Stress, Anger, Time and Conflict Management Essay

1. Avoid unnecessary stress. Learn how to say â€Å"no†. Avoid people who stress you out. Take control of your environment. Avoid hot-button topics. Pare down your to-do lists. 2. Alter the situation. Express your feelings instead of bottling them up. Be willing to compromise. Be more assertive. Manage your time better. 3. Accept the things you can’t change. Don’t try to control the uncontrollable. Look for the upside. Share your feelings. Learn to forgive. 4. Adapt to the stressor. Reframe problems. Look at the big picture. Adjust your standards. Focus on the positive. B. Stress Reduction Tips 1. Nurture yourself Set aside relaxation time. Connect with others. Do something you enjoy every day. Keep your sense of humor. 2. Healthy stress reducers Go for a walk. Spend time in nature. Talk to a supportive friend. Sweat out tension with a good workout. Do something for someone else. Write in your journal. Take a long bath. Play with a pet. Work in your garden. Get a message. Curl up with a good book. Take a yoga class. Listen to music. Watch a comedy. 3. Adopt a healthy lifestyle. Exercise regularly. Eat a healthy diet. Reduce caffeine and sugar. Avoid alcohol, cigarettes, and drugs. Get enough sleep. C. Unhealthy Ways of Coping with Stress Smoking Self-medicating with alcohol or drugs Using sleeping pills or tranquilizers to relax Overeating or eating too little Sleeping too much Procrastinating Withdrawing from friends, family, and activities Filling up every minute of the day to avoid facing problems Anger Management Redford Williams’ 12-Step Approach for Dealing with Unconstructive Anger 1. Maintain a â€Å"Hostility Log†. 2. If you do, acknowledge that you have a problem managing anger. 3. Use your support network. 4. Use anger management techniques to interrupt the anger cycle. Pause. Take deep breaths. Tell yourself you can handle the situation. Stop the negative thoughts. 5. Use empathy. 6. Laugh at yourself. 7. Relax. 8. Build trust. 9. Listen. 10. Be assertive. 11. Live each day as if it is your last. 12. Forgive Time Management and Conflict Management A. How to Manage Your Time 1. Create a schedule or to-do list. Write down deadlines for accomplishing certain tasks. 2. Plan to tackle difficult projects at the times of day when you are most alert. 3. Schedule time for people, including time for yourself. Create some personal time by waking up half an hour earlier or going to bed half an hour later than usual; plan a weekly date with your spouse, or arrange to have lunch with friends. 4. Prioritize what you need to accomplish. â€Å"Pareto’s principle† states that 80 percent of your accomplishments come from 20 percent of your effort, so think strategically: Locate and isolate this valuable 20 percent, then focus your efforts on the tasks that promise the greatest rewards. A. How to set priorities Priority 1: Red: Today/Tomorrow (Day) Priority 2: Orange: 3-7 Days (Week) Priority 3: Yellow: 2-3 weeks (Month) Priority 4: Later this year†¦(Wish List) B. Be realistic when assigning priorities to your tasks. C. Start work on any red tasks first – however awful, boring or frightening they are. The trick to keeping calm and balanced is simple: forget about all the complex planning. Work out what truly needs to be done next and do it. When it’s done, repeat the procedure. D. Start on the orange task next. Don’t even think about any yellow ones until all the reds and oranges are done. If any new tasks arrive, give them a color and put them on the list. Next morning, make a new list and reallocate the tasks into the colors. E. Keep track of your progress. After one week, take 15 minutes to go through the yellow (month) items. Cross all those that have solved themselves off the list. Do the same for those  that you can now see were never important anyway. You’ll be amazed how many there are. Underline those you can remove by: delegating them, using technology rather than your time and attention, or creating a routine for handling them so you can delegate or pass them to someone else. Make a red item to deal with them right away by whatever means is appropriate. 5. Delegate as many chores as you can. Hand out projects to subordinates at work. 6. Learn to say no to nonessential demands on your time. Don’t volunteer for a committee if you don’t have time, and decline invitations to events you don’t have time to attend. 7. Overcome procrastination. Don’t procrastinate. Setting aside high-priority items just because you don’t like doing them, or are boring, etc will obviously make keeping a to-do list useless. Grind through your to-do list and finish all red items first and foremost no matter how boring they are. After completing these daunting tasks, you can feel relieved. They won’t hang over your head and cause you stress later. 8. Avoid perfectionism. Don’t waste time obsessively perfecting a task when you could better spend the time on something else. B. Time Management for New Supervisors a. Maintain a calendar of appointments and keep it with you at all times. b. Write things down so you don’t forget. Maintain a â€Å"To do† list and prioritize the entries. c. Set realistic deadlines for yourself. Then, promise small and deliver big. If you think your team can get a project done by noon, promise it for 2:00 p.m. but deliver it at noon. d. When you are on a deadline, use your voicemail. Filter out all but essential telephone calls. e. Use e-mail instead of the telephone whenever possible. This will avoid the tendency people have to talk longer than is necessary to convey their information. f. With paperwork, practice the principle of â€Å"Do  It Now.† g. Always plan to arrive at scheduled appointments ten minutes early. It almost always takes longer to get there than you think. h. Practice gently helping people get to the point when they are talking to you. Save superfluous chatting for excess time after work. i. Hold impromptu and unscheduled â€Å"drop-in† meetings standing up. This will convey a sense of brevity to the person who wants some of your time. j. When you call a meeting, specify both a starting and an ending time. This will keep participants on track and on schedule. k. Get rid of unnecessary paper clutter. More than 80 percent of the paperwork filed is never used again. Ask yourself if you really need it before deciding to keep paperwork. C. TIME MANAGEMENT FOR SUPPORT PERSONNEL I. What My Boss Could Do that Would Help Me Perform My Job More Effectively 1. Discuss my job priorities with me so that we both have the same understanding of how I should be distributing my time and effort over the various activities of my job. 2. Give advance warning when big jobs are coming up so I can prepare for them. 3. Let me know when you are leaving the office, where you are going, and when you will return. 4. Write messages legibly. 5. Draft or outline memos so that multiple revisions are minimized. 6. Let me know what your priorities are so I can help you with the most important items. 7. Discuss my job, my job duties, and my career with me. 8. Call in or send email messages while on a trip for important messages that have come in while you’re away. 9. Have us meet each morning to discuss projects and priorities of the day. 10. Let me show you our file system so you can retrieve files yourself. 11. Try to give me all parts of a big job at once rather than in bits and pieces. 12. Show a little appreciation when I do a good job. 13. Get your own coffee when I am swamped with work. 14. Let me set up a message center where you can pick up your mail and other things. 15. Protect me from other managers. If I can’t count on you then I can’t count on anyone. 16. Give me a list of your appointments so I can anticipate things to do and prepare. 17. Give me clear instructions and directions and precise assignments. 18. Let me know about changes in your schedule, meetings, appointments, etc. 19. Please don’t refer to me as â€Å"just my staff† or â€Å"my gal† or â€Å"my girl.† 20. Provide me with some career guidance; I am ambitious just as you are. 21. Don’t make me a clerk; I want to and can do more. 22. Attend a time management for managers workshop. 23. Make a daily â€Å"to do† list and share it with me so I can anticipate how to plan my day. 24. Ask for and at least consider my ideas. I am not stupid and I want to contribute more. 25. If multiple bosses, work a priority system for the work that you all give me and let me administer your system rather than force me to make priority decisions upward for all of you. 26. Give the larger projects and jobs as early in the day as possible so I have time for completion. 27. Don’t spend so much time on chit-chat with me. It prevents me from doing my job. 28. Please don’t question or challenge everything I do. I want to be responsible and have the responsibility of my job. 29. When you communicate, please be specific. 30. Let me know how you want callers and visitors screened. We can work a system that will benefit both of us. 31. Don’t have me file a lot of unnecessary papers. Let’s toss out stuff that we both know we will never refer to again. 32. Give me reasonable deadlines for jobs. It really hurts to rush to meet your deadlines and then see those jobs sit on your desks for days (or weeks) untouched. 33. Don’t be a perfectionist. It takes too much of your time and mine. 34. Set up a follow-up system so we can both stay on top of things. 35. Let’s try and agree on time frames for jobs and projects. 36. Try to block certain times during the day for meetings rather than have them chop up the both of us continuously. 37. Trust me with confidential information that I need to do my job effectively. 38. When we are talking, please try to listen better. II. What I Could Do As A Support Personnel that Would Help My Boss to Work More Effectively 1. All the things under Item I would help the boss to work more effectively. 2. Let the boss know where I am at all times. 3. Sort mail of boss into three groups: critical, important, routine and toss out junk mail. 4. Help boss to maintain a daily â€Å"to do† list. 5. Keep my own daily â€Å"to do† list and coordinate with list of boss. 6. Remind boss of upcoming meetings, appointments, lunches, etc. 7. Screen and always try to help callers and visitors so at least some of them will not interrupt the boss. 8. Update my skills in the use of present technology in my job, including my time management skills. 9. Answer routine correspondence or outline or draft answers for approval of boss. 10. Ignore petty and superficial annoyances. 11. Schedule staff visitors so boss is not chopped up all day. 12. Schedule vendor visitors; require an appointment and suggest certain days for batching. 13. Work out a system for interrupting boss stuck with long-winded callers or visitors. 14. Make up file out-card system so boss knows where all files can be located. 15. Take the initiative and make suggestions such as form letters, forms, to help boss. 16. Keep equipment used by boss in proper condition. 17. Help boss to organize and maintain a neat work area. 18. Function as a sounding board for ideas of boss. 19. Keep pending and follow files to prevent procrastination and crises for boss. 20. Keep boss informed through progress reports of long-term projects I am working on. 21. Be sure supplies used by boss are always available. 22. Help boss by making most of the arrangements for meetings held by boss. Conflict Management What is conflict? Conflict is a natural disagreement resulting from individuals or groups that differ in attitudes, beliefs, values or needs. It can also originate from past rivalries and personality differences. Other causes of conflict include trying to negotiate before the timing is right or before needed information is available. Common causes of workplace conflict Limited resources (You have your needs and I have mine.) Incompatible goals (I want this and you want that.) Role ambiguity (Who is responsible for what?) Different values (You and I have different beliefs.) Different perspectives (You and I see things differently.) Communication problems (What do you mean?) Important things to know about conflict: Conflict is inevitable; Conflict develops because we are dealing with people’s lives, jobs, children, pride, self-concept, ego and sense of mission or purpose; Early indicators of conflict can be recognized; There are strategies for resolution that are available and DO work; Although inevitable, conflict can be minimized, diverted and/or resolved. Beginnings of conflict: Poor communication Seeking power Dissatisfaction with management style Weak leadership Lack of openness Change in leadership Conflict indicators: Body language Disagreements, regardless of issue Withholding bad news Surprises Strong public statements Airing disagreements through media Conflicts in value system Desire for power Increasing lack of respect Open disagreement Lack of candor on budget problems or other sensitive issues Lack of clear goals No discussion of progress, failure relative to goals, failure to evaluate the superintendent fairly, thoroughly or at all. Conflict is destructive when it: Takes attention away from other important activities Undermines morale or self-concept Polarizes people and groups, reducing cooperation Increases or sharpens difference Leads to irresponsible and harmful behavior, such as fighting, name-calling Conflict is constructive when it: Results in clarification of important problems and issues Results in solutions to problems Involves people in resolving issues important to them Causes authentic communication Helps releases emotion, anxiety, and stress Builds cooperation among people through learning more about each other; joining in resolving the conflict Helps individuals develop understanding and skills Techniques for avoiding and/or resolving subordinate-supervisor conflict: Meet conflict head on Set goals Plan for and communicate frequently Be honest about concerns Agree to disagree – understand healthy disagreement would build better decisions Get individual ego out of management style Let your team create – people will support what they help create Discuss differences in values openly Continually stress the importance of following policy Communicate honestly – avoid playing â€Å"gotcha† type games Provide more needed data and information. Develop a sound management system Causes of subordinate-supervisor conflict: Trying to be administrators; overstepping authority Making promises as members individually Involving themselves in labor relations Not doing their â€Å"homework† and failing to prepare for meetings Not following procedures for handling complaints Not keeping executive session information confidential Failing to act on sensitive issues Failing to be open and honest with the supervisor Making decisions based on preconceived notions Not supporting the supervisor – lack of loyalty Springing surprises at meetings Having hidden agendas Why conflict resolution skills are important To improve employee performance To maintain good customer service/satisfaction To ensure employee safety To protect employee health To reduce absenteeism and tardiness How conflict should be handled Determine how important the issue is to all people involved Determine whether all people involved are willing and able to discuss the issue in a positive manner Select a private place where the issue can be discussed confidentially by everyone involved Make sure that both sides understand they are responsible for both the problem and the solution Solicit opening comments from both sides. Let them express their concerns, feelings, ideas, and thoughts, but in a non-accusatory manner Guide participants toward a clear and specific definition of the problem Encourage participants to propose solutions while you listen carefully. Examine the problem from a variety of different perspectives and discuss any and all solutions proposed. Evaluate the costs versus the gains (cost-benefit analysis) of all proposed solutions and discuss them openly. Choose the best solution. Reflect on the issue and discuss the conflict resolution process. Encourage participants to express their opinions as to how the process might be improved. Listening improvement checklist to help resolve conflict Remove all distractions Put the speaker at ease Look directly at the speaker Concentrate on what is being said Watch for nonverbal cues Take note of the speaker’s tone Be patient and wait Ask clarifying questions Paraphrase and repeat No matter what is said, control your emotions How and when conflict should be stimulated Team members always agree with you and tell you only what you want to hear. Team members are afraid to admit they need help or that they’ve made mistakes. Team members focus more on reaching agreement that on arriving at the best decision. Team members focus more on getting along with others than on accomplishing objectives. Team members place more emphasis on being popular than on high job performance and competitiveness. Team members are highly resistant to change. The turnover rate is usually low. Team members avoid proposing new ideas. Communication in conflict situations Communicate the following messages when handling conflicts or potential conflicts: This situation is an opportunity to solve a problem cooperatively. There are guidelines we will follow in handling this situation and these guidelines are†¦ We will not engage in blaming and finger pointing. â€Å"If the horse you are riding dies, get off and find another one.† We will not cling to old ideas that are no longer valid. If you say you will do something, do it. Trust prevents conflict. Conflict Management Strategies When it is used Outcomes Drawbacks Collaboration – results from a high concern for the group’s own interests, matched with a high concern for the interest of other partners. Best strategy when society’s interest is at stake Best approach for managing conflict when it’s aimed at reaching consensus Win/win Helps build commitment and reduce bad feelings Takes time and energy Some partners may take advantage of the others’ trust and openness Guidelines for Reaching Consensus through Collaboration Avoid arguing over individual ranking or position. Present a position as logically as possible. Avoid â€Å"win-lose† statements. Discard the notion that someone must win. Avoid changing of minds only in order to avoid conflict and to achieve harmony. Avoid majority voting, averaging, bargaining, or coin flipping. These do not lead to consensus. Treat differences of opinion as indicative of incomplete sharing of relevant information, keep asking questions. Keep the attitude that holding different views is both natural and healthy to a group. View initial agreement as suspect. Explore the reasons underlying apparent agreement and make sure that members have willingly agreed. Compromise – results from a high concern for the group’s own interest with a moderate concern for the interests of other partners. Generally used to achieve temporary solutions, to avoid destructive power struggles or when time pressures exist. Win some/lose some Partners can lose sight of important values and long-term objectives. Can distract the partners from the merits of an issue and create a cynical climate. When it is used Outcomes Drawbacks Competition – results from a high concern for the group’s own interests with less concern for others. Generally used when basic rights are at stake or set a precedent. Win/lose Includes most attempts at bargaining Can cause conflict to escalate and losers may try to retaliate. Accommodation – results from a concern for the group’s own interests combined with a high concern for the interest of other partners Generally used when the issue is more important to others than to you. Appropriate when you recognize that you are wrong. Lose/win â€Å"Goodwill gesture† Your own ideas and concerns don’t get attention One may lose credibility and future influence. Avoidance – results from a concern for the group’s own interests coupled with a low concern for the interest of others. Generally used when the issue is trivial or other issues are more pressing. Used when confrontation has a high potential for damage or more information is needed. Lose/lose Important decisions may be made by default.

