Hypo Group Alpe Adria Analysis

Hypo Group Alpe Adria Analysis 1. General information about Hypo Group Alpe Adria Hypo Group Alpe Adria is an international financial group with more than 380 banking and leasing locations in twelve European countries: Austria, Italy, Slovenia, Croatia, Bosnia-Herzegovina, Serbia, Montenegro, Germany, Hungary, Bulgaria, Macedonia and the Ukraine. The group has a rich historical background. Roots of Hypo Group Alpe Adria date way back in 1896 when the group was founded. Consequently, it has accumulated more than one hundred years of business experience. In the beginning of its activities, it concentrated on financing public institutions and housing construction. Hypo KÃ ¤rnten as it was then known became a universal bank in 1982. In 1988 the Bank took the first step on the road to international expansion by opening a leasing subsidiary in Udine, Italy. It became a public limited company in 1991, and in 1992 Grazer Wechselseitige Versicherung joined the Province of Carinthia as the second shareholder. This marked the beginning of a new era for Hypo Alpe-Adria-Bank. With cross-border activities in twelve countries of the Alps Adriatic region[1], the Hypo Group Alpe Adria has a unique position in the economic area constituted by South Eastern Europe. Its network of branches and offices exists in Austria, Italy and Germany, from Slovenia through Croatia, Bosnia-Herzegovina, Serbia, Montenegro, Macedonia, Hungary, Bulgaria and the Ukraine. Business priorities in the operations of Hypo Group Alpe Adria are the strategic business sectors banking and leasing, with the focus on a common goal: contribution to the prosperity of the Alps Adriatic region and of the people living in it. Hypo Group Alpe Adria is committed to pursuing its goal of becoming the leading commercial bank in the Alps Adriatic region. 1.2. Mission and Strategy The mission of the Group is the following: instead of pursuing global presence as a goal, Hypo Group Alpe Adria is more locally oriented. In the Alps to Adriatic region, with its cross-border markets, it is local market knowledge at a very personal and emotional level, which is crucial. Personal contact with the customers represents the basis of mutual trust for the Group. For this reason the Group sees its relationships as partnerships, which extend far beyond simple money issues. According to the Group, success can only be achieved through human contacts, and it can only be measured in terms of personal relationships, so that partnership at a personal level is the Groups ultimate ideal. Hypo Group Alpe Adria leaves the goal of worldwide presence to the global players. As a leading regional player in the Alps to Adriatic area, it concentrates on the southeastern markets, with the motto banking business is peoples business, confirming its nonnegotiable customer orientation. Respecting differences, growing together and sharing successes with others these are the cornerstones of partnerships with customers on which the business structures of the Group are based. Having in mind that the fundamental strategy of the Group is to achieve growth in the Alps to Adriatic region, Hypo Group Alpe Adria has been pursuing its visionary strategy since 1993 with great success: to establish and develop a strong financial services Group in the Alps to Adriatic region which combines the highly developed Northern Italian, Germany and Austrian business cultures with growth market opportunities in Hungary, Slovenia, Croatia, Bosnia Herzegovina, Serbia, Montenegro, Bulgaria, Macedonia and the Ukraine. As a result, the Group plays a key role in directing funds and economic development to and in the region. Up till now, its successful expansion has given Hypo Group Alpe Adria intensive coverage of the areas, which in coming years will become its home markets. Additionally, long term involvement and commitment are priorities of the Group. Hypo Group Alpe Adria has established itself as a strong and reliable business partner in the Alps to Adriatic region. Its involvement in each country represents a long term commitment, so that businesses operating in any of these countries have the certainty and security they need in order to develop their activities. The Group is actively involved in developing local economies, and consequently, this contributes to the foundations of local prosperity. Furthermore, preserving independence and regional identity is one of the cornerstones of the Groups philosophy. This fact gives customers and business partners the certainty that they are handling their business with a dynamic and internationally minded bank which at the same time is at home in each of the individual regions. Hypo Group Alpe Adria is close to its customers in all the countries it operates in, thanks to its emphasis on independence and un-bureaucratic decentralized structures. 1.4. Regional presence of Hypo Group Alpe Adria It is important to underline that the expansion of Hypo Group Alpe Adria into its core market, the Alps to Adriatic Region, followed gradually. The establishment of the first Austrian bank branch in Vicenza (Italy), under EU law followed with Austrias accession to the EU in 1995. In the same year leasing companies were established in Ljubljana (Slovenia) and Zagreb (Croatia). In the upcoming years further leasing outlets were opened in Slovenia and the expansion of the branch network in Italy and Croatia. In 1997 the number of staff at Hypo Group Alpe Adria went over the barrier of five hundred employees, accompanied by the start of construction of the present Klagenfurt (Austria) headquarters, which was completed in three phases by 2002. By the beginning of the new millennium, Hypo Group Alpe Adria already employed over one thousand people. In the following year it entered the market in Bosnia and Herzegovina. In 2002, Hypo Group Alpe Adrias expansion penetrated into the market of Serbia and Montenegro. The Groups dynamic progress continued in 2003, when it was announced as investor of the year in Bosnia and Herzegovina, opened a leasing branch in Munich (Germany), founded the Biogaspark Alpe Adria and launched tourism initiatives in Carinthia (Austria), starting the Schlosshotel Velden project. Hypo Group Alpe Adria is today active in Austria, Italy, Croatia, Slovenia, Bosnia and Herzegovina, Serbia, Montenegro, Germany, Hungary, Bulgaria, Macedonia and Ukraine. In 2005 it numbered approximately 5000 employees at over 250 locations. The year of 2006 has been extremely important for the Group and it conducted strategically important expenditure decisions. It founded Hypo Alpe Adria Bank a.d. in Podgorica (Montenegro), Hypo Alpe-Adria-Rent d.o.o. in Belgrade (Serbia) and Hypo Alpe-Adria-Leasing OOD in Sofia (Bulgaria). The principal company of Hypo Group Alpe Adria is Hypo Alpe Adria Bank International AG, which has its head office in Klagenfurt (Austria). Its owners are BayernLB (67.08%), the GRAWE group (20.48%), KÃ ¤rntner Landesholding (12.42%) and Hypo Alpe Adria Mitarbeiter Privatstiftung (0.02%). The network of Hypo Group Alpe Adria currently has around 7,500 employees serving more than 1.3 million consumers. 2. Hypo Group Alpe Adria in Serbia Hypo Group Alpe Adria conducts its business activities in Serbia from 2002, as a part of the Hypo Alpe Adria Bank International AG Klagenfurt, which originally operated only in the territory of Austria. In the past couple of years, the Group began with its dynamic expansion in the international market, which consequently resulted in great success: the Group became one of the most successful financial institutions in the Alps Adriatic region, with approximately 7500 employees and more than 1.3 million clients in twelve countries. When we arrived to the Serbian market, we made a thorough analysis of finance, economy and legal sector, as well as the political situation of the country, based on which we have determined that Serbia will become one of the most important countries in our network. Serbia has enormous potential and we plan to invest in this country in the future and to become one of the leading financial institutions of the country. (Markus Ferstl, former Chairman of the Management Board of the Hypo Alpe Adria Bank a.d. Beograd) Having in mind that Hypo Group Alpe Adria`s strategic business sectors are banking and leasing, the Serbian market was firstly penetrated in the leasing sector. Leasing represents a relatively new form of financing in the Serbian market. Therefore, a leasing company bearing the name Hypo Alpe Adria Leasing d.o.o., was established in 2002, and it gained a leading position from the very beginning of its activities. The company remained the leader till present time with a cumulative market share of 35.19% in all segments of financing. Hypo Alpe Adria Leasing d.o.o. Beograd currently employs 136 people in affiliating offices throughout Serbia, including Belgrade, Novi Sad, Cacak, NiÃ… ¡, Subotica, Sombor, Zrenjanin, Becej, VrÃ… ¡c, Ã…  abac, Kragujevac and KruÃ… ¡evac. Additionally, not long after the establishment of Hypo Alpe Adria Leasing d.o.o. in Serbia, the bank by the name Hypo Alpe Adria Bank a.d. Beograd was founded in 2002. In just eight moths of business operations in Serbia, the newly founded bank achieved a growth rate of 853%, which exceeded all expectations. Hypo Alpe Adria Bank a.d. Beograd is currently one of the top five financial institutions in Serbia, with a market share of 8.55% and first-class and diversified portfolios. Additionally, it employs more than 800 people and has developed a rich business network consisting of affiliates in almost all bigger cities in Serbia, taking into consideration the headquarters of the company located in Belgrade, in the Business Center Usce where the other member companies of the Group are located[2]. Hypo Alpe Adria Securities a.d. Beograd was founded in 2004. The company is ranked among the top five broker companies in the market of shares and of old savings bonds trading. The youngest company of the Group is Hypo Alpe Adria Rent d.o.o. Beograd, which is the first financial institution in Serbia to offer the possibility of operational leasing for the clients. During the present research, special focus will be on the bank and the leasing company operating in within the system of Hypo Alpe Adria Group. 3. Hypo Alpe Adria Bank a.d. Beograd In order to proceed with the research on Hypo Alpe Adria Bank a.d. Beograd, it is necessary to explain the circumstances in which the banking sector in Serbia existed from 1990s till present time. Disintegration and collapse of socialist Yugoslavia in the beginning of the 1990s announced the so-called lost decade, meaning that major structural features and weaknesses of the banking system were preserved or additionally deteriorated and the overall situation became desperate. The main characteristics of 1990s were losses of markets, repeated wars, economic sanctions and international isolation of the country. Mismanagement and pervasive corruption were main factors, which contributed to the degeneration of the economy. After the major hyperinflation, which occurred in 1993 and 1994, 90 % of all bank loans were perceived as bad. Unprofitable and non-performing foreign currency balance sub-balances dominated balance sheets. One of the main priorities in the reform agenda of the new Serbian authorities, which took over in 2000 was bank restructuring. The essence of the strategy was to undertake bank rehabilitation and re-capitalization only in the cases when it was expected that the banks could be viable institutions with good prospects for privatization through sale to strategic investor at a reasonable price and only if it can be implemented with identifiable fiscal resources. In the beginning of 2002, Serbian authorities decided to conduct one of the boldest bank resolution measures undertaken in transition economies: they liquidated four large and deeply insolvent banks, which accounted for 60% of the book value of the sectors asset and for about two thirds of outstanding commercial credit to non financial sector. Furthermore, banking legislation and regulations were improved[3]. After the first major wave of reform, credit institutions have become more attentive in lending money to the real sector which was still very week. The government immediately acted on attracting foreign investors since there was an urgent need for such a thing. Consequently, from the late 2000 to December 2002, National Bank of Yugoslavia (the central bank) issued eight bank licenses, out of which seven were for the foreign owned banks. Internationalization and privatization of the Serbian banking industry continued in 2005. The share of the market accounted for by foreign banks rose to 67.52%. Out of the ten largest banks, seven are foreign. Successful sales of Serbian banks to foreign