Brian Skyrms? Evolution of the Social Contract Essay -- essays researc

  Ã‚  Ã‚  Ã‚  Ã‚  Skyrms’ book, Evolution of the Social Contract, offers a compelling explanation as to why individuals, when placed with one-shot prisoner’s dilemmas, will often cooperate, or choose the equilibrium that will benefit both parties equally. He uses examples to outline how individuals of certain environments frequently engage in activities that benefit the group at their own personal expense. Using both game theory and decision theory, Skyrms explores problems with the social contract when it is applied to evolutionary dynamics. In the chapters of the book, he offers new insights into concepts such as sex and justice, commitment, and mutual aid.   Ã‚  Ã‚  Ã‚  Ã‚  Skyrms’ writing goes beyond traditional game theory, and exposes some weaknesses in its application. He rejects the theory’s traditional interpretation of rational actors and actions by discovering some glaring inconsistencies. Skyrms conducted a number of experiments using one-shot prisoners’ dilemmas. The ultimatum the author introduces in the first chapter serves as a simple example of a one-shot prisoners’ dilemma. In the initial form of the example, Skyrms proposes there is a cake that must be divided between two individuals. Each individual is looking to maximize his or her utility, and therefore, wants as much of the cake as possible. However, there is a third party, or what Skryms labels a â€Å"referee.† The two individuals must determine the percentage or portion of the cake they want and summit these requests to the referee. The percentages must not exceed 100%, or the referee will consume all the cake. It is therefore not in either parties’ best interest to request a significantly large portion. Additionally, if the total of the two requests is below 100% of the cake, the referee will take the left-over portion. The two parties will then aim to maximize their portion, however the best claim that an individual submits is dependent upon the other party’s claim. There are two interacting optimization problems (Skyrms 3, 4).   Ã‚  Ã‚  Ã‚  Ã‚  An answer to the puzzle will be found in solutions that are in equilibrium. An equilibrium in informed rational self-interest, or a Nash equilibrium, is any solution to the problem whereby neither party could do better by altering its position. However, this is a general and broad definition. Further stipu... ...as formed certain signals and understandings that are critical to our prospects for cooperation and negotiation today (Skyrms 80-104).   Ã‚  Ã‚  Ã‚  Ã‚  Skyrms’ explorations in Evolution of the Social Contract are based on the premise that human beings are, in fact, inclined to behave justly. His writings do not aim to prove that individuals act justly all the time; however they assert that the disposition exists in societies. Many would take issue with Skyrms’ assertion. Firstly, justice has many interpretations. According to some, equal division of a resource is not always what justice requires. Skyrms fails to address situations where an individual may have worked harder than another for a resource, and invested more time in it. Perhaps one individual would obtain more utility from a given amount of a resource than another would. Libertarians would demand property rights, and argue that one individual might better utilize the resource than the other, creating more benefit for society. Skyrms also fails to give specific interpretations of justice and does not offer any thoughts on what ideas of jus tice, if any, are cultural universals.   Ã‚  Ã‚  Ã‚  Ã‚  

Kantian ethics Essay

Kant argued for the use of a normative ethical theory based around the idea that all men have a similar common goal; his theory was absolute (meaning one must follow a common set of rules no matter the scenario) and deontological (focused on actions themselves rather than the outcome of said actions). Kant advised the use of this theory despite it being a priori, meaning he had no observations or experience of the theory in practice. Kant believed that all men have duties which they ought to fulfil, not to gain a desired outcome or avoid a less desirable outcome, but simply because it is their duty. For example, if we can assume it is always wrong to kill people, it would be considered immoral to kill someone even if that action saved the lives of hundreds of people. Similarly, if you consider a foetus to be ‘alive’ then it would be immoral to terminate it no matter the affect it would have on the mother’s physical or mental health. Nearly everyone would find fault in the former, notably fewer for the latter, yet I would hope that the majority would still disagree. David Gauthier suggested that as morality is an agreed concept, designed so that people cannot run amok doing as they please with no consideration for others, an absolutist theory cannot function as rules are subject to interpretation. Let us briefly consider the foetus example once more, if the rule states that it is immoral to take a life, what should be considered a life? Does life start at conception or at birth, or maybe somewhere in between. For this reason, though an absolute theory should be applied to every situation, the rules do not necessarily mean the same thing for every single person. Kant said that in order to create a duty one had to pass it through three tests, the first of which being the law of nature. This law states that in order for something to become a duty it must be capable of being universalised, so everyone must be able to follow said duty ad infinitum. So, for example: ‘jump the queue’ could not become a duty as if everyone jumped the queue there would be no queue to jump. Though this seems sensible, it is possible that immoral acts could be universalised. For example ‘lie to people’ could be universalised even though it is a traditionally immoral act. Not only that but the rule could easily be manipulated by phrasing things differently, for instance ‘everyone called Hector Benjamin Stellyes can jump the queue’ could be universalised as it would most likely only apply to me. To counteract these faults Kant put in place a second law, the law of wills. This stated that for something to become a duty it must be desirable for the population. This rule however, also has faults. In order for a rule to satisfy an entire population (and if this theory was applied worldwide that would be nearly 7.5 billion at the time of writing) it would have to be extremely broad, leaving it open to being interpreted in drastically different ways. If the rule said that one simply had to please the majority, what happens to those who disagree? As all duties are absolute and universal, one would have to do something they disagreed with in order to be moral citizens. Kant attempts to rebuttal this with his argument that all humans still have free will, even though they should follow their duty they don’t have to; humans remain autonomous. However, some would suggest that though humans are nearly always capable of independent thought, it is human nature to be moral. A psychological study by Yale in 2013 on a number of babies that were as of yet unaffected by modern culture (they couldn’t read, speak etc.) making them almost purely instinctual showed that it is human nature to be ‘good’. If society tells you that there are a set list of moral acts, most people will conform to these acts to the best of their ability. So far, we have a set of rules and how this set of rules are constructed, so now I ask: why should anyone follow this philosophy? If we should not consider consequences when doing our duty, what reason do we have to do so? Kant believed there to be two separate reasons to perform any action: the hypothetical imperative and the categorical imperative.

