Operation Management at Costco

The management of the operations within an organization is extremely essential in bringing about its success. This is especially the case considering that for the most part, organizations in the business world are increasingly getting involved in competition with each other in order to remain competitive. Costco is one of the organizations that seek to bring about the best quality in their services through making sure that its employees are satisfied and this is achieved through the advancement of their interests both within and outside the company. In this way, Costco has been able to develop a good reputation based on its need to promote its image through its employees while at the same time providing the best services possible to its customers.

One of the most fundamental aspects of Costco’s operations is that is seeks to promote the efficiency of their employees. This is especially considering that it seeks to create an environment within which its employees are able to do their best for the sake of the company through the advancement of their interests within it. A good working environment where employees are provided with free reign on how to handle customers on a more personalized basis has made it possible for employees to feel empowered in their work. Taking competitive advantage into consideration is another aspect of management that can ensure Costco’s success (Heizer and Render 71). This has been achieved through the provision of benefits and higher wages to employees for the sake of advancing their quality of life which has in turn made them more loyal to the company. The result is that Costco has allowed for the advancement of its workforce in a manner that brings about the best in them for the sake of promoting its own interests in the market. Moreover, the empowerment of employees can also be considered to be a sound strategy especially considering that other companies tend to deny their employees the right to do what they think is best for the sake of promoting the products that they are selling. The result is that there is a loss of morale among employees who come to believe that they are not valued enough by management to independently bring in customers. This is not the case with Costco which has put employee empowerment at the forefront of its strategy because it has made employees the biggest promoters of its image.

Another aspect of Costco’s operations that can be considered to be important to its success is employment stability. This has been achieved through the promotion of benefits for its employees which include job security as well as benefits in case of disability as well as when suffering from any ailments (Heizer and Render 435). This is an extremely sound strategy because it ensures that employees are completely focused on their work instead of seeking more stable work elsewhere. Works schedules that put into consideration the need to take case of the welfare of employees have also been put in place. This, in addition to the higher wages that they receive when compared to rival companies, has allowed for an increase in motivation to work among employees to such an extent that they give their best to their work. The various constraints to its human resource strategy, such as the need to control the expenditure that it places on its employees when compared to other companies, have been smoothed over by Costco through its making sure that the potential financial problems it might face are outweighed by its excellent performance in the market. This has been to such an extent that a significant number of employees have ended up doing their best in their work in the comfort of knowledge that they will be compensated.

Healthcare benefits are some of the most important aspects of the success of any company because the more generous they are, the more likely that employees will be motivated to increase their performance. This is a lesson that Costco’s management seems to have taken to heart because it has provided extremely generous medical and dental benefits to its employees that have allowed for the advancement of the health of these individuals. Moreover, the extension of these benefits to dependents has made it possible for individuals that work at Costco to increase their output because of the motivation that they have based on the belief that the company cares for their welfare and that of their loved ones. The generous benefits that the Costco has advanced its employees are essential because it has become a major contributor to the success of its operations. The generous incentive system that has been put in place by the company is important because it allows employees to be self-directed in their work (Heizer and Render 438). This means that they are better able to make sure that they work with minimal supervision, which helps the company save both time and money when it comes to dealing with issues concerning employs. Thus, productivity remains high while at the same time making sure that the interests of employees are secured in a manner that advances the interests of the company.

By competing through the advancement of its employees’ interests, Costco has the potential of attracting some of the best individuals in the industry to work for it. The pro-employee policies that it has adopted can be considered to be essential for promoting not only its image as a viable employer, but also shows potential employees that unlike its rivals, it is a generous employer. In this way, it becomes possible to make sure that there is a large pool of potential employees to choose from when the time comes for recruitment. However, while it has the best possible number of potential recruits, there is need for the company to make sure that it only employs those individuals who display the highest ethical standards possible (Heizer and Render 455). This is because when companies in the contemporary world conduct their operations, it is essential for them to observe ethics at all fronts or risk ending up getting their reputations damaged and in turn ending up losing their market share. Therefore, in order to make sure that all operations run smoothly, it is important that Costco, when staffing its operations, is able to advance the highest ethical standards possible so that it can maintain and advance its market share. It is important for there to be an effort to observe ethical standards while at the same time promoting continuous improvement because it is one of the most fundamental ways through which employee commitment to the company can be ensured while at the same time promoting the competitiveness of the company in a way that allows for the creation of better market opportunities than it already possesses.