Finance & Strategic Management Essay

Over the past decades the concept of Corporate Social Responsibility (CSR) has continued to grow in importance and significance due to external pressure of diverse stakeholders, and has thereby become more prominent on companies’ agendas (Carroll & Shabana, 2010; Beurden & Gossling, 2008). The concept of CSR has been subject to considerable debate, commentary, theory building and continues research (Carroll & Shabana, 2010). The question, of whether CSR investments result in financial and social benefits that outweigh its costs, is intensively scrutinized in existing literature (Schreck, 2001; Carroll & Shabana, 2010). Adherents of CSR argue that it is in the long-term self-interest of corporations to be socially involved (Carroll & Shabana, 2010; Barnet 2007). The overall logic is that CSR increases the trustworthiness of firms and strengthens the relationships with stakeholders. CSR may further result in decreased transaction costs and thereby improved corporate financial performance (CFP), by decreasing employee turnover, reducing operating costs, as well as functioning as a buffer in disruptive events (Carroll & Shabana, 2010; Barnet, 2007). Barnett (2007) and Schreck (2011) argue that, if the financial benefits of CSR meet or exceed the costs, CSR can be justified as a rational investment. According to Kurucz, Colbert and Wheeler (2008), firms may attain four distinct benefits from engaging in CSR; cost and risk reduction; gaining competitive advantage; developing reputation and legitimacy; and seeking win–win outcomes through synergistic value creation. Critics of CSR typically use classical economic arguments, articulated most forcefully by Friedman (Carroll & Shabana, 2010). Traditionally, the expenditures of CSR are considered an illegitimate waste of resources, which conflict with a firm’s responsibility to its shareholders (Schreck, 2011, Barnet, 2007). According to Friedman (1970) â€Å"There is one and only one social responsibility of business – to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game†¦Ã¢â‚¬ . Friedman further argued that, social issues are not the concern of business people, and â€Å"the business of business is business† (Carroll & Shabana, 2010). Even though CSR have been subject to critique, an increasing number of corporations are accepting responsibilities that extend well beyond the immediate interest of the owners, by considering â€Å"non-shareholder stakeholders’ concerns† (Grant, 2010; Clegg, Carter, Kornberger & Schweitzer, 2011). Although the existence, direction and strength of possible links between CSR and CFP have been the subject of several empirical analyses (Schreck, 2011), and even though CSR is almost universally practiced, the results from empirical studies are inconclusive (De Bakker, Groenewegen & Hond, 2005). After more than thirty years of research, it cannot clearly be concluded, whether a one-dollar investment in social initiatives returns more or less, than one dollar in benefits to shareholders (Barnet, 2007; Surroca & Tribo & Waddock, 2008). The inconclusiveness of empirical studies may be due to unclear and inconsistent definitions of key terms (De Bakker, Groenewegen & Hond, 2005; Barnet, 2007), methodological differences (Carrol & Shabana, 2010), and diverse approaches of measuring CSR and CFP (Beurden & Gossling, 2008). In existing literature, CSR activities are often entioned to reduce risk, by avoiding the various consequences of moral disapproval by numerous stakeholders (Zadek, 2000). However, CSR derived risk reductions are considered as an ex-post beneficial outcome and not as a proactive risk management instrument to control or reduce idiosyncratic risk (firm specific). Under the assumption that, shareholders are risk adverse and prefer a high expected return (Bodie, Kane & Marcus, 2011; Brealey, Myers & Allen, 2011), a reduction of firm specific risk must be perceived as favorably. Provided that CSR investments can be applied as a risk management tool, CSR could be seen as investments by firms on behalf of its shareholders. Taking a shareholder perspective, this paper looks beyond the socially good deed of CSR, and focuses on the value of CSR as a method to reduce idiosyncratic risk without detriment of CFP. CSR and Risk Management Since this paper hypothesizes that, CSR can be applied as a risk management instrument to preserve CFP, risk need to be defined. Risk can be defined as the uncertainty about outcomes or events, especially with respect to the future (Orlitzky & Benjamin, 2001). Widely risk management is defined as a managerial tool to avoid risk, transfer risk to another party, reduce risk, or in some cases accepting consequences of a certain risk (Froot, Scharfstein & Stein, 1994). A shareholder’s perspective on risk management however, conflicts with the capital asset pricing model (CAPM) (Markowitz, 1952) and the Modigliani & Miller’s theorem on capital structure (1958). CAPM theory states that, the cost of reducing idiosyncratic risks simultaneously reduces the expected return, and hence firm value (Markowitz, 1952). Risk reduction by holding a well-diversified portfolio of securities will be unattainable by risk management (Godfrey, Merrill & Hansen, 2009), why a profit-maximizing investor would not prefer risk management. Total firm risk is in general the combination of systematic and unsystematic risk (Hoje & Haejung, 2012). Systematic risk, often referred to as market risk or non-diversifiable risk, is usually defined as the firm’s sensitivity to changes in the market average returns, which cannot be reduced by diversification of shareholders (Weber, 2008; Luo & Bhattacharya, 2009; Orlitzky & Benjamin, 2001). Unsystematic risk is defined as idiosyncratic risk (Hoje & Haejung, 2012; Luo & Bhattacharya, 2009). Idiosyncratic risk is traditionally viewed as indifferent to the portfolio investors, since it is associated with specific companies and thereby can be reduced by diversified portfolios (Husted, 2005; Weber, 2008). Opposing idiosyncratic risk is of great relevance to the firm manager, whose very survival may depend upon taking adequate measures to reduce the idiosyncratic risk (Husted, 2005). Firms’ financial risk is often defined in terms of variability of returns (Orlitsky & Benjamin 2001), or stock price volatility (Luo & Bhattacharya, 2009), which is important risk measures, given that higher volatility implies greater investment risk and uncertain future cash flows (Luo & Bhattacharya, 2009; Oikonomou, Brooks & Pavelin, 2012). A reduction in idiosyncratic risk reflects reduced variance in the future expected cash flows, which translates into greater shareholder wealth (Luo & Bhattacharya, 2009; Mishra & Modi, 2012). In a strict Modigliani and Miller perspective, risk-management instruments are of no value, since these are purely financial transactions that do not affect the value of a company’s operating assets (Froot, Scharfstein & Stein, 1994). The views of CAMP and Modigliani and Miller have been superseded by a postmodern view of risk management as an important strategic tool. Firms do invest in insurances even though the costs of these investments may be in excess of expected losses, which is in clear violation with the perfect market assumption (Smith & Stulz, 1985; Stultz, 2002). If risk management can reduce firms’ exposure to idiosyncratic risks, it protects shareholders against the deadweight costs of severe financial distress in a way, that investors can not accomplish in the market by diversifying (Godfrey, Merrill & Hansen, 2009). Review of the linkage between CSR and risk For several decades, researchers have aimed at discovering a conclusive linkage between CSR and CFP, the literature however, remains highly fragmented (Aguinis & Glavas 2012). According to Orlitsky & Benjamin (2001) true economic performance manifests itself in both high financial returns and low financial risk. Among financial and non-monetary benefits, risk reduction is often mentioned as a positive outcome of engaging in CSR activities. Porter and Kramer (2006) argue that, today’s pressure, of external stakeholders to hold companies accountable for social issues, learly demonstrate the potential large financial risks for any corporation. Several scholars emphasize, that the costs of CSR can be justified by reductions in risk and costs derived from engagement in social issues (Caroll & Shabana, 2010). The primary argument is that the diverse demands of stakeholders represent potential threats and risks to the viability of the firm, why it is the economic interest of firms to mitigate these threats and gain legitimacy through social involvement (Caroll & Shabana, 2010; Schreck, 2011; Kurucz, Colbert & Wheeler 2008). Existing literature on the CSR-risk relationship is virtually unanimously agreeing upon a negative correlation between CRS and idiosyncratic risk, where empirical results show that CSR lowers idiosyncratic risk (Spicer, 1978; Orlitsky & Benjamin, 2001; Godfrey, 2005; Hoje & Haejung, 2012; Caroll & Shabana, 2010; Godfrey, Merrill & Hansen, 2009; Heal, 2005; Luo & Bhattacharya, 2012; Oikonomou, Brooks & Pavelin, 2012; Berman, Wicks, Kotha & Jones, 1999; Hart, 1995; Shrivastava, 1995; Peloza, 2006). Several studies have also shown a significant negative relationship between CSR and systematic risk (non-diversifiable) (Hoje & Haejung 2012; Orlitzky & Benjamin, 2001; Mcguire, Sungren & Scneewies, 1988; Luo & Bhattacharya, 2009). CSR reduces idiosyncratic risk by reducing the probabilities of expected financial, social, or environmental crisis that could adversely influence firms’ cash flows (Hoje & Haejung, 2012). Firms perceived as socially responsible may be able to increase interpersonal trust among stakeholders, build social capital, lower transaction costs, and therefore ultimately reduce uncertainty about future financial performance (Orlitzky & Benjamin, 2001). Luo and Bhattacharya (2009) present the view of CSR, as helping the firm build a bulwark of defense against future losses of economic value by reducing firm specific risk and vulnerability of future cash flows. Firms with high social responsibility may have lower financial risk, since these are less sensitive to certain negative external events, like regulatory governmental intervention, undesirable publicity, probability of civil- and criminal legal proceedings or consumer boycotts, why risk reduction