Business Organization and Policy

The cost leadership strategy is an incorporated set of actions taken by a firm designed to produce or else deliver goods and services respectively with characteristics that are satisfactory to customers at the lowest cost relative to that of its rivals (Hoskisson & Ireland, 2008, 135). In this paper, we shall discuss five of these strategies and how they work in favor of the firm which applies them.

Demand forecasting is the dedication for understanding consumer goods or services and this understanding is harnessed and used to forecast consumer demand (Kazmi, 2008, 126). This enables the firm to keep the right amount of stock at hand because if the demand is underrated, sales can be lost due to a shortage of supply of goods. If, on the other hand, the demand is overrated, then the firm is left with an excess stock and that could also be a drain to the firm financially. It is therefore imperative that a firm understands demand and is able to accurately predict the market outcome since understanding demand makes a firm more competitive in the market. In order for a firm to be better able to meet its customers’ needs, it has to set up appropriate forecasting models so that it can be prepared to meet the actual demands of its customers.

Economies of scale are the things which cause the standard cost of producing a product to reduce while the quantity of its production increases. There are two varieties of economies of scale: internal economies of scale which are the funds that accumulate to a firm in spite of the industry, market or atmosphere in which it functions; and external economies of scale which benefit a firm because of the way in which its industry is organized. An example of economies of scale is the ability of large firms to carry out sophisticated research because they are able to spread this expenditure across a greater volume of sales and this has led to many mergers in recent years.

The standardization of products is basically an attempt by a firm to reduce costs while increasing the quality of the product it produces by using more efficient methods of production. This is done by minimizing the differences in the product which a firm produces and by doing so, production is rapidly increased, in the process reducing the cost of raw materials.

Aiming at the average customer makes it possible to offer a generalized set of utilities in a product to cover a greater number of customers (Kozami, 2002, 229). This means that a firm will be able to spend less in producing the product but gain more because the average customers are a large market. The cost of production will be quickly recovered and in the process, a large profit will also be made.

Firms often invest in research and development leading to cost saving technologies and as a result, they often trade an increase in fixed costs for a reduction in variable costs (Harrison & St. John, 2009, 91). Examples of cost saving technologies include Internet Banking services provided by most banks, and the reservation systems maintained by major airlines. Investment in cost saving technologies allows for the lowering of overall costs and provides a degree of information and control that was previously impossible to achieve.

Innovations at Apple, GE and Visa

Innovations are very important things to modern companies because they not only make them competitive in the world market but also ensure that they remain relevant to their customers. It is central to any company’s strategy and for many companies it is one of their top priorities in driving growth. The most significant drivers of innovation are culture and people and companies face various challenges when tackling both of these. Furthermore, different companies take different approaches when dealing with their new innovations. In this paper, we shall look at how the innovations at Apple, GE, and Visa have had an impact on them.

Apple is one of the most innovative companies in the world whose influence can be felt by almost everybody on the globe. This company was founded in a spirit of innovation and it is this that has made it one of the leaders in the world market. The Economist (2007) declares that Apple is well known for its ability to create technology that can be adapted for a wide range of purposes such as using an iPad to help in the arrangement of data as well as using it to read eBooks. Furthermore, Apple products tend to be environmentally friendly and this has made many people in the world to adopt them for their day to day use. This has made Apple one of the most successful companies in America and it has made it a world leader in almost all the products it produces with very little sign of it being overtaken any time soon.

GE has also invested in innovations such as the creation of electric powered cars and jet engines among others. It is one of those companies which invest heavily in technological innovations in almost all sectors including health. The MENA Report (2012) states that the new technologies developed are adapted to other products that GE produces and this enables it to remain competitive in the market even after more than a hundred and thirty years of existence. Its main aim is to bring affordable and advanced technologies that will ultimately bring a lot of benefit to many people around the world and this will undoubtedly keep this company among the top technological companies in the world.

Visa is also one of those companies whose innovations have revolutionized the financial system of the world. According to Soukar, M (2000) the introduction of the Visa Card has made payments easier for those who use them because not only can they be used domestically, but they can also be used all over the world. Furthermore these cards also enable payments to be made safely online instead of one having to go to a bank to wire the money. The relative safety of using visa cards to make payments has enabled people not to go around carrying paper money because this innovation allows the electronic transfer of money. Due to this technological innovation among others, visa has ensured that it remains one of the best financial companies in the world.

