Meteorological Satellites Systems Essay Example | Topics and Well Written Essays - 2750 words

Meteorological Satellites Systems - Essay Example These characteristics formed the basis on which most of the theoreticians worked on to provide information about the atmosphere. However, these characteristics ware not enough to provide more precise information about the atmosphere yet such information was of great significance in predicting meteorological parameters and conditions. The introduction of computers and mathematical models resulted in an increased demand for observational data that was adequately sampled and reliable both in time and space. This was due to the fact that the atmosphere forecast models depended strongly on the initial atmosphere state that had been reached at through assumptions. Better data was needed as even after this initial information, there were still many areas that were left without atmospheric soundings that were conventional. Before the discovery of weather satellites, the weathermen work was almost impossible as they were handicapped with very limited information before them about the atmosphe res state at any time (Kidder and VonderHarr, 1995). Even after the world war period when observational networks were expanded by most of the meteorological services from different nations, the global vast land areas that were sparsely populated as well as the large areas covered by oceans remained virtually blank with regards to conventional meteorological observations. The introduction of metrological satellites was a major step towards overcoming all these deficiencies. Satellite imagery has since its discovery proved to be a vital information source in forecasting operations. The images serve various important functions in the metrological field including; a tool used for analysis mostly when dealing with data from the tropics, a vital aid during forecast conducted in short periods before rainfall, cloud, and floods, serves as an input to weather prediction  models mostly dealing with numbers so as to define initial conditions, and used to monitor forecast models.

Success Strategies Case Study Example | Topics and Well Written Essays - 500 words

Success Strategies - Case Study Example The structure of the organization revolves around the entrepreneur who started the business. He is the manager of the plant. From his managing mandate, the organization has several departmental heads. They consist of the operations manager, finance, manager and the human resource. The organization has a limited staff working from the premises since it does not conduct many inside operations. The majority of a human resource consists of the drivers and packages. In the structure, the manager has the final say in all decisions made by the department heads. The other menial staff consists of cleaners and record keepers. The strategies embraced by the organization revolve around increasing the customers who take up transportation services. The competitor issue is also on the top subject to strategize on. The strategy of the organization is based on satisfying the needs of its target market. On satisfying the customers, offers and packages options are also given. Offers include giving monthly packages for individuals using cab services. Apart from customer satisfaction the company also gives etiquette lessons to its taxi and cab operators. This increases the customer staff relation which in turn leads to customers having confidence in the organization. The strategy works in the organization’s favor since the number of customers has been increasing at the start of every financial year. In another strategy, the organization aims at dealing more in providing services based on long-term contracts.

Health Financial Management Essay Example | Topics and Well Written Essays - 1500 words

Health Financial Management - Essay Example The goal that becomes the end in the health financial matters involves the creation of an operational knowledge network. Various opportunities arises that help in the application of a real life situations in matters relating to healthcare. It is also important to note a complete usage of spreadsheet. This knowledge system helps in the compilation of data in the most efficient way (McLean, 2003). Introduction Financial management of the health sector provides an easy approach that streamlines the labor health care intensively. The system of management helps to ensure an increase in the efficiency level, accuracy and reduced labor cost in the entire life of an enterprise. The implementation level provides the best solution if the optimal way is applied in the course of the operation of the business (Latimer, 2012). The National Case mix Scenario The National case under study is an Australian based program that ensures development of the Refined Diagnosis and the related groups. The cla ssification of this form of diagnosis includes the statistical body and the diagnosis centre. The statistical body is involved in the dealing and classification of disease related problems and other bodies. These include the coding standards, classification and intervention body and the modification segment (France, 2001). The model applied at the funding level created an alarming effect with senior members of the health department. This case was felt in the New South Wales with great magnitude. The magnitude emanated from the opposition in the funding process. The hospital association in Australia accepted the idea of funding. Believe in the ideology of better performance evolved from the existence of