You have been recently appointed as Human Resource Managment (HRM) Essay - 1

You have been recently appointed as Human Resource Managment (HRM) Director of a company which has recognized that it has a problem with low workforce motivati - Essay Example Maslows theory of motivation claims that human motives develop in sequence according to five levels of needs. These needs are: psychological (hunger, thirst), safety (protection), social (be accepted, belong to a certain group), esteem (self-confidence, achievements, respect, status, recognition), and self-actualization (realizing one’s potential for continued self-development) (Maslow, 1970). For employees to be productive in an organization, they need to hold positive attitudes toward the elements of organizational life. For example, one should view such factors as work, authority, taking risks in decision making, the need for control, and the need for change in a positive way. A negative attitudinal posture toward these factors will keep ones job satisfaction continually low as well as stimulate considerable resistance to many normal organizational processes and activities. Someone with the wrong attitudes shies away from high effort because the performance it yields is not perceived as worthy. It is not "real" performance from the viewpoint of the employee (Armstrong, 2003). For employees to exert high effort, they must see that it makes a difference in their performance. Employees must sense that effort will pay off in terms of performance--that it is highly correlated with performance and that higher effort will yield better performance. The stronger the perceived correlation, the stronger the motivation. Employee-job performance is a function of ability, job design, and motivation. If the employee has adequate ability and the job is designed well, then performance is solely dependent on the level of motivation. Assuming ability and job design are in order, high motivation becomes a necessary and sufficient condition for high performance. If employees know their ability is high and the design of their job is "top notch," then

Early Spanish And Early English Colonization In America Essay - 1

Early Spanish And Early English Colonization In America - Essay Example At the time New Mexico established, it collapsed because of inadequate wealth. In the New England, separatists and Puritans constituted the population. Following the dissent and reformation of England, the people of England stated to arrive in the new America for the reasons of religion. New England colonies were made up of mostly Catholics and Puritans who banked their hope on putting their beliefs in practice with no interference from church hierarchy or England. The colonial extension under Castile’s crown was instigated by Spanish conquerors and grown by Spanish monarchy through its missionaries and administrators. The motivation for the expansion of colonies was increased Christianity faith and trade through local conversations. This took a period of over 400 years from the year 1492 to the year 1898. To start with is the arrival of Columbus in the year 1942, over 4 centuries the empire of the Spaniards would extend across: in the present day in most Central America, Mexico, and Caribbean island; most of American North that include Southern coastal, Southwestern, California part of United States; and although not active, with territory claimed presently British Columbia; and states of Oregon, Washington and Alaska; and South America. At the start of 19th C, the movements on revolution ended up in the independence of many American Spanish colonies, with exception of Puerto Rico and Cuba, released in the year 1898 subsequent to the wa r waged by Spain against the Americans, together with Philippines and Guam in Pacific. The political loss of the last territories by Spain brought an end to the Spanish colonization (Kathy, pp 64) The settlements of the Spanish in the South West of America and English colonies in the New England in the 17th C may be contrasted in basically two ways. To start with, their political patterns were based entirely on different government systems and classes of the ruling.

Rational Criticism Of All Knowledge Claims Philosophy Essay

Rational Criticism Of All Knowledge Claims Philosophy Essay Whether a knowledge claim should be open to rational criticism relies on the area of knowledge being considered. In areas of knowledge, such as natural sciences, if a claim is not justified rationally then it can not be regarded as truth. Therefore these knowledge claims should be open to rational criticism. In other areas of knowledge such as aesthetics, a knowledge claim does not depend on reason or logic, so for it to be open to rational criticism may be unsuitable. In this essay, I will explore the effect rational criticism has on areas of knowledge and to see whether this should be the basis for knowledge claims to be accepted as truth. Rational criticism plays a huge role in the advancement of scientific knowledge. This is because the scientific method of accumulating knowledge is by producing a theory for which to use reason and induction can not disprove. However if it is disproved by rational criticism or experimental data then the theory must be adapted or rejected. Therefore, any knowledge claims should not contradict any established facts. An example of this would be Democritus who was one of the first to propose the theory of the indivisible atom1 using rational ideas. However at the time, this statement did not have any observational implications and so could not be proved using empirical evidence. His theory that the atom is indivisible should be open to rational criticism if it is to be used to explain rational events in the world. However due to advances in technology, empirical evidence found by Rutherford in 1911 showed that the atom was made of protons, neutrons and electrons2. Therefore to confirm th e validity of scientific knowledge claims, the claim itself must survive rational criticism and fit the empirical evidence. However, most of the time, scientific knowledge claims rely on assumptions and so the validity of Rutherfords claim relies on assumptions that his method and instruments were reliable. So for scientific knowledge claims to be accepted as truth not only must they be open for rational criticism but any evidence or justification should be valid. Rational criticism relies on the way of knowing of reason to produce a point of conflict with a knowledge claim. However if the knowledge claim does not concern reason then rationally criticising it would not be suitable. This is the case in aesthetics where a knowledge claim relies on emotion rather than reason to prove it. For example, the claim that Leonardo Da Vinci is a better artist than Damien Hirst is difficult to prove using rational criticism. Of course if the criteria for being better were the number of pieces of art they produced or the amount of skill required to produce the pieces of art then one may be able to come to a conclusion as to which artist is better using rational criticism. However, if the criteria for being better was which set of art affects the audience greater, often reason is not included in the decision and emotion is used to judge which set of art creates a bigger emotional effect on the audience. To reach a conclusion, evidence can be collected in th e form of a survey but because this is such an unreliable and invalid method, someone can not disprove this knowledge claim at a later date using rational criticism as it is unreasonable for it to be open to rational criticism. Aesthetic knowledge claims therefore rely more on emotion than on reason and so it does not need rational criticism for it to be rationally justified. So, just as the evidence for scientific knowledge claims must be proved valid we must check to see if the emotions used to justify the aesthetic knowledge claim are valid. Moreover, aesthetics and science are different in respect to how they progress. Whereas science uses past data, present theories and reason to prove and improve scientific claims, aesthetics make use of emotions not to improve art but to evoke different emotions in the audience. Therefore, if one assumes that the price of a piece of art is directly proportional, to how good it is (i.e. the amount of satisfaction received from it), this would mean, Leonardo Da Vincis Mona Lisa should evoke more satisfaction than Damien Hirsts For the Love of God. However, in my opinion I find that Damien Hirsts For the Love of God is more aesthetically pleasing than a dull and tacky painting and so I will claim that it is better. However, the lack of justification and reasoning would mean my conclusion is irrational but it can not be proven incorrect. In this way, aesthetic knowledge claims can be irrational but true as it is inappropriate to use rational criticism. Contrastingly, with regard to scientific knowledge claims, the opposite may be true. Knowledge claims in the area of knowledge of science rely almost entirely on reason and rationality. Therefore it is possible for a knowledge claim to be rational yet untrue. For example, J.J. Thomson in 1987 rationally proved at the time that the atom consisted of electrons suspended in a soup of positive charge3. In fact, the idea was so rational that up and until 1910 student studying chemistry would learn the plum pudding model as truth. So even though the claim was rational yet wrong leading to the idea that in order for scientific claims to be accepted as truth rational criticism is required as without it incorrect theories would be accepted as fact. Moreover, Albert Einsteins theory of relativity has yet to be disproved after decades of rational criticism which has concluded his findings as scientific truth. However, the recent anomaly experienced by two German physicists suggest that Einstein and his many followers may not be correct after all in an experiment where a particle exceeded the speed of light4. This experiment was dismissed as its findings were against Einsteins theory of relativity and do not fit the existing data. Of course even if I were to be rational I would say that it is just an error with the empirical data from the German scientists as the paradigm shift that Einstein is may be wrong is unlikely and irrational as he has not ever been proven wrong. This highlights another problem with human reason which tends to look to satisfy preconceived ideas by manipulating evidence and so is not completely objective. Scientific knowledge prides itself for being accurate due to not relying on subjective data but this example shows how humans can be susceptible to subjective ideas and therefore may distort scientific claims of truth. Therefore, for any scientific knowledge claim to be accepted as truth the evidence or justification given must not be erroneous or subjective. In conclusion, science as an area of knowledge is heavily reliant on rational criticism as method of improving the body of knowledge as well as confirming it and so should be open to rational criticism even if the knowledge is considered factual. Moreover, any justification or evidence used to enforce a knowledge claim should be clear of errors and subjective methods The area of aesthetics is slightly different as most knowledge claims within this field are made emotionally in the absence of reason which rules out rational criticism as a method of achieving the advancement of it because in aesthetics, unlike science, the aim is not to improve knowledge but to celebrate and appreciate creativity. However, the use of reason and rational criticism where it can be applied in aesthetics should be encouraged to achieve a well justified conclusion even if the validity of the claim does not depend on reason.

Envy of the Procreative Power of Women in Nathaniel Hawthornes The Sca

Envy of the Procreative Power of Women in Nathaniel Hawthorne's The Scarlet Letter The Scarlet Letter, by Nathaniel Hawthorne, is a novel about procreation. Though Hester Prynne is the mother of Pearl and the creator of the scarlet letter in the novel, Hawthorne is the symbolic mother of the novel, the letter, and the characters. Careful analysis of the text reveals a pattern of womb envy and an attempt to master it on the part of Hawthorne. The concept of womb envy-- envy of the procreative power of women (Kittay 126)-- has been virtually ignored by both psychoanalysts and literary critics since Bruno Bettelheim first introduced the idea. Though intended as a supplement to the concepts of penis envy and the Oedipal complex developed by Freud, womb envy has not generated the attention that penis envy has. This may in part be due to Freud's interpretation of the desires of the males in his case study to bear children as be "anal, autoerotic, or homosexual" in nature. (Kittay 127). Since Freud ignored the possibility of men's envy of women's childbirthing abilities, most of his followers have as well. The disparity in the acceptance of Freud's and Bettelheim's concepts can best be seen in psychoanalytic criticisms in the literary world. Examples of "penis envy" and "Oedipal complex" readings abound. Hamlet's desire for his mother causes him such guilt that he resurrects his father and goes insane. Gertrude's promiscuous and incestuous marriage to her late husband's brother Claudius is a symbolic attempt to gain a penis. Virginia Woolf's invented sister of Shakespeare is a symbolic penis. At the same time, few literary critics have attempted to explain character or author motivation in terms of womb envy, despite the fa... ...st new mothers, Dimmesdale dies after delivering his sermon and confessing his sins. Chillingworth is unable to survive this loss since his dependency on Dimmesdale is unnatural. Of all the central characters, Hester, along with Pearl, is the one who strong enough to survive. Works Cited Benstock, Shari. "Of Gardens, Gold, and Little Girls." The Scarlet Letter. Murfin, Ross C., ed. Boston: St. Martin's, 1991. (292-303). Kiehl, Joanne Feit. "Re-Reading The Letter: Hawthorne, the Fetish, and the (Family Romance.: The Scarlet Letter. Murfin, Ross C., ed. Boston: St. Martin's, 1991. (235-251). Hawthorne, Nathaniel. The Scarlet Letter. Murfin, Ross C., ed. boston: St. Martin's, 1991. Kittay, Eva Feder. "Mastering Envy: From Freud's Narcissistic Wounds to Bettelheim's Symbolic Wounds to a Vision of Healing." Psychoanalytic Review 82. (1995f): 125-157.

