Economics in construction

1. Perfect competition maybe described as a theoretical form of market wherein no buyer or supplier has the capacity (or what is termed the ‘market power’) to control the market price. Regular definitions of perfect competition in economics describe it as a situation in which there is absolutely ‘efficient outcome’. The hypothetical situation of ‘perfect competition’ is primarily conjured to build the fundamentals of the supply and demand theory. Totally contrary to the ideas of a perfectly competitive market is the idea of a monopoly, which maybe defined as a continual market situation within which there is only one supplier of a particular service or an item. All monopolies are necessarily devoid of any economic competition and the utter deficiency of ‘substitute goods’. Often a monopoly is sanctioned by the state. Such a monopoly is called a ‘legal monopoly’ or a ‘government granted monopoly’ and is authorized by the government so as to encourage firms to take up a particularly ‘risky’ or ambitious project. Instead of allowing a certain firm to take up a venture in this manner the state might also keep the project all to itself. Such a situation will then be referred to as a ‘government monopoly’. (King, 126) Unlike in a monopoly in a perfectly competitive market there are a number of minor suppliers and buyers who operate at equal capacities in the market. Given their equal status neither of them manages to attain enough significance to influence the market in their favor. The firms in such a set-up are therefore price-takers rather than price-setters, as in the case of monopolies. Also, while a monopoly provides a particular, unique item or service to the market in a perfectly competitive market no firm enjoys any sort of individuality. Instead, each of their products is quite like the others such that there is no room for ‘product differentiation’. A monopoly remains the sole provider of a certain product or service by simply barring other similar firms to enter the market by some means or the other. Often such means include government authorization, like in the case of ‘legal monopolies’ discussed above. In case of perfect competition however no such entry barrier can be introduced. As a result any given firm can enter the market if it wishes to. Similarly, unlike in a monopoly in a perfect competition set-up all firms have access to the same kind of resources all of which are completely ‘mobile’. In a monopoly of course a particular firm controls (and occasionally even withholds) essential resources and production expertise. Given the large number of close substitutes available for the products/services sold by firms in a perfectly competitive set-up it is only obvious that no single firm or even a group of firms have any say about the ‘market-price’. The price of the products or services of firms in an arrangement such as this is duly decided instead by the market, which in turn depends on the behavior of the buyer. A monopoly however doesn’t remain obligated to the market in this manner. Instead, it effectively determines the market price simply by increasing or decreasing the quantity of its produce. Such independence is enjoyed by a monopoly simply because it faces no form of price pressure from opponents. However, there is a limit to which this liberty maybe pushed. Monopolies that raise their price far beyond permissible limits invite competition and may soon have to face rivals providing the same services/products either legally or even illegally. (Fletcher, 188) 2. The residential construction industry might pretend to be a single, solid, well defined industry but it in fact is far from being that. As anyone who has ever had a house made knows building a great house involves a number of things; great plumbing, great carpentry, great painting etc. etc. etc. Given the large demands of building a residential outfit the residential construction industry does not represent one single market, like it appears to be but rather a variety of sectors. However, not all of them need to come into play in every residential construction project. Often a particular house does not need all the facilities the industry is capable of providing it with. For instance if an environmentalist who feels strongly about the use of wood in his house decides to build a house tomorrow he is hardly likely to employ a carpenter, irrespective of how easily he can land one. Similarly a family who decides to paint their interiors themselves will not need painters, at least to the extent they are usually needed by new house owners. Also, in many cases residential construction involves repairing old structures. This obviously takes less effort and expertise than those required for building a house from scratch. As is obvious therefore there are a number of ifs and buts in the industry. We will take a look at some of these a little closely. Normally, specialist contractors who have long standing reputation in the field carry out residential constructions. These individuals take complete responsibility of building an entire building from scratch and cover everything from plumbing to painting. Once they achieve the contract however they duly sub-contract additional independent workers who assist and accompany their own crew. Contractors are often described as the king of the jungle in their own area. They are managers, salesmen, supervisors and directors all rolled into one. As a result of their unique capacity to bring in professionals of their own field under their wings these individuals soon turn out to be perfect monopolies by themselves. Often many of these professionals operate all by themselves in a given area, without any form of opposition or competition. Given their advantageous position they duly flex every possible monopoly muscle they possibly can and obviously determine the market price of the services they provide. Similarly special service providers in the industry, such as say wood engravers or carvers who are both sophisticated and rare in terms of their skill usually monopolize the market and set the market price by themselves. Unlike them plumbers or electricians, who are found in plenty and whose skills hardly vary can never really behave in a monopolistic manner. Instead, their circuit closely replicates what can be called a ‘perfectly competitive’. Much like them painters and carpenters can hardly afford to be choosy or ultra expensive since they are easy to substitute. A good illustration of this point is provided by the use of lumber in the industry in the past decade or so. The U.S. residential construction industry is, by all accounts the biggest consumer of softwood lumber. However, the amount of softwood lumber available to the industry fell dramatically following the restrictions that came to be placed on state and federal forests in the past few years. As a result of this unfortunate fall in supply a large chunk of the industry soon shifted to other alternatives available in the market. Amongst the 2,500 builders we surveyed for this particular study about 12.8% reported to have increased their use of alternative structural materials in the past decade alone. 99% of the respondents also confessed to having started to use at least one out of the long list of alternative structural materials that we provided them with. Till 1995 only 91% of the builders interviewed used substitute materials. (Kar, 145) While the decreased supply of lumber has obviously proved unfortunate for the lumber industry the construction industry itself has survived virtually unscathed. This is primarily due to the wide availability of materials such as reinforced concrete, plastic fiber, steel etc. which maybe easily used as a replacement for lumber. This example clearly proves the market for construction material itself therefore it maybe said to be a ‘perfectly competitive’ market. With easily available substitutes, easy entry into the market and hardly any product differentiation it fits almost every characteristic of the ‘perfect competition’ market to the tee. Unlike lumber and its alternatives however other important facets of construction are not as easily obtained. The expertise required to design a house for instance is far harder to replace than the construction material it is to be built with. Due to the utter importance of their job and how extraordinarily dependant on knowledge and skill it is, the architect and the whole engineering industry maybe described as a bit of a monopoly. It is of course difficult to enter their market, there are hardly any ‘substitutes’ available (since the level of skill and expertise of each engineer varies from the other) and the engineers themselves tend to determine the market price of their know-how. (Lamb, 243-245) Thus we see how the residential construction industry of U.S.A. is actually a mà ©lange of a wide variety of competitive markets and not a single market by itself. It is the proper functioning of each of these individual parts that ultimately allows the construction business to function properly. References: Fletcher, R; Economy: Beliefs and Knowledge; Believing and Knowing. (Mangalore: Howard & Price. 2006) pp 188 Kar, P; History of Indian Consumer Market Applications (Kolkata: Dasgupta & Chatterjee 2005) pp 145 King, H; Fiscal Fitness Today (Dunedin: HBT & Brooks Ltd. 2005) pp 126 Lamb, Davis; Cult to Culture: The Development of Civilization on the Strategic Strata. (Wellington: National Book Trust. 2004) pp 243-245   