financial institutions provided a vigorous stimulus to the countrys banking industry. Total assets of all banks in 2005 jumped by 40.4% compared with the previous year, to 9.07 billion euros. Strong increases in lending to private and business customers were the main forces, which were driving growth. Progress was also made in restoring the confidence of domestic savers: total deposits at the end of 2005 amounted to 5 billion euros. Foreign banks which penetrated the Serbian market played an important role in restoring confidence in the sector and have gathered a significant share of new deposits. One of these banks was Hypo Alpe Adria Bank a.d. Beograd. Hypo Alpe-Adria Banks involvement in the Serbian market began in December 2002, when it acquired Depozitno-kreditna banka. The Austrian bank concluded the purchase of 86.6% of the Serbian Depozitno-Kreditna Banka, founded May 22nd 1991, whose registered offices were in Belgrade. At the shareholders meeting held on October 8th 2002, the Banks name was changed to Hypo Alpe-Adria-Bank a.d., the capital increase to EUR 5.5 million was resolved, and the new Supervisory Board was appointed. The headquarters of to Hypo Alpe-Adria-Bank a.d., the member of the Hypo Group (after Austria, Italy, Slovenia, Croatia, Bosnia-Herzegovina and Liechtenstein), are located in the new part of Belgrade New Belgrade. Referring to total assets, Hypo Alpe-Adria-Bank a.d. is Serbias fourth-largest bank with a market share of 6.47 %. Furthermore, approximately 900 employees are currently working for the Bank in a total of forty-one branch offices throughout Serbia. Market share of top five banks in Serbia (Source: National Bank of Serbia available at http://www.nbs.rs/export/internet/latinica/50/50_5.html) After just several months of its operations in Serbia, the Bank has established itself as a recognizable part of the Serbian financial scene. In its first two years of its activities, Hypo concentrated on corporate customers. The Bank has achieved a particular competitive advantage in the corporate sector with its long-term investment lending. Efforts to develop private customer business began in 2004. The specific focus gradually switched to the housing construction market, which was performing excellently. When we arrived to the Serbian market in 2002, we were among the first ones and there had been only six foreign banks operating in the market. We have used that window of opportunity, the situation when there had been few foreign banks present, in order to develop our credit portfolio. In that period, we had the opportunity to finance some of the most successful companies in Serbia, as well as to develop well-balanced portfolio, which we diversified over the years. Special attention was dedicated to retail sector, mostly in the field of house loans. Additionally, we have formed a special unit for financing of small and medium sized enterprises and this has become one of our corporate priorities, having in mind that these companies are often suppliers and partners of the big companies we already cooperate with. Other than that, our focus is on food industry, agriculture, pharmaceutical and chemical industry. (Vladimir Cupic, Chairman of the Management Board of the Hypo Alpe Adria Bank a.d. Beograd) The Bank is organized in the following sectors and departments: Corporate sector Retail sector Sector of financing public enterprises and local community units Treasury sector Investment banking HR department Economic analysis department Sector settlement Market support sector Logistics sector Sector of organization and information technology Legal department Department of business control harmonization Marketing department The research process will only incorporate the sectors, which are relevant for the research question of the thesis. 3.1. Corporate sector From the very beginning of its operations in Serbia, the Bank has established an extremely developed corporate sector, which quickly expanded in the sense of different departments within the sector, as well as the number of employees. The corporate sector of Hypo Alpe Adria Bank quickly achieved competitive advantage in comparison to other banks in Serbia. Various departments are organized within the sector: Credit department Small and medium enterprises (transferred to the Retail sector in 2006) International financing Products and services of the corporate sector are concentrated on the client and its needs, and include the following: Investment loans (loans approved for the purpose of purchase of machines, equipment, land, real estate) Framework loans (exceeding permissible minus on the account, eskont of bills and revolving lines) Documentary operations (guarantees, credits, purchase of receivables and inkaso) Loans for working capital Till 2006 Hypo Alpe Adria Bank mainly focused on long term corporate loans, which were given to the big corporate clients. Since then, it strategically refocused on small and medium sized enterprises and expanded its offer of products. Corporate sector is known for its extremely innovative products and services offered to the clients. The innovation, which was introduced by the Bank in the market of Serbia, is the so-called cross border financing. This type of financing is dedicated to the clients that operate in more than two countries. The financing capital is actually provided from outside Serbia and offered to the clients under much better conditions than the ones, which are present in the Serbian market. Additionally, the Bank provides special guarantees for the clients within the Hypo Group, and in this way supports their business activities in other countries. Furthermore, another product, which is particularly innovative, was introduced in 2004 and it is called the revolving line. By using this product, clients are automatically enabled to use other additional products, according to their needs (dinar and foreign currency loans, working capital loans, guarantees etc.). The revolving line can be used by big corporate clients, as well as small and medium sized enterprises and entrepreneurs. Being a strategic branch of the Serbian economy, agriculture is one of the top priorities of the corporate sector. The Bank has been extremely active in financing agricultural production: individual agricultural manufacturers have the possibility to finance basic and working capital. Cross selling activities refer to the presentation of banks products from other sectors within the Bank. Acquisition of new clients also represents one of the fundamental operations of the corporate sector. It is particularly important since it is the basis of the planned growth of deposits, as the fundamentals for the primary sources. Special attention within the sector is dedicated to project and structural financing, like: financing of projects for the market or long term exploitation, purchase of shares, mergers / acquisitions of companies. 3.2. Human resource (HR) department and relationship towards employees HR department of Hypo Alpe Adria Bank was established in May of 2003 and has developed its activities at a very rapid pace, due to the fact that the number of employees was increasing intensively. In the very beginning of its operations in Serbia, the bank had a total of 27 employees and in just one year the number increased to 323 employees. In 2005, the growth trend continued and the number of the bank staff reached 531 people. Finally, on the closing date, 31 December 2008, Hypo Alpe-Adria-Bank a.d., Beograd had 871 employees. The increase of the number of employees is the result of the extension of the branch office network. Furthermore, additional employees were recruited in the headquarters to cater for the increasing customer demands. Within the initial process of selection and engagement of young experts, 600 potential candidates have been interviewed. Furthermore, database containing more than 1500 biographies of interested candidates was created, which points out to the fact that young people of Serbia are very keen on participating in the creation of modern multinational companies. One of the key priorities of the HR department from the very beginning of its existence was to enable quick integration of new employees into the system. Secondly, the Bank immediately started with the implementation of the Hypo standards, creation of the corporate identity and team atmosphere in the institution. Additionally, a very important strategic goal for the department was to become the source of educational staff, which would be capable of taking on new jobs, initiatives and development. In that sense, many of the employees, who have already acquired standards of the corporation and business modalities, have obtained leading positions within the Bank as the heads of various sectors. As far as the age structure is concerned, majority of employees of the Bank belong to the age group 30 39 years old, as it is shown in the diagram below. Additionally, 47% of all employees have acquired university education, while 33% of employees have secondary education. Activities of HR department are focused in three directions: administration, finance and education. In the area of administration, the department is handling recruitment process and hiring of new people who are competent and can contribute to the environment of the Bank. In the field of finance, the so called time management program is being implemented within the department, referring to the planning of the budget which will be used for the purpose of staff education and various bonus systems realized through completed targets. Having in mind the fact that, contemporary flows of banking operations worldwide demand constant education of the staff in all areas of the business, HR department takes particular notice of education of employees. The department is conducting educational trainings in various forms: motivation trainings, special skills development courses and language courses. This contributes to the raising of the efficiency level of the staff. Educational trainings are organized internally and externally. Some of the most important types of trainings, depending on the sector are: Cross selling courses Microsoft Office Excel seminars Insurance trainings, which enables the participants to obtain the license of the insurance mediator Small and medium sized enterprises trainings Seminars for the sale of pension and investment funds CDO`s and Credit linked trainings Specialist courses MCPD and MCITP Database Administrator for staff in the sector for informational technologies System Oriented Management course 1 and 2 Optional modules Top executive Education Public Finance Basic Training Project management Train the Trainer Project Management for Top Management Cross selling courses for account managers are particularly important for the activities of the Bank, in order to introduce existing clients of the Bank with new products and services. In this way, account managers tend to ensure that the additional product or service is being sold to the client, while at the same time enhancing the value the client gets from the Bank. Moreover, employees have the opportunity of expanding their knowledge in seminars jointly organized in cooperation with relevant public institutions, such as the National bank of Serbia, Association of Banks in Serbia, Serbian Chamber of Commerce, Institute for Business research and other external providers, as well as trainings related to international accounting standards. Having in mind that the Bank operates in twelve countries and that everyday communication involves the use of foreign languages, English courses are provided for all employees, at the expense of the Company. Additionally, certain numbers of employees who occupy the positions, which are directly linked to the headquarters of the Group in Austria, take courses of German language, whose expenses are also borne by the Company. Particularly relevant project of the department was realized in 2008, when the Bank established its internal employee training center. The main goal of the project was to make the best possible use of the existing knowledge and the practical experience of the staff. The center was formed in order to initiate internal transfer of knowledge among employees, information sharing, better communication, which consequently leads to better work performance and improvement of inter-personal relations within the Bank. This modern and completely technically equipped space is intended for internal and in house trainings, seminars and workshops for employees. Additionally, several types of trainings are conducted within the Center: cross selling workshops, Hypo 1 a tool which helps the staff get acquainted about other sectors besides their own, small and medium size enterprises trainings, etc. In just three months after