Yahoo and Amazon Essay Example for Free

Yahoo and Amazon Essay 1. Describe, in brief, the histories of both of Amazon.com and Yahoo.com, and determine the core business of each. Yahoo and Amazon have been seeking to have a competitive advantage for years. Since they were incorporated, the companies have experienced a mix of challenges and success as they strive to gain market share. To start with, Yahoo was established in 1995. Yahoo is one of the global technology companies that compete for the growing number online users in the recent world. The company delivers digital content and experiences on various platforms including mobile devices. Furthermore, the company provides properties and online services. Marketing services is a major business for the company. Generally, the company earns revenues from text-based links to advertisers, search advertising, display advertising, and other essential sources. The company has five core segments that include Search and Market Places, Communications and Communities, Developers and Platform Offerings, Advertise and Publisher offerings and Services, and Media. Lastly, the company has operations in approximately 60 countries. Nonetheless, Amazon was incorporated in 1995. It offers online retailing services to customers across the world. Amazon focuses on convenience, selection, and price. In addition to the direct retailing services, the company allows other small and medium sized businesses to sell their products through the company’s websites. The customers and business are able to complete their orders and transactions in Amazon’s websites. Other individuals such as authors, musicians, and filmmakers are also able to sell their products using the same platform. Millions of products are offered through the website. The website may be accessed through PCs, and even mobile applications. The core segments of the company include the International segment, and the North American segment. Generally, the company has witnessed substantial growth since its inception. The success of the company may be attributed to the strategic actions  implemented by Jeffrey Bezos, the founder of the company (Amit, 2012). The next section will illustrate the strategic difference between the companies. 2. Determine the key strategic differences that have impacted the relative success of both Amazon.com and Yahoo.com. Provide two (2) specific examples of such strategic differences to support the response. The strategic actions undertaken by the company would determine the success of the company (Coulson-Thomas, 2013). Yahoo and Amazon have implemented different strategic actions since their establishment. On the fore, Yahoo core business does not involve direct retailing. Yahoo provides a platform for business people who engage in e-commerce. From the sales earned in the Yahoo stores, the company is able to earn commission. Particularly, the company’s core business involves advertising and marketing services. This contributes to a huge chunk of the company’s revenues. As far as human resources are concerned, Yahoo employees do not have a high level of autonomy as compared to the situation in Amazon. Yahoo coordinates with entertainment content providers and media in improving their website. They do not invest in the employees in enhancing creativity and innovation as compared to Amazon. On the other hand, Amazon has a different approach as far as online retailing is concerned. Initially, the company was involves in selling books in its websites. No other business used the website to sell or market its services. Amazon engaged directly with its customers. In the initial years of the company, this was an effective strategy. The company was a monopoly in the online book selling. This created a barrier for potential entrant. However, with the improvement in technology the company had to diversify its operations in order to sustain its position in the market. Other competitors were reaping big from diversified products; hence, the need for the company to similarly expand its operations. Therefore, the company had to modify its operations to fits to the growing market for online retailing. 3. Compare and contrast the approach to strategic planning that each company has pursued in order to achieve a competitive advantage. Focus specifically on both intended and emergent strategies. Strategic planning is an important step for any company that seeks to gain a competitive advantage in the market. There is need for the company’s management to set out plans and strategic actions in achieving the organization’s goals and objectives (Hill, 2013). An effective designed  strategic planning process would steer the company to success. Basically, there are intended and emergent strategies. The intended strategies are those that the companies hope to implement. The effective implementation of the intended strategies would lead to the realized strategies. On the other hand, emergent strategies are those that are not planned for by the management. They are unexpected and are always as a result of competitors actions. In the case of Amazon and Yahoo, both intended and emergent strategies were implemented in achieving competitive advantage. One of the emergent strategies that Amazon implemented is the diversification strategy. The Company allows other businesses to sell their products in the company’s website. This provides a variety of products and services for customers. The diversification strategy was in response to the increasing competition from businesses that equally have diversified portfolio. Nonetheless, the level of product diversification in Yahoo is not commensurate to that of Amazon. The company offers space for other businesses to sell their products through its website. However, the company itself does not engage in direct selling of the products. The company has various features in its website ranging from games, emailing, to financial news updates. The main aim of the company in providing a variety of features in its website is increasing traffic. More traffic in the company’s website implies that there will be more clients demanding the advertising services of the company. In increasing its popularity in the market, the company invested in aggressive advertising. Next, both companies have invested in expansion strategy. With increase in globalization, there is potential market for online retailing. Amazon has an international segment, which focuses on the global market. Lastly, Yahoo and Amazon have different approaches on employees’ motivation. Am azon employs a participative approach whereas Yahoo is mainly autocratic. Amazon employees are free to make decisions that concern new ideas and the success of the company. This has been critical for the success of the company. 4. Analyze the manner in which each company’s distinctive competencies help to shape the strategies that each company pursues. Provide a rationale to support the response. Distinctive and core competencies are essential in transforming the strategies of the companies (Mellat-Parast, 2013). Effective strategic  implementation depends on the distinctive competencies. On the fore, Amazon has various distinctive competencies that have assisted it in shaping its strategies. The technology experts of the company have been critical in its strategic implementation. Innovation being essential for the company, the technology experts has improving the service provision quality. The websites have been effectively designed to meet the customer’s needs and requirements. Another distinctive competency involves the association program. Allowing other enterprises to conduct business in its website has been significant for the company’s diversification strategy. Therefore, the association program has shaped the company’s diversification strategy. On the other hand, Yahoo has various distinctive competencies that have played a role in its strategic planning. As pointed out earlier, the company’s website host a range of service. This is essential in improving the number of visitors in its website. With respect to this, the companys marketing strategy has been shaped by the distinct website. Furthermore, the company’s expansion and diversification strategies are supported by the numerous services offered in its website. The company has also been effective in forming strategic partnerships, for instance, the collaboration with Microsoft. The partnerships have gone a long way in reducing the company’s operating expenses despite the numerous challenges and competition. 5. Recommend one (1) functional level strategy for each company which prescribes the essential ways in which each may achieve superior efficiency, quality, innovation, and customer responsiveness. Provide a rationale to support the response. The functional level strategies are effective in achieving the business and corporate level strategies. They are implemented at the operational level, and directly involve the employees. I would recommend an effective marketing strategy for Amazon. The company is in a competitive environment with eBay being its largest competitor. Amazon should ensure that its products are offered at a low price as part of its marketing strategy. For instance, the company should offer discounts or free shipping with an aim of attracting more customers. They should be speedy delivery of the products in order to earn superior efficiency. The response to customer complaints and inquiries should also be fast. This would improve the company’s competitiveness. Nonetheless, I would recommend both a human resource and marketing strategy  for Yahoo. The company’s competitiveness has been low in the recent years. The company should invest in recruitment of skilled personnel that would contribute in enhancing its research and development. Furthermore, the management should allow for independent decision making. This would reinforce the innovation strategy since independent decision making promotes creativity. Next, the company should modify its marketing strategy to meet the needs of the current dynamic environment. More emphasis should be on social media marketing. This approach is cheaper and has a wider coverage (Amit, 2012). The company may be close to prospective customers through Facebook, twitter, and YouTube. References Amit, R. . (2012). Creating value through business model innovation. MIT Sloan Management Review, 53(3), 41-49. Coulson-Thomas, C. (2013). Implementing strategies and policies. , . Strategic Direction, 29(3), 33-35. doi:doi:10.1108/02580541311304643 Hill, C. . (2013). Strategic management: An integrated approach (10th ed.). Independence, KY: Cengage. Mellat-Parast, M. (2013). Supply chain quality management. International Journal of Quality Reliability Management, 30(5), 511-529. doi:10.1108/02656711311315495

Brave New World Critical Lens Essay Example for Free

