Reforms in the International Finance System Essay

Reforms in the International Finance System - Essay Example According to the research findings the global financial crisis did not occur over night; rather it was a series of occurrences that led to the progression of the crisis, which impacted the entire world. The US National Bureau of Economic Research asserts that the financial crisis began in early to mid 2007. The most notable start of the financial crisis was the marketing and sale of US mortgage-backed securities that had risks, which proved difficult to assess. This marketing took place on a global basis that saw risks being spread out to all areas of the globe. In addition, a comprehensive credit boom exemplified the international speculative bubble witnessed in industries such as the real estate and equities industries of the global economy. This further enhanced the risky practice in terms of financial institutions’ lending capacities. Drastic increases in global food and oil prices also served to enhance the precarious financial status of the world. However, the financial crisis actually began following the surfacing of sub-prime loan losses in 2007. This uncovered risky loans and the over-valued asset prices. As loan losses increased, as well as the collapse of Lehman Brothers, a global panic broke out in the inter-financial institution loans market. When share, as well as housing prices, eventually declined, a majority of financial and investment institutions in the US incurred massive losses, with some even facing bankruptcy. This ultimately led to major public, fiscal assistance to the tumbling institutions. The global financial crisis led to a sudden decline in international trade, massive unemployment and collapse of global prices of essential commodities. In summation, the situations that led up to the financial crisis include the boom in demand for financial instruments, excessive rise in asset prices, all of which were compounded by lack of sufficient regulation. The financial crisis subsided in late 2008, but the global economy has experien ced several aftershocks. Reason behind the Financial Crisis The reason behind the global financial crisis is a complex combination of liquidity and valuation issues in the global banking sector in the year 2008. In the US, in year 2007, the global economy experienced a boost following the emergence of a real estate bubble in residential markets. The real estate bubble refers to a scenario where real estate is sold at highly inflated values. The 2007 real estate bubble

Causes of Conflict in DRC

Causes of Conflict in DRC INVESTIGATING THE CAUSES OF CONFLICT IN DEMOCRATIC REPUBLIC OF CONGO (DRC) Location of the D R Congo Background The Congo is situated at the heart of the west-central portion of sub-Saharan Africa. DR Congo borders the Central African Republic and Sudan on the North; Uganda, Rwanda, and Burundi on the East; Zambia and Angola on the South; the Republic of the Congo on the West; and is separated from Tanzania by Lake Tanganyika on the East. The country enjoys access to the ocean through a 40-kilometre (25 mile) stretch of Atlantic coastline at Muanda and the roughly nine-kilometer wide mouth of the Congo river which opens into the Gulf of Guinea. The country straddles the Equator, with one-third to the North and two-thirds to the South. The size of Congo, 2,345,408square kilometers (905,567sqmi), is slightly greater than the combined areas of Spain, France, Germany, Sweden, and Norway. It is the third largest country (by area) in Africa. In order to distinguish it from the neighboring Republic of the Congo, the Democratic Republic of the Congo is often referred to as DR Congo, DRC, or RDC, or is called Congo-Kinshasa after the capital Kinshasa (in contrast to Congo-Brazzaville for its neighbour). The name Congo refers to the river Congo, also known as the river Zaire. (The river name Congo is related to the name of the Bakongo ethnic group). As many as 250 ethnic groups have been identified and named. The most numerous people are the Kongo, Luba, and Mongo. Although seven hundred local languages and dialects are spoken, the linguistic variety is bridged both by widespread use of French and intermediary languages such as Kongo, Tshiluba, Swahili, and Lingala. The Congo is the worlds largest producer of cobalt ore, and a major producer of copper and industrial diamonds. It has significant deposits of tantalum, which is used in the fabrication of electronic components in computers and mobile phones. In 2002, tin was discovered in the east of the country, but, to date, mining has been on a small scale. Katanga Mining Limited, a London-based company, owns the Luilu Metallurgical Plant, which has a capacity of 175,000 tonnes of copper and 8,000 tonnes of cobalt per year, making it the largest cobalt refinery in the world. After a major rehabilitation program, the company restarted copper production in December 2007 and cobalt production in May 2008. The United Nations 2007 estimated the population at 62.6 million people, having increased rapidly despite the war from 46.7 million in 1997. Currently the Head of State is President Joseph Kabila (October 2006-) and Head of government is Prime Minister Antoine Gizenga (December 2006-). Provinces and territories Formerly the country was divided into eleven provinces, Kinshasa, Province Orientale, Kasaà ¯ Oriental, Kasaà ¯ Occidental, Maniema, Katanga, Sud-Kivu, Nord-Kivu, Bas-Congo, Équateur and Bandundu. However, the constitution approved in 2005 divided the country into 26 fairly autonomous provinces, including the capital, Kinshasa to be formed by 18 February 2009. These are subdivided into 192 territories. Provinces and their Capital Cities Province Capital 1. Kinshasa Kinshasa 2. Kongo central Matadi 3. Kwango Kenge 4. Kwilu Kikwit 5. Mai-Ndombe Inongo 6. Kasaà ¯ Luebo 7. Lulua Kananga 8. Kasaà ¯ oriental Mbuji-Mayi 9. Lomami Kabinda 10. Sankuru Lodja 11. Maniema Kindu 12. Sud-Kivu Bukavu 13. Nord-Kivu Goma Province Capital 14. Ituri Bunia 15. Haut-Uele Isiro 16. Tshopo Kisangani 17. Bas-Uele Buta 18. Nord-Ubangi Gbadolite 19. Mongala Lisala 20. Sud-Ubangi Gemena 21. Équateur Mbandaka 22. Tshuapa Boende 23. Tanganyika Kalemie 24. Haut-Lomami Kamina 25. Lualaba