Jefferson About Education Essays - Randolph Family Of Virginia

Jefferson About Education Thomas Jefferson accepted that general training would need to go before general testimonial. The oblivious, he contended, were unequipped for self-government. In any case, he had significant confidence in the sensibility and openness to instruction of the majority furthermore, in their aggregate intelligence when instructed. He accepted that the schools ought to show perusing, composing, and number juggling. Likewise, the kids ought to find out about Grecian, roman, English, and American History. Jefferson accepted the country required state funded schools spread around, for every single male resident to get free instruction. By 1789, the main law was passed in Massachusetts to reaffirm the provincial laws by which towns were committed to help a school. This law was disregarded. Tuition based schools were opened uniquely to the individuals who could stand to pay them. In the center states strict gatherings opened most schools. Very few schools or foundations were opened to the nonwealthy individuals. The ladies, blacks, and Indians couldn't go to class. It was not until the mid 1900's that the Nation started making institutes for females, since government felt that they should have been taught moms to instruct their kids. Jefferson accepted in the Republican Mother. Afterward, numerous nineteenth century reformers trusted in the intensity of instruction to change and recover to discharge a fault or obligation, to purchase back-in reverse individuals. Thus, they created a developing enthusiasm for Indian Education. Jefferson and his adherents accepted that the Native Americans were respectable savages, they trusted that tutoring the Indians in white culture would inspire- to improve the profound, social, or keenness condition- the clans. Be that as it may, the states and neighborhood government did little to help training. In contrast to the ladies and Indians, blacks had no help by any means. There were no endeavors to instruct subjugated African Americans, generally on the grounds that their proprietor favored that they stay oblivious and this probably less inclined to revolt. By 1815 there were 30 optional tuition based schools in Massachusetts, 37 in New York, also, numerous others spread all around the country. They were generally distinguished; they were very few that were open. Advanced education also veered from Republican goals. The quantity of schools and colleges in America developed significantly; they went from nine of the hour of the Revolution, to twenty-two in 1800, and after that expanded consistently. Barely more than one white man in a thousand, approached any advanced degree, and those rare sorts of people who attended colleges were nearly no matter what individuals from prosperous, propertied families. Jefferson unequivocally accepted that the country's future depended, in extraordinary part, on the country's training. He said in 1782, Each administration degenerates when trusted to the leaders of the individuals alone. The individuals themselves, accordingly, are its lone safe stores. What's more, to render even them safe, their brains must be improved in a specific way. He accepted that in request for individuals to confide in the individuals who are accountable for their administration, they need to have instruction, to have the option to settle on choices dependent on their information. Jefferson likewise accepted that there wasn't any opportunity without training. He stated, If a country hopes to be oblivious and free, in a human progress, it expects what it never was and never will be. By this, he implies that all together for the individuals to need a free country and expect for extraordinary things to occur, they have to have some instruction. On the off chance that they don't need an instruction, at that point they are simply going to consistently dream and never go anyplace. The Connecticut school ace and attorney Noah Webster, said that the American student ought to be taught as a patriot. When he opens his lips, Webster composed, he ought to practice the historical backdrop of his own nation. Each resident was to be instructed somewhat. For the less well off individuals, to likewise have some training. Jefferson accepted that the country truly expected to have schools. He needed for poor people and rich to have some sort of Education, for themselves, yet in addition for the country's future.

The relationship between employees job satisfaction and customer satisfaction in service business

The connection between workers work fulfillment and consumer loyalty in administration business Conceptual This examination is directed inside the bank of America and is planned for demonstrating the connection between representative fulfillment and consumer loyalty in the banking industry.Advertising We will compose a custom proposition test on The connection between workers work fulfillment and consumer loyalty in administration business explicitly for you for just $16.05 $11/page Learn More The investigation is required by the acknowledgment that consumer loyalty is dictated by the observations the clients have on the nature and the nature of administrations advertised. Since the investigation centers around the connection between's worker fulfillment and consumer loyalty at a particular point in time, a cross sectional examination configuration is picked. 104 members will be focused for this investigation, 53 of which will be representatives of the bank of America. Information will be for the most part gathered through composed meetings. Anyway arrangement for oral meeting will be accessible particularly for corporate customers who might be too occupied to even consider filling in composed meetings. Seven parts of occupation fulfillment will be estimated and associated with five classifications of consumer loyalty. The investigation presumes that consumer loyalty is straightforwardly affected by representative fulfillment. Various elements transaction in this relationship. These incorporate employer stability, remaining burden, inspiration, and worker strengthening, among others. Presentation Management specialists accept that business achievement is accomplished through contribution quality assistance to clients. Be that as it may, relatively few of these specialists connect quality assistance with the degree of employees’ fulfillment. Do the trick to express that the administration business is viewed as one of the key segments of development in any economy. Thusly, legitimate administration of the administration business is expected to guaran tee that the estimation of administration offered doesn't bargain client desires. This is on the grounds that, negative client recognitions about the nature and the nature of administration offered is adverse to business development. This recommends customers’ discernments about assistance quality are straightforwardly relative to the business achievement achievable.Advertising Looking for proposition on business financial aspects? We should check whether we can support you! Get your first paper with 15% OFF Learn More There various attributes interesting to the administration business. Workers in the administration business put in more hours while serving various clients, the vast majority of whom have muddled necessities. This generally makes the activity of client support suppliers awkward. Thus, Yagil (2006) clarifies that specialist organizations are well on the way to be exhausted and worn out. Such wear out impacts the nature of administration advertised. In a review l ed by Burke, Graham and Smith (2005), it is discovered that client support is a mental intercreative human experience. This suggests administration arrangement is social, up close and personal, and has got nothing to do with the items that the specialist organization offers. A decent intercreative condition in this way improves the view of the client on the nature of administration advertised. All things considered, two significant ends can be produced using the affirmation above: recognition assumes a crucial job in deciding the idea of administration quality; client assistance arrangement is a psycho social movement. Burke et al. (2005) infer that administration arrangement must be offered properly; in any case the client is disappointed. This prompts loss of business. This declaration is affirmed in an investigation led inside the Indian cell phone industry by Sathish, Santhosh, Naveen and Jeevanantham (2011). In this investigation, it is obvious that one of the significant reaso ns why buyers of Indian cell phone administrations switch suppliers is low quality of administration advertised. Subsequently, consumer loyalty is legitimately associated with nature of administration advertised. The degree of employees’ fulfillment fluctuates and can be credited to various components. These incorporate poor pay rates, worker weakening, outstanding burden issues just as representative strengthening (Bull 2005; Yagil 2006). Yagil (2006) and Burke et al. (2005) include that the impression of the client on the nature of administration is straightforwardly associated with employees’ fulfillment. These elements, combined with worker wear out decide the sort of conduct showed by representatives inside the client support industry. Subsequently, specialist organizations depict loss of eagerness and positive respect for their occupations, absence of worry for clients’ needs, both enthusiastic and physical weariness among different practices (Yagil 2006). Advertising We will compose a custom proposition test on The connection between workers work fulfillment and consumer loyalty in administration business explicitly for you for just $16.05 $11/page Learn More During the reason for administration arrangement, if representatives depict negative perspectives and practices towards the client, the customers’ level of fulfillment with administration quality reductions. This statement can be credited to the way that social conduct is controlled by the recognitions about the basic intentions and the overarching condition, inside which administration is offered (Yagil 2006). Accordingly, the view of the client with respect to the nature of administration offered is affected by the conduct and disposition depicted by representatives. The examinations above recommend a mind boggling connection between consumer loyalty, representative conduct and the nature of administration advertised. Consumer loyalty dictated by customers’ recog nition on the nature of administration advertised. Employees’ direct is dictated by how the clients see estimation of administration advertised. The impression of the client is affected by the degree of occupation fulfillment. As referenced above, past examinations uncover that worker fulfillment is legitimately identified with customer’s discernment on administration quality. All things considered, it is basic to infer that there is connection between employees’ work fulfillment and client impression of administration quality which influences the general fulfillment in the administration business. While past examinations concentrated on inn, instructing and phone ventures, there doesn't exist any investigation that centers around the connection between representative fulfillment and consumer loyalty inside the financial area. As such this investigation appears to be pertinent. The motivation behind this investigation is to test theory that the there is a connec tion between representative fulfillment and consumer loyalty and saw administration quality. All things considered, the accompanying inquiries appear to be pertinent for this examination: Do clients report higher fulfillment with administration quality when representatives show more elevated levels of work fulfillments? What parts of occupation fulfillment that legitimately impact employees’ spirit and conduct and how it impacts consumer loyalty? To flexibly replies to this inquiries, the cross sectional examination configuration has been picked. Information for this investigation will be gathered, independently, from workers and clients of Bank of America New York branch.Advertising Searching for proposition on business financial matters? We should check whether we can support you! Get your first paper with 15% OFF Find out More Since past investigations show that consumer loyalty is reliant on discernments about employees’ work fulfillment, with the end goal of this examination, representative fulfillment is the autonomous variable and customer’s fulfillment is the depended variable. The bank of America was picked as a result of the high number of clients served by the bank just as high number of representative inside the bank. All things considered, the banks representatives and clients will give adequate wellsprings of information to this examination. Approach This examination targets both the workers and clients at the bank of America’s New York branch. The branch is picked because of its focal area just as because of the way that its serves an enormous customers base. The investigation targets both individual and corporate clients, who will be seen at a specific point in time. An all out number of 104 clients will be focused on. The number 104 has been picked not on the grounds that it has any uncommon significance according to the investigation yet since it is reasonable, and will likewise permit the analyst to gather however much information as could reasonably be expected. The objective populace will be partitioned into 53 workers and 51 clients. Out of the 51 clients, 17 corporate will be focused on. All the representatives focused for this investigation will be from offices that manage the clients. Accordingly, workers from the client relations work area, tellers, credit agents, data officials among other will be give substantial information to this examination. As clarified over, the numbers picked for this examination have no unique importance comparable to the subject of the investigation. Be that as it may, odd numbers are picked for counting. Since the scientist focuses on a wide range of customers and workers at a specific point particle time, a cross sectional investigation configuration appears to be applicable for this examination. As per Rose an d Barker (1997), a cross sectional examination focuses on a subset of the whole populace with the point of giving information that can be utilized to figure summed up presumptions in regards to the whole populace. It is likewise basic to make reference to that the investigation depends on perceptions made, whose outcomes are identified with the representative fulfillment (autonomous variable for this examination) and consumer loyalty (subordinate variable for this examination). As Rose and Barker (1997) further clarify, examines which assess the connections among factors and try to build up design are graphic in nature. In that capacity, this examination is engaging. Members As clarified already, the examination targets 104 members. The member will be chosen from both the representatives and clients of the b