In conclusion, we have briefly looked at some technological innovations of the three companies above and how these innovations have kept them at the top of their fields of specialization. These companies are the leaders in technological advances that have changed the lives of many and it is these which also keep them competitive. The relevance of these three companies relies heavily on their innovative strategies because if they do not produce products that are relevant to the ever evolving tastes of their customers, then they would be overtaken by their competitors.

The DREAM Act

Of the three million students who graduate from high schools in the United States every year, approximately sixty five thousand of them are termed illegal immigrants. Although they have lived in the United States for most of their lives and know no other way of life other than they live in America. However, because they are labeled illegal immigrants - which is not their fault because they did not choose to come to come to America on their own – they have very little opportunity to test their dreams and prosper in this great nation. Instead, they have become the victims of government deportation due to their illegal immigrant status in the United States and have found themselves in very different environments from what they know, not able to fit in the culture, and not knowing the languages of the countries in which they were born but not raised. This has been a gross injustice on the part of the American government because whichever way they got to America, these so called illegal immigrants are still American through culture, language, and thought, and should be recognized as such.

The Development, Relief, and Education for Alien Minors (DREAM) Act is a bipartisan legislation that was pioneered by the Republican senator Orin Hatch and Democrat senator Richard Durbin, with the intention of solving this injustice in the American society. Under its provisions, qualifying undocumented youth would be eligible for a six year long process which would require them to complete a college degree or to serve at least two years in the military, and would eventually lead to their gaining American citizenship. This piece of legislation has come up twice for a vote in the senate, once in 2007 and again in 2010, but both times, it has failed to pass. In June 2012, the Obama administration issued a policy directive which would make over a million young people who were brought to the United States illegally as children free from deportation proceedings and which would make them eligible to get work permits.

The government had been under considerable pressure from various circles to take action on behalf of those young immigrants due to the fact that Congress had been deeply split about the DREAM Act legislation. Furthermore, since this is an election year, this move by the Obama administration was most likely aimed at securing the votes of Latino voters, considering that the bulk of those would have been deported if this policy had not been put in place would have been Latino. According to Welner, K and Chi, W (178) every year, these illegal immigrants graduate from high school often at the top of their classes but because of their illegal status, they are prevented from attending college and working legally. However, with the Obama administration’s change in policy, they will get the opportunity to discover their full potential as future doctors, teachers, and entrepreneurs, among other professions, who would greatly benefit the American economy.

According to the Congressional Record (1026) proponents of the DREAM Act state that it would contribute to the military’s enrollment efforts and preparedness because it would expand the recruiting group to the benefit of the American military. Furthermore, it would make America more competitive in the global economy because the young people who would be the beneficiaries of this Act would be able to live up to their fullest potential. They would also contribute a great deal to America’s efforts to have the highest number of graduates in the globe by the year 2020, which is something very important if America is to remain in the increasingly competitive international economy. Moreover, the immigration and border security experts will be able to focus on those who pose a serious threat to the security of America because this legislation provides a firm but fair way of dealing with innocent children brought to America at a young age so that the Department of Homeland Security can dedicate more of its resources to detaining and deporting criminals and those who pose a threat to America. It is further stated that this legislation would require the responsibility and the accountability of the young immigrants who are applying to change their status. These young people would have to meet several requirements such as: having entered the country when they were under the age of sixteen; they have to undergo a rigorous criminal background check; and being responsible for the fees to cover the costs of processing their applications.

The opponents of this legislation, such as Mayorga, E and Picower, B (188) claim that it will only encourage more students to immigrate illegally and that applicants would just use it to petition on behalf of their relatives who are in their home countries. This claim is not true because those involved in the process of naturalization will not be able to petition for their relatives until such a time as they have met all the requirements stated in the DREAM Act, and this is not a guarantee. The opponents of this legislation further claim that it would result in the use of taxpayer’s money being use to subsidize student loans and grants for those who are registered through the DREAM Act. This claim has also been found to be untrue because those registered under this act will not be eligible for any federal funding towards their studies.