favorable arrangements at the time. Later, a committee for case mix evolved. It performed the work of determination of clinical changes as per the US regulations. This gave rise to the creation of Australian National and Australian Refined. The entire national case system gets fund fr om the Australian health department. The seventh edition of Australian modification happens to take place at the end of June 2013. Another event will also unfold on first of July 2013. This event will feature under the seventh edition partnership program. The seventh edition will ensure that planning and implementation takes place in the entire phase of the heath management (Willis, Reynolds & Helen, 2008). National Health and Hospitals Reform Commission (NHHRC) Report The birth of COAG is a signaling factor to the NHHRC. The COAG had a meeting that raised important agendas to focus on the NHHRC (Appleby & Aroney, 2012). Some of the recommendations included the requirement on the address of peculiar issues of regulation as a rule in the commonwealth. The Council of Australian Government (COAG) body had an agreement to increase the funding requirements of the state aimed to increase health issues. The funding initiative had a focus on capacity improvement as a main goal. It is impera tively important to appreciate work performed by the COAG (Crase, 2008). The body comprises of on dignitaries including the prime minister and other state dignitaries. The body schedules to have a meeting on April 13 2012 at Canberra. The main agendas at any meeting must revolve at some of the most important issues like the major reforms, delivery of Medicaid and the funding level aimed at the sustainability of the

Jurisdiction Essay Example | Topics and Well Written Essays - 2750 words

Jurisdiction - Essay Example There are various types of jurisdiction; among the types of jurisdictions are: in personam and subject matter. A court must have both in personam and subject matter jurisdictions, in order to preside over a case. Subject matter jurisdiction refers to the authority over the matter in dispute. It concerns what types of disputes may be heard by which courts. The in personam jurisdiction is referred to as the authority over a person (Garvin, 2002). All trial courts have either limited jurisdictions or general jurisdictions; limited jurisdictions are limited to certain types of cases, for instance, bankruptcy court, tax court and housing court. General jurisdiction courts have the power to hear various cases. In addition to that, all courts have either exclusive or concurrent jurisdictio9n in any specific category of cases. An exclusive jurisdiction is a type of jurisdiction whereby only one court has the power to hear a case. On the other hand, concurrent jurisdiction is the kind of jurisdiction where more than one courts have the power to hear the case (Barbara, 2001). Other types of jurisdictions include original and appellate jurisdictions. All courts either have original or appellate jurisdiction. ... Appellate jurisdiction is where a court reviews the legal rulings of lower courts. Federal courts and state have restricted jurisdictions over many sectors of law and concurrent jurisdictions over areas of mutual interest. In other words, the federal courts have jurisdictions over cases concerning the federal government, laws, and constitution. Similarly, they have jurisdictions over civil cases that involve state law issues between different states having great damages (Garvin, 2002). The jurisdiction to preside a case is determined by the nature and the type of the case. For example a warehouse employee who worked for a company, injured his leg at work and pursued a worker compensation claim. Moreover, his employer's investigator trespassed upon the employee's property in the same company while trying to video the employee digging a trench in his backyard. If the employee filed a suit against the investigator and the company for invasion of privacy, he will do so in a court that has subject matter jurisdiction over wrongful trespass committed within the state, and in personam jurisdiction over employee, employer and investigator (Barbara, 2001). The federal courts, under the principle of pendant jurisdiction, may decide cases that involve both substantial federal issues and state law issues, when the facts and the parties are the same. References Barbara, A. (2001). Procedural justice and jurisdictions. New York: Springer. Garvin, A. (2002). The Justice Broker. Lawyers and Ordinary Ligation. New York: State University of New York Press. Q3 Identify what rights an offender has and how those rights are legally determined. Offenders' rights cover all phases of a

Trovan Essay Example | Topics and Well Written Essays - 500 words