Ritual Performances in A Midsummer Nights Dream

Running back to the fourteenth century, ceremonial exhibitions assumed extraordinary jobs in people’s lives since they had faith in the outcomes in that. Ceremonies and merriments underscore Shakespeare’s works.Advertising We will compose a custom research project test on Ritual Performances in A Midsummer Night’s Dream explicitly for you for just $16.05 $11/page Learn More For example, the festivals that portray the finishing up setting of A Midsummer Night’s Dream, is a soul changing experience, a custom that looks to draft Hippolyta who must turn into an Athenian for she is from Amazon which is outside Athens. In any case, Shakespeare utilizes his traditional characteristics of scripted-ness to accomplish his goal. Romances and play-inside play stand apart obviously in this satire; besides, Shakespeare utilizes signs to make the devised and the engineered to seem regular. In A Midsummer Night’s Dream, romances are difficult. As Lysander watches, â€Å"The course of genuine romance never runs smooth† (Shakespeare 134). Lysander’s relationship with Hermia is one that is loaded with setbacks. Hermia’s Father picks Demetrius but then his girl is enamored with Lysander. The Duke decides for Demetrius requesting Hermia to wed him or experience execution or lifetime virtue to the goddess Diana. Helena’s love for Demetrius isn't responded. In the fairies’ world, the sovereign Titania is offended to her better half since she can't give him her Indian changeling. The circumstance turns out to be so entangled to a degree of Oberon requesting Puck to control a spell on Titania to apparently to make her fall for anything she sees upon her awakening gave it is a living animal. In this play, love is offset with lopsided characteristics. Toward the start of the play, two men love Hermia but then she cherishes just one, Lysander. Then again, Helena is insanely infatuated with Demetrius who doesn't convey e ven the smallest inclination for her. After Puck directs the adoration part to the two men, first to Lysander who he had thought was Demetrius and later to Demetrius, the men’s consideration goes to Helena. Indeed, even her sweetheart, Lysander, forsakes Hermia. On account of Oberon and Titania, lopsidedness comes in when Oberon’s want for the Indian changeling overweighs his adoration for Titania.Advertising Looking for research project on english writing? How about we check whether we can support you! Get your first paper with 15% OFF Learn More He throws her on a spell that makes her begin to look all starry eyed at the ass-headed Bottom. This shows an awkwardness in nature and appearance (Nostbakken 70). In what manner can a sovereign of the pixies go gaga for an ass-confronted Bottom? All things considered, the affection divide maybe works. By the by, any develop individual acquainted with the play will differ with the possibility of the sovereign of pixies succum bing to the ass-confronted Bottom. Utilization of parody that spins around the issues that go up against the characters associated with connections in the play shields the crowd from the feelings that these issues could produce. Rather, utilization of cleverness guarantees the crowd an effective end perhaps with the people wedding the adoration for their lives. The crowd is shielded from the strain that accompanies vulnerability. When composing this play, Shakespeare’s point was to make individuals giggle, as it is a satire. This has been very much accomplished through mixing of human torments with humor. Shakespeare created this style of writing to get the audience’s consideration and it works very well in accomplishing that reason. The craftsmen’s play that is intended to engage the duke and his recently marry sovereign is a play-inside a-play. The play, in light of Pyramus and Thisbe’s story, speaks to the most significant thoughts and subjects of the primary plot however in a dense structure (Nostbakken 87). Pyramus and Thisbe’s guardians don't endorse their wedding, a component that contrasts and that of Hermia and Lysander. This play-inside a-play mirrors the disarray in the principle play. Just before the wedding, the fairies’ love divide show results into sentiment disarray. Demetrius and Lysander love Helana simultaneously. The sovereign of the pixies, Titania, experiences passionate feelings for the ass-headed Bottom. The craftsmen’s play draws out the topics and thoughts of the principle play obviously and in a silly manner. The play is intended to cause the crowd to comprehend the principle play well and it does precisely that. Again, Shakespeare utilized this style of writing to accomplish his traditional scripted-ness that underlines his sensational exhibitions that describe his plays. The play-inside a-play component depicted in this piece fits well in the substance of the entire play. The subject of dream has been utilized widely in the play to clarify a significant number of the peculiar happenings that whenever taken as reality would not be conceivable to the human psyche. â€Å"I have had a fantasy, past the mind of man to state what/dream it was. Man is nevertheless an ass on the off chance that he goes about t’expound this dream† (Shakespeare 37).Advertising We will compose a custom research paper test on Ritual Performances in A Midsummer Night’s Dream explicitly for you for just $16.05 $11/page Learn More Bottom uses these words to clarify the ass-headed individual the pixie has transformed him into before. It isn't in the laws of nature for a human to obtain an ass-head one moment and in the other has returned to the typical human. Base could just consider this to be a fantasy. Hippolyta thinks about their wedding days as a fantasy, â€Å"Four days will rapidly soak themselves in night,/Four evenings will rapidly dream away the time† (Sha kespeare 8). Four wedding days may appear to be unnatural in nature and to cause them to appear to be less, Hippolyta makes it lighter to the crowd by contrasting the four days with a fantasy that is brief. The casualties of the occasions that happen on that game changing night see the occasions as minor dreams. Demetrius and Lysander strife over Helena and Titania’s fleeting relationship isn't intelligible to the people. To shield them from this ridiculous reality, the pixies cause the people to accept that it was nothing to a lesser degree a fantasy. Toward the finish of the play, Puck guidance to the crowd is to accept the play as a fantasy in the event that it didn't dazzle them. Shakespeare utilizes this fantasy subject to draw out the comic idea of his play and guarantee that the surprising happenings in the parody serve to engage the crowd rather than discouraging it. Great and awful signs accompany what a general public accepts. During when the play was being composed , noncompliance to one’s guardians or/and spouse were considered as a terrible sign and they would bring about setbacks. Shakespeare’s work mirrors this legend in Hermia and Titania’s cases. When Hermia decays her father’s decision of spouse, a few adversities come to pass for her. The duke rules against her, sentencing her to an execution or lifetime virtue to the goddess Diana. At the point when she absconds with Lysander, the fairies’ love elixir redirects Lysander’s love from her to Helena. At the point when Titania won't give her better half the Indian changeling, the couple become antagonized to one another. The spouse feels so annoyed that he looks for retribution by ‘bewitching’ her into cherishing the ass-headed Bottom; she even offers sexual favors to give her love for the recently discovered love. This demonstration mortifies Titania and simultaneously, she loses her Changeling that had been depended to her by the Ind ian mother. Despite the fact that these cases are just engineered in the play, they seem common on the grounds that much of the time when one neglects to regard specialists or guardians as a rule end up resembling Hermia and Titania in the story. In the parody, Shakespeare utilizes images to speak to different parts of nature. Pioneers are related with soundness. Theseus and Hippolyta show up in the principal demonstration of the play yet vanish for quite a while after the obscurity sets in. They later show up in act four when the sun rises.Advertising Searching for research paper on english writing? We should check whether we can support you! Get your first paper with 15% OFF Find out More Theseus and Hippolyta are profoundly regarded pioneers and must be related with request and security. Their long vanishing during the demonstrations that speak to the night occasions shows the impact of their nonattendance as bedlam and turmoil rule the scenes during their nonappearance. Their return after dawn sets things all together. The befuddled couples can perceive their correct accomplices. The duke and the sovereign later permit them to wed. Unquestionably, as the familiar proverb goes, ‘love is blind’ and the affection mixture utilized here underscores this incredible however frequently dismissed certainty. It is the wellspring of all the terrible things on that night. Demetrius and Lysander succumb to Helena to the mortification of Titania. The thoughtless organization of the mixture by the pixies makes extraordinary mischief numerous individuals. This represents the damage that spontaneous and uncontrolled love can cause to the included gatherings. This play i s an incredible presentation of Shakespeare’s particular dramaturgy. In his work, Shakespeare utilized human experience to make his plays. He mixed this with cleverness and verse that gave it an immortal stream. In A Midsummer Night’s Dream, Shakespeare utilizes an encounter that was normal back in that time. Guardians picking accomplices for their kids, spouses overwhelming over their wives and rulers deciding for antiquated laws hang out in this play. Notwithstanding the experience, Shakespeare utilizes cleverness and verse to give it a light touch. The play is ageless and it has earned Shakespeare extraordinary regard after some time. Normal for Shakespeare’s works, exhibitions underline A Midsummer Night’s Dream. Two exhibitions are all around communicated in the play. These incorporate romance and play-inside a-play. T

How does the character of Willie Mossop develop through the course of the play Essay Example

How does the character of Willie Mossop create through the course of the play Essay Willie Mossop is a shoe producer of a boot shop which is claimed by Hobson. Hobson doesnt respect Willie and he doesnt mind since he says, I am not aspiring that I am aware of. Creeps character creates all through the play from being a poor unconfident man, to a rich and extremely sure man who is as yet unassuming and really nice.As we enter the initial scene of the play we read that Hobson is no place to be seen demonstrating that he doesnt have anything to do with the running of his shop. His business is just effective due to Maggie who sells the boots productively. We see proof of that when she powers Albert to purchase a couple of shoes when he comes to see Alice. When Hobson does at last enter the shop he gets exceptionally irate in light of the fact that he imagines that his little girls dont have the correct demeanor towards him saying they are uppish and dont act like appropriate ladies. This mentality of Hobsons changes quickly when Mrs. Hepworth enters his shop since she is a rich individual and spends a ton on shoes.She requests to see the producer of her boots and Willie is raised to Mrs. Hepworth. She commends Willie to his face and says that on the off chance that he ever leaves Hobsons he ought to go advise her so she can get her boots made by him. Hobson says, What does she need to laud a worker to his face for? We see that Hobson doesnt care much for, nor does he truly acknowledge, Willie and he doesnt acknowledge how significant Willie is to his business which he will lament later on.Hobson tells his little girls that he will pick spouses for them since they arent sufficiently keen to do as such without anyone else. At the point when he says that he avoids Maggie saying that she is as of now past wedding age which upsets Maggie, she concludes that she ought to get a spouse herself and escape her life of hopelessness. Maggie perceives that Willie is her best way to find some kind of purpose for existing out of her current life and says to him, My mind and your hands ull make a working organization. She requests that he wed her so they can leave Hobsons and start their own shop.Maggie advises Willie to kiss her to seal their bond yet Willie is excessively bashful and runs into the basement. Now Maggies sisters enter and they state that youre mixed up in the event that you think Ill own Willie Mossop for my brother by marriage. They state that he is too low class to join the family and that father wouldnt be glad about this. When Hobson enters the shop again and hears the updates on Maggie and Willie he says that the best way to stop this marriage is too beat the affection out of Willie. When Hobson strikes Willie, Willie is irritated and takes Maggies hand. When Willie is hit once more, Willie kisses Maggie and leaves the shop with her.We see that Willie doesnt have a lot of state in his marriage choice with Maggie however he would prefer to wed her than the young lady he was tokened to in light of the fact that he was fri ghtened of her mom. This reveals to us that Willie isnt an exceptionally sure man however we likewise realize that he is figuring out how to be increasingly certain when he leaves the shop with Maggie in light of the fact that Hobson hit him.When Willie and Maggie move out, Hobsons business starts to bomb radically. Alice and Vickey maintain the business and they ruin it since they dont have Maggies business keenness. When Maggie goes to the shop to welcome her sisters to her wedding she discloses to them they need to acknowledge Willie and kiss him to show it. After much dissent they do kiss him and acknowledge him as a major aspect of the family. They all go to their wedding and Maggie takes a metal ring for their marriage. Maggie still doesnt trust Willie enough that is the reason she doesnt give him the ring. Before they enter the congregation Maggie inquires as to whether he really adores her since she has regard for the congregation. Will says, Youre developing on me young lad y. Sick fall in line with you. This discloses to us that Willie currently cherishes Maggie despite the fact that the marriage was initially a business agreement.Afterwards they all go to Willie and Maggies new house for the festival. Maggie has been preparing Willie too peruse and compose and he gives a superb discourse to every one of them which stuns them. Creeps certainty has developed and you can advise that as he talks straightforwardly to Maggie and he quits tending to Vicky and Alice as Miss. In any case, he still doesnt feel good at being disregarded with Maggie on their wedding night since he doesnt comprehend what will occur. Hobson enters as Willies visitors are going to leave and they need to stow away and remain inside Willies house. This is a defining moment in Willies character change as he talks legitimately to his old ace as the new ace of his own home. Affirmative, let him come inHobson has issues he needs to settle and needs to converse with Maggie about it. She s ays that Willie is her significant other and if Hobson needs to talk he needs to converse with them two. This gives us that Maggie is making Willie an equivalent to Hobson by making Hobson need to converse with Willie and Maggie together.At the finish of the play, after a year, when Maggie and Willie know about Hobsons breakdown, they go to perceive how he is. Alice and Vickey are additionally there to see their dad yet are increasingly intrigued by his will. Willie talks straightforwardly and with a solid voice to Alice and Vickey expressing he is an equivalent or even of higher status then them. Sick do the orchestrating, Alice. On the off chance that we come here, we come here on my footing. Willie likewise brings Hobson sensible about his business and offers him an association. Hobson attempts to extend Willie his old employment opportunity back however Willie says weve took care of Mrs. Hepworths credit and made a touch of metal what's more. Willie has taken the entirety of the high class clients from Hobson. Hobson is compelled to concur as he doesnt have some other decision with the exception of Hobsons Choice alluding to the title as he has just a single decision which he needs to take. Willie even confronts Maggie when they are choosing the name of the shop, Mossop or Hobson or its Oldfield Road for us, Maggie. Maggie gives in realizing that Willie has developed since their marriage and is presently an equivalent to Maggie.Willie has changed since he begun to work. He has developed in certainty yet still has held his lowliness as he consented to have an organization with Hobson and not leave him in his hour of need. Willie reprimands himself for being to brutal on Hobson however he is told he has made the best decision. Maggie and Willie are equivalent now and both partake similarly in settling on choices and Maggie now cherishes him more than she did whenever she initially considered him to be a business opportunity. Willie additionally begins adorin g Maggie and they have joined marriage and business very well into a working organization. I think Willie has developed well all through the play. He defended himself now and again when he expected to most and never developed presumptuous and held his genuineness, respectability and real warmth and mindful.