its opening, more than 400 employees have participated in organized trai nings, and in one year more than 900 employees successfully passed over 30 internal educational and development programs of the center, which consequently justified the original expectations set by the management of the Bank. In addition, there is no doubt that one of the key priorities of the Bank is employee satisfaction. HR department in Hypo Bank actively conducts the employee assessment programs, which are incorporated in the employee satisfaction program. Originally, the program was based on yearly interviews of employees and their superiors on the subject of work efficiency and success, through self evaluation done by the employee, and the evaluation obtained from the superior. In order to upgrade the program, in 2007 HR department decided to introduce new actions. One of these actions was employee satisfaction survey. This type of survey is conducted among all employees in the end of every working year, and concentrates on the four most important areas of employee satisfaction: general satisfaction with work and work conditions, communication and interpersonal relations, leadership, bonus systems and career opportunities. Achieved results from the survey serve as the basis for strategy planning for the upcoming years. This is particularly important in order to include the opinion of the staff in the process of future strategy defining and decision making, so that everyone can benefit from it. Furthermore, obtained results were than given to the HR agency Advance Response International that deals with HR issues, and in this way anonymity and objectivity of the research was achieved. At this point, it is necessary to highlight that Hypo Bank has developed cooperation with several human resource agencies for the purpose of various types of train ings: project management, leadership and management, credit and market risk, etc. Asides from the efforts, which are focused on the improvement of communication among employees, inter-personal relations and management, the management of the Bank puts special emphasis on professional development of the middle and top management members. For that purpose, development center operating within the HR department was established in order to assess development necessities of the staff belonging to these levels of management. The center analyses results of interviews, surveys and supervisors suggestions, and consequently creates individual development plan for every employee. Another type of development plan created in the center, is team development plan, which is implemented on the entire teams working in specific sectors. In order to do business well, you need to have products of good quality, but asides from that, you need to have excellent staff. Therefore, we invest a lot in education and training of our employees. For example, in the second quarter of 2006, we realized a special trainee project. We hired motivated young people who had just completed their university education and we enabled them to pass specific trainings throughout the entire Group in two years, in order to get familiar with every aspect of the company business activities. They didnt have trainings only in Serbia; they also visited other Hypo companies abroad. As we often like to say in the Group: our greatest assets are our employees and for that reason we will continue to invest in their internal and external education. (Marija Sutanovac, Head of the HR department of the Hypo Alpe Adria Bank a.d. Beograd). Important point, which should be highlighted in this section, is opportunity for scholarships for university education of employees. Each year Bank supports further education of thirty selected employees and provides funding for their studies. This program represents a special kind of acknowledgement for talented and hard working employees. Furthermore, in cooperation with the Serbian Business Club Privrednik[4], the Bank provides scholarships for ten students, which are not employees of the bank, and in this way shows its support directed to the young people of Serbia. In this way, talented and perspective students have the opportunity to be in touch with the people from the most significant and influential companies in Serbia, and can find employment opportunities upon their graduation asides form their scholarships. 3.3. Marketing department and relationship towards clients Marketing department had a challenging task of providing support to all business activities of the Bank, once it penetrated the Serbian market. The key priority of the department was to create a positive image of the Hypo Bank, as well as to inform the Serbian population about its products and services. Corporate image strategy emphasized values of the bank: its tradition, innovative approach to business, Alps-Adriatic philosophy based on the regional banking client focus, partnership, security, corporate responsibility and independence. The main focus of the department was to create and promote the corporate image, which emphasizes that Hypo Alpe Adria Bank a.d. Beograd takes care of its clients in the same way as it takes care of its employees, and that it is a reliable partner who nurtures the local community in which it exists. The main element of the departments strategy was to create two-way communication with the clients: to reach the clients, and to hear their needs as well. For that purpose, the Bank introduced a special program called clients suggestions. Clients of the Bank have the possibility of sending their suggestions, comments, Hypo Group Alpe Adria Analysis Hypo Group Alpe Adria Analysis 1. General information about Hypo Group Alpe Adria Hypo Group Alpe Adria is an international financial group with more than 380 banking and leasing locations in twelve European countries: Austria, Italy, Slovenia, Croatia, Bosnia-Herzegovina, Serbia, Montenegro, Germany, Hungary, Bulgaria, Macedonia and the Ukraine. The group has a rich historical background. Roots of Hypo Group Alpe Adria date way back in 1896 when the group was founded. Consequently, it has accumulated more than one hundred years of business experience. In the beginning of its activities, it concentrated on financing public institutions and housing construction. Hypo KÃ ¤rnten as it was then known became a universal bank in 1982. In 1988 the Bank took the first step on the road to international expansion by opening a leasing subsidiary in Udine, Italy. It became a public limited company in 1991, and in 1992 Grazer Wechselseitige Versicherung joined the Province of Carinthia as the second shareholder. This marked the beginning of a new era for Hypo Alpe-Adria-Bank. With cross-border activities in twelve countries of the Alps Adriatic region[1], the Hypo Group Alpe Adria has a unique position in the economic area constituted by South Eastern Europe. Its network of branches and offices exists in Austria, Italy and Germany, from Slovenia through Croatia, Bosnia-Herzegovina, Serbia, Montenegro, Macedonia, Hungary, Bulgaria and the Ukraine. Business priorities in the operations of Hypo Group Alpe Adria are the strategic business sectors banking and leasing, with the focus on a common goal: contribution to the prosperity of the Alps Adriatic region and of the people living in it. Hypo Group Alpe Adria is committed to pursuing its goal of becoming the leading commercial bank in the Alps Adriatic region. 1.2. Mission and Strategy The mission of the Group is the following: instead of pursuing global presence as a goal, Hypo Group Alpe Adria is more locally oriented. In the Alps to Adriatic region, with its cross-border markets, it is local market knowledge at a very personal and emotional level, which is crucial. Personal contact with the customers represents the basis of mutual trust for the Group. For this reason the Group sees its relationships as partnerships, which extend far beyond simple money issues. According to the Group, success can only be achieved through human contacts, and it can only be measured in terms of personal relationships, so that partnership at a personal level is the Groups ultimate ideal. Hypo Group Alpe Adria leaves the goal of worldwide presence to the global players. As a leading regional player in the Alps to Adriatic area, it concentrates on the southeastern markets, with the motto banking business is peoples business, confirming its nonnegotiable customer orientation. Respecting differences, growing together and sharing successes with others these are the cornerstones of partnerships with customers on which the business structures of the Group are based. Having in mind that the fundamental strategy of the Group is to achieve growth in the Alps to Adriatic region, Hypo Group Alpe Adria has been pursuing its visionary strategy since 1993 with great success: to establish and develop a strong financial services Group in the Alps to Adriatic region which combines the highly developed Northern Italian, Germany and Austrian business cultures with growth market opportunities in Hungary, Slovenia, Croatia, Bosnia Herzegovina, Serbia, Montenegro, Bulgaria, Macedonia and the Ukraine. As a result, the Group plays a key role in directing funds and economic development to and in the region. Up till now, its successful expansion has given Hypo Group Alpe Adria intensive coverage of the areas, which in coming years will become its home markets. Additionally, long term involvement and commitment are priorities of the Group. Hypo Group Alpe Adria has established itself as a strong and reliable business partner in the Alps to Adriatic region. Its involvement in each country represents a long term commitment, so that businesses operating in any of these countries have the certainty and security they need in order to develop their activities. The Group is actively involved in developing local economies, and consequently, this contributes to the foundations of local prosperity. Furthermore, preserving independence and regional identity is one of the cornerstones of the Groups philosophy. This fact gives customers and business partners the certainty that they are handling their business with a dynamic and internationally minded bank which at the same time is at home in each of the individual regions. Hypo Group Alpe Adria is close to its customers in all the countries it operates in, thanks to its emphasis on independence and un-bureaucratic decentralized structures. 1.4. Regional presence of Hypo Group Alpe Adria It is important to underline that the expansion of Hypo Group Alpe Adria into its core market, the Alps to Adriatic Region, followed gradually. The establishment of the first Austrian bank branch in Vicenza (Italy), under EU law followed with Austrias accession to the EU in 1995. In the same year leasing companies were established in Ljubljana (Slovenia) and Zagreb (Croatia). In the upcoming years further leasing outlets were opened in Slovenia and the expansion of the branch network in Italy and Croatia. In 1997 the number of staff at Hypo Group Alpe Adria went over the barrier of five hundred employees, accompanied by the start of construction of the present Klagenfurt (Austria) headquarters, which was completed in three phases by 2002. By the beginning of the new millennium, Hypo Group Alpe Adria already employed over one thousand people. In the following year it entered the market in Bosnia and Herzegovina. In 2002, Hypo Group Alpe Adrias expansion penetrated into the market of Serbia and Montenegro. The Groups dynamic progress continued in 2003, when it was announced as investor of the year in Bosnia and Herzegovina, opened a leasing branch in Munich (Germany), founded the Biogaspark Alpe Adria and launched tourism initiatives in Carinthia (Austria), starting the Schlosshotel Velden project. Hypo Group Alpe Adria is today active in Austria, Italy, Croatia, Slovenia, Bosnia and Herzegovina, Serbia, Montenegro, Germany, Hungary, Bulgaria, Macedonia and Ukraine. In 2005 it numbered approximately 5000 employees at over 250 locations. The year of 2006 has been extremely important for the Group and it conducted strategically important expenditure decisions. It founded Hypo Alpe Adria Bank a.d. in Podgorica (Montenegro), Hypo Alpe-Adria-Rent d.o.o. in Belgrade (Serbia) and Hypo Alpe-Adria-Leasing OOD in Sofia (Bulgaria). The principal company of Hypo Group Alpe Adria is Hypo Alpe Adria Bank International AG, which has its head office in Klagenfurt (Austria). Its owners are BayernLB (67.08%), the GRAWE group (20.48%), KÃ ¤rntner Landesholding (12.42%) and Hypo Alpe Adria Mitarbeiter Privatstiftung (0.02%). The network of Hypo Group Alpe Adria currently has around 7,500 employees serving more than 1.3 million consumers. 