Trovan - Essay Example Trovan of Pfizer, an unapproved drug, was administered in children at the hospital of Kano in 1996, which came to the public attention only in December 2000. Pfizer picked approximately 200 children for their clinical trial, of which 100 children were administered with Trovan whereas the other half was treated with the standard anti-meningitis drug Ceftriaxone that also acted as the control group. The children who were treated with Ceftriaxone, a cephalosporin antibiotic, were given an initial dosage level of 100 mg/kg dose which was subsequently reduced to 33 mg/kg to reduce the pain caused by intramuscular injection. These children, who had reached the hospital for their treatment of meningitis, were hand-picked randomly by the doctors of Pfizer. These children were also given tags to identify the drug they received. These two batches of children continued their treatment with Trovan and Ceftriaxone for five consecutive days and were monitored either in the hospital or out-patient clinics, depending on their health. Those children who required additional care were transferred to another hospital at the expense of Pfizer. The study was concluded after four weeks and a follow-up exam was conducted by Pfizer. The results at the end of the trial conducted at Kano IDH recorded a survival rate of 94.4% at Kanos IDH against the overall survival rate in Nigeria of 90%. However, this anti-meningitis trial treatment was not devoid of mortality issues. Five children out of 100 children treated with Trovan and six out of 100 children treated with the standard drug Ceftriaxone died after the treatment. Though the follow-up conducted by the Pfizer team reported that there were no unusual side-effects, unrelated to meningitis, the children treated with Trovan did develop symptoms of arthritis, though no evidence relating the drug to this development is available. Trovan was being developed for its

Sherlock Holmes Essay Essay Example for Free

Sherlock Holmes Essay Essay Arthur Conan Doyle has written a number of short stories about a fictional character called Sherlock Holmes and his trusted work mate Dr. Watson. Together they solve mysteries using the art of the reasoner and imaginative thinking. I have recently been studying the adventure of the speckled band among other short stories. Holmes is portrayed as an intelligent crime solver, with quick thinking skills and a sharp mind. We find straight away in the story that Dr. Watson and Holmes are good friends as Holmes wakes Watson up early especially because he thinks he would want to learn about the case right from the start. Holmes has an eye for detail, which we realise near the beginning of the story as he can clearly describe how the woman travelled to meet him, by the half return ticket and mud splatters on her jacket. The crime is a murder; set it the mansion belonging Dr. Grimesby Roylott in Stoke Moran. Dr. Roylott was in great debt and rented out most of his property to gypsies. He was a very lonely, bitter, miserable man. The murder is described by the victims sister, Helen Stoner, she saw her sister just before she died and experienced some of the strange things that happened to her sister on the night of her death, afraid and worried she turned to Holmes for his help. There are many suspects in this story, such as the gypsies, or the animals that the doctor kept in the grounds. But the prime suspect in this scenario was the doctor himself, he had the motive, if his daughters should marry then the money from their mothers will, would go to them. Therefore if they were to die before they got married the doctor would keep the money. It is an unusual murder because the room in which it took place was locked, with the windows closed and metal bars put there. On visiting the scene Holmes finds some peculiar abnormalities with the room, there is a bell- pull, which isnt fixed to a bell, just the ceiling. Also the bed is nailed to the floor and there is an air vent between this room and the doctors. Holmes also looked in the doctors room and found a bowl of milk on top of a safe also a small dog lead hung on the corner of the bed and tied to make a loop of whipcord. Holmes finds these clues using the art of the reasoner and his imaginative thinking, to work out how the previous murder happened and when the next was about to happen. Holmes also uses the art of the reasoner in another short story- Silver blaze, where the prize racing horse is stolen and its owner beaten to death in Kings Pyland, Holmes works out that it cant have been anyone other than John Straker or his wife, as no-one else could have made it so that curried mutton was the dinner for the stable boys, so as to hide the taste of the sleeping drug put in it. So that Straker could take the horse out of the stable at night, in order to harm the horse and fix the race. The murder weapon was an Indian snake; the doctor kept it in a safe, but whenever one of his daughters was to be married, he would let it out. It would make its way through the air vent; down the dummy bell- pull and onto the bed to kill whatever was lying bellow it. It was then called back with a whistle, to the doctors room and put back in the safe. The red herring in this story could be the cheetah and the baboon, as they could have come into the house and killed the girl, also the gypsies as there were some around at the time of the murder, and the before the victim died she said the speckled band which could have meant the spotted scarves they are often found wearing and a band of gypsies. The tension is built up when Holmes and Watson stay in Helen Stoners room to find out what killed her sister and could possibly kill her. As they sit in darkness listening to the night sounds outside, waiting for what they dont know at this stage, then Holmes realises that a snake has just entered the room and scares it off with a light. The twist in the tale is right at the end, when, because the snake is scared back through the ventilator, it gets confused and bites Dr. Roylott. So his greedy and malicious plan backfires, and he is killed. I chose to write about this story because I think that it has a lot of good points to describe, and it is a great, gripping story. Show preview only The above preview is unformatted text This student written piece of work is one of many that can be found in our GCSE Arthur Conan Doyle section.

