Thursday, December 6, 2012

emerging underclass

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THE EMERGING UNDERCLASS

Andrew Thompson

“Young people are now the significant losers from the radical transformation in the nature and shape of work in Australia over the past two decades” (Kirby report, 000)

Once upon time it was commonplace to leave school at 16, get a job and be fairly confident of holding it until you were handed your gold watch upon retirement. Enter economic rationalism; downsizing and all of sudden things ain’t what they used to be. The casualisation of the work place has left many young people with no job security.

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When Adam Coote left school, he didn’t feel like going to university, he’d had enough of school and wanted to join the work force straight way. It’s a decision he has now come to regret.

“I started working casually at factory, it was pretty boring but the money was good, then they lost a contract that they were counting on, all of a sudden me and about 0 others were told we were out of a job. From there I’ve been working for different job agencies. For the last two years I haven’t been at the same workplace for more than 6 weeks”

It’s a trend that’s becoming all to common according to Cate Steinfort, Executive officer of Inner Eastern Lens, an organization aimed at battling the wave of youth unemployment.

Mrs Steinfort says that employing on a casual basis has become a popular trend among large companies.

“They have a much smaller wage bill, they have much less work cover, they don’t have to have to carry staff in quiet times, They just pull people in when they need them, they don’t have to carry all the costs for employing someone and keeping them employed.”

Those most prone to the change in the workforce are young unskilled workers who have no qualifications, but are enticed by the high wages earned on causal rates. It’s these people, says Ms Steinfort, that will create a considerable problems in the future.

“They won’t have the commitment to a job. They won’t have any financial stability. They can’t take a loan out on a house, they cant make any future plans; they are often kicked out of rental accommodation and can end up homeless”

But the problem doesn’t stop there; Cate says it could flow on, creating a recurring cycle, an unskilled underclass

“It’s called intergenerational unemployment. If they have children, then their children won’t have a role mode, therefore won’t be able to hold a job down either because they didn’t see a working role model in the house”

It’s a problem Adam does not want to be part of.

“Yeah I’ve had enough of it. It just gives you no stability, you just don’t know if you’re going to have work next week or not”

Adam is studying a pre- apprentice course at TAFE and one day hopes to gain an apprenticeship as a builder.

“I’m just looking forward to a job where I can roll up everyday, know what I’m expecting, see the same people and get to know a trade so I’ve got some skills”

“If the governments are looking at a pure economic outcome it is much better having a more trained less casualised work force because it actually costs the society less in the long term”, Cate says

Cate feels the problem needs to be addressed as soon as possible.

“The long term effect of a disengaged marganalised segment of society will have a very high cost on society and could see a massive rise in mental illness, abuse, social welfare and crimes.”

At a time when market freedom is so firmly entrenched in Government policy, the road ahead could be a rocky one.



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Monday, October 22, 2012

Fate

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What’s your Fate?

When it comes to fate there are two types of people, those who believe in it and those who don’t. The people who don’t believe in it often don’t because they don’t like to think that they don’t have control over there life, when in all reality they do have control. For example, we are all going to die, there is no changing that, but we can sometimes change when, or how we die. To help explain myself I’m going to look at the role of fate in Sophocles’ play, Antigone.

In this play every character is given a determined fate, but they are also given several choices that they can make as individuals. By making those choices they’re determining their destiny. When they determine their destiny there are consequences that they must live with, sometimes they are good and sometimes they are bad. In Antigone the role of fate comes into play when Teresias foresees the death of Haeman in his speech to Creon. Teresias says, “You shall have given a son of your own loins to death, in payment for death”. This occurs after Creon has made the decision not to bury the body of Antigone’s brother, Polynices; he then makes a law stating that anybody who attempts to bury him shall be sentenced to death. That in turn sets in effect the decision of Antigone to bury her brother, which leads up to her getting caught in the act by Creon’s servants. From this point on a domino like affect takes place leading up to the deaths of Antigone, Eurydice (Creon’s wife), and Haeman.

Now for the explanation of destiny and fate in this play. Creon chooses his destiny by not burying the body, his fate then becomes the consequences of his destiny. Creon’s fate develops into him having to live through the deaths of his son and wife. After Creon sends Antigone off to be killed and his son has proclaimed his love for Antigone, Creon realizes that he has made a major mistake. He understands that his actions have been much too harsh for the crime Antigone committed and that he may lose the love of his son if he doesn’t try to correct his mistakes. The only problem is that Creon realizes his mistakes all too late and he now must suffer the consequences of his destiny. When Antigone is killed Haeman arrives to see her body still hanging from the rope and then vengefully kills himself in front of Creon. Then when Creon returns home he arrives to see his wife has also slain herself after she learned of Antigone and Haeman.

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You see that the predicted fate of Haeman comes through in the end despite the attempts of Creon to correct his mistakes. It was predicted that Haeman was to die and that’s what happened. In this play you get the impression that Sophocles is trying to say that you can pick and choose your destiny and set up your own fate but once you’ve committed to your fate you can’t change it. I draw this conclusion about Sophocles because he also writes of a similar scenario in Oedipus Rex.

In Oedipus Rex King Laius and his wife had a child named Oedipus. In this play there is also a prophet who goes by the name Apollo, and Apollo gives and oracle about Oedipus saying that “he (Oedipus) is destined to one day kill his father, and become his own mother’s wife”. Well the king could not live with this possibility and had a servant nail Oedipus’ feet together and leave him in the mountains to die. But once again fate comes through and everything thing that was predicted about Oedipus comes true.

By reading this two plays you get the inkling that Sophocles is telling us that there are some things in life that you just don’t have any control over. We’ve all heard the story of the boy and girl who grew up next to each other and fell in love and proclaimed to one another that they would always be together, that they were made for each other and so on. Then after high school they go away to different colleges and end up meeting different people and never get back together. What most people would say to that is that they “just weren’t meant to be together”. That is the same as saying their fate was to move away and find other people and despite all the attempts people make to stay together and always love each other if it’s not their fate to be with that person then there isn’t much they can do about it.

In the end I get the feeling that you can’t change fate. Destiny is different, you can change your destiny, and I do things everyday that changes my destiny. When I made the choice to go to college so that I could get a well paying job to make money I picked my destiny, but if my fate is to die poor then I believe that no matter how much money I make when my time comes I will die poor.



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eveline

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As evidenced in James Joyce’s “Eveline”, an abusive family life is difficult to separate from. In trying to leave an abusive household Eveline experiences great feelings of fear, anxiety, guilt, and tremendous sadness. All of these things incline her to settle back into the dusty and depressing lifethat she is leading.

A great deal of Eveline’s difficulty in leaving is her feelings of guilt. Her house is a dusty and depressing shell of a home, “She looked round the room, reviewing all its familiar objects which she had dusted once a week for so many years, wondering where on earth all the dust came from.” Even though she leads a bleak existence, she feels responsibility to what is left of her family. When her mother died she promised that she would take care of her father, the children and the house hold, and by leaving she feels as if she is disappointing her deceased mother. Though her drunken father can care for himself, there are two young children left in her care, “...see that the two young children who had been left in her charge went to school regularly and got their meals regularly.” This tremendous sense of responsibility weighs down Eveline like an anchor.

Though Eveline dreams of escaping her life she still has not convinced herself that this is the right thing to do. She wants it but even though, “It was hard work-a hard life-but now that she was about to leave it she did not find it a wholly undesirable life.” This only illustrates how great the hold of the abuse is. Eveline knows that her life is terrible and still cannot admit it without second guessing herself. When Frank first came around her father he felt threatened by Eveline having another male influence and forbade her to see him again, “One day he had quarreled with Frank and after that she had to meet her lover secretly.”

Eveline’s insecurity and inability to face a world that is different from her rigid and pitiful existence, causes her great fear and anxiety. Her father believes that Frank is up to no good but offers no explanation other than, “I know these sailor chaps.” With nothing more than a stereotype he believes himself to be an authority on the subject. With him being a lonely, widowed, alcoholic and extremely overbearing and in need of ego-stroking it cannot be assumed that he truly had his daughter’s best interest at mind when shunning Frank. Frank seems to be a well intentioned young man who cares about Eveline. As a sailor, if he wanted a fling he could have had one without having to bring the girl along with him, or even offering to do so.