A Profile of the Leasing Business in India - Free Essay Example

Sample details Pages: 16 Words: 4923 Downloads: 10 Date added: 2017/06/26 Category Business Essay Type Narrative essay Did you like this example? 25 years ago, Farouk Irani quit his high profile job in Citibank to launch his dream project: a leasing company in India. On 10th  Sept., 1973, Irani was able to convince Dr A C Muthia, Industrialist, to have the First Leasing Company of India incorporated. For several years, First Lesing Company remained the Only Leasing Company. Don’t waste time! Our writers will create an original "A Profile of the Leasing Business in India" essay for you Create order Ever since IFC, Washington decided to support Indian leasing with investment in companies in 4 metros, Indian leasing has never looked back. This was about 1980. Early eighties capital market boom found many young entrepreneurs riding the leasing wave. As it celebrates its 25th  Birthday, Indian leasing is today a central part of the financial system. On its way, it has passed through several twists and turns. Financial industry World-over has a very high beta factor: it is hyper-sensitive to changes in economic scenario. Periods of general prosperity are extremely good for the leasing industry; downturns in economic cycle cost is extremely high. That apart, financial system is invariably affected by the contagion effect: failures of a few players affect even the healthy ones. Evolution of Indian Leasing Industry Leasing activity was initiated in India in 1973. The first leasing company of India, named First Leasing Company of India Ltd. was set up in that year by Farouk Irani, with industrialist A C Muthia. For several years, this company remained the only company in the country until 20th  Century Finance Corporation was set up this was around 1980. By 1981, the trickle started and Shetty Investment and Finance, Jaybharat Credit and Investment, Motor and General Finance, and  Sundaram Finance  etc. joined the leasing game. The last three names, already involved with hire-purchase of commercial vehicles, were looking for a tax break and leasing seemed to be the ideal choice. The industry entered the third stage in the growth phase in late 1982, when numerous financial institutions and commercial banks either started leasing or announced plans to do so.  ICICI, prominent among financial institutions, entered the industry in 1983 giving a boost to the conce pt of leasing. Thereafter, the trickle soon developed into flood, and leasing became the new gold mine. This was also the time when the profit-performance of the two doyen companies, First Leasing and 20th Century had been made public, which contained all the fascination for many more companies to join the industry. In the meantime,  International Finance Corporation  announced its decision to open four leasing joint ventures in India. To add to the leasing boom, the Finance Ministry announced strict measures for enlistment of investment companies on stock-exchanges, which made many investment companies to turn overnight into leasing companies. As per RBIs records by 31st March, 1986, there were 339 equipment leasing companies in India whose assets leased totaled Rs. 2395.5 million. One can notice the surge in number from merely 2 in 1980 to 339 in 6 years. Subsequent swings in the leasing cycle have always been associated with the capital market whenever the c apital markets were more permissive, leasing companies have flocked the market. There has been appreciable entry of first generation entrepreneurs into leasing, and in retrospect it is possible to say that specialized leasing firms have done better than diversified industrial groups opening a leasing division. Another significant phase in the development of Indian leasing was the Dahotre Committees recommendations based on which the RBI formed guidelines on commercial bank funding to leasing companies. The growth of leasing in India has distinctively been assisted by funding from banks and financial institutions. Banks themselves were allowed to offer leasing facilities much later in 1994. However, even to date, commercial banking machinery has not been able to gear up to make any remarkable difference to the leasing scenario. The post-liberalization era has been witnessing the slow but sure increase in foreign investment into Indian leasing. Starting with GE Capitals entr y, an increasing number of foreign-owned financial firms and banks are currently engaged or interested in leasing in India. Pre 1970 1970-1995 1995-2004 Only HP companies  Automobile financing mainly for commercial vehicles  Fixed Deposit: main source of funds Entry into equipment finance through: * Leasing * Hire Purchase  Commencement of car finance  Access to Capital Markets  Funds from FDs and Banks Exit of large no. of companies: * Small Large * Indian Foreign Regulation by RBI Few companies diversified into related financial services Major Constituents of Indian Leasing Industry Lessors Specialized leasing companies: There are about 400-odd large companies which have an organizational focus on leasing, and hence, are known as leasing companies. Till recently, most of them were diversified financial houses, offering several fund-based and non-fund based financial services. However, recent SEBI rules on bifurcation of fund-based and non-fund based activities has resulted into hiving-off of merchant banking divisions of these entities. Banks and bank-subsidiaries: Till 1991, there were some ten bank subsidiaries active in leasing, and over-active in stock-investing. The latter variety was ravaged in the aftermath of the 1992 securities scam. In Feb., 1994, the RBI allowed banks to directly enter leasing. So long, only bank subsidiaries were allowed to engage in leasing operations, which was regarded by the RBI as a non-banking activity. However, the 1994 Notification saw an essential thread of similarity between financial leasing and traditional lending. Though St ate Bank of India, Canara Bank etc have set up leasing activity, it is not currently at a scale to make any difference on the leasing scenario. This is different from the rest of the World, where banks are front-runners in leasing markets. Specialized Financial institutions: There is a wide variety of financial institutions at the Central as well as the State level in India. Apart from the apex financial institutions, viz., the Industrial Development Bank of India, the Industrial Finance Corporation of India, and the ICICI, there are several financing agencies devoted to specific causes, such as sick-industries, tourism, agriculture, small industries, housing, shipping, railways, roads, power, etc. In most States too, there are multiple financing agencies for generic or focussed cause.Most of these institutions are using the lease instrument along with traditional financing instruments. Significantly, the ICICI was one of the pioneers in Indian leasing. At State level also, finan cial institutions are active in leasing business. One-off lessors : Some of the companies engaged in some other business which gives them huge taxable profits, have resorted to one-off leasing on a casual basis to defer their taxes. These people are interested only in leasing of high-depreciation items, preferably those entitled to 100% depreciation. Manufacturer-lessors: This part of the lessor-industry is in highly under-grown form in India, for simple reasons. Vendor leasing is a product of competition in the product market. As competition forces the manufacturer to add value to his sales, he finds the best way to sell the product is to sell it without the buyer having to pay for it instantly. Product markets so far for most durables were oligopolistic, and good products used to sell even otherwise at a premium. With the economy decisively moving towards market orientation, competition has become inevitable, and competition brings in its wake sales-aid tools. Hence, the pot ential for vendor leasing is truly great. The Lessees Corporate customers with very high credit ratings:  These essentially look at leasing to leverage against assets which are otherwise not bankable, or for pure junk financing. Public sector undertakings:  This market has witnessed a very rate of growth in the past. With budgetary grants to the PSUs coming to a virtual halt, there is an increasing number of both centrally as well as State-owned entities which have resorted to lease financing. Mid-market companies: The mid-market companies, that is, companies with reasonably good creditworthiness but with lower public profile have resorted to lease financing basically as an alternative to bank/institutional financing, which to them is time-consuming and tedious. Consumers:  Retail funding for consumer durables was frowned-upon at one point of time, but recent bad experience with corporate financing has focused attention towards consumer durables which incidentally, is all the all-time favorite of financie rs World-over. Most of the larger companies have expressed interest in consumer funding, with ticket size going as low as Rs. 5000. Car customers:  Car leasing World-over is a very big market, and the same is true for India. So long, most car leases were plain-vanilla financial leases but one now finds few instances of value-added car lease services also being offered. Commercial vehicles:  Commercial vehicles customers have always relied upon funding by hire-purchase companies. The customer profile ranges from large fleet owners to individual truckers. Earth-moving machinery customers:  These customers have also traditionally relied upon lease financing. Their requirements are generally large each excavator costs more than Rs. 25 lacks. The income-stream is based on contracts they have at times, the income generation may be sporadic, or the need might itself be temporary. In fact, operating leases would have been ideal in this market, but they are ye t to be launched to any serious degree. Govt. depts. and authorities: One of the latest entrants in leasing markets is the Govt. itself. The Dept. of Telecommunications of the Central Govt. took the lead by floating tenders for lease finance worth about Rs. 1000 crores. In its reforms, India has limits to the extent to which it can resort to deficit financing, and leasing is easily going to appeal to the Govt. , if not for cost reasons, at least for the fact that it will not feature in national accounts as a commercial financing. As a spin-off, it might even help reducing the reported deficit, as the Govt. resorts to what is loved World-over as a tool of off-balance-sheet financing. Factors that contributed to the growth of Indian Leasing Industry With the exception of 1996-97 and 1997-98, the 1990s have generally been a good decade for Indian leasing. The average rate of