The Sodor Oil Terminal

The Sodor Oil Terminal Introduction The Sodor Oil Terminal project was undertaken by a team of students as a case study in project management. The purpose of the exercise was to organize and plan the project as part of a project team, and deal with events arising during the project life, utilizing techniques and tools learned during the study of project management. Management of the Project Team Team Selection The team selection for the project was left to individuals, who had to form themselves into teams based on personal choice and internal acceptance. In an educational setting random group selection is very common but not realistic as it does not consider the diversity of skills among the students (Blowers 2003). In terms of skill sets the team forming in this project was random in that there was no comparison before a team was selected, merely a choice of friends or acquaintances. This would seem to be negative and, as Blowers (2003) pointed out, totally unrealistic in the business world, where teams of high skill-set individuals would be chosen to give a project the highest possible chance of success. However, the team selection was not as random as it first seemed, as four members of the team had worked together before, and although it was not acknowledged formally, were aware of each individuals skills and working methods. This proved to be a positive feature in the project development. There were an additional two members of the group who were known only to one of the core four, and this also proved to be significant during the course of the project. Team Development Tabaka (2006) paraphrasing Tuckman and Jensen (1977) stated that in the forming stage the team members must acquaint themselves with each other and judge their own and others role in the team. This stage was already accomplished in the team which formed for the Sodor project. Four out of six members had already worked with each other in previous projects and knew each others capabilities. The two extra members were unknown, did not turn up initially, and showed no enthusiasm for participating in the project tasks. They were therefore largely ignored in terms of expectations of the other team members. The second stage according to Tuckman and Jensen is storming where team members try to exert power over one another, and jockey for position within the group. This stage was also already completed within the core team at the start of the project, and the team had already surpassed Tuckman and Jensens norming stage, with the trust having been built up in previous team encounters, and the ability to work together successfully having already been achieved. The team was therefore ready for Tuckman and Jensenss performing stage. Unfortunately the two outsiders to the team never achieved a real measure of trust within the team, so they remained outsiders for the rest of the project, but were allowed to contribute in a small way whenever they expressed a desire. Team Project Management In the initial stages of the Sodor project tasks, most of the project team was missing for the meetings. This would seem to be a very unfortunate and negative feature for the progression of the project. Ericksen and Dyer (2004) maintained that most of the successful project teams they had studied had had a very decisive launch, with solid project management, direction and clarification right at the beginning, as opposed to the teams who had procrastinated and lacked direction. As there was no-one else to take the position, the one team member present in the initial stages of the Sodor project took on the responsibility of project manager, at least for that stage of the project. The team member had to act alone at the start of the project and was able to be decisive and act with direction precisely because there was no-one else to interfere, and no negotiations to be performed, and the project was able to progress. As the team was already normed it was able to move into the performing stage. The reaction of the other team members was approval that the team member had shown the responsibility to take on the task. There was also an underlying understanding that the other team members would accept future responsibilities. This understanding was formulated into an informal contract of work within the team, more out of conformance to the project guidelines than from the need within the team. Throughout the course of the rest of the project the other team members fulfilled their roles as had been agreed in the contract of works. It was decided that the areas of relevance within the project would each have an individual largely responsible for that particular area. The areas of relevance chosen were planning, costing, procurements, and configuration or change management. The four core members of the group accepted responsibility for an area each with little consultation between members, with the two outside members agreeing to assist whenever needed. This seemingly discrete allocation of tasks would have been a negative feature in some teams but was suitable for the character of the team members, all being highly motivated and goal oriented individuals, but also having a high level of trust in their other team members to deliver. There was an element of informal skills measurement in the allocation of the tasks, done on a purely experiential basis rather than empirical evi dence. Tenenberg (2008) questioned whether people who are highly individual can be encouraged into more collaborative behaviour in order to make teamwork more effective. He quoted Cain et al. (1996) and stated that software development should be regarded as essentially social and that the social side of the activity needs to be addressed the same principle could be applied to any projects which are team-based. Tenenberg (2008) stated that teams have in common a set of collective action problems which require teamwork to be solved. One of those problems mentioned is that of dealing with people who do not contribute to the teams efforts. The Sodor project team did not address this problem at all, largely because the team worked as co-operative individuals rather than a team, and those who did not co-operate were simply ignored and their potential workload absorbed by the co-operating members. Akgun et al. (2007) also postulated team processes as a way to improve the chances of a projects success, and put forward the idea of group potency a belief held by team members that they can be effective. Although the Sodor team worked largely as individuals there was a genuine trust among the main members and a genuine belief in the potency factor which may have been mistaken. Summary The team did not behave as a traditional team with a high level of interaction and decision making but rather as a set of co-operating individuals. It did, however, go through the traditional Tuckman and Jensen (1977) stages of development, albeit before the Sodor project began, and also displayed some of the characteristics of a team as defined by Katzenbach and Smith (1993) complementary team members with common goals and approaches who were willing to be held accountable to the other team members. Evaluation of the Project General frameworks of project management can be found from many sources. Gannon (1994) suggested that project management should consist of six functions planning, organizing, executing, monitoring, reporting and controlling. Prodomos and Macaulay (1996) proposed four main activities planning, monitoring, co-ordinating, and reviewing. The Sodor project will be evaluated using the categories of planning, and monitoring and control. The Gantt charts and cost schedules from this section can be found in the Appendix attached. Planning the Project Prodomos and Macaulay (1996) cited Jordan and Machesky (1990) and proposed that the planning stage was the foundation for the other project activities. Dvir et al. (2003) reported that a belief amongst project management