child to have been the first Prime Minister, after his long struggle for independence. The day is marked with a lot of activities for children. But the fact remains that only a section of the country s children actually have an opportunity to celebrate their existence. Schools organize events and activities that their students thoroughly enjoy, but there is an entire populace of young ones that are left ignored on this special day the downtrodden street children.As mentioned earlier, Childrens day in India is celebrated on Pandit Nehrujis birthday as a day of fun and frolic, a celebration of childhood, children and Nehrujis love for them. As a tribute to his love for children, Nehrujis birthday is celebrated all over India as CHILDRENS DAY His great love for roses as well as children is a well-known fact. In fact he often compared the two, saying that children were like the buds in a garden. They should be carefully and lovingly nurtured, as they were the future of the nation and the citizens of tomorrow. He felt that children are the real strength of a country and the very foundation of society. Most importantly he did not discriminate between the sexes and believed in giving equal opportunities to girls and boys. In fact his own little girl grew up to be the third Prime Minister of India. Quite naturally, he was the beloved of all the children who gave him the endearing name of Chacha Nehru. As a tribute to this great man and his genuine love for children, his birthday is celebrated all over India as UNIVERSAL CHILDRENS DAY. A day of fun and fanfare. It is not only a national holiday, but is celebrated with singing, dancing and storytelling in schools and colleges as well as on radio and television. Special functions are held to honour children all over the country. The significance of Childrens Day But amidst all this pomp and glory, we should not lose sight of Chacha Nehrus real message. That is providing our children with a safe and loving environment in which to grow as well as giving them ample and equal opportunities through which they can take great strides and contribute to the progress of the nation. This day serves as a reminder to each and every one of us, to renew our commitment to the welfare of children and teach them to live by their Chacha Nehrus standards and example.

Narcissistic Personality Disorder :: Narcissism Essays

There are two types of Narcissistic Personality Disorders. The individual whose surroundings supports his or her ego, and demands that he or she present their selfish behavior will develop to be a kind of an exhibitionistic narcissist. These types of person thinks that they are superior to others, but at the same time his or her personal feelings are ignored. To make his or her feelings of satisfaction, to come back, the person will attempt to make the environment support his or her enormous claims of superiority and perfection. On the other hand, if the environment feels threatened by the person's ego it will attempt to suppress the person from expressing him or herself. These kinds of persons learn to keep the ego hidden from others, and they will growth to be a closet narcissist. The closet narcissist will only reveal his or her feelings of fulfillment when he or she is convinced that such revelations will be safe.   Ã‚  Ã‚  Ã‚  Ã‚  Is our negative leveling of narcissism a defense against a demanding call of the soul to be loved?†   Ã‚  Ã‚  Ã‚  Ã‚   By denying our narcissistic tendencies and by labeling this part of our dark side as negative, we our only repressing the growth that our soul desires.   Ã‚  Ã‚  Ã‚  Ã‚  The more we push narcissism away from us by disowning it, the more self consumed we actually become. In my own life, self-love was one of the greatest and most valuable lessons learned through very difficult circumstances. I discovered that the importance of self-acceptance must first be established first from the inside our self if I was ever to sincerely receive love from another. Our potential does not create our attitude, but our attitude creates our potential. I think that when people change their perception of self, then their lives will for sure change as well.

