Anotated Bibliography No Child Left Behind Essay

What the paper â€Å"What’s Missing from No Child Left Behind? A Policy Analysis from a Social Work Perspective.† argues is that the No Child Left Behind bill might not be accomplishing its purpose. Moreover, the paper sheds light on the social and emotional risk factors that prevent students from succeeding in school. In the end, the article suggests that school social workers are capable of eliminating these barriers by applying in school interventions to address the psychosocial factors that highlight the difference in achievement at school. School social workers are also capable of advocating for an education policy change that looks beyond test scores and help at risk students succeed in school. Works Cited Lagana-Riordan, Christine, and Jemel P. Aguilar. â€Å"What’s Missing From No Child Left Behind? A Policy Analysis From A Social Work Perspective.† Children & Schools 31.3 (2009): 135-144. Academic Search Complete. Web. 25 Mar. 2012. This article reports the results found by a national survey taken by the state, about the national impact of the No Child Left Behind bill. Results indicate that in between 2001 and 2005 statewide assessment of science and writing increased but it decreased in the social studies, arts, humanities, and computers. The research teams found that there are few themes that come up at almost every school. The first, which is an obvious one, is that for subjects that are not tested for under the No Child Left Behind bill, the schools reduced their resources and the effort that the school puts into these areas dropped. Second, is an interesting method because they take material away from tested subjects and integrating them into the classes that are not tested for. Just so the teachers that are going to be tested have more time to focus on the testing material. The last theme is that there is no change observed, everything seems to be the same as before the No Child Left Behind bill. Works Cited Pederson, Patricia Velde. â€Å"What Is Measured Is Treasured: The Impact Of The No Child Left Behind Act On Nonassessed Subjects.† Clearing House 80.6 (2007): 287-291. Academic Search Complete. Web. 25 Mar. 2012. The article discusses how teachers are discovering that the No Child Left Behind idea is flawed, developmentally unfitting, lacking funding, and leaving more students, educators, and schools behind before the bill was passed. Later the article presents a short history about educational testing, investigates the argument of teaching to the test, and focuses on subgroups of school populations that are negatively affected by No Child Left Behind bill, distinctively students from low socioeconomic backgrounds, minorities, second-language learners, and students with special needs. Works Cited Smyth, Theoni Soublis. â€Å"Who Is No Child Left Behind Leaving Behind?.† Clearing House 81.3 (2008): 133-137. Academic Search Complete. Web. 25 Mar. 2012. This article in the Times newspaper, points out problems and flaws with the 2002 U.S. No Child Left Behind educational legislation, which was designed to improve education in the U.S. Topics that are discussed include, teachers complaints that No Child Left Behind policy sets impossible standards and forces teachers to teach based on the test material, and how the bill originally came to life by the proposal of former U.S. president George W. Bush. The other topic discussed is how originally neither the Democratic or Republican political parties were in favor of the legislation. Furthermore article explains that No Child Left Behind bill has publicized gaps between students but it did not fixed them. Works Cited Webley, Kayla. â€Å"Why It’s Time To Replace No Child Left Behind.† Time 179.3 (2012): 40-44. Academic Search Complete. Web. 25 Mar. 2012. The goals of this article are to raise awareness about the challenges educators and school mental health professionals face throughout the semester as a result of the implementation of No Child Left Behind bill. The most important part about this article is that its purpose is not just to point out the flaws caused by the No Child Left Behind bill, but to enhance the bill’s ideas and provide less interference between the bill and school mental health by coming up with ideas and solutions for the problems that they are facing. Works Cited Weist, D. Mark et al. â€Å"Enhancing No Child Left Behind–School Mental Health Connections.† Journal Of School Health 76.9 (2006): 446-451. Academic Search Complete. Web. 25 Mar. 2012.

Nature and scope of accounting Essay

As an introduction to the course in accounting, it may be useful to define the following terms : – Accounts : These are the financial records in the organization. Every business transaction, or accounting entity, may be represented in an account by itself, e.g. wages, telephone expense, motor vehicle, Cash at bank, Investment – Book-keeping : This is the recording of the financial transactions of a business in a systematic manner, so that relevant financial data may be extracted when needed. – Accounting : This is a more comprehensive step than book-keeping. It involves the classifying, recording, compiling, reporting and interpreting the financial activities in the organization. This allows the users of the information to make informed judgement, planning and decision regarding the organization. – Accountancy : This is the procedure or the system that must be followed when recording, reporting, and interpreting the financial activities of the organization. It involves the set of principles or rules that must be observed in order to achieve an objective view of the accounting results. Accounting in the fullest sense, is therefore the interactive and integrated process of reviewing, forecasting, planning, recording, classifying, reporting , and interpreting the financial activities in the organization. This allows the custodians to make informed judgments and decisions pertaining to the performance and financial position of the organization. It also facilitate those who may have a vested interest in the business to assess their relationship and expectations from the operations. To this end accounting information should be – Relevant : to the users so as to influence their ability to make informed decision – Reliable : free from material error and bias, giving a truthful representation of the firm – Comparable: presented in a consistent manner so at to allow for reasonable comparisons – Understandable : uncomplicated, structured, and clearly presented. – Timely : provided when needed, or on time as required by law – Unqualified : not subjected to unnecessary modifications or restrictions USES OF ACCOUNTING INFORMATION The accounting system in the organization generates a wealth of financial data that may be utilized by several interest groups. These include : – Management : Those who are entrusted with the day to day operations of the business must not only make informed decisions, but also set operating standards and then review the results. In order to do this, they must use the accounting system as their base. – Owners : The accounting system enables those who have an invested interest in the business to make an overview of the performance, as well to determine the results of their investment. – Investors : Others who have contributed to the business, either by way of financial assistance, supply of goods, or any other form of involvement, need to analyse the levels of profitability and risk involved in the business – Government : Assessment of the business operations by the government may be done for tax purposes, or to determine national income, or other statistical calculation. – Trade Union : Collective bargaining on the behalf of employees by the trade union can only be done beneficially if the union has a clear understanding of the financial position of the firm. DIVISIONS OF ACCOUNTING In order to satisfy the users of the accounting information, the accounting process may be sub-divided into broad categories : – Cost and Management Accounting : This aspect of accounting is concerned with the supply of information to the internal users, i,e, to the managers and the decision makers. It includes such activities as product costing, budgeting, systems operations, and accounting methods. This allow the users to formulate plans, set policies, make decisions, and control the operations in the organization. – Financial Accounting : This is the maintenance of the accounting records in a methodical manner and the preparation of summarized statements regarding the results of the business. This is of use primarily to parties external to the business, and gives an indication of the level of profitability and financial position of the business. – Special Reports : Some business operations may be financed or regulated by a parent organization. These operations must prepare and submit progressive reports to the regulatory body, indicating any factor that may have impacted on the results of its operations. These regulatory bodies included development banks, cooperative societies, venture capital assistance organizations, industry related organizations, and government agencies – Annual Return : Most firms must submit various types of tax or other statutory returns. These include NIS, NHT, HEART Fund, Income tax, Sales Tax ( GCT), Property Tax. Compliance to these is mandatory, although it is usually a complex procedure. Some organizations may engage the services of an attorney who specializes in business law or taxation. USES OF ACCOUNTING DATA Management Cost & Management Accounting Regulatory Bodies Statutory Agencies The Special Reports Accounting Annual Returns Process Financial Accounting (Certified By Public Accounting Auditor) Govt Trade Union Shareholders Investors Creditors General Public There are several areas of difference between financial and management accounting. Among these are: AREASFINANCIALMANAGEMENT Main UsersExternal parties, e.g. investors Creditors, trade union, gov’tInternal parties, e.g. managers, owners Time OrientationReview of the pastForecast of the future AccessAvailable to any partyAvailable to insiders only Restrictions Presentation FormatsStandard financial StatementsWhatever format most suitable View of the Organization Condensed view of the organization as a Detailed view of segments or activities whole RegulatoryRegulated by ruling of bodiesNo significant regulatory Restrictionssuch as IFRS, ICAJ, as well asRestrictions the Companies Act PurposeInformation disclosureDecision making and control CONCEPTS OF ACCOUNTING Certain fundamental concepts provide a rule or framework for the recording and reporting of business transactions. These may also be termed as principles, assumptions, or standards. Among them are : The Accounting or Business Entity Concept: Each business enterprise should be regarded as a separate and distinct unit from the other economic or personal affairs of the owners. Thus the information compiled by the business unit should only relate to the activities of that enterprise. The Historical Cost Concept: Resources should be maintained in their accounts at their original cost, not at the periodically revised or market value. Adjustments to the cost, e.g. depreciation, should therefore be shown in a separate account. The accumulative effect of these accounts may be determined when the balance sheet is being prepared. The Going Concern Concept: It is assumed that the business unit will continue for a lasting period during which time it will be able to fulfil its objectives. Thus, interim liquidated values are not shown when preparing the balance sheet. This assumption would not apply if the firm’s continued existence can not be established by fact, e.g. If faced with a legal injunction, anticipating liquidation, on the expiration of a contract, or in the event of a buyout or takeover. The Money Measurement Concept: Accounting transactions and the summary of their results can only be measured in monetary units. Thus, those activities or situations that are not measurable in a monetary sense would not be reflected in the accounts. These include the firm’s industrial relations, management styles, or industry position. The net value of these situations, however, may be classified as goodwill when the firm is being re- valued, or being sold as a going concern. The Accrual Concept: Revenue and expenses must be accounted for during the period when they occurred, and not necessarily when they were honoured. Thus, income is calculated from revenue and expenses incurred, not from those actually paid for. The Dual Aspects Concept: There are two aspects to every accounting transaction, one shows the gains realised and the other represents the claims that may be made against these gains. From this concept comes the double entry principle, i.e. for every debit (Dr) entry there must be a corresponding credit (Cr) entry. The Realisation Concept : Income is regarded as being earned at the point when the legal property, or the claim, in goods has passed from the seller to the buyer. This may be different from the point when the order was received, the delivery was made, or payment completed. This, however, is determined by the terms of contract. The Materiality Concept: On-going accounts are only maintained for those items or activities that by themselves will make a significant impact on the business. These are called assets or liabilities. Immaterial or complementary items or activities are written off as expense or revenue at the end of each accounting period. The Prudence Concept: Accounting systems should allow for the reporting of the minimum value of income. Thus, total expenses include non-cash items such as depreciation, bad debts, and other provisions. The Substance Over Form Concept: The benefits from, or material substance of a resource should take precedence over the legal form of ownership. Thus, the firm may be in possession of an asset that is being used in the business but which has not yet being paid for. For example, an equipment may have been bought on hire purchase or acquired by way of a lease, and as such the asset does not legally belong to the firm until it is paid for. However, the material substance of the equipment must be shown in the books, and this takes precedence over the legal form in it. The Time Interval or Periodicity Concept: The firm should prepare a set of final accounts in order to take a reading of its performance and financial standing from time to time. This is required although the business is regarded as a going concern. This periodic reading of the business allows management to exercise informed assessment and control over the affairs of the business. The Full-Disclosure Concept: Although the financial statements are concerned with the last accounting period, it should also take into consideration any future events that may have an impact on the firm’s financial position. Thus a disclosure should be made for eventualities such as a pending lawsuit, on-going negotiations for sales, disposal, acquisition or take-over, or changes in the accounting methods being used. These disclosures are usually listed as explanatory footnotes. The Objectivity Concept: The accounting transactions recorded in the firm’s books should be supported by objective evidence or by a basis of origin in fact. This includes such documentation as sales invoices, payment vouchers, cash receipts etc. Thus there should be a basis by which the transactions can be verified. This is usually required whenever an audit is being done. The Consistency Concept: The methods that are used in the recoding and reporting of accounting transactions should be unchanged over the course of the business, unless it is governed by some new rule or mode of operations. Changes result in a distortion of profit, thus objective comparison or analysis would not be allowed.

