Government Legislation And Market Structure Of Airline Industry Economics Essay

Government Legislation And Market Structure Of Airline Industry Economics Essay Over the past two decades the airline industry has experienced major changes that has affected the overall structure and segmentation of the market. The Low-Cost Carrier (LCC) market has stolen ground on the established market, at a substantial rate. This essay will focus on the Low-Cost Carrier (LCC) market and in particular will look at the easyJet firm based in Luton, England. The essay will asses the position that easyJet has acquired in the European airline market and the microeconomic factors that affect the firm. In addition, the essay will provide an analysis of how past, current and future prospects of the economy and how macroeconomic factors influence easyJets growth. Finally, based on analysis of the key discussions raised throughout the essay, a set of recommendations will be made outlining possible strategies that the firm could consider in order to prosper further. History of easyJet Greek entrepreneur Stelious Haji-Ioannou founded easyJet in 1995. The company was created to take advantage of the deregulation of the European Airline industry and to offer customers a low cost alternative. The company along with Ryanair pioneered the no-frills airline. The reduction of costs lies at the core of the low-cost business model, which aims to offer lower fares, eliminating some comfort and services that were traditionally guaranteed (Malighetti, Paleari Redondi. 2009). EasyJet was floated on the stock market in 2000. It has grown since then into a leading European Low-Cost Carrier. The company provides airline services on short-haul and medium-haul point-to-point routes, operating primarily in Europe on over 400 routes. SECTION 1, MICROECONOMICS: Government Legislation Market Structure: In the past the European airline industry was characterized by an oligopoly market structure, a form of imperfect competition in which a limited number of firms dominated the industry (Rubin Joy, 2005). However although airlines may use oligopoly market power to restrict competition, new innovative firms can carve out a niche, which is the strategy of easyJet (Rubin Joy, 2005) In order to stimulate competition, during the 1980s the European Commission implemented the open skies legislation. This aimed to liberalise air travel within the European Community and challenge the cartel of flag-carrying national airlines such as British Airways, Air France and Lufthansa which controlled 40% of the available passenger-kilometers on scheduled intra-European flights through bilateral agreements, regulated by the International Air Transport Association (IATA) (Ghoshal, Lefefebure, Jorgensen Staniforth, 1988) As easyJets annual report in 2001 eludes to the market environment for too long, many of Europes airlines have considered themselves immune from the realities of their operating environment. State aid, entrenchment at Europes busiest airports and favourable restrictive bilateral agreements have been used to prevent proper competition from sweeping continental Europe. According to Rubin et al., (2005) although high entry costs of aircraft acquisition and other capital requirements make entry difficult, the industry appears more contestable (e.g. imperfectly competitive but subject to potential entry if warranted by prices or profits). This paved the way for the LCCs to enter the market, armed with completely different business models which have erode the dominant carriers market share even at large hub airports. Figure 1 shows how the UK in particular where easyJet are based have taken to the LCC idea. Figure 1 Low Cost Carriers operating to/from major European countries by frequency in November 2005 Source: OAG MAX Online. February 2006 Competitive analysis: The airline industry is characterised by high levels of competition, therefore the profit margins can be result in low returns. Because profit margins are very small, during a recession or a lull in demand airlines can become bankrupt within a short space of time. In order for easyJet to sustain there profit growth they rely on very quick turnarounds in order to maximize there profit. In addition the expansion of the Internet has made the pricing of fairs more transparent to the customer and has eradicated the travel agents fee, which has brought huge cost savings for airlines. These costs have been passes onto to the passengers, which has triggered a boom in flight capacity. However, the internet has also resulted in more price comparison websites for the price sensitive customer to compare ticket prices from different airlines. Customers now do not have much loyalty towards specific airlines, as they are more concerned with finding the cheapest price for their journey. However easyJet have now become one of the leading LCC airlines in the UK as illustrated by market share in Figure 2. Figure 2 Shows the dominance of both easyJet and Ryanair that have a large market share in the UK. Figure 2 Low Cost Carriers to/from the UK Source: OAG MAX Online. March 2006 Major determinants of demand: The demand for air travel is sensitive to changes in easyJets own prices, the price of related goods, incomes and individual taste preferences. However the degree of sensitivity is dependent on varying market conditions. EasyJets own price The low cost carriers have profoundly changed the airline industry, by increasing the demand for air travel. Alertness to latent demand, characterized by the passengers willingness to pay elastic prices, which is not the attitude of the so-called traditional passengers, is among the key factors of easyJets success (Pels and Rietveld, 2004). Because of the their alternative business