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Reflection I have been attending Virginia State University for one semester now, and ever since I came here I have learned more than I imagined imaginable. Since I have taken an English class every year in my life since the age of five, I believed I knew exactly what to expect. I was definitely wrong. When I began at Virginia State University, I assumed all my English classes would only consist of reading, discussing and then writing about â€Å"Old English†. Since that was what all my English classes consisted of in high school, I did not believe there would be huge difference at Virginia State University. I quickly discovered that there was much more to it. With only one semester of an English class at Virginia State University almost complete, they successfully showed me way more than the English language; they showed me how to be me. Taking a glance at my previous essays I wrote in high school before I came to Virginia State University, I am now very aware how much my skill to write, reveal my thoughts, ideas, and intelligence has grown stronger in this course. I have learned here at Virginia State University how to write, how to be myself, how to ponder for myself, and how to locate the solutions to the problems I do not have the answers to. I learned how vital the English language is to everyday life. There is never a second that goes by without me contemplating about something, but being enrolled in my first English class at Virginia State University, I am very proud to announce that as a result my critical analysis skills have significantly increased. Instead of concentrating on a proposed purpose, I have figured out how to constantly ask myself "why". I now actually dare myself to investigate an author’s work as acu... ...em up. The first English class I took at Virginia State University had actually assisted me in removing that horrid impulsion and write an essay worth writing with improved ideas that comes with added support. I was taught how to write numerous styles of essays in a lot of various arrangements. My writing has really improved in this writing course. This course has slowly taught and is still teaching me how to not write like I am still in high school. I do not make as many grammar mistakes as I use to. I have become a better proofreader. I learned a process to creating a thesis statement that unlike my other methods actually worked. I also learned a lot about the mechanics of writing. But, there are a few of things that I do believe I crave the fortitude and ability to achieve, and that is what I believe I will acquire continuing at Virginia State University.

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Science project: Creating a cell Cell membrane The cell membrane in the plant controls what comes into the cell. If something is needed the membrane lets the cell get past. In a plant, the membrane is surrounding the cytoplasm and the cell itself. The main function: The cell membrane has the important job to support the cell membrane and cytoskeleton inside of it. The membrane does the same job to the cytoplasm as it does to the cell. It lets some proteins in and keeps others out. In a plant, the membrane also serves an attachment to the cytoplasm. This means the membrane supports the cell and keeps it in shape. The membrane is made up of two parts, the internal and outer membrane. The outer membrane controls what comes in of the cell and how much of it is needed. The inner membrane supports the cell and controls the exchange of organelles from its cell to another. However, membranes are semi-permeable. This means that they allow very small molecules in even if not needed. Like oxygen and carbon molecules. The cell transport proteins to other cells that keeps the cell healthier. Other parts that help the membrane transport organelles are transmembrane proteins. These proteins are spread around the whole membrane. There are four types of transme mbrane proteins transporters, receptors, anchor and enzyme. Transporters carry one molecule to another. The enzyme transforms a molecule to a different form. An anchor protein can connect an outer molecule with an inner molecule. What are they made of; Cell membranes are made up of a phospholipids bilayer. The bilayer is made of many phospholipids side by side. The phospholipids has one glycerol two fatty acids and one phosphate heads. This compares to a †¦ Laser alarm: ... ...reate a chemical reaction to make NADPH and ATP. Now the dark reaction. The ATP from the light reaction is used to make carbohydrates from hydrogen. The carbohydrates posses and energy that are given by the ATP and NADPH. This carbohydrate has the chemical energy to make glucose (sugar) that is the main source of their food. The chloroplast’s ability to do the process photosynthesis is not only helpful to plant but to animals that eat plants. This because a plant cannot live without food and an animal’s food is a plant. What is it made of: A chloroplast is made up of lipids and protein membranes that are folded in a complex way. This compares to a: Solar panel: Similarities: †¢ Converts sun light to energy †¢ Just like the chloroplast, the solar panel stores the energy from the day so they can use it for the night too. †¢

