Role of Institutions in Social Policy

Role of Institutions in Social Policy Explore with examples the role of institutions in influencing policy outcomes. The following will discuss the role that institutions can or may have in influencing public policy outcomes, and where relevant examples of such influences will be provided. The role of various institutions will be explored, and any differences in the amount or the importance of those organisations in influencing policy outcomes will be analysed. Included in this study of the influence upon policy outcomes that institutions have, will be an evaluation of whether that influence changes with the type of organisation that is being examined, and upon the circumstances in which the policy outcomes are reached and implemented within. How much influence the roles of institutions allow them in the determination of policy outcomes, or policy decision-making can depend on the functions and objectives of the institutions involved in the decision-making process. The influence any institutions have upon policy outcomes or policy decision-making processes varies with the expertise, knowledge, tech nical know how that the institutions have available, as well as the level of access these institutions have to the decision-makers that are mainly responsible for determining policy outcomes. As will be explored the decision-makers that are responsible for the framing and carrying out of policy outcomes will be more likely to be influenced by the institutions that have the most experience and expertise in the policy areas that the decision-makers are tasked with controlling and administering. An area of policy outcomes in which institutions have played roles in influencing the final policy decisions made and actually carried out has been in issues relating to the environment. Institutions that have been involved in studying the environment in general and environmental changes like the greenhouse effect in particular have been able to influence the policy outcomes in relation to taking measures to limit or reduce environmental damage. Academic and scientific institutions alongside environmentalist groups such as Friends of the Earth have played a significant role influencing policy outcomes. There are a few examples of policy outcomes that could be used in support of this statement, arguably strong supporting evidence as well (Jones et al, 2004 p. 600). These groups and institutions believe they can influence policy outcomes by setting the public agenda (Seldon Kavanagh, 2005 p. 5). Prior to the 1960s academic and scientific institutions had a minor role in influencing po licy outcomes with regard to issues concerning the environment. Policy decision-makers would contact institutions that had expertise or knowledge about environmental issues upon an ad hoc basis, for example in the 1950s when the British government wished to solve the problem of smog in the London area. On that occasion institutions gave advice as to the best way of cleaning up the air pollution that had been the cause of the smog (Jones et al, 2004 p. 600). From the 1960s academic and scientific institutions began to suspect that human economic and industrial activities were having a profoundly detrimental affect upon the physical environment. Increased concerns over the environment led to the emergence of pressure groups such as Friends of the Earth and Greenpeace, these groups have tended to attempt to influence policy outcomes by generating publicity to raise public awareness of environment issues (Jones et al, 2004 p. 695). Arguably, the combined efforts of the academic and scientific institutions and the pressure groups have raised international as well as national awareness of environmental issues. Without the publicity achieved by the environmentalist pressure groups, the academic and scientific institutions would have found it much harder to have had any kind of meaningful influence over policy outcomes relating to the environment. In turn the publicity campaigns of the environmentalist pressure groups would have a had minimal i nfluence over policy outcomes without the strong and convincing scientific evidence of human induced climate change and environmental damage presented by the by the academic and scientific institutions. These were research findings that policy decision-makers believed they have had to react to (Coxall, Robbins, Leach, 2003 p. 401). The universal nature and the global scope of environmental issues has meant that institutions and pressure groups have attempted to influence policy outcomes upon a regional or even a global basis as well as at the national level (Jones et al, 2004 p. 599). Now attention needs to be turned to explore when the approach of academic and scientific institutions and environmentalist pressure groups has been able to influence policy outcomes. A good example of this happening was the problem of acid rain, which had its worst affects upon the forests of Scandinavia. Coal fired power stations in Britain were regarded as being the main culprits behind acid rain. Strong scientific evidence produced by research institutions and environmentalist pressure groups proved that this was in fact the case. Pressure from the Scandinavian governments and the European Union coupled with the evidence from academic institutions combined to persuade the British government to take action to solve the problem by cleaning up the emissions from the coal fired power stations (Coxall, Robbins, Leach, 2003 p. 406). Perhaps the first significant example of academic and scientific institutions having a global impact as opposed to a national impact over policy outcomes with regard to the environment was over the issue of damage to the ozone layer. During the early 1980s there was increasing scientific evidence of expanding holes in the ozone layer, which is an important barrier against the more harmful effects and forms of radiation emitted by the sun. The depletion of the ozone layer would not be harmful to peoples’ health, and it would increase the environmental damage caused by the greenhouse effect and speed up the process of global warming. Scientific research proved that the hole in the ozone layer was caused by the chloroflurocarbons (CFCs) used as coolants in fridges and freezers, as the propellants in aerosol cans, and in fast food packaging. Media coverage of the problems that the shrinking of the ozone layer was causing increased the ability of institutions to influence policy ou tcomes. International agreement was eventually reached that the use of CFCs would be phased out with less harmful alternatives being used instead (Jones et al, 2004 p. 600). As the scientific evidence of the greenhouse effect grew the role of academic and scientific institutions in influencing policy outcomes has increased as well. Countries such as the Netherlands, Germany, Sweden, and eventually Britain have made efforts to reduce the emission of greenhouse gases (Judt, 2007 p. 494). The efforts of institutions concerned with protecting the environment has also strongly affected and influenced the European Union, which has introduced legislation, regulations, and directives for its member states to take policy measures to reduce the emissions of greenhouse gases and achieve sustainable development. Attempts to reduce their emissions of greenhouse gases culminated in the Rio Earth Summit, and the later Kyoto Protocol (Coxall, Robbins, Leach, 2003 p. 407). Currently there are ongoing talks to renew the Kyoto Protocol. Over all policy decision-makers have to take into account the environmental affects of the policy outcomes they make decisions on (Coxall , Robbins, Leach, 2003 p. 406). An area in which institutions can play a major or significant role in influencing policy outcomes is in relation to medical and public health issue. Hospitals, medical centres, universities, doctors, and nursing unions are all institutions or organisations that influence or attempt to influence policy outcomes. Governments believe that they have a responsibility to ensure that their policy outcomes if possible protect and enhance public health and safety standards. Doctors, nurses, universities, and hospitals also have good reasons to promote public health issues, mainly as that is important part of their objectives as institutions and skilled professionals. When it comes down to these institutions or groups influencing policy outcomes, those that have firmly focused public health and safety objectives are more effective if they have a strong or well developed expertise in their area of specialisation. In Britain the medical institutions that are linked with, or are actually part of the National Health Service (NHS) potentially have a strong influence on health policy outcomes. For instance, doctors and the medical departments of universities have played in developing new medical treatments, diagnosing new diseases, and researching for cures to illnesses. These institutions have helped to progressively improve the quality and quantity of healthcare services and medical treatments available, allowing for increased life expectancy. For instance organ transplants, better cancer treatments, and drugs that delay the onset of the HIV / AIDS virus have all been developed since the 1960s. These medical achievements were primarily developed to prolong both life expectancy and quality, which after all is the purpose of all medical professions (Hobsbawm, 1994 p. 556). However, universities, medical research laboratories, and pharmaceutical companies also motivated by the opportunities to raise their reputations for expertise, as well as hoping to gain substantial financial rewards (Hobsbawm, 1994 p. 556). Decision-makers that are part of publicly funded health services such as the NHS in Britain can have another major influence over policy outcomes, aside from the influence of medical institutions. That other influence is often decisive in the final determination of policy outcomes, and that is the issue of funding. The majority of the British population has high expectations of the NHS, and they expect or hope that all new medical treatments will be available to patients as soon as those treatments are required. Despite public expenditure on the NHS increasing every year, medical treatments have to be rationed out or provided on the basis of which patients need treatment the most urgently (Seldon Kavanagh, 2005 p. 296). The splitting up of the N HS budget into individual budgets for each health trust unit also means that medical institutions now have to attempt to influence policy outcomes at the health unit trust level as well as at the national level. Although the introduction of health trust units was intended to improve efficiency within the NHS, it has also meant that the medical treatments that patients may or may not receive depends on which area of Britain they live in (Seldon Kavanagh, 2005 p. 297). Of course those people that chose to have private healthcare there is no worry about their medical treatments being rationed or not available in some areas, all they have to do is have enough money or insurance to pay for their treatment in the first place (Moran, 2005, p. 54). Medical institutions can have an influence over policy outcomes when they diagnose or discover new illnesses, or when they wish to change people’s behaviour to prevent illnesses. When medical institutions diagnose or discover new illnesses it can have drastic consequences, and therefore have a significant influence upon policy outcomes. A prime example of a new illness having such a significant effect on policy outcomes was over the issue of mad cow disease in Britain. The issue of mad cow disease cut across agricultural, trade, and medical areas of government policy. The origin of the crisis began with the farming practice of feeding cattle food that inadvertently used the brains of sheep infected with scrapie, and subsequently led to the emergence of mad cow disease or Bovine Sponigform Encephalopathy (BSE). Medical and scientific evidence proved that BSE could be passed on to humans through the food chain. People infected in such a way went on to develop variant CJD, for wh ich there is currently no cure, and it invariably kills those infected. The initial reaction of the British government to the BSE crisis was slow, and seemed to ignore advice and evidence provided by agricultural and medical institutions in a vain attempt to protect the British beef industry (Fisher, Denver, Benyon, 2003 p. 123). Indeed the slowness of the government’s reaction meant that the problem got better rather than worse. The government’s efforts to maintain public confidence in the safety of British beef proved unconvincing. The testing of cattle herds for BSE infection was too slow, leaving the culling of entire herds as the only means of tackling the problem. The government was also slow in issuing safety guidelines in the NHS which meant that blood and organs unknowingly donated by variant CJD victims was used in blood transfusions and organ transplants which therefore infected more people (Moran, 2005 p. 433). The whole handling of the BSE issue clearly demonstrates that if politicians or policy decision-makers within the government fail to heed the advice of suitably qualified or experienced institutions that it can have disastrous consequences in terms of policy outcomes. Tackling an issue before it becomes an intractable problem can be the difference between damage limitation, and unmitigated policy failure (Moran, 2005 p. 433). The delays in tackling the BSE issue meant that peoples lives were put at risk unnecessarily, whilst the European Union ban on British beef and any of its by-products was highly damaging to the British beef industry (Fisher, Denver, Benyon, 2003 p. 123). The measures taken to restrict and eventually got rid of BSE cases in British cattle. However the gestation period of variant CJD means that it will be some time before there are no cases at all. The BSE free status of British cattle did eventually lead to the lifting of the ban on British beef exports (Moran, 2005 p. 433). Institutions have been able to influence policy outcomes when it comes to taking preventative health measures. For instance, reducing the number of smokers, heavy drinkers, and the number of people that have heart disease. Medical institutions have been aware for quite some time that many health problems are preventable, especially if people change their behaviour. An example of medical institutions having a strong influence on policy outcomes has been in reducing the number of smokers. Smoking has been proven to be a major cause of various types of cancer, heart disease, high blood pressure, and strokes. Anti-smoking groups and medical institutions have sought to influence policy outcomes to reduce the numbers of people killed by smoking related illnesses. Policy outcomes have included a ban on cigarette advertising, government health warnings on packets, and hard -hitting NHS adverts showing the consequences of smoking upon people’s health. Governments have also raised duty levels on cigarettes to persuade people to give up smoking, although this has only had limited