Reaction Paper on Game Theory Essay

Game Theory is undeniably new to me. Its concept is just so brilliant that it made me rethink how I ought to see a business’ road to success. In the past, my key idea of winning in the industry was by toppling down competitors, and rising as the sole survivor in the war. Plainly, it’s a winner-take-all perspective. The real target was to capture the entire market then. After reading the theory and the cases suitably alluded to, realizations came to me that I’m way too far from the wisdom good strategists possess. Way too far from making it to the corporate executives’ seat. Way too far from a business’ lifelong success. For Filipinos, it’s always been a â€Å"here-and-now† match. Typically overlooked are the impacts of strategies in the long run, and how competitors and other players in the game would tend to respond. Game theory offers the notion of coopetition — cooperative and competitive ways to change the game. The primary insight of game theory is focusing on others — namely allocentrism. It further states that the game of business is all about value: creating it and capturing it. Many are the so-called mental traps that must be killed in order that one be set for the game or set to change it. We often think that it’s hard and it’s beyond our competencies to dare change the game, and that we should do just what others do — only in a differently-tailored fashion. We go with the flow and no new routes are shaped to arrive at a better position and standing for us and the other players as well. Just like the Zero-Sum View, we tend to see winning only at the loss of another. Because of these delusions, the scales in our eyes gets even thicker and we finally end up blinded from seeing the bigger picture, the whole game. To be able to use game theory as a tool in strategizing, I recognized that it cannot be used without sufficient knowledge in economics. Given a particular action, the players that get affected and would react are to be properly determined. The cause and effect relationship among them must also be linked as it should be. Rational reasoning and forecasting entails academic competence on the subject to enable you to see the domino effect of your decision to others and back to your company. The business game is really like chess. Sometimes you have to give in or even sacrifice some of your aces to obtain a greater advantage or to make a draw at the very end. At times, you must delay a couple of moves to maintain advantage or stay equal with the opponent just like what Nintendo did. Being egocentric must be done away with and altered to focusing on others to facilitate a win-win situation for both parties. An opponent may retaliate or be unwilling to cooperate in the future if one’s strategy always seeks out the highest payoffs at the cost of the other player. That’s the mindset of Kiwi that kept it alive in the game. Also, you must raise your own added value or lower that of others and consider that the role of every player in the game is not fixed. In spite of its applicable purposes, game theory cannot be said to be the perfect treasure map. There will always be creases that would simply be left out unpressed. Be flexible and ready for changes.

Governements Use Fiscal Policy to Help Them Achieve Their Macroeconomic Objectives