Leadership At Berkshire Hathaway And General Electric Commerce Essay

Leadership At Berkshire Hathaway And General Electric Commerce Essay Since, the researchers interest was the effects of diversification on two American Conglomerates (Berkshire Hathaway and General Electric). First, its important to look at why the researcher has chosen these two companies. Both companies have a wide range and diversity of product portfolios which are of particular interest. Following earlier research (Natter, Mild, Feurstein, Dorffner, Taudes, 2001; Krishnan Ulrich, 2001) the paper intends to narrow down area of focus to Berkshire Hathaway Inc and general Electric. Both companies are going against the trend of diversification, starting from the last decade the trend has been becoming less popular, but both corporations are still diversifying their business lines. Berkshire Hathaway currently has 80 businesses and one of the reasons for the companys success might be strong management, the CEO, Warren Buffett is a core resource for Berkshire Hathaway, he is known for buying excellent businesses at a price that make business sense. On the other hand, with so many businesses, diversification strategies might help companies in spreading market risks: adding products to the exiting lines of business can be viewed as analogous to an investor who invests in multiple stocks to spread the risks. Diversification into other lines of business can especially make sense when the core product market is uncertain, which is the case for Berkshire Hathaway and General Electric. 4.2. 2 Reasons for their success (Berkshire Hathaway and General Electric) In order to achieve higher performance, GE generates great results from the people and process. This combination unlocks GEs business breadth, revealing new paths to growth. The company has 2 councils that are responsible for achieving such high performance: The Commercial Council that drives the Companys growth initiative: Growth as a Process. This initiative has yielded record-setting organic revenue growth for the last three years (Annual report, 2008). They also have Leadership, Innovation and Growth team training program, all are meant to achieve the long-term profitability and success of the Conglomerate and to develop communications expertise to create new ideas and foster existing ones. Also there is the Operating Council which was formed in 2007, which consisted of leaders from engineering, supply chain, sourcing, finance, and product management. The goal of the council was clear: create a $1 billion funnel of ideas, and improve the Companys operating profit margin rate by 100 basis points to a world-class level of 18% (Annual report, 2008). Also, The Council is focused on lowering product costs, reducing overhead, countering inflation, turning inventory, and improving price. It is a forum to share best practices on topics such as productivity, simplification, sourcing, restructuring, quality, and new products -all critical disciplines in an increasingly competitive and global environment. The Council uses a common scorecard to measure progress across the company and spreads its success to all businesses. In addition, General Electric has been a leading source of corporate strategy concepts and innovations for more than half a century. The firm has been among the top five members of fortune magazines Americas Most Admired corporations since the listing began. Considering the research question in this project which is the reasons for the success of two American conglomerates through diversification strategy and their achievements, the researcher refers diversification as a growth strategy and both 9Berkshire Hathaway and General electric) are known for their wide range of businesses and their growth through acquisitions. Makron Associated identified several conglomerates with exceptional performance in terms of ten-year shareholder returns. Berkshire Hathaway and General electric were part of these identified firms. The common characteristics of these companies were: strict financial discipline, rigorous analysis and valuation, a refusal to overpay for acquisitions and a willingness to close or sell existing businesses (Kaye and Yuwono, 2003) However, the case against conglomerates can be overstated and there are certainly potential advantages to unrelated diversification in some conditions: Exploiting dominant logics, rather than concrete operational relationships, can be a source of conglomerate value creation. As at Berkshire Hathaway, a skilled investor such as Warren Buffett, the so-called Oracle of Omaha and one of the richest men in the world, may be able to add value to diverse businesses within his dominant logic (Prahalad and Betis, 1986, 1995). Berkshire Hathaway includes businesses in different areas of manufacturing, insurance, distribution and retailing, but Buffet focuses on mature businesses that he can understand and whose managers he can trust. During the e-business boom of the late 1990s, Buffet deliberately avoided buying high-technology businesses because he knew they were outside his dominant logic. Countries