Critically response to articles and a book Essay

Critically response to articles and a book - Essay Example Readers interpret texts depending on how they understand them. When readers read the book The Things They Carried, they will not fail to sympathize with what soldiers go through while at war. The paper looks at how a reader may respond to the book concerning the circumstances surrounding the soldiers when they are at war. When readers read the text, they will no doubt understand the role of soldiers in ensuring that their country is safe from external attacks. Andrew Krepinevich Jr, the author of The Army, and Vietnam argues that soldiers must be ready to face various challenges when they go to war (13). The writer argues that the US army had to accomplish its mission in Vietnam before leaving that country. In order for soldiers to have victory in the war, they are fighting, it is important for them to be prepared both psychologically and physically. Wars are won first in the mind, then physically. Fatalities on the side of the American army would have been reduced if America would have taken time and studied Vietnam before launching attacks. Love is the most powerful weapon soldiers can take to war. Soldiers must first love their country and family in order to have the morale to fight in the war. The author of the text does a commendable job to highlight the story of love in the book. In the book, Cross carries letters from a student named Martha because he is in love with her. Cross remembers taking her out on a date and wishes he had taken to her room (Brien Cranston). Love is a powerful tool for an individual can decide to do anything just because of love. What the American army needs to do always is to cultivate the love of its members to their country and families. Every soldier would want to be a hero back at home. The book ought to have identified more cases of love in the book since it is the main issue that surrounded the soldiers who went to Vietnam. Every person must embrace hope when facing challenges or

Reflection Essay Example | Topics and Well Written Essays - 250 words - 73

Reflection - Essay Example I have taken this concept of leadership from the leader of Starbucks where he consults and engages the low level staff before making a decision. Thirdly, and lastly, I have learnt the concept of objectivity and subjectivity in relation to financial management and asset acquisition. This is from the considerations that the Starbucks Company has to consider some aspects accepting offers. All these concepts that I have learnt apply both to my professional and personal life in terms of being an effective resources manager pertaining to corporate resources and making personal budgets to avoid spendthrift activities (CheckMate, 2009). Leadership also applies to both professional and personal life in that I will engage the junior employees in a company once employed and even in my personal life I will be an effective leader. Lastly, the concept of critical analysis and subjectivity and objectivity applies in my professional life in terms of assessing all aspects before making decisions on taking or dropping offers or venture g into a certain activity. This applies in my personal life as well since it can help me in making a decision with first assessing the different

The Role of the Dead Letter Office Essay Example for Free

The Role of the Dead Letter Office Essay While Melville only mentions the Dead Letter Office in the last paragraph, he portrays its significance throughout the story. Melville reveals Bartleby previously worked in a Dead Letter Office, where he handled the monotonous task of burning undeliverable mail. Because the narrator views Bartleby as a mirthless man, he feels pity for Bartleby working at a place devoid of happiness. By employing a theme of lost hope, Melville describes the dead letters as mail, which fails to reach its destination with its encouraging message or item of value. Melville associates the melancholy present in Dead Letter Office with the strife evident in Bartlebys life. In Melvilles short story, the Dead Letter Office serves as an influence upon Bartlebys fastidious nature. Throughout the story, Bartleby expresses his preferences in regard to his work, which primarily result from the dissatisfaction he felt in his previous profession. Perhaps Bartlebys refusal in performing his duties signifies his dismissal of authority, which indicates Bartlebys desire to control his own life. By characterizing Bartleby as an isolated man, Melville demonstrates how Bartlebys environment separates him from nature and the company of others. Working in the narrators office, Bartleby occupies a secluded area near a window, where he constantly stares at a wall. Bartleby exhibits the behavior of a loner as he stays at the office even at night, when no one occupies the streets. When Melville states On errands of life, these letters speed to death, he refers to the Dead Letter Office as a symbol of mortality (Melville 52). In describing Bartlebys former occupation, the narrator even acquaints the dead letters of the mail center with dead men (51). Melville portrays the final depressing image of death through Bartlebys former workplace, the Dead Letter Office.