A CASE STUDY †STRATEGY AT H&R BLOCK, INC. Essay

A Case Study Running head: A CASE STUDY – STRATEGY AT H&R BLOCK, INC. A Case Study – Strategy at H&R Block, Inc. Capella University OM 8012 Strategy Dr. Perry Hahn Dec 21, 2005 Abstract This paper will include an analysis of the company from the four strategy perspectives provided in the project deliverable which are: Strategy as rational thought – strategic planning and decision-making, Strategy as revolution – what is referred to as disruptive innovation, Strategy as resource allocation and accumulation in the firm, and finally Strategy as technology leadership viewed as a unique competitive advantage. This paper provides information about H&R Block in the areas identified in the project deliverables. Background information regarding the company is provided, along with the mission, vision, and an overview of management and the current structure. The strategy of the company as defined by the CEO, current management statements in the annual report and investor meetings and conferences is explained. An analysis of this strategy is then presented focusing on core strategic concepts such as five forces model and value chain analyses. This paper then provides a competitive analysis from both an external and internal perspective. External factors affecting this organization that are included involve an industry overview in each of the areas in which the company operates; tax preparation, mortgage services, financial services, business services, and software. In addition, foreign markets are explored for possible opportunities. Internal factors include a SWOT analysis as well as identifying the current business ethics and social responsibility paradigms exhibited by current management. Diversification strategies employed are identified as well as the current state of shareholder value. A final strategy analysis is provided with an overview of results and how the strategic plans of Block have been implemented and to what degree. Finally, future plans are explained and the information in this paper is summarized and final comments are added. H&R Block is a dynamic company with a history of providing excellent tax preparation services to over 16 million clients a year. Can this company branch out successfully into these other complimentary areas of mortgage, financial services, business services, and software and ensure they no longer depend upon one product but instead truly do become what they envision; To help our clients achieve their financial objectives by serving as their tax and financial partner. A Case Study – Strategy at H&R Block, Inc. Introduction Company Background H&R Block opened in Kansas City, MO in 1955 specializing exclusively in income tax preparation. Because the IRS no longer offered free tax preparation starting in 1956, H&R Block was able to capitalize on this enormous new market, by offering this service in the right place at the right time. H&R Block holds the largest market share in the tax preparation business and filed 14.3 million or 15.3% of all tax returns with the IRS in 2003 (HRB, 2003). H&R Block’s fiscal year ends on April 30th. Much of Block’s revenue is highly seasonal with over 50% of its annual revenue from the period of February – April, known as the tax season. H&R Block operates out of 9,301 tax offices and 98 Financial Centers in the United States, as well as 1,334 tax offices in Canada, Australia, and the United Kingdom and has a presence in all 50 states. Many of these offices are seasonally open only from January through April, although some offices remain open year round and phone representatives are available year round. Block views its business in five segments consisting of United States Operations, International Tax Opera tions, Mortgage operations, Investment Services and Business Services. Before H & R Block was born Henry Bloch opened up a bookkeeping business called United Business Company and later his brother Richard joined him. They did bookkeeping for several companies and they had an office of 12 employees, they even did income taxes for some of their clients. Eventually, they were becoming overloaded. So, one day they decided that they weren’t going to do income taxes anymore, but one of their clients, which was an advertiser for the Kansas City newspaper suggested that they  should try to make a business out of doing income taxes. So, their client persuaded them to run an ad twice and the IRS had just stopped doing free income tax returns. So, one day their office was full of people who needed to get their taxes done. On January 25, 1955 Henry and Richard Bloch replaced their original firm with a new firm, H & R Block because they wanted a company that strictly specialized in prep aring income tax returns. The company went public on February 13, 1962, with a $300,000 offering, 75,000 shares at $4 per share. H& R Block became listed on the New Stock Exchange in 1969. Today H&R Block Inc. is a diversified company with subsidiaries that deliver tax services and financial advice, investment and mortgage products and services, and business accounting and consulting services. The world’s largest tax preparation company, H&R Block in fiscal year 2002 served nearly 21 million clients in approximately 10,400 retail offices worldwide and with award-winning TaxCut ® software and online services. Investment services and securities products are offered through H&R Block Financial Advisors Inc., member NYSE, SIPC. H&R Block Mortgage Corp. offers retail mortgage products. Option One Mortgage Corp offers wholesale mortgage products and a range of mortgage services. RSM McGladrey Inc. serves mid-sized businesses with accounting, tax and consulting services. Mission To help our clients achieve their financial objectives by serving as their tax and financial partner. (HRB, 2000). Vision H&R Block seeks to be the world’s leading provider of financial services through tax and accounting-based advisory relationships. (HRB, 2000). Management Mark A. Ernst, 46, is chairman of the board, president and chief executive officer of H&R Block, Inc. He was appointed chief executive officer in January 2001, and elected chairman of the board in September 2002 (HRB 2002). Ernst joined H&R Block in 1998 and was first elected to the board of directors in 1999 when he was appointed president. Since joining the company, Ernst has been responsible for developing and implementing a long-term strategy for the company that strengthens the H&R  Block brand and builds on the company’s history of service to clients. Over the past five years, he has managed the company to achieve annual results that rank H&R Block in the top 10 percent of all companies in the S&P 500 for financial performance. During his tenure H&R Block has sharpened its strategic focus on increasing the value that its tax professionals bring to their client relationships; moved forward with its mission to become its clients’ tax and financial partner; strengthened its senior management team by hiring executives with the expertise needed to offer clients a wider range of financial services; and brought more discipline to its planning processes. The company and its subsidiaries offer a full range of tax, financial and mortgage products and services, including personalized financial advice about ret irement savings, home ownership, and other opportunities to help clients to build a better financial future. (HRB 2000-2005) Structure Block’s Five Business Segments consists of tax services available to the general public in the U.S. This includes the company’s full range of software including TaxCut personal tax preparation software, online tax preparation services through HRBlock.com and tax preparation through one of the company’s tax professionals. The company generates revenue from tax services provided through company owned tax offices and royalties from franchised branches. Also in this segment are H&R Block’s tax preparation classes in which members of the public and perspective employees learn how to complete tax returns. During ‘03 254,000 students enrolled at an average price of $450 for this 80 hour class (HRB 2003). Besides traditional personal tax services, the company also offers software TaxCut ($15-$50) and an online tax preparation program ($35-$100). International tax operations offers all of the services listed above for U.S. citizens living abroad wishing to file U.S. tax returns in addition to filing foreign returns for citizens of foreign countries. Pre-tax income for this segment has increased 114% over the last four years. Investment services: This segment of H&R Block Inc. offers investment advice and related services and securities products through HRBFA (H&R Block Financial Advice) branches to the general public. A nationwide network of registered representatives makes stocks, bonds, mutual funds and similar products and available. In ‘03 Block had 1,600 financial advisors and registered associates in more than 600 offices nationwide (HRB 2003). Average trading volumes fell during fiscal year’ 03 by approximately 21%, as measured by average trades per day. This is one of Block’s  sources of non-seasonal revenue and is expected to drive revenues and overall company growth during the coming years (HRB 2003-2004 statements by management in annual reports and investor meetings). Block views its key to future success of the investment services segment as retention and recruitment of financial advisors, which Block pursued in ’03 by hiring 260 experienced advisors. This segmen t of Block’s business has experienced severely declining revenue which is suggested to have been a result of the unfavorable environment of the equity market during the recent years. However, since acquisition of this business in ‘00 Block has been able to increase clientele in this division by over 14%. H&R Block’s management lists the Investment Services business as one of their priorities for the next six years. Mortgage operations: Subsidiaries in the Mortgage Operations segment originate service and sell prime and sub-prime mortgage loans and securitize residual interests in the United States. Sub-prim mortgage originations constitute 90% of Block’s business in this segment. Through a network of more than 24,000 mortgage brokers in all 50 states this segment offers a diverse mortgage product line to clients that do not meet traditional underwriting criteria, according to Reuters. These services are available through Block’s subsidiaries in addition to HRBFA branches. Block approves about 50% of their loan applications which come from over 2,200 independent sales associates throughout the U.S. Block makes money from the gain on the sale of these loans to other lenders. Through securitization the company makes money from the interest spread between its funding costs and its cost of borrowing. During the past 2 years, the declining interest rate environment has been favorable for the company and the company has been able to achieve as high as 4.46% in net profit margin. (HRB, 2004) Business services: H&R Block’s business services segment provides accounting, tax, consulting, payroll, employee benefits to business clients and tax, estate planning, financial planning, wealth management and insurance services to individuals. These services are made available through a number of sources, the largest of which, RSM McGladrey, Inc, operates more than 100 offices in 22 states. (HRB, 2004). The addition of these business units under the parent company along with the core H&R Block Tax Services, Inc. created the operational backbone to support a fuller line of financial services. Cross selling is heavily used and customer information, with proper consents, is shared amongst the business units for marketing and contacts. Even though this strategy is well under way, and in some ways is doing well other ways not, the average person on the street does not have any idea Block does more than â€Å"taxes†. In addition, some attempts to cross sell have worked to some degree such as mortgage products but others, such as offering IRA products to tax clients, have not. H&R Block’s average client has an income around $38,000 (individual) and do not seem to be interested in savings vehicles to the degree that would be necessary to meet sales goals. Strategy Defined In an effort to become â€Å"America’s year-round tax and financial partner† Block transformed itself from a company focused exclusively on tax preparation to a company that provides comprehensive financial services. This diversification aimed to offer existing clients a wider range of products and services while compensating for sagging revenue during the off season of the tax preparation business. In researching statements  by management in annual reports, investor meeting materials, etc. the author finds the following strategic direction is desired by the company. Several years the new CEO, Mr. Ernst, at H&R Block said that the new strategy is to take the steps necessary to transition the company from â€Å"tax preparer† to â€Å"financial partner† (HRB, 2000). Ask anyone you know what does this company does and you will hear â€Å"prepare taxes† but financial partner? H&R Block, Inc. began to implement a strategy to offer clients, and potential clients, additional financial services beyond tax preparation. H&R Block acquired Olde financial (based in Detroit) and used this firm as a launch to create H&R Block Financial Advisors, Inc. In addition, Block acquired Option One mortgage (Based in Irvine, CA) and renamed the firm to H&R Block Mortgage, Inc. Block’s management feels that the tax preparation market is so unsaturated that it is foreseeable to open 50% more stores in order to provide its customers sufficient convenient locations. H&R Block studies indicate that for some of their clients, convenience of location is valued higher than brand name and that the only way to capture such fringe customers is open stores throughout market areas. These plans are currently under formulation and implementation. Although there was a 6% increase in the number of tax return offices, tax clients served declined 3% during ’03, which lead Block to file 600,000 fewer returns than in ‘02. This was offset by a jump in software sales of 600,000 for the same period. Block achieved increased profitability during the ’04 tax season as a result of higher tax preparation fees. Average tax preparation fees have increased about $10 per year over the last four years to $130.59 suggesting that demand is slightly price elastic. According  to Mr. Ernst because of this elasticity Block can continue to raise its prices to generate revenue growth. The company is competing on quality, not on cost and on ‘location’ whether it be a physical location or via online using the web. In addition, the company has announced the opening of 400-500 new offices for tax season 2005 in under served markets. With the trending to online and software, causing a decrease in office clients, this may be a mistake. One of the Organization’s Corporate Priorities is to integrate and align Tax, eSolutions, Financial Advisors and Retail Mortgage, incorporating advice as a key differentiator. In that respect, the Company’s Vision states: â€Å"To be the world’s leading provider of financial services through tax-and accounting- based advisory relationships.