Writing a College Graduate Essay

Writing a College Graduate EssayWriting a college graduate essay is not as hard as it may seem. It is actually not that difficult and you can teach yourself how to write a good one very easily if you have the right guide.It is very important to know that every person will need to find something in their life, some particular thing or concept that made them who they are today. People will have different opinions about this question and you can tell when you talk to them how deeply they want to know the answer. And you should be able to write a college graduate essay about this topic, because you may be the only one who can give you the solution.It is therefore important to study and research about different types of answers to this question and know that not everyone has the same answer. The information can be found in the Bible, history, literature, and many other sources.The most common place where people write about this topic is the school where they went to school. That is why yo u should always write your information about what happened in your life at the time. Do not just rely on your experience at the time, you should know what your classmates are going through and you can see how they respond to some issues they are having in life.You could try to imagine the response you would get if you would talk to your teacher. You could find many answers in your teacher's mind and you could also find out if your grades were high in that particular class. This is one great way to learn something new in college.In fact the only problem with writing a college graduate essay is that people could take the information and find ways to use it against you. You should try to focus on the facts should be written properly.The more you think about the question, the more you will learn about the subject. But you should remember that every person has a different perspective on things so you should be able to find something that fits for each individual.Writing a college graduat e essay is not as hard as it seems. You just need to make sure that you research and you find the right information that would fit your needs.

Sunway Real Estate Investment Trust - Free Essay Example

(b) Explain whether Sunway Real Estate Investment Trust berhad should involve hedging or not hedging. Why or why not? Sunway Real Estate Investment Trust (Sunway REIT) berhad should involve hedging because it exposes to the foreign currency exposure and exchange rate fluctuations. Since successful hedging gives the trader protection against commodity price changes, inflation, currency exchange rate changes, interest rate changes and so on and so forth, Sunway Real Estate Investment Trust should involve in hedging to reduce these types of risks. Indeed, Sunway Real Estate Investment Trust does involve hedging to reduce exchange rate risk by having a three-year fixed rate US dollar 100 million term loan which has been fully hedged via a cross currency swap (Sunway REIT annual report, 2013). Besides, Sunway Real Estate Investment Trust has also used cash flow hedges to mitigate the risk of variability of future cash flows attributable to foreign currency and interest rate fluctuations over the hedging period on the foreign currency borrowings (Sunway REIT annual report, 2013). Besides reducing the exchange rate risk, hedging can be used for enhancing a companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s value. In the overall managerial strategy, reducing corporate risk is an essential component. Several market imperfections make risk management an essential goal for companies. These market imperfections lead to the reduction of the value of companies by making volatility an expensive proposition. The imperfections, in turn, contribute to other market deficiencies such as expensive financial distress costs (Myers, 1977 and Smith Stulz, 1985); external financing (Froot, Scharfstein Stein, 1993); agency costs; and costs pertaining to managerial risk aversion. These imperfections have a negative effect on a companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s value. By helping reduce costs resulting from such imperfections, hedging enhances a companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s value (Ghosh, 2013). In ad dition, hedging helps to reduce distress costs. The ability to raise capital is extremely important in the event of a perceived or real distress faced by a company. Every business faces the possibility of distress under adverse circumstances (Damodaran, 2008). Even perceived circumstances of distress can be costly for companies à ¢Ã¢â€š ¬Ã¢â‚¬Å" often in the range of 20% to 40% of the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s value (Shapiro Titman, 1985). In the extreme event, distress can lead to bankruptcy. Hence, it is prudent for companies to protect themselves from the risk of distress events by hedging against them. Damodaran (2008) estimates that the payoff from lower distress costs can show up in the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s value in one of the two ways. In a conventional discounted cash flow valuation, the effect is likely to manifest itself as a lower cost of capital which is through a lower cost of debt and a higher value. In the adjusted present value approach, the expected bankrup tcy costs will be reduced as a result of hedging. To the extent that the increase in value from reducing distress costs exceeds the cost of hedging, the value of the company will increase. When likely distress costs are large, benefits from hedging by the means of savings on distress costs are likely to be significant. Kale and Noe (1990) have noted that hedging can increase the value of companies which are highly levered. Finally, by reducing the cost of financial distress, hedging can also enhance credit quality and reduce the cost of debt financing (Chidambaran, Fernando Spindt, 2001). Moreover, hedging ensures continuity of cash flows. Price volatility has a negative impact on the revenue streams and can disrupt cash flows. Hedging prevents the companies from price volatility and ensures uninterrupted and stable revenue streams. Companies, through hedging, can choose what proportion of production to hedge and how far into the future the hedged position is to be established a nd maintained which can bring about certainty in their production process, and ensure continuity of cash flows. This is especially true for small companies with high costs, which are probably unwilling to accept the reduced risk for additional, risk-mitigated profits. Thus, the certainty in production planning at guaranteed minimum prices by using commodity futures to hedge, protect both a companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s future and that of its employees (Ghosh, 2013). Furthermore, hedging can be used to lower tax liabilities. A more visible strategic reason for hedging is the immediate impact it can have on tax liabilities of companies. Under a progressive taxation regime, losses of companies can be carried over for a finite number of years only. Over a medium to long run, therefore, volatile earnings induce higher taxation than stable earnings. Stulz (1996) empirically proved this argument to hold good in any regime marked by convexity of the tax code, for example, increasing margina l tax rates, limits on the use of tax-loss carry forward and minimum tax rates. A second tax saving from hedging arises from the increasing debt capacity of companies, which in turn increases the interest tax deductions. Graham Rogers (2002) have performed empirical testing for 442 companies and found that the statistical benefit from increased debt capacity was 1.1% of the value of these companies. They also found that companies hedge to reduce the expected cost of financial distress. Thus, higher tax benefit is a tangible outcome from hedging, which, however, should not overshadow the clear benefits of risk management bestowed by this practice (Ghosh, 2013). On top of that, hedging serves as a strategic resource. One of the biggest strategic use of hedging as a corporate practice is, probably, the force multiplier it acts as in the resource pool of companies. By locking in prices of inputs and outputs, hedging releases valuable resources which can be better deployed for the co mpanyà ¢Ã¢â€š ¬Ã¢â€ž ¢s growth. Similarly, the ability of the company to stabilize its costs and hence control its pricing policy is itself a valuable resource of the company. Following the theory of Resource Based View (RBV) of the company (Rumelt, 1984 and Hamel Prahlad, 1994), this control over price stabilization is an inimitable resource. It has the potential to be a source of differentiation to the company, bestowing competitive advantage over its competitors. In this way, companies can turn price volatility in raw materials and finished products into a key differentiator, giving them more opportunity to reduce costs, achieve higher average profitability and expand market share. Last but not least, hedging can also be served a tool for corporate governance. An important strategic function fulfilled through hedging lies in its role in corporate governance of companies. In a typical example of à ¢Ã¢â€š ¬Ã‹Å"agency riskà ¢Ã¢â€š ¬Ã¢â€ž ¢, it is possible to argue that manage rs of companies act in their self-interest, rather than in the interests of shareholders. While investors want the management to take risks in the interest of the company and the financial results of a company provide signals to boards and investors concerning the skills of its management, it is rather difficult for shareholders and the Board to differentiate between risk-taking behaviour of managers that is desirable from the risk-taking activity that leads to volatility in earnings, caused by management incompetence. This difficulty in identifying the value-creating from value-destroying risks in companies often leads to Boards seeking management action to eschew all types of risks. Often, managerial incentive structure including performance measure is linked to the extent of risk mitigated by managers. Besides, there may not be adequate human resources in the company to identify, manage and remove the undesirable risks from those that are desirable. As a result of these two facto rs, managers may reject investments that add value to the company in the long run, simply because the company-specific risk exposure, encompassing both the undesirable and desirable risks, seems to build up. Hedging allows a way out of this dichotomy. By driving a wedge between risks that are external to the company from those that are internal and then establishing a well thought- out Risk Management Policy that seeks to transfer avoidable risks out of the company in a transparent manner, hedging can delineate between the two types of risks. By transferring the external and avoidable risks through a large external market such as the commodity derivatives market, hedging also enables investors to segregate between legitimate and reckless risk-taking management behavior. Thus, hedging can promote sound corporate governance practices by providing a solution to investors to assess managerial performance (Ghosh, 2013). In conclusion, hedging helps in reducing exchange rate risk, enha ncing a companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s value, reducing distress costs, enhancing credit quality, reducing cost of debt financing, ensuring continuity of cash flows, lowering tax liabilities and serving as a strategic resource as well as a tool for corporate governance. Since hedging brings so many benefits and advantages to the company, Sunway Real Estate Investment Trust (REIT) berhad should involve hedging as a strategy in order to sustain profitability, competitiveness and growth in the industry.