Case Study on Sumitomo Corporation Essay

1.Case Study on Sumitomo Corporation on Derivative Losses and Lesson Learned 1.1Introduction Sumitomo Corporation was top in market in copper business in the world prior to 1996 in term of trading size and it operations. Copper business is part of their portfolio and it was delegated to Yasuo Hamanaka who was the Head of Copper Trading and he was engaged in illegal copper trading and faced extensive losses and massive cover-up. As the result of this loses, he attempted to avoid losses many times. This was against the rules and regulation of the London Metal Exchange (LME). LME created new regulation to prevent the market domination, as the result of this; he faced losses on his operations. There were two malfunctions recorded; he maintained two types of books, one is to showing big profit, and the second one is to keep secrete account, unauthorized trades over 10 years. No one except Hamanaka was not aware of accumulated loss of $ 1800 million. 1.2Background of the Company Sumitomo Corporation is one of the subsidiaries of Sumitomo Group which is one of top 5 â€Å"Sogo Shosha† general trading in Japan. It has 120 overseas branches in 65 countries, and having diversified business of Metal, Mineral Resources, Energy, Chemical & Electronic and Infrastructure. Copper Department is one of the departments in Copper Corporation which is owned Mineral Resources, Energy, Chemical & Electronic Business unit. In 1800s, Sumitomo Corporation was diversified the business into Sumitomo Bank, Sumitomo Metals, and Sumitomo Corporation. In 1980, they obtained strong position & positive reputation in the Copper market. Competition in Copper industry was very high; Copper was traded on LME listed in London and COMEX in USA. Copper was placed 3rd used Metal after Iron & Aluminum. There were two types of market participants i.e. one is supplier who does physical supply, and the second is speculators who arbitrage deal without delivery. Sumitomo was acted as speculator and after acquiring mines in Philippines in 1984, Sumitomo changed from speculator to supplier. After 1988, they made of $3 to 4 million profit and they followed cost leadership strategy which caused huge loss because of having high inventory while declining demand. LME is popular for providing spot and future markets where clearing systems reduce counter party risks. The delivery would be taken place for the authorized warehouses and storage facility. The specification of copper would be included i.e. quality, trading unit, price quotation, trading month, minimum fluctuation, and tick value. The copper contract would meet the following conditions i.e. counter party information is open, and delivery condition is by the party, not LME. Yasuo Hamanaka was the Chief/Head of Copper Corporation. He was committed wrongful Act during the 1985-1996. He was referred as by many Mr. Five percent/Mr. Copper. He traded 0.5 million metric tons per year which was the 5 % of total world demand and having experience of 23 years in copper trading. 1.3Sumitomo Copper Scandals From 1985, Hamanaka lost a total of $1800 million. He executed as many as $20 billion worth of unauthorized trades a year. His main strategy was the â€Å"short squeeze†. The future market was particularly vulnerable to manipulation since the market volume was relatively small. By buying up futures and choosing physical delivery, future seller ended up buying copper in a spot market, which resulted in backwardation: the spot price is higher than the forward price. As far as LME concern, it considers only the inventory in their authorized warehouses. If someone moves away from copper inventory outside of an authorized warehouse, LME inventory appear to decrease and therefore, copper price rise due to a perceived tight supply in the market. Hamanaka implemented such strategy because of all his illegal trades was not booked, but is clear that this was a possible way to induce backwardation. In December of 1991, the LME decidbed to set new regulations that would limit the range of backwardation within 25 pounds to prevent market manipulation. Backwardation shrunk to almost $0 or even negative, thus causing a huge loss in Sumitomo’s portfolio. To recoup the loss, he conducted a Radr transaction in June 1993, but at the end he ended up closing their Radr position and incurred a $1.1 billion loss. Hamanaka tried to recoup the loss by increasing the trade volume and made a contract with Winchester for1 million metric tons over two years at the price of $2,800, however, due to price declines, the loss kept expanding. Hamanaka’s next step was to create an option portfolio named â€Å"Radr† transactions. He made six different transactions in Radr. The counterparty of these transactions was Credit Lyonnais Rouse (â€Å"CLR†, currently Calyon Group). Since the position held by CLR was