can be seen as a monetary benefit of CSR (Mcguire, Sungren & Scneewies, 1988; Oikonomou, Brooks & Pavelin, 2012; Weber, 2008; Orlitzky & Benjamin, 2001; Mcguire, Sungren & Scneewies, 1988). Participation in specific types of CSR, those aimed at a firm’s secondary stakeholders or society as a whole, is argued to create a form of goodwill or positive â€Å"philanthropic moral reputational capital†, which functions as an insurance-like protection, when negative events occur (Godfrey, 2005; Peloza, 2006). When business activity creates negative impact on society, stakeholders respond by sanctioning the firm (Godfrey, Merrill & Hansen, 2009). It is argued that the goodwill, derived from engagement in CSR, reduces the overall severity of the sanctions, by encouraging stakeholders to give the firm ‘the benefit of the doubt‘(Godfrey, 2005; Uzzi, 1997; Peloza, 2006; Godfrey, Merrill & Hansen, 2009). The resultant moral capital gained from social engagement has little to do with generating financial value, but the insurance-like protection contributes with preserving shareholder value and thereby financial performance (Godfrey, Merrill & Hansen, 2009). Mishra and Modi (2012) fund a significant effect on idiosyncratic risk, when CSR is applied, the authors however enhanced this result by finding that, positive CSR reduces idiosyncratic risk, while negative CSR increases idiosyncratic risk. Literature has, according to Mishra and Modi (2012), often a singular focus on positive CSR, and overlooks that firms also occasionally engage in activities that qualifies as negative CSR. Luo and Bhattacharya (2009) and Porter and Kramer (2006) argue that CSR is not beneficial in all situations, but is rather advantageous in some contexts and disadvantageous in others and can even lead to additional risk. This is in line with Barnet (2007), who argues that stakeholders’ perception of firms’ CSR engagement are path-dependent (Barnet, 2007; Luo & Bhattacharya, 2009; Hoje & Haejung, 2012). For firms with social negative impact or prior bad reputation, CSR may be perceived as â€Å"blood money† to mitigate past sins, omissions or shortcomings (Luo & Bhattacharya, 2009; Barnet 2007). CSR can thereby lead to reduced idiosyncratic risk, but can also expose a firm to additional risk (Weber, 2008; Barnet, 2007). Discussion Even though the CSR-risk relationship have received much attention in the existing literature, managing risk as the predominantly basic for engaging in CSR has not received specific attention. Focus within the field is on ex-post measures of risk-related benefits, where CSR is not valued as a proactive tool to reduce idiosyncratic risk. Existing research does not seem to provide any practical guidance to managerial proactive evaluations of the risk reductions derived from CSR involvement. It further lacks a practical framework to ex-ante quantify the risk related benefits of CSR (Weber, 2008). The above review demonstrates the focus on risk, solely as valuable side-effect of engaging in CSR activities. The authors of the paper posit a research gap exists within the existing literature of CSR and risk: CSR is not considered as a proactive ex-ante risk management instrument to control and reduce firm risk. Given the risk reducing benefits of CSR, the authors suggest that investments in CSR can be used as a proactive risk management instrument to reduce idiosyncratic risk. Such an approach could strengthen the overall CSR involvement and support rational ex-ante decision-making in this area (Weber, 2008). The aim is to draw a much-need attention to the risk-reduction potential of CSR by viewing CSR investments as a proactive risk management tool, where managing risk is the main purpose for engaging in CSR. Empirical resolving the research gap and verifying the hypothesis is beyond the scope of this paper. The authors however, suggest that a potential solution is to apply real option theory as a basis for proactive CSR risk management decision-making. CSR as a real option Attributable to the aforementioned arguments, the function of CSR as a risk management tool can be considered as a real option. Regular options are based on securities (financial instruments), whereas real options are based on hedging against uncertainties in real investment projects (Mun, 2002). An analysis of the costs and benefits of CSR projects, using traditional NPV models, often leads to a rejection, as these fail to contribute to maximizing shareholder value (Friedman, 1962). This is, nevertheless, not always the right decision, as the NPV approach fails to incorporate the main advantage of real options (Husted, 2005). Compared to the traditional NPV approach, real options offer management flexibility through multiple decision-making in situations with high uncertainty. Managers have the option, but not the obligation, to engage in, modifying or end strategies, as new information becomes available (Mun, 2002). A CSR option offers the choice of deferring, abandoning, expanding, or staging an investment project (Amram & Howe, 2003). Due to the theoretical and mathematical complexity of option theory, which is beyond the scope of this scientific paper, option theory will be described on an incomprehensive level. In brief option pricing is a function of five variables: the value of the underlying asset, the exercise price, time to exercise, the risk-free interest rate, and the volatility of the underlying asset (Black & Scholes, 1973). The value of the underlying asset is the resources resulted from the CSR option, such as qualified employees, PR and cost avoiding’s etc. Husted, 2005). The exercise price refers to the required additional investments needed for receiving the value created by the CSR option. The timing of the exercise is an essential variable, as it has great effect on the value of CSR options. The risk-free interest rate does not play an important role in most real options (Mun, 2002). The volatility or the uncertainty of the underlying asset has a significant impact on the value of CSR options (Mun, 2002). The variance of the expected value can both be higher or lower than the expected return. Black and Scholes is the most widely used regular option pricing model, however, also one of the most complicated models (Mun, 2002). A Binomial lattice approach is applied in most real option pricing, as it provides a more transparent and intuitive appeal compared with Black and Scholes’ theoretical and mathematical approach (Mun, 2002). However, since the aim is solely to clarify the value of real options in a CSR context, the choice of approach is of less relevance. Real options provide an important framework for firms to manage risk by reducing the risk of future investments, and can thus be an essential tool in corporate risk management (Husted, 2005). Finally, a real CSR option explicitly includes a time dimension. This ex-ante perspective is clearly different from the focus on risk in most CSR-risk research, which is ex post in nature. CSR as a risk management instrument – The Toyota example A few decades ago, car manufacturers did not focus so intensively on a green profiling as they do today. The increased oil prices in 1973 and 1979 were influential for the entry of Japanese car manufacturers in USA, who were producing smaller and more gas efficient cars (Andrews, Simon, Tian & Zhao, 2011). The gas efficient cars of Japanese manufactures were causative to the car industry as a whole subsequently invested massively in green technology projects. These investments have met consumers’ need and have generated positive branding values. Toyota’s Prius has reached â€Å"cult status†, as it is one of the most gas efficient and green cars on the market. However, more interestingly is the security, that the green profile of the Prius has offered Toyota, which includes protection against the bad publicity of car manufacturers’ contribution to pollution and factors such as Middle Eastern conflicts that influence oil prices and hence sales of cars. At first glance, it appears as Toyota has been skilled at forecasting future trends and meeting customer’s needs without using CSR as management instrument. As the following example however illustrates, Toyota’s management could have benefitted from considering investments in CSR as real options to control idiosyncratic risk and thereby preserve CFP. In 2009 repeated accidents occurred, which were accused to be caused by flaws in floor mats and accelerator pedals in Toyota’s vehicles. This resulted in a recall of more than 5 million vehicles, alone in the North American market (Andrews, Simon, Tian & Zhao, 2011). Before a product is recalled, companies have to make severe considerations. A product-recall can have great financial impact in terms of losses in brand value, consumer goodwill, decreasing sales and a negative effect on stock prices (Kumara & Schmitza, 2011), which in this case is the value of the underlying asset of the CSR option. The decision to recall the cars is the price of the option. The recall option could have generated strategic flexibility, which however, meanwhile was eliminated, as Toyota’s management failed to exercise the option, before it was too late. The leisurely recall decision resulted in losses in brand value, consumer goodwill, decreased stock price, lower sales, a fine of $16 million and more than 130 potential class-action lawsuits (Andrews, Simon, Tian & Zhao, 2011). The negative outcome of the late recall is considered as high volatility of the underlying asset. A faster recalling could have had a avoiding, a limited or opposite effect on product brand, consumer goodwill and the massive media coverage (Husted, 2005). Provided that Toyota’s management had viewed the recall decision as a valuable option rather than severe costs, strategic flexibility could have been obtained, why the negative outcome may have been avoided. A faster exercise of the recall option might have resulted in goodwill or trust, which could have been exploited by Toyota to limit the negative publicity caused by the repeated accidents. Toyota however, failed to exercise the recall option in acute time, why the result was lost flexibility to respond to the unexpected event of the accidents. The value of the real option foregone by Toyota was a function of inter alia lost sales, brand value and reputation. Toyota’s management failed to exploit the advantages of CSR as a risk management tool.