success (Seldon Kavanagh, 2005 p. 297). The Scottish Parliament took evidence about the harmful effects of smoking from medical institutions, and voted to ban smoking in public places. That decision proved to be the catalyst for the Westminster Parliament to do like likewise in 2006 (Whitaker’s, 2007 p. 1067). Data shows that increasing numbers of British smokers wish to stop, 598,600 attempting to do so in 2006 alone (Schott, 2006 p. 109). Attempts by medical institutions and the Police to reduce heavy drinking have not been so successful. Whilst the government has tried to reduce the amount of binge drinking, most steps have been done voluntarily by the drinks industry to avoid tougher measures been taken. Medical institutions are opposed to heavy drinking due to the medical damage it does, whilst the Police can prove the link between alcohol consumption and crime. The government also decided to extend licensing so pubs could stay open for 24 hours a day, a policy outcome that seems to contradict the objective of reducing alcohol consumption levels (Coxall, Robbins, Leach, 2003 p. 330). Britain according to research is the country with the third largest frequency of binge drinkers in the European Union, after Finland and Ireland (Schott, 2006 p. 109). In terms of reducing the risks of heart disease, high blood pressure, and strokes, medical institutions seem to have had more influence with food and drinks producers t han with the decision-makers that decide policy outcomes. Once again the government prefers that companies make their products healthier on a voluntarily basis. Governments also prefer not to alienate too many businesses by affecting their ability to make profits (Jones et al, 2004 p.599). Another way in which institutions can have an influence upon policy outcomes is by being involved with organisations or committees that can determine policy decisions. Such organisations are referred to quangos or quasi-autonomous non-government organisation, and they control many areas of public decision-making and expenditure (Comfort, 1993 p. 493). The definition of quangos is now national rather than non-governmental, as they are part of the governmental structure even they are not part of departments or the civil service. Quangos have various functions and therefore levels of power and budgets. Quangos such as regional development bodies have large budgets, and community institutions could have stronger influences on policy outcomes than national institutions. Other Quangos such as regulatory bodies like Ofgem are meant to regulate private businesses rather then being influenced by institutions (Coxall, Robbins, Leach, 2003 p. 332). Quangos therefore have a great deal of inform al power, so to influence with any of them can allow institutions to gain influence over policy outcomes (Jones et al, 2004 p. 663). Potentially institutions could gain influence over policy outcomes by having some of their representatives joining any quangos that operate within their areas of interest or expertise. Alternatively quangos often have the power to award lucrative contracts, or grant funding for research or community projects, that provides further incentives for institutions to gain access to those quangos that can decide policy outcomes. There are quangos that are linked to the relevant government departments, some of which could provide institutions with the ability to communicate with ministers. Some would argue that quangos are undemocratic, and increase the chances of corruption, although ministers can make them accountable to the government if not to Parliament (Fisher, Denver, Benyon, 2003 p.371). Both the Conservatives and New Labour have made widespread use o f quangos when in government as they argued that quangos make governance more efficient (Jones et al p.664). Another way in which institutions are able to influence policy outcomes is through publicity campaigns, and lobbying the government to make decisions that favour their objectives. Such a mode of operation can mean that the behaviour and strategy of institutions is very similar to pressure groups (Fisher, Denver, Benyon, 2003 p. 171). Publicity campaigns can be either positive or negative in their tone, depending on whether institutions want to encourage or discourage certain decisions (Judt, 2007 p. 544). Examples of positive campaigning include universities encouraging the introduction of tuition fees to fund increasing numbers of students, or campaigns to fund new hospitals or new medical treatments (Seldon Kavanagh, 2005 p. 272). More negative campaigns have included medical institutions resisting any reforms of the NHS that they do not like. These campaigns have proved highly effective, as even the Thatcher government could not attempt to dismantle the NHS (Judt, 2007 p. 544). Therefore it could be concluded that institutions could play a significant role in influencing policy outcomes. However, no institution is guaranteed to play a significant role in influencing policy outcomes just because it exists. The roles that institutions play in influencing policy outcomes varies with circumstances, whether the government of the day has strong ideological beliefs, the expertise, campaigning skills, and the objectives of each individual institution. Governments will naturally tend to favour the institutions whose views and objectives are similar to their own, although governments also like to pursue policies that improve their chances of re-election. However, that does not mean that governments are unwilling to hear the opinions of institutions if those institutions lobby the government to influence policy outcomes. Institutions are more likely to succeed in influencing policy outcomes if they can provide strong evidence to back up their arguments or policy sugge stions. Governments prefer to adopt policies that they can convince the electorate is necessary to improve public services, could improve the standard of living, or prevent things going wrong. Examples of governments being influenced by institutions that have altered government policy include taking the environment seriously, measures to reduce smoking, and steps taken to deal with the BSE crisis. The failings that the initially inept handling of the BSE crisis demonstrated that institutions cannot always have had an influence on policy outcomes, and may only be consulted after things have gone wrong. Bibliography Coxall B, Robins L Leach R (2003) Contemporary British Politics 4th edition, Palgrave, Basingstoke Fisher J, Denver D, Benyon J, (2003) Central Debates in British Politics, Longman, London Hobsbawm, E (1994) Age of Extremes, the Short Twentieth Century 1914-1991, Michael Joseph, London Judt T, (2007) Post-war – A History of Europe since 1945, Pimlico, London Moran M, (2005) Politic and Governance in the UK, Palgrave, Basingstoke Schott B, (2006) Schott’s Almanac 2007, Bloomsbury, London Seldon A Kavanagh D, (2005) The Blair Effect 2001 – 5, Cambridge University Press, Cambridge Whitaker’s, (2007) Whitaker’s Almanack 2007 – today’s world in one volume, A C Black, London

Business Ethics Essay -- essays research papers

Running Head: Business Ethics Business Ethics name school The modern theory of the firm, which is central to finance and corporate law, views the corporation as a of contracts among the various corporate constituencies. Upon this foundation, finance theory and corporate law postulate shareholder wealth as the objective of the firm. Research in business ethics has largely ignored this contracts theory of the firm except to reject the financial-legal model as normatively inadequate. Philosophers generally bring philosophical theories of ethics to bear on problems of business, and they regard the contractual theory of the firm primarily as a subject for criticism using the resources of philosophical ethics. In particular, stakeholder theory, which stresses the importance of all groups that affect or are affected by a firm, has been proposed as a more adequate theory of the firm for studying business ethics. An important benefit of business ethics research conducted within such a framework would be a narrowing of the gulf between business ethics and the fields of financial economics and corporate law. Business ethics is widely dismissed as irrelevant by researchers in these fields because of its failure to recognize the existing financial and legal structures of the corporation, which are built largely on a contractual foundation. Hence, a common framework could increase the relevance of business ethics research and create a mutually beneficial dialogue. As a framework for identifying and analyzing many common business ethics problems, the contractual theory focuses our attention on the need to provide adequate safeguards for each constituency's interests. Corporate governance is concerned primarily with protecting shareholder interests, in part because the special contracting problems of shareholders are best met by the residual claims that the law of corporate governance creates. The comparative neglect of other constituencies in corporate law is not a matter of concern as long as their interests are adequately protected in some way. How the interests of each constituency are protected--whether by means of corporate governance structures or other means--is a matter of what works best in practice. Before we can devise means for protecting the interests of each ... ...act but on the efficacy of the actual claims of the group in question. Business ethics problems can be identified mainly as wrongful harms, misallocations, and misappropriations. These categories are commonly employed in economics, finance, and corporate law in the analysis of various kinds of problems, which are usually attributed to market failures, imperfect contracting, and other causes. However, many of these other kinds of problems arise from larger economic and political forces that would affect any theory of the firm. References Kenneth E. Goodpaster, "Business Ethics and Stakeholder Analysis," Business Ethics Quarterly, 1 (2001), 53-73; Allen Kaufman, Lawrence Zacharias, and Marvin Karson, Managers vs. Owners: The Struggle for Corporate Control in American Democracy (New York: Oxford University Press, 1995. Alderson, A. and Kakabadse, A., (1994), 'Business Ethics and Irish Management: A Cross-Cultural Study', European Management Journal, Volume 12, Number 4, December, pp. 432-441. Abelson, R. and Nielson, K., (2003), 'The History of Ethics', in Edwards, P. (Ed.), Encyclopaedia of Ethics, Macmillan, New York, pp. 81-116. Business Ethics Essay -- essays research papers Running Head: Business Ethics Business Ethics name school The modern theory of the firm, which is central to finance and corporate law, views the corporation as a of contracts among the various corporate constituencies. Upon this foundation, finance theory and corporate law postulate shareholder wealth as the objective of the firm. Research in business ethics has largely ignored this contracts theory of the firm except to reject the financial-legal model as normatively inadequate. Philosophers generally bring philosophical theories of ethics to bear on problems of business, and they regard the contractual theory of the firm primarily as a subject for criticism using the resources of philosophical ethics. In particular, stakeholder theory, which stresses the importance of all groups that affect or are affected by a firm, has been proposed as a more adequate theory of the firm for studying business ethics. An important benefit of business ethics research conducted within such a framework would be a narrowing of the gulf between business ethics and the fields of financial economics and corporate law. Business ethics is widely dismissed as irrelevant by researchers in these fields because of its failure to recognize the existing financial and legal structures of the corporation, which are built largely on a contractual foundation. Hence, a common framework could increase the relevance of business ethics research and create a mutually beneficial dialogue. As a framework for identifying and analyzing many common business ethics problems, the contractual theory focuses our attention on the need to provide adequate safeguards for each constituency's interests. Corporate governance is concerned primarily with protecting shareholder interests, in part because the special contracting problems of shareholders are best met by the residual claims that the law of corporate governance creates. The comparative neglect of other constituencies in corporate law is not a matter of concern as long as their interests are adequately protected in some way. How the interests of each constituency are protected--whether by means of corporate governance structures or other means--is a matter of what works best in practice. Before we can devise means for protecting the interests of each ... ...act but on the efficacy of the actual claims of the group in question. Business ethics problems can be identified mainly as wrongful harms, misallocations, and misappropriations. These categories are commonly employed in economics, finance, and corporate law in the analysis of various kinds of problems, which are usually attributed to market failures, imperfect contracting, and other causes. However, many of these other kinds of problems arise from larger economic and political forces that would affect any theory of the firm. References Kenneth E. Goodpaster, "Business Ethics and Stakeholder Analysis," Business Ethics Quarterly, 1 (2001), 53-73; Allen Kaufman, Lawrence Zacharias, and Marvin Karson, Managers vs. Owners: The Struggle for Corporate Control in American Democracy (New York: Oxford University Press, 1995. Alderson, A. and Kakabadse, A., (1994), 'Business Ethics and Irish Management: A Cross-Cultural Study', European Management Journal, Volume 12, Number 4, December, pp. 432-441. Abelson, R. and Nielson, K., (2003), 'The History of Ethics', in Edwards, P. (Ed.), Encyclopaedia of Ethics, Macmillan, New York, pp. 81-116.

The Breedloves in Toni Morrisons The Bluest Eye Essay -- American Lit

In the third chapter of The Bluest Eye, entitled "Autumn", Toni Morrison focuses on Pecola's family, the Breedloves. Morrison goes in depth about the family dynamic of the Breedloves and how it affects Pecola and her self-image. The passage starts after one of many arguments between Cholly and Mrs. Breedlove, Pecola's parents, turns violent. Mrs. Breedlove wants Cholly to fetch some coal from the outside shed. Cholly spent the last night drinking and does not want to get out of bed. The passage begins with the children becoming aware of the argument. Mrs. Breedlove starts to hit him with cooking pans while Cholly mostly used his feet and teeth. After the fight is over Mrs. Breedlove just lets Cholly lie on the ground and she goes about her business like nothing happened. Pecola starts off this passage with a sick feeling as she relaxes and stops feigning sleep during her parents' argument. It seems that these arguments happen a lot, for while "she had tried to prevent [the sick feeling] by holding in her stomach, [the sick feeling] came quickly in spite of her precaution" (Morris...