large and caused backwardation, LME tightened the backwardation limit to $5 in September 8 1993. In addition, LME informed Credit Lyonnais that they were to cancel part of their transactions with Sumitomo on September 17th,, Thus resulting in a $1.16 billion loss for Sumitomo. ïÆ'Ëœ1st: In June 25, 1993, Hamanaka buys call option with an average price of $2,400 and which expires after 2 years. The transaction is totally irregular because the total volume was 1 million metric tons as compared to all LME inventory of 0.5 million. The portfolio could make a profit if the price went up to $2,480. To pay a premium of $69 million, Hamanaka made a 2nd trade. ïÆ'Ëœ2nd: Hamanaka made a short strangle, combination by selling a 0.5 million $2,100 call and $1,900 put option. The portfolio could make a profit if the price remained between $1,900 and $2,140. From this transaction, he got $94 million of premium and paid for the 1st option. With 1st and 2nd strategy, total breakeven was $2,700. ïÆ'Ëœ3rd: Selling future at a price of $2,000 which increased payoff to around $1,900. ïÆ'Ëœ4th: Buying 1.35 million metric tons of $1,750 put, breakeven was $1,580. He predicted that the copper price would go down below $1,600 level. ïÆ'Ëœ5th: Buying 1.35 million metric tons of $1,800 put again, breakeven was changed to $1,680. This portfolio could make a profit slightly if the price went down below $1,700 level. ïÆ'Ëœ6th: Selling 1.2 million metric tons of $1,950 call to get $29 millions of premium. With this transaction, breakeven was changed to $1,680. However, if the copper price exceeded $1,950, Sumitomo suffered a huge loss. 1.4Lesson Learned from Sumitomo Case The Sumitomo Case explains following lessons base on internal control and risk management prospective, and it believed that if controls were in place, losses would have been detected much earlier. (a)Management Level Control: Sumitomo Corporation failed to execute a risk management practices and they believed the expertise and specialized knowledge of Hamanaka. The essence of the problem was unauthorized trading that the culprit undertook to enhance his firm’s profitability and then his own career and pay. Hamanaka tries to cover up the losses through taking more risk that end up with further losses. Setting up corporate discipline and sound Management structure is important to manage the risks. (b)Independent Transaction Monitoring: Sumitomo should create a separate and independent supervisor system within the company hierarchy to avoid these agency issues; specifically the issues between recording and checking procedures. Segregation of duties is important to prevent the malpractices. Middle and bank office should be totally separated from the front office.   (c)Corporate Responsibility: We should also consider corporate responsibility with regard to timely reporting. In the Sumitomo case, the management waited ten days until issuing a press release. Sumitomo needed some time to calculate their losses; they could have avoided additional declines in copper prices that were caused because of the rumors and uncertainty in the market. (d)Government Regulations: The regulatory agency should execute more stringent rules on the derivatives market to avoid price manipulation and impose new regulations on corporate reporting obligations so as to provide investors and other market participants with greater information regarding the organization’s willingness to take risks and capability to manipulate market prices. The official and market pressures of stringent regulation will strengthen the internal auditing and information systems of many firms and provide a check against possible management discretions. 2.Case study on the Orange Country on Derivatives Losses & Lessons Learned The purpose of this case is to explain how a municipal lost $1.6 billion in the financial market. In December 1994 Orange County stunned the market by announcing that its investment pool had suffered a loss of $ 1.6 billion this was the largest loss ever recorded by local government investment pool and led to the bankruptcy of the county shortly thereafter. The loss was the result of unsupervised investment activity of the Bob Citron, the county treasure who was dealing with the $ 7.5 billion portfolio belonging to the county schools, cities, special districts, and county itself. In the tome of fiscal restrains Citron was viewed as a wizard who could painlessly generate greater results to the investors. Citron generate 2% higher than the comparable state pool Figure 01 citron’s track record Citron was able to increase returns on the pool by investing in derivatives securities and leveraging the port folio to the hit. The pool was such demand due to its track record that citron had turn down investments by agencies outside Orange County. Some local schools districts and cities even issued short term taxable notes to the investment in the pool by increasing the leverage even further. For that there was a repeated public warning, which was by notably by John Moorlach, who ran for treasurer in 1994, that the