growth   on compounding basis works out to 24% from 1991-92 to 1996-97. Broadly, the following factors have been responsible for the growth of Indian leasing, in no particular order: No entry barriers   any one could float a leasing entity, and even an existing company not in leasing business can write a lease purely for tax shelters. Buoyant growth in capital expenditure by companies   The post -liberalization era saw a spate of new ventures and fresh investments by existing venturers. Though primarily funded by the capital markets, these ventures relied upon leasing as a source of additional or stand-by funding. Most leasing companies, who were also merchant bankers, would have funded their clients who hired them for issue management services. Fast growth in car market:  Needless to state with facts, the growth in car leasing volume has been the highest over these years the spurt in car sales with the entry of several new models was funded largely by leasing plans. Tax motivations:  India continues to have unclear distinction between a lease that will qualify for tax purposes, and one which would not. In retrospect, this is being realized as an unfortunate legislative mistake, but the absence of any clear rules to distinguish between true leases and financing transactions, and no bars placed on deduction of lease tax breaks against non-leasing income, propelled tax-motivated lease transactions. There was a growing market in sale and leaseback transactions, which, if tested on principles of technical perfection or financial prudence, would appear to be a shame on everyones face. Optimistic capital markets:  Data would establish a clear connection between bullish stock markets and the growth in both number of leasing entities and lease volumes. Year 1994-1995 saw the peak of pr imary market activity where a company, even if a new entrant in business, could price itself on unexplainable premium and walk out with pride. Access to public deposits:  Most leasing companies in India have relied, some heavily, on retail public funds in the form of deposits. Most of these deposits were raised for a 1 year tenure, and on promise of high rates of interest, at times even more than the regulated rate (which was lifted in 1996 to be reintroduced in 1998). A generally go-go business environment: At the backdrop of all this was a general euphoria created by liberalisation and the economic policies of Dr. Manmohan Singh. Present industry order Only few major players exist SREI International Finance Sundaram Finance Cholamandalam Finance Mahindra Mahindra GE Capital Shriram Finance Tata Finance Countrywide Finance Citicorp NBFCs on strong turf NBFCs are today an Integral Part of Indian Financial System showing improving health: Increase in resource profile Significant decline in NPA Substantial improvement in brand image Improvement in profitability margins Maturing industry in which financially managerially weak companies already weeded out . Surviving companies are large corporate with good brand image. NBFCs enjoys a Niche position in the financial sector due to: Better Customer service Innovative flexible financing options Continuously reducing NPAs Healthy Capitalisation Innovative resource mobilisation Focused Operation Products/Customers/Geography Formation of Finance Industry Development Council a Self Regulatory Organisation for NBFCs. Challenges before the Industry The current problems of Indian leasing could be listed as follows, again without any order of listing: Asset-liability mismatch:  Most non-banking finance companies in India had relied extensively on public deposits -this was not a new development, as the RBI itself was constantly encouraging and supporting the deposit-raising activities of NBFCs. If the resulting asset-liability mismatch, to everybodys agreement, is the surest culprit of all NBFC woes today, it must have been a sudden realization, because over all these years, each Governor of the RBI has passed laudatory remarks on the deposit-mobilization by NBFCs knowing fully well that most of these deposits were 1-year deposits while the deployment of funds was mostly for longer tenures. It is only the contagion created by the CRB-effect that most NBFCs have realized that they were sitting on gun-powder all these years. The sudden brakes put by the RBI have only worsened the mismatch. Generally-bad economic envir onment:  Over past couple of years, the economy itself has done pretty badly. The demand for capital equipment has been at one of the lowest ebbs. Automobile sales have come down, corporates have found themselves in a general cash crunch resulting into sticky loans. Poor and premature credit decisions in the past:  Most NBFCs have learnt a very hard way to distinguish between a good credit prospect and a bad credit prospect. When a credit decision goes wrong, it is trite that in retrospect, it invariably seems to be the silliest mistake that ever could have been made, but what Indian leasing companies have suffered are certainly problems of infancy. Credit decisions were based on a pure financial view, with asset quality taking a back-seat. Tax-based credits:  In most of the cases of frauds or hopelessly-wrong credit decisions, there has been a tax motive responsible for the transaction. India has something which many other countries do not- a 100% first y ear depreciation on several assets. Apparently, the list of such assets is limited and the underlying fiscal rationale quite holy and sound certain energy saving devices, pollution control devices etc qualify for such allowance. But that being the law, it is left to the ingenuity of our extremely competent tax consultants to widen the range with innovative ideas of exploiting these entries in the depreciation schedule. Thus, there have been cases where domestic electric meters have been claimed as energy saving devices, and the captive water softenizer in a hotel has been claimed as water pollution control device ! As leasing companies were trying to exploit these entries, a series of fraudsters was successful in exploiting, to the hilt, the propensity of leasing companies to surpass all caution and all lending prudence to do one such transaction to manage its taxes, and thus, false papers for non-existing wind mills and never-existing bio-gas plants were fabricated to lure leasing companies into losing the whole of their money, to save the part that would have gone as government taxes ! Extraneous problems frauds, closures and regulation:  As they say, it does not rain, it pours. Several problems joined together for leasing companies the public antipathy created by the CRB episode and subsequent failures of some good and several bad NBFCs, regulation by the RBI requiring massive amount of provisions to be created for assets that were non-performing, etc. It certainly was not a good year to face all these problems together. Opportunities for the Industry Huge leasing opportunity Large Potential Outstanding lease hire purchase assets around Rs 20,000 crores Large variety of user segment High growth potential in Vehicle Finance Commercial Transportation Govt. support, Diverse products Personal Transportation Wide Variety, Low finance costs, Increasing Propensity for credit purchase, Huge used car finance market New Products Dealer Finance, Working Capital Finance, Personal Loans Low lease penetration ratio Around 1.5% as a % of Gross Domestic Capital Formation Very low in sectors like equipment infrastructure Substantial upside possible Expansion Opportunity Huge infrastructure spending in next 5yrs (apprx Rs 3,60,000 crores) Steadily rising disposable income Generating huge demand for consumer goods With growth ingredients in place Global opportunities Cross-Border Leases allowed Substantially reduced dependence on public deposits as a source of fund Out of a total asset base of Rs 40,050 crores, public deposits account for Rs 5,850 crores as against NOF Rs 4,500 crores . Comparatively Low Default Rate Particularly in consumer loans and vehicles financing as compared to many other markets Future Strategy Segmentation and positioning: Firms try to attain growth in numbers by unfocused diversification, but soon realise that diversified presence creates organisational pressures which are difficult to cope with. This leads to a trend towards consolidation and focused growth. Leasing firms of yesteryears were everything: money market players, merchant bankers and discount houses. Gradually, both regulators and industry participants have realised that clearer roles are necessary for stability. Cross-border competition: Cross-border competition will come in two forms: direct cross-border transactions, and cross-border investments in lease transactions. It is estimated that the second variety of transactions will gain momentum before the first. A number of global leasing giants have already occupied their positions in India. Capital account convertibility measures will precipitate the process. The impact of foreign investments will be greater consolidation activity at home. Emergence of vendor leasing: There are so many merits in vendor-based leasing that it is surprising that it has not made its debut in India still. For the asset vendor, a leasing plan is a sales-aid, and for the lessor, it is easy access to a vast market, with equipment support from the vendor. In 1997-98 and after, many lessors will be forced to leave general equipment leasing market and line up with suppliers of equipment. Vendor leasing in time to come will be a very significant part of the leasing market. Asset-based funding: True asset-based funding is an extension of the vendor lease market. The two generally go together to develop into operating leasing. Full scale operating leasing, that is, leases will in-built cancellation options, will take quite some time to develop in India, but features of operating leases will be introduced once vendor tie-ups take place End of tax-based leasing: This author has consistently opined against tax-based leasing, and that advice has so far fa llen flat because most of the leasing in the past was triggered by tax motives, sometimes greedy tax motives. Spate of income-tax problems in the past has made some leasing companies wiser, but there will be more of such problems when the disputed questions reach appellate levels. In the opinion of the author,  the leasing industry must take the matter across to the Central Board of Direct Taxes and get a set of guidelines on true leases.  