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Eveline’s abusive background and fear of her father and being alone causes her to pass up a rare opportunity to change her life. She gave up the chance to be married to a good man and start a new life far away from her depressing home and cold and calloused father. Eveline returns to the same dusty, dead end life not knowing if she will ever get the chance to be married with her own family or if she will remain in the same place with a spirit as broken as the harmonium that sits in the family room.

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English People

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When you read Great Britain’s History you will reflect on that there is a certain pattern that repeats it self over and over again

There was, for one or another reason, a drift to the west from the middle of Europe, and Great Britain was the end of the line.

One reason was persecution Jews came from Spain at the end of 15th century, escaping from Roman Catholic’s. The next stage of immigration was driven not by escape but by attraction

In the 150s, 60s and 70s immigrants from the Caribbean, Africa, hong kong and Cyprus came to work.

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The National Health service, London transport, british railways could not find enough labour in Britain and were keen to take on immigrants.

But all this immigration has created a problem There has been, and there is racism in Great Britain. Today the most racism is against black and Asian people. There is still a problem of discrimination in many areas of life, but particularly in employment. It’s harder for black and Asian people to get jobs according to their education.

For example A Law Society Survey, in 4, found that white students had 47% chance of getting a job compared with 7% for black students.

But there is a positive thing that’s against the racism, the mixed-race marriages has increased and that is after all the best breakdown of barriers.

The Brittish people are obsessed by class.

“ We are, by occupations, education and habits of life, divided into different species“. Wrote Dr Johnson in 18th- century.

British humour is based on the differences between upper and working class.

The strangest thing about the class system is that it’s not entirely dependent on money. Which means that you can be high class and poor, or low class and rich. So instead of money the class system is based on history and relatives.

Two really important indicators of class are education and accent. George Bernad shaw wrote

“It’s impossible for an Englishman to open his mouth without making some other Englishman despise him”.

The thing is, that where ordinary people have regional accents, the upper class speaks exactly the same way.

This is rather strange, because children normally take on the accent of the people around them rather than that of their parents. The reason why, is the schools they go to. All members of upper class go to private fee-paying schools. The top schools costs £15000 per year. ( 10000 Swedish crones)

So it’s actually quite difficult to maintain your position in the upper class, with out lot’s of money.



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Angela's Ashes

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In novels character often make an error in judgment. This is the case in Angela’s Ashes by Franck McCourt. Malachy the father made the mistake of not supporting his family. The family lived in America but since they had no money and their baby died they went to Ireland. The family tried to make a living but it was hard.

Malachy was an alcoholic and always spent the family money on a pint. When their new baby was born they received 500 pounds from a relative. However, the money did not go to the baby instead Malachy decided to go to the bar. Then when he went to England and wasted the money he made there he decided to return home but only stays a day. He then leaves and never returns, which made the family, suffer more.

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By wasting the money he made at work on alcohol the family did not have food or clothes. He did not care that his new baby did not have a drop of milk or that his sons had not eaten. Malachy tried to repair their shoes but it did not work and Frank was made fun of at school. Since he was an alcoholic eventually he would lose his job because he was to drunk to work. So Frank tried to help but there is so much a boy can do. He went to the church but they did not want him as an alter boy.

Malachy left to find work in England, which forced Frank to find work with Mr. Hannon. However, that did not last long. His eyes became so bad that his mother did not let him work anymore. When Malachy went to England he did not send over any money. He just drank the money away. It was hard but they survived. When he left the family for good he sent them three pounds one week and they never heard from him again.

Malachy’s errors impacted the family greatly. They suffered more than he knew. He only cared about having a drink and making him self feel better. This was serious and maybe him leaving made the family better. However, his children did not have a father and they really needed him. Since he was not there, the mother was forced to live with a man that only used her and the children suffered. His errors had consequences and he probably thought they would be better with out him. I believe that if he was more responsible and did not make the mistake to spend the money he earned on a pint the McCourts would have been happier.



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A World of Loneliness

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Is there an actual thing as “not fitting in” or being “unusual”? Does this mean that there is no one who can relate to us; how we think or feel? No matter of age, gender, race, sexual preference, background, likes or dislikes, everyone has characteristics about themselves that either makes them capatible to or distinguishes them from others. Everyone blends in somewhere and no one person can fit in everywhere. That one capatible person may not always be in reach. Finding a person who can relate to us is sometimes hard but like finding the perfect mate, we must search about or sit until we are found. In Willa Cather’s Paul’s Case, Paul is an unusual teenage boy who is unsatisfied with his life and wants to live in a fantasy world because he lives in an environment where it is hard to find someone who understands or that can relate to the way he feels.

In Willa Cather’s Paul’s Case, a teenage boy by the name of Paul is described to be unusual because no one understands him. Paul is unhappy with the school he attends. “Paul is shown to be in an unhappy relationship with teachers and classmates and, generally, cannot endure the academy without infusing that world with his own sense of color and need for embellishment” (Pitcher 547). Unlike other teenagers his age, he does not understand how he can learn anything of use, from his teachers. Paul’s attitude toward school causes his teachers to hold a conference with his father. “The teachers are not unkind by nature, but they lack the imagination to understand sympathetically Paul’s temperament and consequently allow

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themselves to be goaded into actions that contradicts their own values” (Summers 111). When entering the room, Paul’s nonchalant attitude causes the teachers to come to a harsh conclusion.

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Paul’s father does not take the time to recognize and understand why Paul is misbehaving. He does not take extreme measures in reaction of Paul’s unaccepted behavior at school. Instead he removes Paul from school after another incident where Paul lied to his classmates about his relationship with the performers of Carnegie Hall, where he worked. Paul’s lies got so outrageous, the principal went to Paul’s father about the issue. Consequently, Paul’s father removes him from school, making him find anther job and foreboded Paul to be allowed in Carnegie Hall ever again. Paul’s father did not know what he had actually done to Paul emotionally. Paul’s father did not know that the hall was where Paul went to mesmerize, clearing his mind of all of the realistic occurrences in his life. “A similar failure of imagination leads Paul’s father to force his son to break off his relationship with his only friend, the young actor, and to bar him from the theater and concert hall, the scenes of his only pleasures. Instead of regarding Paul’s interest in art and in the friend (a potential lover), as a possible resource that might be developed to help his son, the father reacts simplistically and increases Paul’s isolation and alienation” (Summers 111). Paul’s father did not understand what the hall meant to Paul. He did not know that visiting the hall actually kept Paul from getting into worse problems such as those he was engaged in after he was forbidden from it. “Despite his addiction to the stimulus of art, Paul is himself singularly uncreative. He is neither an artist, musician, writer, actor, nor reader “He felt no necessity to do any of these things; what he wanted was to see, to be in the atmosphere, float on the wave of it, to be carried out, blue league after blue league, away from everything”” (11). Paul used the concert hall to free his mind of all the bad things that was

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happening in his life. This is where he escaped is imperfect world and crossed to his fantasy world.

Paul’s reason for no one understanding him was his homosexuality. Paul never revealed that he was a homosexual. He kept it hidden because he did not feel it was ordinary for anyone to feel the things he felt. “Paul is seeking “freedom from fear” of discovery of his homosexuality” (Pitcher 54). He feels he will be punished from society if this is revealed. Because of these unusual feelings that Paul has, he refuses to associate himself with others. He prefers to be in alienation and isolation from the rest of the world for which he is surrounded by. Paul’s homosexual feelings make him believe that the society and environment he lives in will not understand him.

Paul is completely unsatisfied with his life. Being in an environment in which he is not understood causes Paul to dislike the academy that he attends, to dislike Cordelia Street, the street that he lives on, and the house on Cordelia Street in which he lives. He feels these things are unlike him. He wishes to be around those who are wealthy. He thinks being surrounded by things of value and people who have money is what his society must be filled with for him to be understood. Paul feels he can escape the harsh punishment, which the world holds, if he lived a life similar to those who are wealthy. He dreads going home to a house occupied by his father, whom misunderstands him. Paul refuses to return constantly to a house he now realizes is inescapable. “Paul’s imagination is so constructed and circumscribed that he can picture himself only within that “immense design” over which he has no control and from which he can find no exit. Even in his dreams he finds himself violently thrown back home” (Salda 11). Paul tries to

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use his imagination a number of times to help him escape his world of torment but realizes there is no escaping, not even in his imagination.