Geosciene Online Quiz Question and Answers

The Geosci Motherload Unit 1 – Science! |1. |The US government, and most other governments of the world, provide support for scientists but not for astrologers, palm readers, or telephone | | |â€Å"psychics†. Why do governments support scientists? | | |A. | | |Scientists are amazingly sexy, and government functionaries simply cannot control themselves in the presence of such overwhelming sexiness and | | |throw money at the scientists (sometimes tucking tens and twenties into the pockets of the scientists’ lab coats). | | | | |B. | | |Scientists use a careful method, and governments are always committed to supporting the use of careful methods. | | | | | |C. | | |Scientists help humans do useful things, which makes the humans healthier, wealthier, etc. , and governments often like to support health and | | |wealth. | | | | |D. | | |Scientists all drink Diet Pepsi because they think it makes them look sexy, and governments are all controlled by the powerful Pe psi | | |Corporation and so the governments support the Diet-Pepsi-drinking scientists. | | | | | |E. | | |Scientists learn the Truth, and governments are always deeply committed to learning the truth. | | | The government is often interested in seeing people live longer, or improving the economy, or having better and more-accurate explosive devices for the military, or in many other things that improve our lives, and science plus engineering and scientific medicine are better than any other human activity at delivering these. A cynic might say that politicians are often not all that interested in finding the Truth.And a realist would note that science is being improved all the time, and because you cannot improve on the Truth, science has not (yet? ) learned the Truth. There are many methods in the world, some of them are careful, and many of them are not funded by the government. Some of our spouses or significant others may think that some scientists are sexy, but many other se xy persons are not funded by the government. One of the professors has been known to drink a competitor of Pepsi on occasion, and some scientists refrain from soft drinks entirely. [pic]|Points Earned: |1/1 | |Correct Answer: |C | |Your Response: |C | |2. |What is an accurate description of the job of a scientist? | | |A. | |The scientist does only things that require high-tech equipment. | | | | | |B. | | |The scientist invents new ideas, and goes on to show that some of those ideas are false. | | | | | |C. | | |The scientist learns the Truth through careful application of the scientific method. | | | | | |D. | |The scientist does only things that show how sexy being a scientist really is, causing down-trodden non-scientists to lose control of | | |themselves with carnal lust for the scientist. | | | | | |E. | | |The scientist Invents new ideas, and then goes on to prove that some of those ideas are True. | | | | Much of the fun in science is coming up with great new ideas (h ypotheses, if you like fancy words).But for your new idea to â€Å"win†, you have to show that it does better than old ideas, so you have to prove those old ideas false (or incomplete, or not-quite-right, or whatever â€Å"nice† word you might prefer). The scientific method is a powerful way for humans to learn to do things, and learn what does and doesn’t work, but the results of science are always open to improvement, so are not claimed to be Truth, and probably are not Truth. Some scientists still use pencils and look at things, and there are probably a few non-sexy scientists around somewhere. [pic]|Points Earned: |1/1 | |Correct Answer: |B | |Your Response: |B | |3. |Newton’s ideas on physics â€Å"won†, and Aristotle’s ideas were kicked out of science and over into history. Why? | | |A. | | |Newton’s ideas appealed to dead white European males, whereas Aristotle’s didn’t because Aristotle wore a toga all the time. | | | | | |B. | |Newton’s ideas did a better job of predicting how nature would behave. | | | | | |C. | | |Newton’s ideas appealed to dead white European males, whereas Aristotle’s didn’t. | | | | | |D. | | |Newton’s ideas were more elegant, and so were intellectually favored. | | | | | |E. | | |Newton won the Nobel prize. | | | |Unlike painting or literature, scientific inquiry has a well-defined procedure for figuring out if Newton's ideas are better or if Aristotle had it right all along. In looking at a painting, we can ask different people what they think, or we can make up our own mind on whether we like it or not, and that is perfectly valid. In science, we have to ask: does the idea fit with the way the world works? Can I predict the speed of a falling object better using Newton's ideas or Aristotle's? As it turns out, Aristotle’s ideas didn’t predict things very well, and Newton’s did. [pic]|Points Earned: |1/1 | |Correct Answer: |B | |Your Response: |B | |4. |Scientists often speak of consensus—the scientific community agrees that a particular theory is better than the competitors.What is such | | |scientific consensus based on? | | |A. | | |The insistence of a single scientist that he or she is correct. | | | | | |B. | | |A number of different experiments by different people that all had outcomes that were predicted accurately by the favored theory and not by | | |the competitors. | | | | | |C. | | |Statements in the old textbooks that the scientists studied when they were in school. | | | | | |D. | |The decision of the Nobel prize committee to give the inventor of the idea a lot of money. | | | | | |E. | | |A single experiment had an outcome that was predicted accurately by the favored theory and not by the competitors. | | | | Agreement on scientific theories is a contentious, drawn-out, and sometimes acrimonious business. Scientists are no better (and no worse! ) than everyb ody else: we think we are right and those who disagree with us are dunderheads!I put forward my idea, and the experiments that I did that show the idea is a good one†¦ then everybody else piles on and pooh-poohs my idea. BUT, they go out and do experiments that try and show my ideas are wrong†¦ and they can't do it! So eventually all those experiments accumulate, and finally people agree that my idea is a good one. (Sometimes accompanied by a sneer: â€Å"†¦ but of course I knew that all along. I just didn't bother to publicize it†¦ † I told you, scientists are no better and no worse than the rest of the world. |[pic]|Points Earned: |1/1 | |Correct Answer: |B | |Your Response: |B | |5. |Your job depends on you finding the best available information on a particular technical topic. Where should you concentrate your search if | | |you want to do it right and keep your job? | | |A. | | |Watch cola commercials on football bowl games. | | | | |B. | | |Locate articles in weekly news magazines analyzing the views of public officials on the technical issue, as reported in the newspapers. | | | | | |C. | | |Get on the web and go looking for the pages posted by â€Å"think-tanks† headquartered near Washington. | | | | | |D. | | |Scan databases of newspaper articles to find the views of public figures on the technical issue. | | | | |E. | | |Find and study refereed scientific articles in learned journals. | | | | No source of information is perfect, but the refereed articles in learned journals put immense effort into â€Å"getting it right†. The web has reliable information, of course, but probably most of the information on the web is not especially reliable. The web is very inexpensive, and lots of people put junk on it.Think tanks also often are pushing an agenda, and try to â€Å"spin† information their way. Most newspapers are around for the long haul, and try to make the news fairly accurate, although some news papers do have agendas, and the editorial pages are not especially accurate. But, if the report is on the views of a public figure, the newspaper may accurately report what the public figure said, but what the public figure said may be less than completely accurate. Some magazines are quite good and careful, but many are pushing a belief or just overhyping things to tease you into buying the magazine.And while you are welcome to believe that drinking a particular cola makes you sexy†¦ don’t count on it. |[pic]|Points Earned: |1/1 | |Correct Answer: |E | |Your Response: |E | |6. |Before they can be published, scientific papers must be peer-reviewed. This means that: | | |A. | | |Some other scientific experts read the papers and guarantee that they are True. | | | | |B. | | |Some other scientific experts read the papers and provide quality control by eliminating many mistakes. | | | | | |C. | | |Government bureaucrats read the papers, to be sure that the papers do not i nsult the political positions of the current officeholders. | | | | | |D. | |Everyone in the world is given the opportunity to comment on the papers through a specially maintained blog. | | | | | |E. | | |An editor reads the papers, to make sure that all the semicolons are in the correct places. | | | | Reviewers work hard to identify errors of any sort, almost always identify many, and then the reviewers and editors insist that those errors be fixed before publication.Review is done voluntarily by scientists; this is part of the cost of being a member of this great human undertaking. Science doesn’t claim Truth; although science strives to be as accurate as humanly possible, that is often well short of Truth. |[pic]|Points Earned: |1/1 | |Correct Answer: |B | |Your Response: |B | |7. |What is more accurate about the Earth? | | |A. | |The Earth is formed of flat, vertical layers; one runs from the North Pole to the South Pole, and then others are layered on to the sides o f | | |that. | | | | | |B. | | |The Earth is formed of flat, horizontal layers, a little cap at the South Pole, then a layer above that, and a layer above that, all the way | | |up to a little cap at the North Pole. | | | | | |C. | |The Earth is formed of concentric layers (something like an onion–a central ball with a shell around it, and a shell around that†¦), but with | | |a giant hole on one side where the moon-making collision blasted pieces off. | | | | | |D. | | |The Earth is homogeneous; when it melted, it got all mixed up. | | | | | |E. | |The Earth is formed of concentric layers (something like an onion–a central ball with a shell around it, and a shell around that†¦); when the | | |planet melted, it separated into layers. | | | | The planet is onion-like, with an inner core, then an outer core, a mantle (which has several sub-layers), and a crust. The moon-making collision did happen, but the planet got hot enough to separate again. The plane t separated after melting largely or completely, with the densest stuff falling to the center and the lowest-density stuff floating to the top. [pic]|Points Earned: |1/1 | |Correct Answer: |E | | | | |8. |Geologists get to play with chemistry, physics, biology†¦ and history! And what a history you will meet as you work your way through the | | |course.Starting at the beginning, the textbook provides the scientifically accepted start of the story†¦ and promises that you’ll get to | | |explore some of the evidence for that scientific view, later in the semester. Meanwhile, which is more nearly correct of the scientifically | | |accepted view? | | |A. | | |The Earth is eternal, having been here forever and promising to be here forever. | | | | | |B. | |The Earth formed from the falling together of older materials, about 4. 6 billion years ago. | | | | | |C. | | |The Earth formed in the Big Bang, about 6000 years ago. | | | | | |D. | | |The Earth was assembled by g igantic space beavers, which gnawed down the primordial tree of life and piled its branches together to form the | | |planet. | | | | | |E. | |The Earth formed when the Big Bang caused older materials to fall together, about 14 billion years ago. | | | | The Big Bang is estimated as having occurred about 14 billion years ago. Stars that eventually formed in the wake of the Big Bang led to production of elements such as iron and silicon that are common in the Earth—we are formed from second-generation stardust, which â€Å"got it together† to make the planet about 4. 