Not having any guidelines leaves too many things to the discretion of the tax officer which does not provide a safe harbor to the transactions. A Profile of Factoring Services: A Concept Note Introduction Factoring service in India is of recent origin. It owes its genesis to the recommendations of the Kalyanasundaram Study Group appointed by the RBI in 1989. Pursuant to the acceptance of these recommendations, the RBI issued guidelines for factoring services in 1990. The first factoring company SBI Factors and Commercial Ltd (SBI FACS) started operation in April 1991. How old is the concept of factor? Factoring has been in existence long before ago during the reign   of Mesopotamian King Hammurabi . Then it gets extended to 14th  century during British Rule specially in textiles industries ,but it gained its importance in 1905 from Canada ,especially in American colonies .Now it is no more concentrated in America but have widespread to other countries also .  At that time factoring was used as a mode of advancing funds to the seller, before they  received the payment from the buyer for the raw materials they sold.   But with industrial revolution factoring concept have changed as a  mode of giving credit .The concept got revolutionized during 80s with the growth of banking sector .And now the concept is gaining importance day by day because of the added advantages the corporate gained from factoring. It is generally a well defined arrangement where financial institution engaged in factoring business provides an array of services like rec ording, collecting, controlling and protecting the book debts for its clients including the purchase of his bills receivable. Why account receivable is an important part to handle with? Company  generally give credit to customers for payment in order to increase sales .If customers pays in time then the company tries to provide more and more services to that customers .But if any customers dont make payment even after the end of credit period then this is a matter of concern for the company .More and more delay causes account receivable to increase further and so the debtors list also increases. This becomes a very hard situation to handle with. Especially if the corporate is a huge one, then to maintain accounts receivable becomes a headache for the company .So to avoid this, factoring is an ideal solution. Seller sell all its accounts receivable to factor and obtain cash in turn which it would have received after . So firm dont have to experience unnecessarily cash crunch situation. So in brief in process of factoring 3 parties are involved viz Seller Factor Buyer .But in return seller has to pay factor charges to factor for the services rende red to seller by factor. Types of Factoring 1. Recourse Factoring Client bear all the risk, factor is not liable for any debts .Factor is not responsible for collecting debts from customers. So, recourse factoring is cheaper than non recourse. 2.  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Non Recourse Factoring Factor bear all the risk besides providing services of collection of bad debts. 3.  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Advance Factoring Factor advances to the client for the amount of receivable purchased. 4.  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Maturity Factoring Factor provides dual services collection as well as insurance against debts. 5.  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Bank Participation Factoring Bank provides advances not against the full receivables purchased but against a part of the receivable. 6.  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  Disclosed Factoring Name of the factor is disclosed in the invoices raised by the supplier. 7.  Ãƒâ€šÃ‚  Ãƒâ€šÃ‚  International Factoring -  Factoring services against export sales. Factoring Mechanism  Steps involved in Domestic factoring: There are 3 parties involved viz seller (client), buyer (customers) and the intermediary -factor . 1.  The customers buys goods from client and in return client gives invoice to customers. 2.  The client now assigns/send invoice to factor. 3.  Checking the invoice, the factor make prepayment advance of 80 %/90 % to client. 4.  Factor sends statement of payment to customers. 5.  Customers make full payment to factor. 6.  Finally upon receipt of full payment from customers, factors make the balance payment to client.  In International factoring 4 parties are involved -client ,customers, overseas correspondent and factor Steps: Customers places orders to client. Client fixes prepayment limit with factor. Client delivers goods to customers . Client sends a copy of invoices to factor . Factors sends another copy of invoice to the overseas correspondent Based on the invoice, factor makes prepayment advances upto 80 %/90 % to client. Customer make payment to overseas correspondent.   Ãƒâ€šÃ‚  Ãƒâ€šÃ‚   8.Overseas Correspondant make this payment to factor.   Ãƒâ€šÃ‚  Ãƒâ€šÃ‚   9 Finally after receiving the full amount factor make the balance 20 % payment to client . FORFAITING Under this mode of export finance, then exporter forfaits his rights to the future receivables and the forfaiter loses recourse to the exporter in the event of non-payment by the importer. Difference between Factoring and Forfaiting Factoring Forfaiting Suitable for ongoing open account sales, not backed by LC or accepted bills or exchange. Oriented towards single transactions backed by LC or bank guarantee. Usually provides financing for short-term credit period of upto 180 days. 2. Financing is usually for medium to long-term credit periods from 180 days upto 7 years though shorterm credit of 30-180 days is also available for large transactions. Requires a continuous arrangements between factor and client, whereby all sales are routed through the factor. 3. Seller need not route or commit other business to the forfaiter. Deals are concluded transaction-wise. Factor assumes responsibility for collection, helps client to reduce his own overheads. 4. Forfaiters responsibility extends to collection of forfeited debt only. Existing financing lines remains unaffected. 5. Separate charges are applied for financing collection administration credit protection and provision of information. Single discount charges is applied which depend on guaranteeing bank and country risk, credit period involved and currency of debt. Only additional charges is commitment fee, if firm commitment is required prior to draw down during delivery period. Service is available for domestic and export receivables. 6. Usually available for export receivables only denominated in any freely convertible currency. Financing can be with or without recourse; the credit protection collection and administration services may also be provided without financing. 7. It is always without recourse and essentially a financing product. Changing Scenario of Factoring Business in India SBI Factors purchases the 91 % stake in   Global Trade Finance to gain a market share of around 75 % in factoring business by April 2008. HSBC is going to provide factoring business for SMEs Specially in Mumbai, New Delhi, Kolkata, Pune, Bangalore and Chennai.SME with turnover of more than 5 crore can avail the facility of factoring from HSBC.   HSBC ties up with New India Assurance for credit risk insurance.   With  the increasing demand for factoring services, foreign players such as Development Bank of Singapore (DBS) and GE Capital have shown their keen interst to   getting into the factoring business in India. Both DBS and GE Capital have global exposure in the factoring business.   Many global players in the field of banking(Standard Chartered Bank, Citi Bank ,etc ) are coming forward to India to carry on factoring business in SME segment since the scope for financing large corporates is reaching saturation point.Âà ‚  SME sector plays a major role in Indias present export performance, contributing to 45-50% of the Indian exports. Global Trade Finance has dedicated most of its facilities to the SME sector.   With the growth of factoring business ,credit insurance is also getting edge day by day today specially for the global factors who are operating in India .   According to Factors Chain International, the observer of all factoring companies, India with just eight companies clocked a total turnover of  Rs.  19,860.5 crore in 2006 way below Japans  Rs.  4,15,789.1 crore Taiwans  Rs.  2,23,152. 6 crore and Chinas  Rs.  7,97,77.1 crore in Asia. The Indian factoring market has grown by 176 per cent from  Rs.7,196.7 crore to  Rs.  19,860.5 crore between 2002 and 2006. Global leaders are the UK, France and Italy Challenges faced by global   factors operating in India Indian Market is attractive ,but to get into it is not so easy for foreign markets There are various reasons for this: Factoring is a new concept which is not widely known among Indian business community .  Because of the banks failure to educate potential customers on its benefits. Debt recovery is very slow in India as compared to other developed countries .Comparision of duration of debt recovery case resolution in (calendar days).India 1420 days where as on Average OECD 351 days.   Huge competition from Indian banks in this field . Increased interest rates  impact sales either through increased financing costs or through reduced sales. Foreign  factors faces lot of risk through a higher cost of capital and increased business risk as the credit risk of customers increases. And   the ideal solution is credit insurance .(  Because of credit insurance with Atradius   ,Global Trade Finances turnover grew 121% in its 2007 fiscal year and its total market share grew to 25% from 20% including a 70.4% share of export factoring and a 62.7% share of import factoring.) But   credit insurance is a newer concept in India .Where as ECGC started only   export credit insurance in 1957 . In India assignment of debt is a very complicated process and involves stamp duty .Stamp duty varies from state to state  in India . As a result the process becomes expensive by nature. No clear laws exist in India regarding transfer/assignment of debt,bankruptcy ,debt recovery etc  as in other countries ,so foreign operators have to face lots of problems . Also proper information access is very slow in India. NBFC operating as factors is a difficult proposition in India as compared to banking sector as there is no protection under Debt Recovery Tribunal or securitization act . Conclusion  At the end it is to be concluded that factoring is now gaining its importance in India slowly with the increase in customers access to benefits of factoring. Indias future in factoring business seems to be luring on the facts obtained regarding the fast growth of 174 % in only 4 years .So for factoring to be successful in India government regulation/ policies need to be modified further   so that more and more private players can come forward to start up their factoring business in India .Customer awareness about benefits of factoring is to be increased further to fight back the global leaders in factoring business .