plan, easyJet are able to offer a reduced price to customers. The price choices and the ability of the airlines to understand the characteristics of the demand are decisive in the balance of the business model itself (Malighetti, Paleari, and Redondi, 2009) The Internet has also increased the transparency of costs and allowed customers to compare prices instantly. There is now no loyalty, because customers will most often than not choose the cheapest ticket. No-frills airlines tend to use simplified pricing structures based on demand regulated single fares or flexible return tickets without the high- cost premium fares required by mainstream airlines for fully flexible travel (Baum, 1997). Lower fares have meant that those more frequent shorter holidays are not necessarily a more expensive option and the trend towards more flexible booking arrangements has encouraged this development (Graham, 2006). Price of related goods: The price of substitute goods and the consumers purpose of travel consistently affect the demand for easyJets services. There are numerous forms of substitutes that could cater for the customers needs such as travelling by car domestically or by train internationally. The structure of demand, which guides the optimisation choices of the carrier, is influenced by the presence of competitors, and the passengers opportunities to opt for a substitute service (Malighetti, Paleari, and Redondi, 2009) Therefore if Eurostar decreased their prices to travel from London to Paris then this would affect the demand for and the price customers are willing to pay to travel with easyJet. In addition airline passengers usually travel for different purposes, either leisure, business or to visits friends and family. Typically, business travelers have lower demand elasticity, and higher willingness to pay than leisure travelers. (Alves, and Barbot, 2009) Income The demand for travel is also affected by the average household income. If the household income increases so does the purchase of luxury goods such as travelling abroad. On this basis a elasticity multiplier of 1.1 is used to adjust air travel price elasticitys for short-haul flights (Deaton, 1975). Tastes SECTION 2: MACROECONOMICS This section of the essay will asses how past current and future prospects of the economy has affected easyJet. Monetary and Fiscal policy: Monetary policies in the shape of interest rates affect the demand on the airline industry. Higher interest rates raise the retail price index by raising the cost of living. This has made borrowing from banks more expensive and coupled with the current economic climate has had a negative impact on consumer expenditure. Therefore people have less disposable income to spend on travelling aboard. Figure 3 Relationship between Interest rates easyJets annual total profit Source: Bank of England As Figure 3 illustrates, between 2005 and 2007 there was a sharp increase in easyJet profits. However, because of the recent economic recession the Bank of England have responded to the current climate by reducing their interest rates from 5.5% to 2.0% to try and stimulate the economy. EasyJet are affected by fiscal policies through the implementation of tax duties on air carriers. The government allocate these fees to fund for increased security needed since the September 11th terrorist attack and support operations at airpark facilitates. As the graph illustrates during the 2007-2008 period there was a sharp decline in profits due to the unexpected doubling of Air Passenger Duty (APD) in the UK (easyJet Plc Annual report, 2007). Although the government use fiscal policies to try and stabilise the airline industry, they ultimately decrease the already tight profit margin that easyJet operates under. In addition the future of the airline industry seems likely that there will be more taxes levied at easyJet and the airline industry as a whole. As easyJets annual (2008) reports states the European Union has now finalised the terms of aviations entry into the Emissions Trading Scheme (ETS). This will require us, from 2012, to hold carbon emission allowances to cover our CO2 emissions. ETS is a cap and trade scheme, covering many sectors, and is designed to ensure that carbon emissions in the EU are reduced as efficiently as possible. Crude oil The airline industry uses kerosene, which is now ranked as the third highest petroleum because it is widely available and can withstand a wide range of temperature fluctuation. Therefore, the price of kerosene has an obvious and direct impact on the cost of easyJets and the airline industry as a whole, because it is one of the major costs occurred in the business. Figure 4 The relationship between Crude Oil and easyJets net profit Source: U.S. Energy Information Administration, Independent Statistics Analysis Figure 4 illustrates the relationship between crude oil prices and easyJets total revenue. As you can see from the graph there is a direct correlation between the two values. Crude oil has been rising astronomically since 2000. EasyJets annual report highlighted the affect that oil is having on their profits the price of oil, which constituted some 14% of our costs for the year ended 30 September 2004 (easyJet Plc Annual Report, 2004). In 2008 the price of oil was still high on the agenda of easyJets annual report, which stated The price of fuel rose to unprecedented levels and less well positioned competitors struggled to survive resulting in capacity exiting the market. In addition it is alarming to realise that the price of jet fuel has risen by more than 50% in the last year. This is directly affecting easyJets baseline profits as Table 1 demonstrates. (IATA Website, 2010) Table 1 This weeks price of aviation jet fuel Percentage change vs. 1-Jan-10 