Paul’s alienation from others causes him to live in a fantasy world. He feels a more wealthy society can relate to him better so he looses himself in his daydreams of an understanding world. In Paul’s fantasy world, there is no Cordelia Street, a place where the cost of things mattered. Cordelia Street and the house in which he lives is just temporary. “Cordelia Street is not the actual stage of life but a backstage, where he does not live, but only endures”(Page 554). In Paul’s world, the value of money really did not matter. He thinks that having money helps people to cope and deal with society and personal problems. Paul no longer has to play a role in this world in which he does not belong. He no longer has to pretend to be something he really is not. Paul no longer has to live in a world in which he does not fit. “In another sense, he is happy because, having found his place and himself, he no longer has to play a part at all”(556).

In Willa Cather’s Paul’s Case, Paul seems to have a problem of being able to find someone to whom he can actually relate to. Paul has a hard time finding someone because he alienates himself from the world. It is not that no one does not want to hang or be friends with Paul, he just does not allow anyone to get close to him because of his own insecurities.



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Success due to customer service

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Customer Service



Certain companies, businesss and corporations seem to have unlimited success and tremendous financial gain. This is due to several reasons some of which are the companies vision, the way the train their staff, and because of the companies management philosophy. In this report I am going to show how four companies (Disney entertainment, Stew Leonards dairy, Apple computers and M) made their businesss so successful and literally built empires in their respective niches. I am also going to discuss how the philosophies and beliefs practised by these companies can be used to help me in both my schooling and my career in the golf industry.

The first thing that I will discuss will be how the beliefs practised by the companies can help in my approach to school, and in return make me a more successful student. The first company that I will look at is M innovation, this company is constantly stressing the idea to its staff members that they use their free time to work on alternative projects and to not waste time. This lesson is imperative to being successful in college, if a student doesnt waste his free time and uses his free time pockets effectively then he/she can get a tremendous amount of work done with very little stress. Another benefit shown in this video was the companies management philosophy, for this example I will use Stew Leonards dairy. At this particular store they believe so heavily in the idea that customers know what they want and that the store should listen to what the customers have to say that they actually hold discussion groups with several customers once a month so they better learn how to improve different aspects of their store. This is easily related to the way a student should approach school. I have always believed in the belief that having an open line of communication with the faculty will make me a better student. If you listen to the teachers comments and opinions as Stew Leonards Dairy does with their customers then you can get their feedback and in return learn how to improve as a student. Another question raised was what are the strengths of the company. For this question I am going to use the example of Apple Computers and how they stress innovation and individuality. At Apple, on the inside of every one of their computers is the signatures of the team involved in the production of the computers because Apple believes that doing your best as an individual and not simply relying on your team is the key to success. This is similar to the way I approach school as to be successful as a student you must be independent and be able to stand up for your beliefs, or youre reports and essays are going to come across as boring because it seems as if you have no opinion, and this will in return hurt your chances of getting a good mark, and if you dont take pride in your individual work then that will come across as well.

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The last question I will relate is the companies vision, for this I will use the example of Disney entertainment. The entire vision of Disney is to make its customers happy and I believe that to do well in school you have to be happy with your work and never settle with not your best work and take extreme pride in everything you do in school.

The last idea that I am going to discuss in this report is to take some of the ideas that these companies stress and relate them to how I can use them to have a successful career in the golf industry. The first idea is that I am going to use is the strengths of the Disney corporation. The key strength that makes Disney so powerful and successful is how well they train their employees, and how they hire people who share the beliefs of the company and are only their to do their best and make Disney better. This is very easily related to my career in the golf industry, I intend on either becoming a head professional at a golf course or owning my own independent golf retail store, and I believe the most important decision you can make in either of those positions is to hire a great staff and do your best to train them well so they are well adapted for what their job entails. The next question I will use is the values imparted on the staff, for this question I will use the example of Stew Leonards dairy. At this store the only real value imparted on the staff is to be customer friendly and do what ever you can to make the customer happy and make them want to come back. This is very important at either a golf course or a retail golf shop as you must impart the value of customer relations on your staff because mad or unsatisfied customers will not return to your store. The third question I will answer is what are the strengths of the company, for this I will use the example of M. The main strength that I noticed of M is that they reward their employees when they earn it, which in return makes them happy and increases their productivity. As an owner of a golf store or as a head pro at a course I believe that keeping your employees is imperative to being successful and the best way to keep your employees happy is to reward them when they deserve it. The last question I will use to relate these businesss to how I plan on being successful in the golf industry is explain the companies management philosophy, and for this I will use the example Stew Leonards Dairy. The management philosophy of this store is to make the customer happy, give them what they want and make them want to come back. This is a huge belief of mine that is crucial to the success of a person in the golf industry. This particular industry is all about customer relations as most of the customers out their become very loyal to either a golf course or a retail store so you want to be the company that keeps all its customers coming back.

In closing, I believe that this video In Search Of Excellence is a tremendous tool for companies who are looking for an edge in their respective fields. The main idea or belief that I got out of this entire thing that is truly important in any career you may choose is that customer service is imperative to being successful and in return having a great career in the golf industry.

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resignation

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Date

Dear Mr. ,

As required by my contract of employment, I hereby give you one weeks notice of my intention to leave my position as Platform Assistant.

I would like to express my thanks to this great company and my fellow co-workers. The success I have had here has opened new doors for me, it would be foolish for me not to seize these new opportunities.

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Please be assured that I will do all I can to assist in the smooth transfer of my responsibilities before leaving.

I wish both you and company every good fortune and I would like to thank you for having me as part of your team.

Sincerely,

Dear Mr.

As required by my contract of employment, I hereby give you one weeks notice of my intention to leave my position as Platform Assistant.

I have decided that it is time to move on and I have accepted a position elsewhere. This was not an easy decision and took a lot of consideration. However, I am confident that my new role will help me to move towards some of the goals I have for my career.

Please be assured that I will do all I can to assist in the smooth transfer of my responsibilities before leaving.

I wish both you and comopany every good fortune and I would like to thank you for having me as part of your team.

Yours sincerely,

Date

Dear Mr. ,

As required by my contract of employment, I hereby give you one weeks notice of my intention to leave my position as Platform Assistant.

I would like to express my thanks to this great company and my fellow co-workers. The success I have had here has opened new doors for me, it would be foolish for me not to seize these new opportunities.

Please be assured that I will do all I can to assist in the smooth transfer of my responsibilities before leaving.

I wish both you and company every good fortune and I would like to thank you for having me as part of your team.

Sincerely,



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Managerial influences

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Introduction

Managerial Behaviour and the goals of management have long been identified by many as independent of the goals of shareholders . Two models have attempted to explain why the goals are different and how these goals are achieved; Baumol’s Theory of Revenue Maximisation and Marris’s Model of Managerial Enterprise . Initially the Two models will be briefly explained. Then, by reference to determinants of managerial remuneration, the empirical evidence of the occurrences of the determinants, the two models will be examined. This is to come to a conclusion on which model is best supported by the empirical evidence

Models

Marris’s model of managerial enterprise is based on the goal of the manager to increase the balanced growth of the firm . This balance is achieved by offsetting two opposite goals; Maximisation of the growth of demand for goods/services of the firm and maximisation of growth of capital .

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Both of these goals require opposite treatment of retained profit

To maximise growth in capital the management must distribute as much profit as possible back to the shareholders. This keeps the shareholders content with their investment and they will not sell shares or remove the directors. It can result in rising share values and reduce the risk of the firm being taken over. This therefore appeals to the management’s main aims, job security by not being taken over or removed .

The flip side of the coin is to increase the demand customers have for the firm’s goods or services. This is achieved by using as much of the firms profits for investment and increase the firms growth. This would increase the management’s utility at the sacrifice of shareholder utility .

Marris’s model requires that these to aims be balanced to achieve the maximum use of retained profit use for investment and still keeping the shareholders content. To achieve this balance it is necessary to employ two constraints; Managerial constraint and Job security constraint .

The managerial constraint is set by the skills of the current management team or by the limit by which the management team can be increase to increase those skills. Therefore, this limit is the maximum growth achievable. R & D would also limit the growth of the firm. If new products or new designs of existing products can’t be produced, the product will only have a certain life cycle.

Job security constraint is set by the amount the manager has to do to reduce the chances of dismissal. The manager may have to distribute a certain amount of profits to share holders to keep them happy with the manager’s performance. It is also necessary to keep share prices at a high enough level to reduce the chance of take over. Reducing risky investments will have similar effects.