The Functionalist View on Education (for as Level Sociology)

â€Å"Asses the contribution of functionalism to our understanding of the role of education† Functionalists take a very positive view of education. They see it as a form of secondary socialisation which is essential to the maintenance of society. Functionalists believe that social institutions including education benefit society and perform functions to maintain a stable society. However there are many different theories to consider. Sociologists such as Durkheim believe that education has two main roles. These are ‘Creating social solidarity’ and ‘teaching specialist skills’.Durkheim believes that social solidarity is created through teaching children shared norms and values. These are taught particularly in history lessons where students learn about their shared heritage. It may also be constructed through wearing school uniform or in American schools, pledging to the American flag. This helps create value consensus and prepares students for work as both children and adults have to work with people who aren’t family or friends. Durkheim also establishes the fact that modern industrial society has a very complex division of labour.He argues that education teaches students specialist skills in order to keep the economy functioning, as students can apply their skills to specific jobs that society needs them to perform. Parsons argues that school is a ‘bridge` between family and wider society, especially work. He states that how we are treated in the family is different to how we are treated at work. Therefore schools must prepare children for this change. Parsons claims that in the family a child is judged by particularistic standards (rules that apply only to that child/family) thus their status is ascribed.However in school and work, children are judged by universalistic standards (rules that apply to everyone equally), which means their status is achieved through passing exams or working towards a promotion. Accor ding to Parsons both school and work are meritocratic which means every student and employee has an equal chance in succeeding. Sociologists Davis and Moore argue the main function of education is ‘role allocation`. (Making sure people end up in the jobs they are suited to). To do this we need to make sure the most talented students get the most important jobs such as doctors etc.As these jobs are highly paid, many students try to compete for them in school. Schools then ‘sift and sort` people based of their talents and intellect, to ensure the students with the highest valued qualifications achieve the most important jobs. Vocational courses are an example of the functionalist view that education teaches students specialist skills to perform specific jobs. The first type of vocational course was the Youth Training Scheme (YTS) which was formed in the 1980s which unemployed young people had to enrol.This gave them the work experience they needed to maintain a job. Later forms of vocational courses included BTEC’s, NVQ’s and vocational A-levels. However YTS has been criticised due to young people not being offered jobs after training. Also, vocational training can be seen as having a lower status and being less academic than courses such as A-levels and Degrees. Functionalists have also been criticised as Marxists argue the norms and values that are passed on through education aren’t those of society, but of the ruling class.Interactionalists such Wrong also argue that the functionalist view of education is too deterministic: functionalists assume that students accept the norms and values they are taught in school, when they may reject them. In addition to this there is a lot of evidence that suggests that students don’t have an equal chance of succeeding. Gender, social class and ethnicity all have an influence on how well children do in school. In conclusion, functionalists are able to establish the preparation for the workplace which occurs in schools through theories such as parson’s and Durkheim’s.It is clear that education does in fact create value consensus and prepare students for changing attitudes from school to the workplace. However there are flaws in many of these theories. As Wrong states, functionalists ignore the fact that students may reject norms and values, thus the functionalist view on education is too deterministic. There is also evidence that schools are not meritocratic due to influences that gender, social class and ethnicity have on a child’s education. Ella Clarke

Ten-Foot-Square Hut

Zhao Meng Cui Buddhism Professor Broughton Mon 6:45pm-9:45pm Ten-Foot-Square Hut The Ten-Foot Square Hut is more of a story book to me rather than any religion related book. Kamo no Chomei describe the arrival of the mappo is complete chaos. First, there is a huge fire broke out on a windy night in the third year of the Angen era(1177) in the capital city. The fire was spread widely. Houses were torched; people were chocked to death by smoke or burned to death alive. The result of the fire was â€Å"Sixteen mansions of the nobility were consumed by the fire, to say nothing of untold numbers of other dwellings.Fully one third of the capital was destroyed; several thousand men and women perished. † Second, there is a huge whirlwind hit the capital again in the Jisho ear(1180). Four or five blocks of the city were destroyed. People lost their house, belongings, and lives. The southwestern area next to the city was damaged as well due to the wind moved that way down. Third, the re location of the capital and changing in politics. New capital was built in a different location up north in the mountain area by the sea. Kamo no chomei was also noticed the persons that he knew were riding on horses like the warrior clans instead of sitting in ox cart.People were still living in the fear of the fire. Fourth, the hunger comes around the Yowa era (1181-1182). Typhoons and floods destroyed farm lands and grain. It lasted 2 years. Many people were dead and grain were worth more than gold. Fifth, earthquake. Kamo no chomei mentioned the destruction of all temples first time. Last, People’s mind changed. People’s desire of wealth grows. They become greedy. This is the arrival of the mappo to Kamo no Chomei. It’s like everything that is known to people were destroyed and the old believes were collapsed.Nothing is going to the right direction. Kamo no chomei’s hut measures ten feet square in area and less than seven feet in height. The eaves ext end out three feet for firewood and cooking on the east side. There is also a bamboo balcony with a book shelf at the western side. He put an image of Amida and bodhisattva fugen on the north wall. His bed is along the east side of the room. He kept his music instruments and other books at the southwest corner. Nembutsu was his Bhuddhist practice. His problem was that he loved his small hut and the simple life style.His small hut help him with practice, but it is still consider as mental grasping. â€Å"Buddha warn us against feelings of attachment. † He is still attached to something that would keep him in the samsara. His solutions to his problem are â€Å"call upon my tongue to utter two or three recitations of Amida Buddha’s name, ineffectual as they might be, before falling silent. † My understanding is that he would first do more Buddhist practices as mentioned above â€Å"utter two or three recitations of Amida Buddha’s name†; secondly, easy his mind and meditate as in â€Å"falling silent†.

Benina Brave New World Essay Example

Benina Brave New World Essay Example Benina Brave New World Paper Benina Brave New World Paper Essay Topic: Brave New World Linda and Lenina Comparison in Brave New World It’s shocking how two people from different societies can be both similar and different at the same time. In Aldous Huxley’s Brave New World, Linda and Lenina are two such characters. Each of them have their own characteristics which make them unique, but they also have separate characteristics. The three ways in which Lenina and Linda can be compared would be physically, intelligently, and emotionally. First of all, Lenina’s physical characteristics help distinguish her type of character. Lenina is a typical woman in the new world, and she has all the characteristics that describe her as pneumatic. Lenina is a particularly attractive female since many men in the society seem to be attracted to her. Even the Arch-Community-Songster of Canterbury is attracted to Lenina. â€Å"‘Lenina my dear,’ he called in another tone. ‘come with me,’†(Huxley 176). This quote shows that Lenina is able to get any guy to want her, even members of higher classes. For instance, she’s able to get Henry Foster, an Alpha, to have her as well. Overall, Lenina is a very attractive woman who uses her assets to her advantage. In comparison, Linda also has some interesting characteristics that help distinguish her character. Linda, is very different from Lenina being described as a not very appealing character. â€Å"†¦Two of the front teeth were missing†¦And all the lines in her face, the flabbiness, the wrinkles. And the sagging cheeks†¦the bulge of the woman’s stomach and simply reeked of that beastly stuff,†(118-119). With this description given, it can be obvious that Linda would not fit in in the new world society looking the way she does. She would not fit in with everyone else with the way that she looked making her an outcast in the society. Linda, at one point, looked like Lenina in the civilization. After all, Linda was a Beta before she came to the reservation so she most likely looked at least a little like Lenina. Linda and Lenina seem to have more differences in their physical appearance rather than similarities. Another area that can be compared would be Lenina’s and Linda’s intellectual ability. Lenina falls into the stereotypical person from the society. She constantly repeats many of the hypnop? dic phrases that she was conditioned to know. For instance, when she is having her conversation with Henry about the Epsilons she states, â€Å"I suppose Epsilons don’t really mind being Epsilons†¦Ã¢â‚¬  and then after a bit of explanation, â€Å"†¦Everybody’s happy now,† (74-75). This shows that even though a little thought was put into what she said, Lenina still uses her hypnop? dic training as a basis for everything. Another example of this is when she continuously repeats, â€Å"A gramme is better than a damn,† (116). This is one of the hypnop? dic thoughts that are popular amongst everyone and seem to be a reaction when the word damn is used. So while Lenina can think for herself and make her own ideas about things, the hypnop? dic suggestions provide a basis for her actions that she makes throughout the story like taking soma whenever she’s bored and when she wants to get away. On the other hand, Linda’s intellectual ability is on an entirely different scale, for the most part. Linda began with all the same hypnop? ic suggestions as Lenina but her life in the reservation caused her to lose some of that knowledge. Linda was able to adapt to the life in the reservation. When Linda is talking to Lenina about cleanliness and when she first arrived she mentions, â€Å"But of course they didn’t understand. How should they? And in the end I suppose I got used to it,† (121). This quote is significant because it proves that people from the new world are able to adapt to another society if it’s the only way to survive, just like how Linda adapted to not having any soma in the reservation. Even though Linda adapted partially to the society in the reservation, she still tried to live as though the rules of the new world applied to the reservation. An example of that was when she tried to sleep with all the men in the reservation as though the same rules of the new world applied there. Linda is a character who knows what goes on outside the new world but wishes that she didn’t. Lenina has her general basis on how to live through the hypnop? dic suggestions, while Linda uses the things she learned in the society and what she learned from the reservation. Finally, Lenina and Linda can be compared through their emotions and how they act with them. Lenina is a strange character when it comes to looking at her with emotions. Normally, in the society, people are not to have any attachment to someone, but this is not evident with Lenina. There is a significant moment where Lenina shows possible affection towards another person, with Henry Foster. Lenina begins showing some affection towards Henry when she talks about him to Fanny. â€Å"Lenina blushed scarlet; but her eyes, the tone of her voice remained defiant. No, there hasn’t been any one else,’† (40). This begins to show that Lenina is different than the other people of the new world because she has only been having one guy instead of the typical many as the society usually has it. Lenina has shown many other emotions towards other people such as John or Bernard as well. That’s evident when Lenina brings John to go see a film and when she goes with Bernard to the reservation. Similarly, Linda also shows some emotions towards certain people as well, such as with John. Some of these emotions show love and compassion, while other emotions show hatred and grief. Linda seems to be very confused with her emotions towards John because of the fact that she cannot decide whether to hate or love John. â€Å"‘Little beast! ’ she pulled down his arm; his face was uncovered†¦He tried to smile at her. Suddenly she put her arms around him and kissed him again and again,† (127). That is a perfect example of how Linda is confused about how she should act towards John; one moment she’s aggravated and annoyed with him and the next moment she’s a loving mother figure. Both Linda and Lenina are very emotional when it comes to certain people in the society. To summarize, Linda and Lenina both have similarities and differences when it comes to physical features, intelligence, and emotions towards others. These areas allow for the comparison of both Linda and Lenina. While some parts show more similarities and differences than others, overall, Linda and Lenina are both two very different people. Huxley, Aldous. Brave New World. New York: Harper Brothers Publishers, 1932. Page #s, 74-75, 116, 118-119, 121, 127, 176

Love & basketball (compare&contrast essay) essays

Love & basketball (compare&contrast essay) essays As one can infer from the title, the movie Love s review and James Berardinellis review not only commend the movie but they also point out a few aspects of the movie that could have been better. There are two areas of the movie that Caros and Berardinellis review compare and an area both reviews contrast. Both say that the story shifts slightly towards the female perspective more than the male. Both also commend the writer/director of the movie (Gina Prince-Bythewood) for the technique she uses. They write that the technique helped balance out the time periods of the characters life, making the movie more interesting and comprehensible. However, they disagree on the characters. Mark said all the characters especially the leading characters were well chosen, while James felt one of the leading characters is not. After all, the reviewers gave Love This movie entitled Love d rather shoot baskets. When Monica was about twelve years old, her family moves into a new house in Baldwin Hills, Los Angelos. There, she introduces herself to her basketball-playing neighbor, Quincy McCall, (Glenndon Chatman). Quincy is a gorgeous person who dreams of becoming a NBA (National Basketball Association) star like is father. The first time Monica and Quincy met, they play a pickup game but when little Monica tries to...