Index* $/b cts/gal $/mt 1 week ago 1 month ago 1 year ago Jet Fuel Price 241.7 88.4 210.5 696.7 3.7% 1.6% 50.3% Sourced from Platts  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   * 100 in 2000 (87 cts/gal) Increases in fuel prices have an obvious affect on the operation, but they also trigger economic recessions, which in turn result in a substantial decline in demand for air travel and air cargo. However, like many other industries that rely on crude oil high prices forces them to cut down their use or look for alternative resources. In order to tackle this problem easyJet have bought fleets of new airliners. To offset this, we are concentrating both on operating the most fuel-efficient aircraft and reducing costs elsewhere (easyJet Plc Annual Report, 2004). The new aircrafts are more fuel-efficient enabling them to reduce the expenditure on fuel. In addition, when fuel prices are raised it also affects the consumers decision on whether to fly at all or look for substitute modes of transport. GDP Growth: GDP growth has historically been a key determinant of the leisure travel demand and it continues to play an important role in many forecasting models (Graham, A. 2006). EasyJet and the airline industry are affected by the overall condition of the national and international economy. When there is a healthy economy the nations expenditure on travel increases. However, when there is an unhealthy economy the buying habits of the consumer falls because travelers will have fewer resources available to travel for pleasure. Figure 5 The relationship between GDP and easyJet net profit Source: Office for National Statistics As the graph illustrates 2002 and 2003 there was a sharp decrease in easyJets profit. A statement from the annual report attributes these facts to the War in Iraq, economic uncertainty and the SARS epidemic all adversely affected sentiment about travel, both business and personal (easyJet Plc Annual Report, 2003). However, A fundamental weakness in comparing travel growth to economic growth is that ignores the important influence that travel cost or price can play. The travel cost will determine the amount of income that needs to be spent on travel (Graham, A. 2006). Recent reports have suggested that the UK and the rest of Europe are slowly emerging from the recent recession. This should help to contribute to easyJet reaching its projected growth forecasts. Conclusion: Based on the previous analysis of discussion that was raised I will now sate recommendations and describe possible strategies easyJet could consider to increase their net profit. The current economic conditions have had an adverse affect on the airline industry as a whole. The near future may see more mergers of airlines in order to survive or heavy consolidation of their routes. The future of easyJet is heavily reliant on outside influences. However, because the easyJet company is based on a low-cost business plan coupled with the fact that population is rising, one could argue that they are in a better position to weather the storm and increase market share. In order to take advantage of the current situation easyJet need to face a number of problems. There is no question that the price of fuel is playing a significant role in the underlining profit of the easyJet company. Both in terms of the reduced profit margin and the overall affect the price of oil can have on the overall economy, history has shown us that it can contribute to the manifestation of recessions. However because the price of oil is set externally it is out of easyJets control, therefore there is need to explore alternative avenues of curtailing the effect that oil prices has on the easyJet company. One solution to reducing the affect that oil prices has on easyJet is by investing in more fuel efficient aircraft that reduce the amount of miles per gallon. As technology is moving forward at a unprecedented pace new airliners are becoming more aerodynamic, using lighter materials and pilots are utilising more cruise control technologies so that the consumption of fuel is used more efficiently. In addition, investing in more fuel efficient aircrafts will reduce the amount of money that will need to be paid in 2012 when the new Emissions Trading Scheme is enrolled, which is designed to ensure carbon emissions are reduced as efficiently as possible. Another alternative method to curbing the affect oil prices is to invest in research and development of alternative fuels. Although this may initially require large investments, but if alternatives are found easyJet will be ideally placed to be one of the first airlines to take advantage of new technologies and pass the savings onto their customers. In recent years easyJet has expanded its operations around Europe especially in Italy, France and Spain with nearly half of easyJets passengers now originating from outside the UK (easyJet Plc Annual Report, 2008). However, these expansions may have caused their operations to slip in their overall efficiency. Because of the nature of easyJets business plan, the company relies on very quick turnarounds at airports and highly efficient operations in order to maximise their profit margin. Therefore it would be beneficial for easyJet if they were to focus on economies of scale by making their operations more lean in order to increase profit margins. Because customers are becoming price sensitive to airline prices, another strategy that could prove beneficial is to target the business class who will have less of a price elasticity compared to leisure travellers who do not necessarily have to use easyJets services. In order to appeal to the business class easyJet will need to offer more flexible and more frequent services to the major business capitals in Europe.