In conclusion, it is essential for Costco to make sure that it continues to promote the interests of its employees through providing them with incentive packages as well as better working conditions than its competitors. This is one of the most fundamental ways through which it will be able to continue performing well in the market while at the same time attracting the best talent possible to help run its operations. Making employees the center of its operations management is essential because it is these who are the driving force behind their success while at the same time advancing the good name of the company through their efforts to make it a success. It is, therefore, essential for the interests of employees to be protected as a means of making sure that there is a proper means through which operations can be advanced without any glitches as a result of lack of motivation.

Work Cited

Heizer, Jay and Render, Barry. Operations Management: Sustainability and Supply Chain Management. 11th Edition. New York: Pearson, 2013.

Social Inequality

The increasing level of social inequality in the contemporary world is a source of concern within society. This is as a result of the widening gap between the rich and the poor in society to such an extent that the latter have ended up in situations where they cannot hope to improve their lives for the better. Also, the rich, in the process of seeking to attain even more wealth, have ended up forcing making use of those resources that could have been utilized for the purpose of alleviating poverty among individuals in society. Despite the presence of a welfare system, it is not robust enough to cater for the needs of the poor while at the same time helping them rise above poverty. This paper seeks to analyze the nature and causes of poverty as well as the theoretical frameworks that deal with the issue of inequality.

One of the biggest causes of social inequality is that the economy is controlled by the rich, who make use of the available natural resources to become richer. The rich few people in the world have taken over the most crucial means of production; essentially forcing the rest of society to work for them or buy products from them. The result has been that a significant number of those individuals who do not have any means of making a decent living have ended up in a situation where they have been reduced to poverty. The latter tend to have very few opportunities to advance themselves in society, meaning that they have to ensure that they do the best that they can to make ends meet with minimal support (Parish, 1988). The rich, on the other hand, often seek to increase their wealth, but this process often comes at a price because it encourages unequal development in society. There is little that the poor can do to protect their own interests because the rich have both the means and the power to ensure that they are able to attain considerable control over most of the wealth and resources within their own societies. As a result of the power that they derive from their wealth, the rich have the ability to ensure that they not only achieve dominance over the rest of society, but also advance their own interests in a way that is often against the interests of the poor.

The rich often seek to protect their interests through influencing government towards establishing favorable policies to them. The result is that a significant number of rich people in society end up being given access to numerous resources while at the same time not paying their fair share of taxes. This is a situation of concern because government ends up not having enough money that can be used in the establishment of a welfare program that is not only efficient, but also caters for the needs of the poor in diverse circumstances. Furthermore, as a result of the actions of the rich, it becomes extremely difficult for the poor to have the much needed opportunities to bring about their advancement in society. These individuals do not often have the educational qualifications to attain sustainable jobs in the current highly competitive economy; meaning that they have few opportunities to improve their lives. The unequal relationship between the rich and the poor in society can be explained through the Marxist theory, which proposes that society is divided into two distinct groups; the bourgeoisie, who control the means of production, and the proletariat, who provide the labor that the former need to ensure that they exploit the resources under their control. Thus, due to their need to not only maintain their power, but also increase their wealth, the bourgeoisie end up seeking to control even more resources; essentially ensuring that the proletariat remains subservient to them while still providing the labor that they need.

The Marxist perspective, therefore, proposes that social inequality comes about as a result of class struggle, or social conflict. The continuous struggle within the bourgeoisie, as well as the bourgeoisie against the proletariat and vice versa is essential in understanding social conflict because it promotes the idea that the different classes in society are often in conflict with each other. A consequence of this conflict is that a considerable number of individuals in society have ended up sinking into poverty while a very few have not only become rich, but have increased their wealth many times over. The resulting social inequality has created a potential for significant class conflict in the years to come, especially considering an increasing number of individuals have become poorer because of the social policies that have been established to protect the interests of the rich. The potential for conflict has become so great that it is possible that there will be an attempt, as Marx predicted, by the underprivileged classes in society to overthrow the rich in order to establish a just society. In most communities within the United States, specifically in large cities such as New York, the differences between the lifestyles of the rich and the poor can be seen through the manner that communities are separated. The rich live in exclusive neighborhoods that are not only secure, but also have all the amenities that they need. The poor, on the other hand, live in an insecure environment that is dominated by crime, low level of essential services, and high incidences of lack of basic needs; a sure sign of the inequality that has become dominant in society.