Kolwezi 26. Haut-Katanga Lubumbashi History of the DR Congo Conflict The state of DR Congo emerged from brutal colonial history. From 1880s, Belgian King Leopold II used territory as personal kingdom, exploiting vast natural resources through indigenous forced labour. Leopold transferred control of â€Å"Congo Free State† to Belgian government 1908. After upsurge of nationalist sentiment and parliamentary elections May 1960, Belgium accepted independence June 1960. Within two weeks, country faced nationwide army mutiny and secessionist movements in Katanga and southern Kasai. Cold War interests fuelled tensions, with U.S. fearing Congos break-up and Soviet inroads. Power struggle between President Joseph Kasavubu and PM Patrice Lumumba intensified when Lumumba used army to brutally (but unsuccessfully) suppress Kasaian rebellion and appealed for Soviet support. Kasavubu dismissed Lumumba, who was later arrested and 1961 assassinated with Belgian complicity. UN troops began disarming Katangan rebels August 1961 but situation deteriorated into sporadic conflict between UN and Katangan forces. Head of breakaway Katanga Moise Tshombe forced out 1963, returning as Congos prime minister 1964. Colonel Joseph Desire Mobutu ousted Kasavubu and Tshombe in 1965 and began thirty-two year rule. In 1971-2 he changed the countrys name to Zaire. Mobutu systematically used countrys mineral wealth to consolidate power, co-opt rivals and enrich himself and allies through patronage. Following the end of Cold War, cessation of international aid and internal pressure to democratise pushed him to reinstate multiparty politics in 1991, but Mobutu manipulated agreement to retain power. Mobutu was finally ousted in May 1997 by rebellion under Laurent Kabilas leadership, backed by Rwanda and Uganda. Second war The Second Congo War, also known as Africas World War and the Great War of Africa, began in August 1998 in the Democratic Republic of the Congo (formerly called Zaire), and officially ended in July 2003 when the Transitional Government of the Democratic Republic of the Congo took power (though hostilities continue to this day). The largest war in modern African history, it directly involved eight African nations, as well as about 25armed groups. By 2008 the war and its aftermath had killed 5.4million people, mostly from disease and starvation, making the Second Congo War the deadliest conflict worldwide since World War II. Millions more were displaced from their homes or sought asylum in neighboring countries. War sparked again in August 1998 when Kabila moved to purge Rwandans from government. Rwandan troops backing Congolese Tutsi rebels invaded. Kabila called on Zimbabwe, Angola and Namibia for help. It is estimated that 4 million people died in during this conflict between 1998-2004, mostly from war-related diseases and starvation. A Lusaka ceasefire signed July 1999 and UN Security Council peacekeeping mission (MONUC) was authorised in 2000. Laurent Kabila was assassinated January 2001 and replaced by son Joseph. Peace negotiations resulted in Rwandan and Ugandan withdrawal in late 2002, but proxies remained. In December 2002, all Congolese belligerents and political groups signed peace deal in Sun City, South Africa, ushering in transitional government June 2003 in which Kabila shared power with four vice-presidents. However, conflict in Ituri, North Kivu, South Kivu and Katanga provinces continued. Rebel groups, including former Rwandan-backed Tutsi and Hutu militias (Democratic Forces for the Liberation of Rwanda (FDLR) being largest), continued to fight for land and resources. Violence in north eastern Ituri halted 2003 after three-month French-led emergency mission under EU authority, after UN failed to contain clashes. Deaths and displacements led UN to describe Eastern Congo as â€Å"worlds worst humanitarian crisis† March 2005. Following DRC government request International Criminal Court (ICC) investigate crimes from June 2002 throughout DRC, ICC Prosecutor opened investigation into crimes in Ituri June 2004. Government and MONUC security efforts, undermined by lack of progress in establishing integrated national army, reinvigorated September 2004 by force expansion from 10,800 to 16,700 and more aggressive mandate. From March 2005, MONUC often participated in joint operations with integrated national army. But despite significant demobilisation, many rebel groups still active 2006. Uganda rebel group Lords Resistance Army (LRA) settled in north east late 2005, reigniting tensions: Kampala threatened to pursue LRA into Congo, while Kinshasa suspected Uganda sought access to resources in east. International Court of Justice 2005 found Ugandan army committed human rights abuses and illegally exploited Congolese natural resources. New constitution introducing president/prime minister power sharing and two-term presidential limit was adopted 13 May 2005 and approved by referendum 18 December. After delays, national assembly and first-round presidential elections held 30 July 2006. Violent clashes erupted in Kinshasa between Kabila and opposition MLC leader Jean-Pierre Bemba supporters when neither gained majority in first-round votes. Kabila took presidency in 29 October second round (58 per cent of vote), and his alliance won majority in national and provincial assemblies. Elections considered by outside observers to be relatively free and fair, ushering in first truly democratic government 40 years. Kabila government faces substantial challenges, including an abusive and ill-disciplined national army (FARDC), corrupt public administration, and lack of infrastructure and basic services. Advances in Ituri remain precarious, with slow progress on militia disarmament and reintegration and lack of transparent natural resource management. Security further deteriorated in North Kivu, where the national army and dissidents under command of General Laurent Nkunda (CNDP, National Congress for the Defence of the People Nkundas political movement, unveiled July 2006) resumed fighting from late November 2006, displacing up to 400,000 in years since. Signing of Nairobi Agreement November 2007 and Goma â€Å"Actes dEngagement† January 2008 were welcomed. The Former provided for repatriation of FDLR and