2. Hypo Group Alpe Adria in Serbia Hypo Group Alpe Adria conducts its business activities in Serbia from 2002, as a part of the Hypo Alpe Adria Bank International AG Klagenfurt, which originally operated only in the territory of Austria. In the past couple of years, the Group began with its dynamic expansion in the international market, which consequently resulted in great success: the Group became one of the most successful financial institutions in the Alps Adriatic region, with approximately 7500 employees and more than 1.3 million clients in twelve countries. When we arrived to the Serbian market, we made a thorough analysis of finance, economy and legal sector, as well as the political situation of the country, based on which we have determined that Serbia will become one of the most important countries in our network. Serbia has enormous potential and we plan to invest in this country in the future and to become one of the leading financial institutions of the country. (Markus Ferstl, former Chairman of the Management Board of the Hypo Alpe Adria Bank a.d. Beograd) Having in mind that Hypo Group Alpe Adria`s strategic business sectors are banking and leasing, the Serbian market was firstly penetrated in the leasing sector. Leasing represents a relatively new form of financing in the Serbian market. Therefore, a leasing company bearing the name Hypo Alpe Adria Leasing d.o.o., was established in 2002, and it gained a leading position from the very beginning of its activities. The company remained the leader till present time with a cumulative market share of 35.19% in all segments of financing. Hypo Alpe Adria Leasing d.o.o. Beograd currently employs 136 people in affiliating offices throughout Serbia, including Belgrade, Novi Sad, Cacak, NiÃ… ¡, Subotica, Sombor, Zrenjanin, Becej, VrÃ… ¡c, Ã…  abac, Kragujevac and KruÃ… ¡evac. Additionally, not long after the establishment of Hypo Alpe Adria Leasing d.o.o. in Serbia, the bank by the name Hypo Alpe Adria Bank a.d. Beograd was founded in 2002. In just eight moths of business operations in Serbia, the newly founded bank achieved a growth rate of 853%, which exceeded all expectations. Hypo Alpe Adria Bank a.d. Beograd is currently one of the top five financial institutions in Serbia, with a market share of 8.55% and first-class and diversified portfolios. Additionally, it employs more than 800 people and has developed a rich business network consisting of affiliates in almost all bigger cities in Serbia, taking into consideration the headquarters of the company located in Belgrade, in the Business Center Usce where the other member companies of the Group are located[2]. Hypo Alpe Adria Securities a.d. Beograd was founded in 2004. The company is ranked among the top five broker companies in the market of shares and of old savings bonds trading. The youngest company of the Group is Hypo Alpe Adria Rent d.o.o. Beograd, which is the first financial institution in Serbia to offer the possibility of operational leasing for the clients. During the present research, special focus will be on the bank and the leasing company operating in within the system of Hypo Alpe Adria Group. 3. Hypo Alpe Adria Bank a.d. Beograd In order to proceed with the research on Hypo Alpe Adria Bank a.d. Beograd, it is necessary to explain the circumstances in which the banking sector in Serbia existed from 1990s till present time. Disintegration and collapse of socialist Yugoslavia in the beginning of the 1990s announced the so-called lost decade, meaning that major structural features and weaknesses of the banking system were preserved or additionally deteriorated and the overall situation became desperate. The main characteristics of 1990s were losses of markets, repeated wars, economic sanctions and international isolation of the country. Mismanagement and pervasive corruption were main factors, which contributed to the degeneration of the economy. After the major hyperinflation, which occurred in 1993 and 1994, 90 % of all bank loans were perceived as bad. Unprofitable and non-performing foreign currency balance sub-balances dominated balance sheets. One of the main priorities in the reform agenda of the new Serbian authorities, which took over in 2000 was bank restructuring. The essence of the strategy was to undertake bank rehabilitation and re-capitalization only in the cases when it was expected that the banks could be viable institutions with good prospects for privatization through sale to strategic investor at a reasonable price and only if it can be implemented with identifiable fiscal resources. In the beginning of 2002, Serbian authorities decided to conduct one of the boldest bank resolution measures undertaken in transition economies: they liquidated four large and deeply insolvent banks, which accounted for 60% of the book value of the sectors asset and for about two thirds of outstanding commercial credit to non financial sector. Furthermore, banking legislation and regulations were improved[3]. After the first major wave of reform, credit institutions have become more attentive in lending money to the real sector which was still very week. The government immediately acted on attracting foreign investors since there was an urgent need for such a thing. Consequently, from the late 2000 to December 2002, National Bank of Yugoslavia (the central bank) issued eight bank licenses, out of which seven were for the foreign owned banks. Internationalization and privatization of the Serbian banking industry continued in 2005. The share of the market accounted for by foreign banks rose to 67.52%. Out of the ten largest banks, seven are foreign. Successful sales of Serbian banks to foreign financial institutions provided a vigorous stimulus to the countrys banking industry. Total assets of all banks in 2005 jumped by 40.4% compared with the previous year, to 9.07 billion euros. Strong increases in lending to private and business customers were the main forces, which were driving growth. Progress was also made in restoring the confidence of domestic savers: total deposits at the end of 2005 amounted to 5 billion euros. Foreign banks which penetrated the Serbian market played an important role in restoring confidence in the sector and have gathered a significant share of new deposits. One of these banks was Hypo Alpe Adria Bank a.d. Beograd. Hypo Alpe-Adria Banks involvement in the Serbian market began in December 2002, when it acquired Depozitno-kreditna banka. The Austrian bank concluded the purchase of 86.6% of the Serbian Depozitno-Kreditna Banka, founded May 22nd 1991, whose registered offices were in Belgrade. At the shareholders meeting held on October 8th 2002, the Banks name was changed to Hypo Alpe-Adria-Bank a.d., the capital increase to EUR 5.5 million was resolved, and the new Supervisory Board was appointed. The headquarters of to Hypo Alpe-Adria-Bank a.d., the member of the Hypo Group (after Austria, Italy, Slovenia, Croatia, Bosnia-Herzegovina and Liechtenstein), are located in the new part of Belgrade New Belgrade. Referring to total assets, Hypo Alpe-Adria-Bank a.d. is Serbias fourth-largest bank with a market share of 6.47 %. Furthermore, approximately 900 employees are currently working for the Bank in a total of forty-one branch offices throughout Serbia. Market share of top five banks in Serbia (Source: National Bank of Serbia available at http://www.nbs.rs/export/internet/latinica/50/50_5.html) After just several months of its operations in Serbia, the Bank has established itself as a recognizable part of the Serbian financial scene. In its first two years of its activities, Hypo concentrated on corporate customers. The Bank has achieved a particular competitive advantage in the corporate sector with its long-term investment lending. Efforts to develop private customer business began in 2004. The specific focus gradually switched to the housing construction market, which was performing excellently. When we arrived to the Serbian market in 2002, we were among the first ones and there had been only six foreign banks operating in the market. We have used that window of opportunity, the situation when there had been few foreign banks present, in order to develop our credit portfolio. In that period, we had the opportunity to finance some of the most successful companies in Serbia, as well as to develop well-balanced portfolio, which we diversified over the years. Special attention was dedicated to retail sector, mostly in the field of house loans. Additionally, we have formed a special unit for financing of small and medium sized enterprises and this has become one of our corporate priorities, having in mind that these companies are often suppliers and partners of the big companies we already cooperate with. Other than that, our focus is on food industry, agriculture, pharmaceutical and chemical industry. (Vladimir Cupic, Chairman of the Management Board of the Hypo Alpe Adria Bank a.d. Beograd) The Bank is organized in the following sectors and departments: Corporate sector Retail sector Sector of financing public enterprises and local community units Treasury sector Investment banking HR department Economic analysis department Sector settlement Market support sector Logistics sector Sector of organization and information technology Legal department Department of business control harmonization Marketing department The research process will only incorporate the sectors, which are relevant for the research question of the thesis. 3.1. Corporate sector From the very beginning of its operations in Serbia, the Bank has established an extremely developed corporate sector, which quickly expanded in the sense of different departments within the sector, as well as the number of employees. The corporate sector of Hypo Alpe Adria Bank quickly achieved competitive advantage in comparison to other banks in Serbia. Various departments are organized within the sector: Credit department Small and medium enterprises (transferred to the Retail sector in 2006) International financing Products and services of the corporate sector are concentrated on the client and its needs, and include the following: Investment loans (loans approved for the purpose of purchase of machines, equipment, land, real estate) Framework loans (exceeding permissible minus on the account, eskont of bills and revolving lines) Documentary operations (guarantees, credits, purchase of receivables and inkaso) Loans for working capital Till 2006 Hypo Alpe Adria Bank mainly focused on long term corporate loans, which were given to the big corporate clients. Since then, it strategically refocused on small and medium sized enterprises and expanded its offer of products. Corporate sector is known for its extremely innovative products and services offered to the clients. The innovation, which was introduced by the Bank in the market of Serbia, is the so-called cross border financing. This type of financing is dedicated to the clients that operate in more than two countries. The financing capital is actually provided from outside Serbia and offered to the clients under much better conditions than the ones, which are present in the Serbian market. Additionally, the Bank provides special guarantees for the clients within the Hypo Group, and in this way supports their business activities in other countries. Furthermore, another product, which is particularly innovative, was introduced in 2004 and it is called the revolving line. By using this product, clients are automatically enabled to use other additional products, according to their needs (dinar and foreign currency loans, working capital loans, guarantees etc.). The revolving line can be used by big corporate clients, as well as small and medium sized enterprises and entrepreneurs. Being a strategic branch of the Serbian economy, agriculture is one of the top priorities of the corporate sector. The Bank has been extremely active in financing agricultural production: individual agricultural manufacturers have the possibility to finance basic and working capital. Cross selling activities refer to the presentation of banks products from other sectors within the Bank. Acquisition of new clients also represents one of the fundamental operations of the corporate sector. It is particularly important since it is the basis of the planned growth of deposits, as the fundamentals for the primary sources. Special attention within the sector is dedicated to project and structural financing, like: financing of projects for the market or long term exploitation, purchase of shares, mergers / acquisitions of companies. 