† It appears that the vision statement does not fully reflect the company’s long-term goals since it only mentions two specific products, -tax and accounting- under the umbrella of financial services. By stating only two products, the vision statement implied that tax and accounting are the company’s core strategic goals, with the other products revolving around them. If that were the case, then all the integration and arrangement measures through structural changes done in order to accelerate the alignment process would be much ado about nothing, that is, if the company’s true intention is what can be deduced from the Vision statement. Strategy Analyses Some of the measurements of an effective strategy as outlined by Thompson, Strickland & Gamble (2005) includes consideration of and alignment with the adopted competitive moves and business approaches, a focus on competitive advantage, resource  strengths and overall competitive capabilities. By acquiring complimentary businesses, financial services and mortgage, the company has been able to, to a certain degree, begin offering the millions of customers who come to Block for tax preparation other financial services. During the last few years mortgage has done well, tax held steady with barely an increase, and financial services has lost money. Online services and software have shown good increases in clients yet profitability is very low at this time. Consumer awareness and trust as well as infrastructure and technology needs require more work than originally realized. In addition, the internal problems of an old cash cow business unit, Tax Services, being asked to suddenly share clients with, and work with, business units with differing cultures and oper ating speeds is a much larger issue perhaps than management anticipated. The strategy of providing additional financial products to current tax customers as well as running these complimentary business units as unique operations does have a good fit, H&R Block does have competitive advantage in the service areas mentioned but more so with Tax and Mortgage than with financial services. It may be learned and the results the last few years bears this out, that the client base of Tax and Mortgage are not the most ideal financial services fit. Tax and Mortgage deal primarily with mid to low income groups and high profitability in financial services comes from the mid to high income groups. Value Chain The value chain categorizes the generic value adding activities of an organization. The â€Å"primary activities† include: inbound logistics, production, outbound logistics, sales and marketing, maintenance. The â€Å"support activities† include: administrative  infrastructure management, human resources management, R&D, and procurement. The costs and value drivers are identified for each value activity. The value chain framework quickly made its way to the forefront of management thought as a powerful analysis tool for strategic planning. Its ultimate goal is to maximize value creation while minimizing costs (Porter, 1985). The value chain maps a firm into its strategically relevant activities in order to understand the behavior of costs and the existing and potential sources of differentiation. Differentiation results from the way a firm’s product, associated services, and other activities affect its buyer’s activities. All the activities in the value chain contribute to buyer value, and the cumulative costs in the chain will determine the difference between the buyer value and producer cost. A firm gains competitive advantage by performing these strategically important activities cheaper or better than its competitors. One of the reasons the value chain framework is helpful is because it emphasizes that competitive advantage can come not just from great products or services, but from anywhere along the value chain. In strategic management it is critical to understand both the competitive advantage of an organization as well as understand the value chain. Five Forces Model The five forces model developed by Porter (1985) guides the analysis of organization’s environment and the attractiveness of the industry. The five forces include the risk of new competitors entering the industry, threat of potential substitutes, the bargaining power of buyers, the bargaining power of suppliers, and degree of rivalry between the existing competitors (Porter).  A starting point to analyzing the industry is to look at competitive rivalry. If entry to an industry is easy then competitive rivalry will likely to be high. If it is easy for customers to move to substitute products for example from coke to water then again rivalry will be high. Generally competitive rivalry will be high if: †¢ There is little differentiation between the products sold between customers. In this case Block has the advantage of a long solid history with the perception being that they know what they are doing and can be trusted. In addition, electronic filing is a long time product of Block that has also gained a lot of trust with customers. Of the two competitors, Jackson Hewitt and Liberty, Block is the only one with a guarantee that pays additional costs of any errors in work done. †¢ Competitors are approximately the same size of each other. The two competitors are very small compared to Block. No other tax preparation firm comes close to re aching the size and market share of Block. †¢ If the competitors all have similar strategies. They do have very similar strategies in the tax services arena; however, this will be an area to review in regards to financial services and mortgage. Suppliers are also essential for the success of an organization, however Block is a service business and suppliers are abundant for office supplies, computer equipment, etc. Block develops its own tax software. All mission critical needs are handled by Block so the threat of suppliers is almost non existent. Although, the IRS in a sense is a supplier of the electronic filing product infrastructure and does heavily influence what sort of electronic filing products are offered. Buyers or customers can exert influence and control over an industry in certain circumstances. This happens when there is little differentiation over the product and substitutes can be found easily. For many low income customers there is no loyalty and they will move to other providers if the fees are lower or they can get their refunds quicker. Regarding threat of substitutes the question is: Are there alternative products that customers can purchase over Block’s product that offer the same benefit for the same or less price? This is high in the case of H&R Block due to the availability of cheap and easy tax preparation programs, the increased use of the internet by a growing number of internet users, and technology is creating new forms of service delivery such as online services and software capabilities and price. Competitive Analysis – External Industry Analyses  Tax Preparation Industry: The IRS projected that for ‘05 they would receive 226.9 million tax  returns, a  number which  they project to  continue  growing at a  rate of 1.6% per  year until 2010  when the total number is expected to be 247.9 million. In the U.S., tax payers may file  their returns either through pipeline filing methods (sending paper forms  through the U.S.P.S.) or by e-filing (IRS 2004-2005). The IRS has strongly encouraged e-filing in recent years which is now becoming increasingly popular and consists of both TeleFiling and online filing. Online filing can be completed either through a broker or from any personal computer. The IRS projects that during ‘04, 58.9 million returns will be e-filed which would constitute 26% of all expected returns. Subsequently, the IRS projects this number to grow 8% per year until 2010 when the number of e-filers is expected to be 93.5 million, or 37.7% of the expected returns dur ing the 2010 tax season. (IRS 20042005). During recent years the IRS has promoted this method by touting higher accuracy, lower costs, less time consuming processing procedures, and refund turn around three to five weeks sooner than pipeline filing. Online filing is expected to increase by 21% from ‘03 to ‘04 and is expected to jump another 18% for the ‘05 tax season. According to HRB, the percentage of individual tax returns completed by paid preparers has risen from 48% in 1990 to 56.8% in 2002. Tax Preparation Competition The most recent U.S. economic census conducted in 1997 suggested that the tax preparation industry is very fragmented. While H&R Block holds 15.3% of this market its largest competitors, Intuit and Microsoft, hold significantly smaller portions. Although both of these companies directly compete with a portion of Block’s business, neither has the same business model or identical products. Intuit Inc. is a provider of business and financial management solutions for businesses and consumers and accounting professionals. This company not only produces products such as TurboTax and the  Quicken line of software, they also provide the general public professional tax help in person. Intuit has offices in 13 states while Block has offices in all 50 and both companies have a presence in the U.K. and Canada. Microsoft also plays a part in the tax preparation industry with Microsoft ® Excel Version 2002 Inside Out software. Growth of two fairly new competitors, Jackson Hewitt and Liberty Tax, which are using similar business model of combination of retail locations and online services. While currently these organizations are no where near the size of Block they are growing significantly each year. The availability of cheap and easy tax preparation programs is also an external factor which is driven by the customer need to conduct business when and where it is convenient for them. The increased use of the internet for tax preparation by a growing number of internet users is also an external factor. Technology is creating new forms of service delivery as mentioned previously regarding online services and software capabilities and price. In addition, the Internal Revenue Service factors as both a resource and competitor in a sense. In the chapter entitled â€Å"Conceptions of Environments† (133) Scott notes that the most common conception of environment of organizations is that of a task environment. He defines this concept as all aspects of the environment that are â€Å"potentially relevant to goal setting and goal attainment† and goes on to note that it is typically narrowed to refer to the nature and sources of inputs, competitors, and markets for output. This based on the belief that most organizations are created to achieve goals, to perform some type of work. Scott goes on later in the book and talks about managing task environments and notes (197) that there are many research resources and theories regarding the various aspects of managing the task environment, i.e., the sources of inputs, markets for outputs, competitors, and regulators. At H&R Block there is a great deal of material that could covered under this subject but one in particular stands out and that is the need at Block for the customers it serves in tax operations to continue to need that service. I am speaking of the Internal Revenue Service as both a resource and a competitor for Block. Block’s tax service is regulated in that all paid tax preparers must conform to tax professional rules and regulations that are part of the tax code and compliance enforcement in the responsibility of the IRS. So in one way, the IRS is a compliance officer to Block and Block must ensure that all tax professionals and company representatives comply with these rules at all times. They include sharing of information, application of tax law and theory, etc. In addition, the IRS has been a partner to Block and these two organizations worked together, almost a joint venture in behavior, to develop electronic filing in the late 80’s. This has been a boon to both organizations. At IRS processing centers labor needs have decreased as more filer’s use electronic filing rather than mailing in paper returns. They have experienced other benefits as well, less errors, etc. At Block this new product produced a new revenue stream that now makes up approximately 30% of revenues in the tax services business unit. Block and the IRS also work together on special projects and have a sort of standing arrangement where if the IRS wants an idea tested or hammered out they go to  Block, the largest preparer with 16 million customers. Five years ago IRS was concerned over the pending proposals for changes to the earned income credit. IRS asked Block to analyze what they might mean to lower income tax papers. With 16 million customer records that could be analyzed for impact it is much more than a random sampling. The IRS used this information to make internal recommendations to the program. In many ways, over the years Block has managed to use the IRS to actually help grow the company and the IRS has benefited from this enormously. This is true case of no organization  generates all the resources necessary for its goal attainment or survival (197). Software Comparison: TaxCut versus Turbo Tax  During ’03 48 million filers used Intuit’s Turbo  Tax while only 20 million used Block’s TaxCut.  (HRB, 2004 & Intuit, 2004). Block’s software  offerings average $10.00 less expensive for  comparable software with similar features which is  illustrated by TaxCut and Turbo Tax’s price ranges  $15.00-$50.00 and $20.00-$70.00, respectively. Both  products tout extremely user friendly features, such as  aggressive deduction finder, error double check, and  import of previous year’s repeatable information to promote continued use. Complaints regarding Turbo Tax are that the software is generally designed for one user to do one return and that it difficult to jump to one part of the return process without completing the entire procedure. Regarding TaxCut’s short comings, consumers have  suggested that it is easier to file more complicated itemized returns with Turbo Tax than TaxCut, although thi s may be outweighed by the smaller price. Both products are designed to file only the federal tax return for the fiscal year the product is purchased, and both also offer a rebate program to get the state version at no cost after rebate. Because tax legislation varies by year, a new version of either product is available each year, which sustains demand for this market. It is unclear if on of these products will clearly dominate the market in the near future because their extremely similar characteristics, pricing and availability. What is clear is that the market for ax preparation software is growing and that as long as both products remain innovative and react to consumers demands they will continue to attract new customers. Block’s brand name is one small advantage regarding TaxCut’s prospects in the future although that is only enough to pique interest in the product, while the features and ease of use will keep customers retuning year after year. Mortgage Industry The specific activity mortgage bankers engage in is the purchase, packaging, and sale of loans to third parties. This segment of Block’s business is sensitive to interest rate fluctuations. Interest rate cuts have driven mortgage rates to a 45 year record low, which, in turn spurred a sharp increase in home mortgage refinances. The industry has directly benefited from significantly higher volume of loan transactions in recent years driving a $2.5 trillion increase, in mortgages originated between ‘00 and ‘03. Because the majority of those interested in refinancing their mortgages have had sufficient opportunity to do so, business in this sector will be driven by new mortgage originations rather than additional refinances. The market for sub-prime mortgage will not slow down as much the prime market over a period of rising interest rates due to the cash-out refinance nature of the business. During ‘02 sub-prime originations constituted 8.3% of all loans and during ‘03 they constituted 8.4%. If interest rates rise in ‘05 as Greenspan has indicated then sub-prime originations should rise to their normal volume of 15% of all loans, nearly double what they are now. Over the new few years, the sub-prime industry expects growth of at least 5% a year. Regardless that low interest rates may have caused a spike of mortgage refinances in recent years, Block has experienced steadily increasing rate of mortgage originations the same time period. Although mortgage refinancing may not continue to be as considerable revenue source in the future, HRB management suggested in a Goldman Sachs conference call that non-refinance mortgage origination rates are increasing steadily  which should at least partially compensate. Financial Advice Industry H&R Block Financial Advisors (HRBFA) competes directly with a broad range of companies seeking to attract consumer financial assets, including full-service brokerage firms, discount and online brokerage firms, mutual fund companies, investment banking firms, commercial and savings banks, insurance companies and others. In ‘99, there was $6 trillion invested in mutual funds which is the largest single portion of this industry. 93% of this $6 trillion was controlled by six firms at that time. These were Vanguard (35%), Janus Capital Corp (20%), Fidelity (17%), PIMCO, Alliance, and MFS with 7% each (NYSE Market Report Searches, 2005). Clearly, Block is a small player in this enormous industry. In the secondary business units, financial services and mortgage, there are huge number of competitors currently offering services. Both businesses who core business are in these areas with high skills and those businesses that branched into these areas whether or not related to their core business. For example, retailers running credit operations. In the regulatory arena Block business units are heavily regulated. Tax Services by Internal Revenue Service and Treasury Department rules, financial services by SEC and broker regulations, and mortgage by lending laws. The most out of control areas are mortgage due to interest rate drivers and tax due to tax law changes. Foreign Markets Of the five segments at Block only one, Tax Services, actually operates in foreign markets. Mortgage, Financial Services, and Business Services operate solely in the United States. Until Recently H&R Block placed a moderate amount of emphasis on foreign markets but the particular services Block offers, and especially the non-tax segments, are not viable in most countries. As disclosed in the companies 2005 Annual Report the International Tax Operations segment has been aggregated with U.S. Tax Operations in the Tax Services segment and prior year results have been reclassified to reflect this change. In the 2005 Annual Report Block stated that international operations contributed $110.0 million, $97.6 million and $85.1 million in revenues for fiscal years 2005, 2004 and 2003, respectively, and $11.3 million, $11.1 million and $10.5 million of pretax income, respectively. This represents only 5.2% of revenue in 2005 but is up a bit from the 3.8% contribution in 2001. Australia is flat over this time period and the growth came from tax law changes in Canada. Considering the markets it makes sense that Block would not allocate a great deal of resources to foreign markets but instead operate primarily domestically. The company’s tax segment provides services to assist taxpayers with required self filings. Few countries have such systems requiring tax payers to self file. In Canada the tax reporting system is similar to the United States in that taxpayers file returns on an annual basis. This is also true in Australia. The United Kingdom is different in that few taxpayers are required to submit any filings. In the financial services area there is impact from foreign markets. The financial services industry has become considerably more concentrated as many firms have been acquired by or merged with other firms in recent years. Some of these competitors have greater financial resources than HRBFA and offer additional financial products and services. Competition from domestic and international commercial banks and larger securities firms is expected to continue to increase as a result of legislative and regulatory initiatives in the U.S. Firms in this industry are impacted by market performance, volatility, investor sentiment, margin balances, government regulation, and many other factors which cannot be controlled. Competitive Analysis – Internal SWOT Analyses A SWOT analysis is an effective method for identifying H&R Block’s strengths and weaknesses, while examining the opportunities and threats the company may face. Strengths: Personalized product and services Only brand to offer software, online and in-office solutions Dynamic marketing skills and structure Brand Client Base/Distribution Scale Very user-friendly website Low cost delivery system Low number of major (tax) competitors and no one on par with Block as far as clients served. H&R tax professionals are offered more education at most tax preparation firms over 400 hours. Weaknesses: Niche brand and market position Mass business system best serves lower income consumers Delivery system perceived to not meet many consumers’ needs Outside of tax relationships, limited or no competitive advantages in financial services/mortgage businesses Customer service in office and telephone Part time employees lack corporate citizenship Offices are leased and appear so Non-contractual service allows customers ease of switching to competitors Opportunities: Financial advisory business Tax preparation software Consumers are rapidly embracing internet availability Digital self-preparation splitting between software and online Online attracting younger, moderate income consumer (Early Adopters) Push for/advantage to E-Filing likely to drive growth for many years Financial services – long-term trend toward advice Online trading phenomenon is likely over – now just way business gets done Pricing for services evolving toward fee-based Major competitors focusing on high net worth market for growth Interest rate cycle impact on conforming loan market refinance business Financial advisory business Tax preparation software Threats: Availability of cheap and easy tax preparation programs Organizing low-end Competitors – Jackson Hewitt and Liberty Tax Banks or other financial companies could offer similar services in the future IRS could reduce complexity of forms and remove demand Technology is creating new forms of service delivery Flood of entries into financial services arena Financial services competitors building brand strength and service capabilities that drive consumer expectations Service capabilities that lead consumer expectations Mortgage industry – scale advantages dominate successful business models Business Ethics According to Thompson business ethics refers to the application of general ethical principles and standards to business behavior. They go on to say that business actions are judged by the general ethical standards of society, not by a special set of more permissive standards. Examples of ethical behaviors are honesty, integrity, keeping one’s word, respecting rights of others, and practicing the Golden Rule. H&R Block has a core set of values that the company attempts, through training and orientation, to instill in each employee. H&R Block’s values are client focused. Integrity: We are honest and ethical in everything we do, Excellence: We take pride in doing our best in everything we do. We embrace change to learn and grow, Respect: We treat each other with respect and dignity, recognizing that innovation springs from unique perspectives, and Teamwork: Everyone’s collaboration and full participation make us stronger and allow us to serve clients better (HRB web site). In my experience at Block, these values, which include being honest and ethical in all actions are adhered to by the majority of employees and leaders. Block has a culture of honesty and integrity which was fostered by Henry Block, the founder, and I would say this is a very ethical company. Social Responsibility Thompson outlines the notion of social responsibility as it applies to businesses concerns a company’s duty to operate by means that avoid harm to stakeholders and the environment and, further, to consider the overall betterment of society in its decisions and actions. At H&R Block one the products sold is known as a Rapid Refund. This is a loan against a refund. The demographics of Block clients are typically middle or lower income tax payers and many qualify for a refundable tax credit known as the Earned Income Tax Credit. This is credit given to low income tax payers and was intended to help those falling into this income range to move higher up in the income levels to assist with supporting their family. Block’s Rapid Refund product is a high cost loan and the interest rate is very high considering the length of the loan, typically a few weeks. The National Consumer Law Center is a non-profit organization specializing in consumer issues on behalf of low-income people. NCLC works with thousands of legal services, government and private attorneys, as well as community groups and organizations, who represent low-income and elderly individuals on consumer issues. According to the NCLC Refund anticipation loans (RALs) are usurious short-term loans secured by the taxpayer’s expected tax refund. Over half of RAL consumers are recipients of the Earned Income Tax Credit (EITC), despite the fact that EITC recipients only constitute 15% of all taxpayers. They also state, from valid research, that low income Taxpayers Lost over $1 Billion in Loan Charges and Fees in 2002 Their research also indicates that check cashing fees add to the cost of getting tax refunds or RALs, especially for those consumers who do not have bank accounts. While many un-banked consumer s find ways to get their checks cashed for free, commercial check cashers count on tax season to boost their revenues. One study found that 45 percent of EITC recipients planned to use a check casher to cash refund checks, further draining this program.50 Check cashers are also moving into the tax-filing and RAL market for their clientele. Since IRS rules prohibit commercial tax preparers from charging their clients to cash tax refund or RAL checks, 51 some tax preparers have formed partnerships with check cashers. H&R Block has teamed up with ACE Cash Express, one of the nation’s largest check cashing chains. This partnership has been proven very profitable for ACE, which has seen growth in its income during tax season. Part of the H&R Block/ACE partnership involves placement of self-service check cashing machines in lobbies of H&R Block tax preparers. ACE reported that 3.2% of its check cashing fees in fiscal year 2002 came from self-service machines located in ACE stores or in H&R Block offices. ACE placed 100 machines at Block locations during 2002 and has an agreement with Block to place up to 250 machines during the 2003 tax-filing season. As of the end of June, ACE had 22 machines in company-owned  locations and 150 machines available for deployment at H&R Block locations for 2003. ACE, expecting a boom ing business in cashing Block checks this year, announced cash inventory of $290 million during the 2003 tax season for 248 self-service machines placed in H&R Block offices. ACE also has a $55 million credit line from banks, for a total cash inventory of $345 million available to cash tax refund and refund anticipation loan checks during the 2003 taxfiling season. In addition to NCLC, several other consumer groups have charged this is a rip off and that Block is stealing some of this earned income credit from needy families and is perceived as being very unethical. Block counters that these clients in fact want this service and Block is doing nothing more than meeting the needs of its clients. This issue draws attention every year and creates quite a bit of bad press. Currently the National Consumer Law Center Consumer Federation of America is working to Ban refund  anticipation loans outright or make them subject to state usury and small loan interest rate laws. Diversification Strategies Thompson points out that diversification becomes an attractive strategy when a company runs out of profitable growth opportunities in its original business. H&R Block since it’s inception in the 1955 was focused on one area, tax preparation. In the 1980’s they did begin to think about diversification when talk began about a flat tax. They purchased a company called CompuServe based in Columbus, OH. At the time it was doing well in the new area of online subscription services. It did not, however, fit all the tests for a good acquisition for Block and the management team at corporate lost some key people at CompuServe and had no skills at all in running such a business. In essence for several years it sort of just stayed flat in growth and innovation and AOL took off and left CompuServe in the dust. CompuServe was finally sold in the mid 1990’s and the buyer stripped off the technical infrastructure for their own use. The other services were  discontinued. This was Blocks first try at diversification so it was a long while before they tried again. In the late 1990’s a new CEO was hired, who is still managing the firm through a brand and strategic shift, and he immediately laid plans to diversify but only with complimentary businesses with a good fit to the core competencies of Block. Block certainly fits with the opening remark from Thompson in this discussion. Tax is mature and has growth potential that is limited each year. Mergers and Acquisitions Thompson (2005) identifies several strategy choices in chapter 6 of Crafting and executing strategy: The quest for competitive advantage and one of those is the merger and acquisition strategy. The authors state that a â€Å"merger is a pooling of two or more companies as equals, with the newly created company often taking on a new name. An acquisition is a combination in which one company purchases and absorbs the operations of another.