Fedex and UPS Essay Example for Free

Fedex and UPS Essay 1. Accounting Treatments Capital Lease -Lessee Initially, the lessee recognizes the asset under his property, plant and equipment. The amount that should be debited is the Lower of asset’s fair value and present value of minimum lease payments. The present value is determined by discounting minimum lease payments using interest rates implicit in the lease. Also, initial direct cost that the lessee incurs in relation to the lease is added to the cost of recognized asset. On the credit side of the entry should be lease liabilities, which is in fact, some kind of a loan. The lease liabilities should be split into current and noncurrent liabilities as some payments are made within 12 months while others are made after 12 month of the reporting date. Subsequently, there are two things we must take care of. First, we must depreciate the lease asset over the economic life, not over the lease term because that doesn’t necessarily need to be the same. The entry is to debit depreciation expense in profit or loss and credit the accumulated depreciation account. Secondly, we need to allocate the lease liability or minimum lease payments paid to the lessor into two parts; reduction of lease liability and finance charge or interest. IAS 17 requires the finance charge to be allocated so as to produce a constant periodic rate of interest (interest rate implicit in the lease) on the remaining balance sheet liability. (Refer to appendix A for journal entries Capital lease-Lessor The lessor is a finance provider, and therefore records lease receivables as the debit side of the entry. The lease receivable is the net investment in the lease, which is the total of minimum lease payments and unguaranteed residual value. Total of these two figures is gross investment in the lease and we need to discount it to present value using discount rate implicit in the lease and all this must be equal to fair value of the asset plus initial direct cost. The credit side to this entry is simply cash given out by the lessor. Subsequently, we have to split minimum lease payments received from the lessee between reduction of finance lease receivable and finance income similar to what the lessee would do. (Finance income should reflect a constant periodic rate of return on the lessor’s net  investment in the lease.) (Refer to appendix A for journal entries) Operating Lease-Lessee In an operating lease, the lessee does not recognize any asset. The lease payments are recognized as rent expense in profit or loss on a straight-line basis. The journal entries would include a debit to rent expense and credit to cash or accounts payable. (Refer to appendix A for journal entries) Operating -lessor Lease payments received from the lessee are recognized as revenue in profit or loss on a straight-line basis. The lessor keeps the asset on his financial statement and depreciates it in line with its fixed asset accounting policy. (Refer to appendix A for journal entries) Advantages of Operating Lease In an operating lease, the lessee is considered to be renting the equipment and thus the lease payment is recorded as rental expense. No assets or liabilities are recorded on the balance sheet (Off-balance sheet financing). This is beneficial for companies because it will result in a lower asset base, therefore creating a higher ROA. Operating lease will also display more desirable solvency ratios such as lower debt to equity. This off balance sheet method of recording will also produce better debt covenant ratios for the company to show its debt lenders. Moreover, some companies associate management bonuses to certain ratios such as return on capital, which would be more optimal looking if recorded under operating lease. Another major benefit of operating leases is the potential tax benefits. An operating lease may allow the company to deduct payments as operating expenses during the period in which they are paid. If the company purchases equipment, they may be able to deduct the in terest, as well as the cost of the depreciation. 2. Under current Financial Accounting Standards Board regulations, what business arrangements might FedEx have made in order to account for leases as operating leases rather than capital leases? An operating lease is usually coined as anything that is not classified as a finance lease.  Factors that an operating lease may include are: 1. If a lease does not significantly transfer all the risks and rewards, associated with ownership of an asset the lease 2. If the ownership of the asset is more likely to go back to lessor at the end of the term 3. The lessee does not have the option to buy the asset at a cost significantly below the fair value of the asset → ie. a bargain price. The term of the lease is not a major part of the economic life of the lease item. IAS 17 does not explicitly say how much is a major portion however ASPE states that 75% and above is a major portion. 5. If there is little or no risk to the lessee; all major risks are borne by the lessor. An example wo uld be cancellation costs. 6. The leased asset is of common nature; not specialized and can only be used by the lessee. 7. The present value of the total amount of minimum lease payments do not equal or is close to the fair value of the asset leased. Other Additional Criteria can be: 8. Whether fluctuation in fair value at the end of the lease accrue to the lessor 9. If the lessee does not have the option to extend the lease for a secondary period at a â€Å"below the market† price Arrangements FedEx would have to make to disclose the operating lease would include disclosures about: the outstanding payments left for non-cancellable operating leases for the time periods: within one year within two to five years after more than five years the total future minimum sublease income for non-cancellable subleases the lease and sublease payments recognised in income for the period the contingent rent recognised as an expense  the general description of significant leasing arrangements, including contingent rent provisions, renewal or purchase options, and restrictions imposed on dividends, borrowings, or further leasing For operating leases, IAS 17 states that the total lease payments should be incurred as an expense and would appear on the income statement regularly with the amount on a straight-line basis over the entire lease term. Any enticements that the lessee may have received from the lessor to enter into the lease arrangement, must also be divided on a straight line basis to offset the  rental expense. 