The effects of these constraints can be seen from figure 1 (see below) and it can be seen that a balanced growth point is where management feel the trade off between job security and maximisation of growth is most desirable. The y-axis on the graph shows the profit distributed to shareholders and the x-axis depicts the growth achievable from investment. The growth curve symbolises the managerial constraint. This is curved because the most profitable investments are undertaken first. Management can undertake a policy which would maximise growth (point B) but at the sacrifice of distributed profit which would risk job security. A more appropriate trade off may be point A where distributed profits are much higher and growth is reduced by a smaller amount.

Figure 1



Baumol’s Theory states that the goal of management is not profit maximisation (shareholder goal) but revenues maximisation (increased sales). Baumol gives several reasons for this belief . The reasons to focus on are to do with remuneration of management, job security and prestige (which undoubtedly can lead to increased or decreased remuneration) .

Baumol feels there is evidence that directors’ salaries and slacks are more closely correlated with sales of the firm than profit . So it would follow from this that managers would maximise sales for self interest.

Job security in Baumol’s theory is shown from the desire of management to have satisfactory profits, apposed to maximised profits. Maximised profit in one year may look bad for management when in subsequent years profits are not at the same maximised level .

Prestige can come from high sales. This prestige can increase remuneration (from head hunting or shareholder retaining their services) or if bad, increase the threat of management being replaced or reduce remuneration .

To achieve sales maximisation managers have to calculate the conditions which will achieve the maximum revenue. This is not the same as profit maximisation � see Figure . Point A represents profit maximisation. Point B represents the point where sales maximisation, point Z, appears on the profit ability curve. It can be seen that profit maximisation and sales maximisation are not normally the same thing. Point A is the desired position for the shareholder and point B is the desired position for, in Baumol’s theory, management.

Figure



However shareholders will require dividends to stay happy with the firm’s performance. In Baumol’s theory there an Operative profit constraint .

The operative profit restraint is the minimum amount of net profit that the shareholder will be satisfied with. If this restraint is active it may reduce the maximum sales the directors can achieve � see figure . If this operative profit constraint is active then output will be greater as a sales maximiser than a Profit maximiser . Figure shows that when a operative profit constraint is operative then the maximum sales drop to point Y and the intersection on the profitability falls to point C. It can be seen that management can be limited in their sales maximisation policy if operative profit is closer to the profit maximisation point.

Figure



Empirical Analysis

When discussing which model best reflect the reality of managerial behaviour it is necessary to examine what motivates managers and what determines there objectives. Focusing on remuneration as manager main motivation gives the opportunity to examine empirical evidence of what determines the amounts management receive.

Martin Conyon and Paul Gregg Examined 170 firms between 185 and 10 . They looked into what factors determined top directors’ pay . In conclusion of their results, it is commented that the results they received pointed to previous, earlier studies , which showed that directors’ pay had very little to do with corporate performance. Therefore, from this evidence, profit, considered a major factor in determining corporate, would not affect the directors’ pay . This would be consistent with Baumol’s model and to a certain extent Marris’s model too . Baumol’s theory identifies sales maximisation as the primary aim. Marris’s model identifies the importance of growth which is identified as a factor with similar directors’ pay correlations. Conyon and Gregg also found from there results that there seemed to definite correlation between increases in directors’ remuneration and increase in sales again consistent with Baumol’s model .

Paul Gregg, Stephen Machin and Stefan Szymanski, came to a similar conclusion in a later study (this study included the period from 188 � 11 when Britain was in recession) . Higher sales had a direct correlation with high directors’ remuneration and identified growth as a primary salary driver .

David Shipley published a study in to pricing policies in British manufacturing firms in 181 . Although his study was more specifically on the pricing policies his finding suggested that there was some support for profit maximisation in manufacturing firms’ management . The majority of firms in the study used multiple goals when setting pricing policies . This would not entirely be consistent with Baumol’s theory which states focus of management to maximise sales only and primarily. All other goals displayed by the study were, if not profit orientated, practiced under the premise that profit targets would be met . This is consistent with the operative profit constraint in Baumol’s theory and the job security constraint in Marris’s model . This study would point more towards Marris’s model as there is more emphasis on increasing profit if for no other reason than to improve the amount of money available to put into investment and improve growth while still satisfying shareholders .

While sales are quoted to be a major factor in managerial remuneration . It is also stated that this is not the only factor which would affect their pay . It is therefore assumed that manager’s should consider all factors that affect them. Baumol does not identify other factors which in his theory management should consider .

It has been has been suggested that early studies do not reflect the current sensitivity of remuneration of management to performance of firms . This is closer to Marris’s model .

Size of firms has been identified as the most important factor in terms of remuneration . For the size of a firm to increase it must grow. Marris’s model identifies the importance of growth to management

There have been articles and studies that point to the unreliability of empirical evidence on corporate governance and managerial remuneration factors . So many methodical issues relating to principal and agency theory have been identified as the reasons .

Conclusion

Only remuneration factors have been considered when examining the two models. This makes the discussion incomplete as factors such as corporate structure, managerial labour market factors and personal managerial preferences have not been discussed. There are other managerial behaviour models and theories which have not been included which may be more consistent with the empirical evidence gathered in studies referred to, such as Williamson’s model of managerial discretion. Also more detail explanations of the two models referred to may have allowed closer examination of empirical evidence. Due to these factors, the discussion is limited. However, as I feel that management has the greater ability to influence there pay and it could be argued this is the most important reward for anyone in employment; this was the most appropriate factor to use.

To generate a conclusion from the arguments in this discussion is difficult as with many studies and opinions no conclusive results have been shown. It is my opinion that although sales may be an important factor in remuneration, many other factors exist. Baumol’s theory does not allow for management to apply other factors to their management goals. Marris’s model identifies growth in general as an important factor to the agent (management) and shows the constant battle between satisfying the principal (shareholders) and achieving managements’ utility. This appears more consistent with the difficulties shareholders have in aligning their managements’ interests with there own.

A. Cosh, “The Remuneration of Chief Executives in the UK.” The Economic Journal 175

A. Griffiths, S. Wall, “Applied Economics. An Introductory Course.” 8th ed Longman 1 chapter

A. Koutsoyiannis, “Managerial Theory of the Firm.” nd ed. St. Martin’s Press 17

B. G. M. Main, A. Bruce, T. Buck, “Total Board Remuneration and Company Performance.” The Economic Journal 16

D. D. Shipley, “Pricing objectives in British Manufacturing Industry,” The Journal of Industrial Economics 181

J. E. Garen, “Executive Compensation and Principal-Agent Theory.” Journal of Political Economy 14 vol.10

J. W. McGuire, J. S. Y. Chiu, A. O. Elbing, “Executive Income Sales and Profits.” American Economic Review 16

Keasey, “Corporate Governance.” Chapter 4

M. C. Jensen, K. J. Murphy, “Performance Pay and Top-Management Incentives.” Journal of Political Economy 10 vol. 8

M. J. Conyon, P. Gregg, “Pay at the Top A Study of the Sensitivity of Top Directors’ Remuneration to Company Specific Shocks.” National Institute Economic Review 14

P. Gregg, S. Machin, S. Szymanski, “The Disappearing Relationship Between Directors’ Pay and Corporate Performance.” British Journal of Industrial Relations 1

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Tuesday, October 2, 2012

columbus

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Christopher Columbus and the New World

Christopher Columbus’ discovery of the New World was a negative historical event. Christopher Columbus’ findings led to the exploitation and slavery of the Native Americans. The contact of the Europeans with the New World’s Natives brought many diseases to the New World, which eventually led to the destruction of the Indians. The Europeans exploited the New World and destroyed the harmony with nature that the Native Americans had maintained for thousands of years. The Europeans brought a new disease, syphilis, back to Europe from the New World. Eventually, Columbus’ discovery of the New World led to the decline and eventual eradication of a rich Indian culture that had been developing for thousands of years.

When Christopher Columbus first came to the New World, he said he believed that the Indians themselves were the New World’s riches, yet he did nothing to protect them. Columbus said “the Indians of this island . . . are its riches for it is they who dig and produce the bread and other food for the Christians and get the gold from the mines . . .and perform all the services and labor of men and of draft animal“ (Viola 1). Christopher Columbus began the genocide of the Native Americans and it is believed that he and his men killed or exported one-third of the original population that he found within four years. He captured Indians as slaves an shipped them back to Europe. Hundreds of Indians died in captivity. “His (Columbus‘) marauding band hunted Indians for sport and profit-beating, raping, torturing, killing, and then using the Indian bodies as food for their hunting dogs. (Weatherford).