Athletes And Drug Use

Use of athletes and drugs Many people believe that the use of drugs in professional sports is not a serious problem, but it is widespread and more serious than people think. In professional sports, drug use is considered a serious problem, but it is also very individual and discreet. From time to time, people will see sports celebrities being accused of using some illegal drugs, but this is one of the many people who meet by chance. Today's athletes do not seem to use drugs to improve their performance, or in other words to improve ethical issues of cheating. Drugs have become a problem of our society for many years. They are abused and used by many groups including amateur and professional athletes. It is very common to hear and read athletes and drug abuse. Athletes have long history of using drugs, but they are now more common than ever. Today, there are other ways to hide drug abuse, so it is increasing rapidly. The use of drugs in sports is cheating, that is a mistake, and most importantly, it is illegal. Steroids are artificial derivatives of androgen testosterone. To improve performance, anabolic steroid hormones are a drug of choice for today's athlete. Steroids are a series of synthetic compounds. Assimilation shows the ability of steroids to accumulate muscle tissue and stimulate growth. Testosterone began to move when the Russian weightlifter found them in the 1940s and 1950s. Most athletes use assimilating steroids, which means building body tissues. Anabolic steroid hormones are potent medicines, and many people take large quantities to improve exercise performance. Natural androgen of weight, testosterone. (Steroids, 2008) Many athletes think that it is very useful to use steroids. Because it is the only way to develop muscles and build muscle strength. It is not a type of medicine people use to nurture and get rid of reality. The steroid is the name of testosterone, a medicine made with reproductive hormone seen in men. Some athletes frequently u se anabolic steroid hormones because they increase competence and trainers ability and bring high results. Steroids work by reducing fatigue during training and by shortening the time required for athletes to recover from fatigue. - People all over the world complain about professional athletes' salaries everyday. Even though top athletes make millions of dollars annually, most athletes do not earn more money than the average working class citizens. There are many risks in work, the safety of work is very unstable. Fees and taxes also limit the amount earned by athletes. Male and female tax rates participating in professional sports are very high

Assignment 3 - individual written format business report an

3 - individual written format business report an organization i would like to work for - Assignment Example BCG has been consistently maintained a top five positions over the years as the best organization. Recently they were ranked third by the fortunes magazine’s 2014 list of â€Å"top 100 companies to work for† (12). There is a lot that goes on before one gets hired at BCG since the expectations are always high, but the experience is just phenomenal. The organization may be small in size, but it casts a relatively large shadow amongst its competitors, mainly McKinsey. This has in turn attracted many admirers in the business world who tend to compare themselves to BCG even though it is a consulting firm. The competition is intense at the organization; an insider says that the organization hires approximately one candidate in over 200 applicants for an associate position. The main secret to the rampant success at BCG has been mainly gaining good strategy projects that require planning and hard work as compared to implementation only. New ideas are highly appreciated in the company. This gives the organization varied approaches to tackle business hurdles. The organization had its downfall in business; in 2001, the global revenue hit a downfall as technological explosion ventured in the business. The event resulted to layoffs, and the organization had to reduce its support staff as well as consulting by 12 percent (WetFeet 38). The strategies employed by BCG may be seen as small, but they have long term solutions to business problems. This has enabled the organization to stay top of its competitors like McKinsey and Bain, even if BCG has less staff compared to the two. Intellectualism has always stood up as the best culture for the organization over the decades. An insider describes the company’s growth as just incredible. At one point, he says he used to know almost everyone in the offices but now there are very many people that he can hardly identify with (WetFeet 36). Despite having all the success and growth, the

888 Essay Example | Topics and Well Written Essays - 750 words

888 - Essay Example Said traces most of his perceptive from the colonial era at a time when America had not become the world’s superpower. At this time, the British had colonies in the East and the French was also on the verge of establishing dynasties in the same location. The paper identifies, interprets and analyzes some of the proponents of the Said for use as a lens in the analysis of a primary text. Said pinpoints some assumptions made by the West about the Orient. He assumes that the West perceives Arabs as dishonest, menacing, anti-western and irrational. The text reveals that the thoughts presented in it are in opposition to how he considers the West to think of themselves (5). Therefore, he outlines his broadly projected image of the people of Arabic nature as they feature in the minds of the Western people. Specifically, he acknowledges that the Arabs exist in the western minds as â€Å"others.† According to them, anyone who is not one of them belongs to the category of others. The author addresses his issues using assumptions that one may risk considering to be truthful (7). If one takes such a positive stance, his ideologies and relations with the Arabs may be jeopardized. Hence, while considering Said’s arguments one should be cautious to avoid bias. The call for a new perception and treatment of â€Å"the Orient† that permits the independent representation of authors who belong to the Orient as opposed to the reliance on the second-hand representation is valuable. In respect to the profound dependence on other personalities for ideas, it is significant to notice the widespread use of the word â€Å"orient† on almost half of the world. The mentioning of a greater part of the world as orient expands the bracket of disparity and intensifies the divide on ideology and identity. However, making such broad generalization is unwarranted in the modern day as nations such as Egypt and the Chinese that have achieved a significant level of

Leadership & Negotiation Essay Example | Topics and Well Written Essays - 1000 words

Leadership & Negotiation - Essay Example From the discussion it is clear that organizations are faced with an alarming shrinkage in the availability of funds as obtaining credit has become harder, a fact which has resulted in driving well established businesses to the point of bankruptcy. The global recession also proves to be a considerable challenge because inflation has increased the level of risk associated with business activities and in these times of the financial crunch.This essay discusses that smaller businesses will generally be much more sensitive to the on going credit crunch because of their limited sources of external funding, larger more well established organizations will face the difficulties of keeping a huge business set up going in an atmosphere of financial   vulnerability. Hence it would be safe to say that all sorts of businesses are facing considerable difficulties during these times. However, there are some ways that organizations can counter these circumstances. Leaders must aim to build their o rganization’s credit structures in a way which enable them to weather the â€Å"bitter cold shock to the credit markets† . Leaders of small to medium organizations can ensure credit approval by devising strong negotiation strategies and can also look towards other sources of external financing such as â€Å"crowd funding†.  Leaders will have to learn how to make their organizations more ‘flexible’, because surviving in today’s business environment means that organizations will have to respond to the micro-markets’ demands in a timely manner, and this can only be done if organizations are flexible.