6 billion years ago. [pic]|Points Earned: |1/1 | |Correct Answer: |B | |Your Response: |B | |9. |National Parks are: | | |A. | | |Regions containing key biological resources that have been set aside for the enjoyment of future generations. | | | | |B. | | |Regions containing key geological resources that have been set aside for the enjoyment of the present generation. | | | | | |C. | | |Regions contai ning key cultural resources that have been set aside for the enjoyment of the present generation and future generations. | | | | | |D. | |Regions containing key biological, geological or cultural resources that have been set aside for the enjoyment of the present generation and | | |future generations. | | | | | |E. | | |Regions containing key roller coasters that have been set aside for the enjoyment of you and your immediate friends. | | | | Old Faithful, the giant sequoias, and Mesa Verde’s cliff dwellings are waiting for you, and your grandchildren. [pic|Points Earned: |1/1 | |] | | | |Correct Answer: |D | |Your Response: |D | |10. You find two neutral atoms. Each has 8 protons in its nucleus, but one has 7 neutrons, and the other has 8 neutrons. It is correct | | |to state that: | | |A. | | |The two atoms are from two different elements. | | | | | |B. | | |The two atoms are from the same element, but are different ions of that element. | | | | |C. | | |The two ato ms are from the same cola, but presented in different packaging. | | | | | |D. | | |The two atoms are from the same element, but are different isotopes of that element. | | | | |E. | | |The two atoms are from the same element, but are different isopleths of that element. | | | | The element is determined by the number of protons, so if each atom has the same number of protons, the atoms are the same element. Changing the number of neutrons primarily affects the weight, giving a different isotope of the same element. Changing the number of neutrons too much can introduce radioactivity, so the isotope won’t hang around forever. ) Ions are made by gaining or losing electrons. Isopleths are lines on a map connecting places with the same concentration of something that someone has measured, not exactly relevant here. And cola requires making atoms into molecules, and then mixing molecules of several sorts (water, sweetener, coloring agent, flavoring agent, perhaps caffeine) to mak e cola. [pic|Points Earned: |1/1 | |] | | | |Correct Answer: |D | |Your Response: |D | |11. You get some stuff, and start taking it apart. But, you are restricted to the use of â€Å"ordinary† means (fire, sunlight, your digestive| | |system) and you cannot use atom smashers or atom bombs. What is the smallest piece that you are likely to be able to produce: | | |A. | | |A quark | | | | | |B. | | |A nucleus | | | | |C. | | |A proton. | | | | | |D. | | |An atom | | | | | |E. | |A neutron. | | | | We can break matter down into atoms (Greek for â€Å"not cuttable† because the Greeks didn’t have atom smashers or other exotic tools that would allow cutting atoms into smaller pieces). All of the wrong answers here are smaller pieces of atoms, but cannot normally be isolated by â€Å"ordinary† tools. [pic|Points Earned: |1/1 | |] | | | |Correct Answer: |D | |Your Response: |D | |12. Ignoring good manners, you start rooting around in the nucleus of a p oor, unsuspecting atom, to see what is in there. What are you | | |most likely to find? | | |A. | | |Only neutrons. | | | | | |B. | | |Neutrons, usually with some electrons hanging around among the neutrons. | | | | | |C. | | |Protons, usually with some electrons hanging around among the protons. | | | | |D. | | |Protons, usually with some neutrons hanging around among the protons. | | | | | |E. | | |Only protons. | | | | The simplest nucleus is the single proton in â€Å"ordinary† hydrogen.All other nuclei include protons and neutrons. Electrons make the cloud around the nucleus. |[pic]|Points Earned: |1/1 | |Correct Answer: |D | |1. |What is an accurate description of the job of a scientist? | | |A. | | |The scientist invents new ideas, and goes on to show that some of those ideas are false. | | | | |B. | | |The scientist learns the Truth through careful application of the scientific method. | | | | | |C. | | |The scientist Invents new ideas, and then goes on to prove th at some of those ideas are True. | | | | | |D. | |The scientist does only things that show how sexy being a scientist really is, causing down-trodden non-scientists to lose control of | | |themselves with carnal lust for the scientist. | | | | | |E. | | |The scientist does only things that require high-tech equipment. | | | | Much of the fun in science is coming up with great new ideas (hypotheses, if you like fancy words).But for your new idea to â€Å"win†, you have to show that it does better than old ideas, so you have to prove those old ideas false (or incomplete, or not-quite-right, or whatever â€Å"nice† word you might prefer). The scientific method is a powerful way for humans to learn to do things, and learn what does and doesn’t work, but the results of science are always open to improvement, so are not claimed to be Truth, and probably are not Truth. Some scientists still use pencils and look at things, and there are probably a few non-sexy scient ists around somewhere. [pic]|Points Earned: |0/1 | |Your Response: |B | |1. |Most Americans support science because: | | |A. | | |The scientific method allows scientists to learn the Truth. | | | | | |B. | | |All scientists are sexy. | | | | | |C. | |All Americans are bored silly by science. | | | | | |D. | | |All Americans are fascinated by science. | | | | | |E. | | |Science has helped make our lives easier, safer, etc. | | | | Without science and technology, the great majority of us would be dead, so we tend to be supporters of science.Although we know that science works, we’re never sure that it is completely right. Students so often discover things that professors missed, or that professors got wrong, that scientists would be silly to claim Truth. Comparing the TV ratings of the latest hit to the ratings of the latest science program on public broadcasting shows that many Americans are not fascinated by science, but the science-show ratings are above zero, so some people are fascinated by science. And hope as we might, it is unfortunately clear that not every scientist is sexy (just most of them are†¦). [pic]|Points Earned: |1/1 | |Correct Answer: |E | | | | |2. |What is an accurate description of the job of a scientist? | | |A. | |The scientist invents new ideas, and goes on to show that some of those ideas are false. | | | | | |B. | | |The scientist learns the Truth through careful application of the scientific method. | | | | | |C. | | |The scientist does only things that show how sexy being a scientist really is, causing down-trodden non-scientists to lose control of | | |themselves with carnal lust for the scientist. | | | | |D. | | |The scientist does only things that require high-tech equipment. | | | | | |E. | | |The scientist Invents new ideas, and then goes on to prove that some of those ideas are True. | | | | Much of the fun in science is coming up with great new ideas (hypotheses, if you like fancy words).But for your new idea to â€Å"win†, you have to show that it does better than old ideas, so you have to prove those old ideas false (or incomplete, or not-quite-right, or whatever â€Å"nice† word you might prefer). The scientific method is a powerful way for humans to learn to do things, and learn what does and doesn’t work, but the results of science are always open to improvement, so are not claimed to be Truth, and probably are not Truth. Some scientists still use pencils and look at things, and there are probably a few non-sexy scientists around somewhere. [pic]|Points Earned: |1/1 | |Correct Answer: |A | |Your Response: |A | |3. |The final arbitrator between two alternate theories (for example Aristotle’s and Newton’s ideas) is: | | |A. | | |A public opinion poll conducted by Gallup, ABC News, and Fox News. | | | | |B. | | |Nature, and experiments conducted to test each idea. | | | | | |C. | | |A committee of â€Å"wise men† who gather twice a year to arbitrate such disputes. | | | | | |D. | | |The Nobel Prize Committee in Stockholm, Sweden. | | | |Unlike painting or literature, scientific inquiry has a well-defined procedure for figuring out if Newton's ideas are better or if Aristotle had it right all along. In looking at a painting, we can ask different people what they think, or we can make up our own mind on whether we like it or not, and that is perfectly valid. In science, we have to ask: does the idea fit with the way the world works? Can I predict the speed of a falling object better using Newton's ideas or Aristotle's? As it turns out, Aristotle’s ideas didn’t predict things very well, and Newton’s did. [pic]|Points Earned: |1/1 | |Correct Answer: |B | |Your Response: |B | |4. |When scientists agree that a particular scientific theory is a good one, and the scientists use that theory to help make new things, cure | | |diseases, etc. that â€Å"agreement† came about because: | | | A. | | |A single experiment had an outcome that was well-predicted by that theory. | | | | | |B. | | |A single, well-respected scientist put forward the idea. | | | | | |C. | | |That's what it says in all the books. | | | | | |D. | | |The Nobel prize committee gave the inventor of the idea a lot of money. | | | | | |E. | |A number of different experiments by different people all had outcomes that were well-predicted by the theory. | | | | Agreement on scientific theories is a contentious, drawn-out, and sometimes acrimonious business. Scientists are no better (and no worse! ) than everybody else: we think we are right and those who disagree with us are dunderheads! I put forward my idea, and the experiments that I did that show the idea is a good one†¦ then everybody else piles on and pooh-poohs my idea. BUT, they go out and do experiments that try and show my ideas are wrong†¦ nd they can't do it! So eventually all those experiments accumulate, and finally people agre e that my idea is a good one. (Sometimes accompanied by a sneer: â€Å"†¦ but of course I knew that all along. I just didn't bother to publicize it†¦ † I told you, scientists are no better and no worse than the rest of the world. ) |[pic]|Points Earned: |1/1 | |Correct Answer: |E | |Your Response: |E | |5. Which is more likely to contain reliable information? | | |A. | | |A web page posted by an independent â€Å"think-tank†. | | | | | |B. | | |A magazine article summarizing recent newspaper and television reports. | | | | | |C. | | |A refereed article in a learned journal. | | | | | |D. | | |The views of public figures reported in a newspaper article. | | | | |E. | | |A cola commercial. | | | | No source of information is perfect, but the refereed articles in learned journals put immense effort into â€Å"getting it right†. The web has reliable information, of course, but probably most of the information on the web is not especially reliable. The web is very inexpensive, and lots of people put junk on it.Think tanks also often are pushing an agenda, and try to â€Å"spin† information their way. Most newspapers are around for the long haul, and try to make the news fairly accurate, although some newspapers do have agendas, and the editorial pages are not especially accurate. But, if the report is on the views of a public figure, the newspaper may accurately report what the public figure said, but what the public figure said may be less than completely accurate. Some magazines are quite good and careful, but many are pushing a belief or just overhyping things to tease you into buying the magazine.And while you are welcome to believe that drinking a particular cola makes you sexy†¦ don’t count on it. |[pic]|Points Earned: |1/1 | |Correct Answer: |C | |Your Response: |C | |6. |What is accurate about peer review of scientific papers? | | |A. | | |It insures that they are True. | | | | |B. | | |It almost alway s leads to the recommendation that the papers be published without changes. | | | | | |C. | | |It is why we call scientific papers â€Å"primary sources†. | | | | | |D. | | |It provides quality control by eliminating many mistakes. | | | | | |E. | |It is primarily done by government bureaucrats hired for that purpose. | | | | Reviewers work hard to identify errors of any sort, almost always identify many, and then the reviewers and editors insist that those errors be fixed before publication. Review is done voluntarily by scientists; this is part of the cost of being a member of this great human undertaking.Science doesn’t claim Truth; although science strives to be as accurate as humanly possible, that is often well short of Truth. Asking grandpa what school was like in his childhood gives you a primary source (grandpa), even if he insists that he walked 20 miles through neck-deep snow, uphill both ways. Some primary sources have selective memories. |[pic]|Points Ea rned: |1/1 | |Correct Answer: |D | |Your Response: |D | |7. The Earth is layered. Most geologists believe that this layering originated primarily because: | | |A. | | |The denser material fell together from space first, and then the less-dense material fell in later. | | | | | |B. | | |The Earth partially or completely melted soon after it formed, and the denser materials fell to the center. | | | | | |C. | |Graham Spanier decreed that it be, so it was. | | | | | |D. | | |The Earth has been separating bit-by-bit for billions of years as the cold oceanic slabs sink all the way to the center and pile up. | | | | | |E. | | |The Moon flew out of the Earth after a great collision with a Mars-sized body, causing the Earth to spin faster and separate. | | | Melting allows things to sort out more easily. Think of the rocks and snow and ice and salt and squirrel parts that stick on the bottom of your car when you drive in a snowstorm, and how they sort themselves out when they melt in t he garage or in the spring. Much evidence points to early separation of the Earth into layers, before the collision with a Mars-sized body that blasted out the material that made the moon, although a little bit of separating may still be going on.The type of material falling together to make the planet may have changed as the planet formed, but this doesn’t seem to have been too important in controlling things. And mighty as Graham Spanier is, this was a bit before his time. |[pic]|Points Earned: |1/1 | |Correct Answer: |B | |Your Response: |B | |8. |The Earth has a fascinating history, which this class has just begun to explore.Which is more nearly correct, according to the scientific | | |interpretation presented in the text? | | |A. | | |The Earth has been here forever. | | | | | |B. | | |The Earth formed in the great Pepsi flood, when Graham Spanier’s private reservoirs burst open and flooded Pennsylvania. | | | | | |C. | | |The Earth formed in the Big Bang, abo ut 4. 