Tourism And Its Impact On Nation Branding Tourism Essay

Tourism And Its Impact On Nation Branding Tourism Essay How a country is perceived, both domestically and from abroad, from the quality of its goods and services, to the attractiveness of its culture and its tourism and investment opportunities, to its politics, economic policies and foreign policy, can be shaped under a brand. In this section, we will focus on tourism, its impact on nation branding, its effect on GDP and the benefits of tourism branding. In the latter part of this section, we are going to analyse the tourism industries of India and Malaysia, their successful tourism campaigns, and further scope of improvement in the respective areas. We will also try to enumerate what are the major constituents of a tourism industry in any country and their relative importance, in the two countries taken as our focus areas. The early history of tourism tells us that people travelled from one place to another mainly because of food or shelter. But in due course of time, large scale mobility of people was caused by the natural elements of human pressure, livelihood or a better standard of living. In the words of UNESCO, tourism is a traditional instrument, which enables culture to be rehabilitated and made known to the rest of the world. Tourism has become a popular leisure activity. International tourism activities have grown by leaps and bounds in the past years.   With the dismantling of national boundaries, the tourism scenario is changing. There is a steady growth in the number of tourist arrivals and more satisfactorily the average spending of foreign tourist has gone up. Tourism is vital for many countries such as Egypt, Thailand, Malaysia and Maldives and last but not the least, India. The associated goods and service industries in these countries have sprouted to aid the tourism industry. These include transportation services, hospitality services such as accommodations including hotels and resorts, and entertainment venues like amusement parks, shopping malls and casinos etc. It is universally accepted that government promotion of tourism is a good idea that brings excellent return on investments. It generates jobs like no other, and its development also leads to development of infrastructure, education and related industries. However, promoting tourism successfully requires setting a context that will allow the tourists to appreciate what is on offer. THAT context is the brand or the overall image of a country. If a country is widely viewed as secure, modern, clean and efficient, chances of getting tourists to frequent attractive destinations are good. If a nation is known for its unique features whether they be cultural, manmade or natural, there will a positive curiosity towards them encouraging tourists to discover first hand something new. On the other hand, if a country is known for civil war, crime and corruption, inadequate infrastructure or unfriendly population, inviting tourists to your country is a mammoth task. They either require pretence of not existing, or there will be a lot of convincing to be done that it doesnt impact the travel experience in any adverse manner. Tourist choice behaviour is one of the most needed studies by today. Tourists take into account the various factors in terms of facilities, local attractions etc, before choosing their destination. Local attractions, accessibility, facilities are some of the factors that generate tourist flow to a particular location. Absence of any of these facilities may deter the tourists from travelling. Hence, tourism has to be seen in totality and as comprising of its constituents mainly attraction, hospitality and the transport facilities in the country. We are going to look at each of them in the following pages. The model that this section follows is as under: Attractions A  tourist attraction  is a place of interest where  tourists  visit, typically for its inherent or exhibited cultural value, historical significance, natural or built beauty, or amusement opportunities. Attractions are the major factors, which ensure the flow of domestic or international tourists to a specific place. Some examples include historical places,  monuments,  zoos,  aquaria,  museums  and  art galleries,  botanical gardens, buildings and structures (e.g.,  castles,  libraries, former  prisons,  skyscrapers,  bridges), national  parks  and  forests, theme parks  and  carnivals,  living history museums,  ethnic enclave  communities,  historic trains  and cultural events. The history of attractions has often been inextricably linked with the development of travel industry in any country. It can be assumed generally that older attractions (either manmade or natural) were not designed to appeal to travellers. Some of the best examples include the Tajmahal, Niagara Falls and the Pyramids. Most modern tourist attractions on the other hand, have been purpose-built for visitors, like theme parks or casinos. However, in the Asian context, this may differ as the attractions are generally perceived as more elaborate culture and history. The definition of attractions has been changing over time; and a few broad classifications of tourist attractions can be as follows: Natural Man-Made Outdoor Indoor Heritage Based Purpose Built for tourism Special Global Events Local Festivals/Events Drawing Power (high) Drawing power (low) The growth of small local attractions has also been manifold due to an increase in the number of independent off-beat travellers. Interest in exotic destinations and wildlife has led to the development and upkeep of modern zoos and safari parks. The continuing trend of increased leisure time, greater mobility and more disposable income has led to a boom in the attractions sector. Parallel attractions like theme parks have also emerged, and a number of shopping centres and waterfronts have become tourist attractions in their own right. Culture and Tourism Culture is a human construct, existing in representations and understanding by the people. Culture defines a society in a way which makes it different from the next. Contemporary societies are not isolated, insular entities. There is a constant exchange of ideas, beliefs and faiths; travel and tourism undoubtedly play a significant role in this. Culture and creative industries are being increasingly used to promote destinations and enhance their competitiveness and attractiveness. Many locations are now developing their tangible and intangible cultural assets as a means of developing comparative advantages in an increasingly competitive tourism marketplace. People, when they visit a country or a destination or a city, are always keen to visit the sites that are important, the places of distinction, the question is always what is there to see, what is there to experience and the destinations provide further encouragement through the printed material, the information, the brochures that they provide to visitors. There are also wider benefits of developing relationship between culture and tourism such as enhanced image and support for the cultural sector. Culture creates distinctiveness in a crowded global market. Local communities are beginning to come together to develop cultural products for tourism rather than competing directly with one another. New policies are likely to feature new structures and projects involving public-private partnership and bringing together a wider range of stakeholders to use culture not only to make destinations attractive for visitors, but also to promote regions as destinations to live, work and invest in. Local communities are not only hosts; they define the sense of the place, providing cultural experience for tourists. Culture in all its forms is likely to figure strongly in the tourism product and promotion of most regions, even those which have traditionally relied on their natural assets, such as sun and beach or mountains, for their attractiveness. Destinations are also trying to increase their comparative advantage by adding to their stock of cultural attractions. They are also trying to develop their intangible culture and creativity. Culture creates authenticity and distinctiveness in the global tourism market. In this regard, tourism experiences that can connect people and visitors to local cultures are very important. In many cases, destinations are also linked to specific cultural events (e.g. connected to famous places, people or historical events) which can also play a catalyst role in this development. The Cultural Heritage of India is a vibrant mosaic of lively and magnificent colours. Indian Culture encompasses a unique blend of food, fashion, festivals, dance and music that spellbound the four corners of the world in its euphoric nature.  