Just Do It Essay

Sharad Haksar’s Just Do It is part of his very moving series of pictures he calls â€Å"Brand Irony. † This series portrays ironic juxtapositions of world-renowned brands combined with interesting visuals. In this specific picture, Haskar shows Nike’s famous Swoosh accompanied by its â€Å"Just Do It† slogan on a wall acting as an advertisement somewhere in India. On the wall next to the ad, a young boy is urinating as a little dog looks on. At first a feeling of excitement comes over the viewer because of Nike’s large media presence and its ties to athleticism. The boy urinating next to the slogan seems to then invoke a feeling of humor. These emotions soon give way, however, to a much deeper and serious analysis. Soon enjoyment and wittiness turn into anger and sadness as the details of the image slowly come forward. Born in India, Sharad Haksar was probably accustomed to seeing this kind of situation day in and day out. For this reason, Haksar was surely biased in the way that he definitely had some kind of disgust with companies like Nike. He is trying to appeal to the same audience Nike would be trying to attract in their advertisements. This would be, for the most part, young and active people anywhere from the ages 15-40. More than that, he is also trying to appeal to anyone who has an interest in photography, advertising, and the worldwide problem of worker exploitation. He finished up his collection of photos entitled â€Å"Brand Irony† in 2006. These photos were meant to show big-market companies advertising in ironic situations and/or places. In this specific photo, his frustration with large corporations exploiting their workers seems to be the focal point. Nike is a world –power when it comes to brand imagery, and their â€Å"Just Do It† slogan is as recognizable as any. By combining the first glance humor of a boy urinating on a wall, with the more profound message hidden deeper inside the photo, Haksar creates a brilliant image that begs to be understood. Many human beings see Nike as a model company, one that is always progressing its craft, and constantly trying to better its products. Haksar realizes this, and he wants to shed some light on the other side of the business. He wants to show how huge commercial businesses like Nike affect the countries and communities in which they conduct their trades. Nike has been at the forefront of â€Å"sweatshop† controversy in India, and the dirty and grimy background of the image appeals to this controversy. The â€Å"Just Do It† slogan, rather than being the upbeat, creative influence it usually is, is now portrayed in a much darker light. In Indonesia alone, 30% of factory workers were reported as being verbally abused, with another 2. 5% experiencing â€Å"unwanted fondling† (Dukcevich). In Honduras, two Nike subcontractors closed down their plants, pushing 1,800 natives out of work. It didn’t stop there, though. In complete disregard for Hondurian law, they refused to pay the $2 million in severance that was rightfully owed. Nike’s â€Å"factory to factory† competitiveness creates â€Å"an ultra-competitive environment that drives down wages and gives factory owners virtually no choice but to disrespect workers’ basic rights† (Greenhouse). The motto â€Å"Just Do It† is supposed to cast anger over the viewer, as it is clear that this is not an option to these people; life will never grant them the chance to just do it. Haksar is trying to bring awareness to the poverty-laden countries that big companies exploit to inexpensively run their large factories. He is trying to show that these disadvantaged humans slave over products that they cannot and probably never will be able to afford. This underprivileged boy and the rest of this community are living a life that doesn’t allow them to â€Å"Just Do It,† the opportunities just aren’t there. They lead a life of struggling to survive on insufficient paying jobs, some even as factory line workers in one of Nike’s 1000 factories worldwide. It is not unusual for these workers, most of the time women and children ages 10-24, to work 13-hour shifts and come home with a meager $1. 60. This fact becomes staggering when one takes into account that the average minimum living wage in most of the third world countries that house Nike factories is somewhere around $3. 00 to $5. 