Additionally, the rise in inequality has led to a reduction in instances of social and economic justice. Social and economic justice is a situation where all individuals in society, no matter their class or status, are able to achieve a relatively high standard of living. Also, it involves individuals being able to ensure that they promote their own interests through having equal opportunities both within a social and economic context. Therefore, in the interest of advancing social and economic justice, the application of the Marxist theory is essential in creating equal opportunities. This perspective is one that promotes social equality where resources are owned by the entire community rather than by individuals. However, only essential property should remain in private hands, which individuals in society to have an equal share in the resources available while at the same time ensuring that individuals have equal opportunities for self development. The availability of equal opportunities would, however, involve taking away the significant power that capitalists hold over society. The nationalization of natural resources is an essential step in making sure that the state remains in the service of all people, without discrimination, rather than supporting the interests of a few people who form the elite. Moreover, in a society where all the people enjoy the available natural resources, social and economic justice can be achieved in a way that prevents the rise of class conflict.

In conclusion, the increase in the level of inequality in the contemporary world can be attributed to the way that a small number of individuals have come to gain control over a majority of the resources in society. Through this control, it has become possible to ensure that they continue further enriching themselves at the expense of both consumers and their workers. Therefore, in order to ensure that there is an end to inequality and the implementation of social and economic justice, it is essential for a Marxist-leaning type of society to be established.

Reference

Parish, R. (1988). Messages from a Welfare Mom. Newsweek.

Governance Networks

Within the last decades of the twentieth century, the concept of governance developed within political studies and the fields related to it. This concept is one that seeks to promote the idea that there is a wide variety of approaches that are required to make sure that there is an understanding of the world and the changing nature of the role of the state within the international system. Furthermore, there is the rise of the belief that governance can be used to promote the idea that the contemporary world is where individuals live in a world where there are a diversity of coexisting networks that are aimed at safeguarding the lives of individuals as well as society in general (Bush, Oosterveer, Bailey, & Mol, 2015). These networks have developed in such a way that ensures that there is the creation of a better understanding of the massive urbanization, globalization, and a diversity of other societal demands that have come about because of the considerable participation of the civil society in everyday life (Fung, 2015). This new knowledge is essential in bringing about an understanding of the way that the world is developing because it allows for the inclusion of the manner that new concepts such as the participation of the civic society has been able to establish a strong public voice in decision making. In this paper, there will be a discussion and analysis of the concept of the governance network and the manner through which it has been able to affect the world.

One of the most significant aspects of the governance network is that it has led to the argument that societies are increasingly becoming fragmented. This is mainly because of the belief that the new demands that are being made on governments has led them towards a shift from the more traditional bureaucratic order to one that is more responsive to the demands of society (Wiesel & Modell, 2014). Such interactive governments have the potential of leading towards the fragmentation of society because it involves a process where there is greater devolution of power in such a way that promotes the achievement of more efficiency when it comes to service delivery. Governance networks have also become critical when it comes to policymaking because the individuals involved in the latter tend to consult with the diverse stakeholders in society before any decisions are made (Bovaird, Stoker, Jones, Loeffler, & Pinilla Roncancio, 2016). The arbitrary decision making processes that was an essential aspect of the bureaucratic forms of government are increasingly being abandoned in favour of more open ones where there is need to seek to achieve the approval of stakeholders before policies are implemented (Denis, Ferlie, & Van Gestel, 2015; Greve, 2015). Furthermore, there has also been an increasing role of the private sector in those aspects of government that were previously the strict domain of the public sector (O'Toole, 2015). Thus, governance networks have become essential means through which to bring about a form of governmental devolution that seeks to enhance service delivery in the most efficient way possible while at the same time reducing the role of government in the process. It has also ensured that the role of government in society has essentially become blurred because the institutions involved in service delivery have their roles increasingly being taken by more specialized entities from the private sector.