3.2. Human resource (HR) department and relationship towards employees HR department of Hypo Alpe Adria Bank was established in May of 2003 and has developed its activities at a very rapid pace, due to the fact that the number of employees was increasing intensively. In the very beginning of its operations in Serbia, the bank had a total of 27 employees and in just one year the number increased to 323 employees. In 2005, the growth trend continued and the number of the bank staff reached 531 people. Finally, on the closing date, 31 December 2008, Hypo Alpe-Adria-Bank a.d., Beograd had 871 employees. The increase of the number of employees is the result of the extension of the branch office network. Furthermore, additional employees were recruited in the headquarters to cater for the increasing customer demands. Within the initial process of selection and engagement of young experts, 600 potential candidates have been interviewed. Furthermore, database containing more than 1500 biographies of interested candidates was created, which points out to the fact that young people of Serbia are very keen on participating in the creation of modern multinational companies. One of the key priorities of the HR department from the very beginning of its existence was to enable quick integration of new employees into the system. Secondly, the Bank immediately started with the implementation of the Hypo standards, creation of the corporate identity and team atmosphere in the institution. Additionally, a very important strategic goal for the department was to become the source of educational staff, which would be capable of taking on new jobs, initiatives and development. In that sense, many of the employees, who have already acquired standards of the corporation and business modalities, have obtained leading positions within the Bank as the heads of various sectors. As far as the age structure is concerned, majority of employees of the Bank belong to the age group 30 39 years old, as it is shown in the diagram below. Additionally, 47% of all employees have acquired university education, while 33% of employees have secondary education. Activities of HR department are focused in three directions: administration, finance and education. In the area of administration, the department is handling recruitment process and hiring of new people who are competent and can contribute to the environment of the Bank. In the field of finance, the so called time management program is being implemented within the department, referring to the planning of the budget which will be used for the purpose of staff education and various bonus systems realized through completed targets. Having in mind the fact that, contemporary flows of banking operations worldwide demand constant education of the staff in all areas of the business, HR department takes particular notice of education of employees. The department is conducting educational trainings in various forms: motivation trainings, special skills development courses and language courses. This contributes to the raising of the efficiency level of the staff. Educational trainings are organized internally and externally. Some of the most important types of trainings, depending on the sector are: Cross selling courses Microsoft Office Excel seminars Insurance trainings, which enables the participants to obtain the license of the insurance mediator Small and medium sized enterprises trainings Seminars for the sale of pension and investment funds CDO`s and Credit linked trainings Specialist courses MCPD and MCITP Database Administrator for staff in the sector for informational technologies System Oriented Management course 1 and 2 Optional modules Top executive Education Public Finance Basic Training Project management Train the Trainer Project Management for Top Management Cross selling courses for account managers are particularly important for the activities of the Bank, in order to introduce existing clients of the Bank with new products and services. In this way, account managers tend to ensure that the additional product or service is being sold to the client, while at the same time enhancing the value the client gets from the Bank. Moreover, employees have the opportunity of expanding their knowledge in seminars jointly organized in cooperation with relevant public institutions, such as the National bank of Serbia, Association of Banks in Serbia, Serbian Chamber of Commerce, Institute for Business research and other external providers, as well as trainings related to international accounting standards. Having in mind that the Bank operates in twelve countries and that everyday communication involves the use of foreign languages, English courses are provided for all employees, at the expense of the Company. Additionally, certain numbers of employees who occupy the positions, which are directly linked to the headquarters of the Group in Austria, take courses of German language, whose expenses are also borne by the Company. Particularly relevant project of the department was realized in 2008, when the Bank established its internal employee training center. The main goal of the project was to make the best possible use of the existing knowledge and the practical experience of the staff. The center was formed in order to initiate internal transfer of knowledge among employees, information sharing, better communication, which consequently leads to better work performance and improvement of inter-personal relations within the Bank. This modern and completely technically equipped space is intended for internal and in house trainings, seminars and workshops for employees. Additionally, several types of trainings are conducted within the Center: cross selling workshops, Hypo 1 a tool which helps the staff get acquainted about other sectors besides their own, small and medium size enterprises trainings, etc. In just three months after its opening, more than 400 employees have participated in organized trai nings, and in one year more than 900 employees successfully passed over 30 internal educational and development programs of the center, which consequently justified the original expectations set by the management of the Bank. In addition, there is no doubt that one of the key priorities of the Bank is employee satisfaction. HR department in Hypo Bank actively conducts the employee assessment programs, which are incorporated in the employee satisfaction program. Originally, the program was based on yearly interviews of employees and their superiors on the subject of work efficiency and success, through self evaluation done by the employee, and the evaluation obtained from the superior. In order to upgrade the program, in 2007 HR department decided to introduce new actions. One of these actions was employee satisfaction survey. This type of survey is conducted among all employees in the end of every working year, and concentrates on the four most important areas of employee satisfaction: general satisfaction with work and work conditions, communication and interpersonal relations, leadership, bonus systems and career opportunities. Achieved results from the survey serve as the basis for strategy planning for the upcoming years. This is particularly important in order to include the opinion of the staff in the process of future strategy defining and decision making, so that everyone can benefit from it. Furthermore, obtained results were than given to the HR agency Advance Response International that deals with HR issues, and in this way anonymity and objectivity of the research was achieved. At this point, it is necessary to highlight that Hypo Bank has developed cooperation with several human resource agencies for the purpose of various types of train ings: project management, leadership and management, credit and market risk, etc. Asides from the efforts, which are focused on the improvement of communication among employees, inter-personal relations and management, the management of the Bank puts special emphasis on professional development of the middle and top management members. For that purpose, development center operating within the HR department was established in order to assess development necessities of the staff belonging to these levels of management. The center analyses results of interviews, surveys and supervisors suggestions, and consequently creates individual development plan for every employee. Another type of development plan created in the center, is team development plan, which is implemented on the entire teams working in specific sectors. In order to do business well, you need to have products of good quality, but asides from that, you need to have excellent staff. Therefore, we invest a lot in education and training of our employees. For example, in the second quarter of 2006, we realized a special trainee project. We hired motivated young people who had just completed their university education and we enabled them to pass specific trainings throughout the entire Group in two years, in order to get familiar with every aspect of the company business activities. They didnt have trainings only in Serbia; they also visited other Hypo companies abroad. As we often like to say in the Group: our greatest assets are our employees and for that reason we will continue to invest in their internal and external education. (Marija Sutanovac, Head of the HR department of the Hypo Alpe Adria Bank a.d. Beograd). Important point, which should be highlighted in this section, is opportunity for scholarships for university education of employees. Each year Bank supports further education of thirty selected employees and provides funding for their studies. This program represents a special kind of acknowledgement for talented and hard working employees. Furthermore, in cooperation with the Serbian Business Club Privrednik[4], the Bank provides scholarships for ten students, which are not employees of the bank, and in this way shows its support directed to the young people of Serbia. In this way, talented and perspective students have the opportunity to be in touch with the people from the most significant and influential companies in Serbia, and can find employment opportunities upon their graduation asides form their scholarships. 3.3. Marketing department and relationship towards clients Marketing department had a challenging task of providing support to all business activities of the Bank, once it penetrated the Serbian market. The key priority of the department was to create a positive image of the Hypo Bank, as well as to inform the Serbian population about its products and services. Corporate image strategy emphasized values of the bank: its tradition, innovative approach to business, Alps-Adriatic philosophy based on the regional banking client focus, partnership, security, corporate responsibility and independence. The main focus of the department was to create and promote the corporate image, which emphasizes that Hypo Alpe Adria Bank a.d. Beograd takes care of its clients in the same way as it takes care of its employees, and that it is a reliable partner who nurtures the local community in which it exists. The main element of the departments strategy was to create two-way communication with the clients: to reach the clients, and to hear their needs as well. For that purpose, the Bank introduced a special program called clients suggestions. Clients of the Bank have the possibility of sending their suggestions, comments,

Internationalisation of SMEs: Challenges and Barriers

