Common Interview Questions for Teaching Jobs

Common Interview Questions for Teaching Jobs Before walking into any job interview, you should take some time to prepare a few answers to common interview questions. You may even want to write out your answers and practice saying them aloud so that they come naturally to you once youre sitting down for your interview. If youre interviewing for a teaching position, youll want to think specifically about what kinds of education-related questions might come up. At a Title I school, for example, you may be asked,  What do you know about Title I? If you practice answering these questions now, you wont stumble through them later. Basic Questions Expect to be asked a few basic questions about yourself no matter what position youre interviewing for. While some of these questions may seem simple, you still want to be prepared with thoughtful answers. Some common basic questions include: Tell me about yourself.Why are you interested in this position?What are your greatest strengths?What are your weaknesses?Where do you see yourself in five years? Experience Unless you are applying for an entry-level position, you will likely  be asked about your background and teaching experience. The interviewer will want to know how well you work with others and what kinds of environments you are most comfortable in. You may be asked some questions along these lines: What experience do you have using computers in the classroom?Are you a team player? If so, please give me an example of a time you worked well with others.What grade level would you be most comfortable teaching?What type of reading program did you use in  student teaching?Describe your  student teaching  successes and failures. Classroom Management An employer considering you for a teaching position will want to know how you handle yourself in the classroom and interact with students. Expect to be quizzed on classroom management strategies and other logistical issues. Questions may  include: If I walked into your classroom during reading time, what would I see?What methods do you use for classroom management? Describe a  difficult incident with a student and how you handled it.How would you handle difficult parents?Give me an example of a rule or procedure in your classroom.If you could design the ideal classroom for elementary students, what would it look like? Lesson Planning Once your interviewer is sure that you can keep a classroom under control, theyll want to know how you plan lessons and evaluate student learning. You may be asked any number of the following questions: Describe a good lesson and  explain why it was good.How would you go about  planning a lesson?How would you individualize a curriculum for students at various levels?How would you identify the special needs of particular students?What methods have you used or would you use to assess student learning? Philosophy of Learning Finally, your interviewer may want to know how you think about education more broadly, what you consider to be the qualities of a good teacher, what you know about different learning models,  etc. These types of questions may include: Tell me what you know about the Four Blocks  Literacy Model.What is your personal  educational philosophy?What are the most important qualifications for being a good teacher?What was the last educational book you read?

Should Campus security be allowed to search students for drugs or Essay

Should Campus security be allowed to search students for drugs or weapons - Essay Example Because today the exposure to media and violence is so high that it can affect the young minds negatively. This stigma can be avoided if the schools and colleges help to eradicate such evils because training begins at educational institutions. For this purpose and many other some campuses have started searching students for drugs and weapons so that students who are used to such habits can be punished severely for bringing in such stuff (so that they never repeat the mistake again) but the question that is being discussed here is that should the campus security be allowed to carry out searches? If schools experience high level of violence and drug use then school officials may wish to consider adopting search policies that permit under certain circumstances to screen students and search school property for drugs and weapons. There is definitely no harm in doing it since a school is conducting it for the safety of its students and to make them better people who can serve the nation. Violence at school often involves the use of weapons. Traditionally, weapons prohibited on school grounds are firearms and explosives, but recently, many states have widened these guidelines. For example, in Kansas, weapons include firearms, explosive devices, bludgeons, metal knuckles, throwing stars, electronic stun guns, specific types of knives (such as switchblades and butterfly knives), and any weapon that "expels a projectile by the action of an explosive. For example if your child comes back from school and tells you about an incident where his/her friend pointed a knife at him/her during a common fight, would you feel okay? Obviously not! And these kind of situations have become so common now a days that school authorities are left with no option but to conduct security checks since if anything happens on school grounds it comes under the responsibility of the concerned authority, and in such cases parents are the first ones to come up and blame the schools. Sometimes

Critical Thinking in the Workplace Essay Example | Topics and Well Written Essays - 500 words

Critical Thinking in the Workplace - Essay Example Let us now discuss an example to show how critical thinking can be applied to work-related decisions. One of my friends, James, was working as assistant manager in an event management firm. A conflict arose when one of his senior employees, Steve Hudson, refused to supervise a campaign on religious grounds. Hudson had to taste meat in front of the public to launch the campaign. The HR manager consulted the issue with James in order to find a proper solution to the problem. They came up with four options to resolve the issue. Those options included assigning Austin to a low-profile campaign, terminating Hudson’s services on the grounds of disobedience, switching place of Hudson with some other supervisor, and promoting one of Hudson’s subordinates to lead this campaign for this specific event. James and his manager analyzed all options and selected fourth option because that option was the most suitable one to resolve the issue. James and his manager gave preference to the religious views of Hudson over any other thing and did not terminate him on the grounds of disobed ience because he was a very skilled and talented employee of the company. Critical thinking plays a considerable role in decision-making processes. It makes people aware of all aspects of the issue, which helps them take most appropriate decisions based on the analysis of all aspects. Decision-making is the process of choosing the best alternative from the pool of choices. A person needs to look at all possible consequences of all choices before selecting the most suitable choice. The process of critical thinking is unbiased in nature and provides assists decision-makers in taking unbiased decisions. Critical thinking means to let the past assumptions go and embrace new ideas based on proper evaluation and reasoning. Upson (2011) states, â€Å"Critical thinking can help people to excel in their professional lives, allowing for clearer, more concise thought

ACC501 - Accounting for Decision Making Essay Example | Topics and Well Written Essays - 1250 words

ACC501 - Accounting for Decision Making - Essay Example It has expanded rapidly since its insinuation and now has a global presence across all continents - Europe, Asia Pacific, South America and Africa and Middle East markets. In the global market, Ford faces heavy competition. The key competitors of Ford include Aston Martin, Mercedes, General Motors, Chrysler, Toyota, Audi, Daewoo, Honda and Porsche. In addition, it faces strong competition in the local markets as well. For instance, in Asia Pacific, Ford faces strong competition from different companies like Fiat, Tata, Hyundai, Maruti Udyog etc. Ford, unlike its competitors, has ventured into the production of a number of different classes of vehicles. It is evident from the diversity of cars ranging from Jaguar, Volvo, Mercury, Lincoln, Land Rover and Mazda (Davies, 2008). Ford also owns a rental business, Hertz Rent a Car with the aim of getting a wider customer base and collecting profile information. If ford Corporation plans to expand a new plant in China, where it expects a huge demand for its products, than it will be a relevant cost to be considered since this activity will result in incremental benefits that the firm will enjoy. If Ford Company accepts the Labor unions demand for increase in 25% of its wages, it will also be a relevant cost since if the decision is incurred they will face an increase in 25% of the direct labor costs therefore it is relevant. Any cost which does not affect the decision is considered as a non-relevant cost. For instance if Ford company is spending an huge amount of money on the research and development for getting the product for sale than it will be regarded as a sunk and non-relevant cost since they do not increase or decrease the sales neither they change the real costs of the organization. Due to advancement of technology, most of the organizations are efficient as is Ford since it is operating on the state of the art technology. As a result of this Ford is underutilized, and