Discuss the significance of the chapter titles of the novel in regard to theme in Amy Tan’s The Joy Luck Club

In Amy Tan's The Joy Luck Club, as in most other existing novels, the titles of each chapter holds a distinct significance in regard to the content of that chapter. It could be argued that Amy Tan selects the words for her titles carefully in order to attain the highest level of analogical, and metaphoric purpose from them. An analysis of each of the chapter titles in regard to the main ideas and messages Amy Tan is putting across highlights the purpose of each of them, and displays the metaphoric and analogical concepts that each hold. The title of the first chapter is a repetition of the title of the book. Amy Tan probably does this deliberately so as to focus the reader. The title itself, The Joy Luck Club, directly refers to the name of a club formed by all the four mothers in the book. At this club, all the mothers who are the co-main characters in the book are members. Around the Mah Jong table, the four women gossip and gamble. This is the most likely cause of the name, The Joy Luck Club, in the way that it was fun and enjoyable talking and telling tales, but one also needed luck in order to win the games of Mah Jong. The Joy Luck Club is founded by the women immigrants, so as to keep a part of Chinese tradition alive in the new world they were in. This is backed up partially by the quote in the book, â€Å"My mother started the San Francisco version of the Joy Luck Club in 1949† (6). The chapter is mainly focusing on the human needs to be surrounded with feelings of familiarity; the reason the club wa s founded in America. Scar is the title of the second chapter. As a representation of the sequences in the chapter, the title gives us a good basis as of what to expect in the chapter. For example, a scar is the result from someone receiving a deep wound. This is the case as the plot in this part of the book is about a little girl who gets burnt, has a mother who left her, and whom she eventually sees again. The title also holds an analogy. That is the analogy of the emotional healing process. Amy Tan uses this analogy in describing the pain inflicted upon the girl, by the mother, in relation to the pain inflicted on the girl by the hot soup. This analogical and metaphoric purpose Amy Tan intends with this can be directly drawn from the chapter itself In two years time, my scar became pale and shiny and I had no memory of my mother. That is the way the way it is with a wound. The wound begins to close in on itself, to protect what is hurting so much. And once it is closed, you no longer see what is underneath, what started the pain(40) This seems to be the way, in the human emotional and physical healing process, it takes time. Amy Tan uses the title, The Red Candle for her third chapter. In the plot of this part, a daughter of one family is being married to a man from another family. In the festivities, it is Chinese tradition to light a candle that has two ends. This represents the longevity of the marriage, and the commitment of the two involved. As the main plot in the chapter is the marriage the title reflects the content, and so is another good selection by Amy Tan. In regard to the theme of this chapter, the red candle, is representing the strength of the marriage, stated in the book, â€Å"That red candle was supposed to seal me to my husband and his family, no excuses afterward†(55). If the candle goes out the marriage is not strong, where as if it doesn't the marriage can never be broken, â€Å"‘This candle burned continuously at both ends without going out. This marriage can never be broken'†(54). As the burning candle represents the impermanence of a marriage, as there is no way a candle, in the situation as the one in the book, could burn to the end without going out, the girl who actually blows it out, along with the wind, and the servant who leaves the candle unattended all represent the intangible forces a marriage encounters. In all, the red candle has a very metaphoric purpose in this chapter, as a title, and theme. The Moon Lady is the title of the next chapter. The title comes directly from the name given to a particular demigod in the Chinese tradition. As the plot of this area focuses mainly on the Moon festival, celebrating the Moon Lady, and the little girls wish to the Moon Lady, it would appear that Amy Tan has chosen an appropriate title for this part. The main idea the author is trying to put across here is the reliance and desire for hope that human society has. Therefore beliefs that support the idea of hope, even in an irrational form, such as the idea of a moon lady, are popular. The idea of this is backed up in the book, â€Å"It is my earliest recollection: telling he moon lady my secret wish.