latter for ceasefire and voluntary demobilisation of combatants in east, to be implemented through â€Å"Amani† peace program. Success depends on will of militias to disengage, continued funding for the Amani program and improved relations between Kigali and Kinshasa over handling of FDLR. But despite some initial signs of Nkundas readiness to disengage, serious clashes between CNDP and FARDC continued, while June 2008 brought heavy FDLR attacks on civilian camps in North Kivu. Political pluralism has shrunk, with opposition virtually excluded from governorships despite performance in 2006 elections, recurrent use of force against Bembas supporters, and death of over 100 civilians in March 2008 brutal police crackdown on political-cultural movement Bundu dia Kongo in Bas-Congo. The ICC has issued five arrest warrants for DRC leaders and four are in ICC custody three militia leaders charged with crimes in Ituri, and Bemba who was arrested May 2008 for atrocity crimes committed 2002-2003 in neighbouring CARs civil war and transferred to The Hague 4 June 2008. Nkunda resisted hand over of fifth suspect, CNDP chief of staff Bosco Ntaganda, wanted for Ituri crimes. But credibility and future of ICC investigations under question after judges suspended first trial, of UPC militia leader Thomas Lubanga in June 2008 over prosecutions non-disclosure of potentially exculpatory evidence. Recent-Current situation in Congo  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   A deal concluded between Kabila and rebel commander Laurent Nkunda providing for the integration of Nkundas troops into the armed forces known as mixage collapsed in 2007 amid opposition from hardliners on both sides. Kabilas aides attacked him over perceived preferential treatment given to Tutsis in army integration, drawing on public outcry over massive human rights violations caused in Nkundas operations against the FDLR to undermine the deals legitimacy. Nkundas Goma-based Tutsi backers, afraid of losing everything acquired during the war, threatened to pull their support. The mixage process and its collapse left Nkunda militarily strengthened and removed a viable alternative to continued struggle. After frequent clashes in the first half of 2008, violence again engulfed the region from late August, when Nkundas CNDP rebels launched a fresh offensive on army bases and areas under the formal protection of UN troops. After significant advances and the collapse of the FARDC in the region, the CNDP took control of Rutshuru town in late October, moved to the outskirts of the regional capital Goma and consolidated their hold over the surrounding region. For a short time, UN peacekeeping troops (MONUC) found themselves the last protection against Nkundas advances on Goma. A 29 October ceasefire soon faltered, and clashes continued throughout November (2008). Partially due to an intense diplomatic effort, Nkunda put on hold his offensive on the city, while still continuing and consolidating advances in other areas. International and regional diplomatic efforts commenced from late October, 2008. An EU mission led by the French and British foreign ministers arrived in Congo and Rwanda on 31 October, while African leaders joined by UN Secretary General Ban Ki-moon met at an emergency summit of the African Union, calling for immediate adherence to the 29 October ceasefire. The UN Security Councils decision to appoint a special envoy former Nigerian President Olusegun Obasanjo added welcome focus and commitment to mediation. International leaders met in Nairobi on 7 November (2008) and called for the immediate implementation of the Goma and Nairobi agreements, establishing a facilitation team composed of Obasanjo and former Tanzanian President Mkapa. The new mediators met with key players over November, securing Nkundas commitment to a ceasefire in the middle of the month, although clashes erupted again shortly afterwards. In February 2009, Rwanda arrested Nkunda though it has not yet handed him o ver. Recent developments also underscored the fragility of the situation in Ituri. October 2008 saw fresh clashes between government and rebel forces as well as a series of brutal attacks and abductions reportedly by Ugandan Lords Resistance Army rebels. Causes of the Congo conflict Leopold and Belgium colonial occupation Like most African nations, the problems in Congo in the recent past have their tap root in the colonial activities by mainly European nations. The Congo possessed an uncharacteristic wealth that made it the desire of many European countries (Lusignan: 2004). It had an abundance of natural resources such as cooper, gold, diamonds, rubber, cobalt, among others that made it the desire of many trading corporations and companies. At the Berlin Conference in 1885, King Leopold was granted to the exclusive right to privately exploit the Congo.  Ã‚   Once in the Congo, Leopold devised an economic system in which the Congo was sectioned into different areas leased to different European corporations that paid Leopold 50 percent of the extracted wealth. Lusigan (2004) writes that Leopold entered the Congo under the cloak and faà §ade of a humanitarian by making hollow promises detailing his intentions to improve the quality of life in the Congo.   He promised to build schools, homes, and to liberate the Congolese people from Arab slave traders.   But under the rule of Leopold, very little was done to improve the well being of the citizens, and instead a regime was instituted that operated solely through force of might.   People were tortured and forced to sign treaties that according to Leopold â€Å"†¦must grant us everything† (Hochschild 71), which included the rights to all land and resources therein.   Thus for a 20 year period, Leopold was able to operate with impunity, and in the process 10 million people were murdered.  Ã‚   During his reign, women and children were brutally raped and murdered and treated like animals. â€Å"They were fed-and slept-in the royal stables.†(Hochschild 176)   They were even hunted like animals for fun and for sport.   Limb amputation was a joy of many Belgium soldiers; hands, heads, and other body were severed for not only proof of kill, but for the cannibalis tic needs of these Belgium soldier.   