India is a popular destination and boasts a cultural heritage that is worth exploring. As a tourist one has many choices to explore from cuisine to dances to music. All diverse in nature encompass to form the culture of India. Very few countries in the world have such an ancient and diverse culture as Indias. Dating back to over 5000 years old civilization, Indias culture has been enriched by successive waves of migration which were absorbed into the Indian way of life. The Indian culture comprises of Indian music, Indian Dance, Indian cuisines, costumes and Indian Festivals.   Internet has also become a universal tool which offers the possibility to tourists to package destinations and events with accommodation and travel. Architecture and Tourism Because tourism is such an enormous industry, which involves monuments, museums, and other special purpose buildings, it is not a phenomenon that can be controlled. It always stands within the cultural and political conditions of the environment, and the tastes and habits of tourists thronging a place. Everything from historical monuments to exotic holiday destinations has been redesigned and packaged for mass consumption. As a result, the histories of specific sites have been re-conceptualized. Some have been preserved and celebrated, while others have been left to decay. Monuments like the Tajmahal or the Cellular Jail were not built for tourist purposes; however they have been converted into one now. A more contemporary example of construction for attraction, and certainly one that is totally synonymous with its location is the Eiffel Tower in Paris. The association is incredibly strong and more amazing given the fact that Eiffels structure to celebrate the Worlds Expo was designed for disassembly and should have come down in 1909 after just 20 years. Possibly the biggest construction sites of all are to be found today in the Middle East which has made huge strides to develop other sources of wealth including tourism, by constructing hotels and islands. Dubai has made the biggest splash, with the Burj Al Arab embedding deep in everybodys psyche. One of the best architectural tourism spots in the world is China. Chinese architecture ranging from the various dynasties that ruled it has undergone a great evolution. People recognize Chinese architecture from  The Great Wall of China  and the beautiful pagodas. But there is more to Chinese architecture than that. People who are interested in  architecture  will find China to be a virtual unexplored region which has some of the best monuments and buildings.   China  is a country of architectural marvels both ancient and modern and it is one of the best tourist destinations for people who love architecture.   Some notable Chinese architecture that are a must see are Terra Cotta Warriors in the Mausoleum of Qin Shi Huang in Xian, the Hanging Temple, Forbidden City etc. In Budapest, an eastern European country, architectural tourism has been promoted very well. Monasteries, churches, caves, Basilica etc are some well known attractions which pulls throngs of tourists here annually. History and Tourism Tourism is a powerful economic development tool. Tourism creates jobs, provides new business opportunities and strengthens local economies. When heritage and history is paid attention to and used to our advantage, it also helps to protect a nations natural and cultural treasures and improve the quality of life for residents and visitors alike. In the past, the tourism industry saw its primary role as marketing ready products to travellers, such as package tours to Mumbai. But countries are now looking for new ways to attract travellers, and today culture and history are more likely to overlap than any other domains. A concrete example is India, which with its potpourri of different religions and faiths, is a centre for people from countries following similar faith. Tourists from countries like Thailand, Indonesia or Burma (which follow Buddhism as well) desirous of visiting Bodhgaya are attracted to the history and heritage of the country. This can be exploited to promote history and heritage tourism making India a lucrative destination for people sharing the same faith. Also an example is the International Kite Festival held in Gujarat every year, which is slowly turning into a big crowd puller year after year. Cashing in on the history of a place and promoting heritage tourism refers to travelling to experience the places and activities that authentically represent the stories and people of the past and the present. Food and Tourism Food is something an increasing number of us remember from our travels. Like never before, holiday makers are choosing where they go by what they can put in their stomachs. Food is a manifestation of a destinations culture which can be invaluable for giving travellers a hands-on experience. You can open a different door with every meal. The last few years has seen an incredible shift in the way holidays are created and marketed, and that is because people demand authentic experiences. Eating traditional dishes is considered very important on a holiday. People also willingly miss meals in their hotel or resort to try out local restaurants. Tourists are becoming more experimental as well as sophisticated in what they eat during a vacation. Supermarkets have also played a major role in making foreign foods more available. Food festivals are another crowd puller. Singapore hosts an annual food festival each July celebrating a different aspect of its culture. The colourful opening of the  West Bengal Tourism  and  Food Festival  is a reflection of the states positive efforts to boost the tourism sector.   Indian cuisine ranges from the simple and bland to the lavish and complexly pungent. Each region has its specialty cuisine, though some dishes are available throughout the country. All the states have their own signature dishes which are world famous and tempt the tourists to visit those states, for having an authentic experience. Indian sweets and various varieties of tea, especially Assam Tea, boost tourism in India. The cooking styles and flavours of every region of India is unique and differs from each other. While Kashmir is famous for its 24-course banquet- the Wazwan; coastal Goa, Kerala and Bengal specialize in fish, seafood and coconut-based dishes. Gujarat and Tamil Nadu are the best states to taste vegetarian specialties. Bengal, Bikaner and Delhi are particularly famous for sweets. Food tourism includes all unique and memorable food experiences, not just four star or critically acclaimed restaurants. Price is not necessarily indicative of quality. According to industry research, true food tourists are perfectly happy at a roadside cafà © in the middle of nowhere, as long as there is something memorable about their visit. Transport Relevance Though transportation as a topic can be discussed independently, tourism cannot thrive without travel. Transportation is an integral part of the tourism industry. It has been largely due to the improvements in mobility that tourism has expanded to such a stage. Transportation links various cities and countries in some cases. Tourism is all about travel, and the role of transportation in its operation cannot be overemphasized. Accessibility and tourism activities have broken barriers and opened formerly off-the-beaten-track areas to visitors through aggressive marketing of some far-off paradise with the availability of transport. It is, more often than not, seen as only that part of tourism which is in charge of bringing the tourists to their destinations; provide a means of getting around the place and leaving it once the stipulated duration is over. In fact, the transportation system of a tourist destination has a huge impact on the tourism experience which explains how people travel and why they choose different forms of holidays and destinations. Access to tourism sites relies heavily