The Europeans brought many new diseases to the Western Hemisphere that were devastating to the Native Americans. According to historians, these new diseases included measles, bubonic plague, yellow fever, amoebic dysentery, diphtheria, influenza, smallpox, the whooping cough, and malaria (Viola 85). In contrast with the nearly universal immunity of Spaniards, Indians were extremely susceptible to smallpox. To the Indians, smallpox was the most devastating of the new European diseases (Crosby 57).

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It is logical that the Europeans may have received a new disease after all of the diseases that the Indians got from the Europeans. Historians believe that the Europeans brought syphilis back to Europe from the New World, but it is possible that syphilis was already in Europe and a new strain of it was brought over from the New World. Columbus and his crew returned to Europe in 14 and there were descriptions of a new venereal disease spreading across Europe within two years (Viola 17). Many people believe that the Europeans of the fifteenth century were the first to be in contact with syphilis. One contemporary of Columbus, Ruy Diaz de Isla, agreed that 14 was syphilis’ first year saying, “ the disease had its origin and birth from always in the island which is now named Espanola” (Crosby 1).

The Indians lived in harmony with nature for thousands of years before the arrival of Europeans in America. Indians described America as a “disease free paradise” before the Europeans came. When settlers came to the New World from Europe, they disturbed the ecological balance of America and began the industrialization of America. “No sooner did they (the Europeans) discover the new world than they began to subdue it; claim and settle it, till and harvest it, exploit and export it” (Viola ). According to descriptions given by early explorers, before the arrival of Columbus, America showed no real evidence of human contact (Viola 6)

The introduction of the Europeans to the Native Americans destroyed the Indian culture. Diseases that killed the Indians were most effective on the young and old which destroyed the Indians’ educational system because the elderly taught the young all tribal knowledge. Deaths eventually wiped most or all of the Indians’ tribal knowledge. Entire tribes died out and the surviving members of remaining ones were substantially weakened. Indians’ life within the tribe was affected because medicine men, who were once respected and revered within the tribe, lost their positions and their honor due to their inability to cure his people of European diseases (Viola 1). Eventually, Indians that were not enslaved or killed by European diseases were forced west and onto reservations. Indians no longer had the freedom to hunt and travel as they had for thousands of years and they had to change their way of life (Viola 1).

Columbus‘ discovery of the New World could not have been a positive historical event in history because it had negative effects on everyone involved. The Indians, the people of the New World received new diseases, were killed and enslaved, and lost their culture and history. The New World itself was exploited and disturbed by the new settlers and explorers. Also, the Europeans received a new venereal disease, syphilis. “And so the Europeans located a New World, met a beautiful people full of love on its shining beaches, claimed the land, and enslaved the people who had occupied it for centuries” (Viola 11).



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Monday, October 1, 2012

ERP – Stories of Success and Failure

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Information technology has changed our lives forever. It is found in every pore of the modern society. Business world is not spared; in contrary it is probably impacted harder than anything else. We are witnesses of the evolution of production and operation philosophies, from the economic order quantity to the supply chain management. After implementation of one philosophy, further steps must be taken to insure the edge over the competition. The key in today’s business environment is the Supply Chain Management. In order to adopt and implement SCM philosophy, a firm must adopt and implement an Enterprise Resource Planning System.

ERP is the application software necessary for successful supply management. It is the key integration factor between different business functions that allows for fast and easy data exchange, which leads to process improvements throughout organization as well as successful SCM. ERP emerged as a result of the need to successfully communicate across business functions. It insures that data found throughout the organization is always current and available. It is a masterpiece of digital records. Rajagopal (00) offers additional history and reasoning “Firms around the world have been implementing ERP systems since 10s to have an uniform information system in their respective organizations and to reengineer their business processes.” Once implemented ERP affects every aspect of the organization. ERP has evolved from MRP systems. Once the lack of integration in MRP systems was discovered, only logical step was creation of the new software package that would solve the integration issues. Many of the problems firms ones had with MRP and MRP II were fixed through the implementation of ERP. ERP is therefore an extension of MRP systems. Rajagopal (00) also concludes in his research “Organizations that implemented ERP systems have made improvements in cross-functional coordination and have improved business performance at various levels.”

SCM can be defined as the vertical integration and coordination of the participants in a supply chain as well as their processes, and all in order to gain a competitive advantage over their competition. We are witnesses of the evolution of production and operation philosophies, from the economic order quantity to the supply chain management. After implementation of one philosophy steps must be taken to further insure the edge over the competition. A company cannot exist and survive in today’s world if all of the philosophies are not included in its processes. At the present time, the final philosophy that must be accepted is the supply chain management. A supply chain includes all participants from the raw materials to the consumption. ERP’s role in the SCM is to provide necessary information support and make integration and coordination possible, fast, and reliable across the supply chain. Successful management of the supply chain is not possible without ERP implementation, and a firm that fails to properly implement ERP is likely to lose it’s place in the market to a competitor that had a successful ERP implementation.

Although it sounds extremely important, too many firms fail to understand SCM and importance of the proper ERP implementation. Most common mistake firms make is that they fail to understand that people are the key of successful implementation. Instead, they take the information technology for granted expecting it to solve all of the problems. Lack of the involvement and proper training is among leading causes of the unsuccessful ERP implementations stories. Also there are claims that organizations are unwilling to pay what it costs to properly implement ERP as well as unwilling to undergo needed cultural change that comes with ERP implementation. People fail to realize that information systems are only a tool available and the managers are the ones managing company using management principles and process. If an ERP system is successfully implemented it will eventually lead to cost minimization and revenue maximization. Movement across supply chain and supply chain management will be easier, and customer satisfaction will rise to higher levels. Integration within the company and across the supply chain will bring the competitive advantage to the company.

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As stated earlier the major reason to implement ERP system is that it supports SCM and therefore provides an organization with a competitive advantage. However, benefits that are provided with ERP and that directly lead to overall objective, therefore influencing decision to implement ERP system include distribution and availability of information, integration aspects of the system, information centralization, timely information, time and money savings, improved quality, and minimizing errors. It is good idea to implement the system when a company has standardized products and regular customers and suppliers. On the other hand, some firms face certain problems if they decide to implement such a system. The problems that might point against the ERP implementation include loss of flexibility that might be the key in the business processes, cost of the implementation, little experience with formal information systems, and changing information system requirements.

Probability of the successful ERP implementation hugely depends on implementation plan. Proper implementation plan that gives enough time and more importantly involves people within the organization is the key to success. Even if people are involved in the process, hasty implementation will leave too many holes that will have a huge negative impact on company’s performance. Many articles found on the internet that describe successful and unsuccessful implementations agree that consulting, training, and personnel involvement are the key to the successful implementation of ERP systems. Many firms fail to understand ERP from the managerial point of view, they rather see it as the IT solution that should be developed by IT personnel. Gunson and Blasis (00) conclude “Further analysis of success or failure factors show that primarily it is the implementation effect on Organization, the Workplace and the Individuals at Work which yields a positive or negative result. Laughlin puts this clearly by stating that ERP implementations do not fail because applications does not work, they fail because the enterprise rejects them.”

Financial benefits for the company in case of successful implementation are huge. Cost minimization and revenue maximization will result from successfully implemented ERP system. This yields from easier movement across supply chain and easier SCM that resulted in a competitive advantage for the company. On the other hand, if the implementation is unsuccessful a company will face financial distress and difficulties. Unsuccessful implementation leads to disruptions in a supply chain and business processes, customers are not properly satisfied, and trained workforce leaves the company. All of this results in higher cost and lower revenues, sometimes running a firm out of business and in best case creating difficulties that take time to recover from. A firm with such a financial problems gets lower credit ratings as well, therefore making recovery even harder.

Every firm has a huge impact on the environment it is situated in. This impact is mainly reflected through the workforce it employs. Every change within the organization has implications on the workforce and their environment. Successful ERP implementation can have a positive impact on people and therefore spread out in their social environment. However, in some cases, success of one company can create negative effects on the other one situated in same area and conducting similar business. These effects can include loss of business and the jobs, so all of the positive can be dismissed with the negative. Some societies oppose the evolution of the Information Technology since it takes away power from the people, at least the way they see it. Gunson and Blasis (00) see new development of the workforce into knowledge workers “Some characteristics of knowledge workers include Professionals rather than employees, Interdependent on other knowledge professionals, The need for continuing education, Identification with their knowledge (rather than to any particular company), Unlimited upward mobility.” Since the ERP systems support development of the above characteristics we can conclude that successful ERP implementation has a huge impact on the social environment and encourages individual development. On the other hand, failure will discourage people and negatively impact their social surrounding.