The latter collaborative arrangements have made it possible for governments to undertake their tasks in a manner that is more supervisory than active. Governance networks have ensured that there is an increase in the proliferation of governance arrangements either with the private sector or other governments with the aim of bringing about a more efficient achievement of goals (Page, Stone, Bryson, & Crosby, 2015). This is especially the case considering that there are some governance networks which have developed between a local government, other governments, as well as the private sector with the aim of seeking to achieve the best possible results when it comes to undertaking their functions. These new collaborations have essentially made it possible for governance networks to become more common in the contemporary world to such an extent that they have become the norm. It is currently normal for individuals to expect that network arrangements will bring them the services that they need without a complete reliance on their governments to provide the services (Vangen, Hayes, & Cornforth, 2015). Governments have ended up becoming facilitators and guarantors rather than the actual providers of services; meaning that there has developed a necessity that there is the establishment of newer networks to increase efficiency. It has also become possible for a new layer of governance to appear within local governments, with these layers playing a significant role when it comes to the development of strong initiatives aimed at enhancing efficiency while at the same time reducing the role of government (Kapucu, Hu, & Khosa, 2017). The various stakeholders in society have also come to have a say in the management of their own governments and how services are delivered. However, despite this being the case, it is essential to approach governance networks with caution because despite their being widespread, they have not been as widely adopted as expected.

Governance networks have brought about a greater understanding of the role that networks can play in enhancing the role of governments. This is because it involves an understanding of the manner through which the complexity of the multi-governmental landscape has become a necessity in the contemporary world (De Vries, Bekkers, & Tummers, 2016). It is necessary to consider that governance networks have essentially made it possible for there to be the creation of means through which to bring about the interaction between a diversity of actors in society in such a way that promotes the interests of all involved because there is devolution of functions (Borg, Toikka, & Primmer, 2015). Furthermore, it has become possible for these actors to come to terms with each other’s capabilities in such a way that helps to bring about the achievement of means through which to promote the diversification of functions towards the achievement of common goals. Thus, it can be argued that politicians and administrators have become the main actors when it comes to the promotion of societal interests and this has been in such a way that they have come to be seen as the guarantors of public services (Bryson, Crosby, & Bloomberg, 2014; Head & Alford, 2015). However, despite the achievement of this objective, it has become essential to consider that these individuals have gained considerable power over a diversity of functions. This is especially the case considering that these individuals might end up abusing their power to ensure that they serve the interests of their respective organizations or lobbies that sponsored them towards attaining their positions (Howlett & Ramesh, 2016). Therefore, there should be a process where there is the development of awareness concerning the relationships between the actors in various governance networks so that it can be possible to bring about the achievement of greater transparency in the processes that are undertaken.

The term governance network implies that there is a convergence when it comes to a diversity of issues concerning government and the manner through which it is operated. It is necessary to consider that this convergence is one that has taken place in order to meet the needs of society while at the same time promoting a situation where there is the achievement of common goals in as efficient a manner as possible (Lecy, Mergel, & Schmitz, 2014). While there has been considerable debate concerning what exactly governance networks mean, it is pertinent to consider that it is a reality in the contemporary world and has to be understood as such. A body of knowledge and concepts concerning governance networks has grown over the years and this has led to the establishment of means through which an understanding of the term can be understood. One of the most important factors concerning governance networks is that is involves a situation where service delivery and policy are developed and implemented through networks that involve actors that are essentially interdependent. The interdependency between the various actors can be considered to be an essential aspect of promoting the development of the networks that are involved in service delivery (Bryson, Crosby, & Stone, 2015). It is also necessary to stress that it is the actors who make choices concerning the strategies that they have to use in order to find and make solutions to various problems. There are also instances where there is a complexity of interactions and negotiating partners that come about because of the interdependencies that occur between actors (Skelcher & Smith, 2015). Therefore, the different governance networks tend to be quite diverse in their make up because each of them is developed to satisfy a large number of unique needs (Van den Hurk & Verhoest, 2015). The variety of perceptions and strategies that they have to implement requires that there is the achievement of unique problem solving, service delivery and policy implementation initiatives at all times to ensure efficiency.

In conclusion, the governance network approach is one that stresses the need to consider the outcomes of the implementation of different policies and service delivery. A consideration of the outcomes ensures that there are initiatives aimed at promoting the development of the most pertinent policies possible while at the same time including the most qualified actors to undertake the diverse tasks involved in bringing about the achievement of results. The development of an understanding of needs is critical for the creation of institutionalization of the relationships that come about between the different actors. These create patterns that are necessary for the promotion of effective working relationships between actors that make it possible to bring about strong service delivery initiatives. The relationships involved are those that ensure that there is the establishment of social networks that are necessary for not only bringing about better service delivery, but also ensures that there is the establishment of a basis upon which the various actors can work together in other networks. Finally, the relationships between the various actors ensures that there is the emergence of rules that promote the regulation of the behaviour within networks; making it possible for actors to explore new content that might enhance their efficiency while at the same time helping in enhancing the quality of services being delivered.