Internationalisation of SMEs: Challenges and Barriers Small and Medium Enterprises (SMEs) are becoming more important in today’s international markets. (Oviatt and McDougall,1994, 1999). The internationalisation of SME’s can be expected to increase further due to the economy of the world becoming further harmonised with continued declines in government imposed barriers and advances in technology (Lu, Jane W, and Paul W Beamish, 2001). In 2013 there was an estimated 4.9 million private sector businesses in the UK which is an increase of 102,000 compared to that of 2012. SME’s account for over half of employment, 53.9%, and almost half of the turnover in the UK private sector, 48.1%. (Department for Business Innovations and Skills, 2013). Hence, showing that SME’s are still growing and are an integral part of the UK’s economy. Through SME’s, this essay will discuss and critically analyse the process of creating (pre start up) and managing a new venture (post start up). It will begin with considering issues relating to the entrepreneur, and examine the challenges that they are faced with when starting up a business idea, the opportunity, and the innovation. The problems with managing a new venture are then inspected. In French, the term entrepreneur means someone who â€Å"undertakes†, for example someone who undertakes a significant project or activity. It later came to be used to identify individuals who accelerated economic progress by finding new and better ways of doing things. The French economist most associated with giving the name is Jean Baptiste Say who was quoted saying â€Å"The entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield†. Entrepreneurs create value (Dees, J Gregory, 1998). The sources of entrepreneurship are studied by researchers in a wide range of disciplines, the study varies per discipline. For example, an economist would look at mainly socio economic variables, whereas psychologists would look at the personality traits of the entrepreneurs to see which ones were more integral to that of an entrepreneur (Fritsch, Michael, and Alina Rusakova, 2010). The Big Five model of personality provides a framework for analysing the relationship between personality traits and the tendency to become an entrepreneur. The five dimensions of this personality model are: Extraversion, Emotional Stability, Agreeableness, Conscientiousness, and Openness to Experience (Barrick, Murray R, and Michael K Mount, 1991). Zhao and Seibert (2006) investigated the personality characteristics of business founders in comparison to dependently employed managers. They found that self employed individuals are different from managers on the dimensions of openness to experience, consci entiousness, neuroticism, and agreeableness (Zhao, Hao, and Scott E Seibert, 2006). Schmitt-Rodermund states that early entrepreneurial interest is related to elevated levels of openness to experience, extraversion, and conscientiousness (Schmitt-Rodermund, Eva, 2004). Although these relationships show a correlation between single personality traits and entrepreneurship, the effect of personality characteristics for entrepreneurship is still not entirely clear (Rauch, Andreas, and Michael Frese 2007). A main motivation for entrepreneurship is the need for freedom. Stepping into self employment means becoming your own boss and a need for autonomy as a non financial value becomes an important part of the entrepreneurs career choice, despite a potential decrease in income (Fritsch, Michael, and Alina Rusakova, 2010). The Croson and Minniti (2011) model shows that newly self employed individuals are willing to accept a lower income in exchange for the psychological benefits that come with self employment (Croson, David C, and Maria Minniti 2012). This is similar to self determination theory in that autonomy leads to well being and explains why autonomy in the workplace might be a compensator for higher incomes in a position that involves less freedom (Deci, Edward, and Richard M Ryan, 2008). Entrepreneurial opportunities can arise from from structural gaps in the market or from business transformations, for example the genesis of an internet company. The entrepreneurial opportunity itself, consists of a business idea and its potential. The business idea is then formed into a business plan which is the foundation for creating a company and exploiting the gap in the marketplace (Volkmann, Christine K, Kim Oliver Tokarski, and Marc Grà ¼nhagen 2010). The term â€Å"opportunity† seems to be a central part of many definitions of entrepreneurship. It relates to Say’s notion of shifting resources to a higher area. An opportunity, therefore, means an opportunity to create value in some way. Entrepreneurs have a mind-set that sees the possibilities rather than the problems created by change such as technological advances. The entrepreneur always looks for change, responds to it, and exploits it as an opportunity (Dees, J Gregory 1998). However, Peter Drucker, a management consultant, educator, and author, says that â€Å"not every small business is entrepreneurial or represents entrepreneurship†. An example of this would be a â€Å"husband and wife who open a delicatessen or a mexican restaurant in the american suburb†. There is nothing specifically innovative or change oriented in this (Drucker, Peter Ferdinand 1995). He also claims that entrepreneurship does not require a profit motive. Further backing up the Crosson and Minniti (2010) model. With social entrepreneurs, the social mission is central and mission related impact becomes the central criterion, not the creation of wealth. For social entrepreneurs the money is not important, it is the actual outcome of their work that they strive for. However, with business entrepreneurs, the income of money is a way of measuring the creation of value. Business entrepreneurs are subject to market discipline. If they do not shift resources to become more economically functional then they tend to be driven out of business (Dees, J Gregory 1998). The challenges involved in starting a new venture, as well as the characteristic uncertainty and the lack of resources and stability that have led some researchers to view survival as the focused dimension of success (Van de Den 1984), are authentic in the social field. Furthermore, given the difficulty of measuring the performance of firms they use multiple measures of performance. The criteria of success of social ventures are determined as follows: 1. The level to which the venture achieves its set goals, 2. the ability of the venture to ensure continuity and sustainability by acquiring resources necessary to maintain the objectives, and 3. the level of resources that are available to maintain the ventures growth and expansion (Sharir, Moshe, and Miri Lerner, 2006). A large field study was carried out between 1999 and 2001 on the process of initiating and establishing social ventures (Sharir, Moshe, and Miri Lerner, 2006). Of the social ventures, it was deduced into fifteen variables that determined their success. These include: Previous experience this involved checking the history of the entrepreneur for previous expertise in the venture area. Total dedication The time that was invested in the development by the entrepreneur, the investment of the entrepreneur’s private resources. Support from family and friends this was measured by the amount of involvement that was made by the friends and family of the entrepreneur. Acceptance of the idea of the venture in the public’s eyes the public’s awareness of the issue. The primary social network examined the activities that were involved in assisting the venture to acquire needed capital and support in the establishment stage. Support from public sector agencies yes or no. Funding received from foundations support received by foundations for three or more years. Support received from another non profit organisation whether it acquired capital, received support, or was integrated within an older organisation. The amount of budget at the establishment stage fifty thousand dollars was acquired at the establishment stage. Composition of the staff at the establishment stage The number of staff members and their jobs as salaried or part time, and also the distribution of workload between them. Governing board performance the involvement of board members in planning, decision making, personal financial investment, and expanding the social network. The planned expansion and stabilisation of the venture’s social network the actions taken by the entrepreneur in this way. Preliminary planning the preparation of a business plan or detailed planning involving environmental aspects, staffing and budgeting. Long term cooperation with another organisati on cooperation with another organisation for at least three years. Market test of the venture’s service charging fees for receipt of selected services or obtaining long term contracts from public agencies. Eight of the fifteen variables were found to contribute to the success of the social venture (Sharir, Moshe, and Miri Lerner, 2006). Business mortality rates suggest that discontinuous rates of start ups can be as high as seventy percent in the first five years, although this depends on the specific industry in question. Within a new venture, the main problem arises due to a lack of organisational structure and a lack of a specific set of roles, tasks, and capabilities. Therefore the founders of the company must use what little resources they have to address the issues involved. Thus taking up management time. Moreover, the inclusion of structure and teachings of new roles, tasks, and capabilities within the company can cause inefficiency and may lead to worry, and conflict among the members. However, there is one way in which new ventures have an advantage over older businesses. They are able to form a business plan without being restricted because of the decisions that have been made in the companies’ past. They are also not liable to aging. Older ventures suffer from processes such as routinisation and s tandardisation which makes them reluctant to transform their company in the face of change (Gruber, Marc, and Joachim Henkel 2006). There are three stages that can be applied to the growth of a company once the initial start up procedure has finished. These are: early development, (rapid) development, and sustained growth. In the early development stage, the entrepreneur must strengthen the structures laid out at the foundation stage. They must also aim confidently at successful market establishment. Within this stage the growth of the company is determined by the strategies and implementation of those strategies into business operations. During the rapid development stage, the main strengths and strategic advantages of the business must be capitalised on and created. Frequent changes to structures such as communication, leadership, information, and communication are also required for rapid growth. New resources might need to be acquired or existing ones, redistributed to account for the new demands. In order for a company to achieve sustained growth, it must be planned using growth strategies established by the founders of the company (Volkmann, Christine K, Kim Oliver Tokarski, and Marc Grà ¼nhagen 2010). To summarise, SME’s are still a major part of the economy and they are constantly expanding. Entrepreneurs are the people responsible for the stable growth of SME’s and their innovative minds will ensure that technology advances. Psychologists believe that entrepreneurs have different personality traits than normal people which helps them to strive more and become more confident when setting out to achieve their goals. There are two different types of entrepreneur, the social entrepreneurs and the business entrepreneurs. The social entrepreneurs seek pleasure in getting their idea known to the world whereas business entrepreneurs always look for ways to gain wealth. Due to the entrepreneurs ability to seek out gaps in the market, the world will become a more comfortable place to live in with innovations that will make lives easier. Entrepreneurs do not enjoy the restrictions of a workplace and this leads them to becoming their own boss, however, they must face the chall enges that entails with starting up a business. Such as the resources, organisational structure, and growth. References Lu, Jane W, and Paul W Beamish. The internationalization and performance of SMEs. Strategic management journal 22.6à ¢Ã¢â€š ¬Ã‚ 7 (2001): 565-586. Department of Business Innovations and Skills. â€Å"Business Population Estimates for the UK and Regions.† 2013. Fritsch, Michael, and Alina Rusakova. Personality traits, self-employment, and professions. 2010. Croson, David C, and Maria Minniti. Slipping the surly bonds: The value of autonomy in self-employment. Journal of Economic Psychology 33.2 (2012): 355-365. Barrick, Murray R, and Michael K Mount. The big five personality dimensions and job performance: a metaà ¢Ã¢â€š ¬Ã‚ analysis. Personnel psychology 44.1 (1991): 1-26. Zhao, Hao, and Scott E Seibert. The big five personality dimensions and entrepreneurial status: a meta-analytical review. Journal of Applied Psychology 91.2 (2006): 259. Schmitt-Rodermund, Eva. Pathways to successful entrepreneurship: Parenting, personality, early entrepreneurial competence, and interests. Journal of Vocational Behavior 65.3 (2004): 498-518. Rauch, Andreas, and Michael Frese. Born to Be an Entrepreneur? Revisiting the Personality Approach to Entrepreneurship. (2007). Deci, Edward, and Richard M Ryan. Self-determination theory. Handbook of theories of social psychology (2008): 416. Dees, J Gregory. The meaning of social entrepreneurship. Comments and suggestions contributed from the Social Entrepreneurship Funders Working Group, 6pp (1998). Drucker, Peter Ferdinand. People and performance: The best of Peter Drucker on management. Routledge, 1995. Sharir, Moshe, and Miri Lerner. Gauging the success of social ventures initiated by individual social entrepreneurs. Journal of world business 41.1 (2006): 6-20. Gruber, Marc, and Joachim Henkel. New ventures based on open innovation–an empirical analysis of start-up firms in embedded Linux. International Journal of Technology Management 33.4 (2006): 356-372. Volkmann, Christine K, Kim Oliver Tokarski, and Marc Grà ¼nhagen. Entrepreneurship in a european perspective: concepts for the creation and growth of new ventures. Springer, 2010.