6 billion years ago. | | | | |D. | | |The Earth formed about 4. 6 billion years ago, well after the Big Bang, as materials made in stars fell together to form the planet. | | | | | |E. | | |The Earth formed in the Big Bang, about 6000 years ago. | | | | The Big Bang is estimated as having occurred about 14 billion years ago.Stars that eventually formed in the wake of the Big Bang led to production of elements such as iron and silicon that are common in the Earth—we are formed from second-generation stardust, which â€Å"got it together† to make the planet about 4. 6 billion years ago. |[pic] |Points Earned: |0/1 | |Correct Answer: |D | |Your Response: |C | |9. National Parks are: | | |A. | | |An invention of the Romans, to overcome the â€Å"tragedy of the commons† that caused them to invade the food-service buildings of the neighboring | | |Greeks. | | | | | |B. | | |An invention of the United States that has spread around much of the world, as a wa y of protecting some of the finest parts of the world. | | | | | |C. | |A U. S. government program to provide roller-coaster rides for disadvantaged grandparents. | | | | | |D. | | |An invention of the United States, which has been routinely ignored by the rest of the world because they really don’t like us. | | | | | |E. | | |An invention of Greenlandic people, who set aside the northeastern part of the island as the world’s first national park. | | | Yellowstone was the first National Park, but now you can find National Parks scattered across the planet, preserving key areas for the enjoyment of this generation and for future generations. |[pic|Points Earned: |1/1 | |] | | |Correct Answer: |B | |Your Response: |B | |10. |You find two neutral atoms. Each has 8 protons in its nucleus, but one has 7 neutrons, and the other has 8 neutrons. It is correct | | |to state that: | | |A. | | |The two atoms are from the same cola, but presented in different packaging. | | | | |B. | | |The two atoms are from the same element, but are different isopleths of that element. | | | | | |C. | | |The two atoms are from the same element, but are different ions of that element. | | | | |D. | | |The two atoms are from two different elements. | | | | | |E. | | |The two atoms are from the same element, but are different isotopes of that element. | | | | The element is determined by the number of protons, so if each atom has the same number of protons, the atoms are the same element.Changing the number of neutrons primarily affects the weight, giving a different isotope of the same element. (Changing the number of neutrons too much can introduce radioactivity, so the isotope won’t hang around forever. ) Ions are made by gaining or losing electrons. Isopleths are lines on a map connecting places with the same concentration of something that someone has measured, not exactly relevant here. And cola requires making atoms into molecules, and then mixing mo lecules of several sorts (water, sweetener, coloring agent, flavoring agent, perhaps caffeine) to make cola. [pic|Points Earned: |1/1 | |] | | | |Correct Answer: |E | |Your Response: |E | |11. |You get some stuff, and start taking it apart.But, you are restricted to the use of â€Å"ordinary† means (fire, sunlight, your digestive| | |system) and you cannot use atom smashers or atom bombs. What is the smallest piece that you are likely to be able to produce: | | |A. | | |A neutron. | | | | | |B. | | |An atom | | | | | |C. | | |A proton. | | | | |D. | | |A nucleus | | | | | |E. | | |A quark | | | | We can break matter down into atoms (Greek for â€Å"not cuttable† because the Greeks didn’t have atom smashers or other exotic tools that would allow cutting atoms into smaller pieces).All of the wrong answers here are smaller pieces of atoms, but cannot normally be isolated by â€Å"ordinary† tools. |[pic|Points Earned: |1/1 | |] | | | |Correct Answer: |B | |Your Response: |B | |12. |Chemical reactions involve: | | |A. | | |The sharing or trading of partons. | | | | | |B. | |The sharing or trading of quarks. | | | | | |C. | | |The sharing or trading of protons. | | | | | |D. | | |The sharing or trading of neutrons. | | | | | |E. | | |The sharing or trading of electrons. | | | |The clouds of electrons around the nuclei of atoms serve as the Velcro of the universe. Atoms gain or lose electrons and then stick together by static electricity, or else share electrons and stick together inside the shared cloud. The nuclei with their protons and neutrons (which are themselves composed of quarks, which also were called partons at one time) are the things held together by the electronic Velcro of chemistry. |[pic|Points Earned: |1/1 | |] | | | |Correct Answer: |E | |Your Response: |E | |1. Ignoring good manners, you start rooting around in the nucleus of a poor, unsuspecting atom, to see what is in there. What are you most likely | | |to fi nd? | | |A. | | |Neutrons, usually with some electrons hanging around among the neutrons. | | | | | |B. | | |Only neutrons. | | | | | |C. | | |Protons, usually with some neutrons hanging around among the protons. | | | | | |D. | |Protons, usually with some electrons hanging around among the protons. | | | | | |E. | | |Only protons. | | | | The simplest nucleus is the single proton in â€Å"ordinary† hydrogen. All other nuclei include protons and neutrons. Electrons make the cloud around the nucleus. |[pic]|Points Earned: |1/1 | |Your Response: |C | |2. Opinion polls show most residents of the US do not believe they understand science very well, but they do favor more government support of | | |science. Why do most US residents favor government support of science? | | |A. | | |Scientists are so breath-takingly sexy that most people are drawn through sheer carnal lust to support the scientific enterprise. | | | | | |B. | | |Science is so boring that almost everyone uses public-broadcasting science programming as a sleep aid, and government funding is needed to | | |insure a steady supply of boredom. | | | | |C. | | |Science has helped make our lives healthier, wealthier, easier, safer, etc. , and people hope that more funding of more science will provide | | |even more health, wealth, ease, safety, etc. | | | | | |D. | | |Science is simply so fascinating that almost everyone can’t wait to see what will be discovered next. | | | | | |E. | |Scientists apply their scientific method, which allows them to learn the Truth. | | | | Without science and technology, the great majority of us would be dead, so we tend to be supporters of science. Although we know that science works, we’re never sure that it is completely right. Students so often discover things that professors missed, or that professors got wrong, that scientists would be silly to claim Truth.Comparing the TV ratings of the latest hit to the ratings of the latest science prog ram on public broadcasting shows that many Americans are not fascinated by science, but the science-show ratings are above zero, so some people are fascinated by science. And hope as we might, it is unfortunately clear that not every scientist is sexy (just most of them are†¦). |[pic]|Points Earned: |1/1 | |Your Response: |C | |3. In chemistry, the type of an atom (what element it is) is determined by: | | |A. | | |The number of electrons it exchanges with its neighbors. | | | | | |B. | | |The number of protons it has in a cloud around the nucleus. | | | | | |C. | | |The number of neutrons it has in a cloud around the nucleus. | | | | | |D. | |The number of neutrons it contains in its nucleus. | | | | | |E. | | |The number of protons it contains in its nucleus. | | | | Physicists change the name when the number of charged, massive protons in the nucleus changes. Adding one proton makes a HUGE difference to how an atom behaves, and so deserves a new name. The neutrons hang a round in the nucleus to keep the protons from kicking each other out. Exchanging electrons is important, but doesn’t change the element type. [pic]|Points Earned: |1/1 | |Your Response: |E | |4. |What is an accurate description of the job of a scientist? | | |A. | | |The scientist Invents new ideas, and then goes on to prove that some of those ideas are True. | | | | | |B. | | |The scientist does only things that show how sexy being a scientist really is, causing down-trodden non-scientists to lose control of | | |themselves with carnal lust for the scientist. | | | | |C. | | |The scientist learns the Truth through careful application of the scientific method. | | | | | |D. | | |The scientist does only things that require high-tech equipment. | | | | | |E. | | |The scientist invents new ideas, and goes on to show that some of those ideas are false. | | | Much of the fun in science is coming up with great new ideas (hypotheses, if you like fancy words). But for your new i dea to â€Å"win†, you have to show that it does better than old ideas, so you have to prove those old ideas false (or incomplete, or not-quite-right, or whatever â€Å"nice† word you might prefer). The scientific method is a powerful way for humans to learn to do things, and learn what does and doesn’t work, but the results of science are always open to improvement, so are not claimed to be Truth, and probably are not Truth.Some scientists still use pencils and look at things, and there are probably a few non-sexy scientists around somewhere. |[pic]|Points Earned: |0/1 | |Your Response: |A | |5. |What is more accurate about the Earth? | | |A. | | |The Earth is formed of concentric layers (something like an onion–a central ball with a shell around it, and a shell around that†¦); when the | | |planet melted, it separated into layers. | | | | |B. | | |The Earth is formed of flat, vertical layers; one runs from the North Pole to the South Pole, and th en others are layered on to the sides of | | |that. | | | | | |C. | | |The Earth is formed of flat, horizontal layers, a little cap at the South Pole, then a layer above that, and a layer above that, all the way | | |up to a little cap at the North Pole. | | | | | |D. | |The Earth is formed of concentric layers (something like an onion–a central ball with a shell around it, and a shell around that†¦), but with | | |a giant hole on one side where the moon-making collision blasted pieces off. | | | | | |E. | | |The Earth is homogeneous; when it melted, it got all mixed up. | | | | The planet is onion-like, with an inner core, then an outer core, a mantle (which has several sub-layers), and a crust.The moon-making collision did happen, but the planet got hot enough to separate again. The planet separated after melting largely or completely, with the densest stuff falling to the center and the lowest-density stuff floating to the top. |[pic|Points Earned: |0/1 | |] | | | |Your Response: |E | |1. |The US government, and most other governments of the world, provide support for scientists but not for astrologers, palm readers, or telephone | | |â€Å"psychics†. Why do governments support scientists? | | |A. | |Scientists all drink Diet Pepsi because they think it makes them look sexy, and governments are all controlled by the powerful Pepsi | | |Corporation and so the governments support the Diet-Pepsi-drinking scientists. | | | | | |B. | | |Scientists help humans do useful things, which makes the humans healthier, wealthier, etc. , and governments often like to support health and | | |wealth. | | | | |C. | | |Scientists are amazingly sexy, and government functionaries simply cannot control themselves in the presence of such overwhelming sexiness and | | |throw money at the scientists (sometimes tucking tens and twenties into the pockets of the scientists’ lab coats). | | | | | |D. | | |Scientists use a careful method, and governments are always committed to supporting the use of careful methods. | | | | |E. | | |Scientists learn the Truth, and governments are always deeply committed to learning the truth. | | | | The government is often interested in seeing people live longer, or improving the economy, or having better and more-accurate explosive devices for the military, or in many other things that improve our lives, and science plus engineering and scientific medicine are better than any other human activity at delivering these.A cynic might say that politicians are often not all that interested in finding the Truth. And a realist would note that science is being improved all the time, and because you cannot improve on the Truth, science has not (yet? ) learned the Truth. There are many methods in the world, some of them are careful, and many of them are not funded by the government. Some of our spouses or significant others may think that some scientists are sexy, but many other sexy persons are not funde d by the government.One of the professors has been known to drink a competitor of Pepsi on occasion, and some scientists refrain from soft drinks entirely. |[pic]|Points Earned: |1/1 | |Correct Answer: |B | |Your Response: |B | |2. You hang around with the professor, who is a scientist when he’s not teaching. You observe that the professor learns a lot about how certain | | |parts of the world behave, and the professor then uses that information to successfully predict the outcome of an experiment. What does this | | |demonstrate? | | |A. | | |The professor’s knowledge is True; the professor couldn’t have made the successful prediction without knowing exactly what is going on. | | | | | |B. | |The professor was lucky; no professor could ever know what is going on, so a professor who successfully predicted something must be really | | |lucky. | | | | | |C. | | |The professor’s knowledge is close to being True; no professor really knows what is going on , but some professors are sort of close to knowing| | |what is going on. | | | | | |D. |