References

Borg, R., Toikka, A., & Primmer, E. (2015). Social capital and governance: a social network analysis of forest biodiversity collaboration in Central Finland. Forest Policy and Economics, 50, 90-97.

Bovaird, T., Stoker, G., Jones, T., Loeffler, E., & Pinilla Roncancio, M. (2016). Activating collective co-production of public services: influencing citizens to participate in complex governance mechanisms in the UK. International Review of Administrative Sciences, 82(1), 47-68.

Bryson, J. M., Crosby, B. C., & Bloomberg, L. (2014). Public value governance: Moving beyond traditional public administration and the new public management. Public administration review, 74(4), 445-456.

Bryson, J. M., Crosby, B. C., & Stone, M. M. (2015). Designing and implementing cross‐sector collaborations: Needed and challenging. Public administration review, 75(5), 647-663.

Bush, S. R., Oosterveer, P., Bailey, M., & Mol, A. P. (2015). Sustainability governance of chains and networks: a review and future outlook. Journal of Cleaner Production, 107, 8-19.

De Vries, H., Bekkers, V., & Tummers, L. (2016). Innovation in the public sector: A systematic review and future research agenda. Public Administration, 94(1), 146-166.

Denis, J. L., Ferlie, E., & Van Gestel, N. (2015). Understanding hybridity in public organizations. Public Administration, 93(2), 273-289.

Fung, A. (2015). Putting the public back into governance: The challenges of citizen participation and its future. Public administration review, 75(4), 513-522.

Greve, C. (2015). Ideas in public management reform for the 2010s. Digitalization, value creation and involvement. Public Organization Review, 15(1), 49-65.

Head, B. W., & Alford, J. (2015). Wicked problems: Implications for public policy and management. Administration & Society, 47(6), 711-739.

Howlett, M., & Ramesh, M. (2016). Achilles' heels of governance: Critical capacity deficits and their role in governance failures. Regulation & Governance, 10(4), 301-313.

Kapucu, N., Hu, Q., & Khosa, S. (2017). The state of network research in public administration. Administration & Society, 49(8), 1087-1120.

Lecy, J. D., Mergel, I. A., & Schmitz, H. P. (2014). Networks in public administration: current scholarship in review. Public Management Review, 16(5), 643-665.

O'Toole, L. J. (2015). Networks and networking: The public administrative agendas. Public administration review, 75(3), 361-371.

Page, S. B., Stone, M. M., Bryson, J. M., & Crosby, B. C. (2015). Public Value Creation by Cross‐Sector Collaborations: A Framework and Challenges of Assessment. Public Administration, 93(3), 715-732.

Skelcher, C., & Smith, S. R. (2015). Theorizing hybridity: Institutional logics, complex organizations, and actor identities: The case of nonprofits. Public Administration, 93(2), 433-448.

Van den Hurk, M., & Verhoest, K. (2015). The governance of public–private partnerships in sports infrastructure: Interfering complexities in Belgium. International Journal of Project Management, 33(1), 201-211.

Vangen, S., Hayes, J. P., & Cornforth, C. (2015). Governing cross-sector, inter-organizational collaborations. Public Management Review, 17(9), 1237-1260.

Wiesel, F., & Modell, S. (2014). From new public management to new public governance? Hybridization and implications for public sector consumerism. Financial Accountability & Management, 30(2), 175-205.

Gasland (2010)

One of the most espoused ideals of this century has been environmentalism, which can be defined is a philosophy that is based on the concept of conserving the natural environment through addressing issues that concern various human activities. It is a fact that most of the activities which are addressed by environmentalism involve the pollution of the environment through industrial activities such as the extraction of natural gas by oil and gas companies. The documentary Gasland is an attempt to create awareness, within the American public, of the effects of that attempts made by gas companies to extract natural gas in rural America have on the environment. This film has created a new awareness in the public concerning the devastating environmental effects of hydraulic fracturing, which is one of the means through which natural gas is extracted in the mainland United States. This means of gas extraction, also known as fracking, is done through the injection of chemicals and massive quantities of water at high pressures with the intention of cracking open the rocks deep beneath the surface and as a result releasing the natural gas. This method has helped in the emergence of the natural gas boom across the United States, but as the film shows, there has developed proof that this method of gas extraction is leading to the contamination of water as well as leaking into homes. The film works towards the establishment of means through which these issues concerning the conservation of the American environment can be discussed and viable solutions for the environmental problems caused by these activities by oil and gas companies can be found. It can further be said that this film deals with the preservation, the development, and the return of the American natural environment to the state in which it was previously.