upon the state of infrastructure, and the efficiency of the public transport system. Tourists arriving at international cities need mobility and few decide (or can afford) to hire private  transport. Because of this, the public  transport  system is an essential service for this population, especially in cities large enough to need bus, metro and train systems. However, in congested cities with weak public  transport  networks, the influx of tourists exerts additional demand pressure on the  transport  system. Modes Available There are five modes of transportation, based on the physical characteristics of the service offered and the right of way over which a transportation carrier operates. These are air, highway, rail and water, arranged in decreasing order of speed. All modes of transportation are regulated in some manner, be it economic or non-economic. Economic regulation has been reduced in a number of transportation markets in recent years, beginning with domestic airline deregulation in the United States in the late 1970s. Since then, many other countries have deregulated their national transportation systems to some degree, including air, highway and rail. Internationally, economic regulation has been reduced in some markets, with the European Union being a prime example of including not only air but other modes as well.   Passenger transportation plays a critical role in determining the success or failure of nearly every segment of tourism. Without a reliable and economic form of passenger transportation to, from and within a destination, enticing tourists to visit that destination may be very difficult. Island economies like Hawaii, Andaman Islands or Malaysia are almost fully dependent on air transport access. Off-beat destinations The transportation carrier may also become a destination in its own right, such as a few cruise liners in areas like Singapore, Malaysia, Caribbean and the Mexican Riviera. Other forms of transportation serving as destinations include Palace on Wheels, The Orient Express etc. For about the past four years, the travel industry in Asia and the Pacific has been undergoing a dynamic change, and the growth of low cost carriers has been cited as the single most important factor currently shaping the regions airline industry. Thus at the same time, tourism has also had a major impact on transport modes and networks through its ability to supply additional motivations for leisure and business travel. Due to the intensity of worldwide competition and product parity, positioning strategies will become a strategic weapon for tourism destinations. Tourist destinations, for example resorts which can be fairly similar, can succeed in developing strong and differentiated brands through excellent access to transportation facilities. Transport policies and decisions of governments can play a big role in the destinations available to tourists. If the public sector does not cope with the demand in terms of transport infrastructures, tourism industry might not develop in those regions. Hospitality Hospitality  is the relationship between guest and host, or the act or practice of being hospitable. Specifically, this includes the reception and entertainment of guests, visitors, or strangers,  resorts, membership clubs, conventions, attractions, special events, and other services for travellers and  tourists. Hospitality is about compensating/equalizing a stranger to the host, making him feel protected and taken care of, and at the end of his hosting, guiding him to his next destination. Cultures and subcultures vary in the extent to which one is expected to show hospitality to strangers, as opposed to personal friends or members of ones  in-group. The tourism industry has several components food, accommodation, place of attractions, transportation etc. All these components are related to hospitality. Hospitality and tourism experiences have important emotional dimensions that traditional marketing tend to underplay. By understanding the hospitality-based transaction between guests and hosts, marketers and commercial operators can deliver customers experiences through which to build customer loyalty and a robust business better able to withstand. The guest and host relationship has a long tradition, pre-dating modern hospitality and tourism businesses by thousands of years and universally evident across all societies. Hospitality creates an impression of hosting and hospitableness, which prioritizes guest experiences. The Indian civilization is one of the oldest on earth, and like every culture has its own favourite stories including some on hospitality. That of a simpleton readily sharing his meagre morsels with an uninvited guest, only to discover that the guest is a God in disguise, who rewards his generosity with abundance. That of a woman who lovingly cooks up all the  Khichdi she can afford, for everyone who is hungry till one day when she runs out of food for the last hungry person to whom she offers her own share, and is rewarded by the god in disguise with a never ending pot of Khichdi. Most Indian adults having grown up listening to these stories as children believe in the philosophy of Atithi Devo Bhava, meaning the guest is God. From this stems the Indian approach of graciousness towards guests at home, and in all social situations. Benefits of Tourism Branding While many regard branding as simply creating a new look and tagline, if done correctly, a genuine brand management strategy should positively influence all aspects of a nation. The reputation of the country we live in, work and study matters. An attractive and distinctive identity makes it easier for a city (and its citizens) to be preferred in any competitive setting because the place is seen to have qualities that resonate positively with key audiences and can enhance the well-being of its citizens. We can retain different campaigns for a country. They can include exports, education, foreign trade etc. All these should contribute to a clear identity of a nation. It is the tourism promotion in whatever form (advertising, PR, websites etc) that will have the biggest impact on the attitudes to a nation. Tourism is the acceptable public face of a national brand. Clarke (2000) has identified six benefits of branding related to tourism destination products (TDPs): As tourism is typically high involvement, branding helps to reduce the choice; Branding helps in reducing the impact of intangibility; Branding conveys consistency across multiple outlets and through time; Branding can reduce the risk factor attached to decision making about holidays; Branding facilitates precise segmentation; Branding helps to provide a focus for the integration of producer effort, helping people to work towards the same outcome. Impact on GDP Focussing exclusively on India in this section the tourism industry has contributed enormously in the flourishing graph of Indias economy by attracting a huge number of both foreign and domestic tourists travelling for both leisure and business purposes. As per the Travel and Tourism Competitiveness Report 2009 by the World Economic Forum, India is ranked 11th in the Asia Pacific region and 62nd overall, moving up three places on the list of the worlds attractive destinations. It is ranked the 14th best tourist destination for its natural resources and 24th for its cultural resources, with many World Heritage sites, both natural and cultural, rich fauna, and strong creative industries in the country. India also bagged 37th rank for its air transport network. The India travel and tourism industry ranked 5th in the long-term (10-year) growth and is expected to be the second largest employer in the world by 2019. The hotel and tourism industrys contribution to the Indian economy by way of foreign direct investments (FDI) inflows were pegged at US$ 2.1 billion from April 2000 to March 2010, according to the Department of Industrial Policy and Promotion (DIPP). According to the Travel Tourism Competitiveness Report 2009 brought out by the World Economic Forum, the contribution of travel and tourism to gross domestic product (GDP) is expected to be at US$ 187.3 billion by 2019. The report also states that real GDP growth for travel and tourism economy is expected to achieve an average of 7.7 per cent per annum over the next 10 years. Export earnings from