The Effects of Television Violence Essay - 1416 Words

The Effects of Television Violence Recent attention in the media relating violence and children has created much controversy and debate. Our society has brought much focus on violence in the media and how it has effected children of all ages and races. High school shootings and increasing crime in small towns all over the country has brought forth the question of whether or not children are exposed or desensitized to too much violence in television, movies, news, and other sources. Many people feel this violence is causing children to kill children and good towns go bad. Many people are also wondering if this violence could be a matter of survival for our society or if it has to do with the way parents are raising their†¦show more content†¦Theaters have an age system for people who want to see movies but are not quite old enough to handle the violence maturely. This works when children under the age of seventeen are not admitted into certain movies unless accompanied by an adult. This is effective but only when the theaters follow the rules, and when parents who do accompany their children know which movie is acceptable for their children to see. These systems are effective for TV and movies but what about other forms of media violence such as the news, books, and video games? Video games seem to get increasingly violent and yet parents are still allowing their children to play them, and books are easy to come across as long as you have a library card or a few dollars. The violence in the news seems to be one form of brutality that will not be departing from our society until crime disappears all together. So the parents do have an effect on what their children are exposed to and they have a lot of control over most of the violence their children are witnessing. Lately, recent crime increases in white upper and middle-class parts of our nation have brought focus to this media violence problem. Many people have stereotyped urban areas as criminally prosperous areas and have only focused on this problem when it began to happen in the areas of our nation where things were supposed to have a lower crime rate. Small towns in our country areShow MoreRelatedThe Effects of Television Violence on Children1315 Words   |  6 Pages Shortly after a Boston television station showed a movie depicting teenagers dousing a derelict with gasoline and setting him afire, six youths attacked a woman and set her on fire in an identical manner. Several months later, NBC televised Born Innocent, a made-for-television- movie, which showed the sexual violation of a young girl with a broom handle. Three days after this program aired, a group of girls committed a similar attack on another 9-year-old girl (â€Å"Wild† A20). These are justRead MoreThe Effects Of Television Violence On Children1735 Words   |  7 Pageswatches approximately 23 hours of television weekly. Children spend more time watching TV than doing any other leisure activity. By the time they finish high school, most have spent more time in front of the TV than in the classroom (Strasburger, 1995). On average, a child will see 18,000 murders, robberies, bombings, assaults, and beatings in their years of watching television (Liebowitz, 1997). Not to mention all the food commercials. In today s society, the television is used for more than just entertainmentRead MoreTelevision Violence and Its Effect on Children867 Words   |  4 PagesTelevision Violence and Its Effect on Children The children of today are surrounded by technology and entertainment that is full of violence. It is estimated that the average child watches from three to five hours of television a day! (Neilson 1993). Listening to music is also a time consuming pastime among children. With all of that exposure, one might pose the question, How can seeing so much violence on television and video games and hearing about violence in in music affect a childs behaviorRead MoreThe Effects Of Television Violence On Children1552 Words   |  7 Pagesleisure 2.8 hours of television a day. There is the constant outcry from parents and teachers that children are growing to be television-obsessed zombies, or that the exposure to violence from their favorite shows are going to cause aggressive actions. But if that is true, then how is it that we as adults are able to stop ourselves from murdering everyone we see, especially if we have so many television programs with violence as a feature? The effect that television violence has on us does not comeRead MoreThe Effects Of Television Violence On Children915 Words   |  4 PagesIntroduction Today violence is the gold of television. Violence has become a high demand by the viewers. The more violence equals more views which equals more demand. According to Hamilton (2002), â€Å"Children are not the target of advertisers on most violent programs. But their exposure to violent images can lead to social damages not factored into decisions about when to air programs and where to draw the line on content† (p. 18). The controversial debate that television violence influence childrenRead MoreEffects Of Television Violence On Children Essay1722 Words   |  7 PagesEffect of Television Violence Program on Children Now more and more violence television shows appear on the screen. A lot of television shows will remind that is available for certain range of audience. Of course, elementary school student, mostly watch cartoon. However, the television production people will add violence into the show. This study aimed to demonstrate the gender-specific impact of violence-oriented television cartoons for children, and to identify the behaviors demonstrating thisRead MoreThe Effects Of Television Violence On Children Essay1246 Words   |  5 Pagesthrough violence. The guest baby sits your kids and teaches them principles you don’t agree with. Does watching violence in TV is harmful for your children? Is it Ok to let the 2 year olds watch TV unsupervised? No says the American replacing baby sitters? Hypothesis: Extensive viewing of television violence causes children to behave in aggressive or harmful ways to others. Children model behavior they see in the media, she wrote in 1993. If kids don t see the consequences of violence, it teachesRead MoreEffects of Television Violence and Children3538 Words   |  15 PagesEffects of Television violence and Children Outline: I.THESIS STAEMENT: Although the television serves as a form of entertainment, when you abuse its use, and make it a habit to watch, it gives negative effects on the behavior of children especially in their brain’s development. II. PORPUSE OF THE RESEARCH III. INTRODUCTION IV. HIPOTHESIS amp; METHOD A. CHILDREN QUESTIONNAIRE 1. HOW IT CAN AFFECT VIEWER’S BEHAVIOUR 2. CHILDREN RESPONSES B. EFFECTS amp; RESULTS 1. NEGATIVE EFFECTS a. Behavior ofRead MoreEssay Television Violence and Its Effects622 Words   |  3 PagesTelevision Violence and Its Effects Violence on television is a primary cause of violence in real life Teenagers my age are constantly being bombarded with so called parental warnings and film certificates which intend to provide us with guidance on what we should and should not be watching, if it be on the box or at the cinema. Politicians and socialRead MoreThe Effects of Television Violence on Children Essay1338 Words   |  6 Pages Thesis Statement: Unsupervised children who watch violence on television exhibit violence in their everyday lives and develop into aggressive adults. â€Å"Research shows that television violence increases levels of aggression, fear, and desensitization among some who consume it† (Hamilton). This quotation by James Hamilton briefly summarizes the potentially negative effects of television on young minds. A child’s favorite television show can keep a child occupied while the mother prepares

Development of a Multinational Personnel System - 3178 Words