Market Focus And Growth Strategy Of The Coca Cola Company Business Essay

Market Focus And Growth Strategy Of The Coca Cola Company Business Essay Part 1- Internal/External Fit Introduction Established in 1886, the Coca Cola Company operates in more than 200 countries markets more than 500 brands 3,300 beverage products. The Coca Cola Company explains its operations system this way. We are a global business that operates on a local scale in every community we do business The company believes its strengths lie in their ability to have a global reach at the same time have a local focus. The company has more than 300 bottling partners worldwide. The Coca Cola Company manufacturers sells concentrates, beverage bases syrups to bottling operations; owns the brands; is responsible for consumer brand marketing initiatives. The bottling partners manufacture, package, merchandise distribute the finished branded beverages to their customers vending partners, who then sell the Coca Cola products to consumers. Organizational Strategy Product/Market Focus Coca cola is a company that knows that their main priority is to reach their products to the customers. Coca cola focuses on improving the product itself either by design, taste, ingredients, size, convenience, and many other factors. Coca-Colas target market satisfies a wide variety of cultural consumers around the world. Moreover, their products target people who are health conscious and people who are on a diet. Their products do fit all age groups from the young to the old. There are Coca-Cola products for the athletes who train for a sport, such as Powerade (Coca-Cola Product). Also, this company has focused on people who need coffee in the morning before they go to work. Coca- Cola owns a joint venture with Illycaffe, Italy coffee brand which is primarily for the people who are coffee-lovers. The focus of this market, Coca Cola, is applicable to both male and females. Coca- Cola does engage in product diversification throughout the world. Coke a product is mainly directed to th e young children. Their advertisements are mostly directed to the young. Coke wants to target the young because they know their product will give youths power and energy. Brand extension strategy has played a key role on Coke. Coke introduces new products under their trademark Coca-Cola. Brand extension strategy is quite effective under the Coke trademark. There will be this recognition and realization from consumers, that they will be drinking a Coca Cola product. Brand extension strategy puts a new product into an existing market. Diet Coke is an example of brand extension strategy which became successful. For instance, Diet Coke has been recognized gradually by consumers worldwide, it has low calories and has been sold over 100 countries. It promotes liveliness and energy to consumers similar to Coke. Many consumers who do enjoy coke as a soft drink, there would be a higher probability for a consumer to try a can of diet-coke due to brand awareness. Rationale: Coca Cola Company wants to continue focusing their needs for consumers with regards to delivering innovative food products which includes energy drinks, vitamins, and antioxidant drinks. Furthermore, Coca Cola is focusing on creating a healthy and active lifestyle that is more adaptive to consumer behavior. Coca cola is working with their bottling partners to enhance customer relationships and make their products widely known and distributed everywhere. Growth Strategy/Goals Hard goals In terms of its growth strategy, which is their market position in the beverage industry, Coca Cola Company is concentrating in opening more opportunities in developing markets by leveraging the scale reach of the Coca Cola system to shape capture value. The company intends to accomplish it by sharpening their execution at the point of sale and expanding the brand portfolio. The company has projected that these developing markets are expected to contribute approximately 20 percent of incremental population growth over the next 10 years. Personal expenditure per capita in these markets is expected to increase by 65% over the next decade. Furthermore, Coca Cola company anticipates that developing markets will contribute approximately  ¼ of the incremental unit case volume by 2020. Rationale The coca cola companys long term growth strategy of investing in emerging markets, is related to the Coca Cola Company projections in these markets. The CCC attributes this to a positive correlation between wealth and the increase in consumption of Nonalcoholic ready-to-drink(NARTD) beverages. From now to 2020, more than 1 billion people will join the middle class, and the per capita wealth for individuals will increase by nearly 30 percent. They have the ability to invest in new plants in places like china India. Over the next 3 years Coca Cola company plans to invest $2 billion, 3 new plants are expected to be finished in that time period. The company clearly understands in order for intended strategy to be attained, consumer access and system alignment is key to their growth in these emerging markets. This means placing more coolers throughout these countries, in order to drive on-the-go consumption. Soft goals The Coca Cola company is also encouraging their partners in the value chain, to enhance their soft skills within these developing markets. The company is focused on growing annual consumption of beverage products. The company intends to work with its bottling partners to establish new customer relationships grow existing ones, from street vendors restaurants, to large-scale grocers. Rationale The reason why the CCC emphasizes the development of soft skills, the Coca Cola Company has a vast distribution network to contend with. To remain a leader in the beverage industry, communicating with its partners along the value chain is an important aspect of their continued success in the beverage industry. As I have said, Coca Cola Company has a huge distribution network and it is one of the best distribution network in the world, nobody in the beverage industry can match this tremendous asset. Another reason why the Coca Cola company is successful in its core activities, stems from its mission, vision values. This is the source where the CCC can attribute its success, its long-term strategy to become the most widely available consumed soft drink in the world. Perhaps the following statement which comes from the CCCs mission, vision values strategic outlook can be deemed a poignant assertion. The world is changing all around us, to continue to thrive as a business over the ne xt ten years, beyond, we must look ahead, understand the trends forces that will shape our business in the future move swiftly to prepare for whats to come. We must get ready for tomorrow, today. Mission This is Coca Colas mission statement To refresh the worldà ¢Ã¢â€š ¬Ã‚ ¦To inspire moments of optimism and happinessà ¢Ã¢â€š ¬Ã‚ ¦To create value and make a difference. Coca Cola company mission statement clearly defines the purpose for which and reason why they exist as an organization. The employees must be feel they are a part of an organization that knows where it is heading, in terms of the language it uses with their mission statement. to create value make a difference resonates with belonging to an organization, that wants to create a culture of empowerment and continuous improvement. Vision Coca Cola Companys vision statement is a guide to what the company needs to accomplish so it can achieve sustainable and quality growth. The CCC vision statement is based on what we will call the six Ps (people, portfolio, partners, planet, profit, productivity) People: Be a great place to work, where people are inspired to the best they can be Portfolio: Bring the world a portfolio of quality beverage brands that anticipate satisfy peoples desires needs. Partners: Nurture a winning network of customers suppliers, together we create mutual enduring value. Planet: Be a responsible citizen that makes a difference by helping build support sustainable communities. Profit: Maximize long-term to shareowners while being mindful of our overall responsibilities. Productivity: Be a highly effective, lean fast-moving organization. Culture of CCC This quote epitomizes their culture: Our Winning Culture: Our winning culture defines the attitudes and behaviours that will be required of us to make our 2020 vision a reality Such is the importance of the Mission Vision of the CCC, I believe it is important to include the culture of this company. Because the culture shapes the attitudes behaviours of the everyone that works for the organization. The Coca Cola Company is identified with having a strong culture The CCC has incorporated the culture with their 2020 Vision, which is a long-term strategy aimed to be a RoadMap for understanding the trends and forces that will shape their business of the future. The CCC says it is a preparation of whats to come designed to seize on opportunities once they have been identified. This roadmap is based on winning together with their bottling partners. Values of The CCC Live Our Values: Our values serve as a compass for our actions and describe how we behave in the world. Leadership: The courage to shape a better future Collaboration: Leverage collective genius Integrity: Be real Accountability: If it is to be, it is up to me Passion: Committed to heart mind Diversity: As inclusive as our brands Quality: What we do, we do well Values as we understand, act as a guide for our individual actions and group behaviour. They are the moral compass in our every day interactions with the internal external environment, customers, associates, public, family, friends, and institutions, Rationale The Coca Cola Companys mission, vision, culture, and values, defines and shapes the companys objectives into measurable expressions of what the organization intends to achieve. They include a mixture of hard and soft goals, the hierarchy or top management at Coca Cola Company understands they have to develop a blueprint that employees and the bottling partners can follow and identify with being successful in their business. One striking example comes from their vision statement one of the six Ps, which states, People: be a great place to work, where people are inspired to the best they can be Another vision statement says Partners: nurture a winning network of customers suppliers, together we create a mutual enduring value The CCCs vision, culture and values create an atmosphere of individual attainment and group accomplishment. Where the essence of individual talent is nurtured and encouraged, and group effort is identified as an important contributor to the goals of the CCC. Core activities The value of change plays an important part in the core activities of the Coca Cola Company because the company relies a lot in its suppliers, the bottles companies and the people selling the product. The suppliers are from people they get there ingredients like sugar, coffee, citrus around the world, the water they use in the process of making the beverage to the people in charge of the packaging.. Then come in role the Coca Cola system which is basically where first the company produces the beverages and then comes in play the bottling partners. They are independent bottling partners in charge manufacture, package and distribute the final product. Finally there is the selling the beverages process where the final products are taken to the warehouse for being distributed to retail outlets. The products are then distributed to the customers that are supermarket, convenience stores, restaurants, etc. And also to the vending machines and coolers that are place in strategic locations to reach all customers. And that way the product finally reach the consumers, around 1.6 billion time a day are the products consume Coca Cola Company depends a lot in other part to take the products to the consumers. They treat them with respect and importance and make them realize the importance of their work to the coca cola system. They have been using this system for years and so far had work perfectly. They are focus in the need of the consumers, the customers and the franchise partners; they think in terms of globalization, they are always aware of change. They also use an aggressive marketing strategy. Almost everywhere and in the most important events you can see a Coca Cola logo, they have billboards, commercials, products that will be associated with Coca Cola. Rationale The core activities are an important play for the company because if what makes them different from the rest of the company. They depends a lot in the suppliers the bottling companies and the customers. They play in an important role in making the product as the suppliers give them the prime materials. Then there are the bottling companies that are play an equal significant part, they are the package where the product is deliver and if you can see the bottle of the products of the company are immediately associated with the company. For example Coca Cola has a unique bottle design that everyone in the world with associate or recognized. Value Proposition Coca -Cola Company is an organization which provides value for their consumers and customers. Customers are their energy source for this organization. Creating the value starts with their coca cola products. Hence, this can greatly be achieved by greater variety of brands, pricing, packaging, and affordability. In addition, Coca-Cola products do focus on the customer lifestyle in terms of satisfaction. For example, if a person were to be on a diet, well there is diet coke. Hence, Coca Cola does engage in the customer needs in terms of the product. Coca- Cola has over nearly 400 brands (including water, juice, teas, coffees, energy drinks, and especially sodas) and wants to engage consumers to try something refreshing and new. It really comes down to choices for consumer in terms of coca cola products. Coca-cola brands include Fruitopia, Fanta, Sprite, Dasani, Nestea, Powerade, and many more brands. One of Coca-Colas slogans was Open Happiness. This slogan was represented to the consu mers and was meant to letting the consumers enjoy their products. Coca Cola is able to meet todays non-alcoholic beverage needs of consumers. Coca Colas current value proposition is The Coke Side of Life which represents happiness when you open up a can of coke or any other Coca-Cola product. The Coke Side of Life explains that it is an enjoyable, comfortable, and sociable environment when one actually consumes a Coca-Cola product. Rationale: Coca Cola Company continues to work on research/development and focus on making new products. For instance, a can of coke has a secret formula that will be difficult to imitate. Coca Cola products are significant because they make each product unique. Internal Fit/Factors Porter 5 Forces Analysis Threat of Entrants Coca-Cola does have a lot of competitors in the soft drink industry. The threat of entrants is low for the soft drink industry. There are very few entrants who can compete with Coke. In addition, a barrier to entry when entering the soft drink industry would be a high capital investment. If you dont have that high capital investment it would be hard to enter the industry. Coke nearly earns 48% of the soft drink industry and there are no competitors that are nowhere near coca colas distribution. Coca-Cola has over 500 brands of products which are