Analyzing Gender Differences in Spontaneous Speech Research Proposal

Analyzing Gender Differences in Spontaneous Speech - Research Proposal Example From the time they are born, baby girls are considered fragile and they are exposed to delicate language and handled very gently. Boys, on the other hand, are exposed to strong tones and power-filled language and are handled less gently as they are tossed in the air and held upright from a younger age to demonstrate their power and strength (Rasquinha & Mouly, 2005) This study attempts to investigate gender differences in choice of topics to talk about and linguistic differences in verbal expressions. Its significance lies in the fact that understanding gender differences and accepting them as natural to the person will help others understand where the speaker is coming from. To understand gender differences in communication better, it is important to actively analyze how men and women express themselves linguistically and explain the differences between the two if any. Background of the Research Problem Most miscommunication problems between men and women stem from the fact that they are wired differently. According to Rasquinha and Mouly (2005), women are more prone to communicating verbally with a language of connection and intimacy. This means that they use more of their emotions when speaking. On the other hand, men are more prone to communicating with a language of status and independence. This means they use more of their logical reasoning and less of their emotions. Sometimes, conflicts arise when issues pertaining to interpretations of certain topics and gender differences come into play.

Globalization English Paper Essay Example | Topics and Well Written Essays - 750 words

Globalization English Paper - Essay Example The thesis can be seen at the end of the first paragraph of the article. â€Å"Third world countries† are countries that are still developing economically, are in war, to curb poverty. Third world countries faced with the problem of poverty, and most of their citizens are still struggling by doing odd jobs for survival (Divakaruni, 398). Maslow pyramid states that people will keep on working according to their needs and in each stage of life needs keep on changing. Divakaruni used Maslow theory to point out that people will keep on working in accordance to their needs. Therefore, the children will keep on working because of the hardships of life (Divakaruni, 398). Divakaruni suggests that children forced into child labor because; of lack of money to cater for the basics needs of their families, poor education systems and lack of enough schools and their governments being incapable of providing for its citizens. The use of rhetorical questions by Divarakuni is to ensure people get to understand why she is against the bill. In addition, she also wanted people to understand the reasons the children seek child labor. Paragraph three has been designed in such a way, causes of child labor and its effects clearly stated for better understanding of the life faced by the children. Divakaruni uses Nimai story to support child labor. Nimai came from a poor family; therefore, it was necessary to look for employment rather than starve to death. Nimai experience shows that children forced to seek employment to assist their families. Comparing Nimai and children in his village, he is much better since he can provide for his family and he is well treated by his employer (Divakaruni, 399). â€Å"The extra weight that capsizes the already shaky raft of their family’s finances† this metaphor meant that if the poor children taken to school and during their holidays, they return home they will be a burden to their already poor family. Divakaruni felt pity for t he village children because they suffer from hunger and starvation (Divakaruni, 399). Indentured as used by Divakaruni meant that the parents of the poor children took a contract that made children work in manufacturing factories. Inconceivable means that what the poor children are going through is unimaginable. Exploitation in this context means that the children were taken advantage in order to produce products to be used in the United States. Mired means a difficult situation like the one experienced by the poor children. Blithe means cheerful and happy (Divakaruni, 398). Javdani states her thesis in the second paragraph. The thesis developed by narration of two young men living in different worlds. Javdani thesis is about drugs and their origin. One man is living in poverty in an area where drugs are produced, and the other man lives in a rich neighborhood where drugs are sold. Colombian peasants support communist rebels, to protect their families and to earn money for upkeep. W hen the US government sends billions to Colombian government, they do not help the situation because the money used to fund paramilitary groups to fight against the rebels. Javdani solution to the problem is that the US can work from their country by cutting down the demand for the illegal drugs.

Oedipus Rex (play) Critique Movie Review Example | Topics and Well Written Essays - 750 words

Oedipus Rex (play) Critique - Movie Review Example This is indicative of his search for his own personal position in the superficial world he has constructed around his identity. E: This quotation proves that Oedipus is destined to find out that he has already harmed himself. He has already lived up to the prophecy that was delivered to him, now he pursues the knowledge that will vindicate the verdict. A: A senator told Creon that he does not stay focused on the actions of his masters. At that moment, Oedipus entered and immediately confronted Creon and asked if he though he was a fool who would immediately defend himself after being accused of murdering the former king. This quotation represents Oedipus’ deployment of defense mechanism as a means of justifying why he could never be implicated in the murder of his father. While at the same time, he deploys the mechanism because he is coming to grips with the conclusion that he could indeed be the murderer. Oedipus is attempting to escape the knowledge of his fulfillment of his preordained fate. While his search for the answer drives him further insane, he feels as if he will never returned to normality until he knows for sure. He escapes the bliss of ignorance out of pure curiosity. Oedipus realized that his self fulfilled prophecy could have been handed down to his daughters who will have no husbands. Hence he seeks their departure with him to a land where he will not be followed by his dreadful past. At this point, Oedipus has accepted his fate and wanted to reveal it to society as a means of self purification. But even then he feels as if the pain is to bearable and travels further down the path of self destruction. This shows that rejection of ones fate forces the individuals to suffer from more pain. If he would have accepted his fate as destiny, he would have been less hard on himself and attributed the wrongful actions to the gods who cast that fate upon

To what extent has Coalition Government affected the role and Essay - 3

To what extent has Coalition Government affected the role and functions of Prime Minister and Cabinet - Essay Example the Liberal Democrats and David Cameron’s Conservatives has been faced with different challenging administrative issues as compared to single-party governments that came before them. Issues of Cabinet Collective Responsibility, Individual Ministerial Responsibility, Cabinet Committees, and the Sofa Government have mostly changed the way former Prime Ministers have led a single-party government. Collective responsibility at the level of cabinet involves taking a common stand and owning up whenever a no confidence vote is passed by legislators to facilitate an en-masse resignation over government incompetence (Palmer, 2011). What follows normally is the formation of a new administration, or dissolution of parliament to pave way for a general election (Debus, 2011). In the UK, the principle is applicable to all government officials, from cabinet secretaries to lower ranking members of the executive including Parliamentary Private Secretaries (Martin, 2013). Whereas in a single-party government the doctrine may be suspended to facilitate a no-holds-barred debate on key policy issues affecting the public, a Prime Minister under a coalition government tend to be intolerant to dissenting opinion for fear that it could degenerate into a split in and an eventual collapse of government (Bawn, & Somer-Topcu, 2012). Paun (2011) suggests that even though collective responsibility was suspended in Britain in the 1930s debate about the implementation of protective taxation policies; and again in 1975 following the debate on whether the country should continue to serve in the European Economic Community, single-party Prime Ministers tend to be more democratic than their coalition counterparts when it comes to implementing collective responsibility. The isolated cases of breach of collective responsibility in majority governments and their lesser impacts could have informed Prime Minister Tony Blair’s decision in 2003 to permit Clare Short to continue serving in government,

Criminal Justice Administration in New Jersey Essay Example for Free

Criminal Justice Administration in New Jersey Essay Spending is an important aspect of criminal justice administration in any jurisdiction. In many instances, budgeting in public administration is a crossroads between policy issues and politics which makes prioritizing very essential. According to New Jersey Policy Perspective (2003), the spending in the state’s criminal justice system especially the correctional facilities has increased tremendously in the last few decades. This has been as a result of the rapid increase in the number of incarcerated offenders in the state correctional facilities where the number has tripled since early 1980s. Consequently, spending in the correctional facilities in the state of New Jersey has been the fastest growing compared to other departments in the states and was estimated that the figure in the 2005 fiscal year would surpass the amount spent by all states in 1975. Moreover, since late 1990s, the correctional facilities in New Jersey have been operating at over capacity and are rated the sixth most crowded facilities in the country. However, this increased spending due to increased incarceration has taken place as the rate of crime in the country is on a downward trend. The correctional facilities in New Jersey consists of fourteen state facilities, nine of which houses male offenders, one reserved for female offenders, three for juveniles while the one is designated as a reception and intake center. It is also the responsibility of the same department to manage offenders who have completed their sentence but are considered dangerous to the society (NJPP, 2003). As the number of offenders housed in New Jersey states correctional facilities from under capacity in the early 1980s to over 135 percent in 2003, the spending in the correctional department increased proportionally. The large number of convicts incarcerated translated into a need for more staff to manage the systems. For example, the number of employees in the correctional facilities and related jobs were about 13,685. This number of employees was only second to the Department of Human Services. However, the parole officers were needed due to the increased number of individuals under parole in the states surpassed the number of prison officers required in the correctional facilities. The number of offenders under parole rose from under ten thousand to over thirteen thousand between 1983 and 2003 (NJPP, 2003). As the number of individuals under incarceration and parole has increased over the years, the need for more budgetary allocation to the state correctional department has been inevitable. According to the New Jersey Policy Perspective report, the money allocated to the correctional programs in the states rose by about 555 percent in twenty years hitting 1. 1 billion dollars in 2003 up from 203 dollars in 1983. There are many factors including changes in the law that are considered responsible for the increased number of inmates in the states correctional facilities and consequently increased spending. Some of them include changes in the law and statutes within the state’s jurisdiction such as the criminal code and drug laws enforcement statutes (NJPP, 2003). In conclusion, the increased spending in the New Jersey correctional facilities is inevitable. Just as in other states and federal correctional institutions that have been overwhelmed by the increased number of incarcerated offenders or individuals under paroles in the last three decades, the New Jersey facilities have been equally affected by the trends. The increased need for more prison and parole staff, training and caring for offenders in the states facilities has skyrocketed spending in the New Jersey correctional department.