professionals (supported by the Project Management Institutes Guide to the Project Management Body of Knowledge hereinafter referred to as the PMBOK) is that planning is an essential activity which cannot guarantee success, but without which a project will most certainly fail. This belief was reflected in the Sodor case study where half of the activities were on planning the project. Activity Planning Initially, the Sodor project was presented as a textual case study, providing information to construct a work breakdown structure. Andersen (1996) argued that in a real situation activity planning cannot be completed when it is most useful, i.e. at the start of the project, because all of the activities cannot be known then. The Sodor projects activities were identified and provided, so a work breakdown structure could be constructed by the project leader. Other categorizations of the work and different breakdowns were possible but the project team was happy with the project managers decisions. Project Planning Hughes (1995) suggested a Step Wise guide for software projects with details of the stages a project planning team must complete to achieve an effective project plan. PRINCE2 a methodology advocated and required by the UK government also prescribes stages of project development including planning, which reflects the PMBOK areas of Scope, Time and Cost Management. (Siegelaub 2004). Scope management was outside the brief of the Sodor project team as it was provided in the project information. Clear objectives and methods were also provided and no feasibility study was necessary. Therefore the first main planning activity of the Sodor team was in time and cost management to produce a Gantt chart and estimated costs schedule based on the work breakdown structure and provided task precedences to calculate an estimated project end date and project cost. The next stage in planning was to choose vendors.The vendor selection process was carried out by one member of the team acting as project manager. This was where the rest of the team should have had more input, as two important issues in project management would arise which had implications later risk management and quality management. Risk Management The PMBOK devotes a whole knowledge area to risk management and PRINCE2 identifies risk as one of its components. The PMBOK suggests four phases of risk management identification, quantification, response and ultimately control. The Sodor project was totally dependent on third party vendors for both the supply of materials and construction. The biggest identifiable risk for the project would be the failure of a supplier or contractor to deliver on time. This would be particularly relevant to the tasks within the project which were on the critical path in the original estimated plan. Therefore the vendor selection for these tasks should have been carefully considered. Risk is usually quantified as a function of the risks occurrence probability and occurrence impact. (Williams 1996). The probability is a difficult judgement to make but the team was supplied with ratings which were based on how reliable the vendor was. The impact was the penalty cost for late project delivery. The contractors for the two critical tasks of jetty design and construction, and the installation of piping equipment were only rated 2. This proved to cause problems later. Methods of risk management include trying to reduce the risk (Gannon 1994). Of course, reducing the risk by choosing higher rated vendors would have had a cost and would have to have been judged to be cost effective. This was partly taken into account in the vendor selection policy, but should have warranted more attention from the project team. Another way of dealing with the risk in a real situation would have been to deflect it (Gannon 1994) by transferring it to the vendors. Penalty clauses could have been inserted into their contracts for overrunning the quoted task durations. The Sodor project team were not able to do this, so reduction of the risk was the only option available. Quality Management The PMBOK also devotes a whole knowledge area to quality management, so it is obviously an important area for project managers to consider. In the Sodor project the quality of the vendors was the greatest area for consideration. The only indicator of this was the rating provided, which was used in the vendor selection. In a real world situation vendors could have been required to conform to International Organization for Standardization quality standards such as ISO 9001:2008 dealing with Quality Management Systems Requirements, but this was not an option for the project team. After the completion of the planning phase with vendor selection, a final baseline plan and costings were produced. In order to adjust the project end date to conform to the required schedule it was decided to pay overtime to the painting contractor. At this point cash flow should also have been considered by delaying the times for the purchase of materials until necessary but it was not, a potentially huge mistake in the commercial world. Monitoring and Control Gannon (1994) stated that project performance can be measured by the comparison of actual progress to the original planned progress at any stage in the project. The slippages in the Sodor project at 25 weeks were entered into the project Gantt chart and it was found that as a result of slippage in critical path activities the project would overrun by 4 weeks compared to the baseline, and penalties would apply. The project team had 3 choices accept the penalties, reduce the length of an activity on the critical path by paying overtime (known as the time-cost tradeoff problem, (Liberatore and Pollack-Johnson 2006)), or reconsider the precedence requirements (Liberatore and Pollack-Johnson 2006). It was found that paying overtime to the painting contractor to reduce the project duration by 4 weeks was less than the potential penalties and less complicated than reconsidering the precedence requirements. Further problems at the 25 April 2001 stage were caused by the vendor selection for the jetty erection. For the same reasons as above it was decided to pay for overtime on the jetty erection thereby reducing the critical path back in line with the required completion date. By the project closeout it was found that as a result of a reduction in a critical path activity the project completed 2 weeks early and earned bonuses. Summary The project was a success if the criteria was to complete the project in time. But more careful selection of vendors could have also cut the costs of the project the choice of the pipe installation vendor in particular could have produced substantial bonuses. The complete exclusion of any consideration for cash flow was also a major mistake. In the real commercial world, projects can fail because of cash flow problems, so this should have been recognized. Conclusion The Sodor Oil Terminal project was a success in terms of completion of the project within the required time. Pinto and Slevin (1988) measure success simply by achieving the projects time and costs schedule, accompanied by an adequate performance. This approach, however, ignores the factors of commercial success in the marketplace, and how the future of the organization as a whole has been affected by the project, factors recognized by Shenhar et al. (1997). The Sodor project could have been completed within a smaller budget, with greater commercial success and larger profits for future investment in the organization if greater attention had been paid in the areas of vendor selection in terms of risk management. The financial pressure of the large project on the organization could have been offset by greater attention to costings in terms of cash flow optimization. These negative conclusions can be directly attributed to the project teams lack of real teamwork in not questioning each others actions enough or discussing relevant issues.