potentially substitutes. To get the point, the buyer can switch from one product to another at no cost under the Coca Cola brand. Nowadays, consumers are really being health-conscious about their health. So they may not be interested in soft drinks but look at tea, juices, milk and even water. Certainly, Coke does have these products on hand. If Coca Cola decides to increase most of their product by a $0.50 increase, it would be very likely, consumers would buy Pepsi products. Coke can lose its profits margin and can have a major impact on the trademark itself if they increase prices. Price is a huge factor to take into consideration with regards to other entrants. The challenge for this organization today and the future is to focus private companies because they can imitate the products and put cheaper prices. Private companies currently earn 14.4% of the soft drink industry. Having strong barriers prevents from this rising situation to happen. One strong barrier to entrant that prevents from coming would be distribution channels. Coca cola has their products everywhere on their store shelves which make it accessible to consumers while new private companies will have a hard time selling their products to wholesalers, retailers, and distributors. Rationale: Entrants are slowly rising to the carbonated soft drink industry and as organization must find new barriers. Coca-Cola should continue to develop their brand loyalty worldwide and convince consumers to have reliability in their products. Barriers to entry One of the 5 forces that shape the soft drink industry is barriers to entry. The Coca Cola company says on its website it is facing strong competition from well-established global companies and many local participants. For this particular industry, the competitive forces are benign, (favourable). Most of the companies in the soft drink industry are profitable. The Coca Cola companys main competitors are Dr.Pepper, Nestle and Pepsico. These companies definitely have the advantage over there competitors. In porters 5 forces, Porter refers to supply-side economies of scale, where firms such as the CCC and Pepsico can produce at large volumes enjoy lower costs per unit because they can spread fixed costs over more units, employ more efficient technology, or command better terms from suppliers. According to Porters article, supply-side scale economies deter entry by forcing the aspiring entrant either to come in the industry on a large scale, which requires dislodging entrenched competito rs. How does a newcomer circumvent the barriers to soft drink industry? Perhaps create new distribution channels of their own. Creating a niche market for their drink in the form of marketing to a certain segment in the soft drink industry. Competitive Rivalry Competitive rivalry is between two main competitors the Coca Cola Company and Pepsico to satisfy the taste of consumers in this industry. Last month Beverage Digest reported that Pepsi-Colas market share fell 0.5 percentage point while Diet Coke slipped just 0.1 percentage point in the U.S. supermarkets, convenience stores and other retail outlets. The two companies have fought over the past decade to win market share from one another as overall sales dropped. This relates to Porters article on the 5 competitive forces that shape strategy. There is an intense rivalry between these two companies. According to porter high rivalry, limits the profitability of the industry. The Coca Cola Company and Pepsico are competing based on brand image. Power of the buyers One of the 5 forces of porter is buyers the power of the, for Coca Cola Company the power of the buyers is high. They play an important role in the Company process because they are part of the distribution process of the company. They play an important role in distributing the system so it can reach the consumers. They are part of the company and the process. They are part of the strategy used by the company. Power of the suppliers Another of the 5 forces of porter is the suppliers. As well they play an important role in the company process so they have a high power. They have a high power because they also play an important part of the process of the soft drinks. If they decided to boycott the company it will caused them serious damages. There will be a cost to switch suppliers because they will have to build a relationship since 0 and might lost incomes for doing that. External Fit(Diamond E. Model) Management Preferences The senior management team wants to increase the efficiency and effectiveness in the production and bottling sector. With regards to economies of scale, Coke continues to increase production at a low cost. As production of Coca Cola products increase, the cost of producing each unit falls. Moreover, the senior management continues to think about new products (in addition to their 500 products), develop beverages, make new programs and promotions, and meet the needs of customers. The senior management continues to strive for sustainability in their organization. Coca cola recently launched their plant bottle packaging, which basically means they have created their PET bottles from plant based materials. Hence, makes their product 100% recyclable. Muhtar Kent, chief operating officer continues his obligation with sustainability. In 10 years, he plans to reduce coca colas emission by a half. To continue improving performance, Coca-Cola continues to update their technology with regards to quality control. As well continue using better material for their products. In addition, this organization is starting to develop their products in rural areas of the world. The senior management team wants to let consumers know that they are the most trusted carbonated soft drink company and strive to achieve leadership in corporate sustainability. Rationale: The main preferences for Muhtar Kent, CEO, wants to develop and raise their brands, enhance revenue growth and increase productivity within their products. Resources The resources on the Coca Cola Company according to the Diamond E. Model are first the all the resources that the company have to keep on growing and innovating. From the shareholders to the investors, etc. The company has used many of these resources to create healthy products or bio friendly products. They are aware that many of their ingredients comes from the environment and the nature so they are trying to created a friendly environment where the environment is being look after. They have different programs that are meant to help the environments to maintain the natural resources of the land. This is very important because if one of the products they use is gone they wont be able to produce the product anymore. Organization What is the structure, leadership and unique features of the Coca Cola Company in relation to Fry/Killing Diamond E Model. It is what is referred to as the Coca Cola system, which comprises 300 bottling partners worldwide. The coca cola system operates through multiple local channels, the company manufactures and sells its concentrate, beverage bases and syrups to bottling operations, owns the brands and responsible for consumer brand marketing initiatives. The bottling partners manufacture, package, merchandise and distribute the final branded beverages to customers and vending partners, who then sell the products to consumers. It is no wonder the coca cola company has one of the best distribution systems in the world and the ability to penetrate in markets where no company can duplicate is attribute to the structure and leadership at the Coca Cola company. The other unique aspect is the relationship it has with its bottling partners, who in turn works closely with customers, like g rocery stores, restaurants, street vendors, convenience stores, movie theatres, and amusement parks to execute localized strategies developed in partnership with the company. Part2 The strategic job we chose for our organization was Brand manager and the requisite job we chose was a Truck Driver/Vending Machine Supplier. Requisite Job at Coca Cola: Truck Driver/Vending Machine Supplier The requisite job for the Coca Cola company we agreed to use was the truck driver/vending machine supplier. This type of worker requires high school education, has to be licensed to drive a truck, may involve some lifting and moving heavy case of soft drinks. It would be an asset to be in good physical condition. But it is not a requirement. The job incumbent must be personable, because you are dealing with customers and consumers of the company on a daily basis. It would be ideal to hire from within the company a group of truck driver/vending machine suppliers, but due to the supply of this type of worker. We will hire from outside the company. It is easy to hire from a pool of truck driver/vending machine stockers. Duties -Responsible for delivering product and filling vending machines at all points of availability. -Collects and is accountable for money -Check accuracy and stability of the load -Restock machine to proper level, maintaining accuracy in stock levels -Invoice and collection of monies -Securing company assets -Ensure the machines are clean and in good working order -Ensure compliance with regulatory and company policies and procedures -Settle all accounts daily -Ensure product codes and Health codes are adhere to -Report damage to machines -Load supplies in a vehicle, such as a truck -Establish and maintain good customer relations with business owners and operators Knowledge/Skills/Attributes/other attributes of a Truck Driver/Vending Machine Supplier Knowledge -knowledge of the English language -Able to provide customer service and interpersonal relationships on one on one basis. -able to provide and identify customer service needs in a group dynamic situation. -being able to evaluate quickly customer service needs and know how to meet those needs -knowledge of simple mathematics and statistics -knowledgeable of relevant equipment and company safety policies and procedures. -able to understand and read provincial regulations, regarding the safe operation of a vehicle Skills -active listening -speaking -Critical thinking -Coordination -Service orientation -Judgement and Decision-making -Writing Abilities -Oral comprehension -Good Vision -Ability for good oral expression -Speech clarity -Written Comprehension -Control Precision -Depth Perception Other Attributes -Ability to perform and work directly with the Public -Able to deal with external customers -Able to have Face-to-Face discussions -Able to work with a group or team -Is able to work outdoors, exposure to all types of weather -Able to handle the daily contact with the same people in a professional and polite manner Labour Market for a Coca Cola Truck Driver/Vending Machine Supplier Based on the duties and KSAOs of this type of work at the Coca Cola company. We are not just looking to hire any driver. They need to have the experience in dealing with customers and the public. They must be committed to working for the company, because we are going to be testing the potential hirees. The testing will be based on questions about our companys occupational health procedures and equipment operation. The potential hirees will be tested on English language proficiency and Mathematics problem-solving etc They will also be quizzed on customer service skills. What type of interpersonal skills do they possess? This type of job consists of daily contact with customers and business owners. We will give provide further training for those drivers/vending suppliers at the companys expense. Based on these requirements for the job, we will need to find certain individuals that possess a high school diploma, with a clean driving record. The company is confident that we will find the se talented people to come and work for the Coca Cola company. The CCC will provide the additional training to enhance skills such English, written and oral comprehension. The training will also involve a simulation of driving a Coca cola delivery truck. How to handle tight corners for example, or driving on the highway, avoiding dangerous maneuvers, while changing lanes. We at Coca Cola believe we can, attract and retain this type of driver. They will go through Coca Cola University, and once they complete their goals with a certificate. They will have the ability to work anywhere in Canada and the U.S. The company believes by showing that commitment and belief to our people in this case, our truck driver/vending suppliers, we have created a our own market. Benefits The benefits are: -Training: at the Coca cola university for only selected hirees. -Health, Dental, Vision Plan -an employee who requires work-life balance, can ask for it. This might involve parental leave or personal leave program. It is our belief at our company that we have invested time and training for our employees, in order to retain and attract future employees this is one benefit at the coca cola company will a mainstay. We also have wellness programs, so our employees have the option of going into a fitness program at the no cost to them. We have financial planning benefits that our Truck driver/vending suppliers can take advantage of, so they can plan for the a secure future for their families. Compensation We would start the new hirees at $13 hourly rate,work, after one year to $15/hr- enventually topping at $30/hr. The performance pay would be based on individual performance. We are designing the merit bonuses into the compensation package. One form of a bonus incentive could be showing up for work consistently. Or we could gear it to production like serving a number of vending machines or a certain number of clients. The other options are, since this type of work involves excellent customer service skills, we could start to give bonuses to employees who score high on customer service. Another type of bonus, could be about minimizing errors by truck delivery personnel on the most efficient routes for delivering products of Coca cola. We would also encourage the participation of employees on what type of bonuses they like to attain. Research has shown that employees who work to challenging but attainable goals, especially when they had a role in formulating these goals-outperform those without specific work goals Recruitment It is our belief that the best form of recruiting for future truck delivery drivers is externally. Although we will encourage the input of our present employees about their ideas on who would be an ideal candidate, people they know. We trust our employees input, this method of HR forecasting may not be sophisticated but it assures the involvement of our employees for this type of work. It also ensures the employees, that the company has invested this much training and time for their personal development, they become part of decision-making. External recruit reduces our HR costs somewhat, but the investment we make in the training we provide is offset by performance bonuses and compensation packages. The company becomes profitable because of our incentives and the commitment by our truck driver/vending suppliers. PAQ Based on the type of work is involved in becoming a Truck driver/vending specialist, we believe the PAQ method for analyzing specific techniques of this job will be sufficient. It is a structured job analysis checklist of items or job elements used to rate a job. The PAQ method will complement the expected performance standards set in areas, such