Political Climate of the 1970s Essay Example for Free

Political Climate of the 1970s Essay The 1970s were times of chaotic events held over from the chaos of the 1960s. The 70s brought Americans an end to the Vietnam War and a change in the political and social perspectives, another presidency term with Richard M. Nixon, and his policies of engagement, and the Watergate scandal, leading to the first resignation of an American President. The end of the Vietnam War led to political and social fallout around the globe, especially in America. All of the chaos of the 1970s also led Americans to have a changed perspective in their government. People were beginning to notice similarities between Nixons policies of engagement and strategies used during the Cold War, and the aftermath of the Watergate scandal led many Americans to doubt the role of their government and its power. In 1969, Nixon built his presidential campaign on the idea of ending the Vietnam War. Early in his administration, the president outlined a foreign policy based on a low profile and on reductions in the U.S. role abroad. Many believe this was the reason for Nixons election. Fed up with the war in Vietnam, Americans were ready to get our soldiers home. Nixon considered his engagement strategy peace with honor. Nixons priority was the settlement of the Vietnam crisis while using the peace with honor code. Nixon found an ally in Henry Kissinger who was the Nation Security Advisor and working together to end the crisis in Vietnam. One strategy was called Vietnamization, a carrot on a stick method, which would to gradually move the troops away and force the South Vietnamese to fight for themselves in order to advance peace talks in Paris. (Davidson et al., 2002 pg 895) The truth of the matter is that Nixon continued with the Vietnam War for nearly four more years. Nixons peace with honor code or policy of engagement was similar to Truman and the Cold War. Truman used the treat of nuclear arms attacks to scare the communist bloc from expanding. When the peace with honor code did not work, that is when Nixon took action on an earlier threat by using troops, force, and weapons. Nixons policy of engagement also differs somewhat from the strategies used by others during the Cold War. Where containment assumed a bipolar world, Nixons policy of detente saw the world as multi-polar. (Davidson et al., 2002, p. 907) By the end of March 1973, The Vietnam War had ended. All U.S. fighting forces  had been withdrawn. (Vietnam War, 2007) The political and social aftermath of the Vietnam War hit America almost immediately. In July 1971, for the first year in the century, it appeared that the U.S. would import more merchandise than it exported, and consequently it faced a severe deficit in its balance of payments. A federal budget deficit of about $20 billion was projected for fiscal 1971. In August, a crisis in world monetary stability was evident, and the value of the dollar was threatened for the second time in a year. (The Vietnam War Period, 2007) By the end of the 1970s, the National Debt was nearly $382 billion. From spending money during the war and cutting costs to federal programs, the nation was experiencing severe recession in 40 years. This recession affected many families, which became dual income households due to necessity. The government tried to fix this spiraling problem by raising minimum wage, but with each wage increase came inflation and higher unemployment rates. To curb this growing problem, reversing his previous refusal to impose price and wage controls, Nixon announced a 3-month freeze on wages, prices, and rents. (TVWP, 2007) Before Nixon had a chance to work on changing the economic problems in America he was surrounded by the Watergate scandal. From the fall of 1973 through the summer of 1974, the evidence steadily mounted that President Nixon himself was implicated in the Watergate burglary and its attempted cover-up, and that it was indeed only one aspect of a series of lawless acts committed by the administration. As a result, by the beginning of August 1974 the president was faced with imminent impeachment. He resigned on August 9, the first president of the U.S. to do so. (TVWP, 2007) Americans have come to believe the worst about government, politics, and politicians. It didnt start with Watergate, but Watergate turned an erosion of public confidence into a collapse. The downturn came to a climax with Watergate. Americans saw a presidency disintegrate before their eyes, criminal conspiracies at the highest level of government and a president driven out of office. The effect on public trust was immediate and dramatic. Watergate crushed the publics faith in government. In 1974, a little more than a third of Americans 36 percent said they still trusted the government. (Americans in the 1950s and 1960s saw there government as successful. They had led the country out of a depression and won a World War. The 1970s did  not carry that same prestige, instead the American public saw there elected leader in the center of a severe scandal, the worst recession in 40 years, and an embarrassing loss to an un-winnable war. Since Watergate, nothing has happened to restore public trust. (Bill, 1997). By the end of the 1970s, Americans were ready for change. The Vietnam War had ended, Nixon had resigned from office, and there was a lack of trust in government officials. Many Americans believed the 1980s were going to be that time of change. Nixon was a professional politician when elected president. Since that did not fare well, there was heightened contempt in professional politics. This created a market for outsiders and non-professionals for the job of Presidency. Many Americans today still crave for the Eisenhower or Kennedy era, but not since then has there been that kind of support for an elected president. Only when special interests groups stay out of politics or presidents remember they are leading by example will that return. Lets all hope that day will be sooner rather then later. References Vietnam War. (2007). _World Almanac Encyclopedia,_ Retrieved November 19, 2007 from facts.com database. Davidson, J. W., Gienapp, W. E., Heyrman, C. L., Lytle, M. H., Stoff, M. B. (2002). _Nations of Nations: A Concise Narrative of the American Republic_ (3rd ed.). Boston: McGraw-Hill. Bill Schneider, (1997). Cynicism Didnt Start With Watergate. _allPolitics_. Retrieved November 19, 2007, from http://www.cnn.com/ALLPOLITICS/1997/ _United States of America: HistoryFrom Watergate Through the 2000 Election._ (n.d.). Retrieved November 21, 2007, from The World Almanac Encyclopedia @ FACTS.com database.