†(65). The Moon Lady is symbolic of hope. In the next chapter, the title is relatively straight forward in its relation to the Content. The Rules of the Game, is referring to the rules of chess, the game that the young child is playing. This chapter is also showing the learning that is coherent in life, that the girl is experiencing. So this chapter title was selected for that purpose, showing the rules the girl is learning. The author uses the word rules, as a metaphor for life's experiences, and how to deal with them. In human society, there are many different situations which require a certain way to act, that is not written, or spoken, but expected, and needed in order to survive. In Chinese society however, there are many ways to approach situations that are spoken about. These are the rules. The game is a metaphor for life. So Amy Tan uses the title in a very blatant and a very subtle metaphoric way. In chapter six, the title The voice from the wall is given. In the physical sense, the voice from the wall is the voices of the mother and child fighting next door, to the girl in the story. In a metaphoric sense, the title is given as to represent a different side of thought. For instance, in the story, the girl misinterprets what she is hearing from next door as murder rather than just a fight occurring between a mother and child, â€Å"She didn't seem like a girl who had been killed a hundred times. I saw no traces of blood-stained clothes†¦Ã¢â‚¬ (115). This title is hinting at the human side of us that limits our way of looking at things. It is suggesting that at times we perceive one thing when really it is another, grabbing the wrong end of the proverbial stick. The voice in the title is the other view of the situation, and the wall can be seen as the situation. Amy Tan here again uses her title to perform a discreet metaphoric purpose. The chapter title, Half and Half arises from the daughters realization of how fate is formed. She sees fate as being the result of two things, expectation and inattention, â€Å"And I think now that fate is shaped half by expectation, half by inattention†(140). This title is used to reflect the troubled marriage of the daughter in this story, and the loss of a little boy. The author is focusing on the area of human behavior that leads to events caused by our unlimited expectations and ignorance leading to inattention. The title has no sense of physically describing anything in the story, as in previous chapter titles. The next chapter is a story of a child, whose mother forces her to learn the piano, in the hope of her becoming a prodigy. This chapter is entitled Two Kinds. As a title it holds little significance physically until the end where the daughter finds two halves to a piece of music she once played, â€Å"And after I played them both a few times, I realized they were two halves of the same song†(155). In relation to theme, the title holds a strong relation to the main points of emotional duality that the author is touching on. The main idea, being, the two sides of a mind that see things from different perspectives. There is the side that always an endless capacity to desire, and the side that makes us grateful for what we already had. This is summed up in the book, â€Å"†Pleading Child† was shorter but slower; â€Å"Perfectly contented† was longer but faster†Ã¢â‚¬Ëœ(155). This supports the idea of the daughter of the seeing the two sides of her life as a child, the way she saw it then, ‘Pleading Child', being pushed around and wanting more than she had, and the way she sees it now, ‘Perfectly Content', she realizes she had a good mother and a good life. The ninth chapter in The Joy Luck Club, is called Rice Husband. The title comes from a story the daughter was told by her mother. This was about the grains of rice she left in her bowl becoming the number of pockmarks on her future husbands face. The title relates to the main plot, as the story is set when the daughter has now married her husband, and is having her mother to stay with her for a while. The title has little other significance, other than the quality of the daughter husband reflecting the times she left rice in her bowl. The husband is not very nice, â€Å"I'm sitting on the sofa, seething, and I don't know why. It's not that Harold has done anything wrong. Harold is just Harold†(178). If a husband can annoy you with out even doing anything he must really not be a good husband. The pock marks in the fable meaning the impurities of your husband, of which the daughter's obviously has many. As with the last chapter the title Four Directions holds very little significance in an analogical or metaphoric sense. There seems to be no underlying or hidden reason for Amy Tan using the title, other than it is the name of the restaurant that the mother and daughter go to. Four Directions is the name of the place, â€Å"I said as we waited for the lunch bill at Four Directions†(184). The next chapter called Without Wood, is given to describe a characteristic, or lack of that the daughter has. The title has no physical relation to any of the events in the story here, but has the purpose of describing the type of person the women is. In the Chinese tradition, people contain certain elements, such as metal, water, fire and wood, to name just a few. Each of these holds a certain key to some ones character, and each need to be balanced with on another. In the story, the woman has a very indecisive side, and relies on others to make important decisions in her life, this is supported in the book, â€Å"I sat there quietly, trying to listen to my heart, to make the right decision. But then I realized I didn't know what the choices where†(213). This, in Chinese tradition is due to the fact that she has not got enough wood in her. This is the reason Amy Tan has used the title she has, taking something from her culture and introducing it to the reader. This is at fir st difficult to see but after recalling earlier parts of the book the title makes sense. In regard to theme, the title again is just pointing out what the author is trying to convey, and that is the varying characteristics that separate us as human beings in to individuals. The Best Quality, the name of the twelfth part of the book, is given for to reasons. As a title it touches the theme in a sense that mothers always want the best for their offspring, which is no different to the mother in