Culture as a Process in Levines Highbrow, Lowbrow Essay -- Highbrow L

Culture as a Process in Levine's Highbrow, Lowbrow In Highbrow, Lowbrow, Levine argues that a distinction between high and low culture that did not exist in the first half of the 19th century emerged by the turn of the century and solidified during the 20th century, and that despite a move in the last few decades toward a more ecumenical interpretation of â€Å"culture,† the distinction between high art and popular entertainment and the revering of a canon of sacred, inalterable cultural works persists. In the prologue Levine states that one of his central arguments is that concepts of cultural boundaries have changed over the period he treats. Throughout Highbrow, Lowbrow, Levine defines culture as a process rather than a fixed entity, and as a product of interactions between the past and the present. Levine’s first chapter presents evidence that 19th century Americans of all social classes enjoyed Shakespeare as an integral part of their culture and entertainment. Shakespeare’s works were familiar enough to the populace that a variety of parodies were written and performed for large crowds that displayed their engagement with the works by applause, vegetable-throwing, interruptions, and commands to the actors. Shakespeare’s plays were performed in frontier communities and in cities, in churches and theatres and make-shift stages, attended by people of all classes. He describes the integration of Shakespeare into the Americans’ language and imagination, and explains Shakespeare’s popularity on the basis of its compatibility with 19th century Americans’ oral rhetorical style and their ability to see their own culture’s emphasis on individualism and morality reflected in Shakespeare’s characters and stories. Levine ex... ... and others whom Levine treats are a different breed of reformers because they are concerned only indirectly with morality. But when Brown laments that today’s youth are intellectually wanting and have no connection with their cultural heritage, he uses bold phrases such as â€Å"junk food for the soul,† indicating that the erosion of appreciation for high culture is changing not only the common forms of entertainment but the character of today’s youth. Another parallel exists in Brown’s conception of culture and the Springhall’s reformers’ concept of morality as something that youth can access if they choose to break away from the evil influences of â€Å"mass† or â€Å"popular† culture – with the help, of course, of their moral or intellectual superiors, who long to inculcate their own (perhaps technologically or culturally outdated) ways of thinking into the next generation.

methods of persuasion Essay -- essays research papers

Methods of Persuasion When one thinks of government controversy, you cannot help but think of the United States. This issue is usually about how the government deals with one’s rights. Throughout history there have been many that have struggled for freedom against our so-called controversial government. Three writers each had their own specific experience with this government. Although each of these arguments relies on different methods of persuasion, Henry Thoreau, Virginia Wolf, and Fredrick Douglas all suggested that there is definitely something wrong with the United States’ system of government. The following essay will address these author’s arguments and discuss how the role of each writers’ methods of persuasion played an important role in convincing the readers as well as getting their attention. After spending a night in jail Henry Thoreau talked about the problem with the government and how they dealt with rights. The reason he was put in jail was because he refused to pay taxes that he believed was being spent on the Mexican War. Throughout the text he shows how much he disliked the way government was going. Thoreau had a strong belief that the system was going the wrong way and the only way to put it back on track was to rebel against the rules, just as he had. He wrote that in order to make the changes we must take chances and make sacrifices even if it landed us in jail. Thoreau uses a monologue as his method to persuade the readers. The main goal in his writi...

Feng Shui :: essays research papers

When it comes to Feng Shui, I think there are generally three groups of people. There are the Believers, Skeptics and the In-Betweens. In-Betweens are those that are neither Believers but nor are they absolute Skeptics. Being in the industry, obviously, I meet people who believe in Feng Shui all the time. But I do not ignore the fact that like many other metaphysical sciences, is often skeptically perceived by the public in general. The problem lies with the fact that there is so much hocus-pocus in this field, that one cannot help but feel a sense of misconception shrouding the practice. In actual fact, the art, science, study and practice of Feng Shui is a principled subject and no different to other traditional studies. I think it is up to the practitioners of this art, the believers, to help put it in a better light. And I believe, the best way to do this through education. I asked a group of advanced students once, what they believed to be the definition of Feng Shui. To my surprise, almost everyone responded with a different definition. It was such a fundamental question – yet most of their replies were different. Some said that Feng Shui is â€Å"an art of placement†, others claimed that it was â€Å"about harmony† or â€Å"wind and water† and another group said it was about â€Å"living in harmony with nature†. It was interesting experience. It seems, almost everyone has a different ‘definition’ of Feng Shui. Even the professionals in this field seem to have different definitions. Not surprisingly, even the same author, may have different definitions on the subject depending on which book you read! What exactly is this art? Is it really an art? Or is it a science? It is because of this lack of understanding that people tend to lose respect for Feng Shui. If even the professionals don’t have a common denominator on what Feng Shui is, then what value is there in it? Some of the more common definitions circulating today are: 1. Feng Shui is an Art of Placement 2. Feng Shui is Interior Design 3. Feng Shui is about decorating your house with good luck objects 4. Feng Shui is about living in harmony with nature 5. Feng Shui is about enhancing Wealth 6. Feng Shui is about enriching lives. Which one of these is correct? Actually, lets start with the wrong ones, it’ll make it simpler? To begin with, Feng Shui is definitely NOT the art of decorating your home with good luck objects NOR is it the so-called ‘art of placement’ of furniture and objects.

Entangled Pakistan and War on Terror Essay

At eight forty-six Flight eleven crashed into the North Tower of the World Trade Centre (Board). Sixteen minutes later Flight number, one seventy-five, impacted the South Tower (Board, George Washington University). American Airlines Flight seventy-seven dropped on the Pentagon at nine thirty-seven (Board, George Washington University ). On eleventh September 2001 two thousand nine hundred and seventy seven people died (Glazier). It marked the worst terrorist attack in the American history. The United States economy froze while the world still stood in shock. In those dramatic moments on twelfth September 2001, President George W Bush addressed the nation and declared America’s War on Terrorism (US declares War on Terror). What followed was a global campaign by American and North Atlantic Treaty Organization (NATO) troops against Taliban, who controlled Afghanistan and Al-Qaeda, the master mind behind the nine-elven plot. The military campaign was named â€Å"Operation Enduring Freedom†. The leader of Al-Qaeda, Osama bin Laden was the key target of the United States. When the Afghan government refused to hand over, USA decided to invade Afghanistan (Channel). On twenty-second September 2006, President Parvez Musharraf confided that United States threatened Pakistan. In an interview, Musharraf said â€Å"The intelligence director told me that Mr Armitage said, ‘Be prepared to be bombed. Be prepared to go back to the Stone Age’,† (Beale). But before US could go on with its claims, Pakistan had accepted to cooperate and provide a channel into Afghanistan. However, ten years into the war Pakistanis have started to raise serious questions as to whether the war is Pakistan’s or not. In this regard President Musharraf is often blamed for dragging Pakistan into a war which was not Pakistan’s. The debate on this issue has been a controversial one. Opposition leader Imran Khan said â€Å"A friend should tell the other friend what is good for them. A military solution is a disaster for the U. S. , it’s a disaster for the people of Pakistan. † (Solomon). At many instances it has been suggested by opposition leaders that Pakistan should withdraw from the war. Although Pakistan has benefited by the uplift of sanctions imposed in 1998 and improved foreign relations through its critical role in the war, illustrated by Western assistance during natural disasters, the war on terror has been a disadvantageous feat in terms of receiving highly misallocated foreign aid, fighting terrorism which it structured in the first place, and healing a scarred reputation of being a pro-fundamentalist country. Moreover, Pakistan’s ill-equipped economy is not suited to sustain a pro-longed war, especially a one which has extended to its own territories. USAID (United States aid for International development) is the most commonly presented counter argument when Pakistan’s self-interest in the war is put forth. However, it is to be noted here that survival of Pakistan does not solely depend on USAID, let alone boost economy. Between 2002 and 2008 Pakistan received a total of twenty three and a half billion dollars in USAID (Ibrahim). This aid was intended to stabilize Pakistan and render its capability strong enough to counter terrorism. Although the amount â€Å"appears† large enough to change any country, it has largely been futile for Pakistan. If the real purpose of USAID was to enhance cooperation between Pakistan and USA and boost Pakistan’s economy, as it is mostly portrayed, then it should have been more wisely allocated. For instance, a mere ten percent is spent on development projects such as poverty, education and healthcare (Ibrahim). With such meager resources, these programs cannot be extensively carried out to achieve the desirable results. Meanwhile, a stunning seventy five percent of aid was allocated for military purposes (Ibrahim). These included purchasing of advanced weaponry and obtaining counter-terrorism training from the United States. Analytically, three-fourth of spending would do little to prop Pakistan whatsoever. It is astonishing that so much of the aid is being misused for purposes which would not serve Pakistan at best. To lay down the effects, the usefulness of the aid should be considered. A strong military would do little or perhaps negligibly small to make Pakistan a prosperous state. Assume, if three-fourth of aid was spent on development projects instead. In a decade, Pakistan would have been much better off than its current standing. The extremism and terrorism could be better countered by education and improved standard of living than by weapons. Looking from one perspective USAID is the price United States paid to purchase the loyalty of Pakistan. Nevertheless, America took back what it gave. An upsetting aspect about USAID is the phenomenon that it returns back to the donor country. In this regard Dr. Murtaza Haider, associate dean at Ryerson University, says â€Å"The nature of development aid business is such that large sums of donated money in fact return to the donor country in the form of contractual payments to consultants and manufacturers. I recall listening to the former World Bank president James Wolfensohn in 2004 at the 16th Annual Bank Conference on Development Economics in Washington DC where he offered his candid views about how development aid was misspent by donors. In 2003-04 development aid was estimated at $58 million of which $14 million were pocketed by the consultants alone. † (Haider) This fact emphasizes the uselessness of foreign aid to Pakistan. Already being spent so meagerly, a significant proportion of it returns back to USA, which is bound to have a little impact on the country’s wellbeing. So in fact America eventually takes back what it donated while