Brave New World Critical Lens Essay â€Å"I have freedom,† you say? Do you really? Perhaps, in some ways, you do. But in the end, you’re just another puppet being controlled by invisible strings whether you know it or not. â€Å"Man is born free, and everywhere he is in chains,† Jean-Jacques Rousseau once said. In society, man is â€Å"chained† and controlled by the government, by pressure of conforming to the social norms, by wealth and social class, and by one’s desires and emotions. Prior to birth, man is not restricted by such factors but that is merely a fleeting moment as he is slowly exposed to more and more of the world. I agree that â€Å"everywhere [man] is in chains,† but on the contrary, I believe man is already chained from the start—that man is never free. In the novel, Brave New World, by Aldous Huxley, babies are â€Å"decanted† and conditioned to play out their predestined roles in the World State. As early as the embryonic stage, babies-to-be already have their fates determined for them. In addition to conditioning, a drug called soma that induces a false sense of happiness dominates these people’s lives. As long as there is society, there will be shackles. Subjects of the World State were pre-separated into specific caste levels through processes such as the Bokanovsky Process, hypnopaedia, and Pavlovian conditioning. As mere embryos, they were already being trained for their predestined fates. By the time they reached the end of the â€Å"assembly line,† freedom did not exist anymore. They were enslaved to society. They were conditioned to strictly love and enjoy the aspects of their own castes and dislike the aspects of other castes. â€Å"We also predestine and condition. We decant our babies as socialized human beings, as Alphas or Epsilons, as future sewage workers†¦ (13)† stated the Director of Hatcheries matter-of-factly. How can man be born—or in this case, decanted ¬Ã¢â‚¬â€free if he can’t even make his own major life decisions or think for himself? Aside from conditioning, World State citizens so easily obeyed the government because they lived in such a â€Å"perfect† world that there just wasn’t anything to complain about. Generally, they didn’t have any problems in regards to sickness, death, desires, old age, passion, relationships and other issues that were often associated with an â€Å"unstable† society. â€Å"People are happy; they get what they want, and they never want what they can’t get.  (220)† If anything â€Å"bad† happened, all they had to do was take a tablet. â€Å"And do remember that a gramme is better than a damn. (55)† The World State government kept their people in â€Å"bottles.† â€Å"’Each one of us, of course†¦goes through life inside a bottle,’ stated Mustapha Mond. (222-223)† The government expected everyone to act according to the standard of infantile behavior—of simple satisfaction, ignorance, and lack of self-restraint and they condemned anyone who acted otherwise. Citizens of the society were encouraged to take soma when distressed and attend social events and activities and so on. It was through such ways that the people were kept distracted and obliviously controlled. These â€Å"socialized human beings† were so ignorant of the shackles around their limbs that they didn’t even try or think to take them off. When a man is born with chains—metaphorically speaking, of course—he is unaware of them. And if he is unaware of them, then there is no way for him to escape them. Such is the case with the people of the World State. They are conditioned to accept and even enjoy whatever path that is laid out in front of them. In this illusion of a perfect world, everyone is happy and without a care as the government does all the thinking for them. Ultimately, people of the World State are permanently trapped in a stage of â€Å"infancy†Ã¢â‚¬â€even upon their deathbeds.

Global Warming Cause and Effect Essay

Global Warming Cause and Effect Essay Global Warming Cause and Effect Essay It is believed peoples careless use of fossil fuels are responsible for causing Global warming. Environmentalists say people do not realize the serious effects of their own actions. They continue to waste resources and pollute the air despite all the evidence pointing to the effects of such behavior. There are numerous, well known things we do that perpetuate Global Warming. Who would have known that the invention of the car/automobile would eventually contribute to the leading cause of global warming? For years society have been driving cars emitting fossil fuels, using coal powered electricity or heating homes with natural gas and oil. This has caused carbon dioxide and other harmful gasses to be released into Earths atmosphere and environment. Our tree population, for example, has decreased tremendously throughout the years because of increased tree cutting. Has also contributed to more polluted air due to lack of oxygen convertors. (http://environment.about.com/od/faqglobalwarming/f/globalwarming.htm) Peoples lack of concern for conserving its resources will only make Global warming worse. In 2007, scientists met and determined that society has â€Å"very likely† been the main cause of global warming since the 1950s. (http://environment.about.com/od/globalwarming/a/ipcc_report.htm) According to EnvironmentalGraffti.com in 2007 it was determined that the spread of diseases, warming waters resulting in more hurricanes, the probability of increase heat waves,drought, economic consequences, and polar ice caps melting are the top â€Å"5 Deadliest Effects of Global Warming†. (http://www.environmentalgraffiti.com/sciencetech/5-deadliest-effects-of-global-warming/276) Rising sea levels will cause millions who live in coastal regions to lose their homes. Insects are migrating to more warming climates and carrying diseases. It is believed that Malaria still exists in some countries as a direct cause of global warming. In addition, with the continually rising temperature of the ocean there is a threat of an increased chance of more powerful and frequent hurricanes. We all remember hurricane Katrina and the devastation it brought to New Orleans as well as to several other towns and cities throughout the Southeast. With Katrinas aftermath came many economical struggles. People were trying to rebuild their homes, relocate and even find work as many businesses were destroyed. Unfortunately, people are still struggling to rebuild their lives today.Why not try to make changes in our daily lives to prevent devastation such as Katrina? Just as important, the droughts and heat waves that are occurring as a result of global warming are phenomenal. Even here in Arizona, during the monsoon season, we have experienced drought. Though I do not think our drought is as severe as places such as Africa, where they already are experiencing dangerously low water supplies and extreme heat waves. As a result, some speculate that this could cause people to start fighting for water- a necessary resource many take advantage of and assume will be available forever. Half way around the world, however, Sea levels are rising with the increased melting of polar ice caps. When fresh water ice caps melt into the ocean these changes dillute the salty waters. Of course this then affects the ocean and acquatic life which cannot survive without a homeostatic balance of salt content of the ocean. You are probably thinking that losing a little ocean life is no big deal, right? Did you know that the increased global temperature is because the su n can no longer reflect off the tops of the ice caps? When the sun reflects off the ice caps it projects into space. And why is that important? It helps to decrease the temperature in the earths atmosphere which in turn keeps us cooler. So what can we do to help slow down the process of losing our planet? First we need to start by caring. I see people everyday that could walk the 4 blocks to school or work. They choose not to, however. Imagine how much vehicle pollution we could eliminate if everyone were to ask 20 people they know if they could walk instead of driving. If they cant walk them maybe we can use technology wisely and find ways to create vehicles that are environmentally friendly. Another step is to increase recycling. Next time you go to throw that soda can or paper away, remember it is recyclable (and make money from recycling cans). What about disposable diapers? I know they are convenient, but why not give cloths a try? It may take a little extra work and many places around the country have diaper laundry services(but would also provides work and business for others.) Finally, when your kids ask to watch television or play a video game why not limit the amount of time of their use? This will cut bac k on electricity use and theyll benefit doing other, healthier activities. Encourage them to read a book or play outside like we or our parents did. In conclusion, evidence shows that peoples choices in everyday life and their use of technology and resources has undoubtedly increased global warming. We can slow down the negative effects of such choices if everyone does their part. It does not matter how small or big the effort every little bit helps in helping reverse the potential, devastating effects of global warming. Think of the earth as a team and our team wants to win. Help to slow Global warming! Go Green! Works Cited: http://environment.about.com/od/faqglobalwarming/f/globalwarming.htm http://environment.about.com/od/globalwarming/a/ipcc_report.htm http://www.environmentalgraffiti.com/sciencetech/5-deadliest-effects-of-global-warming/276

Importance of Intellectual Capital in the Modern Economy

Importance of Intellectual Capital in the Modern Economy Executive Summary The report discusses the relative importance of the Intellectual Capital in the present economy due to the revolution that fosters the propagation of the value creation. The Intellectual Assets of an organisation play a vital role in improving its value and maintaining the competitive advantage. However, these intellectual assets are not capitalised in the financial statements as they are unable to determine their historic costs and their future benefits are sometimes uncertain. Despite of this a lot of companies have discovered ways that facilitate the valuation , measurement and reporting of their intellectual assets i.e companies like Coca Cola , Marks Spencer and Kingston Hull Plc have reflected their intangible assets such as brands separately from the goodwill on their company balance sheets as some guidance is provided by the International Accounting Standard in the disclosure of the intangible assets. The report also presents some theories that are aimed at eliminating the confusions created about the Accounting Profession. As the Accounting Profession and the Accountants cannot be blamed as conservatives in not providing space for the Intellectual Assets in the financial statements because in doing so , the financial statements will loose their relevance , reliability and neutrality. The report further throws some light on the issues that are related to the field of Intellectual Capital that include that there is no uniformity in the relative theory as there is no such definition and the Intellectual Capital model that is accepted generally. In the end the report concludes by suggesting that the under the supervision of the International Accounting Standard researchers, consultants, scholars and the accountants have to find a common way such that the value relevance of the Intellectual Capital and