Ashes of Izalco-bookr report :: essays research papers

ASHES OF IZALCO By Claribal Alegria and Darwin J. Flakoll   Ã‚  Ã‚  Ã‚  Ã‚   I found the beginning of this book quite confusing. I had a difficult time discerning who the main characters were and what was the plot. I also wasn’t quite sure when the Mother had died and it wasn’t until later that I realized the reason that Carmen was present was because she had traveled home for her mother’s funeral. However, once I got into the book and started to put the characters in context, I really began to enjoy it. This book has very sad overtones. It is concerned with the human struggle for happiness in life, or maybe just contentment. Just about every main character, present and past, seems to be involved in some inner turmoil. Carmen is struggling with her own identity and her unhappiness in her marriage to Paul. She feels she plays a role of dutiful wife as she was brought up to be, but that the marriage really has no strong foundation and she and her husband have nothing in common. Possibly a repetition of her parents’ marriage? She admits to being convinced by her husband to have an abortion. This must have been very traumatic to reconcile with her Catholic upbringing as she refers to it as â€Å"a crime†. She is searching throughout the narrative for answers to her questions. What has become of her? What should she do about her marriage? Her father? And one of the most pressing questions is her struggle to understand why her has mother left the diary to her? There are no clear answers for Carmen. As she searches for answers she is also experiencing the very early stages of the grieving process. She is angry. She doesn’t like at all that her mother has altered her view of her as a parent. Don’t we all think that our parents never make mistakes or have questions in their own lives? If Isabel had left the marriage when she was a child, Carmen would have been forced to deal with the issue of an imperfect world with imperfect people. As she travels through some very poignant reminiscences, she admits to her own self-absorption as a child. As an adult, she reflects on now seeing her parents more clearly as individuals. I, too, have personally had this experience in seeing parents differently from the adult perspective. Carmen appears to be wearing a mask in her own relationship that shows a repetition of her mother’s life.

The Credit Rating Agencies, Their Role in the Financial Crisis?