Tragic Hero - 884 Words

Tragic Hero – Okonkwo Things Fall Apart by Chinua Achebe A tragic hero is a character that performs courageous actions but develops a tragic flaw as they move on with their lives. The effects of the flaw begin to increase and the character usually makes unwise choices. It often leads to his downfall or even death. In Things Fall Apart, Okonkwo is depicted as a tragic hero. He lived a life full of contradiction. He desired to be successful and achieve everything he wanted but he ended up committing suicide. The author develops a story in which Okonkwo has to make a lot of decisions and sometimes he makes the wrong choices without himself knowing, which eventually causes his own death. He is a tragic hero in the story for the sacrifices†¦show more content†¦He said, â€Å"This meeting is for men† when he saw a man without a title was participating during a meeting. Arrogance is one of the qualities a tragic hero has. At the end of the novel, he killed the messenger in hopes that the tribe will support him in a war. He is impulsive. He acts before he thinks. He often offends the igbo peoploe and their traditions as well as the gods of his clan. When the white man brought Christianity to Umuofia, Okonkwo felt that the changes are ruining the Igbo culture. This is his tragic flaw, the inability to accept change. For him, hard work and effort were the true way of living and if you didn’t have any of those you were not worthy for his acknowledgement. The destruction of Okonkwo was revealed slowly throughout the books. He started to make some poor decisions, which became the beginning of his downfall. He killed Ikemefuna just because he didn’t want to be thought weak. He made unwise decisions to only appear to be strong and manly to others in the village. He did not realize how he lost so much from living that way. When, Okonkwo kills Ogbuefi Ezedu’s son, the real tragedy begins. Other tragic heroes usually have a steadier downfall, but Okonkwo had a direct fall in society due to this event. This puts his family into exile for seven years. After a short period of time, white missionaries arrive to Umuofia. When â€Å"TheShow MoreRelatedTragic Hero1598 Words   |  7 PagesTragic Hero From Wikipedia, the free encyclopedia A tragic hero is a protagonist with a tragic flaw, also known as fatal flaw, which eventually leads to his demise. The concept of the tragic hero was created in ancient Greek tragedy and defined by Aristotle. Usually, the realization of fatal flaw results in catharsis or epiphany. The tragic flaw is sometimes referred to as an Achilles heel after the single fatal flaw of the Greek warrior Achilles. [citation needed] Aristotelian tragicRead MoreThe Tragic Heroes Of A Tragic Hero1955 Words   |  8 PagesOedipus Essay Tragic fates and the downfalls of others have always seemed to interest a crowd. Audiences will travel from afar and pay to witness such performances. They listen and sit at the edge of their seats wondering when and how the catastrophe will occur in the protagonist’s doomed life. The reason for this is because almost all of the spectators can relate to the protagonist due to the fact that the protagonists of these tragedies are tragic heroes. These tragic heroes have qualities thatRead MoreHamlet, A Tragic Hero1003 Words   |  5 Pagesmemorable tragic hero’s Hamlet is the definition of a tragic hero. In the book, Hamlet, Shakespeare’s character hamlet is determined on killing his uncle the king. This goal proves to be challenging to him due to his morals. He often struggles with this throughout the book. This proves to be his downfall for not deciding to kill the king until the very end. A tragic hero has to have a fatal flaw that, combined with fate, brings tragedy. This is one of the key characteristics of a tragic hero. He hadRead MoreHonor : A Tragic Hero1399 Words   |  6 Pages19 January 2016 Honor Does Not Lead to Good Things The definition of a tragic hero is perceived as one who is neither wicked nor purely innocent, one who â€Å"is brave and noble but guilty of the tragic flaw of assuming that honorable ends justify dishonorable means†. In The Tragedy of Julius Caesar, Brutus takes the role of the tragic hero. Brutus’s honor, nobility, and self-righteousness makes him â€Å"a tragic figure, if not the hero† (Catherine C. Dominic). As the play opens, Brutus is known as a RomanRead MoreIs Oedipus A Tragic Hero?1167 Words   |  5 PagesLiterature December, 09, 2014 Is Oedipus a tragic hero? Aristotle, Ancient Greek philosopher whom did a lot of philosophizing, he believed in a logical reality. Aristotle’s objective was to come up with a universal process of reasoning that would allow man to learn every imaginable thing about reality. The initial process involved describing objects based on their characteristics, states of being and actions. Aristotle once said A man doesn t become a hero until he can see the root of his own downfall†Read MoreOedipus As A Tragic Hero1724 Words   |  7 PagesOedipus is considered a â€Å"Tragic Hero† because of the tragic fate and effect that he had upon his life. My definition of a tragedy is a great loss that has a unhappy ending to which concluded me to state that Oedipus falls under that category. Throughout the book, Oedipus is leading himself to his own destruction when trying to find the killer of the late King Laios. So when a journal article I found published by The John Hopkins University Press stated that a â€Å"tragic hero is a man who fails to attainRead MoreThe Tragic Hero in Antigone1018 Words   |  5 Pagesfirst established during the fourth century in the Poetics, where he defines what makes a tragic hero. Aristotle suggests that a tragic hero is a character who has a high social standing and embodies great nobility in his/her personality. They are neither a villain nor are they entirely good, but a person somewhat like us, raised to a higher position in society. In addition, the downfall of a tragic hero is caused by fault of their own, often through arrogance or pride, as the result of freeRead MoreOedipus the Tragic Hero1390 Words   |  6 PagesOedipus; The Tragic Hero In the Fourth Century BC, a famous philosopher named Aristotle wrote about the qualities that a tragic hero must possess. Ever since that time, there have been many examples of tragic heroes in literature. None of those characters, however, display the tragic hero traits quite as well as Oedipus, the main character from the play Oedipus Rex by Sophocles. Oedipus is, without a doubt, the absolute quintessence of a tragic hero. His example shines as clear as a sunny summerRead MoreOedipus, A Tragic Hero1648 Words   |  7 PagesOedipus, a Tragic Hero Bob Livingston Liberty University â€Æ' Sophocles presented the world with Oedipus around 2500 years ago. Never-the-less, the story remains among the most riveting of all time. He was, in fact, a man that was driven by a very high internal moral standard. It was that internal moral standard that ultimately entwined him in a sequence of events and circumstances that placed him in the spousal relationship with his mother. Oedipus, in fact, can truly be regarded as a tragic hero as AristotleRead MoreSatan As A Tragic Hero Essay722 Words   |  3 PagesDeRosas 1 Sundi M. DeRosas Professor Julie Roth ENGL.2322.W31C 6 December, 2015 Satan as a tragic hero In the poem of ?Paradise Lost? written by John Milton, Satan is thought of as a tragic hero because he is perceived as a strong leader to the fallen angels and has tremendous importance. He struggles to overcome his apprehensions and choses to dedicate him to evil. He lacks strength to accomplish his goal of corrupting mankind. Satan becomes unable to judge God?s grace and is not able to

Essay on Racial Discrimination - 2256 Words

America has had discrimination against minorities for a long time and it will continue to have it until people treat minorities with respect. Discrimination is when people treat minorities bad because of their skin color, ethnicity and the place they were born. For immigrants, the problems they had to arrive to America were not a good experience only by the struggle to gain acceptance among the population. Most immigrants came to the U.S. to have a better life and give education to their children. Almost all immigrants have experienced discrimination at some point in their life and even some are still experiencing it today. Most Latinos don’t have a choice but to deal with it because they know they are illegal and they can’t say anything†¦show more content†¦They also have to deal with people calling them names because of their skin color or their birth place. â€Å"Americans also accuse Hispanics of stealing their jobs† (Ramos 53) because most Latinos t hat come here have a job. They also face seeing â€Å"racist graffiti on homes or on walls of buildings† (Plunkett 15) and they have to face hate crimes. Plunkett said that â€Å"Latinos sometimes get excluded from white communities† (39) because they are Hispanics. Ramos also said that â€Å"Latinos are blamed for serious problems the country faces† (195) like the fall of the twin towers. There are reasons for Americans to discriminate Latinos and reasons why they shouldn’t discriminate them. The United States doesn’t understand why Latinos really came to this country and they discriminate them without knowing the real reasons. Most Hispanics come to this country for several reasons but the most important one is to have a better life and provide an education for their children. Latinos want their kids to be someone in life and they know they can accomplish it in this country. They also enter illegally because they don’t have the money to enter legally and they know they will get discriminated even if they were legal. The United States would have legal Immigrants if Latin countries weren’t â€Å"poor and if they didn’t have corrupt governments† (Ramos 153). Ramos also said that â€Å"most Hispanic farmers have to come to the U.S. inShow MoreRelatedOvert Racial Discrimination and Institutional Racial Discrimination635 Words   |  3 PagesPrior to the 1960s, discrimination was viewed as a creature of prejudice (Feagin Feagin, 1988). Wha t this means is that the problem of discrimination was viewed as one motivated primarily by individuals (or groups of individuals) on the basis of prejudice or hatred. Implicit in this prejudice-causes-discrimination-model (Feagin Feagin, p. XX) was the assumption that the solution to discrimination was one of simply eliminating prejudice. Thus, the elimination of prejudicial behavior wouldRead MoreRacial Prejudice And Racial Discrimination Essay1347 Words   |  6 PagesRacial discrimination is one of many terms used to express the suppression of a race or many races, but more specifically, it refers to the ill-treatment a person or group receives as a result of differences in their race, color, descent, national, ethnic origin or immigrant status. (Australian Human Rights Commission, 2016). Racial discrimination can be perpetrated by individuals within society, and corporate institutions such as schools, the work force and the government, all of which we have seenRead MoreRacial Prejudice And Racial Discrimination1637 Words   |  7 Pagesreferencing the topic of racism and racial discrimination in today’s society, one of the biggest questions that still remain unanswered is as such: Why does racial discrimination still exist? What factors take place within the human mind that might cause feelings of hatred and bigotry? What can result from an individual using racially discriminating language? From times predating even the most notable case of as much, pre-Civil War United States American slavery, discrimination has existed in many differentRead MoreRacial Discrimination And Racial Profiling1524 Words   |  7 Pages In our society today, racial discrimination and inequality continues to be an issue. Regardless of the advancements we make in our society in terms of race, discrimination is something that can not simply be erased. The conflict with discrimination is evident when we look at the issue of racial profiling. Racial profiling refers to the treatment of an individual based on their race or ethnicity (Statistics of Racial Profiling 1). It is often a tool being used by law enforcement when deciding toRead MoreRacial Prejudice And Racial Discrimination859 Words   |  4 Pageshundred percent accurate. A racial comment would be that African Americans are dangerous coming from the fact that there are more African American in prison that any other demographic. In today’s America, racism is practiced in every sort of way from subtle, aversive, to even â€Å"reverse† racism and, many more. the most common way to racially discriminate against a group is through visual processing, ho wever, what causes this to be the most common mean of discrimination, could it be that this is howRead MoreRacial Discrimination And Gender Discrimination962 Words   |  4 Pagesincreasingly being seen, especially on social media. It s a single word which people are using instead of the longer phrases disability discrimination or disability prejudice. Racial discrimination and gender discrimination have their own single words - racism and sexism - and so those ideas can be expressed a little more easily. Disability discrimination is often complicated and misunderstood. At one end of the scale, buildings with steps instead of ramps may be said to be ableist. Less obviousRead MoreRacial Oppression And Racial Discrimination997 Words   |  4 PagesHuman begins since the beginning of time have understood the concept of racial solidarity but yet decides to ignore it. Racial oppression is a direct consequence of a superior race. Racial oppression is the act of power that causes the sta te of being to feel heavily exploited. There are two types of racial oppression that are not commonly well known of, institutionalized and internalized. Institutionalized oppression is expressed when a group of people based on their race has a different chance ofRead MoreA Brief Note On Discrimination And Racial Discrimination1532 Words   |  7 PagesDiscrimination made its way to planet earth way before it could be documented. Racial discrimination happens all over the world both consciously and unconsciously, destroying lives every day. 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I have listened to countless conversations where people would nonchalantly insult their own culture and heritage as if theyRead MoreRacial Discrimination Essay2245 Words   |  9 Pages The purpose of this paper is to examine the causes, consequences and remedies of racial discrimination in the labor market. Understanding racial discrimination in the labor market is of critical importance because of the sever wage differentials between different races in the market. Most of the economic research on racial discrimination focuses on black and white males. Hence this paper will also be focusing on wage and employment differentials between black and white males. I will start by discussing