The film’s director, states that his father received a proposal from a gas company for the latter to be allowed to drill for natural gas in his property using the fracking method. At this time, this was a new method which can be considered to be extreme for the purpose of extracting natural gas through the pumping of water and toxic chemicals into the ground at extremely high pressures to fracture the rock formations that contain the natural gas. In the film, it is stated that previously, the main method that was used for the extraction of natural gas was through the drilling into the ground until a pocket of gas was hit and this gas was captured as it rose. The director states that one of the reasons why he started making the film is because he started to wonder how it was that all of a sudden his family and their neighbours were in a gas drilling area when prior to this, their area had never had any kind of industrial development. In the film, the fact that the fracking method is causing environmental damage is worrisome and disturbing and it is because of the use of these methods by the various gas companies that the beautiful, scenic and amazing landscape of the United States is being destroyed. The director of the film, who also serves as the narrator, states that at least fifty percent the state of New York as well as sixty percent the state of Pennsylvania is being leased to gas companies for the purpose of drilling for gas using the fracking method. Throughout the film, it is seen that the land in the United States is being handed over to gas prospecting companies at an alarming rate with many of the individuals doing so, mostly farmers, not realising that doing so is resulting in the destruction of their natural environment.

One would say that the film is mostly made up of a series of interviews and it can be considered to be one which shows profound respect for the people from different places across the United States that are interviewed. It can further be said that because of the respect that is displayed by the film’s director that the individuals who are interviewed are so forthcoming with the information that they have to give concerning the effects of fracking on their environment as well as its direct effects on their lives. The film is able to show how the use of the fracking method has come to put those areas in which it is used in an environmental crisis and the people who are affected the most by this environmental degradation seem to be more than willing to talk to the film’s director about their problems. The means through which the director seems to conduct his interviews seem to be down to earth and this not only engages the individuals being interviewed but also the audience of the film as they become more interested and engaged in the arguments being made. One of the factors which make the film more interesting to the viewer and is able to pass its message across is that the director is able to incorporate what the individuals who are being interviewed are saying and doing into the main story of the film and this enables the director to pass his message across from the direct perspective of those individuals affected. It seems that the main aim of the film’s director is to ensure that he attempts to find the most profound factors about fracking that have come to affect the interviewees and because of this, his attempts are rewarded by a straightforward response to his enquiries.

Music plays an important role in the film because it comes to affect the way in which the message of the film is being relayed. Music is what makes the message of the film gain some sort of character because it enables the viewer to recognise the gravity of the message as it is being passed across. It is what gives the interviews in the film the desired effect when the director attempts to make a point concerning the fracking method of gas extraction. Music is also used by the film’s director to display the irony behind the various statements made by some of the leaders in the gas industry as well as some of the politicians who are in full support of the use of the faracking method in the mainland United States. The power of music in this film is so profound that its audience cannot help it but be engrossed in the subject matter of the film without any more prompting. It can be said that music is the soul of this film and it is meant to get in touch with the emotions of its audience as it is used to display the various areas where the director is heading. For example, one hears music from Preston Reed as the director heads into Colorado and this provides the setting for the material which he would like for his audience to hear and absorb.

When one watches this film, he will come to the conclusion that while many environmentalist groups profess to fight for the conservation of the American environment since many of them tend to defeat their own purpose for doing so. One of the reasons why the environmentalist groups have been defeated in their purpose is because they do not have enough awareness concerning how the use of the fracking method of natural gas extraction is slowly but surely destroying the environment of the United States. This is the reason why Gasland is extremely important since it helps to raise awareness concerning the destruction of the environment by gas companies starting from his home state of Pennsylvania to the rest of the United States where gas companies are either involved or propose to get involved in the extraction of natural gas using the fracking method. While it is a fact that most of the gas companies have come out to vehemently oppose the film, making use of all the public relations strategies available to them to discredit its validity, it is the duty of all the environmentalist groups in the country as well as all the people concerned to oppose the use of fracking method by the gas companies as well as ensure that the government is pressured into passing laws which regulate these companies.