00 a day (Braddock). Exploited workers in these factories have no chance of living any kind of lifestyle Nike promotes, but rather become the impoverished human beings that are the face of third-world countries around the globe. The boy in the picture that at first seemed so comical is in fact without hoes or a shirt. He is clearly indigent and the littered ground he stands on emphasizes this. A sense of pity is immediately taken up for the boy, as he cannot even afford to put a pair of shoes on his feet, let alone the ones Nike advertises. Then the focus shifts to the dog. The dog that at first seemed cute and harmonious prancing next to the boy, now seems ragged and undersized. As the powerful, commenting images slowly unfold from Haskar’s photo, the picture transforms from just an advertisement to a much more critical view of Nike’s world-power franchise. He is trying to invoke a sense of guilt and remorse in his audience for their participation in buying Nike’s products. Moreover, a sense of anger is supposed to be instilled in the viewer, caused by Nike’s insistence on advertising in countries where just a miniscule part of the population has the means to buy their products. In this sense, Haksar is appealing to his audience to recognize where and how Nike’s products are being made. The innovation in brand imagery Nike has brought to the commercial world is unparalleled. The Swoosh and the â€Å"Just Do It† slogan are reminders that Nike sits in the top of its class when it comes to advertising. Sharad Haksar’s stunning Nike image in his â€Å"Brand Irony† series is a comment on this advertising and also an insight into how the products they market are produced. The image comes off, at first, just to be a humorous depiction of a boy urinating on a wall, but in fact is trying to shed light on the cruel and inhumane ways workers are exploited by companies like Nike. What the general public sees is Nike’s innovation and their leadership in their industry. What they don’t see are images like this.

Management Innovation and New Technology Essay Example | Topics and Well Written Essays - 1000 words

Management Innovation and New Technology - Essay Example However, modern theories are moving away from this inventor mythology to more holistic approaches that are often based on complete processes and this has led to successful commercialization of new products and processes. An individual can confidently state that product innovation is a complex process rather than a one-day event. This means that there is a lot that is involved in product innovation. A number of insights are evident in the product innovation complexity. To begin with innovation starts and ends with invention (Wield & Rhode, 82). Invention refers to the discovery of new and intelligent ideas and artefacts. Despite the fact, that creating new idea is the baseline of innovation, it is noteworthy that the idea must be sorted out as to whether it is workable and or applicable into the societal context. In other words, innovation takes into consideration adapting the newly found ideas into practical productive application in particular work processes or product markets of a particular firm. The applications should not only be to specific firms but also to the entire economy and into the society. This proposition can be justified by the fact that despite Spencer Silvers discovering the Post-it brand adhesive before 1970 this noble invention was only commercialised in 1978 after the company (3M) had ignored for that long owing to lack of practical applicability (Ketteringham & Nayak 427). Silver’s moment of discovering the Post-it brand adhesive began in 3M’s Central Research Laboratories under program dubbed â€Å"Polymers for Adhesives† in 1964. It is unfortunate that despite the fact that silver came up with unique form of adhesive his new idea could not be taken seriously by the management because Silver could not find a problem to apply this great idea. It was until Arthur Fry a 3M chemist, a choir director and an amateur mechanic found a problem to Silver’s idea when he came up with the paper to paper application of the adhesive. According to Wield & Rhode (84), the complexity of product innovation can be understood by withdrawing the assumption that innovation takes a â€Å"linear flow†. It is noteworthy that successful innovation has no straight line considering that it does not spring from scientific invention all the way to develop a competitive edge. The nature of the link between a scientific invention and the technological development is in itself very complex and because of this reason, the link has often been confusing. Individuals need to understand that scientific invention benefits a lot from technological development in a number of ways that include but not limited to transfer of knowledge, network of profession, skills and instruments. In the case of 3M, it is evident that the company boasts of a poll of skilled scientists that range from chemists and engineers who worked tirelessly in 3M’s Central Research Laboratories to come up with new inventions. The idea that led i nto development of one of the best selling product of 3M named Post-it Note Pad resulted from a series of technological developments that took approximately 10 years (Ketteringham & Nayak 425). Successful product innovation is also a matter of interaction between a number of factors within and outside the organization (Wield & Rhode, 84). Studies indicate that those factors that key determinant to the commercial success of a product are found outside the areas which are commonly associated with the with the