Network industries - Free Essay Example

Sample details Pages: 32 Words: 9475 Downloads: 5 Date added: 2017/06/26 Category Statistics Essay Did you like this example? Network industries differ from regular, competitive markets in that inequality exists naturally in the market. Economides (2004), states that in the case of a network industry with network externalities, the introduction of competition does not significantly alter the structure of the market. The equilibrium of the market is not a competitive one, and prevents perfect competition from developing. Don’t waste time! Our writers will create an original "Network industries" essay for you Create order The conditions of free entry imposed on network industries do not alter what Economides calls the incompatibility equilibrium or the extreme inequality in market share. This equilibrium occurs naturally in network industries, and is not sustained through anti-competitive behaviour, so competition laws will not amend this flaw in the market. This market structure results in a natural equilibrium called winner takes most, in which there will always be a dominant firm, preventing a perfectly competitive equilibrium. Economides (2004) warns against the imposition of a competitive market structure, suggesting that the effects of doing so would be detrimental rather than beneficial to the market, and recommends that competition law should be applied, not using a perfectly competitive market structure as its basis, but judging the industry on its individual features. Whilst moving towards a policy of full deregulation within a state owned monopoly, it is common to have a transitional stage when the industry is partially deregulated (Viscusi et al. 2005), as has been seen in the UK public utilities. It is preferable to have a gradual, staged move towards a fully liberalised market to allow firms time to adapt. In the UK, this course of action was taken by industry regulators within the traditional, state-owned network industries, with the allowance of free entry to the markets, yet price controls were maintained. It is common for the regulator to control the prices of the established firm whilst allowing new entrants to set their own prices. This is to prevent predatory pricing from the incumbent operator driving competitors to insolvency. However, this type of regulation is asymmetric, and has been criticised for allowing unfair competition. Asymmetric regulation can result in cream skimming by competitors who are able to gain much of the profita ble custom from the incumbent due to the freedom they have to set their own prices. Network effects or externalities describe the value added to a unit of the good when the number of goods sold increases (Economides 1996). For instance, there is very little value in being the sole user of a telecommunications network, and so the value to the buyer of a telephone would be very low were this the case. The value of having a telephone and connectivity is heightened by the number of your peers who are also connected to the network. Therefore, contrary to normal goods, the willingness to pay for the last unit rises with the number of units sold (Economides 2004). This increase of the number of users also builds up economies of scale, scope and density within the network, which means that the unit cost will drop, theoretically decreasing the price to the consumer. Competition in network industries: Network industries have, traditionally, been run as regulated monopolies rather than competitive markets. There are several reasons for this. Primarily, it was the intention of the government to ensure that all consumers were able to access basic utilities and services. In a competitive market, operators would compete for the profitable routes and custom, whilst the parts of the network where no profit was available would be neglected, or offered extortionate prices to receive the service. Therefore, the state owned monopoly of utilities is a result of market failure. Across many network industries, there is an obligation for the incumbent operator to supply to the entire network at standard, reasonable price level. This is known as the Universal Service Obligation (USO). It is necessary that the national network of industries such as telecommunications and post are non-excludable on the basis of location and price. However, the costs of supplying these services to each individual co nsumer differ greatly. For instance, it costs the operator more to supply to consumers living in rural area, as the population density is not as high as in rural areas, and more resources are used in the supply to these areas. In the UK public utilities sector, this cost difference has led to the practice of cross-subsidisation, which means that profits generated from more profitable products are used to subsidise those goods or services which do not generate much, if any profit for the firm. The result is that the consumers in rural areas pay a below cost price for the services they receive, whilst those in urban areas pay a price which is above the cost of the service they receive. It is these urban users that provide the operator with the large profit margins, which are used to cross-subsidise the loss-making rural operations. It is these urban markets where competition is more prevalent, as these areas provide the largest profits. The market would fail because no company would w ish to supply to the consumers that they make a loss, and without obligation these consumers would have to go without the commodity. These same conditions apply for the other network industries offering a standardised product such as water or gas. Thus, in each of these industries, competition occurs through access agreements, whereby the incumbent operator allows access to their existing network to allow competition to develop in the market. The competitors are charged a flat rate fee by the former monopolist, and in turn are able to provide the same services to their customers as the incumbent. This allows the users of the network to maintain their positive network externalities, whilst competition will in theory lead to a reduction in prices. Telecommunications: Telecommunications in the UK were, until 1980, run by the Post Office. In 1980, the department of the Post Office charged with running the telecommunications industry was renamed British Telecom (BT), and was run as a state-owned monopoly until 1982, when a license was awarded to Mercury, creating an oligopoly. BT was privatised in 1984, when the UK government sold just over 50% of its shares in the company. In 1990, the oligopoly ended when the market was opened to competition. This competition was introduced with a similar access regime that was deployed within the gas industry, and this access is still how competition is formed today. In 2002, Frontier Economics published a report on behalf of Postcomm, examining the effects that privatisation and liberalisation have had upon former state monopolies in the UK. The resultant findings were that productivity and efficiency substantially increased within BT upon the end of the oligopoly period in 1990, with the average number of emplo yees falling by nearly 100,000 in the first five years of competition, whilst employee levels were stable prior to the introduction of the competitive environment. This shows the reactive measures taken by an incumbent to become more efficient when the threat of competition becomes real. The report also notes that the privatisation of BT has led to an average price reduction of 5.1% per annum between 1984 and 1999, and an overall productivity increase of 25.5% to 1999, or 4.8% per annum average. Gas: Since its inception in 1972, British Gas had been a stated owned monopoly. In 1982, competitors were granted access to British Gas network of pipelines and infrastructure, in order to be able offer gas to final customers around the country. This is similar to the competitive environment introduced through local loop unbundling agreements in the telecommunications sector. Simultaneously, competition was introduced in the purchase of gas from suppliers, ending British Gas monopsony in the market. In 1986, the gas market was segregated into two categories; the tariff market, which consisted of low volume gas users, such as households, and the contract market, primarily businesses and higher volume users. British Gas retained a monopoly in the tariff market, which had its prices regulated, whilst there was competition allowed in the contract market. Also in 1986, British Gas was privatised as a vertically integrated monopoly. This differed from the liberalisation process seen in the elec tricity industry, where the incumbent was separated into a national infrastructure, and several regional suppliers (Armstrong Sappington 2006). Several regulatory reforms were necessary to prevent the incumbent from conducting discriminatory pricing by charging higher prices to industrial gas users with no alternative sources of energy available to them, as well as the prices they charged competitors for access to the pipeline network. Other regulations introduced included the limiting of the share of gas allowed to be bought, and subsequently, supplied by British Gas, forcing entry to the market. By 1998, all consumers were able to access a competitive market, and pricing control determinations were removed in 2002. This highlights a gradual liberalisation of the natural gas market in the UK, and this general framework was followed across other former state monopolies, albeit with industry-specific alterations. Electricity: The UK electricity industry is separated into four different aspects. There is the generation, transmission, distribution and retailing of power before electricity reaches reach the British consumer. Until the 1989 Electricity Act, the industry represented a natural monopoly in each region and sector of the industry. The Central Electricity Generation Board (CEGB) owned all of the generation and transmission of electricity for England and Wales, selling power to Boards which each represented an area, which were subsequently responsible for the distribution and selling of the power to the consumer (Newbery 2004). In Scotland, there were two boards, one covering the north and the other the south, each of which had franchises covering all aspects of generating electricity. In 1989, the ECGB was separated into four companies; two for generating electricity, one which became the modern day National Grid plc, and one for nuclear power. Apart from the nuclear aspect, the companies were formed as public limited companies (plcs). The regional area boards were also made into plcs, and the National Grid was placed into the joint ownership of these companies, which were floated on the stock exchange in 1990. The process which has allowed competition to be introduced into the supply sector has been similar to that seen within the gas industry; with users with demand above 1MW able to choose suppliers first, and gradually the limit was lowered, to 100kW, and in 1999 the entire market was opened to competition, as the regional plcs franchises ended. Competition in electricity generation was also able to occur due to the creation of the Electricity Pool, a wholesale electricity market auction through which all generators has to sell their power to suppliers (Newber y 2004). The aftermath of the liberalisation of the UK electricity market in 1990, and the formation of four companies in a competitive structure, there were large increases in productivity. Newbery and Pollitt (1997) estimate that labour productivity increases were around 100%. Both National Power and PowerGen doubled their megawatts per employee capacity between 1990 and 1998 (Postcomm 2002). It is suggested that these increases were largely due to the reductions in the labour forces of the companies, as they became more streamlined. Newbery and Pollitt (1997) estimated that after five years of privatisation in the electricity sector, costs were 6% lower than they were prior to the restructuring of the CEGB, with costs per unit significantly lower. DTI Energy Prices data shows that the price per kWh for the average consumption of 3300kWh per annum in London was 7pence in 2004, compared with over 11.5pence in 1991. Conclusion: The three examples of the liberalisation of state monopolies highlighted show that despite having common characteristics, each industry is different. Each method of liberalisation shown has features which are unique to the individual markets, yet there is a common basis in the approach. For instance, the introduction of competition in each industry is enabled through allowing suppliers access to the already established network. There is a consensus that having two parallel, competitive networks would be inefficient, in terms of cost both for the operators and the consumers. Economies of scale would drop such that unit cost would rise and the cost to the consumer would have to rise, reducing consumer surplus. The form of regulation in each industry is that of issuing licenses to operate for all market segments, a system which Newbery (2004) praises in comparison to the regulatory systems in the European and North American electricity markets. Terms of these licenses include the requir ement for the license holder to provide the regulator with the information that it needs to accurately and knowledgeably monitor the industry. This should allow the regulator to foresee any abuses of regulation and act swiftly to prevent them. All three industry regulators have retained some form of price controls which limit the profit margins of operators of the monopoly networks (Ofcom, Ofgen). Conversely, the methods used in the deregulation of each industry have differed, especially in the case of the electricity market, which created regional monopolies competing for electricity supplies rather than customers. This highlights the importance of using precedents and adapting them to suit the industry in hand. Chapter 3 Postal Services vs Network Industries: The postal industry across Europe is changing in shape. The letters markets are in structural decline across the continent. Other, newer forms of communication have become more prevalent in recent years due to the technological advances of late. A study by The International Post Corporation points out that the postal industry is becoming less of a two-way communication channel, and more of a one-way method of distribution. This opinion is corroborated by Crew and Kleindorfer (2008) who suggest that the plans to reform the market in Europe stem from the declining mail volumes, which are primarily a result of technological advances in other forms of communication which have been assisted by the previous liberalisation of these markets. Specifically, the vast and rapid increases in the use of e-mail and text messaging have led to a cycle of negative growth in letters sent in the United Kingdom and in Europe in recent years. Institutions such as