with underdeveloped markets can be fertile ground for conglomerates. Where external capital and labor markets do not yet work well, conglomerates offer a substitute mechanism for allocating and developing capital or managerial talent within their own organizational boundaries. For example, Korean conglomerates (the chaebol) were successful in the rapid growth phase of the Korean economy partly because they were able to mobilize investment and develop managers in a way that standalone companies in South Korea traditionally were unable to. Also, the strong cultural cohesion amongst managers in these chaebol reduced the coordination and monitoring costs that would be necessary in a Western conglomerate, where managers would be trusted less (Markides, 2002). The same may be true today in other fast-growing economies that still have underdeveloped capital and labor markets. General electric has operations in many underdeveloped countries, For example, in 2008; GE completed the Hamma Seawater Desalination Plant, the largest desalination plant in northern Africa, which provides 2 million Algerian residents with a reliable source of fresh drinking water every day. Through innovatory thinking and cutting-edge technologies from GEs Oil Gas and Power Water businesses, GE is able to solve some of the problems that Algeria faces under todays harsh climate, while helping to position them for a brighter tomorrow. Also, graduate students in US compete to get entry-level positions with diversified corporation such General electric and Berkshire Hathaway and this provides them opportunities like the hiring of high calibre of employees. Other General Electric Success reason is the corporations strong core values: which are the underlying principles that guide an organizations strategy. Collins and Porras (2002) have argued that the long- run success of many US corporates-such as General Electric and Disney can be attributed (at least in part) to strong core values. The company workers consider their culture as part of innovation, a culture that was built over decades by their leaders and which is still the unifying force for the many GE business units around the world. While, communicating the strategy is an important within a company: Both corporation communications should be focused on the key components of the strategy, avoiding unnecessary detail or complex language. For example, CEO jack Welchs famous statement that General electric should either be number one or number two in all its markets. This strategy clearly shows that General Electric is a company that always strives hard to be a dominant player wherever the company competed. On the other hand, some of the most important sources of value creation within diversified firms are the ability to apply common general management capabilities, strategic management systems, and resource allocations processes to different businesses. Such economies depend on the existence of strategic rather than Operational commonalities among the different businesses within the diversified corporation (Robins and wiersema, 2002). Berkshire Hathaway is involved in insurance, candy stores, furniture, kitchen knives, jewellery, and footwear. Despite this diversity, all these businesses have been selected on the basis of their ability to benefit from the unique style of management established by warren buffet and CEO Charles Munger. The essence of such strategic-level linkage is the ability to apply similar strategies, resource allocation procedures and control systems across the different businesses within the corporate portfolio (Grant, 1988). While, GE participates in a wide variety of markets including the generation, transmission and distribution of electricity (e.g. nuclear, gas and solar), lighting, industrial automation, medical imaging equipment, motors, railway locomotives, aircraft jet engines, and aviation services. It co-owns NBC Universal with Vivendi (Annual Report, 2008). With all these many business divisions General electric remains still successful. 4.2.3 How the shareholders value is enhanced as the firms product diversifies. With so many ups and downs of corporate diversification, financial researchers have been worried with its benefits and costs. Majority of the benefits of corporate diversification come all along with the advantages of internal capital markets over external financing. By avoiding transaction cost and additional cost of informational asymmetries diversified firms with a bigger internal capital market allow for a more efficient capital allocation (Chandler 1977, Stein 1997). Also there are other benefits such as risk reduction on corporate level for diversified firms: lower cash flow volatility may increase the debt capacity of the company and thereby the tax shield of debt without facing prohibitive cost of financial distress (Lewellen 1971). Additionally lower volatility helps to reduce underinvestment cost when external financing is not available or only at prohibitive cost (e.g. Stulz 1990). In addition, Berkshire Hathaway and general Electric are companies that create Value by acquiring companies