End of Studies Thesis What is the role of the credit rating agencies, which part did they play in the recent Financial Crisis and how can their efficiency be improved? Thesis Supervisor – David Menival Emmeline Beauchamp – Cycle Franco- US – March 2013 Acknowledgments I would first like to thank RMS and especially the CESEM to have taught me a lot, helped me to grow and open up and gave me this incredible opportunity of studying two years in the United States. None of this phenomenal experience would have been possible without them.I would also like to thank Northeastern University for allowing me to discover a new culture and a different educating system. It also had a tremendous role in my future accomplishment and professional career. In addition, I would like to thank all the professors I had during these four years of studying, whether it is at CESEM or at Northeastern University. They made this journey even more profitable and enjoyable. I would also like t o thank David Menival, my thesis supervisor, who accepted to work with me on this project.Finally, I would like to thank my parents for always supporting my choices and being next to me when I needed them. They have been my guides and models in life and have always encouraged me to be better and push myself. Table of Content Introduction4 I. Credit Rating Agencies: Role and methods5 1) History5 2) Role and methods7 3) The Issuer-Payer model 9 II. The Credit Rating Agencies and the Financial Crisis: is the thermometer responsible for the fever? 12 1) Background of the financial Crisis12 2) Credit Rating Agency are not fully responsible†¦ 14 ) †¦But they could have done better17 III. What is next? 20 1) Lessons learned from the crisis 20 2) Regularization of the existing Credit Rating system 21 3) A new rating system23 4) Creation of new Credit Rating Agency24 Conclusion26 Exhibits27 Bibliography32 Introduction A credit rating agency is a company whose role is to evaluate th e default risk of a borrower, whether it is a private or public company or a State. Since 1909, when Moody’s emitted its first rating, the role of the Credit Rating Agencies has considerably evolved and the methods used have improved.Even though their ratings do not constitute buying or selling recommendations, they rapidly gained an almost â€Å"biblical authority†. Since the 1980’s, the credit rating agencies have, indeed, become a reference for investors that want to determine the creditworthiness of an entity. Their ratings influence investors’ behaviors and they are indirectly involved in the future of a State or company. After several economic meltdowns and the recent financial crisis, the three big Credit Rating Agencies have been the center of attention.Is their methodology appropriate to evaluate the creditworthiness of an entity? Does the issuer-payer model insure the best transparence? Their role and implications in the crisis have been meticul ously examined and their functioning system has been questioned. Although their role in the crisis in undeniable, are the only responsible of the crisis? The system was defaulting and the predictions of the credit rating agencies turned out to be wrong. Which modifications should we bring to the system to make it more transparent and efficient?These are the questions we will try to answer throughout this thesis. I. Credit ratings agencies: role and methods Credit Ratings agencies, entity still little known outside the financial communities two years ago, found themselves at the center of attention with the subprime crisis. If everyone more or less gets, now, familiar with what a credit rating agency is, people usually do not know what are the origins of this business, its rationale and its financing model. 1) HistoryThe influence of the three main credit rating agencies (Moody’s, Standard & Poor’s and Fitch Ratings) was build step by step since their inception, in the early 1900’s. Historically, the ratings issued by the agencies did not have more value than the ones given by analysts or economic experts. They acquired this particular status when legislators and regulators attributed them a bigger place in their systems. The development of railroads companies marked the origin of these â€Å"Big Three†. These railroad companies were indeed fluctuating and needed nvestments to set up their infrastructures. As investors were concerned and questioned their capacity to reimburse their debts, Henry Varnum Poor published, in 1860, some financial information regarding the creditworthiness of those companies in order to help investors make their decision. Later on, in 1900, John Moody would also start publishing economic data on these companies and finally, in 1909, J. Moody gave his first ratings about railroad companies in â€Å"Moody's Analyses of Railroad Investments† by attributing a letter to each of them; the credit rating was born.This system was progressively adopted by others credit rating agencies such as Fitch Publishing Company, founded in 1913 by John Knowles Fitch, which would later be known as Fitch Ratings. Finally, Less than thirty years later, the credit rating agency Standard & Poor’s is created after the merger of the Standard’s Statistic Bureau and the Poor’s Publishing Company. The development of the ratings is stimulated by several factors. First, its goal is to offer a service for investors by providing useful information that will help them in their decision-making process.In addition, the relative large size of the American territory discourage investors to search for information, they would rather pay for it than waste time looking for it. Moreover, the repercussions of the 1929 financial crisis and the consequences of the World War II, giving supremacy to the Economy of the United States, also favored the expansion of the concept of rating. In 1970, after the ba nkruptcy of Penn Central Railroad, the first doubts regarding the independence of the credit rating agencies appeared. This was the first time that the reliability and seriousness of the ratings were questioned.In order to reestablish the value of the ratings, the SEC (Securities Exchange Commission) created, in 1975, the â€Å"Nationally Recognized Statistical Rating Organization† (NRSRO) designation. The goal was to standardize and formalize the ratings regarding brokerage firms and banks with their capital ratios. At that time, seven agencies obtained the NRSRO designation. In 1990, after several new mergers, the number of NRSRO was only of three: Moody’s investor service, Standard and Poor’s and Fitch Ratings. In 2003, the Canadian agency Dominion Bond Ratings service Ltd also ained the status of NRSRO, followed by A. M Best Company in 2005. In June 2003, after the disorders caused by the bankruptcy of the company Enron, the regulation of the credit rating a gencies and their NRSRO status needed to be examined. Multiple reports on the role played by the agencies in this case were published. Even though investors lost faith in them, they all agreed that they should keep the NRSRO status. In 2006, after years of critics toward the credit rating agencies, the functioning rules of the NRSROs were modified and the Credit Rating Agency Reform Act was promulgated.The objective was to regulate the internal decision process of the credit rating agencies while forbidding the SEC to control the rating system of NRSROs. Right after, in 2007, three more companies were added to the list of NRSROs: Japan Credit Rating Ltd, Rating & Investment Information Inc. and Egan-Jones Rating Company. Since April 2011, the list of agencies that received the NRSRO status counts ten names (See Exhibit 1, page 27). Finally, in July 2010, the Dodd–Frank Wall Street Reform and Consumer Protection Act reinforced the control over the ratings’ practices.Thi s included a reduction of the conflicts of interest regarding the ratings of structured products and decreased dependence on ratings. It also allowed investors to sue a credit rating agency in case of fake or reckless rating. For decades, the three main agencies, Moody’s, Standard and Poor’s and Fitch Ratings, have been controlling the market, as high barriers to enter exist. The major ones are the importance of the reputation and the investors’ confidence in their ratings. Since their creation, these agencies have distinguished themselves with a particular role and specific methods. ) Role and Methods The Credit Rating Agencies evaluate the creditworthiness of debtors. Ratings can concern a company as well as a particular emission or securitization or any financial debt. They are usually solicited by the debt issuer but can also be attributed, if non-requested, after collecting public information. Credit Rating Agencies enjoyed a good reputation and an essentia l role in the financing of economies. Over time, regulators, for practical reasons, tried more and more to impose the use of the notation in the investors’ financing.This long-term trend follows upon the systematic financing by the market, whether it is in a simple formulation taking the shape of debenture or assimilated loans or new products where the risk of defect is difficult to comprehend because it is diffuse in complex financing methods such as the securitizations. Credit Rating Agencies have the role of processing the information for financial markets. They synthesize the information for market needs and the investors seemed to excessively grant their confidence to this information.Investors pay close attention to any modifications in ratings or to any entities placed â€Å"under observation†. The ratings issued by the credit rating agencies have a trustworthy value. Since investors usually do not take the time to look for information regarding a company or a S tate, they based their investment choices upon the rating given by the credit rating agencies. Therefore, the role of the credit rating agencies is essential. Basically, these agencies summarize all information available about a company or State and turn it into a rating that will then influence the future of an entity.However, it is necessary to underline that the ratings given are not buying or selling recommendations, they are only an evaluation of the creditworthiness of an entity, at a defined time, and statically calculated. Next to this informative participation, credit rating agencies contribute to the management of portfolios by giving advice to the investors via the medium-term orientations emitted with the rating. If a company tries to finance itself, the received grading will be determining for the conditions of the operation.Whether it is by financing through banks or by issuing bonds on the market, the more the grade will be raised, the more the company will be able to find cheap funds at low interest rates. On the other hand, a bad grade will imply higher interest rates and difficulties to find financing. The difference of levels between both interest rates will constitute the risk premium. This problem becomes particularly important for companies or States located within the â€Å"speculative† category. Major institutional investors do not want, indeed, to take the risk and, therefore, do not invest on these kinds of values. However, the rating is ot fixed and fluctuates throughout the life of the bonds. A decrease of the rating can lower the price of the bond. Likewise, a raise of the rating can be associated to an increased price of the bond. In order to correctly determine the default risk, Credit Rating Agencies use diverse quantitative and qualitative criteria that they translate into a grade. Credit Rating Agencies distinguish two types of ratings: short and long-term; the traditional rating that applies to loans emitted on the mar ket and the reference rating that measures the risk of counterparty for the investor represented by this issuer.When evaluating the financial risk, credit rating agencies first take into consideration purely financial numbers such as the profitability, the return on investment, the level of cash flows and debt, the financial flexibility and the liquidity. More and more, the agencies integrate non-quantitative elements such as the governance, the social responsibility of the company and its strategy. It is also necessary to highlight the fact that the rating is usually associated with medium-term orientation, allowing to better estimate the future trend regarding the quality of the issuer.In some cases, a borrower can be placed â€Å"under observation†. The main steps in a company’s life (mergers, acquisitions, big investments†¦) are indeed, likely to influence and modify their structure. Credit rating agencies, subject to preserving the confidentiality of the rece ived information and avoiding cases of insider trading, can have insider information on the financial state and the future prospects of the analyzed issuer, while reducing the cost of collection and data processing. They distinguish themselves from financial analysts, who, in principle, only have access to the public information.Even if they can benefit from insider information on behalf of issuers, they are dependent on the information provided by these issuers. Each Credit Rating Agency possesses its own rating system. In broad outline, grades are established from A to D with intermediary levels. Thus, the best grade is AAA, then AA and A for Standard and Poor’s or Aa, A, etc. for Moody’s. In addition, we can also find intermediate ratings; a â€Å"+† or a â€Å"-â€Å" but also a â€Å"1† or a â€Å"2† can indeed be added to the grade (e. g. AA+, A-, Aa2, etc. ).This allows a better and more precise classification of borrowers. These different ratings can be divided in two groups: the first category, â€Å"High Grade† includes all ratings between AAA and BBB and the second category, also known as â€Å"speculative†, for inferior grades. (See Exhibit 2, page 28) The biggest advantage of this system is to provide information at low costs for potential investors. Thanks to an easily understandable grade, but incorporating a vast amount of information, investors can quickly have an idea of the creditworthiness of a borrower.The ratings issued by these agencies are a more and more useful tool in the decision-making process of investors looking for relevant information. Current regulation obliges them to certify published information. As we have previously seen with the United States or Greece, the market strongly reacts and sometimes irrationally to any modification of a rating or to a simple announcement of a hypothetical revision. Credit Rating agencies have a real influence on markets. The impact of their dec ision on issuers and investors is decisive.On the contrary, an excessive reaction was completely predictable in front of their incapacity to forecast the financial crises of these last decades. 3) The issuer-payer model For more than half a century, investors that paid to obtain financial information about loan issuers financed the credit rating agencies. Thus, companies, local communities, States were given a rating, without asking for one or without their consents, but to answer to requests from bankers or investors that were holding these funds.Naturally, these â€Å"non-requested† ratings were only based on public information concerning such or such company. The Credit Rating Agencies sold their publications to bankers and capital holders who were looking for potential adequate investments. In addition to selling these â€Å"manuals†, the credit rating agencies could also offer others services to investors (weekly information about financial results of rated compan ies, actualization of the ratings, recommendations and advices of purchase and/or sell).However, the agencies will lose some profits as some investors managed to have the information and the manuals without paying for them. As from the beginning of the 1970s, Credit Rating Agencies started to charge their services to the issuers of bonded debt. This is the issuer-payer model. These issuers of debt (Companies or communities looking for investment) began to more and more directly solicit the agencies in order to obtain a rating. They believed that this rating would reassure investors during a slowdown of economic growth.Thus, from now on, it is more often the issuers of debts that will request a rating from the credit rating agencies to get an evaluation from them that would allow them to access to credit. This approach contributed widely to consolidate the place of the Credit Rating agencies and â€Å"to legitimize† their intervention. In fact, this translates well a swing of the balance of power between those who look for funds to invest in industrial projects and those who hold funds, while waiting for the best yield at the slightest risk.In a world highly regulated by finance, where pensioners and holders of capital are in a strong position, and where industrial and direct investors are in a position of requestors, it is now, more often, issuers who wish to borrow and will ask to be noted, that will pay the credit rating agencies for their services. This shift from an investor-payer model to an issuer-payer model compromised the independence of the credit rating agencies. In fact, in 2011, only 10% of the revenue of the agencies came from funds’ holders who wanted to know more about the validity, the risk and the potential profitability of an investment.From now on, the ones looking for capital are the ones financing 90% the credit rating agencies. The â€Å"issuer-payer† model strongly modifies the situation of the credit rating agencie s. In this situation, the rating agency is used, and paid, by the market player who wishes to be noted to then be able to hope to obtain capital on â€Å"financial markets†. The question of the independence of the agency in its rating process is then very directly put: the rating agency will be inclined to note well a company which pays her to then try to obtain capital in good conditions on behalf of miscellaneous â€Å"investors†.However, the market has faith in this independence since a credit rating agency has to protect its reputation, and thus an agency could not take the risk of over evaluating one of its customers by fear of losing its credibility and thus all business. Credit Rating Agencies seem, indeed, more and more subjected to conflicts of interests, which decrease their reliability. The issuers pay the agencies to be noted, while credit rating agencies need the revenues from these same issuers. Besides, more and more often, the credit rating agencies mix two activities: consulting and rating.Therefore, in addition to evaluating a company, an agency also advises on current operations. A study for the SEC in 2008 revealed that some analysts from certain agencies participated in meetings between investors and issuers in which commission and rating were fixed. These conflict of interest generated criticisms and accusations against credit rating agencies and especially during the recent financial crisis. As the credit rating agencies were essential and indispensable to any players on the market that wanted either to invest or to find capital, they were at the heart of the upheaval.II. The Credit Rating Agencies and the Financial Crisis: is the thermometer responsible for the fever? In order to determine the responsibility that the credit rating agencies have in the financial crisis of 2008, it is necessary to understand how the crisis happened, which events punctuated it and what has been the behavior of the rating agencies throughout t he crisis. 