Consulting Report of Solberri Hotel

Solberri Hotel January 20 2012 This report is in response to the request by Solberri hotel group for a review of its facing issues and identification of possible solutions. Consulting report ? STATE OF AFFAIRS Solberri is a group of resort hotels registered as a listed company with 12 resort hotels in Europe. Established in the 1980s, it had run successfully until 2003 and also incurred losses in 2005 and 2006. To improve the situation, Solberri implemented strategy changes to the hotel operating environment such as the pricing changes and a refurbishment program. With these adjustments, situation gets better with a large forecast cash surplus in this financial year. Currently the chain of hotels is faced with critical issues revolving around its operation including human resources that are better explained with the help of SWOT analysis in Appendix 1. It is important for Solberri to make use of the management tools to understand the current situation and to achieve the revenue target, increased share holder value and better customer satisfaction. ? ISSUES IN HAND Solberri is faced with multiple issues that act as a barrier to meet their goals and target. From our review and understanding of the environment we put forth the below issues and rank them as priority and other issues. Priority issues: †¢Poor customer experience that could be a result of ethical issues such as oPoor treatment of General manages and senior employees. oMisdistribution of tips oInvestment in unprofitable environmentally friendly initiatives. †¢The potential need to borrow money to enhance spas before the 2007/08 Peak season †¢The need to raise occupancy rates and earnings generated from extra charges to hit the planned revenue for the financial year ending September 2008 †¢The poor share price and vulnerability of Solberri Other issues: †¢Installation of solar panels †¢Non-participation in the international star ratings system †¢Potential problems with the quality of outsourced services †¢Upgrading website to include a virtual tour of facilities . ? ISSUE ANALYSIS In this section, the analysis is done for top priority issues. Customer service and relevant HR issues. The quality of customer service is crucial to companies’ survival in service industry. Unfortunately, the service provided by Solberri failed to meet the expected standard of its customers. The main reason for poor customer service is employees’ lack of skills and motivation. The majority of Solberri employees are temporary, with limited knowledge of the hotel industry and relevant skills. Besides, all short-term employees only receive two days introduction training which is apparently insufficient. The customer service can be improved in two aspects. In the short term, Nick Silva, customer service Director, needs to review staffing level immediately to meet the upcoming demand. Strict selection and a specific regular training program are needed to ensure the quality of its employees. In the long term, adjusting the ratio of the number of long-term employees to that of short-term ones is necessary. Too many temporary employees lead to poor customer service and low stock of talents, resulting in General managers working long hours and under high stress (more details in ethical issues). Though more long-term employees mean more costs, the benefits from improved customer service will outweigh the costs. Furthermore, because recognition of employees’ efforts can stimulate them to offer better service, some motivation measures are recommended. According to ERG theory, people in different levels have different needs. Most temporary employees are in the existence level, they need money to maintain their existence requirements, and therefore incentives such as bonus will be useful. However, most long-term employees are in relatedness and growth level, so incentives such as vocation award or decision making involvement will be suitable. With the new recruitment, training and incentives, it’s estimated that an additional employee cost of â‚ ¬7. 5 million will be incurred, a 12% increase from last year. Ethical issues Two ethical issues will be discussed in this report. a. Poor treatment of employees. General Managers and key senior employees are working under high stress over 16 hours every day. Solberri gets into ethical issue of overworking employees and paying no compensation. Due to a shortage of senior employees, their workload is unlikely to be reduced immediately. Therefore, the hotel should compensate for their overwork. To solve this problem fundamentally Soberri should reserve sufficient elites by increasing its long-term employees. b. Misdistribution of tips. When Solberri collected all the tips and evenly distributed them to employees, an ethical issue arose for the transparency and fairness of such distribution. Such controversial tips distribution should be changed back to the traditional way—employees can keep the tips for themselves. For those non-facing-customer employees who don’t get tips, Solberri is recommended to increase their bonus to make up the difference. Forecast cash surplus investment issue Before analyzing the four proposals, it’s important to know how much cash is available for investment. Since Solberri is under loan covenants and other financing alternatives such as rights issue can’t raise funds in a short time, the only source of funds is the internal capital. It’s estimated that 59 million cash will be generated from operations in this financial year. After deducting finance costs, tax, dividends and additional HR reform costs in the first issue, there’s only â‚ ¬30. 9 million cash available. (Appendix 2. 1) The total amount for the four proposals is â‚ ¬123 million (Appendix 2. 2). Solberri has to perform a cost benefit analysis to choose the most profitable proposal as it is clear that Solberri doesn’t have enough funds to implement all of them. Proposal A is to extend the number of rooms at the four â€Å"Premier† hotels by adding each another 200 rooms and supporting facilities. It’s estimated to generate â‚ ¬10 million NPV for each hotel over a 5-year period based on an 80% occupancy level. However, this may have some negative effects since the additional rooms and facilities make the hotel more crowded and less comfortable. Therefore, the 80% occupancy level is not guaranteed. Besides, it’s just the first year that Solberri has had such high occupancy levels. Extending the number of rooms in such a large scale is too risky. Proposal B is to invest in refurbishment and extend spa facilities at the remaining hotels. The forecast cost is â‚ ¬6 million for each hotel. The high level of bookings at the 4 â€Å"Premier† hotels during the 2008 Peak season has demonstrated the success of the refurbishment plan. So this proposal contains relatively little risk. Furthermore, spa facilities have become a key selling point in resort hotels. This new trend provides great opportunity for Solberri to escape from the Red Ocean, the very competitive market of traditional resort hotels. By differentiating itself by providing exclusive spa facilities, Solberri can successfully grab the Blue-ocean market, namely the profitable and rapidly-developing market of resort hotels with exclusive spa facilities. Finally, refurbishing the hotels can improve Solberri’s profit margin. However, refurbishing all the remaining hotels simultaneously is beyond Solberri’s financial ability. It’s recommended that Solberri refurbish only three hotels—two â€Å"Superior† and one â€Å"Super Plus†. Refurbishing the â€Å"Super Plus† hotels is riskier since there is no previous experience and the refurbishment will need to close permanently 15 rooms in each hotel. But if Solberri only refurbish â€Å"Superior† hotels, in a short time, there will be a gap in middle-priced hotels, which is unfavorable to the company’s strategic development. Proposal C is to acquire an additional resort hotel costing 24 million. The expected NPV is â‚ ¬39. 2 million (Appendix 2. 3). Besides, the breakeven occupancy level is 60% (Appendix 2. 4), which is quite easy to achieve. So Proposal C seems profitable with reasonable risk. However, the initiate cost is too large as it’s for only one hotel. Compared with Proposal B, it’s too risky for Solberri in its first year with such good performance. Proposal D is to invest in environmentally friendly initiatives including the installation of solar panels costing â‚ ¬6 million and other environmental initiatives costing â‚ ¬9 million. Though investing in these initiatives cannot generate profits for the company directly, it can help establish Solberri as a socially responsible company which will be positive to its image. But funds are so limited that investing in all these in unrealistic. It’s recommended that Solberri invest in the solar panel project first since it can produce cost savings of 0. 6 million per year and defer the others. Loan covenant restriction The â‚ ¬20 million loan negotiated at the end of 2007 has loan covenants restricting the company’s further loan financing within 2 years from December 2007, resulting in a probable capital shortage for its future development. Solberri can try negotiating with the bank for removal of restriction by showing them the latest forecast figures and the high level of bookings. However, the good performance of only one year wouldn’t be convincing enough to the bank. Solberri can also try refinancing by issuing additional stocks through public offering or private placement. However, due to the relatively high standard and costly registration of public offering, private placement is preferable. With low threshold for issuing, private placement is feasible for Solberri whose business just began to pick up after slow seasons. With the good performance this year, it’s probable that the Solberri will attract strategic investment from institutional investors via private placements to ensure its future development. The poor share price and vulnerability of Solberri RECOMMENDATION Customer service and related HR issues. It is recommended that Solberri immediately work out a plan for recruitment and training, to ensure job fit and effective training among all employees. Employees who can’t provide the high standard of service will be refused or assigned to non-facing-customer positions. Moreover, Solberri should set up appropriate motivation mechanisms such as bonus and vacation rewards. It is also recommended that Solberri enlarge its long-term employee proportion by training some short-term employees to be skillful long-term ones. In this way, more employees will cultivate a sense of responsibility and can handle the previous temporary employees’ work in non-peak season. Ethical issues It’s recommended that Solberri compensate for employees’ overwork. In the long run, the company needs to enlarge its senior employee reserve. It’s recommended that Solberri abandon its controversial tips distribution and set up a bonus system for non-facing customer employees to make up their income difference. Forecast cash surplus investment issue It’s recommended that Solberri spend its forecast cash surplus on Proposal B to refurbish and extend the spa facilities at two â€Å"Superior† hotels and one â€Å"Super Plus† hotel, which costs â‚ ¬18 million in total. Since it’s just the first year Solberri has performed so well in these years, it’s better for it to be conservative towards investment. It’s also recommended that Solberri invest in the installation of solar panels at all 12 hotels costing â‚ ¬6 million and postpone other environmentally friendly initiatives due to its limited funds. These two plans will result in â‚ ¬6. 9 million cash retained Appendix 2. 5), which will help improve the liquidity of Solberri. . Loan covenant restriction It is recommended that Solberri try to negotiate with the bank for removal of the restriction. If it’s not workable, Solberri could try seasoned equity offering to refinance either by public offering or private placement, while private placement seems to be most feasible for Solberri and thus is highly recommended. If external financing doesn’t work, it is highly recommended that Solberri try all means to control its costs. The poor share price and vulnerability of Solberri ? CONCLUSION Solberri is now at a crucial time since it’s the first time it has had such good performance in these years. It is now facing several important issues. The most important ones are how to solve the poor customer service problem and which investment proposal to choose for its future development to increase the occupancy level for all the hotel rooms. It is believed that the analysis and recommendations above can serve as useful references for its decision-making. Solberri has to differentiate itself in the market through a shift by showcasing its spa facilities as its forefront in capturing holiday makers. With a change in visa regulations in Europe Solberri may opt to pay more attention to its local clients by offering the day use of the hotel’s services and facilities during non-peak seasons. To position itself as a â€Å"holiday resort hotel†, there should be a refurbishment of Solberri’s hotels to â€Å"Premier† standards ? SWOT ANALYSIS STRENGTHS †¢Good reputation with a long history; †¢Proven track record of range of spa facilities †¢Successful refurbishment program †¢Many of long-term employees have worked for Solberri for over 10 years with rich experience. †¢Stable co-operation with several travel agents. Experienced board directors. †¢High sense of Corporate Social Responsibility( 1 hotel won a bronze award in the Green Tourism business awards, 2007 †¢High level of bookings for Peak season 2008 with large cash surplus forecast WEAKNESS †¢Outdated information technology systems. †¢Restrictive loan covenan t. †¢Difficulty in enforcing agreed quality service levels. †¢Declining share price compared to 2002 †¢Poor customer service with disappointing customer feedback. †¢Low level of repeat booking. †¢Lack of motivation of short-term employees. †¢Poorly structured financial planning. †¢Resignation of Finance Director. OPPORTUNITIES High level of bookings and a forecast cash surplus of â‚ ¬59 million which can be used for further expansion, refurbishment program, paying dividends, and(or) meeting CSR by investing in environmentally friendly initiatives; †¢ Huge potential market for Spa service †¢Pricing structure changes to boost occupancy levels †¢Effective use of variety of media to generate more sales THREATS †¢ External completion from other hotel industries †¢ Understaffing and poor service to meet the high level booking that could impact reputation †¢Resistance from †¢Competitors having state of art information technology can be market eaders. †¢ Fall in spa revenues of one â€Å"premier† hotel due to a rival business operated by an ex-manager. †¢Difference of opinion amongst management staff may delay the strategy implementation. WORKINGS 2. 