4. Lease Capitalization on Financial Variable and Ratios Unrecorded Lease Liability and Debt-to-Equity Ratio Based on the ratios and calculations performed there are many incentives for companies to report leases as operating leases rather than capitalize them. It can be concluded that the impact of lease capitalization on the financial statements is far greater for FedEx than UPS, however both companies are reaping benefits from reporting leases as operating leases. Capitalizing leases requires that leases are recorded as assets and liabilities on the balance sheet. The Unrecorded Lease Liability is 98.41% of existing liabilities for FedEx and 8.27% for UPS. Thus, by not capitalizing leases, firms are able to decrease their liabilities and present a more lower debt/equity ratio.The Debt/Equity ratio gives stakeholders an indication of the capital structure of the firm. The ratio for FedEx moves from 0.97 to 2.70, which indicates a more leveraged capital structure. UPS ratio moves from 0.87 to 1.28. The capitalization of leases would not a llow FedEx to maintain a debt-equity ratio below 1, which would change shareholder’s view on the financial flexibility of the firm. If FedEx wishes to maintain a relatively low debt-to-equity ratio on their financial statements it would be unfavourable to capitalize leases. Return on Asset The Return on Assets (ROA) is another key ratio that is affected when leases are capitalized due to the increase in assets that the company owns. When leases are capitalized there is a decrease in ROA for both FedEx and UPS by 1.69% and 0.32%, respectively. This is a relatively significant drop in efficiency and further motivates firms to record leases as operating leases. Interest Coverage Ratio The interest coverage ratio informs stakeholders of a company’s ability to pay back their interest. There is a significant drop of 17.26 in FedEx’s interest-coverage ratio and a drop of 9.2 in UPS’s interest coverage ratio. This means that a certain amount of profit is attributed to the fact that leases are not capitalized. In conclusion, it is clear from the variables and the ratios analyzed why companies prefer to record leases as operating leases rather than capitalize them. Operating leases are kept off the balance sheet and their main impact on the income statement is rent expense since the risks of ownership are not assumed. On the other hand, when leases are capitalized, the present value of payments including interest expense,  is treated as a liability on the balance sheet. These two accounting methods result in ratios to be more favourable for the firm when leases are recorded as operating leases rather than financial leases. 5. New Exposure Draft: A Contract-Based Approach Development of Contract-Based Approach Leasing is a critical activity in business as it is a means of gaining access to assets, obtaining finance and reducing an entity’s exposure to the risks of asset ownership. Some key advantages of leasing assets rather than purchasing assets are 100% financing, flexibility and the tax advantages. Therefore it is crucial that leases are appropriately accounted for and nature and duration of the lease agreement is considered. Current models require lessees and lessors to account for leases as either finance leases or operating leases. A recurring criticism of this approach is that lessees are not required to recognize assets and liabilities arising from operating leases. We can see the benefits of this in the financial statements and ratios of FedEx and UPS, as discussed above. In our opinion capitalizing leases provides stakeholders of a less aggressive view of a company’s financial statements. The contract based approach ensures th at companies recognise the right to use an asset along with the contractual liability on its balance sheet. Recognition and Measurement (Lessee) IASB and FASB are proposing a new approach to lease accounting that ensures entities record assets and liabilities arising from a lease. With this new approach, a lessee would recognize assets and liabilities for leases with a maximum possible term of more than 12 months. Under this contract-based approach, the asset is taken on by the lessee as the right to use to asset and not the asset itself. This a key difference between the contract-based approach and finance leases. When the lease is acquired, the lessee would recognise a lease liability. This would refer to the obligation of the lessee to make recurring lease payments. Additionally, the lessee would recognize a right-of-use asset representing a lessee’s right to use the underlying asset for the lease term. The right-of-use asset would include the initial measurement of the lease liability, any lease payments made at or before commencement date and any initial direct costs incurred by the lessee. The proposal further categorizes the leases into Type A and Type B leases. Type A Lease Recognition Leased assets other  than property (such as equipment and vehicles) would be classified as a Type A lease. However, if the following two conditions are met, the lease would be classified as a Type B: if the lease term is an insignificant portion of the asset’s economic life and if the present value of the lease payments is insignificant relative to their fair value. Initial measurements for a Type A lease would include a right-of-use asset and a lease liability. The lease liability would be measured at the present value of the lease payments, measured at the rate charged by the lessor. If that rate cannot be immediately determined, the lessee uses the incremental borrowing rate. Subsequent measurements would recognize interest expense and the amortization of the right-of-use asset separately on the income statement and balance sheet. This would be accounted for separately from the amortization of the asset. Type B Lease Recognition Leased assets of property (such as land or a building) would be classified as Type B leases. Initial measurements would be parallel to the initial measurements of Type A assets. However, subsequent measurements would recognize a single lease cost. This cost would be a measurement of the interest expense as well as the amortization of the asset. This combined figure would be calculated on a straight-line basis. Effect on Existing Operating Lease Existing operating leases must be appropriately treated based on the a ccounting standards for leases. Leases that were previously reported as operating leases by lessees should be recognised using the new approach at the beginning of the earliest comparative period. The lessee should recognize the lease liability, which is the present value of the remaining lease payments. For Type A leases, a right-of-use asset is measured as a proportion of the lease liability. The proportion is based on the remaining lease term at the time of the earliest comparative period. Additionally, the right-of-use asset recorded should be adjusted for any previously recognised prepaid or accrued lease payments. On the other hand, for Type B leases, a right-of-use asset is measured at an amount that equals the lease liability. The asset is then adjusted for previously recognised prepaid or accrued lease payments.