Construction Issues and Reflective Assignment

Construction Issues and Reflective Assignment Introduction This report evaluates and analyses 4 issues which arose from a construction project and solutions have been recommended. A reflective essay is included to provide an amicable solution to the issue. Background Information Smart Developments are a commercial development company based in Leeds with goals to provide new sustainable buildings in Leeds. The first development is a  £10,000,000.00 project to build new accommodation, retail, sports and leisure facilities. Modern Contractors are a respected and hard-working medium sized contracting organisation operating in Leeds and throughout the region. Modern Contractors had signed an 18month contract with Smart Developments to complete the building works, based on JCT Standard Building Contract with Quantities 2011. The following issues have arisen: 1. On the date that Modern Contractors were due to start the project the main entrance to the site (as stated in the Bills of Quantities) is blocked by materials left by the Client. These materials are not removed from site for 1 week. 2. During the removal of the cellar a gas main was found and British Gas was called to relocate the main which took 16 working days. Some works could continue but the repositioning of the gas main caused a delay to the progress of the main groundworks. 3. Then, during the excavation of the substructure works ancient roman coins are found. This leads to a further delay of 1 month to allow for archaeological investigation work. 4. Monthly payments are agreed in the contract particulars and these should be in Modern Contractors account by the 15th of each month. In August and six months into the contract period payment was not paid until 5th September. When Modern Contractors complained to the employer they said â€Å"that’s the trouble with banks these days – you just can’t rely on them† and Modern Contractors â€Å"should know better than to complain about the situation as this is standard industry practice†. As Modern Contractors have some issues with cash flow they are proposing an additional clause in their contracts with their sub-contractors that will provide for them to pay the sub-contractors only when they have been paid. Issue 1 On the date that Modern Contractors were due to start the project the main entrance to the site (as stated in the Bills of Quantities) is blocked by materials left by the Client. These materials are not removed from site for 1 week. Before going deep into the roots of the contract, it is important to note that all site works are under responsibility of Smart Developments. What does the contract say? In the case ofFreeman v Hensler (1900)where it was held that it is an employer’s duty (of co-operation) to give the contractor possession of the site within reasonable time to enable him to carry out and complete the work on the completion date. According to JCT 11 SBC/Q, the employer has to co-operate fully with the contractor so that the site is handed over within reasonable time, and the contractor will be able to perform the works as per schedule. If the employer fails to do so, it is possible for the employer to defer giving possession of the site for a period not exceeding six weeks calculated from the relevant Date of Possession stated in the contract. (Clause 2.5) Such clause prevent the employer from being in breach of contract and liable to damages, but the contractor will have alternative remedies which are listed in clause 2.29.3 (extensions of time) and clause 4.24 (loss and expense). The fact that materials were blocking the main entrance can be taken positively. The contractors could have notified Smart Development who would have organized for an alternative entrance or simply moved the materials somewhere else. It can be argued that one week’s time loss is not substantial and will not hinder the project or cause the project to continue beyond completion date. Assuming buffers/float were added for activities, Smart Developments can argue that the whole project duration can accommodate the loss of time (1 week) and they negotiate with the contractors to start the project after one week and still finish the project on time. Recommendation In the event that the contractors do not agree and decide to go forward with a claim of extension of time or loss and expense, it is advisable for Smart Developments to allow for reasonable extension of time. Though the process isn’t simple, the contractors need to notify the employer that they will be delayed in starting their work. The Contract Administrator need to do the follow up and find out if this event is a Relevant Event or not. This process may take another week. (Note: Deferment of Possession is a relevant event under clause 2.29.3 / 2.5) Concerning loss and expense claim, it is advisable for Smart Developments to verify the claim amount to know if there has been any mobilisation cost or machinery transferred to site or any valid claim, before proceeding to any payments. Issue 2: During the removal of the cellar a gas main was found and British Gas was called to relocate the main which took 16 working days. Some works could continue but the repositioning of the gas main caused a delay to the progress of the main ground works. What does the contract say? There is a mechanism in the contracts to deal with delays. Usually foreseen or unforeseen events which appear during progress of work have to be dealt with by a protocol. JCT 11 dictates that the Contractor has to inform the Contract Administrator or the Architect in writing when cases arise where they deem to have been delayed significantly. And to stipulate the number of days they think the delay will cause them prejudice/prevent the contractors to continue their job. It can be noted that an extension of time granted for a cause of delay which may seem to have financial implications does not necessarily mean that there will be additional payments. The design team of Smart Developments should have carried out proper site surveys prior any designing and notify the Contract Administrator of possible works concerning gas pipes. It is inevitable for British Gas to be present and complete the repositioning of gas’ main. JCT 11 SBC/Q defines that statutory undertaker such as British Gas (being responsible for gas supply and regulated by law) should carry out their work diligently. Recommendation At this point, it is advisable for Smart Developments to fix the completion date and allow for extension of time for the contractors to complete the work in progress, based on