E-grocery Industry in the US

E-grocery Industry in the US 1.1 Introduction and Background An old Chinese saying goes like this: Food to the people is like people to a king. It means that just like a king has to rely on the support of his people to remain on the throne, ordinary people have to rely on food for survival. The importance of food is universal, and the retail food industry is a vital part of the economic activity of every country. The food on Americas table is mainly supplied by supermarkets, hypermarkets and discounters. Americans are used to going to these traditional stores in person to buy groceries. With an increasing number of grocers now offer online ordering and home delivery of groceries, Americans are gradually changing the way they shop for groceries. Online grocery retailing is becoming more and more common. New start-up online grocery retailers such as Peapod and FreshDirect are in the market to compete with traditional supermarkets. Some of these new online grocers have support from traditional supermarket chains. Some are â€Å"pure-play† or stand-alone grocers that operate their own supply chains and facilities. Traditional supermarkets are also offering online ordering and home delivery to customers as a new distribution channel in a struggle to keep the market shares from being taken away by the new ventures. Online grocers utilize different operating strategies and business models. History has seen both successes and failures in this industry. Various aspects of online grocery shopping have been studied, but few studies have compared the successful and less successful companies in this industry to identify the characteristics that contribute to these outcomes. By identifying these key variables, this study intends to look for business models that have a better chance of success. Once considered a symbol of the dot-com crash, the online grocery industry struggles to come back to life. Applying a sound business model and effective operational strategies is essential for the existing players in order to stay competitive and successful. New ventures that intend to join this business also need to come up with a promising plan. This study attempts to add to the body of knowledge and provide insights that might be helpful to these companies. 1.2 History of Home Grocery Delivery Neighborhood grocery stores have, in fact, offered delivery services since the 19th century. At that time, urban citizens, who did not own horses like the residents of rural areas, had groceries delivered to their home free of charge. Most of them did not own a car until the beginning of mass production of automobiles in 1914. Fifty years ago, Americans were used to having milkmen deliver fresh milk to their doorstep each morning. In more recent decades, grocers have allowed customers to order and receive their food at home. In the 1960s, third-party companies offered phone-in delivery services for groceries. However, these services were usually short lived. Todays shoppers are sensual shoppers who prefer to use their five senses in choosing their purchases. Groceries, especially food, are the kind of merchandise that shoppers would want to see, feel, smell, touch, and possibly taste in person before they make the purchase (Underhill, 1999). The convenience of driving their own family cars and being able to really touch and feel the food in big supermarkets made many customers unwilling to take advantage of phone-in services. Lack of profitability has been the biggest problem for these grocery delivery services for vendors. By the mid-1980s, some local grocery delivery services allowed customers to browse product listings and place orders by computer. Marketing strategies used during this time, such as the foc us on suburban families and the use of price promotions to attract new customers, would later surface again among the online companies of the late-1990s (â€Å"E-Commerce: Online,† 2004). In 1989, Peapod, an online grocery business, emerged in suburban Chicago. In the days before the World Wide Web, Peapods customers used proprietary software and a modem to dial into their systems in Chicago and San Francisco (â€Å"Background on Peapod,† n.d.). Peapod partnered with Jewel in Chicago and with Safeway in San Francisco to put together the orders to be delivered to customers (â€Å"Peapod company history,† n.d.). Afraid they were missing out on the market share occupied by Peapod, many grocery stores jumped on the bandwagon of home-based ordering and delivery in the 1990si. Safeway considered expanding their partnership with Peapod to cover a larger part of the Southwestern United States. Other chains linked their catalogues to online content services like Prodigy and used their own employees to fulfill orders. However, by the mid-1990s, it was clear many of the early expectations for the industry would not be met. Grocery chains and stores discovered that online ordering and delivery were not profitable. Peapod relied only on computer-based ordering and experienced growing demand. Sales doubled every year (Funding Universe, n.d.); however, costs also rose, causing Peapod to suffer continuing losses and growing debt. Peapod saw the rise of new competitors like Streamline Inc. in suburban Boston in 1993. Unlike Peapods partnerships with existing grocers, Streamline developed its own warehouses, as well as relationships with wholesalers and distributors. Streamline delivered to their own boxes located in the garages of their customers (Borrego, 2001). By 1996, companies like Peapod, Streamline, and HomeRuns had created their own websites. The World Wide Web had created a common platform in which these companies could build their ordering systems. During the height of the Internet boom, investors poured money into these dot-com ventures. Taking advantage of this trend, HomeGrocer and Webvan joined the field of competitors. Webvan was started in 1999, offering over 18,000 perishable and nonperishable items. It built highly automated warehouses to process its orders. Webvan allowed customers to schedule a 30-minute window for next-day grocery delivery (Feather, 2001). Webvan had attracted $1 billion of venture capital and had planned to aggressively expand into 26 cities. Founded in 1999, SimonDelivers was another online grocer. It serves the Minneapolis-St.Paul metropolitan area of Minnesota and Western Wisconsin (â€Å"SimonDelivers,† 2008). Expansion did not go smoothly for these new grocers, however. Peapod was suffering cash-flow problems by 1999. It wasnt until Royal Ahold, a Dutch-based international supermarket operator, came to the rescue with $73 million in 2000 that Peapod was saved from collapse (Lerner, 2002). By 2002, nearly all the leading online grocers (HomeGrocer, HomeRuns, Kozmo, Shoplink, Streamline, Urbanfetch, and Webvan) were gone. The only survivors were Peapod and SimonDelivers. The online grocery industry was crushed. Webvan was the most spectacular failure, having burned through $1 billion of venture capital in just two years despite having what was once considered to be the model most likely to succeed (Porres, 2003). Webvans subsequent failure caused many to lose faith in the idea of online grocery shopping altogether. In the early years, overenthusiastic projections of the online grocery industry predicted it would cover as much as 20 percent of all grocery sales by the mid-1990s or 2000. Late r, estimates by Forrester Research in 1998 toned down their forecasts, dropping their projections of 2004s expected online sales to less than five percent of US grocery retail sales (â€Å"E-Commerce: Online,† 2004). Rising from the ashes of the online grocery failures were more cautious ventures in the online world. A scaled-down Peapod, with backing from Royal Ahold, was joined by brick-and-mortar grocers now testing the online waters. Although experiencing some financial difficulty, SimonDelivers weathered the dot-com boom and bust by securing $15 million in funding and focusing on its local market instead of expanding nationwide (Tellijohn, 2000). 1.3 Factors Driving the Popularity of Online Grocery Shopping In todays busy world, the time available for grocery shopping is scarce. Americans now work more and thus have less free time. According to a 2008 ranking by the Organization for Economic Co-operation and Development (OECD), Americans are among the hardest working people in the world with 1,797 work hours on average each year (Olson, 2008). For families with children, having to take the kids to the market adds to the stress of the chore. Due to competing demands on their time from work and home, people are more likely to shop for groceries online. Many disabled people rely on online grocery services to fill their refrigerators and because of the quickly aging US population, more elderly people are also likely to be interested in e-grocery shopping. With Peapod operating in the Midwest and East Coast, FreshDirect in New York City, Albertsons and Safeway in the West, Simon Delivers in Minnesotas Twin Cities area and Shnucks in St. Louis, Central Illinois and parts of Southern Indiana ( Fishman, 2005), this revived e-grocery industry has both new and old players that are now attempting to stake out their shares of the online grocery market and working hard to achieve what their predecessors could not. (See Appendix A for a complete list of current US online grocers.) Scott and Scott (2008) report the following figures regarding the current market size and potential of selling groceries online. The estimated online grocery revenue was $235 million in 1998, $2.4 billion in 2002 and $6.2 billion in 2006; Jupiter research estimates that the percentage of US online grocery sales will rise to 1% by 2009. Manor (2006) stated that industry analysts estimated US online grocery sales would reach $4.2 billion in 2006, up 27 percent from 2005. Despite still being less than one percent of all grocery purchases, online grocery sales are expected to double by the end of the decade. 1.4 Problem Statement Many consumers welcome the option to shop for groceries online, but they are not yet ready to abandon the traditional in-store method of shopping. Many still consider online grocery shopping too expensive, mostly due to the high delivery charges. Since customers are not able to pick out produce themselves, grocers must be able to convince customers that they are choosing only items of the desired quality. The logistics of going from the customer making an order to delivery at an agreed upon time requires a great deal of effort. Many new companies, as well as traditional grocers, have attempted to provide electronic grocery shopping to consumers. Various different approaches to establishing infrastructure, fulfilling orders, and making deliveries have been tried. Margins are very thin; surviving in this industry is tough. Many failed companies litter the history of the industry. Grocers are desperately searching for the best formula for success. 1.5 Purpose of This Study Although grocery delivery is not a new idea, the electronic grocery shopping business is underdeveloped and still in a nascent stage. This is a very challenging business, yet it offers extraordinary opportunities. Despite the efforts made by the egrocers to implement various service concepts and the interest of consumers in online grocery, not much research has been done in this area. The purpose of this study is to identify successful operating strategies that can be employed by online grocers and less successful strategies that should be avoided. 1.6 Major Research Questions of the Study This study will attempt to understand the factors contributing to online grocery success by finding answers to the following research questions: †¢ How should an online grocers management function to ensure its success? †¢ How should an e-grocer expand its business and decide its target market? †¢ How should an e-grocer put together orders? Should it use central warehouses or the shelves of physical stores? †¢ How should an e-grocer deliver orders to customers and achieve operational efficiency? †¢ How should an online grocers website function, and how is customer relations management handled? 1.7 Significance and Limitations The importance of the online segment in the overall retail food industry will be determined in the years to come. Although it presently only accounts for one to two percent of food sales in the US, market share of online grocery shopping may increase due to social and demographic drivers and technological and operational improvements. It has the potential to account for a major percentage of retail food sales if business strategies are chosen wisely in the right environments. Alternately, it may be relegated to the fringes of the grocery industry if the right business choices are not made. There have been many casualties in the history of the e-grocery industry. Todays survivors and newcomers are all hoping to find the strategies for success. By performing case studies on the successes and failures of a group of selected online grocers, this study hopes to find answers to the major research questions stated above and put together a big picture view of the industry. Some of these comp anies are still operating, while others have failed. Various aspects of their business strategies will be compared, and an effort will be made to distill the characteristics of these businesses that led to their success or downfall. This study intends to help the online grocery business learn from the mistakes of the past so that they can increase market share in the future. The study will be limited to e-grocers that offer online ordering and home delivery/pick-up service with product selections similar to a traditional supermarket— specialty food grocers and companies with restricted selections (such as dry food only) will not be examined. 1.8 Structure of the Thesis This thesis is made up of five chapters. The first chapter is the introduction/thesis proposal. It gives a historical overview of the e-grocery industry, presents the problem and states the importance of the study. Major research questions are also identified in this chapter. The second chapter is the literature review which describes the target market of online grocers. The customer base will be reviewed based on demographic, geographic and psychographic characteristics. The literature review also provides information about the state of the market following a chronological and geographical order. The operational aspects of how different e-grocery businesses complete a typical transaction will be described as well. The third chapter presents the methods used. This study will primarily be an inductive qualitative analysis of the e-grocery industry. This research consists of casestudies of successful and not-so-successful e-grocers. A meta-analysis will be performed to compare various aspects of the e-grocers strategies in an attempt to identify patterns and variables that contribute to their varied success levels. The fourth chapter analyzes data. The fifth chapter confers research findings and draws conclusions. It also offers possible directions of future research. 19 Keywords: e-grocery, online grocery business, supermarket, business model, target market, store-pick, online order, warehouse-pick, delivery, customer demand, customer density, cost, investment, knowledge, experience, expansion, Peapod, Tesco, Safeway, FreshDirect, Webvan, Streamline Chapter Two The goal of this chapter is to lay out the operational and strategic groundwork for the analysis. E-grocers employ different business models. To make their business models work, online grocers use various strategies and target different markets. Each operational model varies along several dimensions, such as how orders are placed, assembled and delivered. The first part of this chapter presents statistics and descriptions of the electronic grocery industry in chronological and geographical order. The second part of this chapter presents a review of the online grocery industrys customer base and target market. The third section describes the process of completing an online grocery transaction and how each business model functions differently to fulfill orders. The fourth part of this chapter offers opinions from previous studies regarding the factors contributing to the varied outcomes in the e-grocery industry. 