the principles of accounting are preserved. Aims and Objectives The aim of this study is to discuss that whether the exclusion of the Intellectual Assets of an organisation in the balance is realistic and pragmatic. As the Intellectual Capital is considered a value driver for the modern economy and a lot of organisations are focusing on their intellectual assets as compared to the intangible assets. Objectives The objectives of this study include: To assess the importance of the Intangible assets as compared to the tangible assets of an organisation. To provide some evidences about the organisations attitudes and the awareness about their intellectual assets. Finally, to conclude that whether the eviction of the Intellectual assets is pragmatic or not. Rationale The Current Gobal economies are now facing a new revolution that brings them to a new form of business environment. This major change in the world economies is due to the fact that there has been a disproportion observed between the Book Value and the Market Value of a firm. Because , in the past the Balance Sheet and the Income statement were the only tools used by the Shareholders ,managers and the executives to make strategic decisions and monitoring the performance of the company. However, it can be argued that things have changed now. As one of the important concern for the companies is the Value Creation. The expansion of the markets in the product or a service sector has been possible with the aid of the internet , high- technology and the innovation ,information , market chains and globalisation. This in turn has created a global competition among the firms that are now striving to acquire knowledge. Furthermore, the acquisition of the knowledge brings some vital concerns of its use, management and the improvement. This has changed the operations of the the organizations that used to emphasize on the production capability ,now focus on the creative operational structure. The organisations are now using the special tools for acquisition, management and the protection of knowledge such as Research Development , Patents , trademarks , copyrights , databases , customer and supplier relationships and Human Resources are known as the intellectual assets of the organization and constitute the Intellectual Capital. The relative importance and the expected returns of the Intellectual Capital has convinced the organisations to think and work in a new innovative way to achieve dominance over the competitors in the market. However , inspite of this the Intellectual Capital has not been considered in the performance appraisals and not included in the financial statements under the heading of assets. The organisations are spending a lot on the Intellectual Capital as compared to their tangible assets so therefore it is not wise to go against the flow of current market trends by focusing more on the tangible assets. This would lead to the creation of inaccurate procedures, policies and the decisions. Hence reducing the value in front of the investors and the customers. Cowey (1999), approves the conception of a â€Å"New Economy â€Å" and the â€Å" Knowledge Company † and insists that this concept accepted world-wide. He demonstrates that the opinions of â€Å" what we own † to â€Å" what we Know † have changed and know it depends upon the companies to apprehend the value creation by putting stakes in the training technology , staff retention and knowledge otherwise the efforts will not be productive. The Organisation for Economic Co-operation and development (OECD , 2005) reports that the investments in the Intellectual Capital has grown faster than the investments on machinery and equipment few years back. It is further revealed that the spending on the Research Development , software and the higher education was higher than the spending on the Machinery and the equipment in USA and Finland notebaly in 2002 and increased in greater proportions between 1994 2002 among the OECD countries as well. Arora(2000) purports that the the edge on the competitors in the challenging business environment can only be achieved by the proper administration of the Intellectual Capital which is another name of the Knowledge management. Kaplan Norton(2001) suggest that the company’s market value includes only 10-15% of the company’s book value of the assets. Furthermore, the possibilities of producing a value are risen through the the activities whose foundation is the knowledge that is enforced on the intangible assets of an organisation as compared to tangible assets. A Convention held under the OECD(1999) , concludes that a prominent set of information is required on the Intellectual Capital in its association with the tangible assets in the determination of value. Traditional Financial Reporting does not provide the necessary information to pursue the value creation process. Due to the availability of the information via internet technologies there is a need of a new reporting model that accommodates the information pertaining the Intellectual Capital that creates the value for customers and suppliers. Bradley(1997) discovered that the predicaments that were involved in the traditional financial accounting were due to the emergence of value. He explained the problem by arguing that the balance sheets and the income statements were the benchmarks in delivering the financial information to the shareholders. However, the significance of these financial statements in propagating the value has decreased due to the emerging trend of investments in the intangible assets. It is stated that the value of the brands was not reflected in the financial statements and in the equity values .This has led to the reconsideration of the intangible assets and the brands specifically. This fostered the proposition of of including such assets in the financial statements. However , the accounting profession does not fully supports the the idea that the intangible assets are the main factors in creating the value. On the contrary the investors and the trade leaders have acknowledged this truth. Furthermore, it is also quoted that 72% of the value was not reflected in the balance sheets of the companies surveyed in United Kingdom. Brands form the major part of the unexplained value that is not part of the balance sheet (Brand Finance plc , 2000). The Figure 1 shows the Gap between the market capitalisation and the net asset value. Why Intellectual Capital Upton(2001) reports that the companies under the scrutiny of the FASB Business Reporting Research Project provide considerable non- monetary information. Therefore it can be argued that the AICPA and FASB have been analysing the Intellectual Capital since 1991.The Intellectual Capital is considered endangered when the information of a company becomes obsolete when the competitor increases its information. Therefore the preservation of the Intellectual Capital is crucial for maintaining the competitive edge. However,the companies that are knowledge intensive are prone to risks of losing their market shares(MacDougall Hurst,2005).Guthrie(2000) suggests that â€Å"Accountants must find a to incorporate measures of Intellectual Capital or they will become irrelevant â€Å". Statement of Methodology The method used in the report is the study of the literature that is already present in the field of Intellectual Capital and the Accounting to support the arguments.After, the study necessary facts and evidences are combined to form the Literature Review of this report. This report does includes the collection of the primary data and its analysis. A case study is added to further enhance the understanding of the applications of IC in firms. Research Question The research question is â€Å" Is the exclusion of Intellectual Assets from accounting statements realistics?† The research question of this report is basically a debate that is going on in the academic, industrial and the business sector. This topic demands study to be commenced taking in account both the views of the implications of including or excluding the intellectual assets in the financial statements. Literature Review Definition of the Intellectual Capital The Organisation for Economic Co-operation and development (OECD , 1999) illustrated that the Intellectual Capital was the composition of the financial value of two classes of the intangible assets i.e Structural Capital Human Capital The structural Capital includes the organisational resources like the softwares, databases etc. The Human Capital however, contains the human resources employees (internally) , customers and suppliers(externally). The term Intellectual Capital is presumed as having the same meaning as the Intangible Asset. In contrast , the definition that is provided by the OECD(1999) puts the Intellect Capital as a subset of the intangible assets of an organisation. Because there are certain intangible assets that do not fall under the category of the Intellectual Capital. The repute of a firm is not considered as a part of the Intellectual Capital(Guthrie Petty , 2000). Stewart(1997) defines the Intellectual Capital as a â€Å" Intellectual Material â€Å" that Includes the knowledge , information , intellectual property , experience that can be used to generate wealth. Furthermore , Stewart (1997) categorises the intellectual capital in to structural , customer and the human capital. He argues that the human capital is the generator of the innovation and the improvement. The structural capital includes the tools and the facilities that are used the human capital to form value. Customer Capital includes the value that is produced as a consequence of the organisations relations with which performs the business transactions(Stewart , 1997). Intellectual Capital can also be defined as the combination of the human capital and the structural capital. The human capital includes the knowledge , skills and the experience of the employees. It is further argued that the human capital is not in the possession of the organisation as compared to the structural capital (Edvinsson Malone , 1997). Elements of the Intellectual Structural Capital Structural Capital is what is left behind in the organisation when the employees go home. The Structural Capital arises from the those organisational processes that are focusing on the improvement and the establishment of the organisation. (Roos et al , 1997). Bontis et al (1999) suggests that the structural capital includes the organisational resources that encompass the knowledge that is not actually stored in the human brains and whose value is greater than its physical value.These assets include databases , softwares , manuals , trademarks , leaseholds , franchises , patents , licenses , employee training , employee contracts etc. The structural capital plays an important role in the creation of the value. As it helps the human capital to explore new ideas , learn from the past experience and protects the knowledge and the new inventions by providing the technology and the legal aid. Customer Capital Kohli jaworski(2000) defined the customer capital as the organisations ability to evolve the knowledge about market that is focusing on the cutomer desires