Even the homes of some Belgium officers were lined with the skulls of the Congolese people for decoration.  Ã‚   Many more died from starvation and exhaustion resulting from the inhumane living conditions present in the Congo. After King Leopold relinquished his position in the Congo, the Belgium parliament assumed legal control of the country, but the trading corporations and companies of Belgium and other European countries continued to dominate the course of events in the Congo. â€Å"The one major goal not achieved, he (Morel) acknowledged, was African ownership of land.† (Hochschild 273)  Ã‚   The Congos wealth of natural resources had always been the main attraction of Belgium, and with Leopold removed, the corporations were given more control and influence over the economy in the Congo.   The United Mines of Upper Katanga (UMHK) was founded shortly after Leopolds reign ended and for the next fifty years, this corporation exercised the greatest influence and control over the economy and the resources with the Congo.   It â€Å"controlled about 70 percent of the economy of the Belgian Congoand controlled the exploitation of cobalt, copper, tin uranium and zinc in mines which were among t he richest in the world.†( Hochschild 31) During this time period, the Congo was one the worlds largest copper-producing countries and the â€Å"cobalt extraction in Katanga represented 75 percent of the entire world production.† (Hochschild 31) In June of 1960, the Congo was granted independence, which threatened the future of European economic control of this profitable source of revenue. The United Nations granted independence to the Congo because of pressure from the worldwide anti-colonial movement that touched Africa in the 1950s. But shortly after the Congos independence, Belgium immediately sent troops to the country in order to protect Katanga, the city in the Congo that possessed a wealth of resources and was the primary export site for these corporations.  Ã‚   With this military presence, the corporations continued their production in the city, and surprisingly, production even increased in the year of independence.   This military presence remained in the Congo for years, thus showing the Congolese people were never truly granted â€Å"independence†.  Ã‚   The entitlement complex of Belgium is further revealed here because Belgium believed that they possessed personal ownership of the land in the Congo, and that the citizens of the Congo did not warrant independence.   Belgium regarded the citizens of the Congo as an inferior people who lacked civilization; they believed that the occupation was justified. This denial of own land and resources, injustice, brutal acts and all other in human acts by Leopold and the Belgians groomed anger, resentment, feelings of discontent among the citizens of Congo that was later to be manifested in counter resistances and civil wars against any one who seemed to portray similar acts and policies, hence, conflicts in the Congo.  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The Assassination of Patrice Lumumba The emergence of an independent Congo on June 30, 1960 marked the beginning of a new era of colonialism by the Western powers.   On this day, Patrice Lumumba became Prime Minister of the Congo, and in six months he would be assassinated. He was an extraordinary politician, motivator, and visionary, and one of the most influential figures throughout Africa during his term.   He is now enshrined as an historical figure against the fight of injustice because of his outspokenness against the colonization of Africa by European powers (Lusigan: 2004). Lumumba came to power at a time in which the anti-colonial movement was most intense worldwide; this propelled his general regard as a worldwide leader of this movement. The period â€Å"†¦from 1960 to 1965, was the Wests ultimate attempt to destroy the continents authentic independent development.† (Kanza xxv)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Before serving as Prime Minister, Lumumba was the president of the National Congolese Movement, a party formally constituted in 1958.   He was an ambitious man and envisioned a promising future for the Congo; a future void of European involvement and one in which the Congolese people had absolute power. He was already a prominent figure in the political scene within the Congo, having amassed a following through his writings and speeches advocating sovereignty and the fight against European injustice.   Lumumba eventually became prime minister through democratic elections, but his government only lasted for a very difficult period of two months during which time Belgium launched many attempts to reoccupy and subvert the independence movement. Patrice Lumumba represented a formidable opponent against the colonization forces in Africa. By advocating sovereignty and de-colonization in Africa, he represented everything that the Western powers feared. He was a man capable of affecting change throughout not only the Congo, but across Africa by promoting a self-sustained economy that was entirely independent from the European nations. He opposed the forces of colonialism throughout Africa. The riches of the Congo and the presence of Lumumbas movement could not be allowed to co-exist in the view of the United States and European political and business interests. Lumumba eventually became the victim of a coup funded primarily by the United States and Belgium, under the protection of the United Nations.   Although the United States and Belgium were the primary opponents of Lumumba, they were acting on behalf of European countries throughout the world because Lumumba personified the anti-colonial movement that everyone feared. They feared Lumumba not simply because he was a man that represented the anti-colonial movement, but because he was an African man that had become too powerful and had the potential to gain the loyalty and attention of his people and focus their goals on true independence and real control of their own resources. â€Å"The Congo crisis is due to just one man, Patrice Lumumba† (Hochschild 49) He had the potential to change the entire social structure of Africa and possessed the ability to affect change throughout the world by promoting democracy and equality.   