2.1 Industry Overview Americans are familiar with grocery home-delivery services. This concept has been around in one form or another for decades. In the early days, when not many people had a fridge at home, milk needed to be delivered to customers daily. Milk delivery often occurred in the morning while people were still asleep. Glass bottles or cartons were left at the doorstep. Milkmen even delivered other dairy and farm products, such as eggs, cream, yogurt and butter (â€Å"Milkman,† 2008). Although demand for the service decreased significantly during the past 50 years, some people still prefer the old-fashioned way of getting their milk as they think milk tastes better in glass bottles. The milk delivery business is actually regaining some of its lost ground. The United States Department of Agriculture saw three-to-five percent of milk sold in the US delivered to homes in 1995, compared with only one percent in 1993 (Shih, 1995). In the 1950s, groceries could be ordered over the phone and d elivered to a customers kitchen within an hour or so, free of charge (Underhill, 1999). American grocery stores used to carry only dry grocery items, such as flour, baking soda, dry beans and canned foods. People bought fresh produce and meat from specialty food retailers like butchers and greengrocers. These stores were often located near one another for shoppers convenience. Starting in the 1920s, chain grocers experimented with consolidating smaller stores into larger ones with meats and produce along with the dry grocery items. As a result of this consolidating process, by the 1950s, there were much fewer neighborhood stores but more larger supermarkets and shopping centers that people had to drive some distance to go to (â€Å"A quick history,† n.d.). Fewer grocers offered home delivery after this period, as Americans enjoyed driving their family cars to shop in large, well-decorated supermarkets and spending some leisure time at the urban and suburban shopping centers. Even before the World Wide Web ever existed, getting groceries online was made possible by dialing into grocers servers with special modems provided to customers. Independent online ordering and home-delivery grocery companies like Peapod began to emerge in the US retail food industry. Food retailers like these were referred to as pure-play e-grocers because they only sold groceries online and had no storefronts. The development of the web provided a whole new platform for online ordering of groceries. More pure-play e-grocers jumped into the market. Among these companies were Streamline, HomeRuns, HomeGrocer, Kozmo, Shoplink, Urbanfetch, Webvan and SimonDelivers. Fearing of missing out on the market share occupied by pure-play e-grocers, traditional supermarkets also began to offer grocery delivery service. For example, Sandoval (2002) described Safeways reentry into home-delivery, with experienced UK major e-grocer Tesco by its side. (In 1990, Safeway had started a delivery service , but discontinued it after just two years.) From the emerging of Peapod in 1989 to Webvan s grand entry in 1999, the online grocery retailing industry seemed to be very promising. Industry expectation for the e-grocery sector was optimistic at the time. According to LeClaire (2002), Forrester predicted that 14 million households would eventually buy at least some of their groceries online. Jupiter predicted that sales would reach $11 billion in a few years. Datamonitor reported that the online retail food and beverage market in the United States was worth $2.1 billion in 2001 after growing 43.5% that year (â€Å"United States Online,† 2002). The growth rate slowed from a high in 1999, when the market had grown by 131.6%. Datamonitor predicted the value of the market to increase to $49.9 billion by 2007 (â€Å"United States Food,† 2003). At the time, Webvan accounted for 30.9% of the market volume, followed by Peapod with 28.3% and GroceryWorks with 12.7%. However, problems with customer retention and revenue generation in the pureplay businesses led to a big shakeout in the US online grocery industry. Most of the independent online grocers shut down their websites permanently by 2002. Only Peapod and SimonDelivers weathered the dot com crash and survived. Brick-andmortar stores continued to offer online grocery service and soon took the lead. Later came some new players into the market. FreshDirect (founded in New York City in 2002) was one of them. 2.2 Customer Base/Target Market 2.2.1 Demographic Characteristics According to Buy4Now, an internet shopping service, 80% of online grocery shoppers were 29 to 50 years old in 2002. Seventy-four percent (74%) of the respondents were female shoppers (â€Å"Typical Customer Profile,† 2008). According to eGroceryUSA.com (â€Å"Typical Customer Profile,† 2008), three categories of people are the major users of online grocery services: affluent shoppers pressed for time, families with young children, and people who cant easily get to the store. The first category is people who have higher incomes and less time. These shoppers are usually technology-savvy, heavy internet users who are single or have a dual-income family with no kids. These big spenders prefer to pay someone else to do grocery shopping for them. The second group consists of families with young children. They comprise the largest number of online grocery shoppers. A typical e-grocery shopper in this category is 29-to-50 years old with one or more children and at least one chi ld under the age of five. They normally would cook family dinners, and, therefore, are regular grocery shoppers with above average spending. People in this category expect to save time and avoid the hassle of dragging kids along for grocery shopping (â€Å"Typical Customer Profile,† 2008). The third group is relatively small compared to the first two. They are older or disabled people and those who find going to a grocery store difficult. People are living longer than ever. In 1960, life expectancy of the US population was only 69.7. The number increased to 73.7 in 1980 and 77 in 2000. The projected life expectancies for the years 2010 and 2015 are 78.5 and 79.2 respectively (U. S. Census Bureau, n.d.). Older people may need some form of help with grocery shopping when it becomes difficult for them to drive to supermarkets and carry heavy items home. Online grocery shopping can be a good alternative to hiring personal helpers. For disabled people and others who are physically challenged (temporarily injured, bed-resting, etc.), online ordering and home delivery of groceries would also be of great help. 2.2.2 Geographic Characteristics Sandoval (2002) quoted analyst Robert Rubin saying that average American cities are less densely populated compared to ones in the UK, which means high fuel costs will hurt even more when it comes to grocery delivery. Rubin believed Americans are more likely to drive to the grocer because of the more entrenched car culture. The UK (248 per sq. km) had 8 times the population density of the US (31 per sq. km) in 2004 (â€Å"World Population Prospects,† n.d.). Tesco has been having a relatively successful online grocery operation in the UK. This led to the idea that US online grocers should aim their target at large urban areas with higher population density for more potential customers. In these urban centers, people reside closer together. Less people own family cars in large cities. The dependence on public transportation, more crowded shopping environments, busier lifestyle and higher income make many urban residents favor online grocers over personally going to traditional grocery stores. According to Mclaughlin (2005), Richard Braddock, who was appointed chairman of FreshDirect.com in 2005, mentioned that FreshDirect would look for cities that are similar to New York to expand its business. Those are cities with a high percentage of internet usage, a high number of residents per square mile, and residents with a good deal of disposable income. He suggested that FreshDirect would not expand to the whole surrounding area of New York. Instead it would expand from one urban population center to another to make sure its delivery trucks could make as many deliveries as possible every time they stopped. 2.2.3 Psychographic Characteristics Fox and Kempiak (2006) pointed out that out of MyWebGrocers five critical elements that decide whether a consumer shops for groceries online (price, ambiance, convenience, service and product variety), e-grocers have advantages in ambiance, convenience, and service. Fox and Kempiak stated that changing family structures and increased work hours have made consumers busier, more time-starved, richer and more impatient with time-consuming tasks like grocery shopping. Because of these social and attitudinal changes, many people are more likely to be attracted to convenient, dependable alternatives for the recurring chore of grocery shopping. This makes the e-grocery service more appealing for consumers that fit this profile. Consumers with certain disabilities that make in-store grocery shopping hard are another major market for e-grocers. The ease of shopping from home and the time saved are two of the reasons some prefer buying online. Gennifer Calise, a working Manhattan mom, admitted that she would not want to lug her ten-month old son to the grocery store and lug him back.Instead, she can stay home and play with him on the floor and be clicking online at the same time. With both a child and a full-time job, she said she did not want to do anything that wasnt easy (Koeppen, 2006). Similarly, Sietsema (2007) stated that those who worked long hours at the office and had little time for everyday life were delighted to be able to not have to go to a grocery store. Anckar et al. (2002) stated that the ability to shop from any place, at any time, was an undeniable convenience offered by e-commerce. The status of grocery shopping as an undesirable chore for many people makes it ripe for online efforts that can offer both speed and convenience. Time and convenience have been cited as the principal reasons for purchasing groceries electronically in a study by Morganosky and Cude. With the technology available online, general purpose grocers can easily become specialty grocers tailored to the individual needs of customers with allergies that require a special diet or people with different food preferences, like organic, ethnic, religious, or gourmet items. Scott and Scott (2008) state that by changing and reusing previous shopping lists online, consumers save time. Customers become familiar with the e-grocers website fairly quickly. The average ordering time is only 20 minutes versus 60 minutes when a customer shops online for the first time. The benefits of buying groceries online include the ability to establish, save and modify shopping lists online over time, emailing shopping lists to other family members, getting personalized coupons, sorting items according to nutritional information provided and automatically ordering all the ingredients for a certain recipe. Bates and Lauder (2008) pointed out that customers are often not loyal to just one particular retailer. They can be loyal to several retailers at the same time. These retailers share the spending of each customer. Therefore, the goal of competition becomes maximizing the wallet share a retailer could possibly get from each customer. Offering online grocery shopping to customers as a new distribution channel has the potential to gain a greater wallet share for a grocer. Bates and Lauder (2008) also believed that the market adoption rate is another influencing factor that decides how many customers an online grocer can attract. Customers adopt online grocery services at different rates and at different times. Due to Webvans failure and the dot com meltdown in 2000, the natural evolution and adoption process were set back for years, both for potential customers and for grocers. Bates and Lauder used the figure in Appendix B to show the adoption process being extended. Fox and Kempiak (2006) brought up some major concerns that prevent some consumers from choosing to buy groceries online. These concerns included delivery time and methods, quality of produce, a limited variety of goods, and the security and privacy of online shopping. Anckar et al. (2002) considered the fear of receiving lowquality goods to be a potentially important obstacle to purchasing food online. Some customers fear that store employees may not pick the freshest produce in an attem pt to minimize storage losses or maximize picking speed. While some people consider grocery shopping a burden, there are still a lot of food lovers who enjoy their trips to traditional grocery stores to actually touch and handpick everything they are buying. Online grocery shopping is just not the right experience for them, and, therefore, does not satisfy their needs. When Scott and Scott (2008) described the resistance to online grocery shopping, they mentioned that customers may not be willing to pay the delivery fee. It is also hard to change the established shopping habits of consumers. Customers might not like the long lines at the registers of traditional grocers, but that does not necessarily mean they are ready to give up standing in them right now. The cost involved in the acquisition and retention of customers tends to be high, because once consumers have a negative online grocery shopping experience, they may not buy groceries online again and tell their acquaintances not to try the experience. 2.2.4 Technological Characteristics The internet makes online grocery shopping viable. According to Fox and Kempiak (2006), the Food Marketing Institute (FMI) indicated that 86% of US consumers go online or use their computers every day. Seventy percent (70%) of them shop online frequently. While in the UK, broadband use is ranked number two in Europe and number five in the world. This has been a boon for online businesses in the UK 15.9% of the respondents of this research bought groceries online at least once a year. 3.2% used e-grocers at least once a week. 2.7% used them two or three times a month. 4.5%, the largest group, used an e-grocer once or twice a year (â€Å"E-commerce: The Internet,† 2007). The increasing rate of internet usage likely contributes to the rising number of consumers who purchase groceries online. According to Foley et al. (2003), online shoppers actually had habits different from their unwired counterparts. Online grocery shoppers made fewer shopping trips per month (for all goods) and spent more per trip than those who did not shop online. Online orders tended to be larger than in-store purchases. At Tesco, for example, instore purchases averaged  £21 (about $33), while online orders averaged  £85 (about $136). Online shopping households averaged nearly $10,000 more in annual income over offline ones at a little over $70,000 per year. 2.3 e-Grocery Shopping Process and Various Business Models The process of buying grocery online consists of several major steps. They are ordering and payment, order-picking/ assembly and order delivery/ pickup. (Appendix C shows the process of e-grocery shopping in a figure.) Although all e-grocery transactions have these basic activities, e-grocers vary in how they carry them out. 2.3.1 Online Ordering A consumer who intends to buy groceries on the web would first go to an egrocers website to enter the zip code of the intended delivery address. The e-grocers website would tell the consumer whether home delivery or in-store pick-up i