In conclusion, it can be said that the idea that gas companies retain control of their own matters concerning drilling especially when these methods endanger the environment has come to be challenged in the film since at present, actors other than governments have come to be key players in the environmental issue. There has been a shift from having regional meetings to implementation of initiatives that are localized and formation of partnerships in order to be able to combat the causes of environmental problems that affect various countries. The time has come when the government should shift their strategies to involve those tactics which are able to enhance the prospects that will implement effective management of the environment starting from the local level of the society.

Facts about the Theory of Demand

Demand is the economic theory that explains a consumer’s desire and readiness to pay a price for a precise good or service. Normally, the price of commodities and services increase as their demand dwindles while the price decreases when there is a high demand for them. According to Taylor and Weerapana (53), the term demand is a relationship between two economic variables namely: the price of a particular good; and the quantity of that good that consumers are willing to buy at the price during a specific time period. It describes how much of a good consumers will purchase at each price and it can be represented by a numerical table or by a graph. As the price of goods and services rise, the quantity demand by consumers goes down. Siddiqui (35) further describes demand as that effective desire which can be satisfied meaning that desires are simply imaginations. It is required that the demand commodity should be available at a certain place, time, and price. Demand must satisfy the following requirements; desire for the specific commodity; sufficient resources to purchase the desired commodity; willingness to spend the resources; and the availability of the commodity.

Demand can also be used to measure or predict the quantity of commodities and services which the buyers would be motivated to buy in a market at a given time and at a given place. The changes in the price of the commodities that are related to that which a consumer uses affects the market demand for it and an example of this would be the price of margarine (which the consumer does not normally use) is much lower than the price of butter (which the consumer normally uses). Inevitably, the consumer will decide to go for the cheaper product although their preference lies with the more expensive one. The demand for certain commodities may also be affected by the changes of the income of potential buyers, for example, if the income of a buyer is reduced, then he will opt to purchase cheaper commodities in line with his diminished income; but if the income is increased, then the buyer’s demand for the same product at higher prices will increase significantly. The future expectations of buyers almost always have a tendency of influencing the market demand of a product and this is usually displayed by considering the income security of potential buyers. If a potential buyer is confident in his belief that his future income will be stable, the he is more likely to spend more in buying both the commodities that he needs and wants. If however his future income is very insecure, then he is most likely to keep most of his money in savings in anticipation of a bleak financial future than spending it on commodities.

The demand schedule is a table that shows the quantity of demand of a good at the various price levels and it is a very important feature within the market because it helps to predict the future trends in the demand of commodities. In this way, given the price level, it is easy to determine the expected quantity demanded. A demand schedule is normally used alongside a supply schedule and these show the amount of certain goods that can be supplied to a market or markets at given price levels at various times and it is used to indicate that there is an inverse relationship between the price and the quantity demanded. Lipsey and Chrystal (40) state that a demand schedule is one way of showing the relationship between quantity demand and price. It is a numerical table that is used to show the quantity of goods that will be demanded at some selected prices.

Hoag and Hoag (59) state that the law of demand shows an inverse relationship between the price of a good and the quantity demanded of that good. When the value of a commodity goes in a certain direction, the amount of the equal commodity that is in demand goes in the opposite direction. As the price rises, less is purchased and this is indicated by the quantity demanded decreasing. There is a clear evidence of the law of demand at work in our daily lives. For example, when postage rates increase, then fewer Christmas cards are sent because the quantity demanded has fallen as the price has risen. When retail stores advertise sales, then these sales serve to increase the quantity demanded by lowering the price. The buyer response to higher fuel and energy prices will lead to smaller and more energy efficient cars, and in the homes, cooler temperatures and sweaters because there is a lower quantity demanded of energy at the higher price.

One reason why a consumer buys more of a good as the price falls is that the good becomes an attractive substitute for other goods and this encourages the consumer buys more of the good and consequently less of the other goods related to it. As the price of a good goes down, the consumer is able to purchase more of this good than he could before the price fell. Therefore, the consumer appears to have more income but this is not the case because it should be noted that the amount of money that the consumer actually has remains unchanged yet the purchasing power of the money increases as the price falls. The law of demand tells us that people have a tendency to respond to the price changes of given commodities and learning this would be helpful for a trader in fixing the prices of his commodities because he knows how much the demand for that particular commodity will fall if the price is raised beyond a certain level. The law of demand also helps the government in the setting of taxes on various commodities by analyzing the effects of taxes on the demand of these commodities in the market and adjusting the tax rates so that they may be more to the government’s advantage. It is also a very important factor in the planning of when and where to sell commodities due to their demand.