The future of the ERP systems is focused on the Internet. The Internet will most likely be a replacement to electronic data interchange systems. It seems to be that Internet will have a huge impact on the future software developments. Davenport (000) points out “We dont need big enterprise systems anymore, because weve got the Internet now.” He argues that the information flow through the Internet is of such a scale and flexibility that the companies will not need as big systems as before, and they will be able to facilitate a lot of things by using the Internet. No matter what, if a firm wants to be a part of the 1st century, it is forced to adopt SCM and therefore implement ERP system.

Blasis, J.P., Gunson, J. (00). Implementing ERP in Multinational Companies Their Effects on Organizations and Individuals at Work. Geneva. Found at http//hec.info.unige.ch/recherches_publications/cahiers/00/00.07.pdf.

Davenport, T. (000). Long Live ERP. CIO Magazine.

Jacobs, R., Whybark, C. (000). Why ERP? A Primer on SAP Implementation. McGraw-Hill Higher Education.

Malhotra, Y. (1). Knowledge Management for Organizational White-Waters An Ecological Framework. United Kingdom. Knowledge Management.

Rajagopal, P. (00). Information and Management. Houghton. Elsevier Science.

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Saturday, September 29, 2012

John Constable & Alfred Sisley

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John Constable & Alfred Sisley

I have chosen to write about John Constable and Alfred Sisley’s paintings.

John Constable was born on the 11th of June 1776 in East Bergholt, Suffolk. His father was a corn merchant with two watermills and 0 acres of land. John left Dedham Grammar School and worked in the family business, but his desire was to be an artist. John met Sir George Beaumont, an amateur painter, who showed him a landscape painting by Claude Lorrain, enticing John to study art. In 17 his father allowed him to attend the Royal Academy. John’s father died in 1816 and Constable became financially secure and so he married Maria Bicknell � she was the guiding passion in his life. Constable and his wife moved to Hampsted Heath, London, in 181. They had seven children, five of whom became artists. Constable was heartbroken when his wife, aged 40 died of TB.

I like Johns paintings because they are so full of detail and warm colours, for example the ‘Salisbury Cathedral from the Bishops grounds’ has a lot of warm colours, such as brown, orange and yellow � making it look like autumn. The Salisbury Cathedral is framed with trees, which make an arch around the cathedral. The leaves are different shades of green and show hints of different browns and oranges which are signs of autumn. The painting does not contain a lot of people and so is very calming. There are only two people in the left hand corner admiring the cathedral. Due to the style of clothing that the man and lady have on, it is easy to say that the painting was painted in the 17th Century. Centered between the trees is a pond surrounded by a few cows and above the cathedral are white clouds which fill the blue sky. I like this painting because of the interesting texture and detail. I also like it as it is very still.

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Another painting I chose by Constable, is called ‘ A Watermill at Gillingham, Dorset’. This painting has a different texture to it. It does not look as though it was painted using a brush. The lines are definate and there is a lot colour � brown, white, blue, green, orange, yellow and red. I like the calm blue sky and the brown, natural colour. The reflection of the watermill and trees in the water is very well done � the water has a lot of ripples in it, making the water and the reflection look more realistic.

Alfred Sisley was born in Paris of English parents in 18. In 1857 he was sent to London to study Commerce, but prefers National Gallery paintings especially Turner and Constable. In 186 he returns to Paris and enters Gleyre’s studio where he meets Monet, Renoir and Bazille. By 1866 he had set up home with Marie Lescouezec and their first child, Jennie was born, followed by another named Pierre in 1867. Sadly in 188, Sisley’s wife dies from throat cancer. Not long after on the th of January 188, Sisley dies aged 5.

The paintings that I chose by Alfred Sisley are called ‘Snow at Louveciennes’ and ‘The Loing canal and church at Monet’. The snow at Louveciennes is very blurred and does not look very detailed. It has texture and looks expressive and uneven. The painting looks rough which I think works well with the snow and trees. The painting is mostly white or orange browns, whereas ‘The Loing Canal and Church at Monet’ has a wide range of colour. The pond is full of blues and purples and pinks of the flowers. I like the way the trees have been painted. They look very busy and different shades highlight the tips of the leaves. The reflection of the buildings in the background adds detail to the painting. Again there are just a couple of people in this painting who are placed in a boat in the pond. The painting is set in the daytime which is obvious to see due to the bright colours and light sky.

The difference between the paintings was mostly in texture. Sisley’s ‘Snow at Louveciennes’ was very rough, whereas Constable’s ‘Salisbury Cathedral from the Bishops Grounds’ was very detailed and was painted using small brush strokes. The other two paintings differed in colour. ‘The Loing Canal and church at Monet’ had got a lot of different colour in it. Constable’s painting has got more natural coloures and so does not seem as bright. My favourite painting would be Constable’s ‘Salisbury Cathedral’ because it is very still and calming and I like the way the trees frame the cathedral. The amount of detail is amazing and makes the scene look more realistic.



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Thursday, September 27, 2012

Enterprise Resource Planning

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INTRODUCTION

The assignment will explore ERP from its origin and would shed light on its fundamentals and implementation procedures. ERP will be evaluated from two perspectives of two different companies which implemented the ERP solution. First we will be discussing ¡§Cisco¡¦s¡¨ ERP implementation and the technical and business issues related to that and then we will move on to the other case study of ¡§Tektronix¡¨ which also implemented an ERP system. We will critically be evaluating the pre implementation phase and then we will be focusing on the benefits of the ERP systems for both these companies.

HISTORY

The concept of ERP has been around since the early 160¡¦s. Until 17 ERP was just a concept without a name or classification. It was a concept that companies had to integrate all departments and functions to increase revenues and strengthen the business.

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In 17, five managers left their positions at IBM to start a company to realize this vision of ERP. That company that they started is what is known today as SAP (Systems, Applications and Products).

SAP eventually became the first company to develop and implement ERP specific software and applications. Today SAP is the world¡¦s leader in ERP software with other big names like Oracle, Peoplesoft, Microsoft, Baan and Pinnacle also in the league.

DEFINITION

There is no widely accepted definition of ERP, due to the wide nature of the topic, its many implications and the concept that ERP is individual to each company using it. Some definitions are very technological oriented, focusing on the enabling of the technology and the other elaborate on the business aspect of it which are as follows

ERP, Short for enterprise resource planning, a business management system that integrates all facets of the business, including planning, manufacturing, sales, and marketing.

(www.zdnet.com/erp)

ERP focuses on trying to integrate departments and functions throughout a company. It attempts to integrate everything into a single system that can serve every departments and functions needs.

(Dr. Raft Sheiberger)



ERP is an attempt to integrate all departments and functions across a company onto a single computer system that can serve all those different departments particular needs.

(www.cio.com/research/erp)

ERP broken down simply is an application/system that both small and large companies are using today in order to streamline and integrate operation processes.

(Dr. Hall, University of Conneticut)

ERP¡¦S IMPACT ON BUSINESS

There are key aspects that ERP will help improve in a business. ERP allows for financial information and figures to be accurate and available at any given point in time. This is important because this allows for the executives to be able to evaluate the businesses worth, cash flows and other financial information.

ERP brings together and closes the gap that many companies have between its customers. Companies can now serve their customers in a faster and higher quality manner. The ERP system allows for less flaws and errors that cause tensions between customers, vendors and companies.

The reduction in inventory can increase a company¡¦s financial situation. ERP allows for companies to keep less inventory and try to become a Just In Time production practice. Reducing inventory allows a company to be able to get ride of the buildings and space that the inventory used to occupy. In this process reducing cost of storage and the taxes on inventory that companies have to pay and the fear of them being obsolete.

ERP INTEGRATION

There are many components of an environment that ERP Integrates which are as follows

DATABASES

Databases hold every single piece of electronic information for a company. When companies have several different databases it is hard for those databases to share information. When an ERP brings every piece of information into one central database, it then becomes easy to share that information.