General Electric Company And Its Leadership Short History Management Essay

General Electric Company And Its Leadership Short History Management Essay Thomas Alva Edison established Edison Electric Light Company in 1878. General Electric Company, known as and commonly abbreviated simply to GE, was formed in 1892, as a result of a merger of the competing companies Edison General Electric Company and the Thomson-Houston Electric Company. Having its headquarters in United States, GE is a major technology conglomerate and is the only company listed in the Dow Jones Industrial Index today that was also included in the original index of 1896. GE is a big multinational corporation and has a diversified infrastructure. Its business activities span a wide range of areas from aircraft engines, industrial products, water processing products, power generation to financial services, medical diagnostic imaging, security technology, consumer financing, and television programming. GE operates in more than 100 countries and employs about 300,000 people worldwide. In smaller and less developed countries, it operates through distributorship or dealer ship channel by giving the rights to its distributors companies to sell and service its products. Administratively, the General Electric Company is organized into 5 divisions known as Technology Infrastructure, Consumer Industrial Electronics, Energy Infrastructure, NBC Universal and Capital Finance. A sizable portion of its products manufacturing is done in countries outside United States. Even some products research work for GE is done in Japan. In 2009, GE delivered excellent financial results despite the hard economic conditions with earnings of $11.2 billion. Industrial cash flow from operating activities for the year remained strong at over $16.6 billion. Today the company is one of the largest in the world, and owns numerous research and manufacturing firms around the world as well as two television networks and other businesses (Hanna,). John F Welch era: When John F. (Jack) Welch, Jr., became chairman and CEO in 1981, GE was in economical and financial crisis. Under his leadership, GE entered a period of radical change. Jack Welch restructured GE existing operations in an effort to make GE more competitive and profitable in all of its businesses. He sold lot of GE unprofitable businesses and fired brutally thousands of GE employees not performing well or doing redundant jobs. Welchs first order of business was to return much of the control of the company to the periphery. He decentralized GE management and reduced hierarchical management layers. However, he retained his predecessor Reginald Joness system of classifying divisions according to their performance. His goal was to make GE number one or two in every field of its operation and to make every GE business division profitable. He acquired lot of successful and profitable companies. Over the next several years, GE bought 338 businesses and product lines for $11.1 billion and sold 232 for $5.9 billion. Mr. Welch said that his aim was to make GE the nations largest company. In early 1990s, GEs operations were divided into three business groups of technology, service, and manufacturing. Its manufacturing division accounted for roughly one-third of the companys earnings then. However, the service sector was growing faster and represented more than three-quarters of the U.S. economy of mid-1990s. The company launched an aggressive campaign to become dominant in the growing services sector. Research and investment continued towards energy conservation such as more efficient light bulbs, jet engines and electrical power transmission methods. Despite a global economic downturn in the early 1990s, GE managed to keep aggregate sales from its technology, service, and manufacturing operations stable at about $60 billion annually. Acquisitions in the late 1990s centered on two of the companys growth initiatives: services and globalization. Under Welchs leadership, GE in the late 1990s also adopted Six Sigma, a quality control and improvement initiative pioneered b y Motorola, Inc. and Allied Signal Inc. The program aimed at to cut costs by reducing defects in manufacturing. GE claimed that by 1998 Six Sigma was yielding $1 billion in annual savings. The company also continued to restructure where ever necessary, including taking a $2.3 billion charge in late 1997 to close redundant facilities and shift production to cheaper labor markets. During 1999 General Electric adopted a fourth growth initiative i.e. e-business (globalization, services, and Six Sigma being the other three). In October 2000, Jack Welch planned a $40 billion merger of United Technologies Corporation and Honeywell International Inc. This was the largest acquisition in the companys history. However, the Honeywell deal ended up in a sour ending for the Welch era. Jeff Immelt, who joined GE in 1982, was named as president and CEO of General Electric in September 2001. Immelt era: 2001 and Beyond Immelt began to place his imprint in earnest on GE in 2002 through major restructurings and several significant acquisitions. He launched a reorganization of GE Capital. The financial services unit was divided into four separate units to streamline management, increase oversight, and improve transparency. GE began feeling the effects of the economic downturn that year as revenues fell nearly 3 percent, to $125.68 billion; profits nevertheless increased 7.5 percent, reaching $13.68 billion, though that was a far cry from the yearly 13 to 15 percent increases that Wall Street came to expect from GE during the Welch era. The stock ended the year trading at $24.35 per share, less than half of the high price for 2001. Next year, profits rose modestly, to $14.12 billion, or about 3 