clause 2.27, 2.28 and 2.29 To prevent any further problems concerning loss expenses, Smart Developments can review the rate at which Liquidated Damages are governed and reduce at its free will. Under clause 2.30, once a certificate has been issued, deductions can start after the first payment but Smart Development can bargain with the Contractors for a review of the rate and withhold deductions until practical completion has been reached. If both parties agree, only extension of time will be granted because of the delay caused by British Gas. Issue 3: Then, during the excavation of the substructure works ancient roman coins are found. This leads to a further delay of 1 month to allow for archaeological investigation work. What does the contract say? According to JCT 11 SBC/Q, the clause 2.29.4 acknowledge that compliance with clause 3.22.1 (Antiquities) or Architect’s/Contract Administrator instruction under clause 3.22.2 is a valid Relevant Event. Recommendation Valid Relevant Events are entitled to Extension of Time; Therefore Smart Developments should fix the completion time and allow an extension of time. The contractor can claim for Loss Expenses since excavation was being carried out and it had to stop to allow for investigation. Since 1 month of delay is fairly considerable lapse of time, Smart Developments should allow the contractor to claim for its Loss Expenses, Smart Developments can only compute a reasonable amount of loss incurred. The other side of the coin is that if there is part performance only, then Smart Developments can only pay for the work that has been carried out. Since the contract has not been fully honored, both parties can wait and accept the delay in project. And resume work after the coins’ investigation has been completed. Smart Developments will forfeit the right to claim for Liquidated Damages if the contract completion date is fixed again. Issue 4: Monthly payments are agreed in the contract particulars and these should be in Modern Contractors account by the 15th of each month. In August and six months into the contract period payment was not paid until 5th September. When Modern Contractors complained to the employer they said â€Å"that’s the trouble with banks these days – you just can’t rely on them† and Modern Contractors â€Å"should know better than to complain about the situation as this is standard industry practice†. As Modern Contractors have some issues with cash flow they are proposing an additional clause in their contracts with their sub-contractors that will provide for them to pay the sub-contractors only when they have been paid. What does the contract say? The dates provided in the contract particulars are to be used to distinguish if there has been a breach of contract for delayed payment or not. According to JCT 11 SBC/Q clause 4.12.1 the final date of an interim payment is 14 days from the due date. Therefore money due in August should have been lodged in the contractors account by latest 29th of August. Since payment was received on 5th of September this amounts to a breach of the contract. The contractor has the right to suspend any work as a result of the breach of contract or to terminate his employment under clause 4.16.7 / 4.14.1 Recommendation It is advisable for Smart Developments to pay the contractor simple interest on the amount due from 29th August till 5th of September as per clause 4.12.6 and to make sure that all payments are done within the time frame. The fact that Modern Contractors are altering their contract with the sub-contractors doesn’t not affect Smart Developments because of privity of contract, though Modern Contractors have to notify the employer of the sub-contractors they will be employing as per CDM Regulations stated in clause 3.23.3 Reflective Essay Modern Contractors could have moved the materials on site themselves or notify Smart Developments of the problem that the main entrance is blocked by materials, and expect the Employer to clear the entrance. Concerning the 1st issue: Though the delay is only one week, the employer cannot use any available float to absorb this type of delay. Modern Contractors should apply for extension of time for this delay and make sure that extra time is allowed for the float as well. Concerning the 2nd issue, British Gas has to complete their work as per law, Modern contractors being hindered in doing their job can claim for extension of time. Though Modern Contractors have been trying to complete other works in sections, this delay can be reflected in the overall project hand-over time. Therefore Modern Contractors have to apply for extension of time and moreover claim for Loss Expense as it is accrued for 16 days of not performing actual work towards achievement of project. Concerning the 3rd issue, since the event could not be foreseen by any parties, Modern Contractors are entitled to extension of time and have the right to claim for Loss Expense. The cost would include plant provided on site for excavation, labour, lorries waiting for excavation etc. Concerning the 4th issue: Modern Contractors have the right to suspend any performance until payment has been effected. It is possible to terminate the contract as well because of the breach caused by Smart Developments in delaying payment. By adding extra clauses to the contract, Modern Contractors cannot forego their duties to pay their Sub-Contractors. The payment has to be processed by Modern Contractors no matter what is the outcome with Smart Developments. An amicable solution for problems is direct negotiations between Modern Contractors and Smart Developments. For Issue 1: Either parties could have cleared the materials and go forward with the project. As 1 week is not considerable time and both parties can absorb this delay within float For Issue 2: The design team should have known that there are live gas lines within the cellar, therefore British Gas would have been called during the first week to relocate the pipes. Modern Contractors would have been given possession of site 2 weeks after British Gas had fix the lines. For Issue 3: The best option would be to pay Modern Contractors a minimum rate for the delay caused. That rate would cover for plant hire and labour for example, there would not be any profit for Modern Contractors. Or allow Modern Contractors to carry alternative works on other site until Smart Developments are ready to accommodate them again. For Issue 4: Smart Developments can negotiate to allow for some extra time before payment can be released to Modern Contractors and waive retention money for part of works carried out.