this story. The best quality meaning the best quality of life that a mother can give her children. The title is also given in relation to the events held in the story. In the plot the mother is holding a diner where crab will be served and whilst picking the crabs, she picks one which is missing a leg, which is served at dinner. At the diner, the mother and daughter are last to pick, so the daughter goes to pick the crab with the missing leg, but her mother insists she takes the good one, â€Å"I thought I was doing the right thing, taking the crab with the missing leg. But my mother cried, â€Å"No! No! Big one, you eat it. I cannot finish†Ã¢â‚¬ (227). Hence, the mother always wants the best for her child. The next title named Magpies, has very little relation to the theme in this area of the book. It rather holds as a direct reference to a story within the story. A story of birds mocking peasants, who revolted and killed the birds, is told, The birds became more exhausted, unable to land, unable to eat. And this continued for many hours, for many days, until all those birds-hundreds, thousands, and then millions!-fluttered to the ground, dead and still, until not one bird remained in the sky(273) So again in this chapter the title holds no significance in regard to the theme in this story. Waiting Between the Trees, the title given to the fourteenth part, is significant in terms of the theme here. This part of the book is describing a mother's actions in her life, and using the analogy of a tiger to make us further understand the authors main points. In this chapter Amy Tan is commenting again on the duality of the human mind. She is saying that there is a part of humans that makes itself visible and conspicuous in its actions and another part that is more hidden and subtle in its actions. This is explained in the tiger analogy the author uses. Then she told me why a tiger is gold and black. It has two ways. The gold side leaps with its fierce heart. The black side stands still with cunning, hiding its gold between trees, seeing and not being seen, waiting patiently for things to comes(282) This is another example of Amy Tan's creativeness in her titles, subtle but very meaningful. The next chapter entitled, Double face. This is in reference to the part of this story where the mother and daughter are comparing their faces and seeing how much they look like each other. Double faced means a person who has two ways of acting, which are done in different situations. This is the main them in this part. Amy Tan, again, is commenting on the twin sidedness of human behavior. How we are nice to some one to them, and nasty to them when they are not around. This is explained in the book, â€Å"It means we're looking one way, while following another. We're for one side and also the other. We mean what we say, but our intentions are different†(304). This is a trait of humanity, and a necessary one in some circumstances. So in regard to the theme, the title holds significance in the way that it is using a term that describes a characteristic of human conduct. The last chapter title, as with many in the second half of the book has little significance to the theme of the story. The name A Pair of Tickets, is really just a physical explanation of what to expect I the story, in which a daughter and her father fly to China from America. Two tickets, two people, and a logical choice for representation of the plot in the story, however not for any thematic reasons. This is also a good selection of title by Amy Tan, as it rounds the book off, as the first chapter is about the woman getting tickets to meet her family, the last is about her using the tickets. Overall, Amy Tan has used a wide variety of chapter headings, ranging from ones with deep analogical, metaphoric, and thematic meanings, others with simple physical pointers to events in the story. The selection and timing of the headings also leads to provoking a strong thought process of the reader as to the author's intentions with the names of her chapters. Amy Tan has written a clever, thought inciting book, which although at times is exceedingly boring, is still none the less an intelligently written piece of literature.

Motivation and Prentice Hall

Essentials of Organizational Behavior, 10/e Stephen P. Robbins & Timothy A. Judge Chapter 5 Motivation Concepts Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall 5-1 After studying this chapter, you should be able to: 1. Describe the three key elements of motivation. 2. Identify four early theories of motivation and evaluate their applicability today. 3. Compare and contrast goal-setting theory and selfefficacy theory. 4. Demonstrate how organizational justice is a refinement of equity theory. 5. Apply the key tenets of expectancy theory to motivating employees. . Explain to what degree motivation theories are culture bound. Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall 5-2 What Is Motivation? The processes that accounts for an individual’s intensity, direction, and persistence of effort toward attaining a organizational goal ? Intensity – the amount of effort put forth to meet the goal ? Direction – efforts are chann eled toward organizational goals ? Persistence – how long the effort is maintained Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall 5-3 Early Theories of Motivation Maslow’s Hierarchy of Needs Theory †¢ McGregor’s Theory X and Theory Y †¢ Herzberg’s Two-Factor (Motivation-Hygiene) Theory †¢ McClellan’s Theory of Needs (Three Needs Theory) Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall 5-4 Maslow’s Hierarchy of Needs Theory Self-Actualization Upper Esteem Social Safety Psychological 5-5 Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall Lower Douglas McGregor’s X & Y Theory X Theory Y †¢ Inherent dislike for work and will attempt to avoid it †¢ Must be coerced, controlled or threatened with punishment View work as being as natural as rest or play †¢ Will exercise self-direction and self-control if committed to objectives 5-6 Copyright  ©20 10 Pearson Education, Inc. Publishing as Prentice Hall Herzberg’s Two-Factor Theory Not Dissatisfied Satisfied Motivation Factors †¢ Quality of supervision †¢ Pay †¢ Company policies †¢ Physical working conditions †¢ Relationships †¢ Job security Hygiene Factors †¢ Promotional opportunities †¢ Opportunities for personal growth †¢ Recognition †¢ Responsibility †¢ Achievement Dissatisfied Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall Not Satisfied 5-7 McClelland's Theory of Needs †¢ Need for Achievement (nAch) The drive to excel †¢ Need for Power (nPow) The need to make others behave in a way they would not have behaved otherwise †¢ Need for Affiliation (nAff) The desire for friendly and close interpersonal relationships Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall 5-8 McClelland's High Achievers †¢ High achievers prefer jobs with: ? Personal responsibility ? Feedback ? Intermediate degree of risk (50/50) †¢ High achievers are not necessarily good managers High nPow and low nAff is related to managerial success Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall 5-9 Contemporary Theories of Motivation †¢ Cognitive Evaluation Theory †¢ Goal-Setting Theory ? Management by Objectives †¢ Self-Efficacy Theory †¢ Equity Theory †¢ Expectancy Theory Copyright  ©2010 Pearson Education, Inc. Publishi ng as Prentice Hall 5-10 Cognitive Evaluation Theory †¢ Proposes that the introduction of extrinsic rewards for work (pay) that was previously intrinsically rewarding tends to decrease overall motivation Verbal rewards increase intrinsic motivation, while tangible rewards undermine it Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall 5-11 Goal-Setting Theory †¢ Goals increase performance when the goals are: ? Specific ? Difficult, but accepted by employees ? Accompanied by feedback (especially selfgenerated feedback) †¢ Contingencies in goal-setting theory: ? Goal Commitment – public goals better! ? Task Characteristics – simple & familiar better! ? National Culture – Western culture suits best! Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall 5-12 Management by Objectives (MBO) †¢ Converts overall organizational objectives into specific objectives for work units and individuals †¢ Common ingredients: ? ? ? ? Goal specificity Explicit time period Performance feedback Participation in decision making 5-13 Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall Self-Efficacy or Social Learning Theory Individual’s belief that he or she is capable of performing a task Self-efficacy increased by: ? Enactive mastery – gain experience ? Vicarious modeling – see someone else do the task ? Verbal persuasion – someone convinces you that you have the skills ? Arousal – get energized Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall 5-14 Equity Theory †¢ Employees weigh what they put into a job situation (input) against what they get from it (outcome). †¢ They compare their input-outcome ratio with the input-outcome ratio of relevant others. My Output My Input Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall Your Output Your Input 5-15 Equity Theory and Reactions to Inequitable Pay Employee reactions in comparison to equitably-paid employees Employees are: Paid by: Piece Time Will produce more Produce less output or output of poorer quality 5-16 Will produce Over-Rewarded fewer, but higherquality units Produce large Undernumber of low Rewarded quality units Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall Equity Theory: Forms of Justice Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall 5-17 Expectancy Theory Three key relationships: 1. Effort-Performance: perceived probability that exerting effort leads to successful performance 2. Performance-Reward: the belief that successful performance leads to desired outcome 3. Rewards-Personal Goals: the attractiveness of organizational outcome (reward) to the individual Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall 5-18 Global Implications Are motivation theories culture-bound? ? ? ? ? Most were developed for and by the United States Goal-setting and expectancy theories emphasize goal accomplishment and rational individual thought Maslow’s Hierarchy may change order McClelland's nAch presupposes acceptance of a moderate degree of risk concern for performance Equity theory closely tied to American pay practices Hertzberg’s two-factor theory does seem to work across cultures 5-19 ? Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall Implications for Managers †¢ †¢ †¢ †¢ Look beyond need theories Goal setting leads to higher productivity Organizational justice has support Expectancy theory is a powerful tool, but may not very realistic in some cases †¢ Goal-setting, organizati onal justice, and expectancy theories all provide practical suggestions for motivation Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall 5-20 Keep in Mind†¦ †¢ Make goals specific and difficult †¢ Motivation can be increased by raising mployee confidence in their own abilities (self-efficacy) decisions, especially when the outcome is likely to be viewed negatively 5-21 †¢ Openly share information on allocation Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall Summary 1. Described the three key elements of motivation. 2. Identified four early theories of motivation and evaluated their applicability today. 3. Compared and contrasted goal-setting theory and self-efficacy theory. 4. Demonstrated how organizational justice is a refinement of equity theory. 5. Applied the key tenets of expectancy theory to motivating employees. 6. Explained to what degree motivation theories are culture bound. Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall 5-22 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright  ©2010 Pearson Education, Inc. Publishing as Prentice Hall 5-23