Explain what is meant by this statement and discuss specific fiscal measures that the UK government has implemented in recent years to influence economic activity in the built environment. Definitions: FISCAL POLICY: â€Å"A combination of government spending and taxation used to achieve macroeconomic management. (The flow of government money in and out of the treasury. † (Danny Myers, 2006, pgs 75&126) MACROECONOMIC OBJECTIVES: â€Å"Targets relating to the whole economy, such as employment, price, stability and the balance of payments. † (Danny Myers, 2006, pg128) The Governments Macroeconomic (nations economy) objectives: 1. Low inflation/stable prices 2. Sustained economic growth 3. Low unemployment 4. Balance of payments between imports and exports (keeping money within the country as well as spending abroad 5. Environmental protection 6. Redistribution of income and wealth to poorRECENT YEARS: The fiscal measures looked at in this essay will be taken from 1990 onw ards. ECONOMIC ACTIVITY: â€Å"The production and distribution of goods and services at all levels. † (Wall Street Words, David L. Scott. 2003) THE BUILT ENVIRONMENT: â€Å"The built environment is made up of various types of property (residential, commercial, industrial etc); linked by infrastructure (sewers, canals, roads, tunnels etc) and separated by spaces in between (parks, woods, playing fields, landscaped areas, squares etc)†. (Danny Myers, 2006, pg6)AGGREGATE DEMAND: â€Å"All planned expenditures for the entire economy summed together. † (Danny Myers, 2006, pg123) †¢By influencing Government taxation and expenditure, aggregate demand can be stimulated to achieve Macroeconomic objectives such as; price stability, full employment and economic growth. †¢It is the total demand for goods and services in an economy. EXPANSIONARY FISCAL POLICY: †¢Increase in government spending and/or a decrease in taxes that causes the government’s budg et deficit to increase or budget surplus to decrease. This is a method used in a recession to stimulate the economy by providing each household with more disposable income, which can be used for consumption expenditures, which then stimulates aggregate production. It also decreases unemployment, which leads to further increases in income. CONTRATIONARY FISCAL POLICY: †¢Decrease in government spending and/or an increase in taxes that causes the government’s budget deficit to decrease or its budget surplus to increase. †¢Decreases the amount of disposable income per household meaning the output and national income is less.EXPLANATION OF STATEMENT: ‘Governments use fiscal policy to help them to achieve their macroeconomic objectives’ Fiscal policy deals with the governments spending and taxation. There are two types of fiscal policy, Expansionary and Contrationary. When the government needs to stimulate the economy by increasing public spending then they w ill decrease taxes so that each household has more disposable income to be spent on consumer goods. In turn this puts more money back into the economy, creating more jobs and encouraging economic growth.An increase in aggregate demand leads to a higher inflation as there is more money being spent on limited goods and services, which pushes the prices up. To counteract this the government decreases taxation and spending, so that consumer households have less disposable income to spend on goods and services, this decreases aggregate demand and brings inflation back down with it. To achieve a balance of stable prices the government must mediate between the two. SPECIFIC FISCAL MEASURES: STAMP DUTY HOLIDAY:The Stamp Duty holiday was introduced in September 2008 whereby properties worth between ? 125,000 and ? 175,000 were to be temporarily exempt from stamp duty. The stamp duty on this particular property bracket was 1% of the sale price, therefore saving a potential ? 1,750. The intent ion of the holiday was to boost demand in the property market by encouraging first time buyers to take advantage of the saving and buy a house. More money is then borrowed as people take advantage of this, which has the effect of boosting the mortgage market as well.According to the Council of Mortgage Lenders (CML), 132,500 house purchase mortgage transactions have benefited from the holiday; this is the equivalent of 25% of the overall 486,400 house purchase loans in the period. Buyers have saved 173 million from the holiday rather than the 600 million the government forecasted. The success is questionable as the incentive was supposedly directed at lower income areas to the North, the Midlands, Wales and Scotland where as, the majority of the benefits have gone to the richer areas in the SE.As this area in particular was hit by the recession the least and where the housing market is the strongest, the governmental loss of the taxation seems to have been wasted. The holiday ended on the 31st December 2009. Although there has been a brief stimulation in the current housing market the number of transactions is still at an all time low. The figures may fall further now that stamp duty has been reinstated, meaning that the government may have to explore other options. AGGREGATES LEVY â€Å"The Aggregates levy is a tax on sand, gravel and rock that is dug from the ground or dredged from the sea in UK waters.The tax addresses the environmental damage caused by these business activities in the form of noise, dust and loss of biodiversity. † (www. businesslink. gov. uk, Environmental tax obligations and breaks (online), (07. 01. 2010). The Levy was introduced on the 1st April 2002 setting out to address the macroeconomic objective of environmental protection while trying to retain sustainable economic growth. The idea is that the tax should make the cost of the aggregates better reflect the cost to the environment and should therefore influence business decis ions to become more eco-friendly and efficient.In terms of the Built Environment this encourages sustainable development, â€Å"The creation and responsible management of a healthy built environment based on resources efficient and ecological principals† (Charles. Kibert,1994). This definition incorporates six principals, (Miyatake, 1996) †¢Minimisation of resource consumption †¢Maximisation of resource reuse †¢Use renewable and recyclable resources †¢Protection of the natural environment †¢Creation of a healthy and non-toxic environment †¢The pursuit of quality in creating the built environment There is an argument that taxes such as this will damage international Competitiveness.The common object of development is to keep the cost as low as possible, to have a minimal construction period and to have the best quality possible. With increased taxation on these materials investors may become more cautious due to the rising cost, which is to be kep t as low as possible, therefore there is a possibility of the UK losing international business. This is just part of the problem between economic growth and environmental protection as both have the potential to hinder the other. However some of the tax revenue accumulated will go towards a sustainability fund.This will be spent through various agencies to promote new innovative ways to protect the environment and provide good quality construction at the same time. The Aggregate levy is a further development of the original ‘Landfill Tax of 1996. ’ This was set to influence the management of waste by encouraging a movement away from the cost of disposing waste in a landfill to a cheaper and more productive way of reusing waste materials. Both have helped to make businesses greener which agrees with the macroeconomic objective of Environmental protection. THE THAMES GATEWAY REGENERATION PROJECTThe Thames gateway regeneration project includes an area stretching 40 miles E ast of inner East London, both sides of the Thames and the Estuary. The area has been targeted for urban regeneration by both government and developers. There are an estimated 1. 6 million people living in this area, which has been deemed one of the most depraved in the UK. This is because of the lack of access to public transport, services, employment and affordable quality housing. The government wishes to gentrify this brownfield site to make the most of the economic potential of the gateway, and to encourage new investment and job opportunities. The Government Delivery Plan, 29th November 2007, Yvette Cooper) The project is co-ordinated by The Department For Communities and Local Government who continue to invest 3bn every year alongside the regional development agencies, the London Development agency, the East England Development agency and the SE England Development agency. (Thames Gateway Annual Report 2008/09). The Gateway project was drawn up in 1995 with the government hop ing to achieve 225,000 new jobs and 200,000 new houses by 2016. In this area there is emphases on developing town centres, public spaces and infrastructure to attract new investment to expand the economy.The Government hopes for this project to lead the way in terms of environmental jobs, new technologies and environmental improvements to existing homes and buildings. The Government is insuring this by providing funds for an eco-risk assessment of the housing programmes, energy savings methods for green housing and a zero construction waste target across the gateway. This project seems to have a lot of potential, however the timing of the recession limits the productivity and investment that it needs. The shortage of mortgages makes it difficult to sell the new housing at the arranged rices, which in turn can reduce investor confidence when companies are to buy up the land for housing developments. CONCLUSION From this essay it is clear that to some extent fiscal policies can be use d to help achieve macroeconomic objectives. From the examples shown, a combination of taxation and government expenditure has been directed at particular areas in the built environment to attain certain results. The construction industry makes up a large proportion of the UK economy and the government seems to be very focused on the issue of sustainable economic growth and environmental protection.The policies such as the ‘Aggregates levy’ and ‘landfill tax’ are addressing the objective of Environmental protection by playing a large part in the way buildings are constructed or demolished. By promoting the use of recycling of materials and reuse, the future of development will change for the better. This is seen in the Thames gateway regeneration project where they are leading the way for the future of construction by using eco friendly and sustainable methods. At the same time they are creating a huge investment opportunity, which will lead to the continued sustained growth of our economy.There will be an improved standard of living for the people who once lived in a depraved area by increasing the once lower levels of employment. From the Stamp Duty we can see that the government was trying to use this tax break to boost the property sector of the UK economy in a time of decline. However I do not believe that this has necessarily achieved its goal. The housing market may well fall again and the aim of helping people of lower income to get on the property ladder has not had its desired effect as the benefits did not go to the poorer areas in mind.

European Economic Growth Essay Example | Topics and Well Written Essays - 1000 words