and perceptions. This acquired knowledge is used by the organisations in response to the changing attitudes of the customers and the market. Organisations use this knowledge to have a contingency plan to tackle the threats produced from changing market trends. The definition provided by Bontis(1999) suggests the customer capital should be iterated as the relational capital that includes the relationships with the suppliers, partners and the investors in addition to the relationship with the customers. Human Capital Hudson(1993) defined the human capital as the composition of the inheritance, qualifications , experience with the opinions about life and business. It is further argued that the organisational employees are the key architects of the Intellectual Capital through their proficiency , opinions and expertise. The competence of the employees includes skills and qualifications and their opinions come under their behaviour and perceptions about work. The expertise is important in devising the innovative solutions to the problems. Furthermore, employees are an important asset for an organisation but they are not owned assets(Roos et al , 1997). Exploitation Of Intellectual Capital (Economical Perspective) It is suggested that the critical factor in the improvement of the economy is the proper utilization of the Intellectual capital .It is further noted that by increasing the tricks of Intellectual Capital will provide a competitive edge and the value of the firm will be augmented and specifically business will bring financial benefits. It is not a new thing that the intangible assets like brands, intellectual property , relationships are considered as a unprocessed input for the organization that increases the worth by the application of intelligence in possession of the organization. (Watters et al 2006 , Intellectual Assets Center , Glasgow, Uk). The research on the recognition and reporting of the intangible assets and the intellectual capital has brought them to the acute attention.The research believes that the intangible assets play a significant role in the creation of endurable competitive advantage with in the advanced organsations.Due to the expansion of the modern knowledge based economy it has become transparent that the intangible assets and the Intellectual Capital of an organization have become a platform in accomplishing the competitive advantage as compared to the hi-tech tangible assets(Drew , 1999). Tayles et al (2005) have described two doctrines in the realization of the intangible assets that provide the assistance in the achievement of the competitive superiorty. The research is continuously striving to find the authentic procedures to measure the intangible assets and the indices that provide a forecast of the future economical benefits based upon the doctrines that are prescribed by Tayles et al (2005).Firstly , the expanding financial statements of the companies is the idiosyncracy of its Intellectual Capital that give the edge on the market competitors. Secondly, is the inefficient justification of the Intellectual Capital in the expansion of the economy(Tayles et al , 2005). Skinner (1986) purported that with the utilization of the technology, manufacturing productivity can be achieved by the intangible assets of the company which are the authentic reagents of the prosperity and that justify the monetary investment. How the Companies Exploit the Intellectual Capital Case Study Kingston Communications(Hull) Plc is group of companies based in Hull,United Kingdom. The groups is presently offering the services related to information, communication technology and the telecommunications to the consumer markets in UK. The groups Brands include Affiniti,Smart 421,Jam IP(Integration and management services),Karoo, Eclipse, Mistral (Internet and Telecommunication services) and Hull Color pages and Know( Information Services). The group is Ammortising the its Intangible Assets that aquired in the Acquisitions.In 2007,the ammortisation on intangibles was à ¢Ã¢â‚¬Å¡Ã‚ ¤8 million(from Total depreciation and ammortisation).The group also has purchased the tangible and the Intangible assets worth à ¢Ã¢â‚¬Å¡Ã‚ ¤30.2 million.The Groups Controlled measures include, measuring the learning and development(p9),Customer Satisfaction. KM also believes that Human Resources when managed through and effective Policy can bring the Tangible effect on the companys performance. KM is running a development program to enhance the Knowledge and Intelligence of the employees.The company also manages the Relational (Custmer) Capital by arranging the meetings of the Directors on the Investor relations and the shareholders concerns specifically. The Company’s publishes its Financial Reports complying with the IFRS,however, the company also provides additional disclosures if compliance with the IFRS does not fullfil the requirements of the users(i.e External Stakeholders,External investors,Suppliers and the Customers) to understand the impact of certain transactions that have an effect on the financial performance of the company. Relational Capital Management and Policies Arranaging meetings with the shareholders time to time to discuss the company’s strategies and performance.Maintaining a investors relations function to encourage and improve the communication with the investors. The Goodwill of the Company in 2007 was worth à ¢Ã¢â‚¬Å¡Ã‚ ¤192.754 million(2006:à ¢Ã¢â‚¬Å¡Ã‚ ¤155.551 million) and the Intangible Assets had the value of à ¢Ã¢â‚¬Å¡Ã‚ ¤48.511 million (2006 : à ¢Ã¢â‚¬Å¡Ã‚ ¤39.450) according to the Balance Sheet on 31st march,2007. The Cash Flow Statement of the Company for the year ended 31st march,2007 also explicitly show the Amounts of the Ammortisation of Intangibles as compared to the tangible fixed assets.The Cash Flow statement also show the companys procurement of the Intangible assets à ¢Ã¢â‚¬Å¡Ã‚ ¤6.495 illion in 2007. The financial statements of the Company are prepared according to the principles prescribed by IFRS and IFRIC.These financial statements are based on the concept of historical Cost accounting.However, the statements are modified due to the revaluation of the financial assets to a fair value by using the income statement. Intangible Assets Identified by Kingston Communications The Intangible Assets of the Kingston Communication include: 1.) Goodwill 2.) Customer and Supplier Relationships 3.) Technology and Brands 4.) Software 5.) Development Goodwill The Groups Goodwill is reported in the acquisitions of the subsidiaries and it is the difference between the Cost of Acquisition and the Net Assets. The Goodwill is tested for impairment annually. Development The company’s intangibe asset that is developed through the research and development activities only when it fulfils the criteria of Intangible Asset Recognition prescribed by IAS 38 i.e the asset is identifiable,impact on future cash flows and the developmental costs of the assets are measured reliably.The estimated life of the internally developed intangible asset is 1 year and is also ammortised on a straight line basis. Valuation of the Intangible Assets in Kingston Commnuications The intangible assets that are acquired through the acquisitions are valued on the basis of their time value and the future impact of on the performance of the companies. Appraisal of Intellectual Capital in Kingston Communications The Kingston Communication is exploiting,managing and reporting its Intellectual Capital as tool necessary for the competitive advantage and for improving the future performance of the company. According to the companies policy the Intangibles Assets are included in the Balance Sheets in order to satisfy its investors and guarantee the future investments in the company. However, there are no benchmarks for the management and the evaluation of the these Intangible assets.Also, the company is not using the models for the Classification of these Intangible assets as suggested by (Kingston Hull plc , 2008) Measuring the IC (Performance)through strategies(Management Accounting) Simons(1999) suggests that the by measuring the performance of a company is basically the comparison of the outcomes of the business activities with the critical business targets. The traditional financial accounting utilizes two techniques to measure the Performance .These are Return on Capital Employed(ROCE) and Return on Assets (ROA). However , these techniques are condemned due to the fact that they are old fashioned , unable measure the intangible assets and are unable to appraise the stakes in the technology which is essential for the firm to compete in the global market(Bourne et al , 2000; Amir Lev , 1996). Valuation Methodologies(Performance Measures as well) The economic measure of the Profit yields the same result as the traditional accounting during the matching phase of costs and revenues by preserving the value significance. This is done by improving the financial reports with the disclosure of the concealed assets like the intangible assets and the investments in the long run(Simons , 1990). (It includes the tools and various methodologies ) Watters et al(2006) have discussed the application of a Scorecard assessment tool in the Scottish SME that provides a review that how efficiently companies are exploiting their Intellectual assets.The tool helps the SMEs to manage three areas of operations i.e Sales and Marketing , Research and Development and Human Resources. It assign the scores to activities that come under the three operational areas according to their effectiveness and links them to the strategic objectives of the firms. (Appendix 1) Brand Finance plc(2000) suggests that there are a lot of methods present for the valuation of the Brands, however there is a need to find an optimal one. Cost based methods of brand valuations show a disparity from its market valuation. The Market Comparison method is not efficient as it is difficult to obtain the comparison data. Royalty Relief method determines the royalty rate on the estimates of the income generated from brands. However , this method does not clearly states that how a brand is going to create value. The Economic Use method combines the consumer and the competitor to entitle the value to the brand.The last method is the most optimal method which is the Brand Finance that uses the Discounted Cash Flow (DCF) analysis in concluding the value for a brand.As the Discounted Cash Flow method valuation complies with the valuations performed by the financial analysts , accountants to check for the impairment of the intangible assets. Measurement of Intellectual Capital Why there is a need for the companies to measure the intellectual capital This is a very long debate that why companies need to measure the intellectual capital.There are several advantages of doing that. The term intellectual capital can be said to be â€Å"expandable† in terms of the Value and rewards. The greater the effort of a company the greater is a competitive advantage and greater is sustainability of the company. Nowadays companies and the firms have become Knowledge aware i.e they have now recognized the importance of the of the knowledge that creates value