† According to Thompson the objective of mergers and acquisitions are to achieve one or more of the following organizational business goals; paving the way for acquiring firm to gain more market share and create a more efficient operation, expanding a firm’s geographic coverage, extending a firm’s business into new product categories or international markets, gaining quick access to new technologies, and/or to invent a new industry and lead the convergence of industries whose boundaries are blurred by changing technologies and new market opportunities. Thompson goes on to indicate that combining operations may result in some negative consequences such as resistance from rank-and-file employees, hard-to-resolve conflicts in management styles and corporate culture, and tough problems of integration. In addition, the author’s state that greater-than-anticipated difficulties may occur in; achieving expected cost-savings, sharing of expertise, and achieving enhanced competitive capabilities. Regardless of possible negative effects the merger-acquisition is a much used strategic option and is a common occurrence in business today. H&R Block does have a good example of this strategic method. In 1996 Block acquired Option One mortgage (Based in Irvine, CA) after running the business as a separate company retaining the name and structure in 2000 this firm was renamed H&R Block Mortgage, Inc. In addition, in 2000, H&R Block acquired Olde Financial, a securities firm (based in Detroit) and used this firm as a launch to create H&R Block Financial Advisors, Inc. The addition of these two business units under the parent company, along with the core H&R Block Tax Services, Inc., created the operational backbone to support a fuller line of financial services. Cross selling is heavily used and customer information, with proper consents, is shared amongst the business units for marketing and contacts. In many other ways, outlined in my final project, the company has used these acquired firms to provide the operational structure required to gain entry into new areas relatively quickly. Moving into financial services and mortgage has been a big plus for the company. Mortgage has been especially lucrative financially and while financial services are not as strong it is growing steadily as skills and talent is added. They do fit very well and there is cross marketing and up selling in and across the business units. It is taking longer to really integrate and turn these strategies into operational ways of doing business but they are achieving the plan. Shareholder Value According to Thompson there are three tests that if passed indicates the diversification move can produce added value for share holders. They also state that â€Å"managing a set of unrelated businesses is a much weaker foundation for enhancing  shareholder value than is a strategy of related diversification where corporate performance can be boosted by competitively valuable cross-business strategic fits.† The industry attractiveness test measures whether the industry chosen measures favorably in competitive conditions and a market environment that is as good as or better than the current businesses. It seems that Block meets this test with their diversification strategy. By entering into the financial services and mortgage businesses they are able to cross market and sell to, for most products, existing customers of the core business. The mortgage business has done extremely well in profitability. The cost-of-entry test measures whether the business in consideration has a cost of creating or buying that will limit profitability. In the case of Block the mortgage business has shown incredible returns on the original investment. The financial services firm purchased were slow to contribute profit but are doing so now. The better-off test measures whether, well as it says, the company is better off overall with this business. Financially if there is no increase in profits and shareholder value with the business than without it than it would not meet the test. Block is definitely better off with these businesses than without as shown in the contribution rates of the businesses to the overall corporate profit. In addition, these businesses provide value added services to the 18 million tax clients out there in the form of these added financial and mortgage services. Block, in my opinion as a former long time executive and based upon operating results, has done well in these businesses and seem to have made good choices by using a diversification strategy of related businesses that provide added value to shareholders and customers of the cash cows tax services division. Unfortunately, these units have not all achieved the profitability levels desired and financial services in particular has sustained some heavy losses during the first few years of implementing this strategic plan. Strategy Analysis Strategy – integration of services across business units.  Completing its transformation from tax provider to financial services provider, H&R Block is well aware that it is entering into some stiff competition— from brick-andmortar to click-and-mortar and strictly online ventures One of the areas that could be improved that would allow for better support of the company cross selling and servicing strategy is to create greater cross operational responsibilities for local and regional managers. This company does retain a good deal of silo mentality at this level and managers should have more cross operational responsibilities. For example, those customers using online tax preparation or purchasing TaxCut software could have included year round in person service if needed at the local physical Block office. Both managers should be viewed as responsible for this customer and compensation considering accordingly. This same scenario could work in reverse with physical offi ce customers seeking assistance via the web. Infrastructure is in place to accomplish this and only strategic planning and execution of processes changes is needed. As Thompson states â€Å"organizational capabilities emerge from a process of consciously knitting together the efforts of different work groups, departments, and external allies, not from how the boxes on the organization chart are arranged†. In the past few years technology and functional areas have been reorganized and  processes reengineered to support this type of operational shift, however, the people have  not been paid as much attention to. Currently, if a local Block manager has a client come in that had done their taxes with the software about all the help they can offer is an 800 number to call for support on the product but not with any tax issues. There is no incentive to assist this client any more than that. Customer needs and the market drivers should be primary considerations regardless of wha t branch of the company the client approaches for assistance. H&R Block already has strong brand equity as a tax preparation company, but to successfully take advantage of financial industry deregulation, the company needed to leverage the relationships with its traditional tax customers. Much of this effort falls on its tax preparers. As the first point of contact for customers, they’re charged with gauging the interest level and potential value a tax customer would receive from other financial services, including mortgage products and investment plans. Once customers express interest, the company needed an efficient way to pass information to the appropriate financial advisors and ensure every inquiry was addressed. That was the hard part, with 1,600 advisors spread across 190 financial centers nationwide. Because of changes in policies, processes, structure, and technology solutions, when a tax customer requests more information on other H&R Block services, information on that customer’s background and interest area is automati cally routed to the most qualified financial advisor for an immediate, tailored response. According to a CRM study (HRB, 2003) within the organization conducted by a software firm the company could enable its financial advisors to provide personalized sales and service, they found that H&R Block is giving its customers reason to be loyal and creating a return on relationship over the customer lifecycle. While piloting its financial service center concept, H&R Block initially used a contact management and lead distribution application, but it ultimately lacked the robustness needed. That’s when the financial services group began seeking a new sales force automation solution. Meanwhile, the company had chosen a technology solution as its scalable, web-ready CRM solution to track and route customer inquiries— whether they come in by phone, email, the web or in person—in the company’s newly consolidated customer contact center. Its individual call centers had been using disparate call center tracking software, which meant that the company wasn’t getting a single view of each of its customers—or their profitability levels. The new customer contact center serves the tech support needs of the company’s 10,000 offices as well as its client relations, financial and e-commerce groups. Future Plans Thompson has several key points regarding organizational capabilities; companies don’t implement and execute strategies; people do; all managers have strategy-executing responsibility in their areas of authority, and all employees participate in the strategy execution process; and, when strategies fail, it is often because of poor execution— things that were supposed to get done slip through the cracks. A talented management team is essential talent implies that an appropriate mix of skills and experiences exists within the team. Intellectual capital is more important to strategy execution than other investments. Also decentralizing decision making which takes full advantage of the talent is important to good strategy execution. H&R Block has been reorganizing and changing the management team over the last five years. As they have added businesses through acquisition and development of  new products (online and software, for example) they have added key management per sonnel in those areas with backgrounds and skills in the appropriate fields. While this company does not attract â€Å"stars† it has a very capable management team and the only criticism is that unfortunately many of those newly added have left after two or so years. A great deal of turnover has occurred in seeking just the right individuals. In some cases, they were not working out and in others they sought greener pastures. The management ranks in the middle levels of the company are, however, stable and exhibits a great deal of talent within their respective operational group. This company does retain a good deal of silo mentality at this level and managers should have more cross operational responsibilities. For example, those customers using online tax preparation or purchasing TaxCut software could have included year round in person service if needed at the local physical Block office. Both managers should be viewed as responsible for this customer and compensation cons idering accordingly. This same scenario could work in reverse with physical office customers seeking assistance via the web. Infrastructure is in place to accomplish this and only strategic planning and execution of processes changes is needed. As Thompson states â€Å"organizational capabilities emerge from a process of consciously knitting together the efforts of different work groups, departments, and external allies, not from how the boxes on the organization chart are arranged†. Thompson also states that â€Å"the ultimate goal of decentralized decision making is not to push decisions down to lower levels but to put decision-making authority in the hands of those persons or teams closest to and most knowledgeable about the situation†. Block is a leader in this area. Local and regional managers are responsible for most  decision making regarding hiring, schedule of activities (training, tax  schools, etc.), location selection, local marketing, bookkeeping, public relations, etc. When I was a district manager the total experience was of running my own business with the absence of financial liability. There are, however, policies and procedures for many areas that must be adhered to in all locations but deviations are allowed with proper approvals and usually this is just one level up rather going to the CEO. Another area is evaluation of strategy implementation. For several years the company has been designing and setting up processes to support a balanced scorecard method. (Kaplan, 1996). The balanced scorecard is a management system (not only a measurement system) that enables organizations to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise. Kaplan and Norton describe the innovation of the balanced scorecard as follows: â€Å"The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation.† The balanced scorecard suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives: 1) The Learning and Growth Perspective, 2) The Business Process Perspective, 3) The Customer Perspective, and 4) The Financial Perspective. At H&R Block key performance indicators have been identified and databases put into place to provide executives with data at all levels of the company in the four performance dimensions measured by the scorecard. Executives indicate in personal conversations with the author that the initiative is going well and the tool is providing much needed information to assist with decision making and measurement of results. Summary and closing In a Forbes article printed in early 2004 author Emily Lambert stated â€Å"April 15, looms, but H & R Block Chief Executive Mark A. Ernst has more than taxes on his mind. He’s eager to find out how many of this season’s customers can gradually be convinced to buy H & R Block’s newer offerings, including home mortgages, business consulting and brokerage services. Last fiscal year the company’s non-tax businesses accounted for half of its $3.8 billion in revenue, most of that from its mortgage lending, which it started offering in 1997. Its financial services business hemorrhaged $128 million (pretax) last year, and the business services arm is also lagging. The loans, which can carry interest rates of 129%, appeal to cash-strapped low-income customers. Some customers may be wary, too. The company is under fire for its â€Å"refund anticipation loans.† The loans, which can carry interest rates of 129%, appeal to cash-strapped low-income customers. T he fees accounted for $109 million in revenue last year. H&R Block has settled a number of loan-related laws.† This is a powerful representation of the state of company as of that time which is result of close inspection during a time of transition. What she does not mention is how this compares to the first couple of years of the strategy implementation of broadening services. As of today, the picture is brighter and the company, while still a long way from being there, is closer to achieving some of the goals. This paper outlined the company, the strategy employed, the rationale for various components of the strategy, and how these areas fit within the strategic models studied in this course. One area that the author feels may be needed that is not current present in any of them.