There are however some exceptions to the law of demand and an example of this is the inability of this law to explain why when the price of some goods increases, their demand also increase, and when their prices fall, then their demand decreases with this fall. A good example of such goods are precious stones and metals whose demand will continue to be high when their prices are high and the demand for them falls when their prices fall. A lot of people out of ignorance consider goods of cheaper prices to be of low quality and they buy it less, but when the prices of such commodities become high, then there is a tendency among these buyers to buy more of this commodity.

The law of demand further does not work when in anticipation for the rise of the price of goods; consumers begin to buy more of these goods even after there is an increase in the price of these goods in the present time. Similarly, if the prices are expected to fall in the foreseeable future, the consumers will buy less of these goods even if the costs of these commodities have become even lower in the present. Moreover, the law of demand does not work during the times of war or emergencies because if there are fears of a food shortage, then consumers will buy more food commodities for the purpose of hoarding and building stock. On the other hand, under certain situations, during an economic depression when prices are continuously falling, people tend to postpone their demand and thus buy less at lower prices.

In order to define marginal utility, we shall first define what utility is. Utility is the way defined by market participants of measuring gratification or contentment and how these relate to the decisions that people make while purchasing goods and it measures the advantages or disadvantages of consuming certain goods or services. Lipsey and Harbury (39) state that marginal utility is defined as the difference in utility arising from a change in the rate of consumption per period of time. Marginal utility is the added fulfillment that consumers gain from consuming additional units of commodities or services. It is an essential economic concept because the economists make use of it to determine how much of an item potential consumers will buy. The marginal utility is positive when the consumption of a bonus item increases the total utility while marginal utility is considered to be negative when the consumption of the bonus item decreases the total utility.

Mishra (20) defines the demand curve as the graphic illustration of a demand schedule depicting the relationship between the price of certain commodities and the amount of these commodities that buyers are able and willing to but at a given price. Demand curves are used to approximate the conducts in the market and these are often combined with supply curves to approximate the price at which sellers are willing to put up for sale the equivalent quantity of goods as buyers are willing to buy. The demand curve represents the highest quantities for every unit of time that consumers will take at various prices. The demand curve is used to show the relationships between the diverse quantities demanded at diverse prices.

There are various factors which affect the demand of commodities in the market and this is elaborated by Siddiqui (43) who states that an increase in the number of buyers will increase the demand for the good, for example, the demand for land increases as the population increases. An increase in the price of a commodity expected in future increases the demand in the present while a decrease in the same decreases the current demand. For example, when a good is temporarily put on sale, the people stock up on the good with the expectation that the good will no longer be in the market in the near future. Demand can shift due to the changes in taste over time, for example, the demand for breakfast cereal may possibly be very high in the morning but its demand may turn out to be very low at night. Furthermore, changes in quality also affect demand, for example, CDs cost more than cassettes because the music in CDs is of a higher quality than that in cassettes.

Siddiqui (52) states that elasticity of demand is a measure of the relative change in the amount purchased in response to any change in price or a given demand curve. Price elasticity deals with how sensitive the demand for a certain commodity is to a change in the products own price and in relation to this, there are several factors which determine the elasticity of a product or service and some of these include the following: the more the number of close substitutes for a good in the market, the more elastic is the demand for a product because consumers can more easily switch their demand if the price of one product changes relative to others in the market. Furthermore, there may be significant transaction costs involved in switching between different goods and services and in this case, demand tends to be inelastic, for example, cell phone service providers may decide to include fine sections in contracts or may insist on twelve month contracts being taken out. Goods and services that are considered by consumers to be necessities tend to have a more elastic demand because the said consumers can still survive without luxuries when their financial plans are stretched to their limits. Demand has a tendency to be more price elastic the longer consumers are allowed to respond to a price change by varying their purchasing decisions because it takes time for consumers to notice and to respond to price fluctuations.

References

Hoag, Arleen J & Hoag, John H. Introductory Economic. Singapore: World Scientific, 2006.

Lipsey, Richard G. Economics. Oxford: Oxford University Press, 2007.

Mishra, Sasmita. Engineering Economics and Costing. New Delhi, India: PHI Learning, 2009.

Siddiqui, S.A. Managerial Economics and Financial Analysis. New Delhi, India: New Age International, 2006.

Taylor, John B. & Weerapana, Akila. Economics. Andover, United Kingdom: Cengage Learning, 2007.