Amicis East Coast Pizzeria

Amici’s East Coast Pizzeria started in the year 1987 and was founded by Cooperstein and Mike Forter. The company serves East Coast style thin-crusted pizza that has homemade sauce, a high-quality cheese from the Wisconsin as well as artisan topping. The organization began at San Mateo with just a wooden burning ovens and a thin crusted East coast style pizza. Over the years the company grew from East Coast to West Coast where the chain grew to twelve in San Francisco Bay region over a period of twenty-three years. In the year 2001 the company was regarded as the number one independent pizza chain in the US, and by the year 2011, the revenues had significantly grown to thirty-two million dollars having over three hundred employees. Comparison to other pizza chains the organization had been ranked position 70 nationally. In this case study analysis, it aims to examine some question. The first question is to explain on Amici’s business model. Secondly, what are the drivers that have been employed in this organization to make it successful based on the 7-s model. Lastly, it will explore on the strategy for the growth that could be used by Amici’s moving forward. The business models is essentially a strategy that is employed by Amici's company to use in generation of revenue from the products or perhaps the services they are offering. Amaci’s company uses some strategy to generate the most profit. The model they have used helps to determine the sales and the marketing strategies of the company during branding, pricing and sales channels. One of the strategies that the firm uses is to promote dine in service in their comfort and well-appointed restaurant that account for forty percent of their sales; they support delivery service about 50 percent of the sales and some takeout business that accounts for ten percent of the sales. This strategy has enabled the company to become number one in ranking regarding Pizza today on top one hundred free lists for four consecutive years. The company has differentiated on their products based on the quality and services. Their business model was scalable, as long as their business grew in a manner th at is quiet but steady to ensure the high quality would help them distinguish their restaurant could be maintained. Additionally for strategy growth the company has embarked on charity to enable the children from low-income families to go to the Summer Camp. This has allowed the average families’ income to experience on the summer camp to gain exposure to life-changing the power of a field. Through this, the company has provided more than 1500 summer experiences with the partner camps to children who have limited access to the recreational activities. The use of this model is based on a theory for an organization to perform well. The seven elements need to be aligned and mutually reinforced. This model ensures that the team works efficiently and reach the desired endpoint.   The first driver for the success of the organization is the strategy. Amici’s company strategy is aligned to provide high-quality product and services through differentiating on their product with the right team. The largest pizza they have is more than three dollars than the competitors but the high quality is what the consumers were looking for, and they have done this over the years. Shared value is the second driver for the company. The shared value for the company has been the development of a brand that is within the community transplanted East Coasters through careful and steady growth. The third driver is the system driver that is used by the company. The company employs triple threat operation system in the organization. This entails delivery, dine in and take out for the customer. [3]The next driver is the structure of the organization. The company has grown to 12 chains in San Francisco Bay Area over 23 years. The structure of the company is to open chains in both East and West Coast. The chain of command comes from the management, and the decision is laid from the top to bottom to the junior employees. The style of leadership that has been seen in the company is decentralized. The employees make their decision based on the best quality of product, which is expected by the owners. The owners allow employ to make their decision but should be aligned with their values and mission that is pegged on quality, service and a steady and gradual growth of the company. The skills and the competencies that are exhibited by the employees are top notch. The employs aim to offer the best quality of products as well as services than the competitor's company to enable the employs to come again. Amici’s general approach could be the cost leadership. This involves minimization of the costs to produce products at low prices. In the event, the price is lower the company will offer relatively cheaper products as a comparison to the competitors. Moreover, a broader diversification as the secondary generic strategy would be much useful. This would involve further developing new products that are distinct from the competitors. The organization should use the broad differentiation strategy as a way to move forward. Cunningham, Lawrence A, Torkell T Eide, and Patrick Hargreaves, Quality Investing, 1st edn, 2016. Hader, Richard, "Strategies for Profitable Growth", Nursing Management (Springhouse), 39 (2008), 22-26 https://doi.org/10.1097/01.numa.0000335254.31413.f0 Naeem, Zafar, Jack Fuchs, and Victoria Chang, "Amici's East Coast Pizzeria", California Management Review, 55 (2013), 153-165 https://doi.org/10.1525/cmr.2013.55.3.153 Sheehan, Norman T., "Pizza, Pizza, Pizza: A Competitive Strategy Exercise", Organization Management Journal, 11 (2014), 40-46 https://doi.org/10.1080/15416518.2014.897928

Process and Project Planning Essay Example | Topics and Well Written Essays - 2000 words

Process and Project Planning - Essay Example This report examines the problem of N&F manufacturing by analysing the models that could be used to forecast sales in order to helot eh firm determine potential sales and avoid losses. Forecasting Models and their Significance Sales and the revenue that is realized from sales are very significant to any organization that operates with the aim of maximizing profits. The relevance of sales revenue cannot be ignored since it helps an organization meet its expenses such as payment of its employees, raw materials and meeting fixed costs. Due to their significance, it is necessary for an organization to forecast the expected sales over a given period of time in order to determine its level of production. Effective sales forecast is necessary for future planning of an organization. For instance, accurate sales forecast could enable an organization decide its future operations especially in terms of diversification. A company is able to choose the line of diversification given correct sales forecasts for the different lines of operations. Most industries are characterised by free entry and exit whereby new firms could enter the industry while other companies could leave the industry. Sales forecasts are relevant in helping new entrants venture into a given profitable industry. The sales forecasts included in business plans are vital for decision on entry into a given industry. As noted by Morwitz (2001), sales forecasts are a central section of a business plan given that a new company has not historical sales data. The forecasts are used by business financial providers such as banks to provide capital for investors. Lastly, sales forecasts are important in determining the amount of inventory to be kept by an organization (Morwitz, 2001). Sales Forecasting Model for N&F Manufacturing Forecasting involves various methods that do forecasts mainly from judgmental sources and statistical sources of data. Judgmental forecasting methods have been called qualitative while meth ods that derive their data from statistical sources have been referred to as either quantitative or time series methods. In spite of the differences among the different forecasting methods, judgmental and statistical methods are integrated together and therefore applied simultaneously while undertaking sales or cost forecasts of an organization. Although many methods could be used to forecast the sales of Air New Zealand, this study seeks to explain two methods that are direct sales extrapolation and causal approaches to sales forecasting. a) Direct Sales Extrapolation Extrapolation methods utilize historical statistical data on sales of a company to predict the future performance of the firm in terms of sales revenue. The most common of extrapolation technique is the exponential smoothing that assumes that more recent data of sales of an organization is weighted heavily. The other assumption and principle of this method is that it utilizes long time series data for sales of a firm when developing a forecast model. According to Meade (2001), reliability of the data used in the study is a principle that cannot be ignored. The reliability of data used for forecasting is not debatable if the forecast is to be useful to the organization. Simple accurate, timely and

Research Design Assignment Example | Topics and Well Written Essays - 1500 words

Research Design - Assignment Example Looking at extrinsic motivation, this motivation comes from the outside. In the next stage, they are more internal about their motivation, and this relates more to themes of self-efficacy and self-esteem that comes from inside the individual instead of coming from outside. Having intrinsic motivation is not necessarily the same thing as having self-esteem, although it may be related to this concept. Valuing health and a fitness atmosphere is also a big part of cultivating self-esteem and positive self-image in this environment of research questions into athletic performance, and decreasing potential conflicts and problems in life. Overall, the plan focuses on both self-esteem and motivation. Motivation shows a mind-body connection, so whether or not a positive and motivated mind can lead to a better body for the subjects, is another major question in regards to the researchers. This points towards a holistic definition of fitness as is shown in motivation itself, of which this is part of internal or intrinsic motivation to increase the fitness level of the athlete, who is measured cycling in the study. The authors make educated guesses about whether or not athletes would respond positively or negatively to motivational factors. â€Å"Athletes occasionally follow pacing patterns that seem unreasonably aggressive compared with those of prerace performances, potentially because of the motivation provided by competition. This study evaluated the effect of extrinsic motivation on cyclists` time trial performance† (Hulleman et al., 2007). Extrinsic motivation may be true, but uses levers to encourage a certain way of thinking. Dealing with issues of motivation and planning means that the athlete would be hypothesized to need to have definite goals and at the same time still be flexible. That is, the effective motivated pro will have a master plan going but at the same

Compensation and Benefits Essay Example | Topics and Well Written Essays - 2000 words

Compensation and Benefits - Essay Example It wanted to be recognized as one of the finest places to work. To actualize that vision and mission, Nike implemented an incentive program in correlation with the mission. In any organizations including Nike, the workers do their duties for personal motivations like money (salary), but their motivation will get a great boost if they receive additional financial rewards, promotions and recognitions. When the reward component is analyzed from the perspective of organization's mission, it does somewhat supports Nike's mission. That is, Nike's mission is "To bring inspiration and innovation to every athlete in the world" (Nike Business, n.d.). Even though, this mission is customer centric, to achieve that mission the employees have to work effectively. To make the employee at Nike work effectively, the incentive program plays an important role. The incentive program implemented inside Nike perfectly fits with its resources. That is why, Nike has introduced an incentive program called Performance Sharing Plan, which correlates with the company's performance. "Performance Sharing Plan (PSP) - Nike has an annual bonus plan that rewards employees based on Nik e's performance (to reward team success) and individual performance (to reward your contributions to that success)." (The New York Job Source, 2008). As the program rewards the workers who perform up to the expected level, it meets the expectations of the employees. Importantly, this incentive program is fully attracting and retaining the employees. That is, Nike by rewarding and giving incentives to the deserving and 'success achieved' employees through this program and other programs is making them stick to the organization. This system is very flexible because it changes according to the performance of Nike. That is, if the employees perform optimally and raise organizational productivity and profits, they will be rewarded optimally. As this program is applicable to all types of employees, it cannot be tailor made for specific workers. On the whole, this incentive program functions as one of the main motivating factors for the employees, making them stick to the organization and thereby helped Nike reach the status of the world's number one maker of athletic shoes, equipment and apparel. When organizations fail to reward the employees appropriately, it could wean way the workers from the group decision making process and the resultant work teams. That is, some times or even frequently, the management overriding tried and trusted individuals could give important posts and responsibilities to individuals with negative attributes. If this practice is followed in the organisation, it will create disenchantment among the workers and will destroy team work. This ritual of awarding plum posts, rewards, incentives, etc, to the inappropriate members by the leader or the management team is not a norm in Nike. Nike rewards the employees in an unbiased manner. As mentioned above even this main incentive program of Performance Sharing Plan is applicable to all performing employees. Because of this strategy, workers in Nike are not banding together in a kind of mutual pr otection society with a culture of its own, but unite as work teams and are working in unison for the organizations. Unison of workers into teams with an urge to usher an organization into a successful endeavor will actualize, if the