banks and businesses are able to send stat ements, invoices and payments, through more time and cost efficient electronic means of communication. This has resulted in a reduction in the amount of transactional mail sent in the UK. Social Mail, such as correspondence letters between consumers is also on the wane. The emergence of text messages and emails has reduced the requirement for letters, which are a lot slower. Only the use of greetings cards has continued strongly, with most consumers still preferring to send and receive greetings in paper rather than electronic form (Hooper et al 2008), as people still attach value to the personal touch of sending a letter. These factors have led to a continuous year-on-year decline in the volume of mail being sent in the UK. Hooper et al (2008) suggest that Royal Mail lost 500million in operating profit to other forms of communication in 2007-8. On the other hand, the growth of technology over the past ten years, primarily the internet, has led to a large upsurge in the number of parcels and packets being ordered and delivered by Royal Mail and other courier companies. The Hooper Report (2008) places the value of online retail at 42billion annually in 2007, 10% of all retail sales within the UK, with this figure set to rise to 78billion in 2010, 20% of all retail sales in. This will be of benefit to Royal Mail; however, the estimates show that the expected rise in packet volume will not be enough to replace the lost revenue from the declining letters market (Hooper et al. 2008). Effectively demand is changing, and the market needs to adapt to meet this new demand. Natural Monopoly: Viscusi et al. (2005) describes a natural monopoly as an industry where the cost is minimised if the production of a good or service is provided by one firm. This criteria leads to the cost-function of the industry is sub-additive. Sub-additivity is generally obtained if both economies of scale and economies of scope exist. Cazals et al. (1997) finds evidence of sub-additivity in the delivery sector of the postal industry. The study found that it would be 5.2% less costly for one firm to provide the market than if two firms were to equally share the delivery of the existing volume of mail. The sub-additive cost function that is necessary in defining a natural monopoly. Up until point Q, production is showing economies of scale, with a decreasing average cost. This shows that it is cheaper for one firm to supply the market until point Q, and that cost is sub-additive for that range of outputs. However, after point Q is reached, average costs begin to rise. NERA (2004) suggests that finding economies of scale and scope within a specific part of the industry; i.e. the delivery or sorting capacities, is sufficient to determining that a natural monopoly exists. In this regard, Bradley and Colvin (1994) find that a natural monopoly exists within the delivery segment of the postal industry, due to the presence of economies of scale and scope. However, NERA (2004) mentions that the authors accept the conditions are easy to satisfy, and Wada et al. (1997) find mixed evidence on the sub-additivity of the cost function in parcels and letters delivery. Economies of Scale: On the issue of whether or not there are economies of scale within delivery, Cazals et al (1997) and Cazals, Florens, Roy (2001b) found returns to scale ranging from 1.10 to 1.68 for La Poste, the incumbent operator in the French postal market. This means that based on a 10% increase in volume, costs would increase by less than 10%, with these studies estimating that costs would increase by 9% and 5.1% respectively. In a study of the United States Postal System (USPS) conducted by Christensen et al. (1993), there was found to be returns to scale of 1.26, meaning a 10% increase in inputs would provide the capability for a 12.6% in mail volume delivered. Further studies by Bernard et al (2002) (La Poste), Bradley and Colvin (1994) and Cohen and Chu (1997) (both USPS) discovered decreasing unit costs with an increase in volume in the delivery sector of the companies. The decreasing average cost involved in postal delivery even at a market share of 100%, and that economies of scale are in existence. Thus, the graph for Royal Mail never reaches the Q point highlighted in Figure 1, and the cost function remains sub-additive. This shows that it is cheaper for one firm to supply the market than multiple firms, providing one of the criteria showing the existence of a natural monopoly in the delivery segment of the postal industry. Thus, it can be verified that significant economies of scale exist in the delivery of mail, regardless of the conditions and parameters set and used by the econometricians conducting the studies. The parameters set do, however, influence the results in terms of the extent of the economies of scale, as can be seen from the variation in the economies of scale reported for La Poste by different reports. Within the entire postal operation, rather than solely the delivery aspect, the economies of scale reported are lower. Norsworthy et al. (1991) estimates a value for returns to scale of 1.10 in USPS, whilst Wada et al. (1997) returns a value of between 1.03 and 1.06 for Japan. The reason for the lower values is the addition to the calculations of upstream activities, such as transportation and sorting which do not normally contain economies of scale. However, Rogerson and Takis (1993) found that economies of scale vary in transportation, depending on the mode of transport, and whether the journey is short-haul or long-haul. For instance, long distance transportation by road exhibits returns to scale of 1.11, compared with a figure of 1.01 1.05 for long-haul air transportation. Furthermore the existence of economies of scale was evident in short-haul transportation, with a figure of 1.52. It is important that this study was conducted on the USPS, which covers an area multiple times l arger than the area served by Royal Mail in the UK. In that respect, the majority of journeys undertaken in the UK by Royal Mail will correspond as short-haul transportation, thus showing economies of scale will be prevalent in Royal Mails transportation system. There was mixed, inconclusive evidence by the aforementioned authors as to the existence of economies of scale in mail processing operations. The overriding belief is that any economies of scale involved in sorting are insignificant, and do not act as a deterrent to new entrants, as is shown by the number of companies competing with Royal Mail in upstream activities rather than delivery in the UK. Economies of Scope: The Bradley and Colvin (1994) paper also investigated the existence of economies of scope within the postal industry. The term economies of scope refers to what happens to unit costs when one firm produces two or more outputs through the same system or network. In the postal industry, this refers to the co-existence of first class, second class, bulk mail, and parcels within the same Royal Mail network. The results of the study were that economies of scope exist amongst all types of mail, but only to a very small extent for parcels. This means it is cost efficient for all mail with the same destination, to be processed, transported and delivered together where possible, regardless of type (Rogerson and Takis 1993). This may not always be possible due to high volumes of mail, and the requirement for 1st class mail to be delivered with one day. The exception for parcels could be that due to their size, it may be necessary for a separate delivery to take place. This also occurs for Spec ial Delivery items in the UK, which are processed completely separately from one end of the delivery chain to the other. This could result in multiple deliveries occurring to the one address on any particular day, reducing efficiency, and causing diseconomies of scope. Thus, it would appear that even despite econometric studies, the question of the existence of a natural monopoly within the postal industry cannot be categorically answered. It would appear that each report arrives at similar conclusions on the matter. The statistical evidence points to an agreement with the IPC report, in that, strictly speaking, a natural monopoly does not exist in the postal industry. On the other hand, the market contains many of the mannerisms of a natural monopoly, which do act as a barrier to entry for competitors, which corresponds with the opinions expressed by competitors in the survey within the Hooper Report. Network Industry: The major difference between the postal industry and the traditional network industries, as noted by the IPC (2007) is that the postal industry does not incur the vast sunk costs required to establish an infrastructure. For instance, Royal Mails network is one which is made up of a variety of components. The company uses public roads, railways and airways to transport its mail, and so much of its costs are in vehicles. There is no large sunk investment required by Royal Mail to use these public facilities, in the way that British Gas required an expensive national network of pipelines to supply its gas. Also, the costs in the business are predominantly people based. Royal Mails financial accounts for the year ended March 29th 2009 show that 65% of its costs are people costs, including wages and pension costs. Another 17% of costs are in the distribution and conveyance part of the business, consisting predominantly of transport costs. Some of these transport costs will be sunk cost in vestments in new vehicles, whilst some will be fixed running costs in the form of fuel. Thus, more than 65% of Royal Mails annual costs are categorised as fixed costs. This shows that the level of sunk costs involved in the business is relatively low in comparison to the traditional network industries, and this is the criteria used by the International Post Corporation (2007) to reject the suggestion that the postal industry is a network industry in the classical sense. Overview of Industry: The letters business of Royal Mail is divided into five operational stages: collection, sorting into regions, transportation, sorting in delivery offices, and delivery. Mail is collected at least once daily from each of the 115,000 pillar boxes, 12,000 post offices and 87,000 business addresses (Hooper Report 2008). The mail collected is then transported to one of 69 regional mail centres, where it will be sorted into regions; with local mail being sorted and sent to local delivery offices (DO) for delivery, while national mail is taken to one of nine national distribution centres. From here, the mail is transported by air, rail and road to the appropriate mail centre, where it is sorted and transported to each of the 2249 delivery offices. At the delivery office, mail is sorted into walks or duties, and sequenced into order before delivery commences. Competitors of Royal Mail are able to compete in the collection, sorting, transportation and delivery of mail. The industry regulator, Postcomm, has granted licenses to 21 companies, in addition to Royal Mail, allowing them to operate in all market sectors. Therefore full competition regulation has been implemented. However, as of January 2010, the new competitors have opted not to compete with Royal Mail in all market segments, choosing instead to focus their operations on the collection of mail from businesses and sorting, before handing the mail over to Royal Mail at the inbound mail centre stage of the process. From this point, Royal Mail is to deliver the mail across what is known as the final mile to the customer. This arrangement is called Downstream Access (DSA), with Royal Mail charging a fee per item to its competitors for delivery of their mail. This fee is arranged through agreement with Royal Mail and each individual operator wishing access to the network. If agreement i s not met between the two operators, then Postcomm, acting as arbitrator, will set the access price. One important factor is that Royal Mail should be able to break even on the access activities it undertakes on behalf of other operators. The DSA agreement is similar in type to what occurs within the classical network industries in the UK. Under the Local Loop Unbundling (LLU) agreement in telecommunications, competitors of British Telecom must pay a line rental fee to the incumbent network operator. Under the agreement, for a fee, BT must allow their competitors the use of the physical network to provide telecommunications services to their customers. This is the way in which competition was implemented in the telecommunications industry in the 1990s, and similarly it is the method of competition that has proved most popular since the postal industry was opened up to competitors on January 1st 2006. Bulk mailers are also allowed access to the Royal Mail network under a license called Customer Downstream Access (CDSA). This allows the largest mailers sort their mail internally, and avoid paying Royal Mail for collection and sortation, instead putting the mail into the system at the inbound mail centre stage of the pro cess, similar to DSA. Competition in the Postal Industry: The competition which has developed within the UK postal industry has almost entirely been through Downstream Access. There has been very little competition in the final mile delivery part of the market. The justification of the access agreement was to allow alternative operators to build up economies of scale in the upstream part of the business (collection and sorting) that would therefore enable them to establish a delivery network of their own. However, whilst the uptake in the DSA agreements has been rising, with almost 40% of all items delivered by Royal Mail coming from DSA items, as of yet no operator has established its own delivery network. In reality, since the access agreement has been in place, end-to-end competition has decreased. It was suggested by Hooper et al. that the high uptake in the access agreements has dissuaded many operators from introducing their end-to-end networks, in the realisation that the upstream side of the business is less costly than the downstre am delivery side. The delivery, or downstream part of the mail market, is very labour intensive, and is therefore very costly. These costs are generally fixed, as they are necessary for the provision of service to consumers. Royal Mail claims that the final mile delivery represents 44% of the entire costs of the business. In the year ended 5th April 2009, Royal Mail made a loss of 67million on DSA items, despite volumes increasing to 5.3billion items (Royal Mail 2009). It has been suggested by many in the survey incorporated in The Hooper Report that the current access regime could act as a barrier to end-to-end competition, because the margins involved in the delivery side of the business are so low that it is not worthwhile entering the downstream section of the market. However, the majority felt that the prospect of full competition has