Financial Analysis of Dell Essay Example | Topics and Well Written Essays - 3000 words

Financial Analysis of Dell - Essay Example Dell, Inc. is a leading supplier of information technology equipment and peripherals such as printers, music players, mobile phones, laptop and desktop computers and software, and servers and storage systems. Founded in 1984 by Michael Dell, currently the Chairman of the Board, it generated total sales of $55.9 billion and profits of $3.6 billion in 2006 on the basis of a direct-selling business model to a growing global corporate and consumer market. Customers place orders over the phone or the Internet, pay for purchases up front, and wait for on-time delivery. Its business model allows Dell to sell computers at a lower price and that are tailor-fit to each customer's needs. Although it began by selling to individual consumers, the company now generates over 75% of its sales from large corporate accounts. Using a supply chain and financial management system that it innovated and successfully continues to improve, the company keeps spare parts and finished products inventories low, its cash volumes high, and net profits optimized to drive phenomenal corporate growth. In the task of managing a 65,000-strong global workforce spread in seven manufacturing sites in the U.S., Brazil, Malaysia, China, and Ireland, Dell is assisted by President/CEO Kevin Rollins and a team of directors and professional managers from its Austin, Texas headquarters and five regional offices (Dell, 2006e, p. 22-24). The company belongs to the highly competitive technology sector populated by established companies. It competes for global market share in computer hardware sales with IBM, HP, Xerox, and Apple of the U.S., and with NEC, Fujitsu, and Canon of Japan. Due to the effects of global competition on operating margins, Dell has evolved from a mere assembler and seller of products developed by other companies - such as Intel that supplies computer chips and Taiwanese companies supplying wires and other parts - into a designer of its own products like PDAs and PCs. The first half of 2006 was good for Dell. Fortune ranked the company 25th among the 500 Largest U.S. Corporations; 23rd in annual profit growth measured in Earnings per Share over the last ten years hitting 33.1%; and 2nd in Ten-Year Total Return to Shareholders with 39.4%, making it the second best investment in the list (McGirt, 2006). Its revenues made it the 88th largest company and the third largest supplier of computers and office equipment in the world after IBM and Hewlett-Packard (Lustgarten, 2006). However, the second half of the year has been brutal for the company. First, a battery in a Dell laptop exploded in the U.S., which turned out not to be an isolated case, leading Dell to recall and replace 4.1 million batteries, the largest such order in the history of American business, opening the company to embarrassment and potential lawsuits. Second, Dell made public that in August 2005, the Securities and Exchange Commission (SEC) launched an investigation of its accounting practices. This double trouble

New ways of communication Coursework Example | Topics and Well Written Essays - 500 words

New ways of communication - Coursework Example Moreover, unconventional leadership styles and functions have also been witnessed to play an imperative role for the organizations to obtain competitive success, making greater use of advanced technology and the available resources. One such example can be observed in the dimension of internet communication processes. Emphasizing the aforesaid aspect, this paper aimed at empirically identifying the benefits and drawbacks of communicating with co-workers over internet medium in the 1st assignment. 1st Assignment The method of face-to-face communication has been providing adequate support to the business since the ancient trade periods. Eventually, the integration of advanced Information and Communication Technology (ICT), in the modern day communication process, has been viewed to play a major role for the co-workers in terms of sharing different ideas, thoughts and business information using the internet facilities. However, the process can also impose negative impacts upon the organ izations while the co-workers seek to communicate through internet medium. It is in this context that Patterson (2011) emphasizes various dynamic features concerning the importance of developing face-to-face communication amid the co-workers.

Case project analysis Assignment Example | Topics and Well Written Essays - 2500 words

Case project analysis - Assignment Example Thus, taking consideration of these aspects, the report will mostly remain focused towards assessing the statistical data and the types of renewable energy generation plans undertaken by the 27 EU Member States. It will also elaborate the predictions made by the member states till the period of 2020. Eventually, the new technological implementation will require subsequent planning and investment. Thus, this report will also comprise of a planned ‘work breakdown structure (WBS)’ which will assist the project managers and the contractors in accomplishing the project within the provided deadlines. Project deliverability has always been considered as one of the most crucial aspects of project management. It involves the systematic accomplishment of each and every planned stage of the project in an effective manner. The process also gets accompanied by appropriate structuring and engagement of strategic measures by taking help of the various management tools. The necessity of tallying the attained outcomes with perceived project objectives also forms a crucial of the overall management process. Taking consideration of the guidelines mentioned within the European Commission Call for Tenders ENER/C1/504-2009, the stages of this project has been carefully planned (Prestemon, 2011). A brief summary of the deliverables associated with the renewable energy project have been detailed below. Financial planning can be considered as a crucial factor in accomplishing large scale projects due to the fact that they are time bound and completely rely on the availability of resources. Moreover, the successful accomplishment of the project also depends on the performance and the experience levels of the contracting team. Appropriate use of project financial budgeting tools can also be considered as a crucial deliverable for the undertaken contracts