European Economic Growth - Essay Example This global financial crisis tagged with dire housing market corrections has resulted in a peculiarly uncertain situation (European Commission). The resultant shock has reduced the domestic demand throughout the EU, which is pathetically debilitating considering the fact that the external demand is already on the ebb (European Commission). The autumn economic forecast published by the European Commission in November 2008 reflects a crucial stagnation of the EU economy by the end of the year 2009. Though the inflationary pressures are expected to ease, the labour market and the financial sector is predicted to deteriorate even further (European Commission). Most of the European economies are either already in or are on the verge of facing a recessionary situation and the economic growth is expected to dip down even further (European Commission). As per the current estimates, the GDP growth in the EU is projected to retard to 1.4 percent by the end of the year 2008 and will dip down to a worrying figure of 1.1 percent by 2010 (European Commission). The consumer price inflation that has already achieved its peak level is expected to plummet to 2.25 percent in 2009 and to approximately 2 percent by the end of the year 2010 (European Commission). ... prices and a relative softening of the labour markets because of the bleak prospects pertaining to the overall economic growth (European Commission).(European Commission) The labour markets are already being impacted by stagnation in the economic growth and this is expected to give way to a drastic fall in the employment levels throughout the EU. The employment situation is expected to ease beyond 2009 (European Commission). That will lead to the creation of 0.25 million jobs in the EU in 2009-2010 (European Commission). However, this increase is strikingly less as compared to 6 million jobs created in the EU in 2007-2008 (European Commission). Thus the unemployment rate in the EU is expected to appreciate by 1 percent in the next two years, thus achieving an overall figure of 7.8 percent (European Commission).So far as the public finances are concerned, the present circumstances portend a bleak scenario. The deficit in the government budgets that was roughly 1 percent of GDP in 2007 is expected to appreciate to 2.6 percent by 2010 (European Commission)(European Commission) Considering the fiscal and monetary packages being extended by the governments to resuscitate the ailing economies, the budgetary deficits may rise even further in the times to come (European Commission). Thus, realistically speaking, the public debt is expected to further rise as this economic crisis worsens. The current prospects pertaining to the economic growth in the EU are enveloped in a mist of uncertainty, doubts and apprehensions. The existing credit crunch may worsen, persist for a longer period of time and perhaps could have a more debilitating impact on the EU economy. Further corrections in the housing market may be required

Intellectual Property Rights Assignment Example | Topics and Well Written Essays - 500 words

Intellectual Property Rights - Assignment Example One cannot use government trademarks or the logos of government agencies without getting permission from relevant authorities. For instance, people are prohibited from using government’s agencies logo/trademark on their social media pages. Copyright may protect works that have been prepared for the government by independent entities. The government may have the exclusive rights to use such works. Individuals are not permitted to use government works in ways that show endorsement by a government agency or worker. For instance, it is illegal to use a photo of a government official who is wearing a product of a person/company in an advertisement.4. What are the different types of Government contract data rights?If the government funds a project on its own, it obtains an â€Å"unlimited rights† license. The rights apply to non-commercial technical data, computer software, and computer software documentation. In cases where both the government and a contractor fund a project , there will be a need for a â€Å"Government purpose rights† license. In case a contractor solely funds the project; there will be a need for a â€Å"restricted rights† license in non-commercial computer software. A â€Å"limited rights† license will apply to noncommercial technical data .5. How does the government claim title to an invention while if someone files for a patent while working for the government?Federal law states that rights to inventions created by federal employees belong to the government in some situations.

SLP Time Warp 2 Essay Example | Topics and Well Written Essays - 1000 words

SLP Time Warp 2 - Essay Example Using the formula of the volume-cost-profit, the CVP determines the relationship between the three aspects and thus helps in decision-making, and strategy development. One key benefit of utilizing the CVP tool as an analytical tool is in its ability to facilitate making of decisions as pertains the three products under analysis, the X5, X6, and the X7. Further, its benefits include the capability of making decisions for a particular year, not at its start, but at the conclusion of the previous year (Bivainiene, 2010). The utilization of the CVP is diverse and includes, but not limited to the calculation of the point of breakeven, as well as calculations of the possible prices of varied products that would yield a pre-specified profit margin. The main core of this project is to have a better performance as compared to that of Joe Schmoe, determined by the profit margin generated in the three products, X5, X6, and X7. The strategy to be adopted in this case will, therefore, be focused on increased revenue development that surpasses the amount that the company generated under the captainship of Joe Schmoe (Slotegraaf & Pauwels, 2008). Under Joe Schmoe, the amount of revenue generated for the years extending 2012 -2015 was $ 954, 830, 241. This strategic analysis wills thus focuses on the generation of revenues to the tune of $ 1, 000, 000, 000. The manner in which this figure is hoped to be attained is depicted in the table displayed below. The accuracy of this table is guaranteed since any figures have been arrived at after careful analysis of the Time Warp 1 and profits attained by Joe Schmoe. Profit allocation for $1, 000, 000, 000. Product X5: Having been in the market for a period of about 3 years, the developmental stage for the product can be defined as being between maturity and shakeout. The sensitivity of the products price has the consequent affect that to increase in the sale of the various units; a price reduction may come in handy. This, in essence, is the strategy for growth that we plan to implement as concerns product X5. After inputting such variables as the R & D, the price, ands the aspired profit into a CVP calculator, we can confidently calculate the relation between the targeted profit and the sales volume projected. The same procedure was repeated in the year 2013. However, the product line was discontinued since it is evident that the profitability of the product X5 is limited, attributable to its attaining its maturity phase. This table is reflective of the volume of sales required to achieve the $ 1 million in terms of profits, assuming that the product X5 is sold at $ 245, with a 30% R & D, yielding a total value of about 1, 676, 190 units. This figure is arrived at by a calculation of the cumulative revenue as a factor of the unit price. Alternatively, this calculation can be made via the sum of the fixed costs as a ratio of profits, calculated by their contribution margin in each unit. Product X6 The product X6, one of the products in the tablet development, boasts of a 2 year existence in the market. Unlike in the case of the X5, the product X6 reveals that customers look into such issue as performance and quality in making decisions on whether to purchase a specific product or not. The product quality is directly related to the specifications

Federal Income Tax Research Paper Example | Topics and Well Written Essays - 1000 words

Federal Income Tax - Research Paper Example The total expenditure by Mr. Zimblist could be overviewed by his expenses like extending the garage area for vintage auto collection, donating a large amount to a university and collecting a professional certification by his wife. $45,000 has been invested for the garage area inorder to display the vintage auto collection which is debatable because 60% of it was paid by the company. Mr. Zimblist has donated an income of about $ 25000 to the university is on his behalf. Finally Mrs. Zimblist certification in advanced motivational psychology offered by the organization was worth $ 12,300, this includes the cost of the overall courses, bo foroks and marks. Efran lives in a house that is provided by the company. It is not only in his personal use bu,t also the requirement of the company to set it as an office house inorder to comfort, entertain and leave a good impression on the clients. House maintenance and others are also taken care by the company. His garage serves the same business purpose.  §162(a) states that the taxpayer is allowed to deduct the ordinary and necessary expenses paid in carrying a trade or business. In contrast  §262 provides no deduction to be made for personal expenses. However,  §162(a) (2) and  §280A apply of many restrictions on the expenses made on personal resident being used as office.  § 280A(c)(1)(B) allows deduction for a home office if it is in use for patient, clients or customers and they make meeting and dealings. The Green v. Commissioner, 705 F. 2d 404 (9th Cir. 1983) also claims how important it is to understand the use of the resident as personal or office.  