Ending Hunger in the Elderly Population in America Essay

Ending Hunger in the Elderly Population in America - Essay Example It is surprising to note that this problem is growing on a large scale in the United States of America that believed to be, the most powerful democracy in the world. Economists argue that this condition is specifically created by the inequity in the food distribution system of the country, and food insecurity is increasing at an exceptional rate, especially in the elder population (Nestle & Guttmacher, 1992). According to a survey conducted by Weill, (March 2008), a majority of the elderly population in the United States of America is suffering from malnutrition and food insecurity.He proposed that a solution lies in developing a better food distribution network in the United States of America which should provide food according to the needs of the individual and/or family irrespective of race, religion, or age. This solution is the most logical one based on an observation registered by (Pothukuchi & Kaufman), 1998, that points out a deficency in the food distribution system in the U nited States of America. The growing phenomenon of hunger is also causing the health standards of elders to drop significantly. The underlying fact is that the medications require healthy food intakes to maintain their effectiveness, although, elders are being provided with high quality medicines by federal agencies, but these people need healthy food. During the medical treatment, these medicines make a human body weak, for this reason, the body needs healthy and ample amount of food to survive to fight this weakness caused by medicines. But, at the same time most of the government policies to eliminate hunger are proving to be a mere lip service, many multimillion projects are not implemented to their full potential (Notz, 1971). These failed projects to eliminating hunger in elderly population is causing level of frustration in the general public of US, but the government is also facing a severe deficit in the city of New York alone, therefore, governmental financial resources ar e bearing high pressures regarding fulfilling the needs of public. Inavailability of food for elderly population is forcing them to forego at least one meal each day to fulfil their other necessities such as housing and insurance, this trend is also contributing towards making a bad condition worse in relation to the food supply for elderly population (Gomez & Ranney, 2002). Many researchers are of the view that, elders should be trained in such a way which could help therm in becoming useful members of the society, but this point of view is not a realistic one, because with the increase in age the mobility and strength of an individual is compromised rendering a person unable to work actively. Thus, it is the responsibility of federal government to work for the welfare of these people. On the other hand, international organizations, including UN, are playing a significant role in attempting to eliminate the hunger peoblem; however, their effort is less than effective, because, thes e organizations provide aid to the local government and cannot interfere in the internal affairs of a country. Due to this reason, local government utilizes these fundings in an unjust method, so these international organizations should be empowered to manage and implement these hunger elimination programs by themselves. NGOs of all kind are more than interested in their profitability, therefore human compassion is

Role of women in Christian Leadership Assignment

Role of women in Christian Leadership - Assignment Example Some of these arguments are against women leadership in churches while others seek to justify the need to have women leaders in church. All quarters seek to justify their stand on the issue using the Bible as their basis (Scott, 2002, p. 27). In 1Timothy 2:12, Paul says he does not permit women to have authority over men in the church. He also bars them from teaching. According to him, a woman is to be submissive and silent. He goes further to quote the Genesis creation story and states that God created man first before the woman. He goes further to say that, it was Eve that first fell to temptation and not Adam. This may have formed the basis for his argument against women leadership in the early church. Going backwards, we see Paul stating the appropriate dress code for women as he sees it fit (1Timothy 2:9). This brings out yet another possible reason for Paul’s stand. He may have noted the danger in how women dressed in church and that is why he emphasized on how they were to dress. He possibly saw that in their quest to look good, women might end up overdoing it to the extent that it affects their ministry in the church. It may also form ground for competition among them thus causing them to deviate from their main roles of leadership. Such competition could be harmful to the church as it could escalate and cause division as they try to outdo each other. Yet another fear could be the possibility of women ignoring their ethical responsibilities as they engage more and more in leadership. This could be harmful to their family lives, as they could possibly want to carry their authority back into their homes, which would be against their traditional Laws where the man was the head of the family. We could also possibly say that Paul was referring to women in the past that had been in influential positions but were evil or deceiving. Women such as Jezebel (II Kings 9:10) and Delilah (Judges 16) may have contributed to the notion that given a chance, women could become evil and cause the downfall of man, which could translate to the fall of the church. Great men such as Samson, David, Solomon and even Adam all seem to have fallen or made wrong choices due to women. If Paul was drawing his conclusions from such events involving women, the he had some ground to argue for barring women from leading in the church. In the book of Corinthians, Paul reminds the church what the laws say about women and how they should not speak in front of the congregation. Any woman who had anything to ask was to ask her husband at home and not in the church. The laws considered it a disgrace for a woman to speak in church (1Corinthians 14:34-35). Paul was possibly insisting on this to ensure that there was order within the church. Paul’s letters to Timothy and The Corinthians came at a time when there were quarrels within the church. The letters served to reaffirm the laws to bring about order. In 1Timothy, People who have little understanding of th e laws and scriptures tend to be challenging Timothy’s authority within the church. These seem to be preaching erroneously to the people. Among these are probably women who interpret the scriptures in their own ways to justify their participation in leadership in the church. Paul seeks to help Timothy subdue feministic tendencies that may be cropping up in the Church. He writes to reaffirm Timothy’s authority in the church. Although Paul’s words come out strongly against women leadership, he does not discourage women participation in the work of evangelization. This is through women such as Priscilla who

Reading Reflection Assignment Example | Topics and Well Written Essays - 250 words

Reading Reflection - Assignment Example One of the most important consequences of the globalization process has been the multi-cultural environment of the communities. It has therefore made the role of community development practitioner a highly desirable and essential one. Social workers are also paid employee and their work environment should also come under the purview of ESA so they are not exploited in terms of working environment or minimum wages or even due to any diversity issues. I am also highly distressed that OHSA is indifferent to the working conditions of servants who work in the private residents. People working as servants in the residences of rich are more vulnerable to physical, mental and financial exploitation. It is important that all types of working people who get paid should be protected by the state’s employment laws, irrespective of conditions, whatsoever. Indeed, as a social worker, my first priority would be fighting for the rights of the ‘servants’ who have a right to basic minimum wages and secured employment

Role of women in Christian Leadership Assignment

Role of women in Christian Leadership - Assignment Example Some of these arguments are against women leadership in churches while others seek to justify the need to have women leaders in church. All quarters seek to justify their stand on the issue using the Bible as their basis (Scott, 2002, p. 27). In 1Timothy 2:12, Paul says he does not permit women to have authority over men in the church. He also bars them from teaching. According to him, a woman is to be submissive and silent. He goes further to quote the Genesis creation story and states that God created man first before the woman. He goes further to say that, it was Eve that first fell to temptation and not Adam. This may have formed the basis for his argument against women leadership in the early church. Going backwards, we see Paul stating the appropriate dress code for women as he sees it fit (1Timothy 2:9). This brings out yet another possible reason for Paul’s stand. He may have noted the danger in how women dressed in church and that is why he emphasized on how they were to dress. He possibly saw that in their quest to look good, women might end up overdoing it to the extent that it affects their ministry in the church. It may also form ground for competition among them thus causing them to deviate from their main roles of leadership. Such competition could be harmful to the church as it could escalate and cause division as they try to outdo each other. Yet another fear could be the possibility of women ignoring their ethical responsibilities as they engage more and more in leadership. This could be harmful to their family lives, as they could possibly want to carry their authority back into their homes, which would be against their traditional Laws where the man was the head of the family. We could also possibly say that Paul was referring to women in the past that had been in influential positions but were evil or deceiving. Women such as Jezebel (II Kings 9:10) and Delilah (Judges 16) may have contributed to the notion that given a chance, women could become evil and cause the downfall of man, which could translate to the fall of the church. Great men such as Samson, David, Solomon and even Adam all seem to have fallen or made wrong choices due to women. If Paul was drawing his conclusions from such events involving women, the he had some ground to argue for barring women from leading in the church. In the book of Corinthians, Paul reminds the church what the laws say about women and how they should not speak in front of the congregation. Any woman who had anything to ask was to ask her husband at home and not in the church. The laws considered it a disgrace for a woman to speak in church (1Corinthians 14:34-35). Paul was possibly insisting on this to ensure that there was order within the church. Paul’s letters to Timothy and The Corinthians came at a time when there were quarrels within the church. The letters served to reaffirm the laws to bring about order. In 1Timothy, People who have little understanding of th e laws and scriptures tend to be challenging Timothy’s authority within the church. These seem to be preaching erroneously to the people. Among these are probably women who interpret the scriptures in their own ways to justify their participation in leadership in the church. Paul seeks to help Timothy subdue feministic tendencies that may be cropping up in the Church. He writes to reaffirm Timothy’s authority in the church. Although Paul’s words come out strongly against women leadership, he does not discourage women participation in the work of evangelization. This is through women such as Priscilla who

University and Scholar Ship Funding Essay Example for Free

University and Scholar Ship Funding Essay Should college athletes be paid? Thesis: Amateur athletes at the major college, should not be paid for college sports; instead college athletes should be thankful they are receiving full four year scholar ship funding, that is treated like a pro contract where it can be terminated if one was injured or a recruiting mistake. I. Should Ncaa Athletes be paid? A. Study shows that March Madness has become a huge become a huge business in the college sports scene. B. The Ncaa make a 6 billion dollar revenue off broadcasting the teams and also  athletic conference’s receive millions of dollars if there team advances in the tournament. C. College athletes don’t get to see any of the money, as they risk career ending injuries all the time as they step on the court, field, and rink. II. Why should college athletes be paid? A. Research shows that division 1 scholarships are 25,000 per year which equal 100,000 for the course of four years. B. Being athlete is a full time job there is little to none time for working for extra money for the student. C. Athletes earn their schools thousands of dollars, increased in enrollment, and great recruiting prospects for the later years. III. Why shouldn’t college athletes get paid? A. There are less popular teams in the college scene that does not make the university a lot of revenue, so why pay if all are struggling B. Instead of receiving a salary college athletes need to be worried about achieving a degree. C. Players are receiving an advanced education at universities and colleges that thousands of Americans can’t attend. IV. Conclusion: Trevon Marshall Rough Draft.