international visitors and tourism goods are expected to generate US$ 51.4 billion (nominal terms) by 2019. Furthermore, the sector which accounted for 6.4 per cent of total employment in 2009 is estimated to rise to 7.2 per cent of total employment by 2019. Deeming the growing rate of the tourists arrival in the country, the Indian tourism industry designed a wide spectrum of holiday packages and cheaper airfares to attract more tourists. The booming success of Indian tourism industry has led to a drastic change in the hospitality department as well. The increase in the ratio of tourists resulted in the increase of room rates and also setting up of a wide range of hotels and other residing areas. The Indian tourism industry offers online booking system, one of the basic proofs of technological advancement in this sector. These online bookings are applicable for booking the air tickets via Internet by logging on to the website and also booking the hotel room of the place to be visited. The Role of Tourism Industry in India GDP also features medical tourism that includes traditional therapies like yoga, meditation, ayurveda, allopathy and other conventional systems of medicines is currently estimated at USD 333 million and is most likely to reach USD 2.2 billion by the year 2012. Analysis of India as a preferred tourist destination Tourism is the largest service industry in India. As we have seen in the previous section, it plays an extremely important role in the Indian economy by direct as well as indirect impact. Countries such as USA, UK, Singapore, Thailand and Australia feature high on the list of favourite tourist destinations. Which leads us to the million dollar question Where does India stand among other Preferred Holiday Destinations? India is a Land of all seasons, where beauty beckons, culture echoes, diversity delights and tradition talks. Those who reach India are greeted with a gracious Namaste, Namaskaaram, Vanakkam or Sat Sri Akal denoting warmth, hospitality and respect a tradition in tune with the countrys age-old motto Atithi Devo Bhava where the guest is treated as God. The Incredible India campaign focuses on the hospitality of our country, and the pristine and undiscovered lands it offers. The campaign has been running successfully for some time now, and has succeeded in pulling both domestic and international travellers to Indian destinations. Graciously endowed with mist clad mountain ranges, deep blue seas, enigmatic deserts, golden beaches, emerald green valleys, palm fringed backwaters on the one hand and unique art forms, exciting fairs and festivals, interesting pilgrim centres, exclusive heritage sites, royal forts, majestic monuments, architectural marvels and exotic flora and fauna on the other, this legendary land is unique in all aspects it is no wonder that India has emerged as one among the Top Five Tourist Hotspots of the world, with a tremendous increase in tourist traffic all through the year. Many factors have been collectively responsible for boosting our countrys economic reserves and the impact of Indias economic growth on tourism is increasingly being felt in niche sectors. India abounds in attractive and well-preserved historical sites, ancient monuments of architectural grandeur and not-so-ancient mosques/durgahs, churches and places of worship of other diverse faiths. India is also known for some of its fine beaches like Goa, Mamallapuram, Kovalam, Pondicherry, Puri-Konark etc. In addition island tourism has been developed at Andaman/Nicobar and Lakshadweep Islands. All across the country are wildlife sanctuaries whose areas extend over several thousands of square kilometres, where wildlife can be observed in their natural surroundings. Each sanctuary supports several species of wildlife, being well known for one particular species. In some cases, there are rare or even endangered species. India is a land of fairs and festivals with atleast one fair in each day of the year. These fairs and festivals add colour to the social life of Indian people. Some of the important fairs and festivals are Pushkar fair in Rajasthan, Crafts Mela at Surajkund, Holi in North India, Pongal in Tamilnadu, Onam in Kerela, Baisaki in Punjab, Bihu in Assam, Dance festivals at Khajuraho and Mamallapuram etc. India has a treasure trove of handicrafts for any discerning shopper, in truly remarkable variety of styles and prices. Over the years, India has developed world standard accommodation infrastructure for entertaining the visitors. There are about 60,000 classified hotel rooms in India and about 35,000 rooms are under construction. These hotel rooms scattered in various cities are of varying price range. Some of the major hotel chains in India are the Oberois, Taj Group of Hotels, Welcome Group of Hotels and India Tourism Development Corporation Hotels. Despite the fact that India has a wealth of amazing places waiting to be seen and appreciated and an unbeatable tourism potential, India receives far lesser tourists compared to other relatively smaller countries. Most foreigners who visit India for the first time are heard complaining about Over priced Hotel rooms Corrupt autos and taxi drivers waiting to take them for a ride, literally! Lack of proper infrastructure Confusion and chaos at the airport Unhygienic conditions etc Probable Areas of Improvement India is well known for personal bonding and relations with their tourist customers. What will be promising for India is the effectiveness of proactive relationship building strategies undertaken by India. India should focus on building and maintaining strong tourist relationships. It should also note that the selection and training of tour guides who are directly dealing with the tourists is undertaken properly. Accordingly, the holiday destination managers may undertake certain measures to improve the status of the dominant factors, which will ultimately lead to the improvement in visitors perception towards India as a tourist destination. Hence expertise and communication, and familiarity with tourists are the most effective relationship-building strategies. The next effective strategy could be investing in

Analytical and Empirical Method

How to conduct heuristic evaluation? 5 Advantages5 Disadvantages6 Empirical Method (Usability Testing)7 What is Usability Testing? 7 How to conduct a usability testing? 7 Advantages of Usability Testing8 Disadvantages of Usability Testing9 Conclusion10 Task 211 Introduction11 Description of the problem11 Description of the difficulties11 Conclusion:14 References:15 Task 1 Introduction There are 4 ways mostly to evaluate user interface.Heuristic Evaluation (heuristically) by just looking at the interface and passing judgement according to one’s own view. Cognitive Walkthrough (analytical method) by some analysis procedure, Pluralistic Walkthroughs (empirically) by experiments with trial users, Feature, Consistency & Standards Inspection (automatically),by a programmed procedure. For this assignment I have choose the usability testing for empirical method where else for analytical method I have choose heuristic method. [1] Analytical Method (Heuristic usability) What is heur istic? Heuristic evaluation is a discount usability engineering method for quick, cheap, and easy evaluation of a user interface design. † [3] In heuristic evaluation the usability issues covered are effectiveness and efficiency but do not considered the satisfaction. Quantitative Data is not collected. this method also can be conducted remotely also can be used on any system. Several evaluators independently evaluate the interface & come up with potential usability problems. It is important that there be several of these evaluators and that the evaluations be done independently.Nielsen's experience indicates that around 5 evaluators usually results in about 75% of the overall usability problems being discovered. Heuristic Usability Principals Here I am going to explain more and have a closer look at what condition are needed to evaluate interfaces. Basically the evaluation is easier than design. The principles are the basic points that drive design and drive evaluation as well. The principals are: 1. Visibility of system status The application should always keep user on track and well known on which section of the application they are.This can avoid confusion and user