percent. Taking advantage of the economic downturn to acquire desirable assets from distressed sellers, GEs deal-making appetite grew only larger in 2003. As part of its effort to shift emphasis to higher growth fields, General Electric completed two significant acquisitions in healthcare. Continuing his transformative leadership, Immelt reorganized GEs 13 businesses units into 11 focused on specific markets and customers. Also during 2001, GE Lighting had the largest product launch in its history when it introduced the GE Reveal line of light bulbs to generate a cleaner and crisper light. The reorganization, effective at the beginning of 2004, brought similar businesses together in an effort to increase sales and cut costs. Overall, through the myriad moves engineered during just a few years in charge, Immelt was seeking to cut General Electrics reliance on financial services and mature industrial businesses in favor of such higher growth areas as healthcare and entertainment. He built operations in fast-growing economies such as Chinas. GE was aiming to outsource $5 billion by 2005 of parts and services from China and simultaneously grow sales in China to a like figure. Top Leadership Team and their Characteristics GEs culture of integrity starts with their board of directors and touches every member of the company. Their board members, more than two third of whom are independent, remain in dialogue with GEs leaders. Together they focus on the areas of strategy and risk management while monitoring strategic initiatives personally through site visits. GE leaders are at the forefront of GEs diversified portfolio of business, where they foster an environment that encourages employees integrity and professional development. GE believes that change is the essence of what it means to lead. It is known for having one of the best leadership development models in the world. The end result is that GE is able to build a management core that is very knowledgeable and experienced in the operations of the giant corporation. Worldwide, GE spends $1B every year on training and education program for the people of GE. GE Leadership Team: Jeff Immelt is GEs chairman and CEO. During his tenure since 2001, Jeff has worked to tie GE to the world development, such as emerging markets, environmental solutions, demographics and digital connections. He also laid the vision for GEs ambitious Ecomagination initiative and has been named as one of the Worlds Best CEO three times by Barrons. Leadership to GE means listen to the people and work with them. GE leadership (stated by Jeff Immelt) always believed that building strong leaders is strategic imperative. When market conditions are favourable and a company is on an upward growth then leadership is often taken for granted. However, the true test of leadership is quite evident in turbulent times. Jeff ensured that GE maintained its market position even in turbulent times. Key Actions By Jack Welch Leadership When John F. (Jack) Welch, Jr., took over as a chairman and CEO of GE in 1981, GE was in bad economical and financial situation. He found GE was overgrown, laden with too many layers of management and too many people duplicating work. (Heskett, 2000) Jack Welch restructured GE existing operation extensively. He ruthlessly fired thousands of GE executives and employees and took out GE of hundreds of business lines. Soon he won the nickname of Neutron Jack means getting rid of people while retaining buildings. He decentralized GE management and dismantled the 29 layers of hierarchy and made GE an informal company. Jack opened the GE culture to ideas from everyone, every where by introducing the motto of Imagination at Work, and made boundary less behavior a reflexive, natural part of their culture. He made acquisition of several profitable companies and businesses to make GE more profitable. Jack believed in Globalization and hence implemented strongly. He mentioned that Globalization is good. Globalization makes countries more interdependent on each other. And, the more interdependent we are, the better chances we have for peace. One of the theories of leadership that Welch perfected as CEO of GEl was his theory of the 4 Es. Offic ially known as E to the fourth power, Welch created a leadership dynamics that he employed both at GE and hopes others will employ at their own organizations as well. His program is, for people who have enormous personal energy, the ability to motivate and energize others, edgethe GE code word for being instinctively competitiveand the skill to execute on those attributes. He very strongly enforced the process of Six Sigma. Six Sigma is a vision of quality which equates with only 3.4 defects per million opportunities for each product or service transaction, hence strives for perfection. With its services spanning from the services to the manufacturing sectors, GE realized that the only way they could achieve business excellence in what they were doing was by standardizing processes to minimize variations and hence defects. Todays competitive environment leaves no room for errors. GE is spoken of in the same breath as Motorola for the initiatives that it took on reengineering busines s processes by Six Sigma approach. It is this Six Sigma approach that has led to retention of old customers and acquisition of new ones to the GEs ever-growing list of customers. GEs success with Six Sigma has exceeded most optimistic predictions. Having taken GE with a market capitalization of about $12 billion, Jack Welch turned it into one of the largest and most admired companies in the world, with a market value of about $500 billion, when he stepped down as its CEO 20 years later, in 2000. (Google) By Jeff Immelt Leadership In 2001, shortly after Jeff Immelt took over as CEO, a