and sustainability. The Companies working in the Telecommunication, Pharmaceutical and the research technology sector specifically have to invest a lot in the Research and Development to compete and develop the innovative solutions to avail the opportunities in the market.Therefore, there is a strong need for these companies to devote themselves to measure and manage their intellectual capital effectively. However, it is very difficult to justify the investments in digging out the knowledge that creates value .These investments are rather very complex and unpredictable even if they are tested and analysed by the efficient tools for their proficiency. Some Organisations that are knowledge based are sometimes not sure about the amount of the Knowledge they have and the amount of knowledge they need tocarry out their functions internally and externally. That is the reason, these organizations loose the interest of the investors and therefore the investment. Balanced Scorecard (An Alternative to Balance Sheets) Kaplan Norton(1992) , presented the theory of the Balanced Scorecard for improving and tracking down the performance of an organisation. The authors suggest four dimensions such as Financial , Customer , internal business process and learning and growth. These dimensions are believed to provide a insight in to the current performance and identify the factors that can improve the future performance. A combination of the non-financial and financial measures are insufficient in determining the performance of an organisation. The main problem is that its just like a Wild Goose Chase as this amalgam of the performance indicators are not pursuing a specific business objective. Kaplan Norton(1996) believe that the both the financial and the non- financial measures must have a focus on a goal that has to be achieved in maintaining the sustainability. The authors further argue that the various measures provided by the balanced scorecard can help the organisation to plan a particular strategy and then can implement it across its subsidiaries, departments to share a common motive with trasnparency. A well planned BSC can hep the organisation to learn from the short-term reports that are generated and scrutinized through various perspectives. Andriessen(2004) suggests that the predicament of measuring the Intellectual Capital can be resolved by applying the balanced scorecard. It has been advised that the specified strategy plans can be created that guide the organisations to confidently invest in the human resources, technology and the structural capital. It is further revealed that by measuring and administering the intellectual capital can also help the organisation to convert its non-monetary achievements in to monetary achievements(Kaplan Norton , 2004). A study conducted by Hagood Friedman(2002) devised a way for the implementation of the balanced scorecard to measure the accomplishments of the human resource information system of a company. They have developed a system that uses the balanced scorecard as its foundation to improve the human resource information system in association with highlighting the goals and objectives of the organisation. Despite of its usefulness the Balanced Scorecard has some limitations. In this context Voelpel et al (2006) has identified five limitations of the balanced scorecard in its application in the modern economy. First being its inflexibility that is, it measures the performance of a company only in four perspectives by leaving behind some other perspectives out of attention. Voelpel et al(2006 ) explain the second limitation which is that the BSC is less efficient in accommodating the changes in the changing economy. The BSC a defines a strategy for a company and its subsidiaries to achieve a goal by neglecting the individual goals of a subsidiary as a consequence a company is unable to use its potential properly. The third one is that BSC focuses more on improving the internal performance of an organisation therefore by losing a link with the external world to exploit the innovation.The forth limitation of a BSC is that it focuses on the organisation in itself and provides no information about the actions of competitors. The fifth problem with the balance scorecard is that it goes straight in measuring the performance in a rational way .As a consequence the more complex predicaments are difficult to apprehend(Voelpel et al , 2006). A Comparison between the benefits that arise from intangible and tangible assets There are risks involved with the investment in the intangible assets like RD. Kothari et al(1998) have conducted a research by comparing the uncertainty of benefits associated with the tangibles and the intangibles assets. The methodology used for this research was the regression analysis of the future earnings variability involved with the expenditure in Research and Development and the tangible assets .Furthermore , the variables like firm size and the leverage are also used to define the boundary of a research.It has been illustrated by Kothari et al (1998) that the future benefits of RD investment are more uncertain than the tangible assets. Shi(2003) has analysed and studied the relationship of bond prices and the measures of RD expenditures and suggest that there is a fair risk involved with the spending of the RD projects that increases risk factor with the bondholders claims and hence are more riskier than the other projects. Issues in Intellectual Capital(Flaws in the IC Concepts) Bontis (2001) discovered a predicament with the intangibles assets is that there is no unique conception that is accepted by everyone. Every investigator or a consultant who contributes to the debate expects the approval and recommends his own jargon. Various other researchers have pointed out flaws in the definitions of the Intellectual Capital. According to Edvinsson and Malone(1997) the intellectual capital was the difference of Market value and the Book value. In contrast Upton(2001) recommends that the intellectual capital cannot be absolutely characterized by simply calculating the difference of market and book value. Following that Habersam and Piber(2003) advocate that the term intellectual capital cannot be determined by the difference of market value and the book value. Pragmatically, the difference can be influenced by some other elements that are not associated with the intangibles.Further research enumerates five components that can realize a change in the the stock prices which incorporates the recognised assets , company liabilities , legal events , shareholders equity and the timing issues(Garcia-Ayuso 2003). The benefits received by a firm cannot be attributed to the individual intangible Assets as such benefits are a result from the inter-cooperation of more than one Intangible asset. Therefore, it could be wise to value the intangible assets all together. It is further argued that the market value of a firm cannot be ascribed to the intangible asset Importance of Intellectual Capital in the Modern Economy Importance of Intellectual Capital in the Modern Economy Executive Summary The report discusses the relative importance of the Intellectual Capital in the present economy due to the revolution that fosters the propagation of the value creation. The Intellectual Assets of an organisation play a vital role in improving its value and maintaining the competitive advantage. However, these intellectual assets are not capitalised in the financial statements as they are unable to determine their historic costs and their future benefits are sometimes uncertain. Despite of this a lot of companies have discovered ways that facilitate the valuation , measurement and reporting of their intellectual assets i.e companies like Coca Cola , Marks Spencer and Kingston Hull Plc have reflected their intangible assets such as brands separately from the goodwill on their company balance sheets as some guidance is provided by the International Accounting Standard in the disclosure of the intangible assets. The report also presents some theories that are aimed at eliminating the confusions created about the Accounting Profession. As the Accounting Profession and the Accountants cannot be blamed as conservatives in not providing space for the Intellectual Assets in the financial statements because in doing so , the financial statements will loose their relevance , reliability and neutrality. The report further throws some light on the issues that are related to the field of Intellectual Capital that include that there is no uniformity in the relative theory as there is no such definition and the Intellectual Capital model that is accepted generally. In the end the report concludes by suggesting that the under the supervision of the International Accounting Standard researchers, consultants, scholars and the accountants have to find a common way such that the value relevance of the Intellectual Capital and the principles of accounting are preserved. Aims and Objectives The aim of this study is to discuss that whether the exclusion of the Intellectual Assets of an organisation in the balance is realistic and pragmatic. As the Intellectual Capital is considered a value driver for the modern economy and a lot of organisations are focusing on their intellectual assets as compared to the intangible assets. Objectives The objectives of this study include: To assess the importance of the Intangible assets as compared to the tangible assets of an organisation. To provide some evidences about the organisations attitudes and the awareness about their intellectual assets. Finally, to conclude that whether the eviction of the Intellectual assets is pragmatic or not. Rationale The Current Gobal economies are now facing a new revolution that brings them to a new form of business environment. This major change in the world economies is due to the fact that there has been a disproportion observed between the Book Value and the Market Value of a firm. Because , in the past the Balance Sheet and the Income statement were the only tools used by the Shareholders ,managers and the executives to make strategic decisions and monitoring the performance of the company. However, it can be argued that things have changed now. As one of the important concern for the companies is the Value Creation. The expansion of the markets in the product or a service sector has been possible with the aid of the internet , high- technology and the innovation ,information , market chains and globalisation. This in turn has created a global competition among the firms that are now striving to acquire knowledge. Furthermore, the acquisition of the knowledge brings some vital concerns of its use, management and the improvement. This has changed the operations of the the organizations that used to emphasize on the production capability ,now focus on the creative operational structure. The organisations are now using the special tools for acquisition, management and the protection of knowledge such as Research Development , Patents , trademarks , copyrights , databases , customer and supplier relationships and Human Resources are known as the intellectual assets of the