pool was too risky. Unfortunately, he was widely ignored by Citron when he was re elected. The investment strategy worked excellently until 1994, when fed started a series of interest rate hikes that caused severe losses to the pool. Initially it was announced as a paper loss. Shortly thereafter, the county declared bankrupts and decided to liquidate the portfolio. This occurred because citron expect that interest rates would fall or stay the same, the citrons main purpose was to increase income by exploitation that the fact that medium term maturities had higher yield than short term investments. On Dec 1993, for instance short term yields were less than 3%, while 5year yield were around 5.2% .which such positive sloped term structure of interest tares , the tendency maybe to increase the duration of the investment to pick up extra yield . The boost, of cause comes at the expense of great risk .the strategy went as long as interest rates went down. In February’94 however the Federal Reserve Bank starred a series of six consecutive interest rate increases, which led to a bloodbath in the bond market. The larger duration led to a $1.6 billion loss 2.1. Lessons Learned from Orange Country Case Due to the activities of Bob Citron the municipality lost $1.6 billion in financial markets. Therefore, it is essential to understand the lessons to be learnt from the Orange Country case. (a). No autocratic decisions should make in investment activities Bob Citron was investing the funds owned by the taxpayers in risky securities in Wall Street as per his own interest. Since he managed to generate higher returns for the funds invested in the early stages Citron was viewed as a wizard. This made him over confident on his actions which resulted in huge losses at the end. When the leverage increase due to these activities Bob Citron, the treasurer was warned by John Moorlach thath the pool was too risky. However, counter arguments were widely ignored and Citron was re-appointed as the treasurer. (b). Local governments need to maintain high standards for fiscal oversight and accountability. As noted in the state auditor’s report following the bankruptcy, a number of steps should be taken to ensure that local funds are kept safe and liquid. These include having the Board of Supervisors approve the county’s investment fund policies, appointing an independent advisory committee to oversee investment decisions, requiring more frequent and detailed investment reports from the county treasurer, and establishing stricter rules for selecting brokers and investment advisors. Local officials should adjust government structures to make sure they have the proper financial controls in place at all times. (c). State government should closely monitor the fiscal conditions of its local governments, rather than wait for serious problems to surface The state controller collects budget data from county governments and presents them in an annual report. These data should be systematically analyzed to determine which counties show abnormal patterns of revenues or expenditures or signs of fiscal distress. State leaders should discuss fiscal problems and solutions with local officials before the situation reaches crisis stage. (d). Always aware of the negative side on risky investments The treasurer was assuming that interest rates would fall or stay low when he goes for huge investment activities. However, when the things moved the opposite direction and the interest rates went up the pool suffered severe losses. Therefore, always be cautious when making predictions on market phenomena. (e). Use proper statistical risk assessing methods before invest in securities An investor could use a proper risk assessment method such as Value At Risk (VAR) method to assess the market risk of the portfolio. VAR is the maximum loss over a target horizon such that there is a low, pre specified probability that the actual loss will be larger. Therefore, shareholder and managers can decide whether they feel comfortable with the given level of risk. 3.Case study on the Procter & Gamble on Derivatives Losses & Lessons Learned Procter & Gamble Co. is a Fortune 500, American global corporation based in Cincinnati, Ohio, that manufactures a wide range of consumer goods. In late 1993, Proctor & Gamble financial managers, well known for actively managing their interest costs, expected interest rates to drop and went to Bankers Trust searching for aggressive interest rate swaps that would allow them to profit on these expectations. P&G told to Bankers Trust about ways of replacing a fixed-to floating swap that was maturing. P&G’s specific objective was to negotiate a new $100 million swap that would †¢Again put it in the position of paying floating rates and †¢Squeeze these to a minimum. Specifically, the company wanted to pay 40 basis points (0.4 of 1%) less than its standard, upper-crust commercial paper rate (then about 3.25% for six-month paper). Bankers Trust responded with a highly levered, extremely risky, and extremely complex five-year interest-rate swap agreement. In