increased due to the establishment of the access regime because alternative operators have been able to build-up relationships with customers, as well as mail volumes in collection that develop economies of scale. It may be that end-to-end competition will develop in the future, once economies of scale have been developed, or it may not. However, in a recent episode of Panorama, TNT UKs chief executive announced plans to one-day soon begin their own delivery network, and have orange postmen and women on the streets of Britain. Whether or not this becomes viable in a financial or efficiency sense remains to be seen. USO: The Universal Service Obligation (USO) is a law which insists that Royal Mail delivers daily to each of the UKs 28 million addresses. This agreement is in place to ensure that all consumers of the service receive the same services and products at the same cost. Akin to the telecommunications industry, it is more costly for the Royal Mail to deliver in rural areas than in urban areas, due to transportation costs. However, it would be discriminatory for someone to be financially penalised due to where they live. This means that people sending letters or parcels within urban areas, say from one London address to another, are effectively subsidising the letters sent in rural areas, for example from Lands End to the Outer Hebrides. Therefore, those sending letters within London are being charged more than the marginal cost of delivering that letter, whilst those in rural areas are charged less than the costs of delivery. The Hooper Report, published in December 2008 states that the USO is beneficial for society and the economy as it allows access to means of communication, enables trade, and is non-discriminatory towards those who are not regular users of the network and those on lower incomes. The Royal Mail has made a loss in excess of 100million in each of the last two financial years on products covered by the USO (Royal Mail Regulatory Financial Statements 2008-9). Royal Mails competitors are not subject to the provision of the USO, and are able to pick and choose where they wish to collect and deliver to and from. As they are profit maximising companies, there is no incentive for them to compete with Royal Mail on its loss-making routes, and they are free to cherry-pick the more profitable routes within the urban areas, where they can undercut the incumbents subsidising price. Due to the one price for all rule determined by the USO, for a certain amount of mail, Royal Mail has to offer the same price to one company as it does for all other business customers for the uplift and processing of a certain amount of mail. On the other hand, competitors who are not subjected to the USO can treat business customers on an individual basis, allowing them to negotiate a suitable price which can be altered for another customer, even if the specifics of the arrangement are identical. This enables the competitors to undercut Royal Mails prices and take a lo t of profitable business from the incumbent operator. These arrangements were previously used to cover the cost of the USO. The Royal Mail needs the profitable, urban business to business mail to subsidise the losses made on the USO. If the business is unable to compete on price with its competitors then, put simply, it will lose business. If the company has to spread its costs continually while its revenue falls then there will be less revenue available to subsidise the USO. This will lead to a necessity for Royal Mail to either operate at a loss, or increase its prices to cover the costs of running the USO. If Royal Mail is to be run as a profit making entity, then it cannot function with continual losses, and therefore the only option is to raise prices. If this occurs, assuming they are indifferent towards mail carriers, senders of bulk mail will refuse to pay higher prices if they can obtain a lower cost with a competitor, and so the revenue of Royal Mail will fall further. This will result in a cyclical decline in revenues and increase in prices, which can only end when Royal Mails prices are sufficiently high that the USO is no longer running at a deficit, and requires no subsidy. However, by then, prices may be so high that businesses do not use Royal Mail to collect their mail. Also, as Royal Mail prices conti nue to rise, the competitors will be able to increase their prices and still maintain their level of business so long as they are less expensive than Royal Mail and the other operators. This will represent an increase in the level of inefficiency in the market. Regulation in the Postal Industry: Within an industry where competition is being introduced, there are two broad types of regulation that can be applied to prevent anti-competitive behaviour and uphold levels of service; ex ante and ex post regulation. Each has its benefits and drawbacks, and there are conditions under which each is more suitable than the other. Ex ante regulation is a preventative measure which is established before any anti-competitive behaviour occurs, whilst ex post regulation consists of reactionary competition laws which are applied after anti-competitive behaviour has taken place. These powers consist of imposing fines or sanctions on Royal Mail should the company be deemed guilty of anti-competitive behaviour. Ex post regulation provides incentives for companies not to engage in an anti-competitive manner, whilst ex ante regulation prevents such conduct from occurring. Each type of regulation has its implications for the postal market. Ex ante regulation is more restrictive, particularly on th e actions of Royal Mail, whilst offering more security to competitors and consumers that Royal Mail will not employ anti-competitive behaviour. On the other hand, ex post regulation provides more trust in actions of the incumbent operator, giving Royal Mail more freedom, but offers less protection and assurance for competitors and customers, as it is a reactionary measure. Enforcing ex post regulation, and punishing breaches of competition law can be a time consuming process requiring investigations, by which time the afflicted competitor could have been forced out of business by the incumbents continued anti-competitive behaviour. However, under the current regulatory framework, Postcomm has no power to enforce competition law, thus preventing any use of ex post regulation within the postal market, and limiting the industry to the aforementioned ex ante regulation measures. This differs from the other communications industries, which are regulated by a single regulator, Ofcom, whic h has the power to impose competition laws on companies within its control, allowing a combination of ex post and ex ante regulation to develop. However, Ofgem, the energy regulator for the gas and electricity industries, has no power to impose ex post regulation, although the regulator itself wishes to be granted these powers (Consumer Focus 2009). The current way in which the competition within the postal market is regulated has been criticised for the allowance of asymmetric competition. There have been accusations from Royal Mails competitors that the incumbent operators exemption from paying VAT is a barrier to end-to-end competition. However, this is a ruling from the European Parliament covering all state-owned postal operators in the European Union, and can only be revoked by the UK or European Governments. This issue is therefore out with the control of the regulator. A court ruling from the European Court of Justice in April 2009, upheld the VAT exemption due to Royal Mails deliverance of the USO. This has two main impacts for Royal Mail, and its competitors. Firstly, and more evidently, it provides them with a comparative advantage over competitors, enabling them to offer customers better prices than they would otherwise. On the other hand, it also means that the Royal Mail, unlike its competitors, is unable to reclai m the VAT that it pays on goods and services, such as fuel and sorting machinery. This adds to the business costs. Hooper et al. note that Royal Mails VAT exemption has a limited effect on much of the market, due to the ability of most businesses to reclaim VAT charged to them by any competitor for services tendered. However, for those who do not have the ability to reclaim VAT, i.e. charities and financial institutions; Royal Mails VAT exemption gives the incumbent operator an advantage over its rivals. Royal Mail has also submitted several complaints to the regulator regarding asymmetric competition. The main issue is that of the cream skimming of profitable customers by competitors. Under the current conditions of the USO, Royal Mail has to offer its bulk mail services, Mailsort 1400 and Cleanmail products at uniform prices. Thus, as in most products included in the USO, the services with the highest margins will assist in subsidising the services which make a loss. On the other hand, competitors such as UK Mail and TNT can treat potential customers on an individual basis, and alter their prices depending on the costs imposed by that particular contract. This enables them to undercut the Royal Mails prices and still make a healthy profit on the service. With the introduction of competition, those customers who feel they are paying too much for their bulk mailings can negotiate a cheaper deal with Royal Mails competitors. This will result in the USO making a loss, as profitable cus tomers choose to send their mail through another company, and as such the Royal Mail is unable to subsidise the loss making contracts. This could lead to what Crew and Kleindorfer (2005) refer to as a Graveyard Spiral, which occurs when competitors are able to capitalise on cost-pricing misalignments caused by the fixed, universal pricing regime implemented under the USO. If this misalignment is large, i.e. the costs of provision are considerably below the price charged for the service, leading this contract to be susceptible to undercutting from competitors. However, the contract would have been used to finance loss-making services provided under the USO. This would cause unit prices for Royal Mail to rise, which would lead to a price rise, which, in all probability, would exacerbate the problem, and create a cyclical chain of events. Royal Mails half-year accounts for 2009/10 show that one of every three items delivered by the company is through Downstream Access. Other estimates put the figure at 40% (Hooper et al 2008). Precedents of Postal Competition: It is useful to look upon precedents of markets which have been liberalised in the postal industry. The UK, is however the first country in Europe to induce competition to the market under the EU directive for 2008. The UK introduced competition to its postal market three years ahead of the schedule of the time. However, Sweden and New Zealand both liberalised their postal industries in the 1990s. Postcomm (2002) conducted an investigation into the effects that liberalisation has had on postal industries which have already had competition introduced, including Sweden and New Zealand. Sweden: The postal industry in Sweden was fully liberalised in 1993. Prior to the introduction of competition, the incumbent operator Sweden Post had a stable efficiency rate of around 80,000 letters per employee. However, between 1993 and 1999, the letters per employee rate increased dramatically, to around 135,000. Nevertheless, this is only one measure of efficiency. There was also a reduction in the real operating cost per letter, beginning in 1992, from 1.95SEK, to 1.53SEK in 1995, where the figure stabilised. This represents an annual growth in productivity of almost 9%. In spite of the increases in productivity, Sweden Post has seen revenue per letter and profit per letter fall in the years following 1993. Despite this, the company has remained profitable. This suggests that the majority of gains made in efficiency were passed onto the consumer in the guise of lower prices (Postcomm 2002). Sweden Post also posted increases in the quality of service it provided in the period following liberalisation. Next day delivery increased from 95.8% in 1992 to 97.3% 1998. New Zealand: Full liberalisation of the postal industry in New Zealand was completed in 1998, although it had been phased in over the previous decade. The incumbent operator, New Zealand Post, decreased its workforce by 43% in the ten years to March 1997 (Postcomm 2002). This helped towards an increase in letters per employee of between 70% and 112% over the same period, as estimated in Postcomm (2002). The quality of service provided by New Zealand Post improved from 94% in 1997/98 to 95.7% in 2001. From the case studies from New Zealand and Sweden, it appears that in preparation for the liberalisation of the market, the incumbent operator begins to improve their productivity and efficiency. This effect has been mirrored in the UK, where Royal Mail has shed 60,000 jobs since the plans to fully liberalise the market were announced in 2002, whilst there has been a general trend of increases in the quality of service provided (Royal Mail Financial Accounts 2009). The change in market structure ensures that the incumbent has to change from a monopoly service provider to a competitive business. These improvements in efficiency are emulative of those seen in the former state monopolies in Britain post-liberalisation. Boekler (2007) provides evidence for the formation of the industry. After ten years of a liberalised market in Sweden in 2003, the incumbent still had a market share of 92.9%, despite having over thirty competitors. This figure is the lowest of all incumbents in European liberalised postal markets. Andersson and ThÃÆ'Â ¶rnqvist (2007) commented that the monopoly in the Swedish postal market was too powerful to be seriously threatened by new competitors. It is also suggested that the change of the incumbents behaviour to that of a privately-owned, competitive company only served to strengthen its position in the market and prevent effective competition from developing. This provides support for Economides (2004) in suggesting that the market structure has not changed significantly since competition was introduced. In the UK, Europe Economics (2008) foresaw two possible scenarios developing in the postal market: one where competition continues primarily through access and one where e nd-to-end competition develops. The high end estimate of the study was that entrants could attain a combined market share of 8% by 2016. This would leave Royal Mail with a dominant 92% of the market, serving to highlight the aforementioned inequalities in the market structure, even where competition is plentiful. Contrary to the findings of Postcomm (2002), Boekler (2007) states that liberalisation has led to higher prices and a lower availability of postal services in almost all European markets. The paper suggests that there have been very few advantages for the consumer, and complicated regulations have been