ORGANIZATIONAL BEHAVIOR LEADERSHIP CASE STUDY: DEVELOPMENT OF A MULTINATIONAL PERSONNEL SELECTION SYSTEM ABOUT THE COMPANY: ComInTec AG Co. is a worldwide leading industrial company that has administration, plants, and sales offices in various regions across the globe, mainly Central, Eastern and Western Europe, Asia-Pacific region (APAC), North America, Central and South America. In 2006 they had 23,000 employees worldwide and gross revenue of 5.8 billion Euros in sales. They had recovered well from the worldwide crisis (recession) that had earlier forced the company to opt for downsizing procedures between 2003 and 2006, resulting in the cut of 900 jobs worldwide. The global headquarter of the company is situated in Munich,†¦show more content†¦He is very confrontational and provocative individual, with strong belief in his own ideology. Name: Ms. Sabine Weitmann Designation: Psychologist Nationality: German Brief Description: Ms. Weitmann is a German psychologist with experience in the field of Psychology. She has attended many conferences and seminars during her time in the States. She is well known for her differentiated thinking, something that comes with being a psychologist. More often than not, she goes about trying to diffuse a volatile situation, cherishing the illusion of salvaging the situation. Name: Ms. Sarah Goldmann Designation: Intern Nationality: German Brief Description: Responsible for noting the minutes of the project teams meetings, along with her assistant; Dai Wei. She tries her best to contribute her own ideas to meetings, and is always on the lookout to impress her superiors. Name: Mr. Dai Wei Designation: Assistant to Sarah Goldmann Nationality: Chinese Brief Description: Responsible for noting the minutes of the project teams meetings. He is an MBA graduate from the Strategic Human Resource Management Institute in Hong Kong. He is a confrontational and expressive individual with a slight temper, but other than that has many traits applicable to high power distance cultures Name: Ms. Bettina Carter Designation: Lawyer Nationality: German Brief Description: She is a German lawyer. She is a very down-to-earthShow MoreRelatedDevelopment of a Multinational Personnel Selection System: Comintec800 Words   |  4 PagesDevelopment of a Multinational Personnel Selection System Situation Analysis: ComInTec, a worldwide leading industrial company, has just introduced the new regional management level which 25 middle management positions were expected to be filled in the Asian-Pacific-region. Therefore, the project team with Dr. Thomas Koch as a leader will be responsible for implementing the new personnel selection process. Moreover, Koenig, Dr. Thomas Koch’s boss needs him to come up with the selection system thatRead Moreï » ¿Development of a Multinational Personnel Selection System Essay2103 Words   |  9 Pagesï » ¿Development of a Multinational Personnel Selection System 1. Summary of the Case Study Mr Koch works as an expatriate in Hong Kong for ComInTec AG Co. He was working for the company in the HR department for 17 years and since three years he is the HR director. One day he got the assignment to form a cross functional project team in the high profitable APAC States. The company strive to establish a new regional management level in Asia. A new personnel selection system had to be developedRead Moreâ€Å"Development of a Multinational Personnel Selection System† Discussion Questions1204 Words   |  5 Pagesâ€Å"Development of a Multinational Personnel Selection System† Discussion Questions 1. Based on your reading of the textbook chapter what strengths and what shortcomings do you see in the newly developed multinational personnel selection system? The newly developed multinational personnel selection system seems to be okay at first glance. It is great that the system is two-tiered, with the first tier consisting of three modules: viewing the applicants’ resume, an unstructured phone interview withRead Moreâ€Å"Development of a Multinational Personnel Selection System† Discussion Questions1210 Words   |  5 Pagesâ€Å"Development of a Multinational Personnel Selection System† Discussion Questions 1. Based on your reading of the textbook chapter what strengths and what shortcomings do you see in the newly developed multinational personnel selection system? The newly developed multinational personnel selection system seems to be okay at first glance. It is great that the system is two-tiered, with the first tier consisting of three modules: viewing the applicants’ resume, an unstructured phone interview withRead MoreEvolution of Personnel Towards Hrm1110 Words   |  5 PagesPart (a) HRM Assignment 1 Throughout the history of the evolution of personnel towards HRM there have been many landmarks which fall into a number of categories. For example, I will discuss the following headings; the welfare tradition, scientific management, the multinational influence, HRM education and U.S perspective in the 1980’s. I will discuss in each of the headings and the ways in which they have influenced HRM throughout the years. Welfare tradition – the welfare tradition was developedRead MoreNcr Case Analysis : Ncr Corporation1262 Words   |  6 PagesNCR in Scotland Case Study NCR set up its subsidiary in Dundee in 1946 as part of a wave of inward investment in Europe by major American multinational companies. The incentives had come from various European governments, coupled with the Marshall Aid Plan, a brain child of General George Marshall, who aimed to revive Europe’s economy after the ravages of the World War II. NCR as a whole has about 38,000 employees worldwide. The Dundee subsidiary employs around 1,500 people of whom about 100 areRead MoreStaffing Policies - Pros N Cons1319 Words   |  6 PagesWhat is International Staffing? International management encounters many problems above those faced by a domestic organization. Geographic distance and a lack of close, day-to-day relationships with headquarters represent a major challenge to multinationals. It is essential, therefore, that special attention is given to the staffing practices of overseas units (Pigors 1973: 690). According to Pigors (1973: 690) there are three different sources of employees with whom an international companyRead MoreChallenges Faced By The Multinational Organizations1396 Words   |  6 PagesDue to the rapid development of economics and also increase in the globalisation the multinational firms are becoming more prevalent. The challenges that the present managers of these multinational firms are facing are due to intercultural communication. Many researchers say that the differences in the culture eventually influence the communication, performance and management of the organization. Organizations that are planning to expand their business in the international countries have to faceRead MoreMultinational Corporations Based On International Business Essay1730 Words   |  7 PagesAlthough the multinational is separated in several nations, it remains as a single enterprise and therefore must consider how to balance competitive pressures for differentiation and integration (L awrence and Lorsch, 1967). Multinationals must decide how to be sensitive to the unique demands of the indigenous environment without inhibiting their ability to coordinate the internal operations of local units in search of global strategies. As these issues of differentiation and integration are oftenRead MoreIvey – Development of a Multi-National Personnel Selection System2637 Words   |  11 Pagesindustrial company with administration, sales offices and production plants in various regions in the world.1 The owner of the company, Peter Koenig, wants to have a new personnel selection system to be developed to fill 25 middle management positions in the Asian-Pacific (APAC) region2. He prefers to have a standardized personnel selection system which works everywhere (i.e. something that is ‘’applicable cross-nationally and cross-regionally’’ 3). This means that is should be specific in one country, but

Analysing Personality and Organizational Growth †MyAssignmenthelp

Question: Discuss about the Analysing Personality and Organizational Growth. Answer: Personality influence on personal and professional lives The big five personality model helps to identifies and analyse an individuals behaviour at workplace or in their personal lives. There are five personality traits known as OCEAN forms a strong basis for analysing the personality of an individual (Rothmann Coetzer, 2003). After taking the personality test the results found were as follows: In the organization open mindedness level is very important as it shows the flexibility in adapting new things and have an ability to listen to new ideas but in my case it was found to be average which implies that an individual is hesitant to adapt changes and try something new. It is a major hurdle in any organizational growth. In personal life I am reluctant to try out new things and want to follow the conventional routine (Bailey, 2014). The high conscientiousness level signifies that as a professional I am well planned and set realistic goals and very persistent in achieving them and when it comes to the personal life, I am capable of dealing with lifes tough situation and my lifes decisions are governed by values and principles. The extraversion level was below average which means in professional life, I am very resistant when it comes to communicate my views on certain issues. In personal life I am an introvert and not socially active. The agreeableness level was found to be very high which means I cannot break trust or deceive anyone for my personal benefit. Also I am good listener and very concerned about others problem and their well-being. The negative emotionality level was very low. In case of any issues in my professional life, I tend to be calm and handle the stressful situation efficiently. Also I have less anger issues. Personality traits and core values of the role model The role model that I have chosen is Late Steve Jobs, who was the cofounder of Apple Inc. The personality traits