Frida Is A 2002 Film By Julie Taymor - 1139 Words

Frida is a 2002 film by Julie Taymor that mirrors the life of esteemed artist Frida Kahlo. The first scene of the movie serves only to foreshadow the last scene of the movie, depicting Kahlo lying on bed, being loaded onto the back of a truck. The movie then flashes to the Kahlo’s younger days in 1922 when she was around fifteen years of age. She is shown in a school where she gathers friends to watch Diego Riviera work, this yet again portrays an important facet of Kahlo’s future. We then learn of Kahlo’s relationship with a boy named Alex, a both Physical and emotional relationship. A following scene shows Frida admiring the photos of a photographer who is shortly revealed to be her father. In true fashion Frida is then seen observing a mural on the walls of the school. Alex comes to get her before the two miss the bus, shortly after the film shows Alex and Frida catching up to a bus and jumping on. When the bus they are on passes another the two busses collid e and the bus holding Kahlo is propelled into the side of a stone building, breaking a multitude of her bones, and leaving her in a sleep state for three weeks. The doctors inform Frida and her family that she will most likely not walk again and it is a miracle she survived. When Kahlo is released from the hospital we get the first glimpse of Frida creating her own art, and see her heart being broken when Alex informs her he is leaving. Kahlo then begins to fill her cast with paintings of butterflies. When she isShow MoreRelatedFrida Film Analysis Essay1148 Words   |  5 PagesFrida and the Role of Women During the 1930’s and 1940’s, women of the world held virtually one role and one role only†¦homemaker. This was no different for the women of Mexico, except for one woman in particular, Frida Kahlo. Frida refused to accept the current ideals of society and the accepted social norms by engaging in things that few women in history ever had. Frida was involved in politics, she was promiscuous with men and women, she painted pictures of herself in ways that had never beenRead MoreFilm Analysis : Frida Kahlo1181 Words   |  5 Pages I don’t usually watch bright, colorful movies but I definitely would make an exception for Frida. The colors and the score used in the film always heightened a scene’s mood, whether it be joy or despair. The film utilized bright colors so often that their absence had a profound effect when Kalho dealt with loneliness and heartbreak. I’ve always thought Frida Kahlo as an extremely interesting person. In the movie, s he was interesting in her defiance of gender norms and zeal for life. She never letRead MoreFilm Analysis Of The Film Frida, By Julie Taymor963 Words   |  4 PagesDirector, Julie Taymor, released the film Frida on October 25th, 2002. The film is a true story of Frida Kahlo and her husband Diego Rivera, who have been and still are Mexico’s most acclaimed artists. The film was portrayed like Kahlo’s paintings, with vibrant colors that showed her creativity and pride for her Mexican background. Not only did the film contain a deep resonance of dark pain that represented the pain in Kahlo’s life, but also the recognition and acknowledgement of Kahlo’s strugglesRead MoreFrida, By Julie Taymor762 Words   |  4 Pages â€Å"Frida† the movie was released in 2002 and directed by Julie Taymor. The cast included Salma Hayek as (Frida), Alfred Molina as (Diego Rivera), Ashley Judd, Antonio Banderas, Edward Norton, Mia Maestro, and Geoffrey Rush. The film is a biography of the life of Mexican artist Frida Kahlo. She is a woman who came from a very simple background. Kahlo rose to fame as an artist with an unique vision for her craft. She endured a difficult relationship with her husband/mentor Diego Rivera. Many of herRead MoreThe Inspiration of Frida Kahlo Essay1343 Words   |  6 Pagesknowledge. Later another artist emerged with the same ability, Frida Kahlo. She used her life as her canvas; allowed people to view the world from behind the surrealistic doors. In addition, she was able to present self-portraits in many forms, all influenced by a tragic bus accident which led to a broken spine that affected her whole life. Described mostly in the film Frida directed by Julie Taymor, and the bo ok Frida: A Biography of Frida Kahlo written by Hayden Herrera, Kahlo’s portraits made viewersRead MoreThe Invisible Woman: Female Directors in Hollywood2710 Words   |  11 PagesFilm scholar Louis Gianetti says, â€Å"In the field of cinema, the achievement of the Women’s Movement [of the 1960’s] has been considerable, though most present-day feminists would insist that there is still much to be accomplished in the battle against patriarchal values† (428). Gianetti’s words are an understatement. Women in Hollywood are underrated, underrepresented, and generally shoved into the background of the film industry. However, with film becoming one of the most pervasive and influential