at favorable prices, and they closely monitor their financial performance, and operate through an effective internal capital market. At general Electric, Jack Welch was an especially effective example of corporate initiatives as a means of driving organizational change. His initiatives were built around communicable and compelling slogans such as General Electric growth engine, boundarylessness; six-sigma quality and destroy -your business-dot-com. The research assumes that diversification is a means by which a firm expands from its core business into other product markets, and that is what the corporate management is actively engaged in, diversifying activities than ever before leading to a considerable amount of rise observed in diversified firms. As it was earlier stated, companies diversify for three main reasons, Growth, Risk reduction and Profitability in a simpler way. Normally, Growth and Risk reduction have been significant motives for diversification; they tend to be not consistent with the creation of shareholder value. Therefore, both general electric and Berkshire Hathaway had and still have the desire to grow. Berkshire has been acquiring and owning stakes in companies since early 70s. We clearly see from the companys timeline that the Berkshire continued growing through acquiring stakes in many companies. The latest acquisition was in February 2010 which was the Corporations purchase of the remaining shares of Burlington Northern Santa Fe Corporation for $26 billion, the companys biggest purchase ever. While General Electric has acquired Vital signs Inc for $860 in 2008 (Chicago Tribune, 2008) and it also announce in 2009 that it will buy out Vivendis stake in NBC Universal and sell a controlling interest of the company to Comcast, with General Electric retaining a 49 interest in joint venture (Goldman and Pepitone, 2009). With the Acquisitions history, Both Corporations have been growing and expanding their business with the objective of Maximizing Shareholder wealth. Referring back to the next motive for diversification which is the desire to spread risks To isolate the effects of diversification on risk, consider the case of pure or conglomerate diversification, where separate businesses are brought under common ownership but the individual cash flows of the business remain unaffected. As long as the cash flow of the different businesses are imperfectly correlated, then the variance of the cash flow of the combined businesses is less than the average of that of the separate businesses, Hence Diversification reduces risk. Both of the companies have engaged in numerous activities for decade, they have expanded their businesses. Rumelt (1974) discovered that companies that diversified into businesses closely related to their core activities were significantly more profitable than those that pursued unrelated diversification. According to Peters and Waterman (1982) Virtually every academic study has concluded that unchanneled diversification is losing proposition. This observation provided the basis for one of peters and watermans golden rules of excellence -stick to the knitting: Our principle finding is clear and simple. Organizations that do branch out but stick very close to their knitting outperform the others. The most successful are those diversified around a single skill, the coating and Bonding technology at 3M for example. The second group in descending order, comprise those companies that branch out into related fields, the leap from electric power generation turbines to jet engines from General electric. Least successful, as a general rule, are those companies that diversify into wide variety of fields. Acquisitions especially among this group tend to be wither on the vine (Peters and waterman, 1982). Finally, the research paper postulates that shareholder value is increased when companies diversified in related businesses, since they share capabilities and core resources across the businesses. And the growth of such (GE and Berkshire Hathaway) conglomerates might improve the companys profitability, since new related businesses means spreading of risks and increasing of profitability across each business segments. 4.2.4 The costs and benefits associated with undertaking product diversification. In order to find out the costs and benefits of product diversification, the research paper looks at: the relative costs and benefits of corporate diversification are likely to depend on how the different business activities of a firm are related to one another. Where separate business activities use a common, indivisible input, a diversified firm can exploit economies of scope. However, One of the benefits of diversification focuses on the presence of economies of scope in common resources: Economies of scope exist whenever there are cost savings from using a resource in multiple activities carried out in combination rather than carrying out those activities independently (Baumol, panzer and willig, 1982). Also Economies of scope can arise in finance, by combing an industrial company with a financial services company; General electric lowers