1. 1 Investible surplus â‚ ¬59 million is cash generated from operations before finance costs, tax and dividends, which should be deducted. Besides, the additional operation cost incurred by human resources management should also be deducted in order to get the available cash for investment. 2. 1. 2Cost of finance S. No. AmountRate of InterestDetailsDuration for CYInterest Cost a. 12 m10%Oct- Dec ‘073 monthsâ‚ ¬0. 3 m b. â‚ ¬6 m8%Repayable in Sep 20101 yrâ‚ ¬0. 48m c. â‚ ¬15 m11%June 20121 yrâ‚ ¬1. 65m d. â‚ ¬20 m10%Jan-2008 to Dec ‘149 mthsâ‚ ¬1. 5m Totalâ‚ ¬3. 93 m Notes: a. â‚ ¬12 million loan at 10% repayable in December 2007 -As its repayable date is in December 2007, the interest expens e incurred in this accounting period is only for three months (October 2007 to December 2007). â‚ ¬12 million*10%*3/12 = â‚ ¬0. 3 million b. â‚ ¬6 million loan at 8% repayable in September 2010 -â‚ ¬6 million*8% = â‚ ¬0. 48 million c. â‚ ¬15 million loan at 11% repayable in June 2012 -â‚ ¬15 million*11% = â‚ ¬1. 5 million d. â‚ ¬20 million loan at 10% beginning in January 2008 and repayable in December 2014 -As this loan began in January 2008, the interest expense incurred in this accounting period is only for nine months (January 2008 to September 2008). â‚ ¬20 million*10%*9/12 = â‚ ¬1. 5 million 2. 1. 3 Tax expense As stated in the case, the post-tax profit for the year ended September 2008 will be â‚ ¬27 million. Based on the tax rate of 32%, the taxable income = â‚ ¬27 million/(1-32%) = â‚ ¬39. 7 million . Therefore, the tax expense = â‚ ¬39. 7 million*32% = â‚ ¬12. 7 million 2. 1. 4 Dividends In 2007, Solberri made a profit of â‚ ¬5 million and paid â‚ ¬2 million for dividends, which equals a dividend per share of â‚ ¬0. 083. It’s recommended that Solberri double the DPS this year, making the total dividends expenditure as much as â‚ ¬4 million. 2. 1. 5 Additional operation cost As is mentioned before, the high occupancy level this year will incur additional operational cost due to the employee recruitment, training and motivation. It’ estimated to be around â‚ ¬7. 5 million based on an estimated 12% increase compared with 2007 when the staff costs were â‚ ¬62 million. Cash Available for Investment( in million) Investible surplus( before deduction)= â‚ ¬59. 00 Less: Interest cost –â‚ ¬3. 93 Tax expense –â‚ ¬12. 7 Dividend expense –â‚ ¬4. 00 Additional operation cost –â‚ ¬7. 5 Net surplus= â‚ ¬30. 9 2. 2. Total cost for all four investment proposals : ProposalInvestment cost per hotelNumber of hotelsTotal cost Aâ‚ ¬9 million4â‚ ¬36 million Bâ‚ ¬6 million8â‚ ¬48 million C****â‚ ¬24 million Dâ‚ ¬15 million Total costâ‚ ¬123 million **Total cost for Proposal C = acquiring cost + refurbishing cost + marketing cost = â‚ ¬5 million +â‚ ¬16 million+â‚ ¬3 million = â‚ ¬24 million Total cost for Proposal D = â‚ ¬15 million 2. . Expected NPV of Proposal C As is shown in the case, when occupancy level equals 95%, the NPV will be â‚ ¬100. 0 million. When it’s 80%, the NPV will be â‚ ¬35 million. When it’s 50%, the NPV will be –â‚ ¬25 million. And their probabilities are 25%, 60% and 15% respe ctively. Therefore, the weighted average NPV = â‚ ¬100. 0 million*25% + â‚ ¬35. 0 million*60% +(-â‚ ¬25 million)*15% = â‚ ¬42. 2 million However the marketing cost of â‚ ¬3 million is excluded in the above NPV, so the expected NPV of Proposal C = â‚ ¬42. 2 million – â‚ ¬3 million = â‚ ¬39. 2 million 2. 4. Breakeven occupancy level of Proposal C When occupancy level equals 95%, the NPV will be â‚ ¬97 million. When it’s 50%, the NPV will be -â‚ ¬28 million. Thus, when the occupancy level decreases by 1%, the NPV will decrease by â‚ ¬2. 78 million. [â‚ ¬97 million – (-â‚ ¬28 million)] / (95-50) = â‚ ¬2. 78 million In this way, when the occupancy level changes by about 35% (97/2. 78), the NPV will decrease to zero. Therefore, the breakeven occupancy level is around 60%. 2. 5 Estimated cash retained Estimated cash retained = cash available for investment – investment costs = â‚ ¬30. 9 million –â‚ ¬24 million = â‚ ¬6. 9 million Comparison between Solberri and Shangri-la Asia Limited with the DuPont Model 3. 1 DuPont Model of Solberri 2007 Return on Equity (ROE) 0. 568 Return on Assets (ROA) 0. 3086? Equity Multiplier (EM) 1. 8409 Profit Margin 0. 0314? Total Asset Turnover 0. 9815 1 /(1—Debt Ratio 0. 4568) Net Income/Net Sales Net Sales/Average Total Assets Total Liabilities/Total Assets 3. 2 DuPont Model of Shangri-la Asia Limited 200 7 Return on Equity (ROE) 0. 1046 Return on Assets (ROA) 0. 1029? Equity Multiplier (EM) 1. 016 Profit Margin 0. 3069? Total Asset Turnover 0. 3354 1 /(1—Debt Ratio 0. 0159) Net Income/Net Sales Net Sales/Average Total Assets Total Liabilities/Total Assets Comparison between Solberri and Shangri-la Asia Limited with the DuPont Model 3. DuPont Model of Solberri 2007 Return on Equity (ROE) 0. 0568 Return on Assets (ROA) 0. 3086? Equity Multiplier (EM) 1. 8409 Profit Margin 0. 0314? Total Asset Turnover 0. 9815 1 /(1—Debt Ratio 0. 4568) Net Income/Net Sales Net Sales/Average Total Assets Total Liabilities/Total Assets 3. 2 DuPont Model of Shangri-la Asia Limited 2007 Return on Equity (ROE) 0. 1046 Return on Assets (ROA) 0. 1029? Equity Multiplier (EM) 1. 016 Profit Margin 0. 3069? Total Asset Turnover 0. 3354 1 /(1—Debt Ratio 0. 0159) Net Income/Net Sales Net Sales/Average Total Assets T Solberri Hotel January 20 2012 This report is in response to the request by Solberri hotel group for a review of its facing issues and identification of possible solutions. Consulting report ? STATE OF AFFAIRS Solberri is a group of resort hotels registered as a listed company with 12 resort hotels in Europe. Established in the 1980s, it had run successfully until 2003 and also incurred losses in 2005 and 2006. To improve the situation, Solberri implemented strategy changes to the hotel operating environment such as the pricing changes and a refurbishment program. With these adjustments, situation gets better with a large forecast cash surplus in this financial year. Currently the chain of hotels is faced with critical issues revolving around its operation including human resources that are better explained with the help of SWOT analysis in Appendix 1. It is important for Solberri to make use of the management tools to understand the current situation and to achieve the revenue target, increased share holder value and better customer satisfaction. ? ISSUES IN HAND Solberri is faced with multiple issues that act as a barrier to meet their goals and target. From our review and understanding of the environment we put forth the below issues and rank them as priority and other issues. Priority issues: †¢Poor customer experience that could be a result of ethical issues such as oPoor treatment of General manages and senior employees. oMisdistribution of tips oInvestment in unprofitable environmentally friendly initiatives. †¢The potential need to borrow money to enhance spas before the 2007/08 Peak season †¢The need to raise occupancy rates and earnings generated from extra charges to hit the planned revenue for the financial year ending September 2008 †¢The poor share price and vulnerability of Solberri Other issues: †¢Installation of solar panels Non-participation in the international star ratings system †¢Potential problems with the quality of outsourced services †¢Upgrading website to include a virtual tour of facilities . ? ISSUE ANALYSIS In this section, the analysis is done for top priority issues. Customer service and relevant HR issues. The quality of customer service is crucial to companies’ survival in service ind ustry. Unfortunately, the service provided by Solberri failed to meet the expected standard of its customers. The main reason for poor customer service is employees’ lack of skills and motivation. The majority of Solberri employees are temporary, with limited knowledge of the hotel industry and relevant skills. Besides, all short-term employees only receive two days introduction training which is apparently insufficient. The customer service can be improved in two aspects. In the short term, Nick Silva, customer service Director, needs to review staffing level immediately to meet the upcoming demand. Strict selection and a specific regular training program are needed to ensure the quality of its employees. In the long term, adjusting the ratio of the number of long-term employees to that of short-term ones is necessary. Too many temporary employees lead to poor customer service and low stock of talents, resulting in General managers working long hours and under high stress (more details in ethical issues). Though more long-term employees mean more costs, the benefits from improved customer service will outweigh the costs. Furthermore, because recognition of employees’ efforts can stimulate them to offer better service, some motivation measures are recommended. According to ERG theory, people in different levels have different needs. Most temporary employees are in the existence level, they need money to maintain their existence requirements, and therefore incentives such as bonus will be useful. However, most long-term employees are in relatedness and growth level, so incentives such as vocation award or decision making involvement will be suitable. With the new recruitment, training and incentives, it’s estimated that an additional employee cost of â‚ ¬7. 5 million will be incurred, a 12% increase from last year. Ethical issues Two ethical issues will be discussed in this report. a. Poor treatment of employees. General Managers and key senior employees are working under high stress over 16 hours every day. Solberri gets into ethical issue of overworking employees and paying no compensation. Due to a shortage of senior employees, their workload is unlikely to be reduced immediately. Therefore, the hotel should compensate for their overwork. To solve this problem fundamentally Soberri should reserve sufficient elites by increasing its long-term employees. b. Misdistribution of tips. When Solberri collected all the tips and evenly distributed them to employees, an ethical issue arose for the transparency and fairness of such distribution. Such controversial tips distribution should be changed back to the traditional way—employees can keep the tips for themselves. For those non-facing-customer employees who don’t get tips, Solberri is recommended to increase their bonus to make up the difference. Forecast cash surplus investment issue Before analyzing the four proposals, it’s important to know how much cash is available for investment. Since Solberri is under loan covenants and other financing alternatives such as rights issue can’t raise funds in a short time, the only source of funds is the internal capital. It’s estimated that 59 million cash will be generated from operations in this financial year. After deducting finance costs, tax, dividends and additional HR reform costs in the first issue, there’s only â‚ ¬30. 9 million cash available. (Appendix 2. 1) The total amount for the four proposals is â‚ ¬123 million (Appendix 2. 