of Steve Jobs are: He was a visionary leader; with his innovative products from iPod to iPhone to MacBook he changed the future of technology (Kalla, 2012). He made everyone believe in his vision and delivered something beyond everyones expectations. Perseverance and Passion was reflected in Steve Jobs journey. When he was thrown out from the Apple Inc. he started his own companies Pixar and Next whose shares were later purchased by the Apple. This gave him a way to enter into that organization again and accomplish his dream of making innovative and technologically advanced products. The core value of Steve Jobs was innovation. He and his team were responsible for making revolutionary products which have changed the way how we use the smartphones and computers. He believed in the philosophy of Stay Hungry and Stay Foolish which means an individual should always be hungry for learning and innovating something new and staying foolish so that one can always learn from their mistakes. Steve Jobs surprised everyone with its voice assistant Siri and their famous iPods changed the music listening experience of everyone. He believed in breaking the stereotypes and innovating something unconventional. IPods are the clear example. When Sony was ruling the music player department with Walkman, Steve Jobs dared to launched his IPods and in no time they replaced Walkman and captured the market. The core values of Steve Jobs have helped Apple to become a Global Leader in Technological products. References Bailey, S. (2014). Can Personality Predict Performance? Retrieved from https://www.forbes.com/sites/sebastianbailey/2014/07/08/can-personality-predict-performance/#11a74b5a5499 on 5 May 2017. Kalla, S. (2012). 10 Leadership Tips from Steve Jobs. Retrieved from https://www.forbes.com/sites/susankalla/2012/04/02/10-leadership-tips-from-steve-jobs/#3ea5d9a3667f on 5 May 2017. Rothmann, S. Coetzer, E.P. (2003). THE BIG FIVE PERSONALITY DIMENSIONS AND JOB PERFORMANCE. Retrieved from https://www.ianrothmann.com/pub/psyc_v29_n1_a9.pdf on 5 May 2017.

Intellectual Property Rights free essay sample

Intellectual Property Rights: Music Piracy and Technology J. A. Taylor University of Maryland University College 0902ECON2017983 Dr. Charles Nwaka May 09, 2009 Intellectual Property Rights: Music Piracy and Technology The focus of this research paper is to examine the history of Intellectual Property Rights, with an emphasis on the authorized and unauthorized digital downloads of copyrighted music. Intellectual property rights and its relevance in the policing the music industry has been debated by many for years. With the increasing rate of advancements in technology, most certainly outpacing the policing of music piracy, the violation of intellectual property rights will continue on a global scale. The state of the music industry has drastically changed over the last ten years due to advancements in technology and the prevalent utilization of the internet and the popularity of peer-to-peer (P2P) networks. Today, the availability of audio and video content is available to the masses. Where consumers used to purchase compact discs of their favorite artist, now with an internet connection and a few clicks of the mouse, they can enjoy the music of their favorite artist without having to leave the comfort of their home. We will write a custom essay sample on Intellectual Property Rights or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page With compression technologies, such as MP3s, electronic distribution of music is quick and easy, legally and illegally, with the later being the case much of the time. The arguments as to how much the music industry has been affected by music piracy are varied but consistently the numbers are large in scale. To begin, I will provide a brief history of Intellectual Property Rights, discussing its origin. I will then discuss how advancements in technology, specifically the internet, have outpaced intellectual property rights and the protection that they were designed for. There has been much empirical literature on this subject, so I will discuss some of these findings as well. I will then present statistics on music piracy and their purported effects on music sales, whether intellectual property rights are effective in preventing illegal and unauthorized downloads, and initiatives in place and some that are being discussed to limit or combat copyright infringement. The U. S. Congress enacted the first copyright legislation with the Copyright Act of 1790 designed to provide exclusive rights to authors of maps, charts and book. The act provided American authors exclusive rights to their works for a term of 14 years, with the right of renewal for an additional 14 year term if the author was still alive. While American authors had laws in place to protect their works, the Copyright Act of 1790 did not provide the same protection to foreign authors. This United States refusal to recognize the works of foreigner continued for over 100 years, when in 1891 Congress passed an international copyright act. Additionally, no protection was afforded to works such as musical compositions or newspapers during the initial copyright act. The Copyright Act of 1790 has undergone many revisions over the years. It has been modified many times to encompass new technologies such as music recordings. It has also been modified to extend the length of the term of protection and the length of the extension one receives when the initialterm expires. In 1909, the U. S. Copyright Act was revised to include all works of authorship, including music. From sheet music to the player piano and the compact disc, mechanical rights cover the mechanical reproduction of music. In this case, the copyright holder usually administers these rights directly, but mechanical rights are unique in that anyone is allowed to record a song once the copyright owner has done so or has allowed it to be recorded by others. Once this is done, a fee or royalties is paid to the copyright holder. The compulsory rate is currently 6. 95 cents per song per recording, or 1. 3 cents per minute, whichever is larger. ()Inevitably, whenever a new technology is introduced, it is soon followed by the extension of copyright laws to deal with the new technology and protect the works. The advancements in information technology have been rapid. With the introduction of the personal computer in 1977, the World Wide Web in 1989 and the first mass-market web browser, Netscape in 1994 the information highway has expanded. Now that most information is born digital and this digital information is typically very easy to copy and disseminate, it is conceivable that copyright laws may become almost impossible to enforce in the world of music. () The International Federation of the Phonographic Industry (IFPI) has taken the lead on trying to enforce copyright laws for the music industry with 500,000 infringing links removed in 2007. The IFPI represents the recording industry worldwide, with 1400 members in 72 countries and affiliated industry associations in 44 countries. The IFPI, collating separate studies in 16 countries over a four-year period, estimated unauthorized file-sharing at over 40 billion files in 2008 alone. This means that globally around 95 percent of music tracks are downloaded without payment to the artist or the music company. () Even with this staggering report of the amount of illegally downloaded digital music, the RIAA has reported that the sales of digital music continued growing at a rapid pace in 2008. In fact, the RIAA states that digital music now constitutes 32 percent of the total market value, and $2. 7 billion in total shipments. So, how accurate can the assessment by IFPI really be? There is much empirical literature on this subject all with different opinions as to the effect that music piracy has on the overall sales of CDs or legally purchased digital downloads. The main empirical papers in this area are Blackburn (2005), Oberholzer and Strumpf (2004), Rob and Waldfogel (2004) and Zentner (2006). Blackburn (2005) examines the effect of on-line downloads in music retail sales and finds that on-line downloads work as demand advertisements for small artists, but they work as demand substitutes for big artists. Rob and Waldfogel (2004) collect data on album purchase and download, and find that each download decreases purchase probability by 20 percent. They also find, thanks to valuation data, that downloading decreases expenditure and increase the welfare of those downloading except for the musician. Zentner (2006) uses a European cross section data set to estimate the effect of music downloads on purchasing probability. He finds that peer-to-peer usage reduces the probability of purchases by 30%. Finally, Oberholzer and Strumpf (2004) find that downloading has no statistical or significant economic impact on music purchases. ) Boldrin and Levine, both professors of economics in Arts Sciences at Washington University in St. Louis, argue that there is plenty of money in the distributing and selling of digital content via the Web without the obstacles created by DRM for consumers who legally purchase the digital files. () Hui and Png estimate losses from piracy to be lower than claimed by t he industry. They also find that publishers would have reduced prices in order to dissuade piracy, suggesting that the true revenue loss would have been higher than reported. ) Based on the numerous journal articles and papers I have read on the subject, I tend to agree with Hui Png. With music purchases in 2008 reaching 1. 