Rights and Duties in a Letter of Credit Transaction

Rights and Duties in a Letter of Credit Transaction Introduction The letter of credit is the most commonly used method of payment for goods in international trade. This thesis highlights the imbalance of the rights and duties of the parties in a letter of credit transaction by emphasising deficiencies in the letters of credit system. In addition, on those areas where there is lack of justice and equity and which make the system of the letters of credit vulnerable for fraudulent activities. This thesis is structured in five chapters. First chapter after briefly discussing the structure of the letter of credit system, such as parties to the letter of credit transaction, kinds of letters of credit, step by step procedure of the transaction, different type of the documents used and the common defects in those documents, it also explains about the division of the risk under such a transaction and how the applicant’s risk has increased under UCP and very often the buyer is paying for the goods he had not contracted for. Second chapter after brief discussion of the drafting and interpretation of the UCP, explains about the reluctance of the courts to intervene in order to balance the rights and duties of the parties in a letter of credit transaction, status of the UCP, scope of the banks duties and in addition the disclaimer clauses under UCP. Chapter three explores the autonomy of the letters of credit, the doctrine of strict compliance and the ways in which the courts deal with documentary compliance. It further considers that overprotection of the â€Å"independence principle†, and the lack of â€Å"reasonable care† on the part of banks provides opportunities of fraud to the sellers to obtain payment without actually performing their duties to banks and buyers. Chapter four explains â€Å"fraud exception† to the autonomy principle in detail, the position of the fraud exception in England and the history of the English cases relating to the fraud. In addition it also examines the reasons for such an enormous increase in the number of cases relating to fraud. Finally, chapter five considers some of those methods, which can be used to avoid such an increase in fraud cases and also provides few suggestions to balance the rights and duties amongst all the parties to the letter of credit transaction. Chapter 1 Structure of a Letter of Credit Transaction Commercial letters of credit have been used for the centuries as a most common method of payment, in international trade. Letters of credit used in international transactions are governed by the International Chamber of Commerce Uniform Customs and Practice for Documentary Credits (UCP). A commercial letter of credit is a contractual agreement between a bank (issuing bank), on behalf of one of its customers (buyer), authorizing another bank (advising or confirming bank), to make payment to the beneficiary (seller). The issuing bank, on the application of its customer (buyer), opens the letter of credit, and makes a commitment with the buyer to honour the credit, if the documents presented by the beneficiary are conforming to the terms and conditions of the credit. Thus, the issuing replaces the customer to make payment to the seller. Elements of a Letter of Credit An undertaking given by issuing bank to make payment Issuing bank gives undertaking on behalf of a applicant To pay a given amount of money to the seller On presentation of required documents under the letter of credit Within a specified time as provided by the letter of credit Documents must be in compliance to the terms and conditions of the letter of credit Documents must be presented at a specified place provided by the letter of credit Beneficiary Beneficiary is normally the provider of the goods or services and is entitled to payment as long as he can provide the conforming documents required by the letter of credit. The letter of credit is a distinct and separate transaction from the underlying contract (contract between seller and buyer). All parties deal in documents and not in goods. The issuing bank is not liable for the performance of the underlying contract between the buyer and seller. The issuing banks obligation to the buyer-applicant is to examine all documents to insure that they are in compliance with the terms and conditions of the credit. To get the payment it is for the beneficiary to provide all the required documents. If the seller-beneficiary conforms to the letter of credit, the seller must be paid by the bank. Issuing Bank Letters of credit only concerns with the documents, not with the goods, therefore the duty of issuing bank to pay to the beneficiary and than to be reimbursed from its customer will only be completed upon the completion of the terms and conditions of the letter of credit. Under the provisions of the Uniform Customs and Practice for Documentary Credits, the bank is entitled to have a reasonable time after receipt of the documents from the beneficiary, to examine the documents and then to make the payment. The issuing bank provides a guarantee to the seller that if the documents presented by the beneficiary are in compliance with the terms and conditions of the credit, then the bank will make the payment to the seller. Generally the documents presented include a commercial invoice, bill of lading or airway bill and an insurance document etc. Advising Bank An advising bank is usually a foreign correspondent bank of the issuing bank which advises the seller-beneficiary. Generally, the beneficiary wants to use a local bank to insure that the letter of credit is valid. In addition, the advising bank is responsible for sending the documents to the issuing bank. The advising bank has no other obligation under the letter of credit. Therefore, if the issuing bank does not pay the beneficiary, the advising bank is not obligated to pay. Confirming Bank At the request of the issuing bank, the correspondent bank may confirm the letter of credit for the seller-beneficiary and obligates itself to insure payment under the letter of credit. The confirming bank is usually the advising bank. There are two main types of Letters of credit: (1) Revocable (2) Irrevocable Revocable Letter of Credit Revocable letter of credit is not a commonly used type of the letters of credit. This type of letter of credit can be revoked by the issuing bank at any time, without notification to the beneficiary, for any reason. Such type of letter of credit can not be confirmed by the correspondent bank and the bank will act as an advising bank only. A revocable letter of credit can not be revoked after the presentation of the documents, if the documents are conforming to the terms and conditions of the letter of credit and the payment has been made. Irrevocable Letter of Credit Use of irrevocable letters of credit is very common in international trade. Irrevocable letter of credit can not be revoked or changed without the consent of the beneficiary. Issuing bank will make the payment to the seller, if the seller presents the documents complying with the terms of the credit, as agreed between seller and buyer. Such a letter of credit can only be changed with the permission of both buyer and seller. If it is not clear from the letter of credit that whether it is revocable or irrevocable, it automatically considers as irrevocable. Irrevocable letters of credit are of two kinds: Unconfirmed credit In case of unconfirmed letter of credit, advising bank does not confirm the credit to the seller and the issuing bank is the only party responsible for payment to the beneficiary. Advising bank will only pay to the seller after getting payment from the issuing bank and there is no risk for the advising bank. Confirmed credit In this type of credit, advising bank confirms credit to the seller. When the advising bank confirms that the documents presented are conforming to the terms of the credit, it will make the payment to the seller, and after that advising bank will contact with the issuing bank to get the payment. This type of letter of credit is commonly used, when the seller is unfamiliar with the issuing bank. Such a type of letter of credit is quite expensive because the banks have some liability. Step-by-step process In international trade as the buyer and seller are in different countries so when the buyer and the seller of the goods agree to conduct business, than because of the gap of time between delivery of goods and the payment, usually the seller wants a letter of credit as a guarantee of payment from the buyer. Than the buyer makes a request to his bank called the issuing to open a credit in the favour of the seller. at the request of the buyer, issuing bank issues a letter of credit in favour of the seller and forwards it to the corresponding bank called the advising or conforming bank., which is usually located in the seller’s country. Advising bank than either confirms the credit or not, depending upon the type of credit, and forward it to the seller. Seller than ships the goods and collects the documents required in order to meet the requirements of the letter of credit and finally to get the payment in time. Seller presents the required documents to the advising or confirming bank in order to get the payment in time. Advising or confirming bank examines the documents presented by the seller to check that whether they are conforming to the terms and conditions of the letter of credit. If the documents are in compliance, advising or confirming bank, in case of confirmed letter of credit, will make payment to the seller and will be reimbursed from the issuing bank and in case of unconfirmed letter of credit, advising or confirming bank will forward the documents to the issuing bank. Than the Issuing bank will, after examine of the documents, debit the buyers account if the documents are in compliance to the terms of the letter of credit. In the end, Issuing bank forwards the documents to the buyer. Most commonly used documents in a letter of credit transaction include: Commercial Invoice This includes description of the goods, their price, FOB origin, and name and address of the buyer and the seller. The buyer and seller information must be in compliance with the description provided in the letter of credit. Bill of Lading It is a document which shows the receipt of goods for shipment by a freight carrier. It is an evidence of the control of the goods and also acts as an evidence of the carriers obligation to transport the goods to their proper destination. Warranty of Title A warranty given by a seller to a buyer of goods that states that the title being conveyed is good. It is generally issued to the purchaser. Letter of Indemnity It is a letter specifically indemnifies the purchaser against a certain stated circumstance. Indemnification is generally used to guarantee that shipping documents will be provided in good order when available. Common Defects in the documents presented A discrepancy is some defect in the documents presented by the seller, which show their non-compliance with the terms of the letter of credit. Issuing bank can not change the terms and conditions of the letter of credit with out t he permission of the buyer. Therefore to avoid any delay in getting payment. Beneficiary should be careful in preparing the required documents. Common defects in the documents presented by the seller include: If the description of the goods is not consistent. There is some error in the insurance documents. If the draft amount is not equal to invoice amount. Loading and destination ports are not same as provided by the letter of credit. Merchandise description is not same as in the credit. If any of the documents required by the credit is not presented. Documents are generally inconsistent such as quality, etc. If the names of the documents required are not correct, as mentioned in the credit. Invoice is not signed as provided in the letter of credit. If prior to the presentation of the draft, Letter of Credit has expired. If the date mention in the bill of lading is different from the date stated in the credit. If there are some changes in the invoice which are not authorized by the letter of credit. In international sales, as the seller and the buyer are in different countries, there is a common problem of payment due to the difference of time between dispatch and delivery. Obviously, seller would like to receive payment for the goods when delivering them to the carrier and the buyer would prefer to delay the payment of the price until receipt of the goods. Therefore, a letter of credit solves this problem between the seller and the buyer. Generally, there are three separate transactions in a letter of credit transaction. The first is between a seller and a buyer, called an underlying transaction, by which the seller provides contracted goods to the buyer. The second transaction is between the buyer-applicant and the bank (issuer of the letter of credit), in which the bank issues a letter of credit to the seller-beneficiary. Finally, the letter of credit itself creates a relationship between the issuer and the beneficiary, in which, the issuer makes payment for goods upon the beneficiary’s presentation of the required documents, in accordance with the terms and conditions of the letter of credit as agreed between seller and buyer. The bank’s performance of payment is conditional on the delivery of conforming documents by the beneficiary. The banks are called issuers and are usually the applicant’s bank. Normally the issuing bank opens a letter of credit in its own name and requests its correspondent bank to notify the seller about the letter of credit. Sometimes, the issuing bank asks the correspondent bank not only to inform the seller of the issuing bank’s undertaking but also to add a confirmation. In this case, the credit is known as a confirmed credit and the correspondent bank as a confirming bank. The payment obligation of the issuing bank depends upon the beneficiary’s presentation of complying documents to the confirming bank or to any other nominated bank, in accordance with the terms and conditions of the credit. Under general practice, presenting â€Å"complying documents† means that they comply with the conditions of the credit â€Å"on their face†. From banking point of view, compliance â€Å"on their face† of the presented documents is sufficient. The â€Å"independence principle† (which will be discussed later) is the fundamental principle of the letter of credit system, which prohibits banks from looking beyond facial compliance of the documents, and therefore exclude whether or not there is actual performance by the seller-beneficiary. In fact, letters of credit system has emphasised the independence principle to such an extent that banks are ignoring the performance of the underlying contract very confidently. As a result, all the risk is on the honest buyers, who are sometime paying for goods that they had not contracted for. Importance of the research The primary purpose of the letter of credit system is to facilitate international trade, rather than to provide an opportunity to the banks to make profit. As the fraud is very common in these days, but UCP is not designed to prevent fraud. The number of frauds relating to the letters of credit has increased over the years. Buyers are particularly vulnerable to such practices under the letter of credit system. This situation shows that there is some ambiguity in the letter of credit system and a lack of balance between the rights and duties of the parties to a letter of credit transaction, which is being exploited very easily by fraudsters. Division of risk under a Letter of Credit Transaction As we have discussed above, a letter of credit transaction consists of three linked but independent contracts. The first step is that the buyer makes a contract with the seller for the sale of goods, called the underlying contract. Subsequently the buyer signs an application form requesting the bank to open a credit, which is an arrangement between the buyer and the bank. The third step is that the issuing bank informs the seller, who is the beneficiary of the letter of credit, of the credit and promises to pay against the stipulated documents provided the terms and conditions of the credit are met. The letter of credit allocates risk between the applicant and the beneficiary. By postulating a letter of credit, the beneficiary may greatly reduce the risk of not being paid and ultimately allowing the beneficiary of the letter to reallocate the risk of non-payment for delivered goods which do not conform to the underlying sale contract. Generally, banks are reluctant to dishonour a credit, since to do so may damage the bank’s reputation as a credit issuer. The cost of honour, however, falls on the honest applicant, not the bank. â€Å"If the beneficiary has breached the underlying transaction, payment under the credit to him will occasion loss, but that loss will not be the bank’s; it will be the applicant’s.