Short essay for college admission Example | Topics and Well Written Essays - 500 words

Short for college admission - Essay Example The latest sanctions against Iran were imposed two years ago. The US and the EU are not very much interested in imposing any further bans against Iran; because of the fact that in the light of the previous sanctions, the next sanctions would entail restrictions on buying oil from Iran (Sarukhanyan). The process of institutional secularization is taking place in Iran. These moves came to the fore, in the various reforms to institutions, which took place after the death of Khomeini, in 1989. These reforms have served to strengthen the state, in relation to the religious establishment. This has also been noticed in the Iranian economic and foreign policy. These measures have not been effected at the domestic level, and a rigid Islamic system is strictly enforced, within the country. The political mechanism in Iran, does not accommodate those who oppose the current system; and entities that oppose the system are precluded from participating in the political process (Haugom). This evidences the fact that Iran is a theocratic state. Nuclear empowerment permits Iran to protect itself from external threats. In the absence of nuclear weapons technology, Iran cannot control the malicious efforts of a neighboring country or nuclear power from supporting rebellion. It is perceived by the Iranians that nuclear deterrence will ensure territorial integrity, and establish peace and confidence among its citizens (Habibi).This contention is false and indicates mala fide intent. It has been vehemently claimed by the Iranian officials that their pursuit of nuclear technology, is only for peaceful purposes, like power generation. However, experts on nuclear proliferation are of the opinion that Iran’s fundamental Muslim rulers, could be clandestinely, manufacturing nuclear weapons (Pan). This topic is of great interest to me; because Iran’s actions, in respect of the proliferation of nuclear technology, pose a grave threat

Managing In golbal market Essay Example | Topics and Well Written Essays - 5000 words

Managing In golbal market - Essay Example This internationalisation strategy report identifies two viable markets for entry, Kuwait and Brazil. In Kuwait, consumers are experiencing increased disposable income levels and consumer behaviour factors represent favourable conditions for consumer acceptance of Taco Bell and its diverse product lines. Brazil maintains stable economic conditions and also encouraging consumer behaviour which can enhance Taco Bell’s ability to improve its internationally-based revenue stream. With the chain’s intention of opening one new store, internationally, every few days (Wong 2014), Brazil and Kuwait can ensure this goal is achieved and market conditions in these two countries represent stability upon market entry. This strategy report utilises many strategic models to analyse market conditions in Brazil and Kuwait as viable markets for the chain’s growth. The report’s deliverables include a full understanding of the political, economic and social factors of both markets, the competitive environment, and specific strategic initiatives that must be established to make market entry a success and ensure profit longevity. The threats and risks in both markets are also identified that might contribute to challenges upon market entry with appropriate recommendations for overcoming any barriers to entering both markets. The Kuwaiti government recognises the opportunities for attracting foreign investment. Recently, Kuwait has established a Free Trade Zone in the city of Shuwaikh, a region closely adjacent to the Iran border, a region sustaining an important international airport, and sustaining a shipping port that facilitates recurring movement of goods via water transport systems. This Free Trade Zone provides foreign companies with complete tax exemption on earnings for 10 years upon market entry (Singh 2010). Hence, the endeavours of the Kuwaiti government to entice foreign investment provide Taco

Comparisons among 5 companies of retailer industry Essay

Comparisons among 5 companies of retailer industry - Essay Example It is still believed that the sector will grow by 15 percent in the next five years. By the year 2011, it is estimated that the annual sales of the industry would be around  £312 billion. The sector employs around 3 million people accounting for 11 percent of the total UK workforce. At the same time, the industry contributes 8 percent to the GDP of the country. (Invest in UK, 2010) According to the TNS World Panel grocery market share report as of 29th April 2009, the big three players of the retail industry in the UK are: Tesco with 31 percent market share, ASDA with 17 percent and Sainsbury with 16 percent. The retail industry in the UK has developed in all aspects and categories. The sector has shown tremendous growth and competition in all the allied sub-divisions: electrical, groceries, clothing and footwear, cosmetics, home-ware, floor coverings and furniture, gardening as well as e-retail. (Tesco, 2010) Tesco is a global grocery and merchandising store with headquarters based in UK. The brand is the largest grocery brand within the limits of United Kingdom with the market share of 31 percent. Tesco is globally ranked as the third largest retailer with respect to revenues and second largest with respect to profits. The brand is now well developed with stores in 14 different countries across Europe, Asia and North America. The company appeals to all the different segments of people by providing all kinds of products from grocery to appliances, tires to gardening, clothing to cosmetics as well as furniture. Tesco has added 502 new stores globally to its portfolio in the last fiscal year. (Tesco, 2010) Tesco sales showed an increase by 6.8 percent whereas it’s before tax-profit increased by 10 percent. The company has now transformed itself into a globally diversified business and is well positioned for consistent long term growth. (Tesco, 2010) Tesco plans to invest  £27 million to reduce its carbon footprint by 2020.