its cost of capital to both sides of the company. Also, Economies of scope arise not just from tangible input like a common R D department or a common distribution system but also from intangible assets like brand names and production know-how. For instance, general electric has the fourth most recognized brand in the world, worth almost $48 billion (Business week, 2009). While businesses within diversified firms can therefore be related in at least one of two ways: They could be related either because they share markets, distribution systems, product and process technologies, or manufacturing facilities (Ansoff 1965, Rumelt 1974, Teece 1980), or because they rely on common technologies, managerial capabilities and routines and repertoires (Prahalad/Bettis 1986, Kazanjian/Drazin 1987, Winter 1987, Grant 1988). The use of these assets may be transferable at negligible marginal costs. For instance, General electric shares of its activities like RD and Distribution channels across its wide range of businesses. Also, the companies engage in lots of transaction costs and its very complicated to manage such businesses but in the end they reap Benefits of high returns from their activities. 4.2.5 The incentives Top management expect as companies diversifies In Berkshire Hathaway, managers are paid modest salaries and also receive very significant cash bonuses if performance goals are achieved. Buffett tailors the compensation plan to each business, based on its economics and competitive positioning. Managers are compensated for elements of the business that are directly under their control (such as growth and profitability of insurance contracts). Major emphasis is placed on the capability to return free cash flow to headquarters. The company does not grant equity-based awards because their value cannot be as closely correlated to performance as can cash bonuses (meaning: In terms of value realized rather than expected value on the grant date). Still, cash bonuses can reach extreme levels-tens of millions for superior performance. So, Here the compensation have no relation with the size of the Company and thus it doesnt matter for Berkshire Hathaway whether they have many diversified business or not but the main focus is Achieving the targets and High performance is highly rewarded However, on the contrary, Buffett and his vice-President Munger receive humble compensation. Their salaries are set at $100,000. They receive no bonuses, options, or restricted grants. Instead, their economic incentive is driven by direct holdings of company stock which they purchased with their own money in the 1960s. As of year-end 2009, the values of those holdings were $40 billion of Buffett and $1.3 billion for Munger. Similarly, board members receive insignificant fees for their services and are encouraged to purchase substantial sums of company stock with their own money. To sum up, Berkshires top management performance has no direct influence to how diversify businesses may be, Instead each manager is rewarded for the excellent achievement of his area of control. On the other hand, General electrics CEO, Mr. Immelt earns higher salary than Warren Buffet. Immelts Base salary is $3,300,000 plus Bonuses. While the managers are rewarded on the basis of a guiding principle of compensation program which ensures that the management has in place the right metrics and incentives, applied over the appropriate performance periods. The company rewards consistent performance and discourage short-term-oriented behaviour that may yield a single period of good results without regard for proper risk management or the long-term health of the business. The committee uses a mix of compensation that balances rewards for current and long-term performance. Performance metrics include growth in earnings per share, revenue, and cash flow. Managers believe this is the best way to stimulate innovation and ensure solid execution, while guaranteeing that risks are recognized and managed appropriately over the long term. Although they have fine-tuned compensation programs as conditions change, the management believe it is important to maintain consistency in the compensation philosophy and approach. There is also a recognition that value-creating performance by an executive or group of executives does not always translate immediately into appreciation in GEs stock price, particularly in periods of severe economic stress. Nonetheless, General Electric continues to reward such performances based on the firms belief that, over time, true value creation does translate into stock price appreciation. 