this the P&G had to pay 75 basis points less than rate of Commercial Paper, if the interest rates of 30 years and 5 years treasury bills will remain constant or go down. Five-year Treasury rates rose from 5% in early November 1993 to 6.7% on May 4, 1994. P&G’s other benchmark, 30-year Treasury rates, went from about 6% to 7.3%. Because of large duration the effect of rise in interest rate on long term bonds was very high. When interest rates headed up, Proctor & Gamble’s treasurer realized the magnitude of the company’s potential derivatives losses and decided to get out of the swap. Because of the intricate complexities and linked derivatives of the agreement, however, P&G lost $157 million to lock-in interest rates (which were 1,412 basis points (14.12%) above the commercial paper rate) in only six months of a five year contract. When interest rates headed up, Bankers’ trust entered into another contract with P& G- a wedding band. When this strategy also failed, it led P& G to pay even higher rate of interest from 14.12% above Commercial Paper (CP) to 16.40% above CP. CEO Edwin Artzt, called the swaps â€Å"a violation of the company’s policy against speculative financial transactions† and banned all leveraged swaps. As the Bankers Trust had suggested the contracts, P& G blamed them for the losses. 3.1Lesson Learned from Procter & Gamble Case The Procter and Gamble Case explains following, (a)Legal dispute between P&G and Bankers: Therein lies the crux of the legal dispute between P&G and Bankers. P&G claims that before the swaps were signed, Bankers repeatedly assured it that in the early stages of the swaps, the company would be able to do lock-ins at acceptable prices. Court papers, in fact, include letters from Bankers that make such assurances, though these consistently cite assumptions of stable or only slightly rising rates. P&G says, however, that on one occasion it â€Å"pointedly† asked the Bankers Trust person with whom it was dealing what the lock-in situation on the first swap would be if rates and volatility were not â€Å"stable.† The answer, P&G says, was that â€Å"possible changes in rates or volatilities would not have a material or significant effect† on the company’s lock-in position. (b) Purpose of Deliveries: A P&G spokeswoman stressed that the transaction was â€Å"speculative and goes outside the P&G policy of conservatively managing our debt portfolio.† Asked whether the company’s treasury was expected to be a profit center. In a speech, William J. McDonough, president of the Federal Reserve Bank of New York, warned that top managements of financial and nonfinancial companies have a responsibility to understand and constantly monitor derivative markets when their companies are involved in them. Also Mr. McDonough said. â€Å"To put it simply and directly, if the bosses do not or cannot understand both the risks and the rewards in their products, their firm should not be in the business.† 4.Case study on the Showa Shell Sekiyu on Derivatives Lossess & Lessons Learned Showa Shell Sekiyu is one of Japan’s leading oil refining companies and is engaged in producing gasoline, diesel fuel, fuel oil, kerosene, lubricants etc. It was established in 1876 under Samuel Samuel & Co, and was later became a subsidiary of Royal Dutch Shell group, in 1985. And presently, 50% of shares are owned by Royal Dutch Shell Group. In the year 1993, the Company made history by making approximately USD 1.4 Bn with unauthorized forward currency transactions. As an oil importer, company imported crude oil in US Dollars and sold the end products in Yen. Showa Shell had been used to hedge a proportion of its currency exposure using foreign exchange forward contracts. In 1989, company entered into a series of forward options where it agreed to buy dollars forward at an average rate of USD 145. Over the next few years Yen strengthened ageist the dollar. However, at the time of maturing of these contracts, the foreign exchange rate was at USD 125, indicating a difference of USD 20 or a drop of approximately 14%. But, treasury department of the company decided not to recognize the losses and chose to roll over the forwards using historical rates, without appropriate internal authority. And consequently, the actual losses made were concealed within the new forward contracts, and this actually meant that the company was borrowing money under the guise of forward contracts. This practice or rather malpractice was continued until the end of 1992, and at that time the company had in excess of USD 6.4 Bn of forward contracts on their accounts, and out of this, it was revealed by the management of the company that hidden financial losses were USD 1.4 Bn. And the losses amounted to more than five times of its annual oil import at that time. Four senior executives of the company had resigned following the discovery of unauthorized currency dealing including, Kiyoshi Takahashi chairman of Showa, Takeshi Hemmi the president, who took responsibility for the dealings that resulted in the huge losses. The resignations were made as shell, one