1) Background of the Financial Crisis Everything started when the American housing market suddenly collapsed after a steady rise in the 2000 years.To finance their consumption and acquisition of a house, American households did not hesitate to get into very high debts. The market was booming so there was a trust in the ability to get its money back with a substantial profit. As counterparty, they pawn their properties. This was a guaranty for banks to be paid because if the borrower could not reimburse what he owed, his property would be sold to honor his debt. When the phenomenon grows and affects a large number of households, the sale of their property causes the collapse of the value of the property.The downturn of the housing market was reinforced by the subprime system. Since 2002, the American Federal Reserve, which encouraged easy credit to boost the economy, allowed millions of households to become homeowners thanks to premium loans called subprime, with variable interest rates that can reach 18% after three years. These interest rates are fixed according to the value of the property; the greater the value, the lower the rate and vice versa. That is what happened when the housing market collapsed in the United States in the beginning of 2007.Households, lacking of ways to reimburse their debts to lenders, have caused the bankruptcy of several credit institutions that could not repay themselves since even when taking on the property, this one has a lower value than initially. Finally, banks were also touched by this phenomenon. They have indeed been numerous to invest in these lending institutions. Nevertheless, today, invested funds are gone. In order to compensate these losses on the housing market, banks were forced to sell their shares, leading to a decrease of their values on the financial markets.The crisis quickly expanded in Europe, where major European banks such as Dexia in France and Benelux or IKB in Germany lost a fair part of th eir investments. Besides, the bankruptcy of several European banks led to a confidence crisis on European financial markets. Banks have doubts about each other’s contamination by the subprime crisis and therefore, to be cautious, refused to lend money. Since international banks are linked to each other through financial agreements, the crisis rapidly extended, to reach Asia during the summer 2007.Only one solution seemed conceivable for banking institutions to face this lack of liquidity: sell their shares and bonds. This fast and quick intervention caused a sharp drop in stock value and all the European stock markets were affected (See Exhibits 3 and 4, page 29-30). In order to appease the crisis on the markets but also to bail out banks, the American Federal Reserve (FED) and the Central European Bank (CEB) decided to inject liquidity in the monetary system, hoping to gain back the confidence of investors to help stabilize the situation.On 9 August 2007, the CEB acted first by making available 94. 8 billion euros to banks, followed shortly by the FED which injected $24 billion to appease the spirits of investors. However, markets initially misinterpreted the message, considering their involvement as a sign of weakness. The next day, the CEB injected again 61 billion euros and the FED, $35 billion, but the markets felt down again. Finally, on August 13, 2007, the same action was repeated and the monetary market as well as stock markets around the world kept their heads above water.While it seemed like the financial crisis was faded away at the end of 2007, a second wave of crisis appeared from the banking sector at the beginning of 2008. This was due to the creation of new products such as residential mortgage-backed securities (RMBS), Asset-backed Securities (ABS). In fact, credit risk, such as subprime mortgages, were pooled and backed by other assets, more or less risky, in Collateralized Debt Obligations (CDO) (See Exhibit 5, pages 31). These clust ers of scattered debts were then sold on the stock exchange by the issuer, like shares of a company could be given up.This results in the transfer of the risk of non-payment from issuers of mortgages to financial institutions: in particular banks, major consumers of CDO. In order to invest on the CDO market, some financial organisms went even further and created Structured Investment Vehicles (SIV) that did not have to respect the usual rules of prudence of the banking system. This amplified the risks taken and losses impacted on the performance of the bank. Other new products were also created such as Credit Default Swap (CDS), an insurance contract between two entities against a risk faced by one of two entities, such as the non-payment of a debt.The price of the CDS reflects the confidence in a particular issuer of a debt and is the basis for determining the value of the product of the debt. The crisis took a new dimension on September 15, 2008 with the bankruptcy of Lehman Broth ers and AIG (narrowly saved by the Fed), as well as several American and European banks (HBOS in United Kingdom, Fortis in Europe, Dexia in France and Belgium, etc. ). This international and financial crisis still has repercussions on today’s stock markets and the end of the tunnel seems far away. The question raised here is the role played by the Credit Rating agencies in the crisis.Are they the only ones to blame for everything that happened? Are the actions intended by the rating agencies responsible for the crisis? 2) The credit Rating Agencies are not fully responsible†¦ Ever since the crisis, the credit rating agencies have been easy targets to blame for what happened in 2007 and the years after. Effectively they did not anticipate the downturn of the market, they continued to attribute good rating to banking institutions already hurt by the crisis with an increasing book of bad loans or bad papers that banks will have to deleverage.Many criticisms have been emitte d about toward them. However, it is important to point out that they are not the ones and only responsible for what happened. They did not have power over a lot of factors that went wrong, and for that they cannot be the only to take the fault in the financial crisis. The thermometer could not be responsible for the fever. First of all, they are not responsible for the bankers or mortgage brokers who gave loans unwisely. These institutions lacked of common sense and thinking when offering credits.Banks and managers perfectly knew that unemployed borrowers would never be able to reimburse their mortgages. They have, indeed, disproportionately opened the gates of credit by taking for guarantee, when they did take some, the increase of real estate prices or their trust in the growth of the economy. They thought that they could make benefits if the debtor did not pay, as they believed that they could force the sale of the house for a higher price. However, real estate prices always end up going down and the economy is fluctuating.In an attempt to reduce the risk of these new kinds of loans, banks used securitization; they transformed these loans and resold them on the stock market. Therefore, mortgages securitizers are also to blame. Some companies such as Washington Mutual, Morgan Stanley or Bank of America were mortgages originators as well as mortgage securitizers, other like Goldman Sachs, Lehman Brothers and Bears Stearns bought mortgages directly to subprime lenders and pooled them together to resell them to investors. However, as soon as a debtor was not able to pay back his mortgages, the security became toxic and had no more value.Nevertheless, this was not the last step. Some banks would buy and bundled mortgage backed-securities into collateralized debt obligations, composed of different levels of risk. The creators of these new financial products are also responsible for the crisis. They bet against these risky CDOs by using credit default swap. (See e xhibit 5) Government Sponsored Enterprises (GSEs) could also be blame for what happened. They indeed, control the mortgage market. When a bank or a mortgage broker wanted to take off his books a loan, it could sell it to a GSE, which led to a higher number of mortgages.Fannie Mae and Freddie Mac are the two major GSEs. Alone, they own or guarantee half of the current mortgages. With their â€Å"government status†, investors can buy those bonds while asking for a low interest rate in return, as federal government bonds have the safest credit rating in the world. As long as debtors paid back their mortgages, Fannie Mae and Freddie Mac would be able to pay their creditors too. However, as these loans where often given out, even to people we knew could not reimburse, GSEs had to assume the risk. Therefore, we could also say that investors could be blamed for the role they played.They bought and invest in financial products they did not know about. They should have conducted resea rches about what they were purchasing and should have known these were subprime and meant a higher risk of non-payment. However, we have to see the bigger picture. At that time, banks received pressure from higher instances to encourage homeownership and so, to grant loans to the poorest population. The government wanted households with a less comfortable life to be able to buy their own house. The pressure that was put on the banks â€Å"forced† them to give mortgages to debtors that would ikely not pay back. This being said, borrowers are also responsible for contracting loans that they pertinently knew they could not afford. Moreover, the credit rating agencies are also not responsible for the debt of the countries. They have often been accused to do be the reason for the deficit of some countries such as Greece. Nevertheless, Greece has always had a huge deficit. They never had a break-even budget in 150 years, and governments from left to right parties systematically lai d about the finance of the country.In addition, the national sport is not the Greco/Roman wrestling or the Marathon but how to avoid paying taxes; nothing in which the rating agencies were involved. Furthermore, regulators could have also done a better job to prevent the crisis. In the United States, several regulators exist and each of them has a specific area of expertise. The regulation of the banking sector is shared between the Federal Reserve (Fed), the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (which guarantees the deposits of bank customers) and the Office of the Thrift Supervision (OTS).There is also The Securities and Exchange Commission (SEC) that is responsible for the supervision of stock exchanges. The Financial Industry Regulatory Authority provides the regulation of brokerage activities. Finally, the Commodity Futures Trading Commission (CFTC) insures the regulation of futures and options markets. This various regulato rs could have acted to appease the situation. The SEC could have, indeed, regulate lending practices at banks and force them to keep more capital reserves in case of losses.The Federal Reserve could have contained the housing bubble by setting safer mortgages lending standards, which it failed to do and especially when Alan Greenspan who was the head of the FED, refused to improve the examination of the subprime mortgage market. Finally, according to the Financial Crisis Inquiry Report, executives in the main investment banks did not hold enough capital to be fully protected against losses. Some companies, such as Lehman brothers or Citigroup would just hide bad investments off their books.It is mainly a problem related to the liquidity crisis that led to the bankruptcy of Lehman Brothers. Lehman Brothers, indeed, financed itself on the short-term and lend on the long-term. When the source of the financing dried up (banks did not trust each others by fear of not being paid off), Leh man found himself stuck and was enabled to face its commitments. If the credit rating agencies were not responsible for the mortgage originators or securitizers, the creation of the CDO, the regulators or the executives of the investment banks, they surely played a tremendous role in the crisis ) †¦But they could have done better The credit rating agencies are responsible for a lot in the financial crisis. Several aspects of their business as well as the actions they have done have been pointed out as the main cause of the crisis. First of all, the pertinence of their business model was questioned, among others the oligopolistic situation of the market and the conflict of interest created by the issuer-payer model. The â€Å"Big Three† (Standard & Poor’s, Moody’s and Fitch Ratings) generate 95% of the $6 billion market that the rating business represents.These three agencies dominate the market and adopt similar methodologies and practices. The business mod el of the rating agencies establishes itself on the independence and the credibility granted by the financial markets and the authorities of supervision. That is why, in the absence of statutory reforms and / or of the desertion of numerous customers, the leadership of the â€Å"Big Three† will be maintained, protected by strong barriers of entry (reforms difficult to set up and loyalty of issuers often connected to the heaviness of the rating process).Besides, the oligopolistic situation is strengthened by a consolidation, on the initiative and thus for the benefit of the â€Å"Big Three†. So, Fitch acquired in June 2000 the fourth American rating agency, Duff and Phelps, and in December 2000 Thomson BankWatch. At the beginning of 2006, Fimalac gave up 20 % of Fitch Group (who, herself, holds Fitch Ratings, Fitch Training and Algorithmics, this last company having been acquired in 2005) to Hearst Corporation. Likewise, the French subsidiary of Standard & Poor’s acquired ADEF (Agency of Financial Evaluation).Another reason why the credit rating agencies played an important role in the financial crisis is because of the conflicts of interest they were facing with the issuers. If some say that these conflicts of interest were of minor importance since there are always conflicts of interest in relationships, in that case, it had serious consequences on the global economy, as they are one of the causes of the subprime crisis in 2008. It is, indeed, the issuer that pays the rating agency so that this one estimates its capacity to pay off its debt.It is thus relevant to wonder about the partiality and the objectivity of the rating agencies which find themselves â€Å"at the same time judge and judged† and which can be inclined to note well its customers to keep their market share. Besides, the transparency that the rating agencies show in their methodologies and during their changes of ratings is unreliable as far as these sudden reversal s seemed to have destabilized the markets. The three major credit rating agencies also contribute to worsen the financial crisis by their practices. They were, indeed, a key factor in the financial meltdown.They attributed a rating to every products offered on the stock market. Even mortgage-related securities received a good grade, which made it easier to market and sell them. As we have seen previously, the ratings that they gave had an almost â€Å"biblical authority†, so investors trusted the rating agencies to be fair and to give relevant grade to each product and did not conduct further investigation regarding their investment. Credit Rating Agencies were necessary to the mortgage-backed securities market; each actor in the process needed them: The issuers, to approve the structure of their deal – The banks, to determine what capital to hold – The investors, to know what to buy Since 1970, when the credit rating agencies got the status of NRSRO, the SEC de cided to base the capital requirements for banks on the grades given by the rating agencies. This is also included into the banking capital regulations as the recourse rule, which allows banks to hold less capital for higher-rated securities. The SEC also prevented money market funds to buy securities that did not receive ratings from at least two NRSROs.Without these good ratings, banks would not have been able to place these financial products so easily onto financial markets, and the investors would have never bought them. Theirs ratings helped the market to go up rapidly and their downgrades between 2007 and 2008 wreaked havoc across markets and firms. These ratings, especially the ones for the mortgage-backed securities, appeared to have been very optimistic. But what we could observe, throughout the crisis, is the gregarious reflex of the credit rating agencies.They usually agreed on the ratings and when one of them downgraded a security, a company or even a State, the others would usually follow and did the same thing. As we have seen, the Credit Rating Agencies have indeed played an important role in the financial crisis. However, they are not the only one to blame. Thus, we can say that the thermometer is not responsible for the crisis but it could have given a better temperature of the situation. III. What is next? As we discussed, the credit rating agencies have been criticized a lot during the crisis and some flaws of them have been pointed out.In order to improve their efficiency, it is important to understand what we have learned from the crisis and then propose a better regulation or an alternative to the Big Three. 