series of events such terrorist attacks on American soil and corporate scandals (Enron, World com) occurred. These events created significant uncertainty and led to a crisis of confidence among investors community which in turn caused a slow down of the global economy. GEs stock price went down by 16% slightly more than SP 500 (GE 2001 Annual Report). Immelt recognized that managing GEs exposure to business cycles would be critical to organizations long term stability. With most of the productivity gains already achieved by his predecessor through extensive internal reforms, Immelt realized that organic growth is essential for future profit growth. In 2002, Immelt set a goal for GE to achieve a sustained organic growth rate of two to three times the growth of global GDP. Hardly any company has achieved this kind of growth what GE was looking for, and none on a revenue base of $150 billion (Stewart, June 2006). Immelt identified t he emerging global trends, uneven economic growth, increasingly interdependent global economy, global competitiveness of emerging markets and a more volatile and uncertain world. He aimed at creating value for customers by leveraging GEs core competencies, particularly the ability to develop, test and deploy new products, highly customized products and services for high growth markets. In his letter to shareholders in 2003, Immelt articulated GEs three strategic imperatives as: 1) sustaining GEs strong business model 2) strengthening the portfolio and 3) driving growth initiatives (GE 2003 Annual Report). To implement this strategy, GEs business portfolio was restructured through a series of acquisitions and divestments around five key growth initiatives: Technical Leadership, Services, Customer Focus, Globalization and Growth Platforms. Technical Leadership i.e. Technology and Innovation was at the heart of Immelts GE growth initiatives. Identifying new growth platforms was established as a central strategic challenge for all GEs businesses and involved analyzing the market to identify high-growth segments that offered potential for attractive returns. An important step towards developing growth potential has been the launch of the Ecomagination business initiative to help meet customers demand for more energy efficient products. In formulating his approach, Immelt viewed technology as a key driver to GEs future growth and took measures to expand GEs research and development capabilities and supported them with adequate financial backing. Another essential part of Immelts growth strategy has been implementation of the Customer Focus Initiative. This manifested in the renewal of GEs marketing function most notably through the creation of GEs Commercial Council and the deployment of a whole suite of customer-oriented programs. An important outcome of customer focus was the organizations ability to create new value for the customer in vertical selling by bundling products with support services and combining products and services across businesses to deliver highly customized solutions. This enhanced GEs capacity to meet customer spec ific needs (2003 Annual Report). Historically GE is known for developing professional managers who are broad problem solvers with experience in multiple businesses or functions (GE 2003 Annual Report). Immelt realized that he needs to transform GE into a growth oriented culture to achieve success in his growth initiatives, and initiated a management development program Leadership, Innovation, and Growth (LIG) for senior managers of the company to enable managers to effectively lead the change in culture from operational excellence to a growth culture at GE (Prokesch, Jan 2009). He aimed at raising a generation of growth leaders people with market depth, customer touch and technical understanding emphasizing the depth (GE 2003, Annual Report). GE has sold modified Western products to emerging markets for decades. But now, it has embraced the reverse innovation (develop in-expensive products for emerging economies and bring them to the developed nations) to pre-empt the emerging giants. For past 30 years of globalization of products, GEs major functional units like RD, manufacturing are centralized and are headquartered in the developed world which acts as a barrier for the success of reverse innovation strategy. However, changing a long established structure, practices and attitudes is an enormous task and to bring any major change requires companys top leaders to play a major role. Jeff Immelt and its leadership team created a new organizational form Local Growth Teams (LGTs) by giving them special status, funding and personally monitoring them on a monthly basis to facilitate faster implementation of the reverse innovation strategy (Immelt, Oct 2009) GE realized that Marketing is an essential function to achieve long-term growth and has strengthened Marketing by doubling its size from 2,500 in 2003 to 5,000 today. CMO (Chief Marketing Officer) positions were created for all GE businesses and at the corporate level. Marketing has established a Center of Excellence (COE) that would gather and disseminate key competitor information. The COEs biggest contribution is its delineation of potential scenarios (Comstock et al, Oct 2010). GE gradually reduced its representation in certain parts of financial services industry as it continues to reposition itself in the market place around the key themes that Immelt has identified as emerging global trends. By 2010, its operating frame work was centered on four main businesses: energy, technology infrastructure, finance, home business solutions and media. Effectiveness of Top Leadership Jack Welch Jack Welch led the company to massive revenues. In 1980, the year before Welch became CEO, GE recorded revenues of approximately $26.8 billion; in 2000, the year before he left, revenue blasted to nearly $130 billion; almost five fold. When Jack Welch left GE the company had gone from a market value of $14 billion to one of more than $410 billion at the end of 2004, making it the most valuable and largest company in the world, up from Americas tenth largest by market cap in 1981. Through the 1980s, Welch worked to restructure GE and make it a more competitive and profitable company. He also pushed the managers of the businesses to become ever more productive. Welch worked to eliminate inefficiency by dismantling the bureaucracy and made GE a more informal company. He shut down factories and sold unprofitable businesses and laid off low productive staff. Welchs strategy was later adopted by other CEOs across corporate America. In 1999, he was named Manager of the Century by Fortune ma gazine. Some people believe that Welch is given too much credit for GEs success. They argue that individual managers are responsible for the companys success. It is also held that Welch did not rescue GE from great losses as the company had 16% annual earnings growth during the tenure of his predecessor, Reginald H. Jones. Each year, Welch would fire the bottom 10% of his managers. Still GE hires and fires its employees very swiftly; the continuation of same strategy. As soon as GE sees any losses of revenue or contracts, it fires employees or send them on suspended employment. Critics also say that the pressure Welch imposes leads some employees to cut corners, possibly contributing to some of the defense-contracting scandals that have plagued GE or to the humiliating Kidder, Peabody Co. bond-trading scheme of the early 1990s that generated bogus profits. Welch has also received criticism over the years for his lack of compassion for the middle class and working class. Welch has publicly s tated that he is not concerned with the discrepancy between the salaries of top-paid CEOs and those of average workers. Jack Welch had a record salary of $94 million a year, followed by his record retirement-plan of $8 million a year. Jeff Immelt In 2001, Immelt demonstrated his ability to recognize the changing business environment in the face of a sliding share price in the aftermath of 9/11 and Enron and World com scandals, and assured shareholders by communicating his commitment to good corporate governance and transparency by the introduction of more detailed financial disclosure. He developed and implemented organic growth strategy for organizations long-term sustainable growth considering the emerging global trends in the business environment. Jeff Immelt also addressed the alignment of the structure, systems, skills and staff to effectively achieve the organizational change to transform GE into a company with growth initiative as a core competency. In the context of global financial crisis of 2008, GEs repositioning towards technology and industry has played an important role in protecting GEs revenue and earnings base. Despite the global financial crisis of 2008 which impacted severely on GEs share price, its financ ial performance continued to show remarkable resilience through 2009. However, the GEs stock price is still down at $16 and has under-performed despite earnings growth. One reason could be its financial units perceived exposure in financial markets. In these challenging economic times, the jury is still out on the long term success of Jeff Immelts growth strategy for GE. However, the time will be the ultimate judge. Good business leaders create a vision, articulate the vision, passionately own the vision and relentlessly drive it to completion. By imbibing all these qualities, Jeff Immelt has been successful as an effective leader in positioning GE for sustainable growth in the long term.

Essay --

What is a hero? A hero is someone who does a service to ones community even when staring death in the eyes. A hero is someone who willingly even when face to face with adversity does not quit. A hero can vary from the policemen who keep the streets safe to a preserver of the peace and prosperity to a political leader who helps secure the endowment of democracy to our his country and their posterity. Of all these type of heroes, I tend to believe that the heroes who preserve both peace and prosperity while helping end a deficiency of the human race such as racism is more inspiring, which is why, for my hero I chose Mohondas Karachamand Gandhi who is best known as Mahatma (good soul) Gandhi. Mahatma Gandhi helped uproot the tree of racism and even after being arrested multiple times, he, through both thick and thin, did not give up until his work was finished to a sufficient amount. Mahatma Gandhi may have been a lawyer, an humanitarian, a civil rights activist, legal advisor, and a na tionalist leader, but he was most of all, a hero Mahatma Gandhi was born on October 2,1869 at Porbandar, Gujarat to a very respected family. His father was the chief minister of Porbandar. A few years after Mahatma Gandhi was born, his father had died leaving Gandhi depressed. After a few years, he slowly got on with his life and in the year of 1888, had set sail for England so he could finish his degree in law at the Inner Temple, one of the four law schools in England. He was called to bar in 1891 and even enrolled in the high court of London, yet later that very year he returned to India. In India, after a year of very unsuccessful law practice, he decided to accept an offer from an Indian business man,Dada Abdulla, in which Gandhi would traveled ... ...for his plans to liberate India. In 1942 Gandhi issued a last call for independence by eloquently, in a speech, asking every Indian to lay down there life if it need be to earn India freedom from Britain. In response, Britain arrested both Gandhi and nearly the entire Congress and held them locked up until the conclusion of the war. India soon became a separate country and Gandhi was released. Gandhi is considered a hero because even after he was unjustly arrested multiple times, he persevered and made a difference Gandhi is considered a hero not only because he helped uproot racism, he cared for all classes in society, and because he perseveres through thick and thin, but more of because he made a changed the world forever. Without Gandhi and his techniques, the world would be full of discrimination and racism. If there was one word to describe Gandhi, it is heroic