Public Service Broadcasting Essay -- essays papers

Public Service Broadcasting From the establishment of the BBC in the late 1920s, British audiences were given the opportunity of taking part in a shared national experience and interest. Since that time, an apparent agreement has existed as to the general aims of broadcasting by the BBC which fell under the heading â€Å"public service broadcasting.† Although the BBC no longer enjoys a broadcasting monopoly, the promise to provide a mix of programming by which audiences may be educated as well as entertained has been emulated by the other terrestrial broadcasters, beginning with ITV in the 1950s. However, recent years have shown a breakdown to this widespread agreement and the term â€Å"public service broadcasting† now seems to exist as more of an amorphous notion than anything with a real concrete description. Perhaps because the term brings with it a number of complexities that serve to hinder the mission of public service broadcasting. How does one determine what someone else should watch? What type of person would be making that decision and does it have the potential to be elitist? Can a single broadcasting entity actually appeal to one mass audience in a society as diverse as Britain’s? And does the concept of this â€Å"national interest† even exist at all? It’s questions like these that bring to mind potential problems with the programs broadcast by the BBC and indicate that there is a lot more imbedded in the concept of public service broadcasting than one might assume. For no matter how no matter how much its traditions purport to reach out to create a cohesion for a mass audience, public service broadcasting can also contribute to a very misrepresentative appearance of British society. One aspect of the television medium that is so unique is its pervasive nature on our lives. For many, it is not only the primary source of entertainment and information, but also of education. Therefore, in a public service sense it is necessary to go beyond merely producing quality programs, even producing quality programs at peak hours that will attract a large audience. Rather, it also involves providing a focus for those activities which are best regarded as a common experience. Whether it be a the Wedding of Charles and Diana, a World Cup Football match, or news of a fateful event, â€Å"television has a unique ability to generate a sense of c... ...s, rather than the audience that own the station. Its centralized monopoly can serve a censoring body and does not allow all voices in society to have a voice, although the BBC deems itself representative of a national institution. For this reason it cannot be justified to have a mass audience pay for a license fee that may not be catering at all to their interests or culture and perhaps the only way to justify the programming of the BBC is by adopting a method of optional subscription fees. As far as it may have developed since the time of its founding, the BBC still remains somewhat stuck to its original ideals which have made it impossible to become that national institution that it claims to be. Bibliography: British Broadcasting Corperation. Our Commitment to You. London: BBC Publications, 1998. Department of National Heritage. The Future of the BBC. London: Department of National Heritage, 1994. Green, Damien. A Better BBC: Public Service Broadcasting in the 90s. London: Center for Policy Studies England, 1991. MacCabe, Colin. The BBC and Public Service Broadcasting. London: Manchester University Press, 1986. Madison, James. Federalist Paper No. 10

Cross Culture

Introduction: Introduction Communication is the process by which information is transmitted between individuals and/or organizations so that an understanding response results. Simply we can say, Communication is an exchange of facts, ideas, opinions or emotions by two or more person. The transmission of the sender’s ideas to the receiver and the receiver’s feedback or reaction to the sender constitute the communication cycle. SENDERRECEIVER InputOutput [pic] Feedback Brain drain Brain drain Brain drain Fig- 01: Communication Cycle Culture is an idea in the field of management which describes the psychology, attitudes, experiences, beliefs and values (personal and cultural values) of an organization. Culture is a complex concept. In other words, culture is central to what we see, how we make sense of what we see, and how we express ourselves. Objective of the Report: The Primary Objective of this report is to analysis of cross cultural communication in IBM. The report has accumulated information to know about company’s cross cultural communication, to find out its positive and productive communication in their organization and does the work effectively. Methodology: Sources of data: †¢ Secondary Data: All the data and information are collected from secondary sources. Cross-Cultural Communication: The success of a business depends on its ability to communicate. Communication serves as the medium for instruction, assessment, interpersonal relationships, group interactions and all other interaction that takes place in business. With globalization, business is no longer constrained within the boundaries of a single country. Large business organizations have corporate offices in different parts of the world. They need to communicate in order to promote coordination. Also in multinational companies people from different parts of the world are employed. The way an individual communicates, is influenced by his or her culture. Hence in today’s increasing global economy, it is important for managers and employees at all levels to understand, appreciate, and manage the impact of cross-cultural communication in the workplace. As our world grows, expands and becomes increasingly more interconnected by various technological advances, the need for effective communication among various cultures is increasing. People from different backgrounds tend to perceive information differently. Hence, misinterpretation of information can lead to conflict. Cross cultural communication