of the biggest world oil groups , reported a 28% decline in net profits. Main reason for the losses was that treasury department of the company, entering into unauthorized forward currency transactions, with the expectation of US Dollar to rise against Yen, and attention was not given to the fact of worsening the situation in case of Yen strengthening against Yen. John Jennings, then Shell Group managing director, had stated that, an unauthorized currency speculation was like â€Å"A gross contravention of established rules and practices which was deliberately canceled†. The continued dealings that were made were the result of one treasury manager trying to recoup losses amounting to single figure millions, incurred during normal course of his job, although with failures in attempts made, continues dealings were made by exposing the company to increasingly large exchange rate risks. 4.1Lessons Learned from Showa Shell Sekiyu Case These huge losses made, forced the company to focus on more tight internal controls and focus on the importance of having internal controls. Although defining of risk limits is not necessarily provide results, if proper controlling is not there to take corrective measures, in case of deviations. And furthermore, it is never advantageous to assume that market fluctuations can be predicted accurately, at all times. And if being successful in the past, it can purely be due to luck and it does not guarantee that next time would be the same. Company incurred the losses on the assumption of currency value increasing rather than decreasing. The purpose of using derivatives is to hedge the risk and not to make profits by speculating and speculators take huge risks, rather than hedging risks. Company should have focused on the fact of maintaining their crude oil import price by mitigating exchange rate risks by using the forward contracts. If a loss is made in the process of trying to maintain price level, although losses are made in the profit and loss account, the objective of maintaining price level is still achieved. This fact is very important in dealing with derivatives and should not make harsh judgments on losses made when trying to maintain price level. It is difficult to measure the exact point, where, the hedging of risks ends and being speculative starts. And in Showa case, treasury department of the company, who were there to hedge risk, had dealt as a speculator and without adhering to the internal controls and not obtaining proper approval for its dealings. In addition, it took more than four years to recognize this malpractice by the higher authorities, which pin points the lack of transparency in accounting practices. And it was blamed by some experts on the Japanese accounting system, since the dealings were not identified earlier. And the dealings were only revealed by chance, during a conversation between a Japanese bank manager and Showa manager.

Edward Jones’ original business model Essay

Executive Summary This memorandum addresses some of the key issues with Edward Jones, which includes the lack of an online presence, possible cannibalization from larger firms, and the inability to manage funds from institutional investors. I conclude that the most effective of all of the theorized strategies would be a combination of Edward Jones’ original business model with an online platform. This plan would allow Edward Jones to stay true to its fundamentals, as well as attract new clientele and provide better service to its existing clients. Introduction Edward Jones has become the fourth largest brokerage firm in the United States. By holding on to a fundamental business strategy based on the core concepts of close client relationship and long-term investment focus, Edward Jones was able to offer excellent service and performance. However, with the industry rapidly changing, Edward Jones must evaluate its core values to sustain its competitive advantage but in a manner that will allow them to expand its services, and continue to compete with the top players in the industry. Key Issues and Problems When observing Edward Jones Financial, I found three critical issues and problems with the firm. Edward Jones built its business model around creating an environment that would allow entrepreneurs to thrive and run their own businesses to a certain extent. This is what originally led to Edward Jones’ success when the company first started; however, it is also the catalyst for the issues of the firm that were present in 2006. Edward Jones’ three main issues were the cannibalization of its business by bigger firms such as Merrill Lynch, customers leaving Edward Jones to manage their own money via online platforms such as E-Trade (MITR, 2014), and the lack of  ability to manage high net worth funds that are typically present with institutional funds such as pensions. Edward Jones built its business around meeting face to face with individuals in their homes and offices. This is a great model for an entrepreneur driven financial services firm. However, as the technology b ubble began to burst