Probably if Lumumba had lived a little longer, he would have organized and united the nation to avoid the conflicts that have characterized the country ever since time memorial. Poor Centralized governance of mobutu (dictatorship and exploitation of resources) For the next thirty years following the death of Lumumba, the Congo was the victim of a centralized government with the majority of the power concentrated in one man, General Mobutu, who was an instrumental Congolese collaborator with the Western interests in promoting the coup leading to the assassination of Lumumba. Kaplan (1979) notes that Mobutu created a rigidly centralized administration reminiscent of Belgian rule, topped by a single authority figure that he claimed to be in the African political tradition.   Governing by decree, his words literally were law.   His power was absolute, anchored in a constitution of his own inspiration that made him head of the legislative, executive, and judiciary This was not the type of free democratic society that Lumumba had envisioned, but instead one that still allowed many European nations to exercise the authority and influence that Lumumba vehemently opposed. The United States gave him well over a billion dollars in civilian and military aid during the three decades of his rule; European powers- especially France-contributed more (Hochschild 303)/   Mobutu did little to improve the quality of life of his citizens, and instead exploited his own citizens for his material and economic gain. Even after independence, the Congo was still the economic colony of Europe that existed under the control of Belgium. The European and American corporations and investments were still intact with Mobutu in control.   The Congo was now operating as a puppet government in which the United States used Mobutu to affect both economic and political decisions in an effort to stabilize its investments and operations in the country.   It estimated that a t the end of his reign, he was of the worlds wealthiest men; â€Å"his personal peak was estimated at $4 billion.† (Hochschild 303)   And very little of his fortune went to the people of the Congo. One will therefore be short sighted not to blame Mobutu for the conflicted Congo. He did his best to disorganize and disintegrate the countrys internal economic and political structures and systems that laid ground for what was termed as the â€Å"Africas World War†. His puppetism to western countries only resurrected and reminded the Congolese of the harsh, brutal and inhuman rule of Leopold and the Belgians which escalated the anger among the citizens. Mobutu can further be solely held responsible for the greed and mismanagement of natural resources for selfish needs among the Congolese today, he set a bad example. Ethnic differences One of the most sensitive areas of social life in Africa is the problem of cultural pluralism, which usually rears its ugly face in inter-ethnic relations International conflicts and civil wars, these are not simply products of failed diplomacy or policies of aggression. Virtually they all have roots in endemic cultural features of nations (Aluko: 2003). Patterns of languages, religious beliefs and legal institutions form as much a part of the environment enveloping nations have been tales of woes, anguish, sorrows, deprivations, sadness in most of the member states. Many nations of the continent such as Nigeria, Sudan, Somalia, Angola, Liberia and Sierra Leone, and even many nations of the great lakes region of the central Africa have been in turmoil due to ethnic related reasons. Political instability, economic and social disequilibrium became rampant in countries like Uganda, Burundi, Rwanda and the two Congos. Most ethnic conflicts have a background of domination, injustice or oppression by one ethnic group or another. The tremendous psychological pressure on human populations from political change creates a sense of anxiety that frequently makes people seek refuge in belief systems that involve definitions of membership and belonging. In Sudan, Garang charged that civil war erupted largely because Hassan Turabi, the power behind Khartoums government, wanted to impose Sharia, or Islamic law throughout Sudan. The other factor relates to resources and economics. At the simplest level, the struggle to survive can spawn or deepen ethnic problem. The more limited the resources the greater the danger of ethnic problem. For a range of reasons not necessarily bad or intentionally divisive, ethnic groups are also often positioned differently in an economy. Again, change can accentuate differences, triggering hostility or drastic action. The legacy of Colonialism did not do any better. The problems of most colonial nations of Africa are direct products of their colonial experience. The problems had been created by colonialism in different ways, especially by the indiscriminate merger of various ethnic groups to become monolithic entities, and at the same time treated the units as separate entities and allowed each to develop in whatever direction it chose in isolation from others (Nnoli, 1980. Dare 1986 and Young, 1998). This was the trend in virtually all the Anglophone countries of the sub-Sahar an Africa and some Francophone countries too. Colonialism also created structural imbalances within the colonies in terms of socioeconomic projects, social development and establishment of administrative centres. This imbalance deepened antipathies between ethnic groups. In Nigeria, the South achieved a higher level of social development than the North. Similarly, the Baganda advanced farther than the other Uganda ethnic groups, the Chagga and Haya were ahead of the other Tanzanian groups, the Kikuyu, Ashanti and Bemba made more rapid â€Å"progress† than the other Kenyan, Ghanaian and Zambian ethnic groups respectively. In fact, inter-ethnic relations in Kenya have been characterized by the hostility of all the other groups to the Kikuyu. Today, many nations of the sub-Saharan Africa are in one turmoil, violence or civil disorder of one kind or the other largely originating from the ethnic problem. Such countries include Burundi, Rwanda, Somalia, Sudan, Angola, Chad and the Democratic Republic of Congo. The Congolese people are made up of around 200 separate ethnic groups. These ethnic groups generally are concentrated regionally and speak distinct languages. There is no majority ethnic group some of the largest ethnic groups are the Luba, Kongo and Anamongo. The various ethnic groups speak many different languages but only four indigenous languages have official status Kiswahili, Lingala, Kikongo and Tshiluba. French is the language of government, commerce and education. Societal discrimination on the basis of ethnicity is widely practiced by members of virtually all ethnic groups and is evident in private hiring and buying patterns and in patterns of de facto ethnic segregation in some cities (GS: 2000-9). The ongoing conflict in the Eastern part of DR Congo has often been explained as be