1) Lessons learned from the Financial Crisis The first lesson learned from the crisis is the impact of the globalization of financial markets. This has linked countries together in a greater extent than they were before. That is why, in today’s economy, any crisis that hits a main country or group of countries will have reperc ussion on all other countries. The financial crisis of 2008, started in the United States with the subprime bubble.Then it grew bigger and affected the rest of the world almost immediately compared to the 1929 crisis which also had worldwide impact but more gradually. We have to keep into consideration this new factor and realize that globalization plays an important role in the current worldwide economy. In addition, a country and its financial system need to be better prepared to face the crisis, in order to limit economic and financial damages. This means having a sound and well-regulated environment, keeping its inflation rate low, its exchange rate flexible, and its debt position sustainable.By doing that, a country would limit its vulnerability in front of any financial crisis. Moreover, the country should use fiscal and monetary policies to be able react quickly in case of external shocks. Another lesson learned is the question of the financial supervision. The global crisis is a crisis of confidence, which must impose rules on investment in the financial market, such as CDS (Credit Default Swaps) and short-selling of securities, clearing of OTC derivatives to reduce risks, CSD (Central settlement and Depository) regulation to protect investors and also Hedge Funds transparency.In macroeconomics, monitoring means imposing laws and rules on a structure with what is called the invisible hand. In our case, the invisible hand is the World Bank and the International Monetary Fund and the States, which have full power to intervene and better regulate transactions in the financial markets. This crisis also revealed some weaknesses regarding risk planning. Research based on various methods, including country case studies, confirmed that the more the planning is important, the more the quality of the financial services of a country is raised and more the financial intermediation is efficient.The planning of the risks led a certain number of countries to revise t heir financial structures to adapt itself to the global economic transformations. Finally, we can say that every good thing comes to an end, positive times do not last forever and the end is most likely going to be painful. In today’s financial system and global economy, we cannot avoid financial crisis, we can just hope that enough efforts will be done to improve our financial system and to limit the impacts of future crisis on our economy.If we focus on Credit Rating Agencies, to have a sound environment, it is worth considering a better regularization of our existing Credit Rating system, a new and improved rating system or the promotion of totally new credit rating agencies. 2) Regularization of our existing Credit rating system After the dysfunction of our system translated for instance into the collapse of Lehman Brothers, the disappearance of famous institutions such as Bear Sterns or Merrill Lynch, G7 members stressed the financial industry to improve its functioning mode and enhance the regulation.Several critics have indeed been directed to the credit rating agencies regarding the methodologies used by those agencies (including the growing place of the so-called political factors), the lack of transparency of their decisions, the rudimentary explanation accompanying the changes in notation, the moments selected to realize their announcements of ratings and finally, the potential conflicts of interest. All these aspects need to be taken into consideration when aiming to regulate the rating agencies. Various reform proposals have been recommended.Among them, you find some proposing the suppression of the government’s influence over this industry, or even the creation of a completely government-sponsored rating entity. However, the final goal is the accuracy of the credit rating. The first main step toward a better regulation happened in 2006, when a new section to the Securities Exchange Act has been added. The objective was to â€Å"imp rove rating quality for the protection of investors and in the public interest by fostering accountability, transparency, and competition in the credit rating industry† (ANNUAL SEC REPORT, supra note 22, at 16).The market is an oligopoly; the Big Three set the tone for the rest of the industry. Encouraging competition should give more choices to investors, at a lower cost and with better quality ratings. Several rules were added along the way, especially in 2009, when the SEC’s new rule addressed conflicts of interest, fostered competition and required detailed disclosure. For example, a NRSRO could not anymore issue a rating in which it had advised the bank or the issuer for the structure of the product.Another change emerged from the Dodd-Frank Act, in 2010, where a whole chapter has been dedicated to the rating agencies: â€Å"improvements to the regulation of the Credit Rating Agencies†. The Dodd-Frank Act qualified the agencies as â€Å"gatekeepers† f or the debt market and that is why they needed â€Å"public oversight and accountability†. This meant reducing the investors’ reliance on ratings by limiting references to NRSRO ratings from rules, increasing the liability exposure, maintaining and informing on the structure of the ratings, as well as filing control reports yearly.However, both of these new reforms showed weaknesses, particularly in addressing the conflicts interest coming from the issuer-payer model, or the oligopoly. As mentioned before, several proposals would appear more efficient to answer these problems. The first proposal would be the elimination of the NRSRO status, which would remove any regulatory reliance on the ratings. This would also drive prices down as there would be an increasing competition, but it would also improve the rating quality and the innovation.Nevertheless, this proposal would lead to a total revision of the entire bank regulatory system and could also increase the pressure to satisfy issuers. The second proposal was to create a totally government-sponsored rating industry. This would make the rating a public good, eliminating any conflicts of interest due to the issuer-payer model. Although appealing because it resolves one of the main critics emitted during the financial crisis, it does not say who is going to pay for the subsidization.Finally, another more recent proposal called â€Å"disclose or disgorge† asks for the agencies to disclose the quality of the ratings they give, which means disclose to the public when a rating is â€Å"low quality† or disgorge benefits made with the rating. However, charging penalties would increase the barriers of entry on this market and discourage potential NRSROs. The rating business faces two major problems, the oligopolistic situation of the market that is being maintained by an increased regulation that secures the Big Three, and the issuer-payer model that fosters the conflicts of interest.Even though several reform proposals have been suggested, none appears to be totally conceivable. 3) A new rating system We have seen that a lot of reform proposals exist in order to enhance and increase regulation of the rating system. These proposals, indeed, reveal that some aspects of this business need to be improved. Eventually, a new rating system is worth considering. First of all, we have realized already touch based, throughout this analysis that the business model of the credit rating agencies needs to be modified, especially the issuer-payer model.The fact that the issuer is the one that pay the agencies for their ratings creates a conflict of interest that has to go away to insure an accurate and objective rating. In order to solve this issue, a new model is necessary. A possible idea to get there would be to make, not the issuer, but the investors (the ones that want to know the rating of a company or an entity) to finance the credit rating agencies. It is indeed them that need to know the rating of an entity, so it would be fair for them to pay in order to know what they are investing in.This would solved the problems related to the conflict of interest as rating agencies will not be tempted to give a good grade just to satisfy the client and avoid loosing profits. This was actually the model that existed before 1970, when the issuer-payer model was established. The shift to a model investor-payer would constitute a deep change for the whole rating industry but would eliminate the conflicts of interest. Another change that would be conceivable would be to set up a â€Å"rating planning†. The credit rating agencies should emit their grading at a known rhythm.Therefore, companies or States would know when they would be rated. For example, every January 1st, they could give their ratings for all entities. This would avoid sudden downgrades as we saw during the crisis, where rating agencies lowered the rating of a company right before it went bank rupt. Furthermore, to improve the accuracy of the ratings, a distinction between the rating of a company and a State should be made. In fact, Credit rating agencies do not evaluate the same thing when rating a country or a firm.That is why different ratings should be given according to the nature of the entity. Finally, this new rating system should have a better transparency of ratings. As this has often been reproach to the agencies, it is clear that we need to improve it. In order to get more transparency in the ratings, the credit rating agencies should be forced to make public some criteria that contributed to the rating process. In addition, when an entity is downgraded, there is ever a clear explanation.An explicit and standard comment should go along with the new ratings to explain the cause of the downgrade or upgrade. All these improvements should be made to obtain a more transparent and accurate rating. These changes could lead to more efficient and regular ratings where conflicts of interest would be inexistent and where the distinction between entities would improve the relevance of the ratings. 4) Creation of a new credit rating agency Finally, another solution that arises would be the creation of a new rating agency.This proposition is particularly discussed in Europe. The arguments called in favor of the creation of a European rating agency are multiple. It would be a question, first of all, of introducing more competition into a sector that is today dominated by three major actors. Standard and Poor's, Moody’s and Fitch Ratings are indeed sharing more than 90 % of the market, a situation which confers to the members of this â€Å"Big Three† a tremendous capacity of influence. To create a new rating agency would be a way of having a bigger diversity of points of view.The trust that would be granted by the investors to a new European agency would depend however on its capacity to avoid the criticism sent to â€Å"Big Three† in terms of independence and conflict of interest. It would also be necessary to specify the status of the new agency: a public or a private organization? A public rating agency could face the mistrust of the investors, who could doubt its independence towards public authorities and States, which it would have the mission to evaluate. On the other hand, a private agency would look like a non-profit foundation.The rating agency would be financed by the investors who would use its notations, and not by the entities emitting the financial products, which would allow guaranteeing its independence. Nevertheless, the future prospects of such a structure remain uncertain: to what extent would it be able to impose itself in front of â€Å"Big Three†, in a sector where the experience and the reputation of the institution play a determining role? In addition, a history of ratings would be necessary to evaluate the evolution of an entity and a strict method is mandatory for accurate rat ing.A new rating agency would not be able to have all of these factors before several years. To conclude, it is not easy to find the best solution to improve the current rating methods. Different regulations have been tried, all presenting good points but also flaws. However, what we need to enhance is clear: better transparency, a more accurate rating and a suppression of the conflicts of interest. Conclusion The role of the credit rating agencies in today’s economy is crucial. They evaluate the creditworthiness of an entity, influencing investors and interest rates.However, during the crisis, their role has been criticized. Several factors can explain their controversial position. The oligopolistic situation of the market, their supposedly trustworthy evaluations given by their NRSRO status, as well as the conflicts of interest coming from their issuer-payer model are the main causes of the critics emitted toward them. Recently, the American justice even pressed charges aga inst the rating agencies for their role in the crisis and asked for five billion dollars. Nevertheless, even if the credit rating agencies are the ideal responsible, they are not the only ones to blame.Now that the crisis revealed the different flaws of their system, we can only improve them going forward. Several regulations have already been approved and others are still under consideration. Other ideas to enhance the rating system include a new financing model, by perhaps considering going back to the investor-payer model, a better transparency of their rating, by showing the criteria used for their ratings, and a distinction between a company or a security and a State, which are two completely different entities.Lastly, we can wonder if the Credit Rating agencies still have as much influence as they used to. For instance, when downgrading both the United States and France, the repercussions were minors even nonexistent. The lost of their triple A did not bring the interest rates up as it should have, since today the interest rates are historically low in both these countries. Exhibits Exhibit 1 – Credit Rating Agencies with the NRSRO designation Exhibits Exhibit 2 – Rating systems of the Big Three Source: â€Å"Credit rating – Wikipedia, the free encyclopedia.   Wikipedia, the free encyclopedia. N. p. , 7 Mar. 2013. Web. 13 Mar. 2013. ;http://en. wikipedia. org/wiki/Credit_rating;. Exhibits Exhibit 3 – Important facts about the crisis Exhibits Exhibit 4 – Evolution of market indexes from August 9 to 16, 2007 Index| Evolution| Dax (Germany)| -4,42%| Dow Jones (USA)| -5,95%| Nasdaq (USA)| -6,16%| FTSE 100 (United Kingdom)| –  8,37 %| CAC 40 (France)| -8,42%| Nikkei (Japan)| -10,3%| Exhibits Exhibit 5 – Residential Mortgage-backed securities These tranches were often purchased by CDOs These tranches were often purchased by CDOsSource: The financial crisis inquiry report: final report of the National Commis sion on the Causes of the Financial and Economic Crisis in the United States. Official government ed. Washington, DC: Financial Crisis Inquiry Commission :, 2011. Print Bibliography * Dupuy, Claude . â€Å"La crise financiere 2007-2008 – Les raisons du desordre mondial – C†¦. † francetv education – la plateforme des parents, eleves et enseignants. N. p. , n. d. Web. 12 Mar. 2013. ;http://education. francetv. fr/dossier/la-crise-financiere-2007-2008-o21596-chronologie-de-la-crise-2007-2008-780;. Gannon , Jack. â€Å"Help the Credit Rating Agencies get it right. † Annual review of Banking and Financial Law 31 (2012): 1015-1052. www. bu. edu. Web. 10 Mar. 2013. * Gedos, Jean-Guy, Oussama Ben Hmiden, and Jamel Henchiri. â€Å"Les Agences de Notations Financieres, Naissance et evolution d'un oligopole controverse. † Revue Francaise de Gestion 227 (2012): 45-63. Print. * Goldberg, Adam. â€Å"Credit Rating Agencies Triggered Financial Crisis , U. S. Congressional Report Finds. †Ã‚  The Huffington Post. TheHuffingtonPost. com, 13 Apr. 2011. Web. 12 Feb. 2013. * Gourgechon, Gerard. Les Agences de Notations. † http://alternatives-economiques. fr. N. p. , 17 Jan. 2012. Web. 3 Mar. 2013. . * Krebs, Joshua. â€Å"The Rating Agencies: Where we have been and Where do we go from here?. †Ã‚  The Journal of Business, Entrepreneurship & the Law  3. 1 (2009): 133-164. Print. * McLean, Bethany, and Joe Nocera. All The Devils Are Here, The Hidden History of the Financial Crisis. New York: Penguin Group, 2010. Print. * â€Å"Mieux comprendre la crise – Universcience. † Cite des Sciences.N. p. , 1 June 2009. Web. 12 Mar. 2013. . * Panchuk, Kerri Ann. â€Å"Credit ratings agencies a ‘key cause' of the financial crisis: Senate report | HousingWire. † U. S. Housing Finance News | HousingWire. N. p. , 14 Apr. 2011. Web. 12 Mar. 2013. . * Pelletier, Cecile. â€Å"Crise financiere : les cles po ur comprendre – La crise des â€Å"subprimes†. L'Internaute : actualite, loisirs, culture et decouvertes†¦. N. p. , n. d. Web. 12 Mar. 2013. . * Piliero, Robert D.. â€Å"The credit rating agencies: Power, responsibility and accountability. † Thomson Reuters News and Insight Legal: Legal News, Information and Analysis. N. p. , 19 July 2012. Web. 12 Mar. 2013. . The financial crisis inquiry report: final report of the National Commission on the Causes of the Financial and Economic Crisis in the United States. Official government ed. Washington, DC: Financial Crisis Inquiry Commission, 2011. Print. * Verschoor, Curtis C. â€Å"Credit Rating Agency Performance Needs Improvement. † Strategic Finance 1 Jan. 2013: 17-19. Print. * Vodarevski, Vladimir. â€Å"Crise financiere: qui est responsable? – Analyse Liberale. † Analyse Liberale. N. p. , 22 Feb. 2009. Web. 12 Mar. 2013.