APPLICATIONS

ERP attempts to bring all your current applications functions into one main system. No more having several applications for various tasks is needed to perform. ERP will bring all of those into one system that will perform the same tasks and functions as before, but into looking to streamline and improve the way those older applications performed.

PEOPLE

Over the most important integration that ERP provides is its ability to integrate people together. It joins people from different departments, divisions and countries with each other. People interaction is sometime the most important part of ERP. It allows for business to become personal and not just data flowing through systems

MARKET ANALYSIS OF ERP

ERP has been growing since its conception in the 160s. The ERP software market is estimated to see up to a 7% growth rate over the next five (5) years. This is a strong growth rate showing us that the ERP market is still on the rise, even though some speculations say ERP will be declining over the years. It is however to determine the actual size of the world market because of the inability to actually determine its value.

Even though ERP has its greatest impact in the manufacturing industry, it is breaking into and impacting other industries. These other industries include retail, utilities and health care.

KEY PLAYERS IN THE ERP MARKET

SAP is the world leader in ERP Software. They hold % of the market share. Oracle is a very up and coming ERP Solutions provider that has not been in the market for very long. However because of its strong database software, it was able to develop an ERP software utilizing its strong database. Oracle holds 15% of the market share. JD Edwards is a fast and up coming ERP software developer. Its has a main focus in customer relations, thus it decided to enter the ERP market and develop a ERP Software with a strong CRM module. JD Edwards hold 5% of the market share. The last key player holding 8% of the market share is People Soft. People soft has a relative small market share compared to SAP however it is a big contender in providing solutions for smaller companies. SAP and Oracle have mostly marketed and developed their software for large corporations. It has only been recently that ERP solutions providers have looked into try to develop software for smaller companies.

BENEFITS OF AN ERP SOLUTION

There are a number of benefits that corporations can gain from successful ERP implementations which are as follows

100% Web-based Enterprise Resource Planning

ERP can be deployed as part of an internal corporate network (intranet) or outsourced through ASP Hosting service and accessed via the Internet. Real-time data offers an instantaneous view into supply chain operations. You do not need to build an expensive communication infrastructure to use the ERP applications. You simply access the Internet for doing that.

Flexibility

ERP software is designed to be flexible. Users can define how much of the system they require with a flexible business-rule configurator. Application modules are implemented quickly and are easily modified to fit your business. Functions can be used individually or combined to provide the necessary information tools. ERP software can even be used to modify or replace all or part of an existing legacy ERP system. Functional parameters can be modified to accommodate changing needs. ERP Solutions are made to fit your business, instead of forcing your business to fit to the system.

Rapid Training

A lot of companies have designed a new approach to train people to their ERP solutions with the University in California (who is a leader in the distance learning programs) to develop a comprehensive multimedia training program for the ERP systems. This new training system has reduced implementation times by 75% and cut training costs by over 80% compared to other ERP and supply chain management systems.

Adaptable Architecture

The ERP system is built on a series of tightly coupled object layers that can be easily modified to accept new and current developments. A change in technologies (i.e. databases, communications, hardware, operating systems, or user interfaces) can be accommodated simply by changing the appropriate object layer. This ensures that your investment in the system, the investment in your peoples training, and the investment in your business process development will not become obsolete from a change in technology.

Affordable Pricing

ERP software offer three affordable pricing plans for the use of most ERP solutions in the market

1. Perpetual Licensing One-time fee for each concurrent user

. Transactional Pricing Fees are based on each database write

. Subscription Pricing A fixed monthly fee for each concurrent user

DISADVANTAGES OF ERP

There are a number of disadvantages for firms opting for an ERP approach

COSTS

ERP is a very costly solution to implement into an environment. Costs are a very crucial part of planning for an implementation.

TIME

ERP is a long and often on-going process. Many companies experience a 1-18 month implementation process and 1- year after implementation to see a real transition. Often many companies underestimate the time it will take to implement and see changes with in the company.

TRAINING

With a new way of performing jobs and a new application and sometimes processes, it takes time and money to train everyone in the company in this new system. This a huge disadvantage because many times people do not like change and when forced into change they become unwilling to accept the new system.

ACCEPTANCE

It takes a corporate wide change for and ERP solution to happen. Without 100% acceptance, there could be problems down the road with the new ERP system. Acceptance by everyone is crucial and a huge disadvantage or ERP because it is a given that 100% acceptance can not be reached.

HIDDEN COSTS

Although different companies will find different land mines in the budgeting process, those who have implemented ERP packages agree that certain costs are more commonly overlooked or underestimated than others. Armed with insights from across the business, ERP pros vote the following areas as most likely to result in budget overrun.

Training

Training is the near-unanimous choice of experienced ERP implementers as the most underestimated budget item. Training expenses are high because workers almost invariably have to learn a new set of processes, not just a new software interface. Worse, outside training companies may not be able to help you. They are focused on telling people how to use software, not on educating people about the particular ways you do business. Prepare to develop a curriculum yourself that identifies and explains the different business processes that will be affected by the ERP system.

Integration and testing

Testing the links between ERP packages and other corporate software links that have to be built on a case-by-case basis is another often-underestimated cost. A typical manufacturing company may have add-on applications from the major e-commerce and supply chain to the minor sales tax computation and bar coding. All require integration links to ERP. If you can buy add-ons from the ERP vendor that are pre-integrated, youre better off. If you need to build the links yourself, expect things to get ugly. As with training, testing ERP integration has to be done from a process-oriented perspective. Veterans recommend that instead of plugging in dummy data and moving it from one application to the next, run a real purchase order through the system, from order entry through shipping and receipt of payment the whole order-to-cash banana preferably with the participation of the employees who will eventually do those jobs.

Customization

Add-ons are only the beginning of the integration costs of ERP. Much more costly, and something to be avoided if at all possible, is actual customization of the core ERP software itself. This happens when the ERP software cant handle one of your business processes and you decide to mess with the software to make it do what you want. Youre playing with fire. The customizations can affect every module of the ERP system because they are all so tightly linked together. Upgrading the ERP package¡Xno walk in the park under the best of circumstances¡Xbecomes a nightmare because youll have to do the customization all over again in the new version. Maybe it will work, maybe it wont. No matter what, the vendor will not be there to support you. You will have to hire extra staffers to do the customization work, and keep them on for good to maintain it.

Data conversion

It costs money to move corporate information, such as customer and supplier records, product design data and the like, from old systems to new ERP homes. Although few CIOs will admit it, most data in most legacy systems is of little use. Companies often deny their data is dirty until they actually have to move it to the new client/server setups that popular ERP packages require. Consequently, those companies are more likely to underestimate the cost of the move. But even clean data may demand some overhaul to match process modifications necessitated or inspired by the ERP implementation.

Data analysis

Often, the data from the ERP system must be combined with data from external systems for analysis purposes. Users with heavy analysis needs should include the cost of a data warehouse in the ERP budget and they should expect to do quite a bit of work to make it run smoothly. Users are in a pickle here Refreshing all the ERP data every day in a big corporate data warehouse is difficult, and ERP systems do a poor job of indicating which information has changed from day to day, making selective warehouse updates tough. One expensive solution is custom programming. The upshot is that the wise will check all their data analysis needs before signing off on the budget.

Consultants ad infinitum

When users fail to plan for disengagement, consulting fees run wild. To avoid this, companies should identify objectives for which its consulting partners must aim when training internal staff. Include metrics in the consultants contract; for example, a specific number of the user companys staff should be able to pass a project-management leadership test¡Xsimilar to what Big Five consultants have to pass to lead an ERP engagement.

Replacing your best and brightest

It is accepted wisdom that ERP success depends on staffing the project with the best and brightest from the business and IS divisions. The software is too complex and the business changes too dramatic to trust the project to just anyone. The bad news is a company must be prepared to replace many of those people when the project is over. Though the ERP market is not as hot as it once was, consultancies and other companies that have lost their best people will be hounding yours with higher salaries and bonus offers than you can afford or that your HR policies permit. Huddle with HR early on to develop a retention bonus program and create new salary strata for ERP veterans. If you let them go, youll wind up hiring them or someone like them back as consultants for twice what you paid them in salaries.