Defining Leadership and Management Essay -- Leadership Management

This essay will focus on the meaning of leadership and management, why the two concepts are often used interchangeably and which one is the most relevant in the Tourism Industry. In order to answer these questions, it is necessary define the two terms providing evidences and arguments from different authors about the characteristics, roles, similarities and difference. In conclusion after look at all the different points of view, this essay will evaluate the importance of each term in the context of Airline and Airport Industry. The leadership is complex and can be defined in different ways. The term comes from the combination of two separated words leader and ship, and appeared in the early nineteenth century (Gill, 2006). Antonakis et all (2004) suggest that leadership can be interpreted the influence that one person has on other people behaviour or actions. One comes to think that leader is a person who is in control of a group or team in organisation, the leaders stimulate and motivate the team in order to give a grateful contribution to the organisation for achieve a better results. This is confirmed by Murphy (2004) who said that leader act as a guide, looking at individual behaviour, also they help organisation look after staff, they inspire and stimulate individual contribution on the development and success of the organisation. There are greater interest in know if the leadership is something nature, people born with, or is something that people need to learn. Support for this Adair (1997) suggests that normally the organisation expected that, a leader need to have certain basics qualities before became a leader, but also is something that people can learn from experience or training. There are certain qualit... ...lso most important managers or leaders need to be concerned on the importance related their communication with staff. A defence of this argument Gill (2006) suggest that â€Å"leadership and management can be approached in different ways based on different models of managing and leading†, but a good managers need to understood, exercise and appreciate the leadership responsibility that is expected of them. Works Cited †¢ Adair, J. (1997) Leadership skills. 1st ed. London: Chartered Institute of Personnel and Development (CIPD). †¢ Antonakis, J. Cianciolo, T. A and Sternberg, J.R. (2004)†¦. 1st ed. London: Sage Publication. †¢ Gill, R. (2006) Theory & Practice of Leadership. 1st ed. London: Sage Publication. †¢ Grillo, J. (2010) the difference between leadership and management [online] available at: http://www.leadershippost.com [accessed: 08/11/2012].

Employee Compensation and Benefits Essay

Companies today should mirror their compensation and benefit programs with their long- term business strategy and organizational culture. According to Casio (2010), â€Å"Pay systems are designed to attract, retain, and motivate employees† (p.421). The most important objective is fairness or to achieve internal, external, and individual equity; and maintain a balance in relationships between direct and indirect forms of compensation, and between the pay rates of supervisory and nonsupervisory employees. Employers must perform job analysis, develop job descriptions, evaluate the value of job/position in the organization, develop pay structure and pay levels to create competitive employee compensation and benefits (Cascio, 2010). Components of Employee Compensation and Benefits Employers must gain their workers’ trust, loyalty, and motivation to ensure organizational goals are achieved. There are three major components of the benefits package: security and health (e.g. health insurance, disability insurance, hospitalization, surgical, maternity coverage, pension plans, etc.), payments for time not worked (e.g. vacations, holidays, personal excused absences, grievances and negotiations, sabbatical leaves, etc.), and employee services (e.g. tuition aid, credit unions, auto insurance, fitness and wellness programs, moving and transfer allowances, stock-purchase plans, referral awards, flex work schedules, etc.). Factors such as the following are important strategic considerations in the design of benefits programs: the long-term plans of a business, its stage of development, its projected rate of growth or downsizing, characteristics of its workforce, legal requirements, the competitiveness of its benefits package, and its total compensation strategy (C asio, 2010). Organizational Data to Conduct Human Capital Management Functions Organizations consider human capital management as a function of the human  resources department in managing organizations’ most important asset, their employees. By creating a competitive compensation and benefits package, management puts emphasis on the economic value of their personnel. Because of today’s competitive environment, developing incentives that constantly improve employee performance, job satisfaction, and encourage motivation of every individual employed is essential to effectively achieve the organizations vision, mission, and goals. When the organizations human capital management functions and policies inspire employees to excel, as a result of the compensation, benefits, and incentives provided to them, everyone wins (Casio, 2010)! References: Cascio, W. F. (2010). Managing human resources: Productivity, quality of work life, profits (8th ed.) New York, NY: McGraw-Hill/Irwin.