organization and constitute the Intellectual Capital. The relative importance and the expected returns of the Intellectual Capital has convinced the organisations to think and work in a new innovative way to achieve dominance over the competitors in the market. However , inspite of this the Intellectual Capital has not been considered in the performance appraisals and not included in the financial statements under the heading of assets. The organisations are spending a lot on the Intellectual Capital as compared to their tangible assets so therefore it is not wise to go against the flow of current market trends by focusing more on the tangible assets. This would lead to the creation of inaccurate procedures, policies and the decisions. Hence reducing the value in front of the investors and the customers. Cowey (1999), approves the conception of a â€Å"New Economy â€Å" and the â€Å" Knowledge Company † and insists that this concept accepted world-wide. He demonstrates that the opinions of â€Å" what we own † to â€Å" what we Know † have changed and know it depends upon the companies to apprehend the value creation by putting stakes in the training technology , staff retention and knowledge otherwise the efforts will not be productive. The Organisation for Economic Co-operation and development (OECD , 2005) reports that the investments in the Intellectual Capital has grown faster than the investments on machinery and equipment few years back. It is further revealed that the spending on the Research Development , software and the higher education was higher than the spending on the Machinery and the equipment in USA and Finland notebaly in 2002 and increased in greater proportions between 1994 2002 among the OECD countries as well. Arora(2000) purports that the the edge on the competitors in the challenging business environment can only be achieved by the proper administration of the Intellectual Capital which is another name of the Knowledge management. Kaplan Norton(2001) suggest that the company’s market value includes only 10-15% of the company’s book value of the assets. Furthermore, the possibilities of producing a value are risen through the the activities whose foundation is the knowledge that is enforced on the intangible assets of an organisation as compared to tangible assets. A Convention held under the OECD(1999) , concludes that a prominent set of information is required on the Intellectual Capital in its association with the tangible assets in the determination of value. Traditional Financial Reporting does not provide the necessary information to pursue the value creation process. Due to the availability of the information via internet technologies there is a need of a new reporting model that accommodates the information pertaining the Intellectual Capital that creates the value for customers and suppliers. Bradley(1997) discovered that the predicaments that were involved in the traditional financial accounting were due to the emergence of value. He explained the problem by arguing that the balance sheets and the income statements were the benchmarks in delivering the financial information to the shareholders. However, the significance of these financial statements in propagating the value has decreased due to the emerging trend of investments in the intangible assets. It is stated that the value of the brands was not reflected in the financial statements and in the equity values .This has led to the reconsideration of the intangible assets and the brands specifically. This fostered the proposition of of including such assets in the financial statements. However , the accounting profession does not fully supports the the idea that the intangible assets are the main factors in creating the value. On the contrary the investors and the trade leaders have acknowledged this truth. Furthermore, it is also quoted that 72% of the value was not reflected in the balance sheets of the companies surveyed in United Kingdom. Brands form the major part of the unexplained value that is not part of the balance sheet (Brand Finance plc , 2000). The Figure 1 shows the Gap between the market capitalisation and the net asset value. Why Intellectual Capital Upton(2001) reports that the companies under the scrutiny of the FASB Business Reporting Research Project provide considerable non- monetary information. Therefore it can be argued that the AICPA and FASB have been analysing the Intellectual Capital since 1991.The Intellectual Capital is considered endangered when the information of a company becomes obsolete when the competitor increases its information. Therefore the preservation of the Intellectual Capital is crucial for maintaining the competitive edge. However,the companies that are knowledge intensive are prone to risks of losing their market shares(MacDougall Hurst,2005).Guthrie(2000) suggests that â€Å"Accountants must find a to incorporate measures of Intellectual Capital or they will become irrelevant â€Å". Statement of Methodology The method used in the report is the study of the literature that is already present in the field of Intellectual Capital and the Accounting to support the arguments.After, the study necessary facts and evidences are combined to form the Literature Review of this report. This report does includes the collection of the primary data and its analysis. A case study is added to further enhance the understanding of the applications of IC in firms. Research Question The research question is â€Å" Is the exclusion of Intellectual Assets from accounting statements realistics?† The research question of this report is basically a debate that is going on in the academic, industrial and the business sector. This topic demands study to be commenced taking in account both the views of the implications of including or excluding the intellectual assets in the financial statements. Literature Review Definition of the Intellectual Capital The Organisation for Economic Co-operation and development (OECD , 1999) illustrated that the Intellectual Capital was the composition of the financial value of two classes of the intangible assets i.e Structural Capital Human Capital The structural Capital includes the organisational resources like the softwares, databases etc. The Human Capital however, contains the human resources employees (internally) , customers and suppliers(externally). The term Intellectual Capital is presumed as having the same meaning as the Intangible Asset. In contrast , the definition that is provided by the OECD(1999) puts the Intellect Capital as a subset of the intangible assets of an organisation. Because there are certain intangible assets that do not fall under the category of the Intellectual Capital. The repute of a firm is not considered as a part of the Intellectual Capital(Guthrie Petty , 2000). Stewart(1997) defines the Intellectual Capital as a â€Å" Intellectual Material â€Å" that Includes the knowledge , information , intellectual property , experience that can be used to generate wealth. Furthermore , Stewart (1997) categorises the intellectual capital in to structural , customer and the human capital. He argues that the human capital is the generator of the innovation and the improvement. The structural capital includes the tools and the facilities that are used the human capital to form value. Customer Capital includes the value that is produced as a consequence of the organisations relations with which performs the business transactions(Stewart , 1997). Intellectual Capital can also be defined as the combination of the human capital and the structural capital. The human capital includes the knowledge , skills and the experience of the employees. It is further argued that the human capital is not in the possession of the organisation as compared to the structural capital (Edvinsson Malone , 1997). Elements of the Intellectual Structural Capital Structural Capital is what is left behind in the organisation when the employees go home. The Structural Capital arises from the those organisational processes that are focusing on the improvement and the establishment of the organisation. (Roos et al , 1997). Bontis et al (1999) suggests that the structural capital includes the organisational resources that encompass the knowledge that is not actually stored in the human brains and whose value is greater than its physical value.These assets include databases , softwares , manuals , trademarks , leaseholds , franchises , patents , licenses , employee training , employee contracts etc. The structural capital plays an important role in the creation of the value. As it helps the human capital to explore new ideas , learn from the past experience and protects the knowledge and the new inventions by providing the technology and the legal aid. Customer Capital Kohli jaworski(2000) defined the customer capital as the organisations ability to evolve the knowledge about market that is focusing on the cutomer desires and perceptions. This acquired knowledge is used by the organisations in response to the changing attitudes of the customers and the market. Organisations use this knowledge to have a contingency plan to tackle the threats produced from changing market trends. The definition provided by Bontis(1999) suggests the customer capital should be iterated as the relational capital that includes the relationships with the suppliers, partners and the investors in addition to the relationship with the customers. Human Capital Hudson(1993) defined the human capital as the composition of the inheritance, qualifications , experience with the opinions about life and business. It is further argued that the organisational employees are the key architects of the Intellectual Capital through their proficiency , opinions and expertise. The competence of the employees includes skills and qualifications and their opinions come under their behaviour and perceptions about work. The expertise is important in devising the innovative solutions to the problems. Furthermore, employees are an important asset for an organisation but they are not owned assets(Roos et al , 1997). Exploitation Of Intellectual Capital (Economical Perspective) It is suggested that the critical factor in the improvement of the economy is the proper utilization of the Intellectual capital .It is further noted that by increasing the tricks of Intellectual Capital will provide a competitive edge and the value of the firm will be augmented and specifically business will bring financial benefits. It is not a new thing that the intangible assets like brands, intellectual property , relationships are considered as a unprocessed input for the organization that increases the worth by the application of intelligence in possession of the organization. (Watters et al 2006 , Intellectual Assets Center , Glasgow, Uk). The research on the recognition and reporting of the intangible assets and the intellectual capital has brought them to the acute attention.The research believes that the intangible assets play a significant role in the creation of endurable competitive advantage with in the advanced organsations.Due to the expansion of the modern knowledge based economy it has become transparent