The Struggle of an Outsider Essay -- Race Relations, Native American

Throughout our readings this semester, the theme the outsider has been present. The outsiders in these selections have all had similar roles. One of the main roles was subjection that developed from the feeling of unequal standings. This subjection silenced and forced many from the mainstream. The Native Americans were outsiders to the Europeans. The Europeans had different beliefs and ideas about life which they forced upon the Native Americans. Suddenly with the arrival of Europeans, Indians became strangers on their own territory. They lose the stability which came with knowing the simply pleasures that surround them. They could not longer listen to wind or feel the sun’s touch but they were forced to fight just to keep a place on the land in which now could be owned. â€Å"Could there be a more efficient way to distress and murder them by inches than the way they have taken† (Apess 484).Even if the Indians were successful in keeping a small portion of land, they were afraid of when it would be taken from them. Before the Europeans, they never knew this world. They were somehow â€Å"ignorant of time, either by the sun or moon; nor do they reckon by the month or year. They understand the seasons in terms of the ripening of fruits, the dying of fish, and the position of stars† (Cabeza de Vaca 32). The perplexing thought for most Native Americans was the Europeans claimed to be Christians but seemed so engulfed with hatred toward this people constantly causing destruction to this innocent group of people. William Apess of both European and Native American descent writes of Europeans who â€Å"would think it no crime to go upon Indian lands and cut and carry off their most valuable timber or anything else they chose† (Apess 484).Slowly, the N... ... control. Simon Rosedale is also an outsider in this society although not for the same reason as Lily. Mr. Rosedale Jewish background prevents him from acquiring a position in this society. Although Rosedale is quite wealthy, he cannot advance in this society unless he can marriage a member that has rank in society like Lily at the beginning of the novel. â€Å"Why should I mind saying I want to get into society† (Wharton 200). Mr. Rosedale intentions are obvious and he uses his wealth to try to succeed in obtaining a role in this society. Lily and Rosedale both posses attributes of outsiders trying to earn their way in a vain society. Many of the outsiders in our readings tried desperately to gain acceptance to the inside. They were subjected to the ideas and beliefs of others. They also were forced to take off their identity to gain acceptance in their society.

Traditional and Internet Dating Essay -- Dating Social Values Changes

Traditional and Internet Dating At some point in our lives where we are searching for that special someone. The methods of going about dating have changed quite dramatically over the years. Going out has grown from traditional dating, to internet 'dating', to group dating.   Ã‚  Ã‚  Ã‚  Ã‚  Traditional Dating has changed over the years. In my generation the girls can ask the guys, there is no telling where they might go on a date, or they might just hang out at home, which did not happen as much 25 years ago. My generation's moral values are changing too: sex on the first date happens more frequently now. Many Years ago a guy would go pick the girl up at her house, was introduced to her parents and have a talk with them before taking their little girl out for a first date. Now, however, guys and girls meet somewhere or the guy just beeps the horn and in many cases the parents do not meet the guy with whom their daughter is going out. When my parents were young, dating was something taken seriously, and knew someone for a period of time before ever asking her out on a date. Today a date may be just something to do for fun or if you are bored. Nowadays many people "hook-up" at bar, clubs or random parties. : I wonder what changes are to be in the futur e of dating.   Ã‚  Ã‚  Ã‚  Ã‚  What kind of person goes online and uses personal ads to meet their mate. The Internet changing everything from the way we shop to the way we find driving directions. Cyberspace has become the hottest pick-up jo...

Biology of Mangroves :: Research Essays Term Papers

Biology of Mangroves One of the most unique and least understood environments found in nature is that of the mangrove. This ecosystem is found at the junction between land and sea. Author, Loren Eiseley (1971) wrote vividly about his encounter with a mangrove forest in the book The Night Country: A world like that is not really natural. Parts of it are neither land nor sea and so everything is moving from one element to anotherÃâ€"Nothing stays put where it began because everything is constantly climbing in, or climbing out, of its unstable environment. The actual word à «mangroveà ­ can be used in two ways. It can refer to an individual species of plant or it can indicate a group or forest of plants that contains many species (Figure 1). To determine what constitutes a mangrove species many aspects are considered including: (1) air temperature within a certain range, (2) mud substrate, (3) protection, (4) salt water, (5) tidal range, (6) ocean currents and (7) shallow shores. To clarify, each of these aspects will be considered in turn. The best mangrove development has been found to occur only when the average air temperature of the coldest month is higher than 20 degrees Celsius and where the seasonal range does not exceed ten degrees. Most extensive mangroves are associated with muddy soils along deltaic coasts, in lagoons and along estuarine shorelines. In order for mangroves to survive a protected coastline is essential as mangrove communities cannot develop where high levels of wave action prevent the establishment of seedl ings. In terms of salt water, there is increasing evidence that most mangroves have their optimal growth in the presence of some additional sodium chloride. The tidal range plays an important role in mangrove development. The greater the tidal range, the greater the vertical range available for the community. Also for a given tidal range, steep shores tend to have narrower mangrove zones than do gently sloping ones. Another aspect of mangrove communities is ocean current. The currents are essential since they act to disperse the mangrove propagules and distribute them along the coasts. The need for a shallow shore is the last major aspect of mangrove forests. This is apparent when considering that seedlings cannot become anchored in deep water and that the mangrove requires a large proportion of its body to be above the water (Hutchings and Saenger, 1987). Mangrove forests are established in various regions of the world and one of the most prominent regions is the continent of Australia.