Second Assignment Essay Example | Topics and Well Written Essays - 500 words

Second Assignment - Essay Example cade at rates that were seemingly out of control, ushering in a completely new middles class within and throughout the most populous country in the world. This bought about the recent comments made by Li Keqiang, the Chinese Premier, at the recent opening of the National People’s Congress in China on March 5. Lowering the economic growth forecast to 7% speaks to a ‘new normal’ of more sustained, but slower, growth throughout China (Magnier, 2015). Given this, however, my opinion is that China is still growing at a rate that far exceeds most countries in the world and that they are well position on the economic front to continue its rise to possible world domination in the long term. To be honest, it is quite staggering to consider that the current growth rate of 7.4% is the lowest it has been in roughly 25 years. While the economy is strong, however, there are now concerns that unemployment and social unrest may begin to creep into an otherwise and generally peaceful Chinese society. This speaks to the reality that the global population boom is leading to a lack of resources, both natural and physical. Nations such as China simply have too many people to truly sustain meaningful and lasting employment options. Unemployment leads to less spending, which over time does slow down economic growth (Che, 2013). We saw the same thing occur in the United States following the Global Financial Crisis of 2008. While China weathered that storm quite nicely, it now appears that they are poised for a downturn of their own, even though certain benchmark indicators are still showing as being largely positive. In essence, what the nations of the world need is long term growth opportunities that truly benefit the masses. In China, as elsewhere, the growing disparity between the wealthy and lower classes is staggering. While the world keeps adding many individuals every years whose net work is in excess of the 1 billion dollars, the number of poor among us

Product Survey Project Case Study Example | Topics and Well Written Essays - 750 words

Product Survey Project - Case Study Example The chosen hardware should be able to effectively work in harmony with the required software or soft wares to produce optimum results. The software should be capable of handling all the commands and tasks assigned with high quality design deliverance capabilities (Chen, 2006). This is a detailed documentation of acquiring IT products for an architectural firm. The preferred computer manufacturer is Hewlett-Packard. The 8gb random access memory acts as main memory where application soft wares and programs data are temporarily stored during processing. Architectural design software require high ram value i.e. 8gb high ram value reflects on the computers capability to handle memory demanding software with high graphics requirements The 750 GB hard disk purpose is storage function, its large volume helps store voluminous information that is vital to the organization and for installing many softwares (Chen, 2006). The 21inch monitor displays the design information relayed to it by the video card in the CPU. A larger monitor translates into a wider display which is a vital aspect in architectural design where detail is an essential element. The reason for the 3D printer is that is that it provides simulations that are near real and gives client a clear picture of how developed designs are likely to be when projects are executed. .web camera is to facilitate conferencing with different department without necessarily having to convene in single location (Crnkovic & Asklund, 2003). The reason for the scanner is to expedite conversion of adopted architectural design images to soft copies for storage digitally or for further developments. A design graphic card enables relaying of detailed graphics to the monitor from the central processing unit. The reason for the D-link is to facilitate the connections of all the stations in firm. The external hard disk is for securely storing vital firm information that may

Classroom Scenario Essay Example | Topics and Well Written Essays - 250 words

Classroom Scenario - Essay Example Mr. Hamilton should meet with Danny’s parents and inform them what role they can play in improving Danny’s academic performance. This includes monitoring Danny’s activities at home, providing Danny with a proper place to focus his attention, and linking timely completed homework with rewards. It is vital that Danny’s parents adopt the same approach that Mr. Hamilton has adopted i.e. praising Danny at the display of good performance, and look disappointed at poor performance and yet, encourage him to do better next time rather than scold him. The monitoring system that can help determine the effectiveness of the instructional interventions should comprise both behavioral assessment and performance assessment. â€Å"Prereferral intervention strategies are generally determined by a committee of general education teachers before any specialists are included in the plan† (D’Amico and Gallaway, 2008, p. 4). For optimal performance, it is imperative that Danny feels satisfied and happy with the monitoring system. One way to achieve this is by gauging what intervention strategies Danny feels comfortable with. Instructional interventions can also be established by way of mutual consensus between Mr. Hamilton, Danny, and Danny’s

Best teacher Essay Example for Free

Best teacher Essay My best teacher that I have had thus far in my academic teacher would have to be Elias Semaan. Professor Semaan taught the upper level Finance courses here at JMU and his intelligence as well as his passion captured my attention and made me want to absorb the knowledge that he was preaching. I had Professor Semaan my sophomore and junior year and he was great. He taught a difficult course, FIN 360 Analytical Methods in Finance but he made difficult concepts and equations seem easy by going through the logic behind them and why and how we use them. He added in humor to lighten the heavy load of the courses content and keep the class happy. He was also very creative and used his own little real world examples while explaining bigger critical concepts. Professor Semaan did an excellent job of keeping the class active and participating. He was open to the student’s opinion and always asked at the beginning of class if anyone was having trouble with anything in the course or had any questions, if they did we would discuss it as a class until everyone was caught up. At first I had difficultly grasping some of the concepts as I had switched my major from Management to Finance, but he sat down with me one on one in his office and walked me through any questions I had with clear cut explanations until I had them down. He used tests as assessments for the class and they were tough but fair. If you paid attention and did all your work, the problems would seem familiar and if you slacked off in class or did not attend it would show through the grade of his tests. He was not an easy teacher by any means and you had to work hard for a good grade but he made you want to succeed and motivated me to reach my full potential more than any other of my teachers had. I liked him so much in FIN 360 that the next year I took his other class, FIN 450 Financial Risk Management. I grew a close relationship with Professor Semaan as we shared stories, went over new and challenging concepts, and he served as a role model for me through my College career. Professor Semaan said I remind him of a younger version of himself and I take that as a great compliment. He is very intelligent, he received his PhD in Finance at George Washington University and has been teaching at a University level for over 10 years now. He is in his early 50s and has had a hard life with many ups and downs but continues to push forward and motivate his students to succeed and reach their highest potential. He is dedicated, ambitious, intelligent, funny, charismatic and strong-minded and I admire him and respect him tremendously as a person and mentor. He has made me want to put in all of my effort and work as hard as I have to until I understand what I am learning. He pushed me in the right direction and offers me priceless career information as to what paths to go into and how to make myself look good to employers. He even gave me his cell number to call him if I have any questions or problems at any time. He has my back and I respect him for all that he has done for me and all that he has accomplished throughout his life. I believe Professor Semaan’s teaching philosophy is to have his students maximize their learning potential and focus on their strengths to pick a career path where they will ultimately be happy as well as successful. He has done a great job abiding by his philosophy and has helped me through College and the job searching process. He held office hours by schedule and by appointment and was very flexible and would work with you and do whatever he had to ensuring that his students learned. He also pushed his students to succeed through his charisma and charm and worked one on one with students who went out of their way to learn. He was my best teacher and I feel very lucky that him and I were able to cross paths and establish such a great relationship as teacher/student, mentor/role model, and friends.