2.5 Food Saftey Essay Example for Free

2.5 Food Saftey Essay Directions: Complete the food safety interactive quiz. Use the information from the interactive quiz to complete the following responses regarding food safety practices. For each of the following food safety practices, share at least 2 statements from the interactive quiz. Be sure to put these statements in your own words and explain why they are helpful in preventing food borne illness. An example would be: When dining from a buffet, make sure hot food is hot and cold food is cold. Food that is 40 – 140 degrees Fahrenheit has already begun to grow bacteria and pathogens. Clean (16 points): 1. Keeping your surfaces clean after cooking or letting an animal sit on it. 2. Keeping your hands clean keep you from getting ill. Separate (16 points): 1. When cross contamination happens it spreads bacteria from one item to a food item which will make you sick. 2. Keep raw meat and their juices away from cooked or ready-to-eat foods and fresh produce. Cook (16 points): 1. If food is left out for 8 hours, the food should be thrown out. See more: Strategic Management Process Essay When bacteria have nutrients, moisture, and favorable temperatures, they grow rapidly, increasing in numbers to the point where some types of bacteria can cause severe illness Cook thawed food to a minimum internal temperature to kill the bacteria. Chill (16 points): 1. When cooked food is left out for too long it can grow bacteria that can make you sick. 2. Freezing to 0 degrees F inactivates any bacteria, yeasts, and molds present in food. In your own kitchen, explain 2 food safety practices you feel your family can improve and 2 food safety practices you feel your family does well. (16 points) In my house our kitchen counters are perpetually dirty; at least that’s how I feel about it. Every time I walk into the kitchen there dirty and it’s kind of hard to tell who did what cause were a large family. There’s also the problem with closing bags that hold our food after they grab some of the food. For example the for the cheese container, when they make their sandwiches the leave the cheese container open in the refrigerator causing the cheese to go bad at a faster rate. I do have to say when it comes to cleaning dishes we are immaculate. No spot is left on or glass wear and sliver wear. We also are very particular when it comes to cleaning the stove (gas burner), flat top, and indoor grill. In what ways do your school and community practice or promote food safety to contribute to your personal health? (20 points) I can’t really say there’s anything. Our school promotes healthy eating but, I don’t eat school lunch. My community is really into recycling and making sure our streets and beaches our clean if that counts but that’s pretty much it.