Pakistan still owes favors to the US. The problem here is that the aid comes with a price. By accepting aid package from the United States, Pakistan has become a participant in the war on terror. In return, Pakistan must return favors to satisfy its allies. For instance take the controversial Kerry-Lugar bill of 2009. It promised Pakistan an aid package of one and a half billion dollars annually for five years. Despite the big digits the bill was a controversy. Instead of promoting good image of United States, it declined it further. The conditions applying to the aid package were unacceptable for many Pakistanis. Mustafa Qadir, a researcher for Amnesty International writes â€Å"Controversially, aid may be dependent on US access to Pakistani nationals associated with nuclear proliferation, such as Abdul Qadir Khan. Pakistan must also demonstrate that it is assisting the US in dismantling illicit nuclear supply networks. Pakistan must show a ‘sustained commitment to †¦ combating terrorist groups’ too. Specific reference is made to Pakistan ceasing to support militancy in Afghanistan and India. There is even a reference to the Afghan Taliban shura in Quetta and the Lashkar-e-Taiba headquarters in Muridke† (Qadri). As it appears Pakistan’s sovereignty and integrity is often reduced by US actions. Despite being an ally on war on terror, USA has been suspicious of Pakistan’s nuclear program and objective of its leadership. Conditions accompanying USAID often give the United States the right to interfere in Pakistan’s internal affairs. These conditions have further extended to include military operations by American army in Pakistan’s territory. May it be a covert operation to kill Osama bin Laden or drone strikes, USA takes the liberty to trespass and eliminate multiple targets inside Pakistan. â€Å"The US has launched drone strikes in Pakistan over 330 times with up to 3,247 casualties – including up to 852 civilians† (Rogers). The drone attacks have been terrifically condemned by Pakistanis but despite that United States blatantly continues with its strategy. Though a justification for US drone strikes could have been sought if only suspected terrorists were killed but the collateral damage and deaths of non-combatants is simply disappointing. For Pakistan the most upsetting consequence of war on terror has been the terrorists themselves. For a thorough understanding of fundamental groups, history of their past relations with Pakistan needs to be seen. After Soviet Union’s withdrawal from Afghanistan, a power struggle ensued between different groups of Afghanis. The old Mujahideen army was left with no purpose. The Afghan war was over now. From 1994 a civil war initiated in Afghanistan and eventually the Taliban succeeded in establishing their rule in Afghanistan. Till 2001, the Afghan government remained neutral to Pakistan. This was because of the fact that before 9/11 attacks Pakistan supported the Taliban. Pakistan was involved in assisting terrorist groups, Taliban and Al-Qaeda, in the civil war to form a government in Afghanistan in 1990’s (History Channel). However, after 9/11 there came shift in Pakistan’s policy. Pakistan forged an alliance with the US to help channel the Nato and American troops into Afghanistan. The previously pro-Pakistani terrorist groups turned rogue. Pakistan was instructed by the US to eliminate Al-Qaeda elements and training camps across the border. This later translated into the Waziristan operation by the Pakistani forces in the North-Western territories of Pakistan. It was predictable that the old partners would initiate a terror reign across Pakistan. â€Å"The country’s annual death toll from terrorist attacks rose from 164 in 2003 to 3,318 in 2009, a level exceeding the number of Americans killed on September 11. Some 35,000 Pakistanis, including 3,500 members of security forces, have died in terror and counterterror violence. Millions more have been displaced by fighting. † (Hamid) The benefit of Pakistan seems little from the figures. The war initiated by the United States has cost Pakistan a lot both economically and socially. The extremist groups which had previously aligned themselves with Pakistan turned against it in their attempt to oppose USA. As per the Ministry of Finance â€Å"During the last 10 years the direct and indirect cost of war on terror incurred by Pakistan amounted to $ 67. 93 billion or Rs. 5037 billion. † (Ministry of Finance) This amount outweighs the economic assistance Pakistan has received during the past decade which roughly amounts to only one-third of it. Furthermore, the true impact of terrorism cannot be expressed in monetary terms. For instance, economists cannot place value on the loss of human life, loss of Pakistan’s image to the world etc. Another unanticipated consequence of the war on terror for Pakistan has been its credibility. During the war the western countries have expressed doubts about Pakistan’s loyalty. Pakistan has been accused of playing a â€Å"double-game†, whereby Pakistan pretends to assist United States but secretly support terrorist groups like Al-Qaeda and Taliban. Although no evidence exists regarding Pakistan’s double game but United States and NATO have frequently complained of Pakistan’s secret policy. For example death of Osama bin Laden placed a serious crisis over Pakistan. The international repute and credibility of Pakistan vanished into thin air. President of Afghanistan Hamid Karzai hinted that Osama bin Laden had â€Å"hidden himself in the military bases of Abbottabad. † (Boone and Black) While John Brenan, the homeland security advisor to the White House said â€Å"People are raising a number of questions and understandably so†¦ I’m sure a number of people have questions about whether there was some kind of support provided by the Pakistani government. † (Office of the Press Secretary, White House) What both meant to say was that Pakistan was providing a sanctuary to the Al-Qaeda leader. Thus the event itself was a humiliation for the country. The time of 9/11 can only be commended upon since it coincided at a time when Pakistan desperately required foreign help to drag itself out from the economic turmoil it faced. It will be unfair to say that war on terror has been a complete disaster for Pakistan. Before September eleven attacks Pakistan was under intense pressure from the international community. In May 1998 after Pakistan’s first nuclear test, it came under economic sanctions from the world major power ¬s. Aid to Pakistan ceased and foreign trade was cut off. The US and other shareholder’s formed a coalition to stop International Monetary Fund (IMF) funding to Pakistan. The economy which was already running on debt from the IMF plummeted down even deeper. By November 1998 the foreign reserves of Pakistan fell to four hundred and fifty eight million dollars which is a considerably dangerous figure for any economy. Before the tests the Finance Ministry predicted the Gross Domestic Product (GDP) to grow by six percent for 1998 to 1999 financial year. (Morrow and Carriere) However after the nuclear tests the Economist Intelligence Unit predicted that the Gross Domestic product (GDP) growth rate from 1998 to 1999 was one point six percent. (Morrow and Carriere) In short the Pakistani economy was certain to default. Apart from Chaghi nuclear test, Pakistan’s brief venture into the Kargil war and military coup by President Musharraf had left the country in diplomatic isolation. Pakistan was under an estimated foreign debt of forty billion dollars (Mahapatra). But the war on terror altered the whole scenario. Twelve days after the 9/11 attacks all sanctions were lifted by Preside George W Bush after Pakistan complied to ally with the United States. (BBC News) Pakistan was again recognized as an ally by the Western nations and the started pouring in. Thus the war on terror prevented an economic crisis which was bound to engulf Pakistan. War on terror was the stimulus for improving diplomatic relations between Pakistan and the European nations. Since Pakistan had been an important ally of US and NATO, relations turned good with the European community. Pakistan received aid and technical assistance from the Europe and America during the 2005 earthquake. Pakistan received an estimated total aid of six point seven billion dollars from the International community (Fox News). During the Flood of 2010, Pakistan received one and a half billion dollars in aid for relief efforts (Guardian). This filled the trust deficit that had existed between Pakistan and the West for so long a period. However, the credit again belongs to the so called war on terror which has had been the architect of good foreign relations for Pakistan. It is true that Pakistan’s participation in war on terror was a need at one time but adopting a permanent policy would not be a sane thought. Given its capability both economically and militarily it is not feasible for a developing country like Pakistan to afford a war which would last for a decade, especially when its opponent has mastered in guerilla warfare. War on terror is a bleeding wound that Pakistan needs to heal. It is evident that even after United States withdrawal the war may continue in the region. The dire outcome might be same as the consequences of Soviet Union’s Afghan war. A. Rauf Khan Khattak quotes J. Michael McConnell, the Director of National Intelligence who narrates remarks of a Pakistani general â€Å"In the long run Americans will not have the burden of staying in Afghanistan and when America pull out then India will reign. Therefore the Pakistanis will have to sustain contracts with the opposition to Afghan government meaning the Taliban, â€Å"So when America pulls out, it is a friendly government to Pakistan†. (Khattak 10) After US’s withdrawal Pakistan’s dilemma would be to contain the insurgency in its territories which will be an insurmountable task to cope with. â€Å"Seemingly† war on terror appears beneficial for Pakistan. In fact the case is otherwise. Inflow of huge cash into Pakistan’s will improve the country’s balance of payments and foreign currency reserves for a time-being but in the long run, Pakistan is at loss. The cost paid by Pakistan outweighs the benefits received by a large scale. The true loss can only be estimated. Economically war on terror has been no less than a disaster for Pakistan. Its usefulness lays only in the fact that Pakistan was temporarily stabilized by pro-Western policies, however, mid-war security conditions in the country and costs incurred are too diabolic to accept. The immediate solution would be that Pakistan withdraws from the war and make peace with its neighbor.

Gardening as a Relaxing Hobby Essay

Amidst the problems with climate change and the food shortage in some parts of the world, certain hobbies may become beneficial to humankind. In my personal attempt to help in alleviating this environmental dilemma, I recently engaged myself in a hobby that is useful for myself and to the environment. Gardening is a hobby that I am quite interested in. This hobby is important to me as I am trying to go organic and help the environment in my own little way. Since I am just a beginner in this hobby, I know only little in this particular field and I have plenty of questions that need answers. Gardening may look easy at the start but tending the garden is actually a task that needs knowledge in plants and soil composition. I am moving towards in creating an organic garden that I find beneficial, since I can grow food in my backyard. However, I need to know what plants are best to plant in a particular season. In addition, I need to be knowledgeable on how I will be able to manage pests in my garden without using chemical pest control and how I will be able to add necessary nutrients in my garden soil to assure plants holistic growth. I managed to answer some of my queries through reading and researching about the particular topic. The main research tool that I used is the internet where I managed to find sites that are credible and reliable. They provided tips and suggestions on how to manage an organic garden effectively and efficiently. Also, I managed to find reading materials like magazine and books that contain articles on managing an organic garden. These are also reliable sources of information about the hobby. As a form of evaluating the sources, I assure that the material comes from an expert or someone who is knowledgeable in the topic. Gardening is a hobby that is beneficial to humankind and to the environment.