Implementation teams can never stop

Most companies intend to treat their ERP implementation as they would any other software project. Once the software is installed, they figure the team will be scuttled and everyone will go back to his or her day job. But after ERP, you cant go home again. The implementers are too valuable. Because they have worked intimately with ERP, they know more about the sales process than the salespeople and more about the manufacturing process than the manufacturing people. Companies cant afford to send their project people back into the business because theres so much to do after the ERP software is installed. Just writing reports to pull information out of the new ERP system will keep the project team busy for a year at least. And it is in analysis and, one hopes, insight that companies make their money back on an ERP implementation. Unfortunately, few IS departments plan for the frenzy of post-ERP installation activity, and fewer still build it into their budgets when they start their ERP projects. Many are forced to beg for more money and staff immediately after the go-live date, long before the ERP project has demonstrated any benefit.

Waiting for ROI

One of the most misleading legacies of traditional software project management is that the company expects to gain value from the application as soon as it is installed, while the project team expects a break and maybe a pat on the back. Neither expectation applies to ERP. Most of the systems dont reveal their value until after companies have had them running for some time and can concentrate on making improvements in the business processes that are affected by the system. And the project team is not going to be rewarded until their efforts pay off.

Post-ERP depression

ERP systems often wreak cause havoc in the companies that install them. In a recent Deloitte Consulting survey of 64 Fortune 500 companies, one in four admitted that they suffered a drop in performance when their ERP system went live. The true percentage is undoubtedly much higher. The most common reason for the performance problems is that everything looks and works differently from the way it did before. When people cant do their jobs in the familiar way and havent yet mastered the new way, they panic, and the business goes into spasms.

CISCO CASE STUDY

HISTORY

„h Cisco Systems was founded by two Stanford Graduates in 184

„h Company specializes in the making of ¡§Networking and Internetworking¡¨ devices

„h Rise of the Internet demand for their products boomed

„h 17 Cisco¡¦s market capitalization passed $100 billion, making it the third company after Microsoft and Intel to achieve that.

PROBLEM BACKGROUND

„h Cisco was a growing company which needed a more robust system to handle its transactions.

„h The old UNIX package lacked reliability, maintainability and was also redundant.

„h Cisco wanted a system which could handle its future plan for $5 billion plus operations efficiently.

Cisco adopted the waterfall method in deploying its ERP solution.

Key philosophy and vision taken in the Business Process Re-engineering

„h Implementation strategy encompassed a ¡§Rapid Iterative Prototyping¡¨ technique (CRP)

„h Planned to follow the ¡§Vanilla Approach¡¨

„h Made ERP the first priority of the business and employees

Key steps taken in the Business Process Re-engineering

„h Chose KPMG to be their business partner as a consultant

„h Approached the vendors and jointly with KPMG studied their responses

„h Selection of Oracle (software vendor) was

„h Better Manufacturing capability

„h They made a number of promises of functionality

„h Flexibility offered by Oracle (Oracle was in the same city as Cisco)

„h ERP solution to be provided by a firm bigger than Cisco itself

„h Chalked out a time frame and stuck to it

„h Rewarded employee performance by a cash reward

„h Created structured and effective team for ERP implementation which included an Executive Training Committee under which there was a Project Manager who was reported to by the Business and IT consultants placed in all different areas.

„h Formulated a clever hardware agreement for support

„h Obtained high commitment from Oracle also

„h Formulated proper training procedures for the people in the organization.

During this process of business re-engineering Cisco also committed a few mistakes

„h Employed the ¡§Big Bang Approach¡¦¡¦ to its implementation of ERP

„h This was one of the very first Oracle Implementation and Cisco was a ¡§Guinea Pig¡¨

„h The selection of the project was done in almost 1 months time while most companies spend 6-8 months figuring out an ERP solution provider

„h The employee training process was compressed from 5 days to 16 hour days

„h Did not Black Box and White Box test the application.

„h Didn¡¦t work out the real cost of ERP project (app. $ 4 million)

CISCO¡¦S RESULTS

SHORT RUN (OPERATIONAL)

Initial success was less than expected

Plummeted overall business performance for sometime

System crashes occurred almost once every day due to hardware architecture

Software would crash when large amounts of transactions were made

The customer commitment fell from 5% to 75%

Cisco could not follow ¡§vanilla approach¡¨

LONG TERM (STRATEGIC)

They were able to implement a 15 month planned solution in just months

Total systems were replaced in just $15 million

Cisco achieved the competitive edge with the solution

TEKTRONIX CASE STUDY

HISTORY

An electronic test equipment manufacturer since, 146

By 1, Tektronix had grown to be a $ 1. billion giant manufacturing electronic tools for the industry.

Main manufacturing divisions were Measurement Business Division, Color Printing and Imaging and Vide Networking division.

Tektronix was headquartered in the US with operations in 60 countries

PROBLEM BACKGROUND

IT Architecture - Over 460 legacy systems in the United States only

No standardization, lacked accuracy, delayed orders, slow processing and customer service, extensive manual coordination, lack of integration in the financial systems

Orders were fed into multiple systems due to Tektronix¡¦s operations in 60 countries and in 6 divisions.

Tektronix ERP approach

Textronix adopted the ¡§waved concept¡¨ waterfall method in deploying its ERP solution.

Key philosophy and vision taken in the Business Process Re-engineering

Improvement of Industrial Strength

Standardisation driven

Operational Simplicification

Separability of the businesses

Leveraging Shared Service (worldwide financial system)

Staying as ¡§plain vanilla¡¨ as possible

Key steps taken in the Business Process Re-engineering

Single Mature ERP Vendor

Management Involvement and Support - Strategic and Methodological Role of Steering Committee

Strong Implementation Team Structure

Stressed importance on project schedule, wave concept

Five major sub-projects

Business Change followed by improvement of business Processes due to Plain Vanilla Approach

Only changes affected by extreme cases have been approved competitive advantage threat in OMAR implementation, local language support.

Sub-project Implementation enabled to build practices and learn lessons for the future waves.

Vigorous testing programme at MBD

Rigorous but successful global rollout

During this process of business re-engineering Tektronix also committed a few mistakes

Poor and Unstructured Consulting Support combination of large and small consulting firms and independent consultants.

Choice of Beta Version of ERP under CPID - version instability, ¡§debugging¡¨.

Poor initial internal Project Management Training

CPID & MBD Delayed Schedules due to learning & testing challenges.

Total expenditure app. $55 million

TEXTRONIX RESULTS

SHORT RUN (OPERATIONAL)

Improved Day¡¦s Sales Outstanding & Inventory Level

Worldwide goods inventory visibility

Same Day Shipment went up by 50%

Detailed financial analysis due to improved data integration

Effective sales and performance forecast

Better operational decisions making

Improved personnel satisfaction

LONG TERM (STRATEGIC)

Improved position of managing existing business

Has capacity to grow the business substantially

Increased efficiency and standardisation

Better visibility into customers and products

Meet the company goal to acquire new businesses and divest others

CONCLUSION

There are many limitations in this study. First, we focus on a limited number of variables for ERP implementation success. More relevant variables associated with ERP implementation, for example, project team competence, may be added to improve the understanding of ERP implementation success. Second, we only used perceived project metrics in defining implementation success, leaving out factual aspect of success outcome in the IS research. This was due to the difficulty in securing the factual data from the participating organizations. Third, this paper has a common method bias because the dependent variable and independent variables rated by the same respondent. Again, this was due to the difficulty of securing data from both ERP project members and operating department personnel.

Despite the fact that more and more companies are investing in ERP for replacing their custom-built legacy systems, the research in organizational fit of ERP has been generally overlooked. While it is recognized that organizational fit of ERP is a critical selection criterion for ERP, the link between organizational fit of ERP and ERP implementation success was not empirically validated. Many ERP vendors just ignore the organizational fit concept and urge blind trust on ERP from their clients.

In this study, we found that organizational fit of ERP is indeed critical in explaining ERP implementation success. In addition, we found that both ERP and process adaptations interact with organizational fit of ERP on ERP implementation success. We learned that ERP and process adaptation are only effective when organizational fit of ERP is relatively low. Beyond a certain level of organizational fit, more adaptation will only lead to lower implementation success. We also learned that, since ERP adaptation also shows a significantly negative direct correlation with implementation success (while process adaptation only shows interaction effect), as many ERP vendors have claimed, process adaptation may be a safe choice than ERP adaptation when organizational fit of ERP is low.

Therefore, for successful ERP implementation, ERP implementation managers as well as top management should be able to assess the fit between their organization and the target ERP system before its adoption and, once adoption is decided, should measure and manage the impact of ERP and process adaptations from a risk assessment approach.



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