4.2.4 Risks associated with the strategy of diversification Buffett is also primarily responsible for enterprise risk management. Risk oversight is not delegated to a committee or risk management function. According to Buffett, I regard myself as the chief risk officer at Berkshire. ( Berkshire Hathaway, Annual meeting 20080 The companys primary tool to mitigate enterprise risk is the delegation of responsibility to managers with proven skill and integrity. Munger explains : A lot of people think if you just had more process and more compliance, you could create a better result in the world. Well, Berkshire has had practically no process. We had hardly any internal audit until they forced it on us. We just try to operate in a seamless web of deserved trust and be careful whom we trust. (Wesco Financial, annual meeting 2007). Due to the global economic crisis was the failure of many executives and businesses the ability to understand and adequately manage and price risk. At GE, the corporation has strategies and management processes that effectively manage risk and maximize opportunities across its many businesses. Its process includes long-term strategic planning, executive development and evaluation, regulatory and litigation compliance reviews, environmental compliance reviews, GE Capitals corporate risk function and GEs senior level Corporate Risk Committee. And as a result of the current financial crisis; GE expects that managing risk will be even more important to competitive advantage and long-term success. The corporations executive compensation program is designed to reward those executives who demonstrate an ability to assess and manage risk effectively. At the same time as over the past year, General electric leaders have demonstrated the ability to identify risks and adapt strategies in order to protect the Company. GE acted quickly to improve liquidity, raise capital, and transform the financial businesses. The company has also exited businesses with unacceptable rates of risk-adjusted return. Similarly, Berkshire Hathaway believe that it is important to continue to reward those who demonstrate this disciplined ability to protect the firm;s businesses, but its only appropriate that certain components of compensation will decline during periods of economic stress and reduced earnings. Both General Electric and Berkshire Hathaway, have techniques to spread risks and overcome challenges and thus their activities of diversified businesses. As it was explained earlier, Berkshires CEO considers himself as a chief risk officer and while the managers of both corporations have responsibilities in reducing the risks involved in the activities under their control. In addition, both General electric and Berkshire Hathaway fits in the Prospector strategy of Miles and Snow. Since both firms have highly diversified businesses. This is the most aggressive of all the four strategies. It typically involves active programs to expand into new markets and stimulate new opportunities. Innovative product development is vigorously pursued and attacks on competitors are a common way of obtaining additional market share. The both corporations have a way to respond quickly to any signs of market opportunity, and they do so with little research. A large proportion of their revenue comes from new products or new markets. They are often highly leveraged sometimes with a substantial equity position held by venture capitalists. The risk of product failure or market rejection is high with the prospector strategy. Their market domain is constantly in flux as new opportunities arise and past product offerings atrophy. They value being the first in an industry, thinking that their first mover advantage will provide them with premium pricing opportunities and high margins. Price skimming is a common way of recapturing the cost of development. General Electric and Berkshire Hathaway are known for being opportunistic in headhunting key employees, both technical and managerial. Thus this explains why both firms spend so much on advertising, sales promotion, and their personal selling costs are a high percentage of sales. Typically firms who fit in the prospector strategy are structured with each strategic business unit having considerable autonomy. With Berkshire Hathaway trusting responsibility of business performance entirely in the hands of local managers and General Electric decentralising decisions within each business units, Risks might be reduced. And Firms in these industries tend to be in the introduction or growth stage of their life cycle with few competitors and evolving technology which also provides opportunities such as less competition to both companies Products. Example of GE acquired firms includes Vivendi in 2009,(which is a French international media conglomerate with activities ranging from filming, publishing, telecommunication, music, television and it also have Internet, and video games. The acquired firm had financial troubles due to over-expansion in the late 1990s and the early 2000s. In addition, General electric acquire Vital Signs Inc. for US$860 million in 2008 (Appendix 6.2, GE timeline). The acquired firm makes disposable medical products used to help patients during surgery to breath. Berkshire acquired several companies the last 2-3 years, for instance: the company purchased 80 percent stake in Iscar Metalworking for $4 billion in 2006, which was the firms first purchase of a foreign subsidiary. Johns Manville Corp, a business unit of Berkshire Hathaway Inc acquired Corbond Corp, a manufacturer of polyurethane spray foam insulation products in august 2009.