† Increase in the applicant’s risk and decrease in the bank’s risk under UCP UCP is the governing law of the letters of credit, therefore there should be a balance regarding the rights and duties of the parties, but UCP contains rules that reduce bank risk. There is no provision asking for judicial intervention to compensate letter of credit parties in case of bank’s negligence. The provisions in favour of banks fall into two categories. The first provides sweeping immunity from liabilities that national legal systems may impose. Example of such a disclaimer is Article 15. Under Article 15, banks assume no liability for the genuineness, falsification or legal effect of any documents and therefore the issuer is immune from the liability for paying against forged documents, which on their face appear regular. Therefore, the payment by the issuing bank does not show that the buyer has received the goods, which he had contracted for. The security, which the beneficiary is getting under the letter of credit system is not the same with the security of the buyer. The second category of pro-bank provisions contains rules that set precise boundaries on what the banks must do, which reduces uncertainty about bank responsibility and provides clear guidance to bank employees. For example, the customer cannot stipulate non-documentary conditions of payment, and time limits on examination of documents are fixed rather than open-ended. In case of any loss, the buyer, which is the applicant for a credit, can take action against the seller for breach of contract or fraud, but has no right of action against the bank for bank’s negligence in examining the documents, which can be ineffectual for several reasons, such as insolvency of either the applicant or the beneficiary. Hence the burden of risk on the applicant is more than any party in a letter of credit transaction and in most of the cases, buyers are paying for the goods, they have not contracted for. Chapter 2 UCP and letters of credit Originally UCP has been drafted by the Banking Commission of the ICC, which was comprised of the representatives of the banking community, which shows the dominance of the banks and banking experts. Their dominance in UCP drafting, hints that in drafting UCP, ICC was acting as a private legislature. It looks that the rules contain in the UCP are much beneficial for the banks than any other party, and giving a limited chance to the judiciaries to interfere to protect customers from any careless behaviour of the banks. The authority to interpret the UCP rests in the ICC Commission on Banking Technique and Practice, which can apply these interpretations to solve the problems arising in any case. Because of wide publicity and distribution of commission’s answers, their interpretation can be considered as an official interpretation of the UCP. Commission can enhance, interpreting, and sometimes amend the provisions of the UCP. The banks which deal with the letters of credit, act upon these interpretations and any amendments. As in theory, commission is only answerable to ICC members, therefore the chances of any challenge to such interpretation is very low. Role of courts in balancing the rights and duties of the parties In Discount Records Ltd. v. Barclay Bank Ltd., the judge was reluctant to â€Å"interfere with bankers’ irrevocable credit and not least in the sphere of international banking†. The position is same in many other cases. The apparent reason for the reluctance of the judges to interfere looks that they are afraid from the threats of the banking experts that their decisions would have an unfavourable affect on international trade. The difficulties of the courts to balance the rights and duties of all parties to a letter of credit transaction have increased. In Mannesman Handel AG v. Kaunlaran Shipping Corporation, the Swiss bank argued that the bank was in rejecting the documents by the German company relying on the independence principle and the discrepancies appeared on the documents. The court was asked not to apply the good faith principle otherwise the court â€Å"would be calculated to undermine if not destroy the doctrine of strict compliance and to blur if not extinguish the distinction between transactions concerning goods and transactions concerning documents.† Normally the judicial decisions relating to the legal aspects of documentary credits base on either the express intentions of the parties or established business practice at the time, the parties entered in a contractual relationship. In cases where the UCP provisions are different from business practice, a court will apply the UCP if the UCP is incorporated in the contract of the parties. It shows that courts have assented to the entire documentary credit system being run by the banking industry and eventually abstaining the courts to intervene to balance the legal rights and duties amongst all the parties. Should the UCP have the status of law? Leading scholar Professor Ross Buckley says: â€Å"originally, the UCP was neither designed nor intended to be law. It was prepared as a set of standard terms to be incorporated by reference into letters of credit by those parties who chose to do so.† This has also been confirmed by the UCP in the preface of UCP 500, which states that the UCP is not legislation but a compilation of rules made by bankers for their own industry. Therefore there is a dispute as to whether the UCP is a code of the law, or just customary practices, or some mutually consented regulations relating to letters of credit. However in fact, UCP is the governing law of the letters of credit. The Scope of the Banks Duties Before analysing the wording of the disclaimers used, the scope of the duties undertaken by the banks involved must be identified. Whereas the type of credit and the documentary stipulations therein will usually have been negotiated by the commercial parties and included in their sales contract, the terms and conditions under which a bank undertakes to open a documentary credit will normally appear in the banks standard application form which the importer will be required to complete. Although the application would normally refer to the UCP, it is important to note that the provisions of the UCP would not automatically apply in English law if not expressly incorporated by the parties to the credit and, even if expressly incorporated, its provisions can be excluded, or modified by the express terms of the credit. The duty to issue an efficacious credit The importers failure to procure the issue of a documentary credit which conforms to the terms of the sales contract may be treated by the exporter as a breach of a condition precedent to his performance and a repudiation of the contract by the importer. Whether the applicant can sue the issuing bank in respect of its culpable failure to issue (or to issue in good time) a conforming and efficacious credit is, however, by no means clear. The duty to issue a conforming credit An initial problem arises where the applicant requires the issue of a confirmed credit, that is, a credit in which a second bank, normally in the beneficiarys country, adds its own independent undertaking, to pay against the stipulated documents, to that of the issuing bank. Is the issuing bank in breach of contract towards the applicant if it is unable to procure the confirmation? The answer must depend upon the issuers conduct on receiving the application from the applicant. The second aspect of the duty to issue a conforming credit raises the question of liability for the acts of other banks involved in the transaction. Clearly, if the issuing bank opens a credit which specifies documentation other than that called for by the applicant, then in the absence of a disclaimer it will be in breach of its contract with the applicant under the doctrine of strict compliance. The position should be the same where the issuing bank unreasonably delays issue of the credit so that the beneficiary incurs loss. A difficulty arises, however, when it is not the issuing bank itself which causes the error or delay in complying with the applicants instructions, but the issuers correspondent bank. The doctrine of privity of contract would appear to prevent contractual liability arising in this context. However, in any event, it appears that there is no reason for holding that, in the absence of a disclaimer; an issuing bank should not be liable for the consequences of errors by its correspondents. Duty to receive and examine documents The doctrine of strict compliance means that issuing banks which pay against non-conforming documents are in breach of their contractual obligations to the applicant. The issuer is not, however, a guarantor of the documents conformity; its duty is discharged by the exercise of reasonable care to ascertain that the documents comply on their face with the terms of the credit. Duty to make payment under the terms of the credit The party with the primary interest in enforcing the banks obligation to pay against conforming documents is the beneficiary although it is clear that this obligation is also owed to the applicant. Furthermore, any variation of the payment terms would be a clear breach of contract. Duties of correspondent banks In so far as the confirming bank gives an undertaking in exactly the same terms as the issuing bank, it clearly owes precisely the same duties to the beneficiary. However, since a confirming bank looks to the issuing bank alone for reimbursement, it may be prima facie unlikely that it owes any duty to the applicant, even where the applicant is paying the confirmation fee. There are, however, some judicial dicta which might support the recognition of such a duty. Bank’s risk under UCP (exemption clauses) Article 15 and 18 (b) of the UCP 500, limits the liability of the banks in a letter of credit transaction and which have almost made it a risk free transaction for the banks. Article 15 says: â€Å"Banks assume no liability to or responsibility for the form, sufficiency, accuracy, genuineness, falsification or legal effect of any document(s) or for the general and/or particular conditions stipulated in the document(s) or superimposed thereon, nor do they assume any liability or responsibility for the description, quantity, weight, quality, condition, packing, delivery, value or existence of the goods represented by any document(s) or for the good-faith or acts and/or omissions, solvency, performance or standing of the consignors, the carriers, the forwarders, the consignee or the insurers of the goods or any other person whomsoever.† Article 18(b) further states: â€Å"Banks assume no liability or responsibility should the instructions they submit not be carried out, even if they have themselves taken the initiative in the choice of such other bank(s).† The UCP 500 places the applicant-buyer in an absurdly vulnerable position through its disclaimer clauses. To some extent there is a lack of duties on the part of the bank to verify the authenticity of the documents. Hence it might not be wrong to say that albeit there is a waste increase in the use of letters of credit, does not signify that the UCP is fairly drafted. Letters of credit and its users It is also very important that whether all the parties to the letter of credit, particularly applicant-buyer are conscious about the presence of these exemptions, e.g. by providing a copy of these exemption clauses of the UCP or by giving a notice of these exemption clauses. It is a rule that to enforce an exemption clause, a reasonable notice should be given to the other party but in practice, buyers are assume to have the notice of the UCP and that they are familiar with the provisions of the UCP. Further, the application for the issuance of a letter of credit and the letter of credit document itself only contain a simple sentence: â€Å"Subject to UCP for Documentary Credits†, without any attachment of the provisions of the UCP or any notice of such exemption clauses. Hence it is debatable that why the courts do not look, while dealing with the cases relating to the letters of credit, that whether a reasonable notice has been given relating to the exemption clauses and do not interfere to balance the rights and duties of the parties to a letter of credit transaction? Chapter 3 Doctrine of strict compliance and independence principle It is a basic rule of the letter of the credit transaction and which is widely recognised that the letters of credit are transactions independent of the underlying contracts on which they are based. According to this principle, the issuer has no concern with the underlying contracts between buyer and seller. Its concern is with documents only, rather than the goods or any type of services. Obviously there are some doubts about this principle, i.e. to what extent this principle should be applied. Which some tome may cause injustice to the applicant under certain circumstances. Independence Principle Generally, letter of credit is a contract between the issuer and the seller of the goods, which is independent of the underlying contract between the seller and the buyer. The independence principle is mentioned in Article 3 and Article 4 of the UCP. Article 3 states: â€Å"Credits, by their nature, are separated transactions from the sales or other contract(s), even if any reference whatsoever to such contract(s) is included in the Credit.† Article 4 further says: â€Å"In credit operations all parties concerned deal with documents and not with goods, services and/or other performances to which the documents may relate.