Obsession in Araby of James Joyces Dubliners Essay -- Joyce Dubliner

Obsession in Araby    In James Joyce’s short story "Araby," the main character is a young boy who confuses obsession with love. This boy thinks he is in love with a young girl, but all of his thoughts, ideas, and actions show that he is merely obsessed. Throughout this short story, there are many examples that show the boy’s obsession for the girl. There is also evidence that shows the boy does not really understand love or all of the feelings that go along with it. When the boy first describes the girl, you can see his obsession for her. He seems to notice every detail such as "her dress swung as she moved her body and the soft rope of her hair tossed from side to side" (Joyce 548). You do not usually remember every minute detail of someone unless you are very intrigued by them. Also, note the way he describes her hair as "soft rope." This shows the intricate way the boy views her. Another way you can see the young boy’s obsession for the girl is through his actions. Every morning, he waits for the girl to appear, and then he follows her. The way in which the boy waits for the girl definitely shows that he is obsessed with her. The young boy lies "on the floor in the front parlour watching her. The blind was pulled down to within an inch of the sash so that [he] could not be seen" (Joyce 548). This sounds like spying, and spying on someone usually indicates that you have a fixation with that person. In this case, the young boy does demonstrate this fixation. For instance, while the young boy is following her, this is the way he describes his adventure: "I kept her brown figure always in my eye, and when we came near the point at which our ways diverged, I quickened my pace and passed her. This happened morning ... ...ights go out, and he is in the dark. As he stands there in the darkness, he sees himself "as a creature driven and derided by vanity; and [his] eyes burn with anguish and anger" (Joyce 551). I think this is when the young boy realizes that his whole trip to Araby was foolish because a gift from the bazaar is not going to make the young girl love him. The young boy finally realizes that everything he has done has been driven by some foolish notion that he thinks is love, but now he knows it is just a pathetic obsession for the young girl. The young boy’s eyes are burning because he feels so foolish about everything he has done supposedly for love, when he finally realizes all of his thoughts, actions, and ideas were just an obsession. Works Cited Joyce, James. "Araby." The Harper Anthology of Fiction. Ed Sylvan Barnet. New York: HarperCollins, 1986.      

Mananaging finance

This report will concentrate on the performance of the two aviation companies, Hong Kong-based Cathay Pacific Ltd. and Singapore-based Singapore Airlines. The report will try to help the potential investor in the Asian airline industry to assess the prospects of both companies and their riskiness in regard to each other and the industry as a whole as well as the returns both companies have to offer to compensate for the risk of their financial position. 1. Profitability, growth, return on investment Profitability of the company is indicated by the return on equity ratio that shows the dollar return on each dollar of investment: Return on equity (ROE) = net income/ stockholders’ equity Cathay has a ROE of 1,604/ 31,052 = 5.16% Singapore Airlines’ ROE is 849.3/ 11,455.1 = 7.4% SA provides a better return on equity than Cathay, although the decrease in the annual income at Singapore Airlines in 2003 from 2002 represents a threat to its future earnings and return on equity while Cathay’s results demonstrate improved performance. Return on assets demonstrates how many dollars of income were generated by each dollar of investment and is calculated in the following way: Return on assets = net income/ total assets For Cathay Pacific Ltd. this figure is 1,604/ (54,686 + 20,351) = 1,604 / 75,037 = 2.14% For Singapore Airlines, return on assets is at 849.3/ 16,558.4 = 5.13% Thus Singapore Airlines is more efficient in using its assets and offers a better return on the funds tied up in assets. Another profitability measure is the operating margin that expresses operating profit as a percentage of the revenue. For Singapore Airlines, the operating margin is 680.4/ 9,761.9 = 6.97% For Cathay Pacific Ltd., this ratio is 285/ 2,393=11.9% As for growth, SIA’s revenue dropped in the 2003-2004 fiscal year to $9,761.9 million from $10,515.0 million, which represents a 7.7% decrease in revenue. The company executives explain this plunge with the effects of the SARS outbreak in the Asian region that had a devastating impact in the airline industry. Cathay’ revenue has as well shown a 11.9% decrease in revenue to $3,792 million from $4,242 million. The drop in revenue was reflected in the net income. At Cathay Pacific Ltd., net income was $167 million as opposed to $511 the year before which is a drop of 67.3%. The income dropped as the company was unable to drastically reduce its operating expenses or finance charges in the light of lower