In conclusion, I agree with the DREAM Act and all it stands for because it is one of the noblest actions taken by our politicians in modern times. It sets out to correct the injustices that have been committed against those young immigrants who were brought to the country as young children and have lived in America for most of their lives. It sets out steps through which they must go in order to attain full citizenship and in doing so, they will finally be able to call themselves Americans, for that is exactly what they are. As a world leader, the United States should lead the other countries in the world by example, and the enactment of such a just and tolerant legislation as the DREAM act would greatly boost its reputation on the world stage. Furthermore, because the United States is a country founded by immigrants from Europe and later from all over the world, it would not be appropriate to deny others, even if they come generations later, to gain the same opportunities that we have gained. We should display the same tolerance that we preach to other nations to display towards their people and not react to immigrants in the same way that we have done recently, that is, making their lives hard and deporting them. By showing this tolerance, ours would truly be the greatest nation in the world.

The Causes of Global Poverty and Inequality

Poverty means the shortage of human basic needs such as clothing, food, and shelter, and today it haunts many people across the world and very little has been done or is being done to curb it. It comes about as a result of inequality, which is the gap between the rich and the poor with the latter receiving the most negative effects. In this paper, we shall discuss the causes of poverty and inequality and how they affect the majority of the people in the world, most of them in the developing countries (Haughton, 2009).

Poverty is a very common state that can be found among most of the world’s people and countries. The most common belief on the causes of poverty is that the poor people themselves are to blame because they are either lazy or that they make poor decisions. Furthermore, their governments are also blamed for pursuing policies that actually harm the successful development of their people. There are however more deeper and global causes of poverty which are rarely discussed because their effects are mostly indirect. There are behind the rising connectedness promised by globalization are those decisions, economic policies and practices which are typically influenced or formulated by the rich and powerful. Such people can be the leaders of the very rich countries, or the heads of multinational corporations and institutions and in the face of such great external pressure, the governments of poor countries and their people are often powerless and as a result, a few get wealthy while the majority continue to struggle with or fall into poverty (Clapp, 2010).

The institution of reductions in the expenditure for health, education and other vital social services around the world has resulted from the structural adjustment policies prescribed by the major international financial institutions as conditions for loans and repayment and in addition, the governments of developing countries are required to open up their economies to compete with the more powerful and established nations. In order to attract foreign investment, poor states have entered a race in a bid to see which country can provide lower standards, reduced payment and inexpensive resources and this has increased poverty and inequality for most people in these countries. This system is the basis upon which globalization is founded and as a result, it maintains the historic unequal rules of trade between trading partners (Pogge, 2008).

Around the world, whether in affluent or in impoverished nations, poverty has always been present and currently in most nations, the space linking the affluent and the poor is quite high and is continuing to widen. The causes of inequality are numerous and they include a lack of individual responsibility, bad government policy, exploitation by people and businesses with power and influence, among others and many people feel that the high levels of inequality will affect social cohesion and may lead to problems such as increasing crime and violence (Minkova, 2011).

Food aid, when not given to a country for emergency relief, can actually be very destructive on the financial system of the nation that is receiving this aid and it may contribute to an increase of the hunger and the poverty that will be experienced in the long term. Free subsidized and cheap food that are beneath the market prices at the time undercut farmers who would not be able to compete and would be driven out of their source of livelihood and into the jaws of poverty, further increasing the share of the market for the larger producers in the United States and in Europe (UNRISD, 2010).

We often hear from the leaders of the rich countries telling the governments of poor countries that aid and loans will only be given when they show that they are stamping out corruption, but while that definitely needs to happen, the rich countries themselves are often in the largest forms of corruption in these poor countries and most of the economic policies they prescribe have further increased the problem. The ending of corruption in developing countries should be made a high priority in order to swiftly decrease the poverty and inequality within them (Ahmed, 2007).

Overpopulation has been named as one of the major causes of poverty especially in developing countries. Excessively high population densities put stress on available resources because only a certain number of people can be supported by a given area of land and that number depends on how much food and other resources the land can provide and this can be seen in such densely populated areas as India and in some African countries (Fields, 1980).