5 billion, marking the fourth consecutive year music sales have exceeded 1 billion, one would have to come to such a position. To believe the IFPIs purported statement of 95 percent of downloaded music to be of the illegal nature with the remaining 5 percent being legal and contributing to 1. 5 billion in sales is quite a stretch. Another more recent study found that internet music piracy does not hurt legitimate CD sales and it may in fact boost the sales. The rationale behind this way of thinking was that the consumers who downloaded music on P2P networks were college students who would not have bought a CD anyway. By access to P2P network, they can sample music for free and then buy the legal copy if they like, so in affect the file-sharing network stimulates demand and profits. () Adding to the complexity of enforcing the copyright laws for the music industry is the equally accessible black market. The black market for music is astounding. From the mom and pop shops, to the local barber shop, the street entrepreneurs of the urban communities trying to make a profit are in abundance. The products of choice for many of these entrepreneurs are bootleg CDs and movies. As a military member I have had the opportunity to travel to many countries. If there is one thing that is the same from Korea to Japan to the deserts of Iraq and Afghanistan, it is the black market is alive and well. What I have also found, is that these countries do not think the selling of bootleg CDs, as piracy. They only see it as they are a firm or business with a good or service to provide to the consumer and with no law enforcement to regulate, they operate unabatedly. Enforcement of copyright laws or the lack of enforcement depending upon who you ask has not been for lack of trying. The case brought against the creator and owner of Napster for one highlighted the lengths to which the government would go to protect the copyrights of musicians. The original Napster was the first major file sharing tool and popularized file sharing for the masses. While it was a P2P network, it was not considered P2P in the same sense of websites such as Kazaa. This was because Napster relied on central servers to maintain lists of connected systems and the files users provided. This meant that actual transactions, the transferring of MP3s, were occurring machine to machine. The drawback to this type of infrastructure was that if the computer in which your computer was communicating with shut down, then the transfer of your requested file would terminate. () This case also shined a bright light onto what at its infancy seemed to be harmless and something created for friends who loved music. When Shawn Fanning created Napster in early 1999 while attending Bostons Northeastern University, an idea born out of frustration with MP3. om and others, no one could have foresaw the attention, to which the sharing of MP3s on P2P networks would bring, especially the legal ramifications the sharing of copyrighted music would bring. More than 60 million users took notice and advantage of this new internet sensation. The Recording Industry Association of America (RIAA) also took notice and in December 1999, on the behalf of every major record label in the music industry, i nitiated legal actions against Napster for copyright infringement. Napster did not dispute the allegations leveled against them, therefore the court held that at least some of the Napsters users were direct infringers. The district court ordered Napster to monitor the activities of its network to block access to infringing material. Napster consequently shut down its service in July 2001, and the trademark name was sold to Roxio in October 2003 amid bankruptcy. () As a result of thisand other cases, digital reproduction, international commerce, and digital music sampling have exposed gaps in the laws ability to deal with new forms of production and new technologies. Powerful interests have argued for stronger restrictions that intimidate artists, musicians, and computer hobbyists into respecting property rights at the expense of creative liberty. Others have abandoned all hope of legally constraining piracy and sampling, and have instead advocated a system of electronic locks and gates that would restrict access to only those who agree to follow certain strict guidelines. (Vaidhyanathan, 2001) One such lock or gateemployed to combat music piracy, is the implementation of the Digital Rights Management (DRM) technology. DRM is a technology most will recognize from digital music files downloaded legally from ITunes. DRM allows copyright holders to control how music is distributed online. DRM technologies also can restrict the number of times a user can play a certain file, prevent the file from being copied and passed to others, restrict the number of copies that can be made, or prevent the copying of the file altogether. (Jaisingh, 2007) Along with DRM technologies, the music industry has been calling for the creation of proprietary formats, including ompression, encryption and rights management technologies. The thought process being to make the copying of the original digital copy so expensive that it discourages the consumer from making the copy available for download or hardcopy by using a combination of encryption and digital rights management system. A more recent initiative at the urging of the IFPI, is enlisting the assistance of the Internet Service Providers (ISPs) in order to track the of fenders at the source. The principle that ISPs should play a greater role in protecting online content is moving from concept to implementation. The music industry first proposed a solution to the online piracy problem extending responsibility for copyright protection across the value chain to include ISPs in 2005. Three years later, government-backed systems of ISP cooperation are being advanced or considered in many countries. (Kennedy, 2009)The government of France is one of the first to require steps by ISPs to deter piracy. In 2008 France adopted a law called Creation and Internet Law which sets up a graduated response for ISPs to warn copyright abusers. The system targets persistent abusers who ignore the warnings and are then punished with loss of internet access for one to twelve months. The governments of the United States, United Kingdom, New Zealand and Australia are all moving towards adopting similar systems of graduated response, with other government soon to follow. My research as it pertains to intellectual property rights, its applicability within the music industry and the effectiveness of the initiatives in place to combat copyright infringement, has led me to believe that you can never really rid the industry of music piracy. One has to wonder whether or not when CDs are sold in the stores, whether the record companies put them out and price them as such with a reasonable expectation that piracy will occur. I truly believe that there is a certain amount of unauthorized copying that is expected. How else can you explain level of illegal downloads, especially when it comes to the pre-release downloads that occur with increased frequency. Pre-release copies are leaked days and weeks before the official release date and the number of files containing this music spreads like wildfire. Who else but the record companies would leak these records earlier than advertised? It is a calculated method to gauge the interest and potentially selling power of their product. It is a fact that consumers typically have a higher regard for a good or service if other consumers hold the good or service in the same regard. Because of this, firms can charge a higher price for the good or service with the expectation that it will eventually be pirated. The initiatives being discussed to combat illegal download and distribution of music such as encryption and DRM may reduce the level of music piracy but will not eliminate it all together. With every new technology, there is equal money and time by software designers by profession orhobby in the developing of measures to defeat safeguards such as encryption and DRM technologies. It is these individuals with the technical knowhow, which will continue to make the products available to the masses. Additionally, companies such as ITunes that employ this type of technology on music downloads will eventually abandon the practice, evidenced by statements from Steve Jobs.