What extent could government policies affect house prices

What extent could government policies affect house prices In 2009 British house prices has first to their annual decline since at least 2002. According to the British media, home prices in London actually faced the worse prices down 5.3%. The London Housing Prices are perhaps one of the most popular issues of discussion in UK. To some extent this is due to the fact housing prices have nearly trebled since the mid 1990s. Because of this landlords have seen huge gains of wealth which has left with a apparently impossible task for those trying for buying a house. Since the Wall Street crash in 1929, the economies situation in 2009 was described as the worst financial crisis. The unemployment, credit crunch, failing banks and businesses led the economy into a prolonged recession. The UK housing market is cyclical and is quite familiar with the booms and busts of the economic cycle. The UK housing market is very fundamental sector in the economy. The country performance as a whole is closely related with the performance of the housing market. Before the crises the situation of the countrys economy was that there was huge amount of money flowing in the economy, due to attractive demand banks were confident to lend the money, but the dealings of 2009 came about when the banks failed to collect all the money back they lent, therefore they reduced their lending which leads to collapse of large banks in the market. Ultimately the result effected the consumers that now it became difficult for them to obtain a mortgage from banks. Now the only way to get hold on a house left with cash transaction which results in fall in demand for housing. People started to rent a house rather buying. Therefore, a decrease in demand for housing results in house prices were failing. This is perhaps due to the factors that determine the prices of houses in a free market. So if we study the last three years of the housing market it will show us a very interesting picture. But at this stage we need to take into consideration those factors which affect the housing prices. Following are the key factors that play a very important role to determine housing prices in a free market Source: http://www.mortgageguideuk.co.uk/house-prices/what-factors-effect-house-prices/ Factors That Affect House Prices in UK House prices are affected by a combination of supply and demand factors. Demand Side Factors: These are the basic factor which plays an important role in determination of the house prices. If demand is higher than the supply housing prices will increase and if demand for the house is lower than the supply ultimately prices will decrease. The new housing societys development is very low in UK as compare to demand, which is the fundamental reason for higher housing prices. For house prices to fall, the demand would need to fall extensively. Of course there are many factors that determine demand for houses. Economic Growth / Real income. High economic growth and diminishing unemployment increases disposable income meaning people can spend more on buying a house. It also increases confidence in buying a house. Moreover, the significant rise in Per Capita Income enables people to spend more on buying a house in a free market. By tradition, the mortgage ratio was 3 times of the salary. For instance, if there is a person who earns  £20,000 the building society would led him  £60,000. Therefore, rising incomes leads to rise in housing demand which further enables house prices to rise. On the other hand if the economy goes into a recession and unemployment rises, the demand for buying houses would fall significantly. Interest Rates Interest rates affect the cost of paying for a mortgage. Mortgage Interest Rate is the most important factor that affects housing prices. The cost of interest payments on mortgage depends on the interest rate set by the Bank of England. If interest rates are raised, the cost of mortgage repayments rises this discourages people from buying and it may force people to sell. For instance, in 1992 interest rates were rose over 12% which caused a large fall in demand for housing and house prices fell. However, in 2009 interest rates have been cut very low (1.5%) but demand is still falling. Though it is cheap to pay a mortgage, but, this is outweighed by the fact mortgage availability is low and confidence is low. Availability of Mortgage Finance Study shows that in 50s, 60s and 70s, there were strict restrictions about the availability of finance. However, with the increase in deregulation of the banking sector there has been rise in competition in the number of mortgage products like interest only, self certification mortgages and mortgages up to 6 times income have enabled people to get more mortgages, which leads to increasing demand for housing. However, during the credit crunch of 2008, the number of mortgage products on offer fell due to a deficiency of finance in the money markets which leads to decrease in demand. Demographics / Population The growing levels of net migration are increasing demand for houses. The immigration from Eastern Europe, like Poland and Romania are enhancing the UK population. Therefore, initiating increase in demand. Moreover, growing number of households are demographic changes such as number of people living alone. E.g. rising divorce rates have raised number of single people living alone. Future Price Expectations. There is an aspect of hesitant buying in the housing Market. This is mainly the case in the buy to let market. When people look forward to falling house prices in 2008, it may give confidence to people to sell and cash in their capital gains. If we are not careful falling prices can create a multiplier effect where others are positive to sell. Obviously, most people buy a house to live in, not as an investment. But, diminishing prices will encourage some prospective homeowners to rent rather than buy. Speculation Everyone doesnt buy a house to live in it. An increasing number of property investors buy houses to try and make both capital gains and income from renting. During the past few decades the number of buy to let investors in the UK has risen. Although UK house prices have increased faster than inflation, renting has also become expensive which is the main substitute to buying a house. Supply side Factors This is a second most important factor that affects the housing prices in a free market. A decrease in supply is also responsible to raise housing prices, especially in long term. Some predict UK housing prices will significantly rise in long term due to long-term shortage of supply. In the US housing market, they currently have a surplus of supply so a bounce back in the property market is unlikely. In the short run Supply of housing is fixed because it takes time to build houses. Therefore in the short run demand affects prices more than supply. However if the supply of housing is inelastic then an increase in demand will lead to a big increase in price. In the long Run the supply of housing is affected by many factors: Market Reaction If people observe house prices increasing and they expect prices to keep on rising, more people will buy a house. Also, when confidence in the market is high, lenders are more willing to lend mortgages with small deposits / large income multiples. But now in 2009 confidence is very low, people see house prices falling so dont want to buy and banks dont want to lend mortgages without a big deposit. Location The locality causes major variations in UK house prices by geographical area. Even within different areas of London, house prices can vary terrifically. Availability of planning permission. This is difficult to obtain in rural areas. Opportunity cost for builders e.g. are there better returns from other types of investment. Existing houses may be knocked down because they are deemed unfit to live in. An increase in the cost of building new houses will shift supply to the left. In the UK, it is argued there is a significant shortage of housing is this explains why house prices have risen much faster than inflation and earnings. However, in the US, the supply of housing increased in the period upto 2008 and therefore, the excess supply and falling demand led to a big fall in demand. However, it is important to note that house prices can still fall, even if there is a shortage of supply. In 1992, house prices in London fell over 20%, even though we can say supply is inelastic. A shortage of supply just means they will be on average higher. It doesnt mean they are incapable of falling. http://www.uk-houseprices.co.uk/housing_market/factors_affecting_prices.html Why House Prices are falling in the UK Since the peak in July 2007, UK house prices have fallen considerably. Following are the main reasons for falling house prices: Difficulty of Getting Mortgage due to credit crunch. Low affordability (high house price to income ratios) Economic recession and rising unemployment. Nobody wants to buy when house prices are falling. Government Interventions in Determining the Interest Rate in UK It is the responsibility of Monetary Policy Committee (MPC) and Bank of England to set Interest rates in UK. The MPC works independently from the Government. Before 1997, interest rates used to be set by the Chancellor. It was argued, with a degree of justification, interest rates were subject to political motivation. The government now just sets the MPC an inflation target of CPI = 2% +/- 1. The MPC aims to keep inflation as close to this target as possible. If inflation is above or below this level, the governor of the Bank of England has to write a letter of explanation to the chancellor. In theory, they only target inflation; however in practice they may consider the effects of interest rate changes on economic growth, unemployment, and to a lesser extent the housing market and the exchange rate. http://www.articleclick.com/Article/Factors-that-Affect-Property-Value/2491 The Government is in a way trying to prevent house prices falling by: Bailing out banks and encouraging them to lend e.g. RBS, Northern Rock etc. The MPC is drastically cutting interest rates to make borrowing cheaper. The government is putting pressure on the banks to pass these rate cuts on. Reduction in VAT and increased spending, could limit the extent of the recession. On the other hand, in the current economic crises it is difficult to see any government policy which could successfully prevent house prices fall. This is due to that there is a very strong negative momentum in houses prices, people think that they are overvalued and banks dont want to lend. Hence it doesnt make any difference what so ever government says or tries to do. The only policy which really would have stabilized house prices would be better stabilization of the credit boom and bust. If the government had forced banks to save more and share credit in the boom, the boom would have been less and banks would now have more resources to maintain lending in the current recession. So, the government cant really stop house prices falling. But, they should find much better policies to prevent a repeat of the boom and bust we have experienced twice in the past 17 years. London Housing Market Problems in the London Housing Market First Time Buyers struggling to get on Property Ladder The house prices have been increasing faster than incomes, which is making it more difficult for first time buyers to get on the property ladder. According to the Halifax the first time buyers in London need an average deposit of over  £41,000. So it becomes difficult for them to arrange the huge initial investment to get hold on a house. Supply Growing slower than demand The number of new houses and housing societies being built in London is very low. The main reason for this is the limited area of land within the city where new houses can be built. However the demand for various factors is keep on growing, such as net immigration and changing demographic factors. Shortage of Housing for Key Public Sector Workers The high rise in house prices to earnings means that there are many public sector workers like; nurses, teachers, fireman, policeman and civil servants are struggling to get hold on the property. For instance, comparing the average income of teachers in Greater London, the ration of House Prices has increased 4 times income (2003) to 7 times income (2009). With a shortage of key public sector workers the NHS, for example, has to encourage the migration of foreign nurses to fill the many gaps in its London hospitals. Speculative Buying creating potential for Boom and Bust There is a significant rises in house prices has been seen by the London Housing Market, regardless of the monetary falls in the early 1990s, it is seen as a good investment. As a result it has encouraged investors from abroad and UK to buy a house and make huge capital gains. In response to this the market has squeezed by increase in demand. Facts about London Housing Market There are over three million households in London. The amount of new developments of houses and housing societies in London represents a very tiny proportion of the total stock even less than 0.5 percent. London House Prices Average London property price is :  £351,028 April 2007 The most expensive area is Kensington, Knightsbridge and Chelsea average house price is  £918,000. The cheapest area in London is Barking and Dagenham where average house price is  £181,802. 1990s the market witnessed falling prices with some house owners experiencing negative equity. The supply and demand graph show what has happened, due to declining incomes and consumer confidence and growing unemployment, the demand for housing shifted to left from D1 to D2. The Initial price was at P1 but due to surplus supply where demand go beyond supply) there was downward force on prices to decline to P2. Therefore the housing market in this case restricted from area 0P1E1Q TO 0P2E2Q. The supply curve for housing at any moment is actually unchanging. So a decrease in demand decreases prices rather than Quantity. After the utmost recession the UK economy jumps into action with an increase in GDP of 0.1%. The current position of the housing market in the UK is quite astonishing. House prices have been increasing constantly since May 2009 according to nationwide. With the low interest levels of 0.5% by the Bank of England have helped make mortgages more reasonable. Some argue that house prices have risen due to a shortage in supply since home owners are tentative to sell at current prices. The diagram shows a pointed recover in the prices of houses from early 2009, and a constant rise up till now. Source: http://www.bankofengland.co.uk A further explanation for this sharp rise in prices could be due to a lack of supply in the housing market. There is ambiguity in the market which is averting people from putting their estate on the market, this theory of hesitation and reluctance to put the property on the market can be down on a supply and demand diagram below. Source: http://www.nationwide.co.uk/hpi/archive.htm S2 P3 S S1Higher demand with squat supply has lead to the situation in the diagram. Due to low interest rates, affordability of housing has improved, lifting demand from D1 to D2. At the same time reluctant home owners have not put their properties on the ladder, leading to a fall in supply for houses from S1 to S. Overall this creates an upward force on prices from P1 to P3. Q2 Q Prediction: Anticipating amidst such an unsure economic environment can gently be depicted a challenge. Reviewing at the data of house prices it can be said that in the short-term future prices are probable to increase, as they have done in recent times, but in the medium to long-term are possible to fell down. House prices are possible to change with respect to region; London is most probably going to see a relative raise in prices as other area may not see such a positive coefficient of growth in prices. It is essential to be rational in ones judgement since interest are indubitably going to rise, an signal that mortgage rates will rise thats why demand will decrease in the housing sector, gloomy prices. Pay rates are likely to increase again in the next few years, results in more confidence and belief in buyers so one could argue demand may rise. Assumption will also play an important role; housing is generally seen as a good investment, and buying a property during the start of the growth ca n lead to great rewards, if house prices go on increasing. But it is simple said than done, the economy is on a feeble improvement, increased taxes are likely and the public is expected to cut back their expenditure as people will wish to cut the size of their liability load. Interest rates will play a important role, there are many factors that will keep interest rates low; the UK budget deficit is increasing to 12% of GDP, this shows a deprived financial position of the government. To get better their position the government will compel lofty taxes and lower expenditures. But if taxes rise, this depreciation fiscal policy could slow down improvement so interest rates are likely to stay low. Given the overall fragile revival the Central Bank is to be expected to keep interest rates low. Given the increase of VAT back up to 17.5%, expanding oil prices and growing house prices the government may raise the traditionally low interest rates to stop any future inflationary anxiety, but i n my judgment interest rates if they will raise in the near future are not likely to increase before the end of 2010. Source: http://www.economicshelp.org/ onomics/uk-economy-2010/ http://www.mortgageguidk.co.uk/blog/interestinterest-rate-predions/http://www.statistics.gov.uk/cgget.asp?id=19 Conclusion In general it seems that the UKs housing market has seen the poorer, and is expected to enjoy its boom days in the near future. But it is hard to evaluate the healing as it will depend upon the future interest rate. The size of the interest rate will have its according impact, if we experience a reasonable increase in the interest rate than we can anticipate a good constant recovery while mortgage repayments will not shoot up and people will have time to adjust to the increase, expecting that peoples earnings rise along with the interest rate. A big raise in the interest rate might slow down the Housing market growth, since there will be a rapid variation in the mortgage repayments, this may further discourage the housing market transferring the economy into a double-dip recession. The performance of the economy is a key role in the next few years, and this is extremely dependent upon government policies. To risen the overall economic growth, government may try an augmentation strate gy, but this again will be very arguable as the government is already in a poor financial picture. So the government wishes to play around with its tools it has in hand to twist the economy back into a secure position, which will then along with it lead to a health UK Housing market.