2). Solberri has to perform a cost benefit analysis to choose the most rofitable proposal as it is clear that Solberri doesn’t have enough funds to implement all of them. Proposal A is to extend the number of rooms at the four â€Å"Premier† hotels by adding each another 200 rooms and supporting facilities. It’s estimated to generate â‚ ¬10 million NPV for each hotel over a 5-year period based on an 80% occupancy level. However, this may h ave some negative effects since the additional rooms and facilities make the hotel more crowded and less comfortable. Therefore, the 80% occupancy level is not guaranteed. Besides, it’s just the first year that Solberri has had such high occupancy levels. Extending the number of rooms in such a large scale is too risky. Proposal B is to invest in refurbishment and extend spa facilities at the remaining hotels. The forecast cost is â‚ ¬6 million for each hotel. The high level of bookings at the 4 â€Å"Premier† hotels during the 2008 Peak season has demonstrated the success of the refurbishment plan. So this proposal contains relatively little risk. Furthermore, spa facilities have become a key selling point in resort hotels. This new trend provides great opportunity for Solberri to escape from the Red Ocean, the very competitive market of traditional resort hotels. By differentiating itself by providing exclusive spa facilities, Solberri can successfully grab the Blue-ocean market, namely the profitable and rapidly-developing market of resort hotels with exclusive spa facilities. Finally, refurbishing the hotels can improve Solberri’s profit margin. However, refurbishing all the remaining hotels simultaneously is beyond Solberri’s financial ability. It’s recommended that Solberri refurbish only three hotels—two â€Å"Superior† and one â€Å"Super Plus†. Refurbishing the â€Å"Super Plus† hotels is riskier since there is no previous experience and the refurbishment will need to close permanently 15 rooms in each hotel. But if Solberri only refurbish â€Å"Superior† hotels, in a short time, there will be a gap in middle-priced hotels, which is unfavorable to the company’s strategic development. Proposal C is to acquire an additional resort hotel costing 24 million. The expected NPV is â‚ ¬39. 2 million (Appendix 2. 3). Besides, the breakeven occupancy level is 60% (Appendix 2. 4), which is quite easy to achieve. So Proposal C seems profitable with reasonable risk. However, the initiate cost is too large as it’s for only one hotel. Compared with Proposal B, it’s too risky for Solberri in its first year with such good performance. Proposal D is to invest in environmentally friendly initiatives including the installation of solar panels costing â‚ ¬6 million and other environmental initiatives costing â‚ ¬9 million. Though investing in these initiatives cannot generate profits for the company directly, it can help establish Solberri as a socially responsible company which will be positive to its image. But funds are so limited that investing in all these in unrealistic. It’s recommended that Solberri invest in the solar panel project first since it can produce cost savings of 0. 6 million per year and defer the others. Loan covenant restriction The â‚ ¬20 million loan negotiated at the end of 2007 has loan covenants restricting the company’s further loan financing within 2 years from December 2007, resulting in a probable capital shortage for its future development. Solberri can try negotiating with the bank for removal of restriction by showing them the latest forecast figures and the high level of bookings. However, the good performance of only one year wouldn’t be convincing enough to the bank. Solberri can also try refinancing by issuing additional stocks through public offering or private placement. However, due to the relatively high standard and costly registration of public offering, private placement is preferable. With low threshold for issuing, private placement is feasible for Solberri whose business just began to pick up after slow seasons. With the good performance this year, it’s probable that the Solberri will attract strategic investment from institutional investors via private placements to ensure its future development. The poor share price and vulnerability of Solberri RECOMMENDATION Customer service and related HR issues. It is recommended that Solberri immediately work out a plan for recruitment and training, to ensure job fit and effective training among all employees. Employees who can’t provide the high standard of service will be refused or assigned to non-facing-customer positions. Moreover, Solberri should set up appropriate motivation mechanisms such as bonus and vacation rewards. It is also recommended that Solberri enlarge its long-term employee proportion by training some short-term employees to be skillful long-term ones. In this way, more employees will cultivate a sense of responsibility and can handle the previous temporary employees’ work in non-peak season. Ethical issues It’s recommended that Solberri compensate for employees’ overwork. In the long run, the company needs to enlarge its senior employee reserve. It’s recommended that Solberri abandon its controversial tips distribution and set up a bonus system for non-facing customer employees to make up their income difference. Forecast cash surplus investment issue It’s recommended that Solberri spend its forecast cash surplus on Proposal B to refurbish and extend the spa facilities at two â€Å"Superior† hotels and one â€Å"Super Plus† hotel, which costs â‚ ¬18 million in total. Since it’s just the first year Solberri has performed so well in these years, it’s better for it to be conservative towards investment. It’s also recommended that Solberri invest in the installation of solar panels at all 12 hotels costing â‚ ¬6 million and postpone other environmentally friendly initiatives due to its limited funds. These two plans will result in â‚ ¬6. 9 million cash retained (Appendix 2. ), which will help improve the liquidity of Solberri. . Loan covenant restriction It is recommended that Solberri try to negotiate with the bank for removal of the restriction. If it’s not workable, Solberri could try seasoned equity offering to refinance either by public offering or private placement, while private placement seems to be most feasible for Solberri and thus is highly recommended. If external financing doesn’t work, it is highly recommended that Solberri try all means to control its costs. The poor share price and vulnerability of Solberri ? CONCLUSION Solberri is now at a crucial time since it’s the first time it has had such good performance in these years. It is now facing several important issues. The most important ones are how to solve the poor customer service problem and which investment proposal to choose for its future development to increase the occupancy level for all the hotel rooms. It is believed that the analysis and recommendations above can serve as useful references for its decision-making. Solberri has to differentiate itself in the market through a shift by showcasing its spa facilities as its forefront in capturing holiday makers. With a change in visa regulations in Europe Solberri may opt to pay more attention to its local clients by offering the day use of the hotel’s services and facilities during non-peak seasons. To position itself as a â€Å"holiday resort hotel†, there should be a refurbishment of Solberri’s hotels to â€Å"Premier† standards ? SWOT ANALYSIS STRENGTHS †¢Good reputation with a long history; †¢Proven track record of range of spa facilities †¢Successful refurbishment program †¢Many of long-term employees have worked for Solberri for over 10 years with rich experience. †¢Stable co-operation with several travel agents. Experienced board directors. †¢High sense of Corporate Social Responsibility( 1 hotel won a bronze award in the Green Tourism business awards, 2007 †¢High level of bookings for Peak season 2008 with large cash surplus forecast WEAKNESS †¢Outdated information technology systems. †¢Restrictive loan covenan t. †¢Difficulty in enforcing agreed quality service levels. †¢Declining share price compared to 2002 †¢Poor customer service with disappointing customer feedback. †¢Low level of repeat booking. †¢Lack of motivation of short-term employees. †¢Poorly structured financial planning. Resignation of Finance Director. OPPORTUNITIES †¢High level of bookings and a forecast cash surplus of â‚ ¬59 million which can be used for further expansion, refurbishment program, paying dividends, and(or) meeting CSR by investing in environmentally friendly initiatives; †¢ Huge potential market for Spa service †¢Pricing structure changes to boost occupancy levels †¢Effective use of variety of media to generate more sales THREATS †¢ External completion from other hotel industries †¢ Understaffing and poor service to meet the high level booking that could impact reputation †¢Resistance from Competitors having state of art information techno logy can be market leaders. †¢ Fall in spa revenues of one â€Å"premier† hotel due to a rival business operated by an ex-manager. †¢Difference of opinion amongst management staff may delay the strategy implementation. WORKINGS 2. 1. 1 Investible surplus â‚ ¬59 million is cash generated from operations before finance costs, tax and dividends, which should be deducted. Besides, the additional operation cost incurred by human resources management should also be deducted in order to get the available cash for investment. 2. 1. 2Cost of finance S. No. AmountRate of InterestDetailsDuration for CYInterest Cost a. â‚ ¬12 m10%Oct- Dec ‘073 monthsâ‚ ¬0. 3 m b. â‚ ¬6 m8%Repayable in Sep 20101 yrâ‚ ¬0. 48m c. â‚ ¬15 m11%June 20121 yrâ‚ ¬1. 65m d. â‚ ¬20 m10%Jan-2008 to Dec ‘149 mthsâ‚ ¬1. 5m Totalâ‚ ¬3. 93 m Notes: a. â‚ ¬12 million loan at 10% repayable in December 2007 -As its repayable date is in December 2007, the interest expense incurred in this accounting period is only for three months (October 2007 to December 2007). â‚ ¬12 million*10%*3/12 = â‚ ¬0. 3 million b. â‚ ¬6 million loan at 8% repayable in September 2010 -â‚ ¬6 million*8% = â‚ ¬0. 48 million c. 15 million loan at 11% repayable in June 2012 -â‚ ¬15 million*11% = â‚ ¬1. 65 million d. â‚ ¬20 million loan at 10% beginning in January 2008 and repayable in December 2014 -As this loan began in January 2008, the interest expense incurred in this accounting period is only for nine months (January 2008 to S eptember 2008). â‚ ¬20 million*10%*9/12 = â‚ ¬1. 5 million 2. 1. 3 Tax expense As stated in the case, the post-tax profit for the year ended September 2008 will be â‚ ¬27 million. Based on the tax rate of 32%, the taxable income = â‚ ¬27 million/(1-32%) = â‚ ¬39. 7 million . Therefore, the tax expense = â‚ ¬39. 7 million*32% = â‚ ¬12. 7 million 2. . 4 Dividends In 2007, Solberri made a profit of â‚ ¬5 million and paid â‚ ¬2 million for dividends, which equals a dividend per share of â‚ ¬0. 083. It’s recommended that Solberri double the DPS this year, making the total dividends expenditure as much as â‚ ¬4 million. 2. 1. 5 Additional operation cost As is mentioned before, the high occupancy level this year will incur additional operational cost due to the employee recruitment, training and motivation. It’ estimated to be around â‚ ¬7. 5 million based on an estimated 12% increase compared with 2007 when the staff costs were â‚ ¬62 m illion. Cash Available for Investment( in million) Investible surplus( before deduction)= â‚ ¬59. 00 Less: Interest cost –â‚ ¬3. 93 Tax expense –â‚ ¬12. 7 Dividend expense –â‚ ¬4. 00 Additional operation cost –â‚ ¬7. 5 Net surplus= â‚ ¬30. 9 2. 2. Total cost for all four investment proposals : ProposalInvestment cost per hotelNumber of hotelsTotal cost Aâ‚ ¬9 million4â‚ ¬36 million Bâ‚ ¬6 million8â‚ ¬48 million C****â‚ ¬24 million Dâ‚ ¬15 million Total costâ‚ ¬123 million **Total cost for Proposal C = acquiring cost + refurbishing cost + marketing cost = â‚ ¬5 million +â‚ ¬16 million+â‚ ¬3 million = â‚ ¬24 million Total cost for Proposal D = â‚ ¬15 million . 3. Expected NPV of Proposal C As is shown in the case, when occupancy level equals 95%, the NPV will be â‚ ¬100. 0 million. When it’s 80%, the NPV will be â‚ ¬35 million. When it’s 50%, the NPV will be –â‚ ¬25 million. And their probabilities are 25%, 60% and 15% respe ctively. Therefore, the weighted average NPV = â‚ ¬100. 0 million*25% + â‚ ¬35. 0 million*60% +(-â‚ ¬25 million)*15% = â‚ ¬42. 2 million However the marketing cost of â‚ ¬3 million is excluded in the above NPV, so the expected NPV of Proposal C = â‚ ¬42. 2 million – â‚ ¬3 million = â‚ ¬39. 2 million 2. 4. Breakeven occupancy level of Proposal C When occupancy level equals 95%, the NPV will be â‚ ¬97 million. When it’s 50%, the NPV will be -â‚ ¬28 million. Thus, when the occupancy level decreases by 1%, the NPV will decrease by â‚ ¬2. 78 million. [â‚ ¬97 million – (-â‚ ¬28 million)] / (95-50) = â‚ ¬2. 78 million In this way, when the occupancy level changes by about 35% (97/2. 78), the NPV will decrease to zero. Therefore, the breakeven occupancy level is around 60%. 2. 5 Estimated cash retained Estimated cash retained = cash available for investment – investment costs = â‚ ¬30. 9 million –â‚ ¬24 million = â‚ ¬6. 9 million Comparison between Solberri and Shangri-la Asia Limited with the DuPont Model 3. DuPont Model of Solberri 2007 Return on Equity (ROE) 0. 0568 Return on Assets (ROA) 0. 3086? Equity Multiplier (EM) 1. 8409 Profit Margin 0. 0314? Total Asset Turnover 0. 9815 1 /(1—Debt Ratio 0. 4568) Net Income/Net Sales Net Sales/Average Total Assets Total Liabil ities/Total Assets 3. 2 DuPont Model of Shangri-la Asia Limited 2007 Return on Equity (ROE) 0. 1046 Return on Assets (ROA) 0. 1029? Equity Multiplier (EM) 1. 016 Profit Margin 0. 3069? Total Asset Turnover 0. 3354 1 /(1—Debt Ratio 0. 0159) Net Income/Net Sales Net Sales/Average Total Assets Total Liabilities/Total Assets Comparison between Solberri and Shangri-la Asia Limited with the DuPont Model 3. 1 DuPont Model of Solberri 2007 Return on Equity (ROE) 0. 0568 Return on Assets (ROA) 0. 3086? Equity Multiplier (EM) 1. 8409 Profit Margin 0. 0314? Total Asset Turnover 0. 9815 1 /(1—Debt Ratio 0. 4568) Net Income/Net Sales Net Sales/Average Total Assets Total Liabilities/Total Assets 3. 2 DuPont Model of Shangri-la Asia Limited 2007 Return on Equity (ROE) 0. 1046 Return on Assets (ROA) 0. 1029? Equity Multiplier (EM) 1. 016 Profit Margin 0. 3069? Total Asset Turnover 0. 3354 1 /(1—Debt Ratio 0. 0159) Net Income/Net Sales Net Sales/Average Total Assets T