can get the information easily without consuming more time. 2. Match between system and the real world. The relationship between two things, in most cases the mapping from digital world to real world. Metaphors and analogies 3. User control and freedom User should be informed what the system is doing and is the user on the right track, does it work the way it is suppose to work. This can prevent the user to do their activity correctly on path without having to redo all again. The application also should support undo and redo.The system should confirm with the user before take any action on the application, so user can exit immediately from new actions that risk them. 4. Consistency and standards An application should have a standard platform convention like the symmetry of the interfac e. Is it symmetrical? (Left-Right, Top-Bottom, Center). This includes also the wording to access the application example for navigation bar. The â€Å"Home† button should be same for all pages. It should not been changed to other type of looks (symbol or font) at other page when user access to it. 5.Error prevention The text message for error prevention should convey a message to user while they are currently on the application and risky to faulty. User can understand what the error message is about and prevent the faulty happen before they proceed to the next step. 6. Recognition rather than recall Using symbols that make user feel ease to recognize, remember and think what is the use of the button. The colour contrast also effect attention and focus where the user has been explored on the application. It also is to make user more focus and remember what they did.User also might convey the color for pink †¦ it’s a girl and blue †¦ it’s a boy. This wou ld not affect user memory load. 7. Flexibility and efficiency of use This refers to the perceived and actual properties of the â€Å"thing† that determine just how the â€Å"thing† could be used for new user that never been using that application. The appearance of the â€Å"thing† tells them how to use it. If the system is understandable, neither expert nor inexperienced can easily use the application. 8. Aesthetic and minimalist design The application should display the important and description for the point it is focusing on.The application should not display unnecessary information which will only cause the information traffic on the application. A special consideration for standards graphics and design are enough to make user comfortable when using the application. 9. Help users recognize, diagnose, and recover from errors The error text must not be too long or too short. It should be simple and precisely organized to make sure the user understand the faul ty they have done and they can correct the error based on the solution given in the error message. 10. Help and documentationThere might be possibilities that user don’t need any help and documentation while or after using an application, but there is the chances for user to document the information and get the help if there are lost. This should be considered to ensure user get fully access and satisfied after exit the application. The application must make the user easy to find the information they are looking for focusing on their task and help should provide the step they should pursue. How to conduct heuristic evaluation? Heuristic evaluation by Nielson is a method used by researchers to find usability problems in interfaces designed for use by public.The heuristic evaluation process starts from questions a small number of users, called evaluators, to complete a set of pre-programmed tasks usually related with using the interface. As summary basically the evaluation will be : * Obtain the service of 4, 5 or 6 usability experts, questions a set of pre-programmed tasks usually related with using the interface. * Each expert will perform an independent evaluation, answer question related to interface * Give experts a heuristics inspection guide, is followed from Nielsen’s ten usability principles (Nielsen, Jakob 1994). Collect the individual evaluations, which are answered in subsequent iterative sketch of the interface for better simplicity of use and significant knowledge.* Bring the experts together and do a group heuristic evaluation. (Optional) Advantages Quick and relatively inexpensive feedback to designers can be provided by this method. Response can be obtained early in the design process. Conveying the correct heuristic can help suggest the best corrective measures to designers. * Cheaper comparative to other assessment method. * Spontaneous and simple to encourage potential evaluators to use the method * No advance planning required Formal usability training is not required for evaluators. Professional computer programmers and computer science students are used in Nielsen and Molich * Can be used early in the growth process * Quicker revolve time than laboratory testing Disadvantages Applying heuristics effectively need a good knowledge and skill. Usability experts sometime hard to find and can be pricey. Multiple evaluators are recommended and results must be aggregated. Minor issues and fewer major issues can be detected through these evaluations. * Evaluators maybe just have the understanding of usability design principles, but not for usability experts.Usability experts would recognize more issues than non-experts, experts are the people who have the skill with the type of interface being evaluated, they can identified the most issues was according to Nielson. * The results from multiple evaluators must be aggregated. This is because the evaluator only can detect few issues, but if the issues combined the m ore precise result outcome they can gain. * Heuristic evaluations only identify lesser usability issues compare to and other discount methods may not identify as many usability issues as other usability engineering methods, for example, usability testing. Complex interfaces may not scale well for heuristic reviews. Evaluators may not find the major or serious problem the interface had if the interfaces are complex. * All the issues identified may not willingly suggest solutions for the usability issues * The evaluators are just pretend to be the user but they are not the real user. * The entire problem identified may not be the actual problem in real interface. Empirical Method (Usability Testing) What is Usability Testing? We need to use usability testing method to produce tasks professionally, efficiently and pleasingly for the user benefit.It is better to produce a pre-programme application to ensure so that any important issues can identify. Usability testing can be done at any stages of the design process. Usability testing is not an alternative for a human centred design process and appropriate techniques such as walkthroughs also can be use. Test host or the user who is going to represent for usability testing session should attend. The attendance should be at least one observer one developer and one business representative. Observers should strictly be in a separate observation room.Density of the system, the number of intended users, and budgetary constraints should be considered when doing the session. Even one test session is better than none, but if its more it will tend to discover the majority of important issues. There are two major factor should be considered when conducting a usability testing. The first is to ensure that the best possible method for testing is used. The second major consideration is to ensure that an iterative approach is used. How to conduct a usability testing? To prepare for a usability test we must identify delegate tasks .Ideally, these should derive from scenarios or use cases developed earlier in the design process. Have a clear definition of when a task is complete. We also must prepare a test schedule, book the required room, and identify representative users and invite them to attend. We will need the following materials: †¢ A formal script so that all participants are treated in the same way. †¢ A pre-evaluation questionnaire to check that your participants match the required profile. †¢ A list of tasks, together with criteria for measuring whether they have been successfully completed. Logging sheets to record timing, events, participant actions, concerns and comments. The guidelines should be followed: †¢ Run