in the mid 2000’s, online brokerages such as E-Trade began to draw customers away from Edward Jones. The lack of an online presence on Edward Jones’ part made companies that offered this service more appealing due to lower fees (OBR, 2008). When examining Exhibit 5 (HBR,2007) , you can see that Edward Jones derived over 83% of its revenues from commissions and revenue from fees. Whereas, E-Trade generated only about 34% of its revenues from these categories. This shows that, online brokerage was advantageous to clients given that they could avoid expenses that were used to pay brokers, making it a significant problem for Edward Jones. The last major issue was that they were not suited to manage institutional funds. Despite building an excellent company around working with blue-collar individuals and families, it is clear that Edward Jones’ focus on the individual investor might have been a significant problem. By only working with individuals and not selling large amounts of stock and bonds to institutional investors, Edward Jones passed up significant amounts of manageable assets and subsequently, revenue. Exhibit 5 shows firms that were managing institutional investments such as pension funds had significantly higher profit margins than Edward Jones. In 2005 Edward Jones’ profit margin was 1.05%, while Merrill Lynch and Morgan Stanley, were 27.8% and 26.33%, respectively. This also shows the average amount of assets in dollars per account at each firm. Edward Jones’ average assets per account were $45,556 while Merrill Lynch & Morgan Stanley was $163,667 and $137,111 respectively. Edward Jones leaves revenue on the table by not managing higher net worth institutional accounts. Available Strategic Options Edward Jones’ strategic direction in 2006 had to respond to competitors like Merrill Lynch if the partnership wanted to maintain its exceptional performance and growth. The first option focuses on staying true to Edward Jones’ small-town roots and demonstrating the value of strong personal relationships with one’s financial advisor in planning for the distribution  phase of life (Faux, 2014). FAs can take advantage of face-to-face interactions and close relationships to communicate to clients the importance of planning for the distribution phase as soon as possible and hopefully encourage client referrals. Also, a professional advisor who personally knows the clients and their needs provides critical support to keeping long-term retirement plans on track while still focusing on time-sensitive decisions. This defensive move could stunt the firm’s growth, and if it fails, could leave Edward Jones even more vulnerable to cannibalization. The second option shifts the company’s original policies of strictly face-to-face interaction to a hybrid model, which includes online account and portfolio tracking and current news and research. This option adds value for existing customers because they can view all of their financial information in one place at their convenience. Additionally, this technology offering creates a minimally viable product for mass affluent â€Å"delegator† and â€Å"validator† type investors, and then entices those clients with the added value of a personal financial advisor. This option also leverages the firm’s existing research efforts into growing the business. The final option calls for a rapid expansion to institutional clients in an attempt to compete directly with competitors such as Merrill Lynch, Morgan Stanley, and Wachovia. The success of these firms indicates that expansion is possible. If Edward Jones does not expand, it will forgo potential market share and the attendant revenue. However, expanding as its competitors did would likely mean compromising many of the firm’s established values and beliefs. Recommendations I strongly recommend that Edward Jones shift to a hybrid model of face-to-face interaction combined with online account and portfolio tracking and access to current news and research in order to retain existing clients as well as attract new clients. This strategy enables the firm to stay true to its client-centric roots and positions the firm for growth. When clients have instant access to their financial information and the latest news and research, they feel better equipped to face complex distribution decisions. Potential clients in the post-Internet bubble world expect basic technology offerings but also appreciate the benefits of a personal financial advisor. Being competitive in the future requires embracing technology as well as  taking advantage of the firm’s close personal relationships with its clients. Works Cited â€Å"Online vs. Traditional Brokerage.† Money Is The Root. N.p., n.d. Web. 08 Apr. 2014. Faux, Zeke. â€Å"Edward Jones Trains Young Stockbrokers the Old-Fashioned Way.†Bloomberg Business Week. Bloomberg, 30 May 2013. Web. 08 Apr. 2014. â€Å"Stock Broker Account Transfer Fees.† Online Broker Review. N.p., n.d. Web. 08 Apr. 2014. Collins, David, and Troy Swith. â€Å"Edward Jones in 2006: Confronting Success.† Harvard Business Review. HBR, 21 Mar. 2007. Web.