People and Organization- Human Resources, Semco

Section one: Introduction to SEMCO I don't want to know where Semco is headed. It doesn't unnerve me to see nothing on the company's horizon. I want Semco and its employees to ramble through their days, to use instinct, opportunity, and ingenuity to choose projects and ventures. † – Ricardo Semler, CEO, Semco Semco was established in 1953 by Austrian engineer Antonio Curt Semler. Company started with manufacturing of centrifuges for vegetable oil industry but soon owing to development in naval area it sown its seeds in manufacturing of variety of equipments like hydraulic & load pumps, axles,etc. In 1980’s when Ricardo Frank Semler, founder’s son took over, company explored various other segments & started manufacturing industrial refrigeration equipments, air-conditioners, food processors & mixers for chemical & mining industry. In 1990’s company moved into innovative service area. ERM Brazil (Environmental consultancy), Cushman & Wakefield (real estate consultancy), Semco Johnson controls (facilities in industrial sector), are the classic examples of companies efforts to establish network across the globe. Year 2000 onwards Semco extended its arms into electrical and civil maintenance services by forming Semco Manutencao. It formed partnership with Pitney Bowes & marked its existence in postal and document management solutions. Semco venture also entered bio-energy market and formed BRENCO (Brazilian Renewable Energy Company) in 2006. (web1) Purpose of Study To study standard organizational design & structure, theoretical models of human resource planning in terms of recruitment, retention, success planning & to compare these aspects with similar models operational in Semco organization, to define the deviations & to critically evaluate the approach used by Semco. Organizational Structure Conventional v/s â€Å"Semco Way† Every organization has its own structure & culture. Organizational structure is basically framework which can be defined and altered over a period of time while culture cannot be altered. It is very difficult to design or change culture within the organization. Structure and culture within organization goes hand in hand. It is essential for the organization designer to classify tasks based on mainly four concepts of Function, Territory, Product & Time-Period in order to get work done in organized manner. (Torrington, 1998) â€Å"Organizations are as different and varied as the nations and the societies of the world. They have different cultures-sets of values & norms ad beliefs-reflected in different structures & systems and the cultures are affected by the events of the past and by the climate of the present, by the technology of the type of work, by their aims and the kind of people that work in them† (Handy 1993, p. 180) best defines the organizational structure & culture co-relation. Three forms of conventional organizational structures are compared with the democratic form of Semco’s organizational structure. THE ENTREPRENEURIAL FORM OF STRUCTURE CONVENTIONAL THEME 1. This form emphasis central power. . Power is concentrated in hands of one person or a group called as ‘key entity’. 3. As the business expands this type of structure becomes unviable since too many peripheral decisions cannot be made without taking approval of the ‘key entity’, 4. This form is suitable for small and growing organizations as they owe their existence to expertise or initiat ive or just one or two members. 5. It is difficult if by any means ‘key entity’ leaves the organization. It would be difficult to maintain business in the event of new non potential ‘key entity’. SEMCO WAY 1. It is a unique kind of ‘open management model’ wherein power and rights are equally distributed amongst the group members from the respective departments, but care is taken to see that it’s not misused. 2. The hierarchical signs are removed, everyone is treated equal. 3. Peripheral decisions can be made by implementing democratic way. 4. This form is suitable for developed and expanding organizations which are financially strong. 5. Even if the ‘key entity’ leaves the organization the system is in place and the process of production or delivering services is not affected. FUNCTIONAL DESIGN CONVENTIONAL THEME . Positions, terms & departments are designed based on specific activities. 2. It is most widely used & accepted form of departmentalization, since grouping tasks and employees by function can be efficient & economical. 3. It is possible for members in group to undertake similar tasks & troubleshoot similar problems. 4. Employees are not in direct contact with the clients; hence they fail to meet the customer’s expectations, except marketing product line. 5. It is effective for organizations having narrow product line, competing in uniform environment, pursuing low cost or focused business strategy. hellriegel, 2005) SEMCO WAY 1. Positions, terms & departments are designed by the owner based on functions. Labors are allowed to select wages & their own managers. 2. The employee has only four titles Counselors who are like vice presidents, Partners who runs the business units, Coordinators who are part of first level management, & Associates who are workers. 3. The factory workers set their own production quotas, come in on their own time, help to redesign the products they make & formulate the marketing plans. 4. The ompany is divided in individual business units which are self governed, managers run business units with freedom, determining business strategies without interference from the top. 5. Semco undertakes part nership with established foreign companies & give them access to customers, risk monitoring & extensive network of contacts. They seek partner who has domain in their product & services. (web 2) PRODUCT DESIGN CONVENTIONAL THEME 1. Self contained units are established. Each unit is capable of developing, manufacturing, marketing & distributing its own goods or service. . Organizations that produce multiple goods & services generally adapt this type of structure. 3. Problems arise when new product line is established or there are diverse customers or there is complexity in technological advances in functional design. Product design takes care of these limitations. 4. Company generally start with functional design & add some features in order to meet limitations of the functional design in terms of management aspects. Generally company doesn’t completely discard the features of function organization. hellriegel, 2007) SEMCO WAY ORGANISATION STRUCTURE OF SEMCO THREE CO –C ENTRIC CIRCLES FIRST CIRCLE CONSIST COUNSELLORS SECOND CIRCLE CONSISTS PARTNERS THIRD CIRCLE CONSISTS ASSOCIATES 1. Semco devised a new structure which had three concentric rings. 2. The small innermost circle consisted of 6 counselors who determined general policy & strategy, and attempted to catalyze the action of those in the second circle. Each of the counselors took a six month turn as a CEO. 3. The second circle, known as partners included 7-10 leaders of each Semco division. . All remaining employees comprised the third circle, scattered within this circles are the triangles representing permanent & temporary team leaders. Marketing, sales & production managers, engineers and foreman all fell within this classification. 