a pilot test. †¢ Ensure that participants have the option to abandon any tasks which they are unable to complete. †¢ Do not prompt participants unless it is clearly necessary to do so. †¢ Record events in as much detail as possible to the level of keys trokes and mouse clicks if necessary. †¢ If there are observers, ensure that they do not interrupt in any way. Observers formally prior to test. †¢ Be sensitive to the fact that developers may be upset by what they observe or what you report.Advantages of Usability Testing The advantages of usability testing are [5]: * Reply direct from the board audience to spot the project group * Private conversation can be done by testing the issue to see how users response to the different options being discussed * Problem and possible difficulties are stated clearly before the product is launched. The business advantages of usability testing can be seen at the end of the project: * Probability of usage and frequent usage increase * Risk of the product fault is reduce * Users are able to get what they expect, which makes business meeting its targets achievable.Benefits of using usability testing are [6]: * Reduce maintenance costs, increase user fulfilment, and save on development eff ort cost. * Relevance feedback helps to increase the quality experience. * Measures activities, not preference. Users like to insist what they want, but by observing and measuring behaviour, we can understand what the best for their needs and support is. * Get a competitive benefit. User with no experience can give negative impact to a website. A systematic website is expected by users, especially when the competitors of websites developer are a lot now. Focus to the major needs and the aim of the application. Disadvantages of Usability Testing Usability testing provides many benefits, but there are the disadvantages in using this methodology, which should be noted. Firstly, testing is not 100% representative of the real life scenario. Also, usability testing is mainly qualitative, so does not provide the large samples of response that a questionnaire may, but the response can be far more precise and understandable. It requires a certain level of knowledge and experience to apply th e heuristics effectively. Trained usability experts are sometimes hard to find and can be expensive.Multiple evaluators are recommended and results must be aggregated. The evaluation may identify more minor issues and fewer major issues. [9] Conclusion Two common usability evaluation methods, heuristic evaluation and usability testing were analayse. Results found that heuristic evaluation performed by HCI experts revealed more general problems, while usability testing is a way to see how easy to use something is by testing it with real users. To provide the most effective and thorough usability evaluation results, a combination of usability evaluation techniques from both expert and system user perspectives is recommended. Task 2Introduction For task 2, I am going to evaluate a website from a bank which is OCBC bank. Description of the problem 1. The first problem i notice when I start to evaluate the website was the layout. the layout is merely merge to left side of the webpage. 2. The navigation bar size. It is too small. 3. The application do not provide â€Å"search† function for user to search information. 4. I didnt notice the login function,no idea where to login. The homepage there is no official login space. 5. No language selection option. 6. No register new user and login specific space at main page. 7. No sitemap to track location in application page. . The process option button and link appearance are not interesting and recognizable. 9. Once the user click any options from main page to proceed the next step,the application open new window. Description of the difficulties 1. User need to focus on the left side of the webpage whereelse it should be in the center for user to feel more comfortable when viewing webpage. The view is not standard as normal webpage. 2. The navigation bar font is too small and situated at the upper right corner of the webpage. It is not standard. These two diffrent navigation bar makes user confuse to choose which function to move in the application.Furthermore,when user click to login page,another window open and it does not have a standard navigation bar as the previous page. User will feel confuse,with diffrent thing appears. 3. The login function is not standard. There are several option to login to application. It suppose to have a official login space then allows user to choose the service they want to involve. the login space looks like advertistment and not noticable. 4. Language. User supposed can select the language they are prefereable for. But this application dont allow user to choose the language they understand.If the user dont understand,how they want to use the application. There is just the selection list of country only but not for language. 5. The application does not provide sitemap to track location of user that use the application at current time. Sitemap used to make user easy to navigate along the pages gone through. user can eesayly get back to the pages prevoiously without wasting time to find pages that they want. 6. The hyperlink should be as buttons or symbol button to make user easy to recognize and remember the direction to use the application for the next visit. . Once the user click any options from main page to proceed the next step,the application open new window.User cannot go back to the previous page because noâ€Å"back†function at the web page neither at the browser. If user want go back,user must exit the new window and restore the main page again. If user did some errors user need to repeat all the steps again. Heuristic and explanation 1. The small and not standard navigation bar is link to consistency and standards. * It suppose to gathered and user should select from a line of navigation bar. when user click to login page,another window open and it does not have a standard navigation bar as the previous page. * User feels a diffrent environment,diffrent situation word. 2. The no option for language is match between sy stem and real world. * The system should speaks user language,word or phrase which familliar with the user. This will make user more comfortable and understand what they are doing. 3. Layout of the web which go to left side is a aesthetic and minimalist design. * User should not wonder the blank space of the webpage. It should be used to put any related information. 4.No sitemap for user location is equal with flexibility and efficiency of use. * Sitemap can help the inexperience user to go back to previous page they were to make sure they are on the correct path to do their job. 5. Error prevention which dont have â€Å"back† button,is link with user control and freedom. * This sytem dont allow users to go back. It do no support undo and redo. * User need to navigate away from the page directly and go back to main page and access again the application. 6. Uninteresting link and button to continue using the application is a recognition rather than recall heuristic. The links navigation dont give the user idea when they first see the webpage. User need to read the links and then click to continue. * The link should suppose to be icons so that whenever the user come for next visit,they will recognize the buttons and save their memory load and time. Summary A heuristic evaluation is a usability inspection helps to identify usability problems in the user interface (UI) design, As I find in the OCBC Bank website, it specifically involves me examine the interface and judge its compliance with recognized usability principles (the â€Å"heuristics†).I independently examine a user interface and judge its compliance with a set of usability principles. The result of this analysis is a list of potential usability issues or problems. The usability principles, also referred to as usability heuristics, are taken from published lists. Ideally, each potential usability problem is assigned to one or more heuristics to help facilitate fixing the problem. As more ev aluators are involved, more true problems are found.But as from my view, I can list out only these usability problems and I also have stated the reasons and why it is a problem to me and also what is lacking at the webpage.