revenue. At Singapore Airlines, net income was down 20.2 % at   $849.3 million as compared to $1,064.8 million for 2002-2003 fiscal year. 2. Current financial position, liquidity, both long and short term, sources of finance The liquidity of the company is most often assessed in terms of the current ratio: Current ratio = current assets / current liabilities For Cathay Pacific Ltd. current ratio = 20,351/ 14,520 = 1.4 For Singapore Airlines, current ratio = 3,121.9/ 3,401.6 = 0.92 Usually companies are expected to have a current ratio that is no higher than 2.0, otherwise the company is believed to be in financial trouble. However, due to advances in information technology has enabled a lot of companies to minimize the need to hold cash, inventories and other liquid assets. As a result, a lot of successful companies are content to keep their current ratios lower than 1.0. This allows us to conclude that although Cathay seems to be in a better position in terms of short-term liquidity, SIA’a lower ratio does necessarily signify trouble. Another useful measure is the quick ratio that indicates how well a firm can satisfy existing short-term obligations with assets that can be converted into cash without difficulty and is computed as follows: Quick ratio = (cash + securities + receivables) / current liabilities Cathay Pacific Ltd. has a quick ratio of (15,200 + 4,573)/ 14,520 = 1.36 SA’ s quick ratio equals (0.4 + 130.2 + 1,518.5)/ 3,401.6 = 0.48 Again, based on current ratio, Cathay is much more liquid than Singapore Airlines as it has more assets that can be readily turned into cash. Long-term liquidity of the firm is evaluated using the debt ratio that specifies the overall ability of the company to repay its debts: Debt ratio = Total liabilities/ total assets According to the general rule of thumb, this ratio should not exceed 50%. For Cathay, the debt ratio is (29,361 + 14,520) /   (54,686 + 20,351) = 58.9% For Singapore Airlines, the debt ratio amounts to (446.7 + 2,175.3 + 2,207.2)/ 16,558.4 = 29.16% These calculations make it apparent that although Singapore Airlines is less liquid than Cathay Pacific Ltd., the Singaporean company has less long-term obligations and thus is less risky for the investor. Thus, Cathay relies primarily on debt to finance its operations, while Singapore Airlines is predominantly equity-financed. 3) Changes to the organizations and their effect At Singapore Airlines, a more streamlined organizational structure was introduced at the beginning of the financial year. Under the new structure, sixe senior executives including those heading Services and Operations, Marketing, Corporate Services, Finance, Human Resources and Planning will report directly to the CEO of the company. Hopefully, this simplified structure will make possible a speedier implementation of decisions. Cathay Pacific Ltd. basically retained the same corporate structure in the fiscal year analyzed. 4) The status of the companies in the financial markets and relative to their industry sector. In the aviation industry where both companies belong, the average market cap, according to Yahoo! Finance, is $895.52 million. Both Cathay with about $5.96 billion and SIA with $7.86 significantly exceed this number. On the other hand, revenue growth in the industry has been 12.8% on the average of late as opposed to the drop in the revenue of both airlines. As for profitability, the average operating margin for the airline industry is 6.81% compared to 6.97% at SIA. Cathay with 11.9% is well ahead of the market. The average return on equity in the aviation sector is 8.3% as compared to Cathay 5.16%, Singapore Airlines 7.4%. 5) Past performance and projected future trends Cathay Pacific Ltd. Cathay Pacific Ltd. is Hong Kong’s largest air carrier accounting for a third of all passenger flights through Hong Kong. Cathay owns a minority stake in its competitor Dragonair that holds another tenth of the market. Recently Cathay entered a contract with Air China that it will buy a 9.9% stake in the Air China’s initial public offering. The partnership will allow joint marketing and sales activities, cooperation in engineering, ground handling, purchasing, security as well as better coordination of the two companies’ schedules. This arrangement will allow Cathay to optimize its cost structure. The cooperation with Air China offers a strategic advantage as it provides improved access to Beijing Capital international Airport, a major hub in inland China. China is one of the world’s fastest growing regional aviation markets and the one coveted by many carriers. Competition was until recently restricted by the limitations on the number of flights performed by foreign carriers imposed by the Chinese government. Cathay and Hong Kong have pressured Chinese authorities to allow more flights between Hong Kong and mainland China. Cathay management has been trying to get access to passenger flights between Hong Kong and Shanghai sooner than the agreed date of October 2006 when a second Hong Kong airline will be allowed to start serving Shanghai with passenger flights. Liberalization of these restrictions could boost Cathay’s revenue dramatically since this route is very lucrative because of heavy business travel. In 2003 Cathay resumed air services in mainland China after a 1-year absence from the market. Here it faces competition from its former partner Dragonair. Now it plans to make its three-time -a-week flights to Beijing daily in December, add even more Beijing flights next year and launch passenger services to Xiamen and cargo services to Shanghai. Regular air companies like Cathay and Dragonair now face tougher competition from budget carriers Air Asia from Malaysia and Virgin Blue of Australia forcing the veterans of the market to cut their