Performance Audit of China

Performance Audit of China Performance Audit China EMPIRICAL REVIEW OF PERFORMANCE AUDIT IN CHINA AND DEVELOPED WESTERN COUNTRIES AND MEASURES FOR THE IMPROVEMENT OF PERFOMORNACE AUDITING WORK IN CHINA INTRODUCTION OF THE DISSERTATION The performance audit is a recent expansion in audit scope within these 30 years. Now it is one of the most important and flourishing areas for government audit work in China. The aim of this dissertation is to give a holistic and comparative review on the rising and development of performance audit in Western Countries and China, study the challenges faced by audit institutions in China, and give recommendations and suggestions to audit institutions in the development of performance audit from a scientific and development point of view. This dissertation has five parts: The first chapter will begin with the rising of performance audit in Western Countries and the definition coined by International Organization of Supreme Audit Institutions (hereinafter referred as INTOSAI). A comparison with performance evaluation or performance monitor will be made, and the relationship between performance audit and other forms of audit, such as financial audit, environmental audit and management audit will also be reviewed. In the second part, it will give a holistic view of the performance audit in China National Audit Office (hereinafter referred as CNAO) and audit institutions at all other levels, from the rising of performance audit in China, to legal mandate, to the audit objects and areas which covered, to the audit focus of performance audit. In the third chapter, the current status of performance audit in UK, USA, Canada and Sweden will be scanned. The legal mandate given, the audit areas covered, audit methods employed, the resource allocation will be reviewed and compared. The advanced experience in the performance audit area will be concluded. Chapter 4 of this essay is an investigation of the challenges faced by government audit in China in performance auditing. The risks in political system and macroeconomic environment will be discussed. The interior flaws such as the lack of competences of auditors, the shortage of standard or guidelines will also be talked about. In the last chapter, suggestions and recommendations in how to improve performance audit in the context of current China will be given from both the macro and micro aspects. The Desk study based on a review of the literature is deployed. A large number of books and articles about performance audit manuals, annual reports and handbooks produced by SAIs of some developed countries and China will be categorized and analyzed. INTRODUCTION OF PERFORMANCE AUDIT The Rising of Performance Audit in Western Countries As one of the oldest and venerable state functions, audit has a history of thousand years. However, the performance audit has risen and become a large scale and self-consciously distinct practice within the latest thirty years. It is a modern, challenging and fascinating form of audit, and is treated as a separate and professional activity that requires specialized skills and standards. Over almost exactly the same period as performance audit has emerged as a distinct variant of audit, the government of developed countries, such as Western Europe, United States of American, Canada, Australia and United Kingdom, have embarked upon series of public management reforms, which is so called ‘New Public Management’. ‘Most of the public management reform initiatives emphasized a shift from control of imputes and processes to the new form s of control based on the measurement of outputs and outcomes.’ (Christopher Pollitt et al, Performance or Compliance, P195). Previously, the administrative system emphasized on the correct allocation of public finances to appropriate budget lines, the compliance of the use of resources, and conformity of actions with prescribed procedures. The new approaches aimed at modernizing and streamlining the public management process, and giving more flexibility in respect of inputs. Although the details of the reform programs differed from one country to another, most of them highlights on: firstly, increasing the productivity of public services, i.e., raising efficiency; secondly, the convenience and preferences of its users; thirdly, the transparency of public services, which is assumed as a feature of democratic governance. Both singly and collectively, these new attributes considerably changed the ways in which public management system has been run in the past. To adapt to the new system, the major priority of monitoring and control was shifted from the values of economy towards the value of efficiency and effectiveness and emphasized more on the monitoring and evaluation of outputs and outcomes. The auditors should not only stress on the ‘three Es’ (economy, efficiency, and effectiveness), but also using creative methodology to access to responsiveness and user satisfaction by directly consulting them. They should also devote to the safeguarding of public accountability and assurance. Due to the diversity in mandate and scope of the audit, in the United States, this new form of audit is called ‘performance audit’, while in the United Kingdom, it is labeled as ‘value for money audit’ (VFM audit). ‘Comprehensive audit’ is what is called in Canada. Definition of Performance Audit This definition can be provided in many ways. It can be given by clarifying the distinction between performance audit and other related forms of audit, or by mandates and organizational framework which define the performance audit work done, or simply by describing what different SAIs do when they say they are conducting performance audit. The most widely accepted definition is the one coined by INTOSAI: ‘The full scope of government auditing includes regularity and performance audit’, and ‘Performance auditing is concerned with the audit of economy, efficiency and effectiveness and embraces: (a) Audit of the economy of administrative activities in accordance with sound administrative principles and practices, and management policies; (b) Audit of the efficiency of utilization of human, financial and other resources, including examination of information systems, performance measures and monitoring arrangements, and procedures followed by audited entities for remedying identified deficiencies; and (c) Audit of the effectiveness of performance in relation to achievement of the objectiveness of the audited entity, and audit of the actual impact of activities compared with the intended impact’. (INTOSAI’s Auditing Standards, 1.0.38 and 1.0.40) Within this definition, not only ‘three Es’, but also ‘sound administrative principles’, ‘good management’ are referred as criteria for judgment. In the definition given by the Australian National Audit Office, ‘legislative and policy compliance’ is also been taken as one of the consideration for performance audit. In the Auditing standard of The Government Accountability Office, which was revised in 2007, performance audit objectives may vary widely and include assessments of program effectiveness, economy, and efficiency; internal control; compliance; and prospective analyses. As described in the Performance audit manual of Office of Audit General of Canada, the scope includes not only the examination of three Es, but also environmental effects of government activities, procedures to measure effectiveness, accountability relationships, protection of public assets and compliance with authorities. The Relationship between Performance Audit and Regularity Audit In accordance with the INTOSAI auditing standards, ‘the full scope of the government audit includes regularity and performance audit’. The regularity audit emphasizes on attestation of financial accountability and probity and propriety of administrative decisions. Its core activity is to verify information, whereas the major task of the performance audit is inspection and evaluation of the government programs and organizations. For some countries, performance audit differed from the traditional audit in the way they are managed: the traditional audit is usually carried out in a standardized way as a repeated annual cycle of ‘checking the books ’, performance audit, on the contrary, is organized as serial of individually tailored projects varied in their scope, length and focus. The Performance audit is an independent examination made on a non-recurring basis. Specialized skills, separate standards, special planning, and special reports are required. Another difference between the two types of audit is the extent of standardization. The Performance audit, in comparison to financial audit, has a lower level of standardization in terms of both auditing methods and contents. Within its legal mandate, performance audit must be free to examine all government activities from different perspectives. Thus, the performance audit is more flexible in the choice of subjects, audit objects, audit methodology and making recommendations. Moreover, in financial audits, auditors will tend to judge the transactions being ‘correct ‘or ‘incorrect’, ‘legal’ or ‘illegal’, so the criteria the auditors used is relatively clear and fixed. However, for performance audits, the criteria is chosen is normally open and sometimes, formulated by auditors. In spite of above mentioned differences, in audit practices, the line between these two types of audit is not always clear. For instance, the audit of a financial management system can be both a process in traditional audit and performance audit. Practical examples from some SAIs also show the same result. Comparing Performance Audit with Performance Evaluation Both performance evaluation and performance audit are viewed closely related as external forms of analysis and assessment of the programs or organizations. Performance evaluation is a systematic study of how well a program or policy is working and what can be done to improve its results. It is typically commissioned for the purposes defined by the commissioners to provide in a program management cycle. In recent years, the program or policy evaluation is deemed as an important work for a SAI under a general heading of the performance audit, according to the study result of a working group on program evaluation, ‘it seeks to analyze the relationship between the objectives, resources, and results of a policy or program.’ GAO of the US defined four common types of program evaluations in performance audit, which are process evaluation, outcome evaluation, impact evaluation and cost –benefit cost- effectiveness evaluations. PERFORMANCE AUDIT IN CHINA History of Government Audit in China The auditing supervision system in China can be traced to the beginning days of the dynasties. As early as Western Zhou Dynasty, about 3,000 years from now, an official position named as Zaifu was established with the function of performing audit duties and regarded as a rudimentary form of auditing in China. In modern China, after the 59 years after the founding of People’s Republic of China, the audit work in China went through two different stages. First stage was from 1949 to 1982. No formal and independent audit institutions were established in the first 30 years. The supervision of state financial revenues and expenditures was mainly conducted by internal supervisory bodies of Departments of Public Finance. During that period, the central government and some local governments set up audit institutions within the financial departments and assigned audit personnel to carry out the audit work. However, it was not long that the financial inspection institutions. The second stage started with the provision of formal audit supervision since 1983. The full scale implementation of reform and open-up policy called for efforts to strengthen the supervision on financial administration, establish and improve economic supervision mechanisms. In December 1982, the 5th Plenary Session of the 5th National People’s Congress adopted the resolution to introduce an auditing system in China. The new Constitution made a general provision for the role, mandate, basic principle and administrative system for the audit work. In September 1983, the National Audit Office of the People’s Republic of China (hereinafter referred to as the CNAO) was established. Local governments at all levels above county level also set up their local audit institutions in succession. The Audit Law of the People’s Republic of China was formally promulgated in August 1994, which was an important milestone in the audit legal system building. An audit supervision system with Chinese characteristics was built up. Since the establishment of the audit institutions, audit supervision made great contribution to the rigorous enforcement of financial and economic disciplines and has played an irreplaceable role in facilitating healthy development of the national economy, promoting the building of a clean government. As the supreme audit institution of China, the CNAO is a department of the government and directly under the leadership of the Premier. ‘Its main duty is to formulate the audit strategy, organize and administer audit work nationwide and reports its work to the State Council. Local audit institutions, under the dual leadership of the administrative heads of their corresponding level governments and the audit institutions at their next higher levels, organize and manage the audit work within their jurisdiction. Their audit work is mainly under the direction of audit institutions at the next higher levels, and they are legally required to report to their corresponding level governments as well as the next higher level audit institutions in keeping with the principle that independence is an indispensable feature of a successful audit.’ Audit directly conducted by the CNAO covers the following areas: (Audit Law, Article 18 to 25) ‘ Under the leadership of the Premier of the State Council, exercise supervision through auditing over the implementation of the budget of the Central Government as well as other revenues and expenditures, and submit audit reports thereof to the Premier; Revenues and expenditures of the Central Bank, assets, liabilities, profits and losses of central monetary institutions; Carrying out audit supervision over the financial revenues and expenditures of public institutions of the State and other public organizations using fiscal capital Revenues and expenditures of central government owned enterprises and enterprises where state assets dominate or predominate; Revenues and expenditures related to funds managed by relevant departments of the State Council; Revenues and expenditures of projects with loans and assistance from international organizations and foreign governments. ’ During the past 25 years, audit work in China has made great strides forward and scored remarkable achievements. Audit supervision has become an important and indispensable part of the national supervision system. The social impact of audit is becoming steadily stronger. The Rising of Performance Audit in China Vigorously launching performance audit is an important task set by both the Strategic Plan of the Development of Audit Work for 2003 to 2007 and the one for 2006 to 2010. It is a major move for audit institutions to implement the scientific outlook on development, to comprehensively perform their duties in accordance with law, and to vigorously push forward the building of resource-saving- type society, as a response to the summon of the central government. In the history of the CNAO, finding problems of violation of laws and regulations and of embezzlement and corruption is always considered the most important role. However, with the development of social economy and democracy, there is another problem worthy of notice. That is low value for the use of funds and losses and wastes, due to faulty decisions and maladministration .This kind of problem does not often attract too much of the people’s attention. But, in fact, it would bring about much more serious harm than embezzlement and corruption. Take ‘Image Project’ for example, the construction of project would take up a large amount of Funds of public finance, and yet, it is unable able to bring about benefit to the lives of the ordinary people and it also in no way plays a role in accelerating the economic constructions across the whole nation. Actually, it is just a kind of waste of resource According to the statistics of IMF (World Economic Outlook Database, International Monetary Fund, April 2008), until the end of 2007, GDP per capita of China has reached US$2,360. Moreover, in the most vigorous economy developments area, east provinces in China, GDP per capita has reached US$6000, which means this area had crossed the threshold of initial stage of modernization. From the historical perspective of the development of international government audit, US$3,000 GDP per capita represents the stage of rapid development of performance audit practices in the advanced west countries, such as Sweden, United Kingdom, during the 60 to 70s of the 20th century. Such a period is also a time prone to social contradictions and problems and in particular, a crucial time characterized by quick changes in the form of economic growth in the economic system and speedy social reconstruction. The Chinese government is making great efforts in self-improvement and strength public administration. Accountability and performance are the key elements and areas of the concern in the concept of modern public administration. It has been aware that the work and accomplishments of the government still fall somewhat short of what circumstances require and the people expect. The functions of government have not been completely transformed and public administration and public services are still weak. Some government departments have been overlapping responsibilities, their powers and responsibilities are not well matched, some try to shirk their responsibilities, and their performance is poor. The problems of formalism and bureaucratic behavior are fairly common, and fraud, extravagance and waste are quite serious. Oversight mechanisms and checks on government authority are not strongly expected. Performance audit is also the inevitable necessary outcome in the promotion of democracy and the rule of law. The citizens are more and more concerning the public administration issues, and paying more attention on the transparent and efficiency on the use of public fund. As an independent oversight institution, the CNAO was attached with great importance on the supervision of the shifting of government functions to a more energetic public management and social services, and the gradual transformation of the government from the traditional mode characterized by managing everything by itself, to a government with limited functions, which is more transparent and accountable and service-oriented. Current Status of Performance Audit in China The Article 1 of Audit Law, which came into effect on 1 June 2006,gave the legal authority of audit institutions for the implementing of performance audit. It says ‘Law is formulated in accordance with the Constitution, with a view to strengthening State supervision through auditing, maintaining the fiscal and economic order of the country, improving the efficiency in the use of government funds, promoting the building of a clean government and ensuring the sound development of the national economy and society.’ (Audit Law, Article 1) However, even before the promulgation of the new amended audit law, the performance audit practices have existed in China since the beginning of 90s of twentieth century: The first stage is from the beginning of 90s to the middle of it. During that time of period, the performance audit was mainly carried out for the performance outcomes of state- owned enterprises. According to statistics, in 1984, the very next year the audit insinuations at all levels were formed, during the process of traditional financial audits for 1263 enterprise, economy and efficiency of these enterprises draw attention of the auditors. Among the financial impact of the auditing findings of 3 billion RMB Yuan, nearly 1 billion was caused by the less economic and efficient use of funds. It was stated in the Annual National Audit Work meeting in 1991 that ‘audit institutions at all levels should identify some large- or medium- sized stated-owned enterprises as regular auditees. The audit scopes not only include the truth and fairness of financial revenues and expenditures, but also extend to the test of internal control and performance outcomes. Proper audit evaluation should be made to improve the economic efficiency’ (The Memo of Annual National Audit Work Meeting, 1991). Statistics show that during the ten years after the formation of CNAO, the total financial impact of the performance audit to these state- owned enterprises totaled to 21.1 billion RMB Yuan. From the middle of 90s, the performance audit in China turned to a brand new stage. At this stage, the audit scope shifted from the state-owned enterprises to the major investment projects funded by the government. The emphasis of the audits is put on the economic benefits to the efficiency and effectiveness of these projects. During this time, the performance audit practices were conducted during the audit of major investment projects such as the project of Conversion of Farmland to Forest, the Fund Use of Migration in Three Gorges Reservoir Area, and the Construction of Airports. With the implementation of performance audit methodology, it was not only the problems but also the root causes of these problems were revealed, which had a profound impact in the society. The criteria on the selection of audit topics are: The projects which are heavily invested by the government and great attention were paid by the national congress and the taxpayers. The availability of the resources in terms of the competences of auditors and budget; The timeliness which are closely relevant to the current public administration reform. As well, audit institutions, in accordance with the relevant regulations of the State, carry out supervision through auditing the principal leading persons of government departments and of other units as to compliance about the financial revenues, expenditures and the economy, efficiency and effectiveness of relevant economic activities of their districts during their terms of office. This is a type of comprehensive audit which integrates the compliance and performance audit. From January to November of 2007, the total input in terms of human resources in audit institutions at all levels had amounted to one quarter of the total, which is ten percent higher than the same period of last year. Among the 30 audit projects launched by the CNAO, half of them were performance audit projects, which covered the major infrastructure investments at a national level such as South-to-north Water Transfer Projects, special funds on Disaster Rescue, and projects financed by foreign governments and international agencies. Besides, Performance evaluation is also integrated in the traditional audit areas, such as budget implementation audit. Hereby, the volume of performance audit work amounted to two thirds of the total of the CNAO, also showed a ten percent rise in comparison to 2006. (The Memo of Annual National Audit Work Meeting, 2008) The focuses of these performance audit projects are not only to disclose the improper policy decisions, the waste in public expenditures and infrastructure projects, but also to reveal the details in information security, the quality of constructions, environmental and ecological protections. Only within the 11 months from January to November in 2007, the financial impact on waste amounted to 27.1 billion RMB Yuan, and accordingly the investment on construction was reduced by 29.1 billion RMB Yuan. CURRENT SITUATION OF PERFORMANCE AUDIT IN UK, USA, CANADA AND SWEDEN With the intent of giving a picture of the performance audit framework of the above four countries and making a comparison with Chinese National Audit Office, the performance audit mandates, the audit scope, the resources employed and the audit criteria deployed of and by these SAIs will be investigated in this part. Performance Audit in UK The National Audit Office (NAO) of United Kingdom has existed in its present form since 1983, but the public audit function in United Kingdom central government has a much longer history and used to be taken by the former Exchequer and Audit Department. NAO is independent from the government and works on behalf of the Parliament and the taxpayers to hold government to account for the utilization of public funds, provide independent analysis and assurance to Parliament and to help to improve public services performance. In UK, a value for money examination is defined as ‘the assessment of performance, identifies good practice and recommends improvements to economy (keeping costs down), efficiency (getting more output for what is spent) and effectiveness (delivering the desired results)’( Annual Report of NAO, 2008, P10), that is ‘3 E’ audit. Performance audit practice has a long history under the instruction of the Parliament, especially, the Committee of Public Accounts, however, until 1983, no statutory authority was given to this new type of audit. In 1983, performance audit has been established as a distinct form of audit through National Audit Law, which gave a new foundation for the new National Audit Office’s value for money audits. The major value for money reports produced by NAO focuses on how specific government projects, programmes and activities have been implemented. They examine the way policies have been put into effect and assess whether that represents value for money for the taxpayer. Just like Office of Audit General of Canada, no comment should be made on the policy itself. The topics under examination are identified by monitoring and analysing risks to value for money across the sheer range of government expenditure. NAO also try to keep our performance study topics flexible to accommodate emerging issues. Besides, proposals from Members of Parliament and in particular from members of the Committee of Public Accounts are also been taken careful account. Each year, around 50 values for money reports are delivered and investigated to the Parliament and the Committee of Public Accounts. ‘In 2007, NAO produced 60 value for money report, and the verified financial impacts of these reports amounted to  £656 million, an increase of  £74million over last year, which also representing a return of over  £9 for every  £1 expenditure of running the National Audit Office. ‘(Annual Report of NAO, 2008, P4) Ultimately, it is for the Comptroller and Auditor General to decide which studies should be undertaken. In terms of fund resources, about a quarter of the NAO budget, which amounted to  £25.2 million, was spent on value for money audit, delivering the main programmes of assurance to the House of Commons. In terms of human resources, 238 of staffs, out of the total 845, are employed for the value for money audit purpose. Sustainability was also a feature of other reports during the year. The report on the Thames Gateway disclosed that the Government’s vision for high quality, low carbon footprint, and sustainable developments in the region had not yet been translated into clear objectives, local strategies or developed plans. Performance Audit in USA The Government Accounting Office of United Stated was established in 1921. GAO is an independent, nonpartisan, professional services agency in the legislative branch working for the Congress, and commonly known as the ‘audit and investigative arm of the Congress’ or the ‘congressional watchdog’. GAO examines how taxpayer dollars are spent and advise lawmakers and agency heads on ways to make government work better. After World War II GAO began to perform more comprehensive audits that examined on only the financial compliance but also the economy and efficiency of government operations. By the 1960s, GAO had begun to perform the new type of audit, performance audit, which aimed to examine whether government programs meets their objectives. In 1970, the Bureau of the Budget and GAO agreed to establish government auditing standards. In 1972, the Comptroller General issued the first edition of the Standards for Audit of Governmental Organizations, Programs, and Activities Functions, which was known as the Yellow Book. In this yellow book, GAO decided to extend its audit scope to performance audit, and defined its audit goals as: check the financial activities and their compliances with current laws and regulations; the economy and effectiveness of administration works; Furthermore, their effectiveness in reality. During the last 20 years, GAO has sought to improve accountability by alerting policymakers and the public to emerging problems throughout government. Effective July 7, 2004, the GAOs legal name changed to the Government Accountability Office. The change better reflects that GAO has become the modern professional services organization. The mission of GAO is ‘to support the Congress in meeting its constitutional responsibilities and to help improve the performance and ensure the accountability of the federal government for the benefit of the American people’. Not like SAI in other countries, GAO is a legislative branch agency, so it is exempt from many laws that apply to the executive branch agencies. However, it generally obeys the spirit of many of the laws, including Federal Managers’ Financial Integrity Act, the Government Performance and Results Act of 1993, and the Federal Financial Management Improvement Act of 1996. The Federal Managers’ Financial Integrity Act emphases ongoing evaluations and annual reports to assure the adequacy of the internal accounting and administrative control of each agency. For the seeking of improving public confidence in federal agency performance, the Government Performance and Results Act 1993 requires that ‘federally funded agencies should develop and implement accountability systems based on performance measurement, including setting goals and objectives and measuring progress toward achieving them’. The Federal Financial Management Improvement Act 1996 stresses on ‘improving federal financial management by requiring that federal agencies implement and maintain financial management systems that comply with the requirements of federal financial management systems, applicable federal accounting standards, and the U.S. Government Standard General Ledger.’ In later years, GAO gave the ‘yellow book’ a more concise title, Government Auditing Standards, and updated periodically. In the latest revision of the auditing standards in December 2007, it emphases on ‘enhancing performance audit standards that elaborate on the overall framework for high-quality performance auditing, including reasonable assurance and its relationship to audit risk, and the levels of evidence used to support audit findings and conclusion. GAO performs a series of oversight-, insight-, and foresight-related engagements, a vast majority of which are conducted in response to congressional mandates or requests. GAO’s audit scope includes financial and management audits, evaluations of federal programs and performance, policy analyses, legal o