Use Of Financial Derivatives In Managing Corporate Risk Finance Essay - Free Essay Example

Sample details Pages: 8 Words: 2441 Downloads: 7 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? Financial derivatives are instruments whose value is derived from one or more underlying financial asset. The underlying instrument could be a financial security, a securities index, or some combination of securities, indexes, and commodities. It is a financial contract with a value linked to the expected future price movements of the asset it is linked to such as a share or a currency. Don’t waste time! Our writers will create an original "Use Of Financial Derivatives In Managing Corporate Risk Finance Essay" essay for you Create order There are many kinds of derivatives, with the most notable being swaps, futures, and options. Derivatives are broadly categorized as: Relationship between the underlying and the derivative (e.g., forward, option, swap). Type of underlying (e.g., equity derivatives, foreign exchange derivatives, interest rate derivatives, commodity derivatives or credit derivatives). Market in which they trade (e.g., exchange-traded or over-the-counter) Pay-off profile. Derivatives are used by Investors because it: Provide leverage or gearing, such that a small movement in the underlying value can cause a large difference in the value of the derivative. Speculate and to make a profit if the value of the underlying asset moves the way they expect. Hedge or mitigate risk in the underlying, by entering into a derivative contract whose value moves in the opposite direction to their underlying position and cancels part or all of it out. HISTORY AND EVOLUTION OF DERIVATIVES: Innovations in financial theory and increased computerization, along with changes in the foreign exchange markets, the credit markets and the capital markets over this period, have contributed to the growth of financial derivatives. The first exchange-traded financial derivatives emerged in response to the collapse of the Bretton Woods system of exchange rates established in 1944. Under this system, most governments agreed to fix the exchange rate of their currencies relative to the U.S. dollar, which was convertible into gold. In 1971, the U.S. Treasury abandoned the gold standard for the dollar, causing the breakdown of the fixed-exchange system, which was replaced by a floating-rate exchange system. The need to hedge against adverse exchange-rate movements provided an impetus for currency futures to emerge. Foreign currency futures were introduced in 1972 at the Chicago Mercantile Exchange (Mere). In 1973, the Chicago Board of Trade (CBOT) created the Chicago Board Options Excha nge (CBOE) to facilitate the trade of options on selected stocks. TYPES OF DERIVATIVES: 1. OTC and exchange-traded: OTC and exchange traded contracts that are traded directly between two parties, without going through an exchange or other intermediary. Products such as swaps, forward rate agreements, and exotic options are almost always traded in this way. The OTC derivative market is the largest market for derivatives, and is largely unregulated with respect to disclosure of information between the parties, since the OTC market is made up of banks and other highly sophisticated parties, such as hedge funds. According to the Bank for International Settlements, the total outstanding notional amount is $684 trillion (as of June 2008). Of this total notional amount, 67% are interest rate contracts, 8% are credit default swaps (CDS), 9% are foreign exchange contracts, 2% are commodity contracts, 1% is equity contracts, and 12% are other. Because OTC derivatives are not traded on an exchange, there is no central counter-party. Therefore, they are subject to counter-party risk, like an ordina ry contract, since each counter-party relies on the other to perform. 2. Exchange-traded derivative contract: ETs are those derivatives instruments that are traded via specialized derivatives exchanges or other exchanges. A derivatives exchange is a market where individuals trade standardized contracts that have been defined by the exchange. A derivatives exchange acts as an intermediary to all related transactions, and takes Initial margin from both sides of the trade to act as a guarantee. According to BIS, the combined turnover in the worlds derivatives exchanges totaled USD 344 trillion during Q4 2005. Some types of derivative instruments also may trade on traditional exchanges. 3. Common type of Derivatives: FUTURE FORWARD: are contracts to buy or sell an asset on or before a future date at a price specified today. A futures contract differs from a forward contract in that the futures contract is a standardized contract written by a clearing house that operates an exchange where the contract can be bought and sold, whereas a forward contract is a non-standardized contract written by the parties themselves. Let K-delivery price, and T-maturity, then a forward contracts payoff VT at maturity is: VT = ST K, (long position) VT = K ST, (short position) Where ST denotes the price of the underlying asset at maturity t = T. OPTIONS: Options are the contract that give owner the right, but not the obligation, to buy (in the case of a call option) or sell (in the case of a put option) an asset. The price at which the sale takes place is known as the strike price, and is specified at the time the parties enter into the option. The option contract also specifies a maturity date. In the case of a European option, the owner has the right to require the sale to take place on (but not before) the maturity date; in the case of an American option, the owner can require the sale to take place at any time up to the maturity date. If the owner of the contract exercises this right, the counter-party has the obligation to carry out the transaction. Mathematical Modeling and Methods of Option Pricing USD in cash return = 730,000 666,000 100% = 9.6%; 666 000 Strategy B. The investor exercises the option to receive a payoff: Payoff = 730,000 680,000 = 50000USD Return = 50,000 39,000 39,000 X 100% = 28.2%. Situation I1 The stock goes down to 66,O USD on August 22. Strategy A. The investor suffers a loss: loss = 666 000 660 000 = 6000USD, Strategy B. The investor receives a payoff: payoff = (660 000 680 000)+ = 0. The investor loses the entire invested 39, 000 USD, hence a loss of 100%. SWAPS are contracts to exchange cash (flows) on or before a specified future date based on the underlying value of currencies/exchange rates, bonds/interest rates, commodities, stocks or other assets. ARBITRAGEUR: Arbitrage: Arbitrage based on observations of the same kind of risky assets, taking advantage of the price differences between markets, the arbitrageur trades simultaneously at different markets to gain riskless instant profits. Arbitrage is not the same as speculation: speculation is to seek profits promised by predictions of the future prices, and is thus risky. Arbitrage is to snatch profits originated in the reality of the price differences between markets, and is therefore riskless. An opportunity for arbitrage cannot last long. Since once an opportunity for arbitrage arises, the market prices will soon reach a new balance due to actions of the arbitrageurs and the opportunity will thus disappear. COMMON EXAMPLES: UNDERLYING CONTRACT TYPES Exchange-traded futures Exchange-traded options OTC swap OTC forward OTC option Equity DJIA Index future Single-stock future Option on DJIA Index future Single-share option Equity swap Back-to-back Repurchase agreement Stock option Warrant Turbo warrant Interest rate Eurodollar future Euribor future Option on Eurodollar future Option on Euribor future Interest rate swap Forward rate agreement Interest rate cap and floor Swaption Basis swap Bond option Credit Bond future Option on Bond future Credit default swap Total return swap Repurchase agreement Credit default option Foreign exchange Currency future Option on currency future Currency swap Currency forward Currency option Commodity WTI crude oil futures Weather derivatives Commodity swap Iron ore forward contract Gold option COMPOSITION OF GLOBAL FINANCIAL DERIVATIVES MARKET (AS OF YEAR END 1992 Percentage of Percent by Derivative Type total financial Underlying Security underlying derivatives Security Interest rate 96.5 % Futures 18 % Currency 1.0 Equity 2.5 Interest rate 27.0 Forwards 42 Currency 73.0 Equity 0 Interest rate 89.0 Options 13 Currency 3.5 Equity 7.5 Interest rate 82.0 Swaps 27 Currency 18.0 Equity 0 Interest rate 62.5 Total 100 Currency 36.0 Equity 1.5 VALUATION OF DERIVATIVE: Market price: The price at which traders are willing to buy or sell the contract. Market price can be determined as for exchange-traded derivatives, market price is usually transparent. Complications can arise with OTC or floor-traded contracts though, as trading is handled manually, making it difficult to automatically broadcast prices. In particular with OTC contracts, there is no central exchange to collate and disseminate prices. Arbitrage- free price: Under this method no risk- free profits can be made