is of great importance through out the world. Though in our country, due to the lack of cultural diversity, cross cultural communication is not treated with that much importance. But still with the advancement of technology we have to interact with businesspeople in faraway countries and for this we need know about effective techniques of cross cultural communication Definition of Cross-Cultural Communication: To understand cross cultural communication first we need to know what culture is. Culture refers to a group or community with which we share common experiences that shape the way we understand the world. Cross-cultural communication looks at how people, from differing cultural backgrounds, endeavor to communicate. It is more frequently referred to as Intercultural communication. (Ramsey, 1999). Culture refers to all the knowledge and values shared by a society. The word culture is often considered in terms of nationality or one's country of origin. Other more specific distinguishing characteristics of culture are region, orientation, socioeconomic status, gender, sexual orientation and preference, age, marital and parental status. Another approach to understanding the concept of culture involves the beliefs, values and norms that exist to guide an individual's behaviors in solving common problems. Culture is the acquired knowledge people use to interpret experience and generate behavior (Porter, 1991). Culture is the shared customs, beliefs, and social structures that make up a society, including languages, rules, myths, family patterns, and political systems. (Boone et al. 1997). Cross cultural communication is a symbolic, interpretive, transactional, contextual processing tool with which people from different cultures create shared meanings (Berko et al. , 1997). When we speak to someone with whom we share little or no cultural bond, it is referred to as cross cultural communication. Our need to communicate across culture can be very beneficial personally and professionally. Within an intercultural setting, nonverbal and verbal communications are both prevalent in emphasizing the differences in cultures. The way we act and the things we say determine whether or not we belong in a certain culture. Nonverbal communication systems provide information about the meaning associated with the use of space, time, touch and gestures. They help to define the boundaries between the members and nonmembers of a culture (Hofstede, 1991). Hence, Cross Cultural Communication is the communication that takes place among people from different cultures. Cross cultural communication does not only mean face to face communication it includes all forms of written and oral communication. History of Cross-Cultural Communication: The need for Cross-Cultural communication was felt with the spread of global commerce. It is very tough to get the specific date when cross-cultural communication started. Initial initiatives in cross-cultural communication were taken in different countries in different time period. One of the pioneers of the computer industry, IBM started cross cultural communication in 1953. It was introduced by the CEO of that time Thomas J. Watson Jnr. According to Thomas it was the policy of IBM to hire talented people regardless of race, color and background. During 1978-83, the Dutch cultural anthropologist Geert Hofstede conducted detailed interviews with hundreds of IBM employees in 53 countries. Through standard statistical analysis of fairly large data sets, he was able to determine patterns of similarities and differences among the replies. In the year 1991, Geert Hofstede undertook the first global studies on how a specific business culture, at the time one of the most widely distributed companies, interacted with the local cultures of some 39 different countries. Another professional development initiative is IBM’s Shade of blues – a more in-depth program for managers who are engaged in cross-cultural business interactions or have multicultural teams. Recent Research on Cross-Cultural Communication: As people from different cultural groups take on the exciting challenge of working together, cultural values sometimes conflict. We can misunderstand each other, and react in ways that can hinder what are otherwise promising partnerships. Oftentimes, we aren't aware that culture is acting upon us. Sometimes, we are not even aware that we have cultural values or assumptions that are different from others. One of the major barriers in business communication is cultural diversity. Many communication researchers are trying to find out new and effective ways to improve cross cultural communication. In many cases patients face problems with both translation difficulties and not being able to see the type clearly. As a result they are sometimes unable to take their prescriptions correctly. Many of the pharmaceuticals around the world have been trying to solve this problem. Recently they have come up with a tool which can print instructions for taking medicine in 11 different languages on the prescription bottle labels. Patients no longer have to depend on translation from a friend or relative to make sure they are taking their prescriptions correctly. The languages include English, Spanish, French, Arabic, Korean, Chinese, Japanese, Hindi, Polish, Russian or Portuguese. The tool is also equipped to print a 20- point type versus the typical smaller type, for those patients who prefer larger printed labels on the bottle labels to easily identify their medicines and how to take them. On July 6, 2005 Mark Nash, an American entrepreneur created a cross-cultural website created especially for non-resident Indians and offshore call center personnel (Nash, 2005). The website www. intro2america. om was designed to provide information about American culture. It was also designed to provide information to call center personnel who speak with Americans on a daily basis as part of their job responsibilities. The site is designed to make the transition to American lifestyle easier and reduce the difficulties & misunderstandings