Many experts agree that the actions of the colonial powers in their former territories during colonialism is the reason behind much of the unbalanced distribution of resources in the world economy and in many developing countries; the problems of poverty are massively felt by their populations. In the recent times, most of these former colonies have tried to build their economies through the introduction of industry and technology but many of these countries lack the necessary raw materials and the knowledge and skills gained through formal education and training (Allen, 2008). These countries also lack the infrastructure necessary for development such as transportation systems and power generating facilities and because the infrastructure is a necessity for the establishment of industry, these developing countries must heavily rely on trading with the developed countries for processed goods, most of which they cannot or can barely afford. Developed countries continue to practice a form of colonialism known as neocolonialism because the wealth of these countries is established to a large degree on an atmosphere that is conducive for them in trading with the developing countries. They are able to get cheap natural resources from poor counties and these are manufactured by multinational corporations which use low wage workers in their factories and this practice contributes to the dependency of these poor countries while their standards of living are not raised (Perry, 2008).

Some development scholars have identified the colonial history of developing countries as an important creator of the barriers to advancement in poor countries because of a lack of basic infrastructure such as roads and viable means of communication. In many of those countries with a history of colonialism, the colonial powers developed the local economies to facilitate the removal of resources for their own economic growth and development. Even today, this has remained so, with the policies of governments and companies keeping people poor because these policies ensure that global trade benefits the rich and not the poor and as statistics show, the three richest men in the world are richer than the 48 poorest countries combined (Mack, 2009).

In many developing countries, political power is disproportionately centralized so that instead of having a network of political representatives distributed equally throughout society, one major party, politician or region is responsible for the decision making throughout the country and this often causes development problems. For example, in situations where politicians make decisions about things or places they are unfamiliar with, lacking sufficient knowledge about the context to design effective and appropriate policies and programs to facilitate the development of their people. Corruption also accompanies the centralization of power because leaders are not accountable to the people they serve and it inhibits development when leaders help themselves or reward cronies with money that would otherwise have been used for development projects (Narayan – Parker, 2002).

Warfare contributes to more entrenched poverty by diverting scarce resources from fighting poverty to maintaining a military and a good example of this was the 1999 to 2000 war between Ethiopia and Eritrea during which both countries experienced a drought which led to severe food shortages. The governments of these countries were far more interested in fulfilling their territorial ambitions that they invested more in their militaries than in helping their people during the drought. Because of the lack of government support, these people, most of who depend on keeping livestock, were impoverished due to the huge losses of their animals (Tadjbakhsh, 2007).

The negative impacts of environmental degradation are excessively felt by the poor especially in those countries that are developing, who often rely on the various natural resources to meet their basic needs through agricultural production and the gathering of natural resources such as water. Thus, the depletion of such basic natural resources directly threatens the livelihood of those who depend on them because they cannot afford alternatives (Forsyth, 2005).

Social inequality is one of the most entrenched causes of poverty in the world and it stems from cultural ideas about the relative worth of the members of different genders, classes or races, and its main purpose is to maintain the status quo with the dominant group remaining at the top of the hierarchy. An example of this are the policies instituted in Apartheid South Africa by the white dominated government that segregated the white and the black races always giving the former an upper hand in all political, social, and economic matters. This ensured that the Africans remained in relative poverty compared to their white counterparts (Padayachee, 2006).

In conclusion, as we have seen in this paper, poverty is a reality among the majority of the world’s population. It has many causes some of which we have looked at and all of these causes of poverty are within the human means to solve. However, most of the people with the power to make a difference are either unwilling or unable to do so because they do not want to disturb the status quo as it is. They make the excuse that acquisitiveness is a part of human nature and they use this excuse to exploit the poor people for their own benefit. They further make use of the misguided theory of evolution that states survival of the fittest to justify their ruthlessness without any consideration for the plight of the poor. It is these kinds of perceptions that we should struggle to fight so that we can rediscover our humanity because if we do not, then we are opening the path that will lead to chaos in the future. The most likely scenario that may occur due to the increase in poverty would also be an increase in violence and criminal activities in society. Furthermore, the likelihood of revolutions due to poverty, such as what happened during the French Revolution, would be greatly increased and such events would tear up the fabric of society as we know it today.