costs. Earlier Cathay representatives admitted that the prices are somewhat higher in this market than in others but attributed this to the difference in exchange rates and other long-term factors. The tendency towards more open skies pursued by Singapore, Thailand and Malaysia will draw more passengers through their airports but can damage the market share and financial performance of Hong Kong airlines including Cathay. Asian governments are slowly dismantling obstacles on the way of foreign air carriers and can be expected to continue with this policy. This could improve Cathay’s prospects in mainland China but sharpen competition in Hong Kong itself. However, the epidemic of severe acute respiratory syndrome has attracted the public’s attention to the benefit of having a local air carrier since Cathay kept flying at the time when foreign airlines suspended their operations. Overall, since Cathay is in the business of air cargo travel, it can be reasonably assumed to profit from the world’s economic recovery projected to lead to above-average growth in the global airfreight market, according to a Lufthansa report (2004). Lufthansa experts base their assessment of tonnage increase of 5.9% in international air cargo market in 2004 on expectations of the boom in the Asian market and gradual recovery in North America. Singapore Airlines Singapore Airlines is also in the business of air transportation, engineering, airport terminal and pilot training. Its operations cover Asia, Europe, North and South America, South West Pacific and Africa. Due to this global focus, the company is also expected to benefit from the boom in the Asian market. Unlike Cathay, the diversity of the routes makes it easier for Singapore Airlines to balance its risks that can occur because of an economic downturn in one of the markets. Singapore Airlines is primarily focused in its business on the Asian business as it is the largest carrier in terms of market capitalization with $7.86 billion in market cap as compared with Cathay Pacific Ltd. with $5.96 billion. Singapore Airlines has posted strong second quarter results that beat analysts’ expectations. The reason behind strong growth is increase in travel demand. Singapore Airlines is listed on the first London Stock Exchange office in Asia, and on the first New York Stock Exchange office in Hong Kong along with 15 other Chinese companies. This development can contribute to greater transparency of their accounting procedures and lend credibility to their financial information, which in turn can help them bring down their cost of borrowing and attract more investors’ money. There are a lot of European investment funds waiting to be put into the thriving Chinese economy. Investors are attracted by the huge potential of the Chinese outbound market that has already surpassed Japan as the top location in the Asia Pacific outbound ranking. After surviving an epidemic of SARS, the market is forecast by many analysts to return to very strong growth in 2004-2005. China outbound trip volume has increased about five times in the past decade. In 2002 the annual volume was 16.6 million outbound departures as compared to 3.7 in 1993. The market is predicted to show double-digit annual increases if only the outbreak of SARS is not repeated. Singapore Airlines is fully positioned to take advantage of this trend as it is one of the leading carriers in the Asian-Pacific region, so a dramatic rise in revenue can be expected. According to the corporate news, the company is making efforts at slashing its costs. On November 23, it announced the plan to outsource jobs in uplift flight coupon processing and some aspects of interline billings, making 66 jobs in the Finance Division. This effort could help raise the company’s efficiency and improve the bottom line in the long run. The most important challenge for the airline industry is the rising fuel costs. Singapore Airlines admitted that higher fuel costs hold their halfyear net profit to $616 million. A lot for the airlines will depend on the evolution of the world oil prices. Further uncertainties surrounding the operation of the pipeline in Iraq or disruptions in Russia caused by the Yukos legal proceedings could drive up the oil price further up, negatively affecting Singapore Airlines’ net income. According to the company’s calculations, that a one-dollar-per-barrel increase in the oil price amounts to the additional $ 14 million fuel spending for Singapore Airlines. Another worry for the management of the airline is the advent of low-cost carriers that puts increasing pressure on the company’s cost structure. All Asian carriers should hope that an epidemic of SARS will not be repeated as it had a devastating effect on the revenue of Singapore Airlines and other companies. Works cited Beveridge, Dick (October 20, 2004), Cathay Pacific Buys into Air China, goldsea.com/Asiagate/410/21cathay.html Bradsher, Keith (October 22, 2004), A Struggle over Air Routes in East Asia, http://www.nytimes.com/2004/10/22/business/worldbusiness/22aviation.html?ex=1184817600&en=477bd65aaf1258d7&ei=5035&partner=MARKETWATCH Hong Kong, China Strike New Aviation Deal (Associated Press, September 8, 2004) Lufthansa Cargo forecasts swift recovery of the global airfreight market, http://www.lufthansa-cargo.de/content.jsp?path=0,1,14871,15152,15452,16898 Niem, Andrea (2004), London Stock Exchange Aims to Lure Chinese, Companies, http://www.axcessnews.com/business_110304b.shtml World Travel Trends, 2003-2004, WTMGlobal Travel Report Annual reports: Cathay 2003 Annual Report http://www.cathaypacific.com/intl/aboutus/investor/0,,31343,00.html Singapore 2003/2004 Annual Report http://www.singaporeair.com/saa/app/saa?hidHeaderAction=onHeaderMenuClick&hidTopicArea=AnnualReport ¤tSite=global