upon first moving to the States. The site provides useful information, which is related specifically to cross-cultural types of issues. Moving from an Asian culture to a Western culture can be challenging. The site was designed for the specific purpose of easing the transition to American way of life, for those who are moving to the United States (See Appendix for the sample of the website). To serve customers from diversified cultures, they have taken a great deal of effort and time to analyze what their customers around the globe want. To achieve this they are trying to understand their customer’s behavior, cultural and spending patterns when they fly with Malaysia Airlines. The airliner has successfully catered to the demands of wide variety global customers around the world. Application in the work place: IBM, the leading business organization in computer sector, has a huge diverse workforce from the very beginning. They have concentration to manage the cross cultural communication among these employees. Here we have selected IBM’s Australia branch to present as an example of cross cultural environment where employees are working together with their cultural differences. IBM has developed their cross-cultural program based on the legal requirements of Anti- Discrimination Act & Racial Discrimination Act and corporate values. IBM’s policies on cultural diversity are based on years of corporate experience. It is a long-held view that by valuing diversity, it uncovers new perspectives, taps different knowledge and experience and generates innovative ideas, suggestions and methods. Three pillars that are in place to make up IBM’s diversity strategy are: †¢ Creating a work/life balance: Their strategy is to find the average working age of general Australians through statistical findings and fix age limit for average Australians. †¢ Advancement of women: They think women should contribute more to the workplace. So, they encourage participation of women. †¢ Integration of people with a disability: IBM authority thinks that they have a social responsibility for physically and mentally disable people. The authority always tries to create some opportunity of employment for those people. IBM’s most effective diversity programs combine ‘push and pull’ strategies. They have made good headway through company-led, top down practices such as formalized training or policies like floating cultural holidays. However, IBM’s progress comes about through the contributions by individuals who are passionate about diversity issue. Aside from IBM’s diversity team within human resources, three other groups within IBM have formally identified roles in the implementation of the company’s overall diversity strategy. These are IBM’s Diversity Council, diversity contact officers and diversity champions. The Diversity Council The main objective of the IBM’s Diversity Council, is to ensure that the contribution of employees from different background is properly encouraged and valued. Its key objectives are to enhance employee awareness, increase management awareness, and encourage the effective use of IBM’s diverse workforce. This is achieved through personal commitment, regular communication, by gaining support for the program from other IBM managers and influencing decision making. Under the guidance of the Diversity Council, a series of cultural diversity employee roundtables have been held to gather more face-to-face feedback and ideas from staff. These meetings have generated many practical ideas for increasing awareness of cultural diversity within IBM. Professional development IBM has a professional development program. The objective of this program is to ensure that the employees within the organization can identify and remove psychological barriers of diverse workforce and communicate effectively. The main focuses of this program are: †¢ Understanding the cultural bias of each team member and their impact on mutualperceptions. †¢ Determine the reasons why certain behaviors and communication styles fail in somecultures. †¢ Identifying approaches to address cultural gaps that could lead to misunderstandings. †¢ Handling issues about team decision-making, giving or receiving feedback and conflict resolution. Findings: IBM, One of the pioneers of the computer industry started cross cultural communication in 1953. †¢ They think women should contribute more to the workplace. So, they encourage participation of women. †¢ IBM authority thinks that they have a social responsibility for physically and mentally disable people. The authority always tries to create some opportunit y of employment for thosepeople. Recommendations: Considering research and the case of IBM, we have some recommendation here which will decrease discrimination and increase production by making the flow of cross-cultural communication fluent. Those recommendations are as follows: ? IBM should compare their policy for cross cultural communication with others, so that they can get some new ideas to implement in their organization. It will help them to update existing policies as well. ? Not only the HR department of IBM, but also all other employees of the organization should be involved in the process of making cross cultural communication easier. It will help the whole organization to become a good team. ? Training and raising awareness can improve mentality of the employees towards others. They will learn to respect and honor others differences. Place people from different cultures as team leaders. If diverse employees get opportunity to work and share success they will be highly motivated. Discrimination will be dissolved from them and the communication process will work freely. ? A good idea can be to focus different segments one after another so that every segment can achieve expected mentality. This process will form unity and emotion among the employees of the organization. Discrimination will be terminated and the total organization will work as one body. ? Each program introduced in the organization should honor the basic values of the organization. Every