Avon’s Dividend Policy Essay

A firm’s decisions about dividends are often mixed up with other financing and investment decisions. Some firms pay low dividends because management is optimistic about the firm’s future and wishes to retain earnings for expansion. Other firms might finance capital expenditures largely by borrowing. All the above are examples of dividend policies which can be defined more precisely as the trade-off between retaining earnings on the one hand and paying out cash and issuing new shares on the other. In order to understand the dividend policy we must understand that this phrase means different things to different people (R.A. Brealey & S.C. Myers, 2003). Avon Products, Inc. announced both a change in its business focus and a reduction of its dividend in June 1988. To offset the likely stock price effect of the dividend reduction, Avon announced at the same time an unusual exchange offer under which it would take up to 25% of its common stock. The case traces the history of Avon from 1979-88. We will evaluate Avon’s efforts at diversification in the early 1980s, and will relate that effort to the company’s dividend history. Moreover we will evaluate Avon’s operating and financial strategies from 1979 to 1988 and the company’s financial condition in mid-1988. PERFORMANCE OF AVON’S STOCK FROM 1978-1988Based on Exhibit 4, Avon’s stock price has declined from $50.75 in 1978 to $24.125 in 1988 (decline equal to 52.5%). At the same time, S&P 500 has increased from $96.11 in 1978 to $266.69 in 1988 (increase equal to 177.5%). This rather poor performance of Avon stock contradicts with the performance of the overall market. Moreover, based on Exhibit 1, ROE decreased from 31% in 1978 to 21% in 1988. This is due to the following factors: Avon in the early 1980 made the major strategic decision to diversify its business by entering the health care field. In order to support its diversification strategy it invested heavily in subsequent acquisitions of Health care companies. It acquired Mallinkdroft in 1982, Foster Medical in 1984, Retirement Inns in 1985 and  Mediplex in 1986. Even though its health care division showed increasing net sales from 1982 till 1984, the situation changed during 1985, with a sudden drop of more than 50% in net sales. The inability of the health care sector to grow at attractive rates worsened in the years to come (largely because of the change in Medicare in 1986) and proved that it was a strategic mistake to go for diversification. Not only did not the market appreciate this decision, but also the firm found itself highly leveraged with a long term dept of $816.4 million in 1987, because of subsequent acquisitions. The heavy borrowing of the Avon obliged it to announce a dividend cut from $3.00 to $2.50 in 1982, and to $2.00 from 1983 till 1987. This dividend cutting policy, which was already expected and negatively perceived by the market from the early 1981 severely influenced Avon stock price (a decline in the share price from $30 to $20.375 immediately after the announcement of the following dividend policy) and contributed largely to its poor performance. This poor performance was also partly due to the disappointing financial results of the Beauty care sector from 1982 till 1985 (Exhibit 2). It was only in 1986 that the Beauty care sector showed again positive signs of improving prospects. The wrong commitment of Avon to its Health care sector together with the demographic shifts of the 1980’s, that decreased both its sales force and customer base are the main reasons for the Beauty Care sector’s disappointing results. EVALUATION OF AVON’ S FINANCIAL CONDITION IN MID-1988Avon in mid-1988 divested its healthcare business and acquired fragrance companies. In that way, Avon has demonstrated renewed commitment to beauty business and continued investment in that business. While its long term debt was only $4.1million in 1979 and its net earnings amounted to $250.7 million, Avon found itself heavily burdened with total long term debt of $816.4 million in 1988 decreasing net earnings of $159 million and just before divesting two of its health care businesses probably at considerable book losses. The decision of the company to finance its acquisitions with debt, starting from 1982, resulted to high interest expense payments every year (Exhibit 1). These high interest expense payments, combined with the decreasing net earnings made it very difficult for Avon to meet successfully its generous dividend payment policy. So the company had to reduce its yearly dividend  payments starting from 1982 and onwards. Under its financial condition in 1988 Avon has no other choice but to go for further reductions in dividends. That way the company will be able to meet its heavy debt obligations and at the same time finance the â€Å"come back† to its core beauty products business. PURPOSE OF THE EXCHANGE OFFERThe purpose of the exchange offer was to avoid having a dividend reduction drive down the stock price and find the â€Å"golden mean† between its own interests and the interests of its 25 large Institutional shareholders. Those shareholders owned 46.5 % of total Avon’s outstanding shares (Exhibit 5) and expected high dividends from them. Some investors, as it is mentioned in the case, have stated that they held Avon stock because it paid high dividends. Hence, a reduction of dividends would most likely