that the intangible assets and the Intellectual Capital of an organization have become a platform in accomplishing the competitive advantage as compared to the hi-tech tangible assets(Drew , 1999). Tayles et al (2005) have described two doctrines in the realization of the intangible assets that provide the assistance in the achievement of the competitive superiorty. The research is continuously striving to find the authentic procedures to measure the intangible assets and the indices that provide a forecast of the future economical benefits based upon the doctrines that are prescribed by Tayles et al (2005).Firstly , the expanding financial statements of the companies is the idiosyncracy of its Intellectual Capital that give the edge on the market competitors. Secondly, is the inefficient justification of the Intellectual Capital in the expansion of the economy(Tayles et al , 2005). Skinner (1986) purported that with the utilization of the technology, manufacturing productivity can be achieved by the intangible assets of the company which are the authentic reagents of the prosperity and that justify the monetary investment. How the Companies Exploit the Intellectual Capital Case Study Kingston Communications(Hull) Plc is group of companies based in Hull,United Kingdom. The groups is presently offering the services related to information, communication technology and the telecommunications to the consumer markets in UK. The groups Brands include Affiniti,Smart 421,Jam IP(Integration and management services),Karoo, Eclipse, Mistral (Internet and Telecommunication services) and Hull Color pages and Know( Information Services). The group is Ammortising the its Intangible Assets that aquired in the Acquisitions.In 2007,the ammortisation on intangibles was à ¢Ã¢â‚¬Å¡Ã‚ ¤8 million(from Total depreciation and ammortisation).The group also has purchased the tangible and the Intangible assets worth à ¢Ã¢â‚¬Å¡Ã‚ ¤30.2 million.The Groups Controlled measures include, measuring the learning and development(p9),Customer Satisfaction. KM also believes that Human Resources when managed through and effective Policy can bring the Tangible effect on the companys performance. KM is running a development program to enhance the Knowledge and Intelligence of the employees.The company also manages the Relational (Custmer) Capital by arranging the meetings of the Directors on the Investor relations and the shareholders concerns specifically. The Company’s publishes its Financial Reports complying with the IFRS,however, the company also provides additional disclosures if compliance with the IFRS does not fullfil the requirements of the users(i.e External Stakeholders,External investors,Suppliers and the Customers) to understand the impact of certain transactions that have an effect on the financial performance of the company. Relational Capital Management and Policies Arranaging meetings with the shareholders time to time to discuss the company’s strategies and performance.Maintaining a investors relations function to encourage and improve the communication with the investors. The Goodwill of the Company in 2007 was worth à ¢Ã¢â‚¬Å¡Ã‚ ¤192.754 million(2006:à ¢Ã¢â‚¬Å¡Ã‚ ¤155.551 million) and the Intangible Assets had the value of à ¢Ã¢â‚¬Å¡Ã‚ ¤48.511 million (2006 : à ¢Ã¢â‚¬Å¡Ã‚ ¤39.450) according to the Balance Sheet on 31st march,2007. The Cash Flow Statement of the Company for the year ended 31st march,2007 also explicitly show the Amounts of the Ammortisation of Intangibles as compared to the tangible fixed assets.The Cash Flow statement also show the companys procurement of the Intangible assets à ¢Ã¢â‚¬Å¡Ã‚ ¤6.495 illion in 2007. The financial statements of the Company are prepared according to the principles prescribed by IFRS and IFRIC.These financial statements are based on the concept of historical Cost accounting.However, the statements are modified due to the revaluation of the financial assets to a fair value by using the income statement. Intangible Assets Identified by Kingston Communications The Intangible Assets of the Kingston Communication include: 1.) Goodwill 2.) Customer and Supplier Relationships 3.) Technology and Brands 4.) Software 5.) Development Goodwill The Groups Goodwill is reported in the acquisitions of the subsidiaries and it is the difference between the Cost of Acquisition and the Net Assets. The Goodwill is tested for impairment annually. Development The company’s intangibe asset that is developed through the research and development activities only when it fulfils the criteria of Intangible Asset Recognition prescribed by IAS 38 i.e the asset is identifiable,impact on future cash flows and the developmental costs of the assets are measured reliably.The estimated life of the internally developed intangible asset is 1 year and is also ammortised on a straight line basis. Valuation of the Intangible Assets in Kingston Commnuications The intangible assets that are acquired through the acquisitions are valued on the basis of their time value and the future impact of on the performance of the companies. Appraisal of Intellectual Capital in Kingston Communications The Kingston Communication is exploiting,managing and reporting its Intellectual Capital as tool necessary for the competitive advantage and for improving the future performance of the company. According to the companies policy the Intangibles Assets are included in the Balance Sheets in order to satisfy its investors and guarantee the future investments in the company. However, there are no benchmarks for the management and the evaluation of the these Intangible assets.Also, the company is not using the models for the Classification of these Intangible assets as suggested by (Kingston Hull plc , 2008) Measuring the IC (Performance)through strategies(Management Accounting) Simons(1999) suggests that the by measuring the performance of a company is basically the comparison of the outcomes of the business activities with the critical business targets. The traditional financial accounting utilizes two techniques to measure the Performance .These are Return on Capital Employed(ROCE) and Return on Assets (ROA). However , these techniques are condemned due to the fact that they are old fashioned , unable measure the intangible assets and are unable to appraise the stakes in the technology which is essential for the firm to compete in the global market(Bourne et al , 2000; Amir Lev , 1996). Valuation Methodologies(Performance Measures as well) The economic measure of the Profit yields the same result as the traditional accounting during the matching phase of costs and revenues by preserving the value significance. This is done by improving the financial reports with the disclosure of the concealed assets like the intangible assets and the investments in the long run(Simons , 1990). (It includes the tools and various methodologies ) Watters et al(2006) have discussed the application of a Scorecard assessment tool in the Scottish SME that provides a review that how efficiently companies are exploiting their Intellectual assets.The tool helps the SMEs to manage three areas of operations i.e Sales and Marketing , Research and Development and Human Resources. It assign the scores to activities that come under the three operational areas according to their effectiveness and links them to the strategic objectives of the firms. (Appendix 1) Brand Finance plc(2000) suggests that there are a lot of methods present for the valuation of the Brands, however there is a need to find an optimal one. Cost based methods of brand valuations show a disparity from its market valuation. The Market Comparison method is not efficient as it is difficult to obtain the comparison data. Royalty Relief method determines the royalty rate on the estimates of the income generated from brands. However , this method does not clearly states that how a brand is going to create value. The Economic Use method combines the consumer and the competitor to entitle the value to the brand.The last method is the most optimal method which is the Brand Finance that uses the Discounted Cash Flow (DCF) analysis in concluding the value for a brand.As the Discounted Cash Flow method valuation complies with the valuations performed by the financial analysts , accountants to check for the impairment of the intangible assets. Measurement of Intellectual Capital Why there is a need for the companies to measure the intellectual capital This is a very long debate that why companies need to measure the intellectual capital.There are several advantages of doing that. The term intellectual capital can be said to be â€Å"expandable† in terms of the Value and rewards. The greater the effort of a company the greater is a competitive advantage and greater is sustainability of the company. Nowadays companies and the firms have become Knowledge aware i.e they have now recognized the importance of the of the knowledge that creates value and sustainability. The Companies working in the Telecommunication, Pharmaceutical and the research technology sector specifically have to invest a lot in the Research and Development to compete and develop the innovative solutions to avail the opportunities in the market.Therefore, there is a strong need for these companies to devote themselves to measure and manage their intellectual capital effectively. However, it is very difficult to justify the investments in digging out the knowledge that creates value .These investments are rather very complex and unpredictable even if they are tested and analysed by the efficient tools for their proficiency. Some Organisations that are knowledge based are sometimes not sure about the amount of the Knowledge they have and the amount of knowledge they need tocarry out their functions internally and externally. That is the reason, these organizations loose the interest of the investors and therefore the investment. Balanced Scorecard (An Alternative to Balance Sheets) Kaplan Norton(1992) , presented the theory of the Balanced Scorecard for improving and tracking down the performance of an organisation. The authors suggest four dimensions such as Financial , Customer , internal business process and learning and growth. These dimensions are believed to provide a insight in to the current performance and identify the factors that can improve the future performance. A combination of the non-financial and financial measures are insufficient in determining the performance of an organisation. The main problem is that its just like a Wild Goose Chase as this amalgam of the performance indicators are not pursuing a specific business objective. Kaplan Norton(1996) believe that the both the financial and the non- financial measures must have a focus on a goal that has to be achieved in maintaining the sustainability. The authors further argue that the various measures provided by the balanced scorecard can help the organisation to plan a particular strategy and then can implement it across its subsidiaries, departments to share a common motive with trasnparency. A well planned BSC can hep the organisation to learn from the short-term reports that are generated and scrutinized through various