† From the very beginning independence principle governs letter of credit transactions and very clearly states that the credits are completely separate from their underlying transactions and the issuer makes payment depending on the conformity of the documents presented according to the terms and conditions of the credit without considering the performance of the underlying contract by the beneficiary. Rights and Duties in a Letter of Credit Transaction Rights and Duties in a Letter of Credit Transaction Introduction The letter of credit is the most commonly used method of payment for goods in international trade. This thesis highlights the imbalance of the rights and duties of the parties in a letter of credit transaction by emphasising deficiencies in the letters of credit system. In addition, on those areas where there is lack of justice and equity and which make the system of the letters of credit vulnerable for fraudulent activities. This thesis is structured in five chapters. First chapter after briefly discussing the structure of the letter of credit system, such as parties to the letter of credit transaction, kinds of letters of credit, step by step procedure of the transaction, different type of the documents used and the common defects in those documents, it also explains about the division of the risk under such a transaction and how the applicant’s risk has increased under UCP and very often the buyer is paying for the goods he had not contracted for. Second chapter after brief discussion of the drafting and interpretation of the UCP, explains about the reluctance of the courts to intervene in order to balance the rights and duties of the parties in a letter of credit transaction, status of the UCP, scope of the banks duties and in addition the disclaimer clauses under UCP. Chapter three explores the autonomy of the letters of credit, the doctrine of strict compliance and the ways in which the courts deal with documentary compliance. It further considers that overprotection of the â€Å"independence principle†, and the lack of â€Å"reasonable care† on the part of banks provides opportunities of fraud to the sellers to obtain payment without actually performing their duties to banks and buyers. Chapter four explains â€Å"fraud exception† to the autonomy principle in detail, the position of the fraud exception in England and the history of the English cases relating to the fraud. In addition it also examines the reasons for such an enormous increase in the number of cases relating to fraud. Finally, chapter five considers some of those methods, which can be used to avoid such an increase in fraud cases and also provides few suggestions to balance the rights and duties amongst all the parties to the letter of credit transaction. Chapter 1 Structure of a Letter of Credit Transaction Commercial letters of credit have been used for the centuries as a most common method of payment, in international trade. Letters of credit used in international transactions are governed by the International Chamber of Commerce Uniform Customs and Practice for Documentary Credits (UCP). A commercial letter of credit is a contractual agreement between a bank (issuing bank), on behalf of one of its customers (buyer), authorizing another bank (advising or confirming bank), to make payment to the beneficiary (seller). The issuing bank, on the application of its customer (buyer), opens the letter of credit, and makes a commitment with the buyer to honour the credit, if the documents presented by the beneficiary are conforming to the terms and conditions of the credit. Thus, the issuing replaces the customer to make payment to the seller. Elements of a Letter of Credit An undertaking given by issuing bank to make payment Issuing bank gives undertaking on behalf of a applicant To pay a given amount of money to the seller On presentation of required documents under the letter of credit Within a specified time as provided by the letter of credit Documents must be in compliance to the terms and conditions of the letter of credit Documents must be presented at a specified place provided by the letter of credit Beneficiary Beneficiary is normally the provider of the goods or services and is entitled to payment as long as he can provide the conforming documents required by the letter of credit. The letter of credit is a distinct and separate transaction from the underlying contract (contract between seller and buyer). All parties deal in documents and not in goods. The issuing bank is not liable for the performance of the underlying contract between the buyer and seller. The issuing banks obligation to the buyer-applicant is to examine all documents to insure that they are in compliance with the terms and conditions of the credit. To get the payment it is for the beneficiary to provide all the required documents. If the seller-beneficiary conforms to the letter of credit, the seller must be paid by the bank. Issuing Bank Letters of credit only concerns with the documents, not with the goods, therefore the duty of issuing bank to pay to the beneficiary and than to be reimbursed from its customer will only be completed upon the completion of the terms and conditions of the letter of credit. Under the provisions of the Uniform Customs and Practice for Documentary Credits, the bank is entitled to have a reasonable time after receipt of the documents from the beneficiary, to examine the documents and then to make the payment. The issuing bank provides a guarantee to the seller that if the documents presented by the beneficiary are in compliance with the terms and conditions of the credit, then the bank will make the payment to the seller. Generally the documents presented include a commercial invoice, bill of lading or airway bill and an insurance document etc. Advising Bank An advising bank is usually a foreign correspondent bank of the issuing bank which advises the seller-beneficiary. Generally, the beneficiary wants to use a local bank to insure that the letter of credit is valid. In addition, the advising bank is responsible for sending the documents to the issuing bank. The advising bank has no other obligation under the letter of credit. Therefore, if the issuing bank does not pay the beneficiary, the advising bank is not obligated to pay. Confirming Bank At the request of the issuing bank, the correspondent bank may confirm the letter of credit for the seller-beneficiary and obligates itself to insure payment under the letter of credit. The confirming bank is usually the advising bank. There are two main types of Letters of credit: (1) Revocable (2) Irrevocable Revocable Letter of Credit Revocable letter of credit is not a commonly used type of the letters of credit. This type of letter of credit can be revoked by the issuing bank at any time, without notification to the beneficiary, for any reason. Such type of letter of credit can not be confirmed by the correspondent bank and the bank will act as an advising bank only. A revocable letter of credit can not be revoked after the presentation of the documents, if the documents are conforming to the terms and conditions of the letter of credit and the payment has been made. Irrevocable Letter of Credit Use of irrevocable letters of credit is very common in international trade. Irrevocable letter of credit can not be revoked or changed without the consent of the beneficiary. Issuing bank will make the payment to the seller, if the seller presents the documents complying with the terms of the credit, as agreed between seller and buyer. Such a letter of credit can only be changed with the permission of both buyer and seller. If it is not clear from the letter of credit that whether it is revocable or irrevocable, it automatically considers as irrevocable. Irrevocable letters of credit are of two kinds: Unconfirmed credit In case of unconfirmed letter of credit, advising bank does not confirm the credit to the seller and the issuing bank is the only party responsible for payment to the beneficiary. Advising bank will only pay to the seller after getting payment from the issuing bank and there is no risk for the advising bank. Confirmed credit In this type of credit, advising bank confirms credit to the seller. When the advising bank confirms that the documents presented are conforming to the terms of the credit, it will make the payment to the seller, and after that advising bank will contact with the issuing bank to get the payment. This type of letter of credit is commonly used, when the seller is unfamiliar with the issuing bank. Such a type of letter of credit is quite expensive because the banks have some liability. Step-by-step process In international trade as the buyer and seller are in different countries so when the buyer and the seller of the goods agree to conduct business, than because of the gap of time between delivery of goods and the payment, usually the seller wants a letter of credit as a guarantee of payment from the buyer. Than the buyer makes a request to his bank called the issuing to open a credit in the favour of the seller. at the request of the buyer, issuing bank issues a letter of credit in favour of the seller and forwards it to the corresponding bank called the advising or conforming bank., which is usually located in the seller’s country. Advising bank than either confirms the credit or not, depending upon the type of credit, and forward it to the seller. Seller than ships the goods and collects the documents required in order to meet the requirements of the letter of credit and finally to get the payment in time. Seller presents the required documents to the advising or confirming bank in order to get the payment in time. Advising or confirming bank examines the documents presented by the seller to check that whether they are conforming to the terms and conditions of the letter of credit. If the documents are in compliance, advising or confirming bank, in case of confirmed letter of credit, will make payment to the seller and will be reimbursed from the issuing bank and in case of unconfirmed letter of credit, advising or confirming bank will forward the documents to the issuing bank. Than the Issuing bank will, after examine of the documents, debit the buyers account if the documents are in compliance to the terms of the letter of credit. In the end, Issuing bank forwards the documents to the buyer. Most commonly used documents in a letter of credit transaction include: Commercial Invoice This includes description of the goods, their price, FOB origin, and name and address of the buyer and the seller. The buyer and seller information must be in compliance with the description provided in the letter of credit. Bill of Lading It is a document which shows the receipt of goods for shipment by a freight carrier. It is an evidence of the control of the goods and also acts as an evidence of the carriers obligation to transport the goods to their proper destination. Warranty of Title A warranty given by a seller to a buyer of goods that states that the title being conveyed is good. It is generally issued to the purchaser. Letter of Indemnity It is a letter specifically indemnifies the purchaser against a certain stated circumstance. Indemnification is generally used to guarantee that shipping documents will be provided in good order when available. Common Defects in the documents presented A discrepancy is some defect in the documents presented by the seller, which show their non-compliance with the terms of the letter of credit. Issuing bank can not change the terms and conditions of the letter of credit with out t he permission of the buyer. Therefore to avoid any delay in getting payment. Beneficiary should be careful in preparing the required documents. Common defects in the documents presented by the seller include: If the description of the goods is not consistent. There is some error in the insurance documents. If the draft amount is not equal to invoice amount. Loading and destination ports are not same as provided by the letter of credit. Merchandise description is not same as in the credit. If any of the documents required by the credit is not presented. Documents are generally inconsistent such as quality, etc. If the names of the documents required are not correct, as mentioned in the credit. Invoice is not signed as provided in the letter of credit. If prior to the presentation of the draft, Letter of Credit has expired. If the date mention in the bill of lading is different from the date stated in the credit. If there are some changes in the invoice which are not authorized by the letter of credit. In international sales, as the seller and the buyer are in different countries, there is a common problem of payment due to the difference of time between dispatch and delivery. Obviously, seller would like to receive payment for the goods when delivering them to the carrier and the buyer would prefer to delay the payment of the price until receipt of the goods. Therefore, a letter of credit solves this problem between the seller and the buyer. Generally, there are three separate transactions in a letter of credit transaction. The first is between a seller and a buyer, called an underlying transaction, by which the seller provides contracted goods to the buyer. The second transaction is between the buyer-applicant and the bank (issuer of the letter of credit), in which the bank issues a letter of credit to the seller-beneficiary. Finally, the letter of credit itself creates a relationship between the issuer and the beneficiary, in which, the issuer makes payment for goods upon the beneficiary’s presentation of the required documents, in accordance with the terms and conditions of the letter of credit as agreed between seller and buyer. The bank’s performance of payment is conditional on the delivery of conforming documents by the beneficiary. The banks are called issuers and are usually the applicant’s bank. Normally the issuing bank opens a letter of credit in its own name and requests its correspondent bank to notify the seller about the letter of credit. Sometimes, the issuing bank asks the correspondent bank not only to inform the seller of the issuing bank’s undertaking but also to add a confirmation. In this case, the credit is known as a confirmed credit and the correspondent bank as a confirming bank. The payment obligation of the issuing bank depends upon the beneficiary’s presentation of complying documents to the confirming bank or to any other nominated bank, in accordance with the terms and conditions of the credit. Under general practice, presenting â€Å"complying documents† means that they comply with the conditions of the credit â€Å"on their face†. From banking point of view, compliance â€Å"on their face† of the presented documents is sufficient. The â€Å"independence principle† (which will be discussed later) is the fundamental principle of the letter of credit system, which prohibits banks from looking beyond facial compliance of the documents, and therefore exclude whether or not there is actual performance by the seller-beneficiary. In fact, letters of credit system has emphasised the independence principle to such an extent that banks are ignoring the performance of the underlying contract very confidently. As a result, all the risk is on the honest buyers, who are sometime paying for goods that they had not contracted for. Importance of the research The primary purpose of the letter of credit system is to facilitate international trade, rather than to provide an opportunity to the banks to make profit. As the fraud is very common in these days, but UCP is not designed to prevent fraud. The number of frauds relating to the letters of credit has increased over the years. Buyers are particularly vulnerable to such practices under the letter of credit system. This situation shows that there is some ambiguity in the letter of credit system and a lack of balance between the rights and duties of the parties to a letter of credit transaction, which is being exploited very easily by fraudsters. Division of risk under a Letter of Credit Transaction As we have discussed above, a letter of credit transaction consists of three linked but independent contracts. The first step is that the buyer makes a contract with the seller for the sale of goods, called the underlying contract. Subsequently the buyer signs an application form requesting the bank to open a credit, which is an arrangement between the buyer and the bank. The third step is that the issuing bank informs the seller, who is the beneficiary of the letter of credit, of the credit and promises to pay against the stipulated documents provided the terms and conditions of the credit are met. The letter of credit allocates risk between the applicant and the beneficiary. By postulating a letter of credit, the beneficiary may greatly reduce the risk of not being paid and ultimately allowing the beneficiary of the letter to reallocate the risk of non-payment for delivered goods which do not conform to the underlying sale contract. Generally, banks are reluctant to dishonour a credit, since to do so may damage the bank’s reputation as a credit issuer. The cost of honour, however, falls on the honest applicant, not the bank. â€Å"If the beneficiary has breached the underlying transaction, payment under the credit to him will occasion loss, but that loss will not be the bank’s; it will be the applicant’s.