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Most Wanted Transportation Improvement - Essay Example Board saw the need to alert the public about the different safety regulations which have to be imposed and which have to be complied with in the transportation sector. The safety of Emergency Medical Services flights, more particularly the Helicopter Emergency Medical Services (HEMS) flights were recently added to the list. The NTSB accurately pointed out that the mission of the EMS is to save lives; therefore, operating an EMS flight in an unsafe environment â€Å"just makes no sense† (Rosenker, as quoted by Air Safety Week, 2008). This most wanted improvement identified by the NTSB involves the â€Å"conduct of flights with medical personnel on board in accordance with commuter aircraft regulations† (NTSB, 2009). This improvement is also being described in terms of developing and implementing flight risk evaluation programs; requiring formalized dispatch and flight-following procedures plus up-to-date weather information; and installing terrain awareness and warning systems on aircrafts (NTSB, 2009). In 2006, the NTSB adopted the NTSB Special Investigation Report where they sought out to establish the importance of the EMS and of guaranteeing the safety of these flights. This report assessed EMS accidents from January 2002 to January 2005 and they were able to uncover about 55 EMS accidents during said time with 29 of these accidents preventable through corrective measures (SafeMedFlight, n.d). Most of these flights involved helicopters deployed by the EMS where, most recent figures registered a total of 35 casualties. The preventable nature of these accidents is an important indicator of the need to implement changes and improvements in EMS flights. The report above prompted the NTSB to seek the assistance of the Federal Aviation Administration (FAA) in order for the latter to adopt measures in order to improve the safety of EMS flights. The NTSB was able to establish, during its investigation and assessments, that there seem to be less stringent

Transitioning From Closed to Open Systems Research Paper

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Audit and Internal Control Essay Example | Topics and Well Written Essays - 1750 words

Audit and Internal Control - Essay Example A computer system is at risk of been accessed illegally and data that is held there within put at risk. Given the sensitive nature of accounting data, the finance director has asked for an audit report detailing the security status of the system. Data will be input in the computers from workstations, and there is risk of unauthorized access to this data at this point. Data from satellite stations will be transmitted through the internet, and there is the risk of this data getting accessed by unauthorized individuals either remotely or otherwise. The finance director has specifically asked for a description of the general controls that can be exercised to avert unauthorized access to the computer system from remote workstations. These may be the remote workstations of the company's staff or the remote workstation of a computer hacker. The director also asked for procedures that can be applied to avert unauthorized access to the computer through the service provider. Controls to be employed in the purchases and payroll systems over retrieval of information, input of transaction data and updating of standing data files has also been requested. It has been noted that a large number of unauthorized access to a company's computer system is from within, rather than from without (Wilkinson: 2009). What this means is that there are some members of the staff who are errant enough to access the computers of their employer without the relevant authorization. The reasons why they do this are varied. Some are interested in sabotaging the activities of the company while others are just curious about the contents of the computer. There are several procedures that have been developed that ensure that this does not happen. Use of Password and User ID Control Password is the most common form of control that is used to ensure that there is no unauthorized access to a computer and the computer system (Nikoltos: 2008). In this case, every user of the computer or system is given an identity, or ID. The ID might be his name or other such identifications. He accesses the system by using that ID, since it is the name that the system knows him with. A password is then given to each and every of these ids. The user is supposed to provide the computer with his identity and the accompanying password for him to be allowed access to the system. Every password is specific to a particular ID. A wrong combination of the two will not allow the user to gain access to the system (Nikoltos: 2008). When there is more than one user with identical names and information, a special ID called the User Specific ID is used (Marie: 2007). Windows will utilize Security ID or SID for each and every of those accounts (Marie: 2007). The best thing about this ID is that it is a very unique key. When a user is creating an account, the security identity is generated, giving all his details (Wilkinson: 2009). Passwords and user IDs have some strength that makes them effective in dealing with a remote unauthorized access. For starters, the computer system is set such that there is no access that can be permitted if the correct combination between ID and password is not made (Wilkinson: 2009). This makes it possible for the computer system to alert the administrator when an unauthorized access had been attempted. It is also very hard for a password to be replicated. The user can create a very