by trading in these contracts means rational pricing. The Arbitrage-free price for a derivatives contract is complex, and there are many different variables to consider.. A key equation for the theoretical valuation of options is the Black- Scholars formula, which is based on the assumption that the cash flows from a European stock option can be replicated by a continuous buying and selling strategy using only the stock. A simplified version of this valuation technique is the binomial options model. APPLICABILITY OF FINANCIAL DERIVATIVE: STRATEGIC APPLICATION IN 1203: In the past twenty years international financial markets have been subject toward -reaching structural changes often describederegulation, Seccuritization, computerization and globalization. National controls of the capital markets were reduced, making a free world-wide flow of capital possible. Factors arising from the above named rapid changes were an increased volatility and sensitivity of interest and exchange rates, as well as the growing competition especially within the insurance sector. Financial innovations can be used to manage risk and equally used to make profit. In view of the changes taking place in the financial markets, the insurance sector is forced to restructure their investment strategies. Growing demands for better services from the consumer side also compel insurance companies to take action towards improving their all-round performance and thus sustain in the competitive markets .In the past financial derivatives hav e been applied extremely hesitantly insurance companies. One reason for this is the relatively restrictive legal basis created by the Federal Insurance Provisory Office. Since 1991 the Federal Insurance Provisory Office has put down new legal regulations determining the use of derivatives in the insurance business. STRAGIC APPLICABILITY OF FINANCIAL DERIVATIVES IN ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦. 1205: Principle of Safety: The main criterion of capital investments by any insurance company is the safety of these investments. This safety is not only to be ensured at the time of the investment but also for its entire duration. Regular control of the assets and the debtors are absolutely necessary. Principle of Profitability: The profitability of an asset is featured by the yield to be gained, while simultaneously meeting requirements of safety and liquidity in certain making situation. The profitability of assets is also used to compensate for losses made due to even ts of damage. Principle of Liquidity: Incoming and outgoing payment streams (premiums etc.) vary from one Insurance area to another. In the life-insurance sector payment streams are relatively regular, whereas payment streams in other sectors can be subject to higher fluctuations derived from coincidental and irregular damage that occurs. Therefore demands put to the management of liquidity differ. This also influences the structure of a portfolio which can have different levels of liquidity, depending on the type of insurance cover that is offered. Principle of Mixture: Mixture is meant in the sense of evaluating the individual assets of an entire portfolio according to the specific risk inherent in shares, bonds and options. By mixing the assets, risk-momentum of each portfolio can be minimized. STRATEGIC APPLICATION OF FINANCIAL DERIVATIVES IN . . . 1209: Transformation of national and international financial marketsÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ÃƒÆ' ¢Ãƒ ¢Ã¢ €šÂ ¬Ãƒâ€šÃ‚ ¦. A sharp acceleration in the pace of innovation, deregulation and structural change in recent years has transformed the international financial system. Financial markets have become far more closely integrated world-wide; capital has become much more mobile. Increased complexity of financial transactions, as well as the higher volatility of interest rates and prices make risk- and interest rate management an absolute necessity. The idea of all-round financial servicesÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦..The attractiveness of the insurance market encourages further insurance agencies , banks and building societies to enter the market. As a result of this, markets, formerly reserved to the insurance branch only or the banking branch exclusively, began to overlap, thus breaking down existing market eliminations , depriving insurances of their traditional business area and forcing them to increase their offer of financial services in order to keep their position in the market. Process of concentration: New demands put to the insurance business by the market itself and the insurance customers will give rise to intensified investments in marketing, new products, target-groups and cost-management. AU in all, not every insurance corporation will be able to keep up with the new standards, so smaller companies will withdraw from the market; others will have to specialize on certain products. STRATEGIC APPLICATION OF FINANCIAL DERIVATIVES IN . . . 1211: Product-innovations will head in the direction of designing products that maximize the fulfillment of the needs of the clients. Alterations in investment strategies of insurance companies Decisions concerning the structure of capital investments of insurance companies are made on the basis of foreign exchange, interest rate and profit prognosis. Investments today are exposed to the following risks: Economic risk = recession -risk of inflation -interest rate and price risk -pol itical risks; national and international -credit risk of debtors Taking these risks into account, decisions to buy, hold or sell are made. Risk management will become one of the most important tools of capital investment strategies. Modem risk management consists of: -regular evaluation of each business transaction -determination of factors that influence investment positions -analysis of cash flows and sensitivities -quantification and management of risk -setting of limits TYPES OF RISK: Market Risk Credit Risk Liquidity Risk Operational Risk Enterprise Risk Systemic Risk Individual derivative Risk Risk profile Dynamic Hedging Delta, Gamma and Vega Hedging Exotic Derivative Risks CORPORATE RISK: RISK: Risk is the uncertainty of the outcome. Risk can bring unexpected gains. It can also cause unforeseen losses, even catastrophes .Risks are common and inherent in the financial markets and commodity markets: asset risk, interest rate risk, foreign exchange risk, credit risk, commodity risk and so on. There is different attitude towards risk: 1.RISK AVERSION : Quantify an identified risk and control it, i.e., to devise a plan to manage the exposed risk and convert it into a desired form. 2. RISK SEEKING: Willing to take the risk with ones money, in hope of reaping risk profits from investments in risky assets out of their frequent price changes. Acting in hope of reaping risk profits from the market price changes is called speculation. CONCLUSION: Financial derivatives are used to reduce risk involved in investment. Various derivative tools such as Future, Forward, Hedging, Swaps, and Option are used to control risk. Financial derivatives have grown rapidly in recent years due to improvements in computer technology, innovations in financial theory, and the need to manage risks arising from volatility in the interest and currency exchange rates. Derivatives are increasingly being used to manage various kinds of risk exposure, to obtain desirable financing, and to enhance investment and speculative opportunities. The complexities of the derivatives markets are increasing every day, and it is important for the policy makers and regulators to understand these markets before hastily adopting any major legislative or regulatory changes.

Durkheim s Theory Of The Division Of Labor - 1069 Words

In book one of The Division of Labour, Durkheim sets out to determine the role of the division of labor, something universal that he prefaces as seemingly straightforward to identify. Moving forward, however, in contrast with the groundwork laid out by Adam Smith, Durkheim shows that it is not as simple as one would suspect. Adam Smith assigns the division of labor the function of bearing the fruits of civilization. This, Durkheim notes, renders the division of labor neutrally moral, since there would be the absence of necessity for it to impose rules of behavior. He observes that is surely not this way, with the risings cases of suicides and crimes being called into question. Furthermore, he develops his counterpoint by highlighting that civilization itself - the product of the division of labor in the framework he critiques - can hardly be given the credit for the immorality in society, as he attributes â€Å"the number of such morbid phenomena seems to increase as the arts, scien ce and industry progress†¦if civilization exerts any positive and favorable influence upon moral life, that influence is somewhat weak.† (42) Durkheim is thus driven to deriving an alternative function, â€Å"We are therefore led to consider the division of labour in a new light. 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