program should ensure that none of the employees are discriminated in terms of race, national origin or religion. Conclusion: From the above research we have seen that cultural communication plays a vital role for effective communication for companies around the globe. In our country due to the lack of cultural diversity we do not have to face the problems related to intercultural communication. Many of the successful companies having corporate offices have been able to coordinate their activities through out the world through the successful implementation of cross cultural communication. One of the fore runners in this sector is definitely IBM. IBM has independent division to come up with new policies and strategies to improve cross cultural communication in the workplace. Reference: Boone, L. E. , Kurtz, D. L. , & Block, Judy R. (1997). Contemporary Business Communication (2nd ed. ). Upper Saddle River, New Jersey: Prentince-Hall. 67. Ramsey, James (1999). Available: http://encyclopedia. localcolorart. com/encyclopedia/Cross-cultural_communication/ (July, 17 2005). Carbaugh, D, (1990). Cultural Communication and Intercultural Contact. New York: Pergamon Press. 19. Berko, R. , Rosengeld, L. , & Samovar, L. (1997). Connecting: A Culture Sensitive Approach to Intercultural Communication. Fort Worth, Texas: Harcourt Brace. 121. Porter, R. , and Samovar, L. (1991). Communication Between Cultures. Belmont:NTC Publishing Group. 273. Payne, C. (2001). Culture and Communication. Available: http://www2. mhc. ab. ca/users/cpayne/portfolio/cultcomm/default. htm (July, 29 2005). Appendix [pic] A sample website dedicated to understanding cross-cultural types of issues. [pic] ———————– Idea Letter, Fax, Phone call, E-mail etc. Idea Cross Culture Introduction: Introduction Communication is the process by which information is transmitted between individuals and/or organizations so that an understanding response results. Simply we can say, Communication is an exchange of facts, ideas, opinions or emotions by two or more person. The transmission of the sender’s ideas to the receiver and the receiver’s feedback or reaction to the sender constitute the communication cycle. SENDERRECEIVER InputOutput [pic] Feedback Brain drain Brain drain Brain drain Fig- 01: Communication Cycle Culture is an idea in the field of management which describes the psychology, attitudes, experiences, beliefs and values (personal and cultural values) of an organization. Culture is a complex concept. In other words, culture is central to what we see, how we make sense of what we see, and how we express ourselves. Objective of the Report: The Primary Objective of this report is to analysis of cross cultural communication in IBM. The report has accumulated information to know about company’s cross cultural communication, to find out its positive and productive communication in their organization and does the work effectively. Methodology: Sources of data: †¢ Secondary Data: All the data and information are collected from secondary sources. Cross-Cultural Communication: The success of a business depends on its ability to communicate. Communication serves as the medium for instruction, assessment, interpersonal relationships, group interactions and all other interaction that takes place in business. With globalization, business is no longer constrained within the boundaries of a single country. Large business organizations have corporate offices in different parts of the world. They need to communicate in order to promote coordination. Also in multinational companies people from different parts of the world are employed. The way an individual communicates, is influenced by his or her culture. Hence in today’s increasing global economy, it is important for managers and employees at all levels to understand, appreciate, and manage the impact of cross-cultural communication in the workplace. As our world grows, expands and becomes increasingly more interconnected by various technological advances, the need for effective communication among various cultures is increasing. People from different backgrounds tend to perceive information differently. Hence, misinterpretation of information can lead to conflict. Cross cultural communication is of great importance through out the world. Though in our country, due to the lack of cultural diversity, cross cultural communication is not treated with that much importance. But still with the advancement of technology we have to interact with businesspeople in faraway countries and for this we need know about effective techniques of cross cultural communication Definition of Cross-Cultural Communication: To understand cross cultural communication first we need to know what culture is. Culture refers to a group or community with which we share common experiences that shape the way we understand the world. Cross-cultural communication looks at how people, from differing cultural backgrounds, endeavor to communicate. It is more frequently referred to as Intercultural communication. (Ramsey, 1999). Culture refers to all the knowledge and values shared by a society. The word culture is often considered in terms of nationality or one's country of origin. Other more specific distinguishing characteristics of culture are region, orientation, socioeconomic status, gender, sexual orientation and preference, age, marital and parental status. Another approach to understanding the concept of culture involves the beliefs, values and norms that exist to guide an individual's behaviors in solving common problems. Culture is the acquired knowledge people use to interpret experience and generate behavior (Porter, 1991). Culture is the shared customs, beliefs, and social structures that make up a society, including languages, rules, myths, family patterns, and political systems. (Boone et al. 1997). Cross cultural communication is a symbolic, interpretive, transactional, contextual processing tool with which people from different cultures create shared meanings (Berko et al. , 1997). When we speak to someone with whom we share little or no