imposed. The report also mentions that the privatisation of the former monopolist in Germany has had a negative effect upon consumers. This is contradictory to the effects which privatisation and liberalisation have had upon the prices and conditions in the network industries such as the telecommunications and gas industries, where prices fell for consumers in the UK. Chapter 4 Possible Future Reform of the Postal Industry: Crew and Kleindorfer (2008) make clear that there is a challenge facing postal reform, in that whilst the benefits of competition should be exploited, it is necessary that the risks it poses to the vitality of the incumbent operator are minimised. For this to be allowed to occur, it is important to firstly recognise where the reform of the industry may come from. It is necessary to establish and define where the market is today. There is debate as to whether there is a natural monopoly in some segments and indeed the entire industry. Evidence points to some criteria of natural monopoly being met, whilst others post inconclusive results. On the other hand, the International Post Corporation (2007) does not believe that there is a natural monopoly within the postal industry. However, most importantly, the stakeholders of the industry, as surveyed in Hooper et al (2008) believe that the delivery aspect of Royal Mails business represented a natural monopoly due to the large costs that wo uld be involved in creating a network to run parallel to the current one. If the competitors believe that there is a natural monopoly, then they are unlikely to invest in an end-to-end network. It is this belief that provides the barrier to entry, rather than any econometric data or evidence. Thus, it is unlikely that there will be much, if any, end-to-end competition in the postal industry in the near future. It is therefore evident that any reforms will be improvements of the current regulatory and competitive conditions rather than any radical new changes to the market. Changes in Regulatory Regime: It has become clear that there are a number of issues blocking the progress of the regulation of the postal industry in the UK. The regulators lack of power and subsequent inability to enforce competition laws within the postal industry places restrictions on the market as a whole. The limitation of only being able to apply ex ante regulation can be of detriment to the industry. One criticism of ex ante regulation is that it prevents all conduct of a certain type, even if that conduct is not detrimental to competition. Thus, ex ante regulation could potentially prevent behaviour or innovation which is beneficial to the consumer. On the other hand, ex post regulation is designed to only prevent behaviour which is of harm to the social good, ensuring that innovation is not averted as a rule. The introduction of ex post regulation to the industry could only be implemented once the regulator is certain that Royal Mail can be trusted not to employ anti-competitive behaviour to the expense of its competitors and consumers. As recommended by Hooper et al (2008), it would be beneficial for the Postcomm to have the power to enforce competition laws, enabling the establishment of a combination of ex ante and ex post regulation. However, as noted in Crew and Kleindorfer (2008), one of the aims of postal reform in Europe is to create an integrated communications industry. If this is to be realised, then the postal industry, when ready could be brought under the control of Ofcom, the communications industry regulator in the UK. As stated by Hooper et al (2008), Ofcom already has powers to impose ex post regulation, and has more manpower and resources at its disposal than the current regulator Postcomm. Hooper et al. recommend a change in the regulatory regime, and, in time this may be the preferable option for the future regulation of the industry. The IPC (2007) reinforces this view, suggesting that over time ex post regulation, or competition laws will be ideal for regula ting the postal industry, and that artificial limitations on the industry are harmful to efficiency. This signals a move away from industry-specific regulation, which is one step further than grouping the postal industry with the other communications industries under Ofcoms control. Perhaps this is the ultimate endgame, but this should occur in stages to allow a smoother, more gradual transition. Changes to Downstream Access: Royal Mails accounts show that it makes a loss on the DSA items that it delivers on behalf of its competitors. Thus, the price it receives for access to the market does not cover its costs of delivering these items, as it should. There is a consensus amongst industry stakeholders that Royal Mail at least has to break even on the DSA agreement (Hooper et al 2008). Thus, it is recommended that the cost to competitors is raised to prevent any future losses for the incumbent on the access regime. Reforms to the Universal Service Obligation: There are several possible reforms that could be made to the USO in the postal industry. It has been suggested that the obligation of the incumbent to supply the entire market every working day be shifted to a shared responsibility amongst all competitors. It has been suggested that the competitors would pay into a fund that would compensate Royal Mail for the losses incurred in the provision of the universal service, as is due to happen in France and the Netherlands when their markets are opened to competition. There is also the option for the state to incur any losses incurred by the USO, as will happen in Belgium upon liberalisation (Free Fair Post, 2009). However, Hooper et al (2008) declares that any compensation would be detrimental to the incumbents efforts to improve its efficiency, and there is a danger of implementing too many changes at the one time. If when Royal Mail completes its modernisation program and reduces its costs per unit, the USO still makes a loss for the co mpany, then the idea of compensating the business could be a more viable option. However, until Royal Mails post-modernisation costs are established, this would be an unnecessary measure. As the bulk mail market continues to become more competitive over time, it has been suggested that by reducing the ex ante regulations imposed on Royal Mail, competition can become fairer and prevent cream skimming from occurring. As over 40% of all bulk mail volume is now handled by competitors to Royal Mail (Hooper et al 2008), there is the potential for the removal of the Walksort 1400 and Cleanmail bulk mail products from the USO. This would mean Royal Mail would be able to negotiate contracts on an individual basis in the way that their competitors do, allowing the company to compete more ably with other operators on price for high volume mail contracts. The result would be the removal of one aspect of asymmetric competition that exists in the market, and preventing the occurrence of a graveyard spiral through cream skimming, which could threaten the preservation of the USO. The other main aspect of asymmetric competition is the VAT exemption bestowed on Royal Mail, and all other state owned postal operators by the European Union. There have been complaints regarding the issue from competitors such as TNT. However, in April 2009, the European Court decided to that Royal Mail should retain its VAT exemption, due to the fact that the company retains sole responsibility for the USO in the UK (Reuters 2009) essentially, it is the universal service that is to remain exempt from VAT, rather than the company itself. This decision came against the wish of the industry regulator Postcomm. It appears that the VAT exemption will act as Royal Mails compensation for its responsibility for the USO. Privatisation: Hooper et al (2008) recommend that the only way in which Royal Mail can survive is through a partnership with a private sector company. Effectively this would involve part-privatisation of the business. Evidence from the telecommunications industry suggests that the opening of the industry to competition in 1990 had a greater beneficial effect on the incumbent operators operations and costs than privatisation of the company had six years prior. On the other hand, when the electrical companies were transferred from state to public ownership, there was a substantial improvement in their efficiencies, which led to cost improvements for the consumer. In the UK, everyday consumers face prices for stamps which are amongst the lowest in Europe (Boekler 2007), and low profit margins, which have thus far prevented full competition. It would remain to be seen if privatisation of Royal Mail would provide cost advantages for non-bulk mailers. Therefore there are mixed results in the case of priv atisation of state monopolies. With the competitive postal market still in its infancy, and the regulatory controls still requiring much improvement, the decision on privatisation should be postponed until conditions are more stable and less likely prone to change. If the Royal Mail were to be privatised, it would be unclear as to which measure was most effective, the privatisation or implementation of the competitive market. Also, eliminating the market deficiencies such as asymmetric competition will improve Royal Mails ability to compete for contracts with other operators. If, once these market deficiencies are eradicated, Royal Mail is still struggling, then the case for privatisation can be reopened, but these measures have to be given the chance to work. In this respect, this paper is in disagreement with Hooper et al (2008) that privatising Royal Mail is the only chance of survival for the business. References: Andersson, Monica ThÃÆ'Â ¶rnqvist, Christer. (2007) Liberalization and privatization in Sweden Postal Services. PIQUE-Project-Paper, GÃÆ'Â ¶teborg. BBC Panorama: Cant Deliver, Wont Deliver, by Vivian White. Viewed on December 14th 2009. Bernard, S., Cohen, R., Robinson, M., Roy, B., Toledano, J., Waller, J., Xenakis, S. (2002) Delivery cost heterogeneity and vulnerability to entry. Published in Postal and Delivery Services, Delivering on Competition; edited by M.A. Crew and P.R. Kleindorfer, Kluwer Academic Publishers, 2002. Boeckler. 2007. Liberalisation, privatisation and regulation of postal services in Europe First international experiences in the run-up to new European regulations. March 2007, Dusseldorf. Bradley, M.D., and Colvin, J. (1994) An econometric model of postal delivery in Commercialization of Postal and Delivery Services: National and International Perspectives, edited by M.A. Crew and P.R. Kleindorfer, Kluwer Academic Publishers, 1994: 137-53. Cazals C., Florens J., and Roy, B. (2001b) An analysis of some specific cost drivers in the delivery activity. Published in Future Directions in Postal Reform, edited by M.A. Crew and P.R. Kleindorfer, Kluwer Academic Publishers, 2001. Cazals, C., Rycke, M., Florens, J.P., and Rouzaud, S. (1997) Scale economies and natural monopoly in the postal delivery: comparison between parametric and non parametric specifications. Published in Managing Change in the Postal and Delivery Industries, edited by M.A. Crew and P.R. Kleindorfer, Kluwer Academic Publishers, 1997, 65-80. Christensen, D., Christensen, L., Guy, C., and OHara, D. (1993) US postal service productivity: measurement and performance. Published in The Regulation and the Nature of Postal and Delivery Services, edited by M.A. Crew and Kleindorfer. Boston, Kluwer Academic Publishers, 1993, 237-60. Consumer Focus. 2009. Addressing market power concerns in the electricity wholesale sector Initial policy proposals. Economides, Nicholas. (1996) The Economics of Networks, International Journal of Industrial Organization, vol. 14, no. 6, pp. 673-699. Economides, Nicholas. (2004) Competition Policy In Network Industries: An Introduction, NET Institute Working Paper No. 04-24, NYU, Ctr for Law and Business Research Paper No. 03-10. Europe Economics. 2008. The Benefits of Competition in the UK Mail Market. Free Fair Post. 2009. Is competition developing in the postal market? Comparison study of the French, German, Dutch and Belgian postal legislations Brussels. Hooper, Richard. Hutton, Deirdre. Smith, Ian. 2008. Modernise or Decline: Policies to maintain the universal postal service in the United Kingdom. 16 December 2008. International Post Corporation. 2007. How to regulate the postal industry: an economic approach. Lundgren, A. (2001), Sustainability of USO on a liberalised postal market some empirical insights. Moriarty, Richard. Smith, Paul. 2005. Barriers to Entry in Post and Regulatory Responses. From: Regulatory and Economic Challenges in the Postal and Delivery Sector, edited by MichaelA.Crew and PaulR.Kleindorfer. NERA (2004) Economics of Postal Service: A Final Report A Report to the European Commission. Newbery, D. M. and Pollitt, M.G. 1997. The Restructuring and Privatisation of the CEGB- Was it worth it, Journal of Industrial Economics, XLV (3), 269-303 Newbery, David, M. 2004. Electricity Liberalisation in Britain: the quest for a satisfactory wholesale market design. Norsworthy, J.R., Jang,-Show-Ling, Shi,-Wei-Ming. (1991) Published in Competition and the Regulation of Utilities; edited by M.A. Crew and P.R. Kleindorfer Norwell, Mass. and Dordrecht: Kluwer Academic 1991; 141-68. Postcomm. 2002. The impact of liberalisation on efficiency: a survey. Prepared by Frontier Economics, Published January 2002. Reuters News Agency. EU court: UK Royal Mail services can be VAT exempt. Retrieved from: https://www.reuters.com/article/idUSLN80022620090423 [Accessed on 21/11/09]. Rogerson, and Takis (1993) Economies of scale and scope and competition in postal services in Crew and Kleindorfer, eds, Regulation and the Nature of Postal Delivery Services, Kluwer. Roy B. (1999) Technico-economic analysis of the costs of outside work in postal delivery in Crew and Kleindorfer, eds, Emerging Competition in Postal and Delivery Services, Kluwer. Viscusi, W. K., Harrington, J.E., Vernon, J.M. 2005. Economics of Regulation and Antitrust. MIT Press, Massachusetts. Wada, T., Tsunoda, C., and Nemoto, J. (1997) Empirical analysis of economies of scale, economies of scope, and cost subadditivity in Japanese mail service. IPTP Discussion paper series, August No.1997-08. Royal Mail Regulatory Financial Statement. 2009. Report and Accounts Year ended 29 March 2009. Postcomm. 2007. The Needs of Users of the Postal Service: Customer Service Report. Crew, Michael A. and Kleindorfer, Paul R. 2004 Regulatory Economics: Recent Trends in Theory and Practice. Armstrong, Mark, and Sappington, David. E. 2006, Regulation, Competition and Liberalization. Journal of Economic Literature, 44, pp325-366. Crew, Michael. A. and Kleindorfer, Paul. R. 2005. Competition, Universal Service and the Graveyard Spiral In Regulatory and Economic Challenges in the Postal and Delivery Sector. Crew, Michael. A. and Kleindorfer, Paul. R. 2008. Competition and Regulation in the Postal and Delivery Sector.