have caused investors to sell their stocks and evoke share price delay. Therefore, Morgan Stanley, the financial adviser of Avon offered to exchange one share of a new $2.00 PERCS for each of up to $18 million of Avon’s 7.17 million outstanding common shares. PERCS are mandatory convertibles that work as equity-linked hybrid securities and automatically convert to common stock on a pre-specified date (Yan, A. et al, 2003). The PERCS assured the same dividends ($2.00 a year) until September 1991. The company would also have an option of redeeming the preferred shares for either cash or common shares after that date. In addition, the exchange offer was made in order to support the following four key elements that Avon should have taken into consideration (Ross, S.A., et al 2008):†¢Select Additional capital budgeting projects. Through the capital savings Avon will be able to finance additional projects with positive NPV. †¢Available funds for further acquisitions. To avoid the payment of dividends Avon might use excess cash to acquire another company. With this method the company will be able to support more efficiently its turnaround strategy towards the beauty business. †¢Repurchase shares. Avon will be able to support its market price which has reached the lowest level of approximately $24 by repurchasing shares. At the same time shareholders benefit from the fact that when selling shares they pay lower taxes than when they receive dividends. †¢Personal taxes. Money earned from dividends is considered as personal income so it is taxed. EVALUATION OF THE TRADE-OFFEach decision to go for either the new preferred stock or to keep the common stock has pros and cons. The new PERCS should be appealing to the majority of its institutional investors, since they guarantee to them a stable and relatively high enough quarterly dividend of 50 cents, which is always paid before any other common dividend payment. In this way its large institutional investors can feel certain that they will have a secured return on their investment, without incurring any transaction costs when selling off shares for current consumption. The holders of the new PERCS can also share the benefits of a stock price increase up to $31.5 but also the losses in case of a stock price drop. The great opportunity that the holders of the new PERCS are loosing is in case Avon stock price goes beyond $31.5. Its stock is currently undervalued to approximately $24 and there is a high probability that within the predetermined 3 years its stock price will increase beyond the price of $31.5, as Avon is undergoing a restructuring towards its core beauty care business and the market is expected to react positively to that news. If that will be the case, then they will loose any excess gains incurred beyond the $31.5 stock price. Being a common shareholder, an institutional investor experiences losses in revenues because of the dividend reduction. What is extremely important though is that this implies a policy of retaining earnings to help finance the business, which is currently being restructured. So having a long term perspective an institutional investor can select common stocks and bet on a stock price increase far beyond $31.5. If that will be the case then he will certainly outperform any losses he has experienced so far because of the dividend reduction. In addition, based on Exhibit 5 we can distinguish four types of institutional investors depending on their preferences:†¢Yield. In this case the institutional investors have as a primary objective, the amount of dividends they will receive divided by the purchase price. This is not an accurate measure of total return, since it does not factor in capital gains. (http://www.investorwords.com/5362/yield.html)†¢Turnaround. A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. (http://financial-dictionary.thefreedictionary.com/turnaround)†¢Mixed. An investor with a combination of yield and turnaround incentives. †¢Index. Investors trading index options are essentially betting on the overall movement of the stock market as represented by a basket of stocks. These investors are considered to care a lot about acquiring stocks that help them diversify the risk of their overall portfolio (http://financial-dictionary.thefreedictionary.com/Index+Option). Concluding we assume that according to investors’ preferences we would have a different selection. The yield investor will probably prefer the PERCS, the turnaround investor would keep its common stocks, the mixed would consider both options and finally the index investor will first look at its entire portfolio and decide to keep the stock or not irrespective of the benefits that PERCS or common stock offer as he mainly cares for risk diversification. REFERENCES †¢Ross, S.A., Westerfield, R.W., Jaffe, J., Jordan, B.D. â€Å"Modern Financial Management†. McGraw-Hill, Eighth Edition, (2008)†¢R.A. Brealey and S.C. Myers, â€Å"Principles of Corporate Finance†, McGraw-Hill, Seventh Edition, (2003). †¢Yan, A., Nandy, D., and Chemmanur, T. â€Å"Why issue mandatory convertibles? Theory and empirical evidence, February (2003) Retrieved on 18.3.2008 (http://ideas.repec.org/p/ecm/nawm04/456.html)†¢http://www.investorwords.com/5362/yield.html. 18/3/2008. †¢http://financial-dictionary.thefreedictionary.com/turnaround 18/3/2008. †¢http://financial-dictionary.thefreedictionary.com/Index+Option 18/3/2008.