cultural bond, it is referred to as cross cultural communication. Our need to communicate across culture can be very beneficial personally and professionally. Within an intercultural setting, nonverbal and verbal communications are both prevalent in emphasizing the differences in cultures. The way we act and the things we say determine whether or not we belong in a certain culture. Nonverbal communication systems provide information about the meaning associated with the use of space, time, touch and gestures. They help to define the boundaries between the members and nonmembers of a culture (Hofstede, 1991). Hence, Cross Cultural Communication is the communication that takes place among people from different cultures. Cross cultural communication does not only mean face to face communication it includes all forms of written and oral communication. History of Cross-Cultural Communication: The need for Cross-Cultural communication was felt with the spread of global commerce. It is very tough to get the specific date when cross-cultural communication started. Initial initiatives in cross-cultural communication were taken in different countries in different time period. One of the pioneers of the computer industry, IBM started cross cultural communication in 1953. It was introduced by the CEO of that time Thomas J. Watson Jnr. According to Thomas it was the policy of IBM to hire talented people regardless of race, color and background. During 1978-83, the Dutch cultural anthropologist Geert Hofstede conducted detailed interviews with hundreds of IBM employees in 53 countries. Through standard statistical analysis of fairly large data sets, he was able to determine patterns of similarities and differences among the replies. In the year 1991, Geert Hofstede undertook the first global studies on how a specific business culture, at the time one of the most widely distributed companies, interacted with the local cultures of some 39 different countries. Another professional development initiative is IBM’s Shade of blues – a more in-depth program for managers who are engaged in cross-cultural business interactions or have multicultural teams. Recent Research on Cross-Cultural Communication: As people from different cultural groups take on the exciting challenge of working together, cultural values sometimes conflict. We can misunderstand each other, and react in ways that can hinder what are otherwise promising partnerships. Oftentimes, we aren't aware that culture is acting upon us. Sometimes, we are not even aware that we have cultural values or assumptions that are different from others. One of the major barriers in business communication is cultural diversity. Many communication researchers are trying to find out new and effective ways to improve cross cultural communication. In many cases patients face problems with both translation difficulties and not being able to see the type clearly. As a result they are sometimes unable to take their prescriptions correctly. Many of the pharmaceuticals around the world have been trying to solve this problem. Recently they have come up with a tool which can print instructions for taking medicine in 11 different languages on the prescription bottle labels. Patients no longer have to depend on translation from a friend or relative to make sure they are taking their prescriptions correctly. The languages include English, Spanish, French, Arabic, Korean, Chinese, Japanese, Hindi, Polish, Russian or Portuguese. The tool is also equipped to print a 20- point type versus the typical smaller type, for those patients who prefer larger printed labels on the bottle labels to easily identify their medicines and how to take them. On July 6, 2005 Mark Nash, an American entrepreneur created a cross-cultural website created especially for non-resident Indians and offshore call center personnel (Nash, 2005). The website www. intro2america. om was designed to provide information about American culture. It was also designed to provide information to call center personnel who speak with Americans on a daily basis as part of their job responsibilities. The site is designed to make the transition to American lifestyle easier and reduce the difficulties & misunderstandings upon first moving to the States. The site provides useful information, which is related specifically to cross-cultural types of issues. Moving from an Asian culture to a Western culture can be challenging. The site was designed for the specific purpose of easing the transition to American way of life, for those who are moving to the United States (See Appendix for the sample of the website). To serve customers from diversified cultures, they have taken a great deal of effort and time to analyze what their customers around the globe want. To achieve this they are trying to understand their customer’s behavior, cultural and spending patterns when they fly with Malaysia Airlines. The airliner has successfully catered to the demands of wide variety global customers around the world. Application in the work place: IBM, the leading business organization in computer sector, has a huge diverse workforce from the very beginning. They have concentration to manage the cross cultural communication among these employees. Here we have selected IBM’s Australia branch to present as an example of cross cultural environment where employees are working together with their cultural differences. IBM has developed their cross-cultural program based on the legal requirements of Anti- Discrimination Act & Racial Discrimination Act and corporate values. IBM’s policies on cultural diversity are based on years of corporate experience. It is a long-held view that by valuing diversity, it uncovers new perspectives, taps different knowledge and experience and generates innovative ideas, suggestions and methods. Three pillars that are in place to make up IBM’s diversity strategy are: †¢ Creating a work/life balance: Their strategy is to find the average working age of general Australians through statistical findings and fix age limit for average Australians. †¢ Advancement of women: They think women should contribute more to the workplace. So, they encourage participation of women. †¢ Integration of people with a disability: IBM authority thinks that they have a social responsibility for physically and mentally disable people. The authority always tries to create some opportunity of employment for those people. IBM’s most effective diversity programs combine ‘push and pull’ strategies. They have made good headway through company-led, top down practices such as formalized training or policies like floating cultural holidays. However, IBM’s progress comes about through the contributions by individuals who are passionate about diversity issue. Aside from IBM’s diversity team within human resources, three other groups within IBM have formally identified roles in the implementation of the company’s overall diversity strategy. These are IBM’s Diversity Council, diversity contact officers and diversity champions. The Diversity Council The main objective of the IBM’s Diversity Council, is to ensure that the contribution of employees from different background is properly encouraged and valued. Its key objectives are to enhance employee awareness, increase management awareness, and encourage the effective use of IBM’s diverse workforce. This is achieved through personal commitment, regular communication, by gaining support for the program from other IBM managers and influencing decision making. Under the guidance of the Diversity Council, a series of cultural diversity employee roundtables have been held to gather more face-to-face feedback and ideas from staff. These meetings have generated many practical ideas for increasing awareness of cultural diversity within IBM. Professional development IBM has a professional development program. The objective of this program is to ensure that the employees within the organization can identify and remove psychological barriers of diverse workforce and communicate effectively. The main focuses of this program are: †¢ Understanding the cultural bias of each team member and their impact on mutualperceptions. †¢ Determine the reasons why certain behaviors and communication styles fail in somecultures. †¢ Identifying approaches to address cultural gaps that could lead to misunderstandings. †¢ Handling issues about team decision-making, giving or receiving feedback and conflict resolution. Findings: IBM, One of the pioneers of the computer industry started cross cultural communication in 1953. †¢ They think women should contribute more to the workplace. So, they encourage participation of women. †¢ IBM authority thinks that they have a social responsibility for physically and mentally disable people. The authority always tries to create some opportunit y of employment for thosepeople. Recommendations: Considering research and the case of IBM, we have some recommendation here which will decrease discrimination and increase production by making the flow of cross-cultural communication fluent. Those recommendations are as follows: ? IBM should compare their policy for cross cultural communication with others, so that they can get some new ideas to implement in their organization. It will help them to update existing policies as well. ? Not only the HR department of IBM, but also all other employees of the organization should be involved in the process of making cross cultural communication easier. It will help the whole organization to become a good team. ? Training and raising awareness can improve mentality of the employees towards others. They will learn to respect and honor others differences. Place people from different cultures as team leaders. If diverse employees get opportunity to work and share success they will be highly motivated. Discrimination will be dissolved from them and the communication process will work freely. ? A good idea can be to focus different segments one after another so that every segment can achieve expected mentality. This process will form unity and emotion among the employees of the organization. Discrimination will be terminated and the total organization will work as one body. ? Each program introduced in the organization should honor the basic values of the organization. Every program should ensure that none of the employees are discriminated in terms of race, national origin or religion. Conclusion: From the above research we have seen that cultural communication plays a vital role for effective communication for companies around the globe. In our country due to the lack of cultural diversity we do not have to face the problems related to intercultural communication. Many of the successful companies having corporate offices have been able to coordinate their activities through out the world through the successful implementation of cross cultural communication. One of the fore runners in this sector is definitely IBM. IBM has independent division to come up with new policies and strategies to improve cross cultural communication in the workplace. Reference: Boone, L. E. , Kurtz, D. L. , & Block, Judy R. (1997). Contemporary Business Communication (2nd ed. ). Upper Saddle River, New Jersey: Prentince-Hall. 67. Ramsey, James (1999). Available: http://encyclopedia. localcolorart. com/encyclopedia/Cross-cultural_communication/ (July, 17 2005). Carbaugh, D, (1990). Cultural Communication and Intercultural Contact. New York: Pergamon Press. 19. Berko, R. , Rosengeld, L. , & Samovar, L. (1997). Connecting: A Culture Sensitive Approach to Intercultural Communication. Fort Worth, Texas: Harcourt Brace. 121. Porter, R. , and Samovar, L. (1991). Communication Between Cultures. Belmont:NTC Publishing Group. 273. Payne, C. (2001). Culture and Communication. Available: http://www2. mhc. ab. ca/users/cpayne/portfolio/cultcomm/default. htm (July, 29 2005). Appendix [pic] A sample website dedicated to understanding cross-cultural types of issues. [pic] ———————– Idea Letter, Fax, Phone call, E-mail etc. Idea

Analysis Of The Book Gig Americans Talk About Their Jobs

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