† Increase in the applicant’s risk and decrease in the bank’s risk under UCP UCP is the governing law of the letters of credit, therefore there should be a balance regarding the rights and duties of the parties, but UCP contains rules that reduce bank risk. There is no provision asking for judicial intervention to compensate letter of credit parties in case of bank’s negligence. The provisions in favour of banks fall into two categories. The first provides sweeping immunity from liabilities that national legal systems may impose. Example of such a disclaimer is Article 15. Under Article 15, banks assume no liability for the genuineness, falsification or legal effect of any documents and therefore the issuer is immune from the liability for paying against forged documents, which on their face appear regular. Therefore, the payment by the issuing bank does not show that the buyer has received the goods, which he had contracted for. The security, which the beneficiary is getting under the letter of credit system is not the same with the security of the buyer. The second category of pro-bank provisions contains rules that set precise boundaries on what the banks must do, which reduces uncertainty about bank responsibility and provides clear guidance to bank employees. For example, the customer cannot stipulate non-documentary conditions of payment, and time limits on examination of documents are fixed rather than open-ended. In case of any loss, the buyer, which is the applicant for a credit, can take action against the seller for breach of contract or fraud, but has no right of action against the bank for bank’s negligence in examining the documents, which can be ineffectual for several reasons, such as insolvency of either the applicant or the beneficiary. Hence the burden of risk on the applicant is more than any party in a letter of credit transaction and in most of the cases, buyers are paying for the goods, they have not contracted for. Chapter 2 UCP and letters of credit Originally UCP has been drafted by the Banking Commission of the ICC, which was comprised of the representatives of the banking community, which shows the dominance of the banks and banking experts. Their dominance in UCP drafting, hints that in drafting UCP, ICC was acting as a private legislature. It looks that the rules contain in the UCP are much beneficial for the banks than any other party, and giving a limited chance to the judiciaries to interfere to protect customers from any careless behaviour of the banks. The authority to interpret the UCP rests in the ICC Commission on Banking Technique and Practice, which can apply these interpretations to solve the problems arising in any case. Because of wide publicity and distribution of commission’s answers, their interpretation can be considered as an official interpretation of the UCP. Commission can enhance, interpreting, and sometimes amend the provisions of the UCP. The banks which deal with the letters of credit, act upon these interpretations and any amendments. As in theory, commission is only answerable to ICC members, therefore the chances of any challenge to such interpretation is very low. Role of courts in balancing the rights and duties of the parties In Discount Records Ltd. v. Barclay Bank Ltd., the judge was reluctant to â€Å"interfere with bankers’ irrevocable credit and not least in the sphere of international banking†. The position is same in many other cases. The apparent reason for the reluctance of the judges to interfere looks that they are afraid from the threats of the banking experts that their decisions would have an unfavourable affect on international trade. The difficulties of the courts to balance the rights and duties of all parties to a letter of credit transaction have increased. In Mannesman Handel AG v. Kaunlaran Shipping Corporation, the Swiss bank argued that the bank was in rejecting the documents by the German company relying on the independence principle and the discrepancies appeared on the documents. The court was asked not to apply the good faith principle otherwise the court â€Å"would be calculated to undermine if not destroy the doctrine of strict compliance and to blur if not extinguish the distinction between transactions concerning goods and transactions concerning documents.† Normally the judicial decisions relating to the legal aspects of documentary credits base on either the express intentions of the parties or established business practice at the time, the parties entered in a contractual relationship. In cases where the UCP provisions are different from business practice, a court will apply the UCP if the UCP is incorporated in the contract of the parties. It shows that courts have assented to the entire documentary credit system being run by the banking industry and eventually abstaining the courts to intervene to balance the legal rights and duties amongst all the parties. Should the UCP have the status of law? Leading scholar Professor Ross Buckley says: â€Å"originally, the UCP was neither designed nor intended to be law. It was prepared as a set of standard terms to be incorporated by reference into letters of credit by those parties who chose to do so.† This has also been confirmed by the UCP in the preface of UCP 500, which states that the UCP is not legislation but a compilation of rules made by bankers for their own industry. Therefore there is a dispute as to whether the UCP is a code of the law, or just customary practices, or some mutually consented regulations relating to letters of credit. However in fact, UCP is the governing law of the letters of credit. The Scope of the Banks Duties Before analysing the wording of the disclaimers used, the scope of the duties undertaken by the banks involved must be identified. Whereas the type of credit and the documentary stipulations therein will usually have been negotiated by the commercial parties and included in their sales contract, the terms and conditions under which a bank undertakes to open a documentary credit will normally appear in the banks standard application form which the importer will be required to complete. Although the application would normally refer to the UCP, it is important to note that the provisions of the UCP would not automatically apply in English law if not expressly incorporated by the parties to the credit and, even if expressly incorporated, its provisions can be excluded, or modified by the express terms of the credit. The duty to issue an efficacious credit The importers failure to procure the issue of a documentary credit which conforms to the terms of the sales contract may be treated by the exporter as a breach of a condition precedent to his performance and a repudiation of the contract by the importer. Whether the applicant can sue the issuing bank in respect of its culpable failure to issue (or to issue in good time) a conforming and efficacious credit is, however, by no means clear. The duty to issue a conforming credit An initial problem arises where the applicant requires the issue of a confirmed credit, that is, a credit in which a second bank, normally in the beneficiarys country, adds its own independent undertaking, to pay against the stipulated documents, to that of the issuing bank. Is the issuing bank in breach of contract towards the applicant if it is unable to procure the confirmation? The answer must depend upon the issuers conduct on receiving the application from the applicant. The second aspect of the duty to issue a conforming credit raises the question of liability for the acts of other banks involved in the transaction. Clearly, if the issuing bank opens a credit which specifies documentation other than that called for by the applicant, then in the absence of a disclaimer it will be in breach of its contract with the applicant under the doctrine of strict compliance. The position should be the same where the issuing bank unreasonably delays issue of the credit so that the beneficiary incurs loss. A difficulty arises, however, when it is not the issuing bank itself which causes the error or delay in complying with the applicants instructions, but the issuers correspondent bank. The doctrine of privity of contract would appear to prevent contractual liability arising in this context. However, in any event, it appears that there is no reason for holding that, in the absence of a disclaimer; an issuing bank should not be liable for the consequences of errors by its correspondents. Duty to receive and examine documents The doctrine of strict compliance means that issuing banks which pay against non-conforming documents are in breach of their contractual obligations to the applicant. The issuer is not, however, a guarantor of the documents conformity; its duty is discharged by the exercise of reasonable care to ascertain that the documents comply on their face with the terms of the credit. Duty to make payment under the terms of the credit The party with the primary interest in enforcing the banks obligation to pay against conforming documents is the beneficiary although it is clear that this obligation is also owed to the applicant. Furthermore, any variation of the payment terms would be a clear breach of contract. Duties of correspondent banks In so far as the confirming bank gives an undertaking in exactly the same terms as the issuing bank, it clearly owes precisely the same duties to the beneficiary. However, since a confirming bank looks to the issuing bank alone for reimbursement, it may be prima facie unlikely that it owes any duty to the applicant, even where the applicant is paying the confirmation fee. There are, however, some judicial dicta which might support the recognition of such a duty. Bank’s risk under UCP (exemption clauses) Article 15 and 18 (b) of the UCP 500, limits the liability of the banks in a letter of credit transaction and which have almost made it a risk free transaction for the banks. Article 15 says: â€Å"Banks assume no liability to or responsibility for the form, sufficiency, accuracy, genuineness, falsification or legal effect of any document(s) or for the general and/or particular conditions stipulated in the document(s) or superimposed thereon, nor do they assume any liability or responsibility for the description, quantity, weight, quality, condition, packing, delivery, value or existence of the goods represented by any document(s) or for the good-faith or acts and/or omissions, solvency, performance or standing of the consignors, the carriers, the forwarders, the consignee or the insurers of the goods or any other person whomsoever.† Article 18(b) further states: â€Å"Banks assume no liability or responsibility should the instructions they submit not be carried out, even if they have themselves taken the initiative in the choice of such other bank(s).† The UCP 500 places the applicant-buyer in an absurdly vulnerable position through its disclaimer clauses. To some extent there is a lack of duties on the part of the bank to verify the authenticity of the documents. Hence it might not be wrong to say that albeit there is a waste increase in the use of letters of credit, does not signify that the UCP is fairly drafted. Letters of credit and its users It is also very important that whether all the parties to the letter of credit, particularly applicant-buyer are conscious about the presence of these exemptions, e.g. by providing a copy of these exemption clauses of the UCP or by giving a notice of these exemption clauses. It is a rule that to enforce an exemption clause, a reasonable notice should be given to the other party but in practice, buyers are assume to have the notice of the UCP and that they are familiar with the provisions of the UCP. Further, the application for the issuance of a letter of credit and the letter of credit document itself only contain a simple sentence: â€Å"Subject to UCP for Documentary Credits†, without any attachment of the provisions of the UCP or any notice of such exemption clauses. Hence it is debatable that why the courts do not look, while dealing with the cases relating to the letters of credit, that whether a reasonable notice has been given relating to the exemption clauses and do not interfere to balance the rights and duties of the parties to a letter of credit transaction? Chapter 3 Doctrine of strict compliance and independence principle It is a basic rule of the letter of the credit transaction and which is widely recognised that the letters of credit are transactions independent of the underlying contracts on which they are based. According to this principle, the issuer has no concern with the underlying contracts between buyer and seller. Its concern is with documents only, rather than the goods or any type of services. Obviously there are some doubts about this principle, i.e. to what extent this principle should be applied. Which some tome may cause injustice to the applicant under certain circumstances. Independence Principle Generally, letter of credit is a contract between the issuer and the seller of the goods, which is independent of the underlying contract between the seller and the buyer. The independence principle is mentioned in Article 3 and Article 4 of the UCP. Article 3 states: â€Å"Credits, by their nature, are separated transactions from the sales or other contract(s), even if any reference whatsoever to such contract(s) is included in the Credit.† Article 4 further says: â€Å"In credit operations all parties concerned deal with documents and not with goods, services and/or other performances to which the documents may relate.† From the very beginning independence principle governs letter of credit transactions and very clearly states that the credits are completely separate from their underlying transactions and the issuer makes payment depending on the conformity of the documents presented according to the terms and conditions of the credit without considering the performance of the underlying contract by the beneficiary.