5. The managers work as facilitators providing workers with the tools they need make informed decisions. Managers provides training, information (financial & operations), & all other necessary support for workers to perform their jobs more effectively. (Maveri ck, 1993) Critical Evaluation Semco’s organization is based on three core values employee participation, profit sharing & free flow of information. These core values are in line with the variables of socio-structural model of empowerment which are power, information, knowledge & rewards. Hence the hypotheses which were derived from the author’s understanding of the theories were easily verified. Other companies may have achieved workplace democracy in other ways by having their own pattern of working. Liberty given to the employees would benefit only if there is supervisory control otherwise it may happen that there is misuse of the available resources. Human Resource Planning Recruitment & Retention Recruitment plays a vital role in any industry. Whenever there is vacancy, individual is recruited after he is being thoroughly evaluated. It is essential to find out how the vacancy is generated, either because someone has left the job or there is the expansion within the company. Recruiting a person just because there is vacancy owing to person leaving the job is the appropriate way but not mandatory. Employer can reorganize the work within present employees, or ask them to work overtime, subcontract the work or make it part time in order to reduce the expenses. It would be ideal to find out the nature of job, aspects of the job that specify type of candidature, highlight the job profile to the applicant before recruiting a candidate. There are several ways through which people are recruited. Once employers realized a need to fill the vacancy within the department or in organization, he can recruit by several means. Survey (Torrington, 1998) Investigated the method used by more than 1000 professionals when they were questioned (Torrington 1998) Table: Usage of various methods of recruitment by more than 1000 professional questioned. Advertisement in regional press87% Advertisement in specialist press80% Advertisement in national press78% Job centers71% Employment agencies62% Recruitment consultants61% Executive search consultants36% Career Conventions35% Open days32% Recruitment fairs 32% University ‘milk rounds’21% Radio advertising17% Other forms of recruitment6% (Source: Torrington Hall, 1998) There are various selection methods available and employer needs to implement combination of those available since one method won’t suit the requirements. Choice is generally dependent upon selection criteria for the post to be filled, administrative ease, accuracy, cost, time factor, abilities of the staff involved in the selection process etc. Interviewing is the most popular method of selection. Bio-data of the candidate is initially asked for. It is checked whether candidate meets the necessary specification and has relevant work experience in the same field, if found so he is been called for the interview or rounds of interview, where his domain is thoroughly checked either through verbal interaction or through written test. Written test generally includes Aptitude tests, General Intelligence test, Trainability test, Personality test & Attainment test. Critical features of test use being validity, reliability, use of interpretation & context of texts. Group selection methods are also used if there are more candidates applying for one job. Three main types of group tasks were invented by Plumbley (1985) Leaderless group, command or executive exercises & group problem solving. Also at times for critical job profiles there is factual as well as character check wherein candidate is asked to get references. Other methods include hiring a consultant or recruitment agency that would already interview the candidate and filter out the one from the masses. It reduces efforts of the employer since candidate is interviews before by the agency for the desired profile. Also sometimes candidate is asked to fill the application form and submit it, wherein entire details of the candidate are asked for. Application form is customized per the need of profile unlike bio-data which has information which may or may not be useful for that particular job profile. (Torrington Hall 1998) Retention is generally maintained by introducing attractive policies for welfare of the employees, giving employee shares of the company at very low rate, market supplements, revising salary structure, providing with additional perks and cost to company components, depending upon the nature of appraisal received from colleagues and subordinates. Providing employees with free medical facilities, pension schemes, and loans at affordable rates encourages employee to stay with organization. Semco has altogether different way of recruiting people and retaining them. Ricardo Semler, CEO of the company believes that workers or the Associates have the liberty to recruit their managers. In short the subordinates have the right to choose with whom they wish to work. Since everyone is treated equal in Semco, owner doesn’t interfere with the decisions taken by the subordinates. People that are to be hired to leadership positions are interviewed and approved by all with whom he/she will be working with. Twice a year subordinate receives questionnaire that enables them to anonymously say what they think about their boss and evaluate their performance. Anyone that gets constantly bad grades at the evaluation usually leaves Semco (average is 80 out of 100) Preference is also given to friend or acquaintances of employees, but no family member is considered for job at Semco if all these ways fails then they move for head hunters & newspapers. Semco business unit has a committee comprising everyone from different operations. Members in the committee have time off, with pay to do their work they also have job security as in they cannot be fired while they serve on committee. Semco has another salary programme called as ‘risk salary’in which about third of employees have the pay cut of upto 25% and then receiving supplement raise of 125% of normal salary if company is making profit. (Maverick, 1993) References: 1. Torrington & Hall (1998) Human Resource Management. Edition 4. Prentice hall, Europe 2. Slocum/Hellriegel (2007) Fundamentals of Organizational Behavior International student edition, USA. 3. Semler, Ricardo (1993). Maverick! Century random house UK. 4. Semler, Ricardo (2003). The Seven Day Weekend. UK Century. 5. Hackman, J. R, & Oldham, G. R (1980). Work Redesign. Reading, MA: Addison-wesley publishing company Inc. 6. web1: http://semco. locaweb. com. br/en/content. asp? content=1&contentID=610