Han and Roman Attitudes Toward Technology Essay

Technology is an important aspect in all civilizations, and depending on the point of view looked at the opinions vary greatly. Especially when comparing opinions of lower class and upper class people, or gender. During the early first centuries of the Han Dynasty and Roman Empire there were a lot of mixed feelings toward technology. Depending on whose opinion you heard the answer would vary between negative and positive outlooks. Most opinions seemed to have been based off of the following categories, practicality, citizen’s use, and beauty. Opinions varied depending on the major concern of the point of view and the class they belonged to. When opinions were weighed on practicality their major concern was the efficiency of the technology and if it was easy to use. One Han government official wrote to local officials in the early second century (B. C. E) concerning flood prevention (doc. 1). His opinion was well educated because being of an upper class and being a government official meant he was well educated, and also his opinion was of a situation he witnessed and he had proof to support his thoughts. His opinion was unbiased and trustworthy because his concerns were not for himself but for all the people of the civilization. This is proven when he states more organization is needed in order to stay on top of issues that affect everyone of the dynasty. He felt technology was advanced enough to prevent flooding more efficiently but there needed to be a greater effort into establishing a greater number of water conservation offices in each district. Overall he did not believe that technology was lacking but the organization of the use of technology was. Huan Tan, an upper-class philosopher in about 20 C.  E also had an opinion weighing on practicality (doc. 3). Being a philosopher you can assume he was well educated and therefore his opinion is educated. Huan’s point of view was based on practicality because he had a positive opinion on technology due to the efficiency and usefulness of tools and the fast progression of it. He proves the technology is efficient by stating facts like that the pestle and the mortar were modified and were made capable of allowing the weight of the whole body to be used. Since Huan included these sorts of facts it shows he’s well educated in the area of technology. Overall Huan Tan had a very positive outlook on technology, feeling that it evolved at a steady pace. The source History of the Early Han Dynasty was a government sponsored source that comes from the period of about 200 C. E. (doc. 4). This opinion is clearly biased and untrustworthy because its government sponsored and therefore was written to support the government and make it look successful. This is proven when the governor of Nanyang, Tu Shui is made to look good by the statement that he improved technology because he loved his people so much he wanted to make life easy as possible for them. Although this point of view is untrustworthy it is still weighed on practicality due to the supposed concern of the efficiency and having technology be beneficial without having to do much work. The last opinion formed by practicality was one of a Seneca upper –classman philosopher and adviser to Emperor Nero (doc. 7). This point of view again is someone of a higher class with more money and therefore does not rely on technology as much as someone of a lower class. His opinion of technology was negative; he believed tools were invented by unintelligent men. His opinion was based off of practicality and was proven by his statement that recent inventions were not only inefficient but also were useless. He felt inventors no longer, no matter how intelligent, did not think outside the box and only tackled mild issues that were not of large concern. Overall he felt greater issues needed to be taken on by people of both intelligence and creativity. Other opinions seemed to have most concern with citizen’s use. When weighing on this, the point of view was most affected by the knowledge of who used the technology or the convenience of the access to the technology. A government official by the name if Huan Guan has a negative outlook on technology based off of citizen’s use (doc. 2). This perspective is from an educated upper class man who therefore does not do much manual labor. Foundry work and salt boiling were at one time allowed to be done by workers as long as they followed two conditions, they has to report they were doing so and they had to pay a tax. During the earlier time the tools that were used to do these jobs were made by families and were efficient and well-made. Later on the state forced citizens to only use the iron tools manufactured by them, which were nonfunctional. This is known as convict labor, and in doing so they also monopolized the salt and iron trades. This issue angered Huan Guan because this caused the salt and iron prices to rise and made it so lower class citizens could not afford to buy either. Huan felt technology was being weakened by the government and that making it more difficult for families to continue their businesses was not right. Another opinion based off of citizen’s use was one of a Cicero upper-class Roman political leader of the first century (B. C. E. ). This opinion comes from an upper class man who does not do any handy-work and therefore cannot state and accurate opinion on technology. He believed there was a fine line between the difference of a â€Å"gentleman† and a man. He felt certain jobs were degrading to men, such as manual labor or â€Å"handy work†. He states, â€Å"Vulgar and unbecoming to a gentleman are all the jobs hired workers take on†¦Ã¢â‚¬  (doc. 5). He feels the work they do is paid by the labor they do and not the skill of their work. In conclusion he doesn’t see any importance in the area of technology, also he doesn’t necessarily have a negative nor positive opinion he just doesn’t value it, h cares more about his status. The last source weighed on citizen’s use is one from Frontinus, a Roman general, governor of Britain and water commissioner for the city of Rome (doc. 8). His opinion is biased because he is governor of Britain and therefore feels his civilization is the most advanced and has the greatest technology because he is in charge of it. This is shown when he says that Roman technology exceeds any other including both the Egyptian’s and the Greeks. Frontinus feels that the works of those two civilizations are useless, he states, â€Å"Compare such numerous and indispensible structures carrying so much water with the idle pyramids, or the useless but famous works of the Greeks. † He feels only Roman technology has both the beauty aspect while still being efficient. He feels his technology is so successful because the aqueducts were so successful they made it possible for people of any class to have an abundance of water, which proves his opinion was based on citizen’s use. Lastly, some opinions were made by the beauty of technology. Very simply this is when the point of view is confirmed by the appearance rather than the efficiency or usefulness of the technology. Plutarch, a Greek-born Roman citizen and high official of the second century describes Gaius Gracchus a Roman political leader of the first century’s opinion on technology (doc. 6). This source is unreliable because it is not a primary source and therefore is not as reliable because the opinion could have been slightly altered by misinterpretation or on purpose. The major concern according to this source, of Gaius Gracchus was the appearance of everything and not the usefulness of it; he wanted everything to be pleasing to the eye. All roads were straight; both sides of bridges had to be â€Å"equal and parallel height with the result that the road for its entire course had a level and beautiful appearance. † (doc. 6). Overall the appearance was the greatest factor when it came to Gaius Gracchus. Again just as all the other documents the point of view belonged to an upper-class male, we have no opinions from a woman or someone of a lower class. Out of all the documents the point of view missing in order to truly decipher the overall attitudes towards Han and Roman technology is the opinion of a lower class person such as a peasant. All the documents come from the perspective of an upper-class male. Therefore the ultimate attitude toward the technology of Han and Rome cannot be determined. Each documents perspective varied depending on how they made their opinion, whether it was weighted on practicality, citizen’s use, or beauty.