The Role of the Individual in Candide

All around the world the roles of the individual and of society are completely abstract. As the world changes and develops, the roles of the individual and society change to meet the needs of the people. Voltaire's Candide which involves France during the Age of Enlightment & Marx & Engels' Communist Manifesto which involves Germany around 1848 both discuss the roles of the individual and of society in different ways. In both pieces of literature what is expected of the individuals and of society is very different from what is presently happening. The Communist Manifesto discusses human nature and social class while Voltaire discusses the flaws of society and the realities that not everything is for the best. In Communist Manifesto, the role of an individual is to be an equal and work towards the greater good of society and the role of society is to provide equality for all people. However in Candide, the role of an individual is to be an individual while the role of society is based upon the society you are living in. The role of the individual according to Marx and Engels is to be an equal with everyone else in society. The immediate aim of the Communists is the same as that of all other proletarian parties: Formation of the proletariat into a class, overthrow of the bourgeois supremacy, conquest of political power by the proletariat† (Communist Manifesto 13) The Bourgeois are the 0. 1% of the population that owns the means of production and The Proletariat are laborers who are 99. 9% of the population. Carl Marx state s here that the goal of Communism is equality for all. If you overthrow the Bourgeois it insures that power will be balanced because its 99. 9% in control now instead it’s 0. 1% in control. Marx describes his distaste for how everyone in society is being manipulated by the small percentage in control. Marx goes on to say that â€Å"The Bourgeoisie has subjected the country to the rules of the towns. It has created enormous cities, has greatly increased the urban population as compared with the rural and has thus rescued a considerable part of the population for the idiocy of rural life† (Communist Manifesto 7) People are being control in a majority of their daily routines and being an individual is not something truly supported by the Bourgeoisie. â€Å"You say individuality vanishes. You must therefore confess that by â€Å"individual† you mean no other person than the bourgeois, than the middle-class owner of property† (The Communist Manifesto 16) The idea of communism is to encourage people to actually be individuals while being an active member of society. Although the role of the individual are made very clear by Marx they fail due the ideals of human nature. It is said that the human nature can be considered the downfall of communism. Communism as proposed should be extremely successful but due to human nature there is no way for communist success. The success declines as soon as it starts because people lose motivation. People have no motivation to work as hard as they possibly can because everyone is economically equal. This is a flaw of the communist society as opposed to capitalism. Marx wants people to work as an autonomous collective to gain power and take it away from capitalism however, people are only invested in something that benefits them, and communism relies on an â€Å"all for one, one for all attitudes. According to The Communist Manifesto. the role of society is to provide equality for all people. As stated â€Å"In bourgeois society, living labor is but a mean to increase labor. In communist society accumulated labor is but a means to widen, to enrich, to promote the existence of the laborer† (The Communist Manifesto 15) Marx describes a comparison between the society currently and what Marx’s hopes society will be. Individuals are promised so much more in a Communist society. The difference between the idea of increasing labor and widening labor although minuscule provides hope for the people who are sick of their current society. In communist society, the present dominates the past. In bourgeois society, capital is independent and has individuality while the living person is dependent and has no individuality† (The Communist Manifesto 15). This shows how people, while working toward the greater good have their own individuality under communist society. In a Communist Society although people are allowed to be unique they are all considered equal no matter what. In Candide the role of an individual is to be an individual. Voltaire, throughout the skill of repetition exploits how people behave. He describes for instance how everyone feels someone is better off than they are. Voltaire uses Candide's journeys to portray the human assumption that the grass is always greener on the other side. Now even though most people are not pleased with how their lives are currently, they are esteemed individuals. Individuals work for the benefits of themselves as they cultivate their farms and work hard to make sure their families are well fed and stable. â€Å"‘I have only twenty acres of land’ replied the Turk, ‘which my children and I cultivate. Our work keeps us free of three great evils: boredom, vice and poverty’† (Candide 112). This shows how in Candide, society’s individuals work hard on their own to make something out of themselves. According to Voltaire in Candide the role of society clearly depends on what kind of society you are currently living in. Societies, according to Voltaire had many flaws. As Candide comes to the land of Eldurado, we are shown an almost flawless society. â€Å"Candide asked to see the law courts, he was told that there were none, that lawsuits were unknown. He asked if there were prisons; the answer was no. †(Candide 64) In this nearly flawless society all men are free and the king is the complete opposite of a tyrant. â€Å"I know my country doesn’t amount to much, but when man is fairly well of somewhere, he ought to stay there. I certainly have no right to prevent foreigners from leaving: that kind of tyranny is sanctioned by neither our customs nor our laws† (Candide 66). Another society Candide discusses is Paris. â€Å"Yes, I’ve been in Paris: it’s a mixture of everything found in all the provinces. It’s a chaos, a restless throng in which everyone is looking for pleasure and hardly anyone finds it, or at least that’s how it seemed to me†(Candide 75) In Paris it seems that this society has no partake in it’s citizens lifestyle. The individuals yearn for what society has to offer them. Voltaire uses satire to take aim at the military, religion, and societies' shallowness to disprove Pangloss’ theory that â€Å"all is for the best†. The world that we live in is not the best of all possible worlds.