perspectives. Andriessen(2004) suggests that the predicament of measuring the Intellectual Capital can be resolved by applying the balanced scorecard. It has been advised that the specified strategy plans can be created that guide the organisations to confidently invest in the human resources, technology and the structural capital. It is further revealed that by measuring and administering the intellectual capital can also help the organisation to convert its non-monetary achievements in to monetary achievements(Kaplan Norton , 2004). A study conducted by Hagood Friedman(2002) devised a way for the implementation of the balanced scorecard to measure the accomplishments of the human resource information system of a company. They have developed a system that uses the balanced scorecard as its foundation to improve the human resource information system in association with highlighting the goals and objectives of the organisation. Despite of its usefulness the Balanced Scorecard has some limitations. In this context Voelpel et al (2006) has identified five limitations of the balanced scorecard in its application in the modern economy. First being its inflexibility that is, it measures the performance of a company only in four perspectives by leaving behind some other perspectives out of attention. Voelpel et al(2006 ) explain the second limitation which is that the BSC is less efficient in accommodating the changes in the changing economy. The BSC a defines a strategy for a company and its subsidiaries to achieve a goal by neglecting the individual goals of a subsidiary as a consequence a company is unable to use its potential properly. The third one is that BSC focuses more on improving the internal performance of an organisation therefore by losing a link with the external world to exploit the innovation.The forth limitation of a BSC is that it focuses on the organisation in itself and provides no information about the actions of competitors. The fifth problem with the balance scorecard is that it goes straight in measuring the performance in a rational way .As a consequence the more complex predicaments are difficult to apprehend(Voelpel et al , 2006). A Comparison between the benefits that arise from intangible and tangible assets There are risks involved with the investment in the intangible assets like RD. Kothari et al(1998) have conducted a research by comparing the uncertainty of benefits associated with the tangibles and the intangibles assets. The methodology used for this research was the regression analysis of the future earnings variability involved with the expenditure in Research and Development and the tangible assets .Furthermore , the variables like firm size and the leverage are also used to define the boundary of a research.It has been illustrated by Kothari et al (1998) that the future benefits of RD investment are more uncertain than the tangible assets. Shi(2003) has analysed and studied the relationship of bond prices and the measures of RD expenditures and suggest that there is a fair risk involved with the spending of the RD projects that increases risk factor with the bondholders claims and hence are more riskier than the other projects. Issues in Intellectual Capital(Flaws in the IC Concepts) Bontis (2001) discovered a predicament with the intangibles assets is that there is no unique conception that is accepted by everyone. Every investigator or a consultant who contributes to the debate expects the approval and recommends his own jargon. Various other researchers have pointed out flaws in the definitions of the Intellectual Capital. According to Edvinsson and Malone(1997) the intellectual capital was the difference of Market value and the Book value. In contrast Upton(2001) recommends that the intellectual capital cannot be absolutely characterized by simply calculating the difference of market and book value. Following that Habersam and Piber(2003) advocate that the term intellectual capital cannot be determined by the difference of market value and the book value. Pragmatically, the difference can be influenced by some other elements that are not associated with the intangibles.Further research enumerates five components that can realize a change in the the stock prices which incorporates the recognised assets , company liabilities , legal events , shareholders equity and the timing issues(Garcia-Ayuso 2003). The benefits received by a firm cannot be attributed to the individual intangible Assets as such benefits are a result from the inter-cooperation of more than one Intangible asset. Therefore, it could be wise to value the intangible assets all together. It is further argued that the market value of a firm cannot be ascribed to the intangible asset

F. Scott Fitzgeralds The Great Gatsby Essay -- Fitzgerald Great Gatsb

The 1920s was a time of excess and growth. Economically, it was a time for great financial gain. Largely because of improvements in technology, productivity increased while overall production costs decreased, and the economy grew. Not only was this time filled with prosperity, but corruption as well. People who had previously worked day and night finally acquired leisure time. Some of the most wealthy people made the choice to fill this free time with gluttony and lust. Many authors during this time believed that the excessive spending and consumption would surely lead to ruin. Although many people associate good times and carefree abandon with the reverie of the 1920s, some also suggest a hidden, much darker side. In his novel The Great Gatsby, F. Scott Fitzgerald, conveyed his belief that wealth and materialism corrupted the American Dream. In The Great Gatsby, F. Scott Fitzgerald shows his disapproval of the times by portraying characters attempting to achieve their American Dream by any means possible. Myrtle Wilson, a low class inhabitant of the valley of ashes, puts her morals to the side when pursuing the wealthy life. Not even marriage stops Myrtle from having an affair with Tom Buchanan-- a rich man who enables her to finally buy the life she thinks she deserves. Not only does Myrtle cheat on her own husband, but she has an affair with someone who caught her eye with "a dress suit and patent leather shoes and [she] couldn't keep [her] eyes off him" (Fitzgerald 40). It is not a love for Tom that attracted Myrtle, but his money and power that she lusts after. Jay Gatsby-- a man actually in love with Daisy Buchanan and not simply the money she represents-- aspires to achieve his dream of wealth in... ...ent within Tom and Daisy signify that wealth cannot buy a person everything, including happiness. Fitzgerald questions the validity of the fiscally inclined American Dream within The Great Gatsby. During the 1920s, F. Scott Fitzgerald conveyed his disdain for the corruption within the American dream by depicting the immoral actions of society in his literature with a disapproving tone. Even though the country was economically prosperous, people increasingly lost much needed morals on their journey of the American Dream. Affairs and other sins took place with little guilt. People got caught up in the corruption around them in order to try to get their piece of the growing wealth. Without making some changes, society could have been on its way to self-devastation. Works Cited Fitzgerald, F. Scott. The Great Gatsby. 1st ed. New York: Scribner, 2004. Print.

The Turn of the Screw Essay -- Literary Analysis, Henry James

Superficially, Henry James’s The Turn of the Screw seems to reinforce the status quo of American literature as male, whereby men are viewed as having power over women leaving women to become mere objects. James creates a nameless female protagonist whose story is told through the guise of a male narrator. She becomes an object viewed by Douglas’s audience and is used simply as means for the master on Harley Street to avoid being bothered by his charges. She is then set up as naà ¯ve and love-struck, willing to do just about anything, including risking her own sanity, for the sake of keeping the master undisturbed. However, on closer examination, James actually creates a novella that subverts the traditional idea of men having power over women as it is the governess who has the final word in her story, not the male Douglas, and it is the male heir Miles who becomes the scapegoat leaving the governess free, â€Å"awfully clever and nice† (James 24). James’s unfinished frame tale creates frustration and confusion but his experiment with form also draws attention to what has largely been left unconscious. Through Douglas’s initial telling of the governess’s story she is reduced to a nameless object that they all raptly listen about rather than listen to. While at the start, Douglas does have power over the governess’s story, in the end it is the governess who has the final word and Douglas, who disappears after only the first seven pages, is never to be heard from again. James relinquishes power to the governess and allows her to participate as there is no need to return to the male voice once she takes over. Furthermore, as the governess does remain nameless throughout her own narrative this hardly is a power issues as both the master on... ...til finally â€Å"the air was clear† (116-117). In this way the governess is able to reverse the roles of passive/female and active/male as she denies Quint the power of his gaze and instead forces him to be the object of her gaze. Through his distortion of traditional male dominated structures and ideas, James is able to not only draw attention to the inequality of men’s power over women but he also uses the same devices to subvert this binary opposition. Through a distortion of the assumed patriarchal order the governess is able to adopt male characteristics in order to wrest back some of the power initially taken from her. Whether consciously or unconsciously James’s unfinished frame, disturbing death of Miles, and the disappearance of Quint’s ghost all point to a hidden power within the governess allowing her to survive long after her weaker male counterparts.

Crude Oil Crisis Essay example -- Essays Papers

Crude Oil Crisis The modern world survives on a steady diet of energy that is obtained from a wide variety of places and is used in an even wider variety of ways. The undeniable dependence of our modern culture on energy has both positive and negative effects on the world we live in. While our lives get more convenient, the environment is suffering. While technology is used to improve the quality of life, our non-renewable energy resources are depleting. The double edged sword that is our energy reliance is a constant compromise between what the world wants, and what the world has. While solutions to these problems are difficult to enact, the world must be wise in the way that it consumes and uses the energy resources it has. It is estimated that 98.16 quadrillion Btu of energy are used in the United States each year, the vast majority of which comes from non-renewable resources such as crude petroleum oil, coal, and natural gas (EIA, February 2005). This is particularly true in the United States where these three sources account for roughly 87% ...