Cra and Financial Crisis

Table of Content Introduction2 Real-life examples2 Empirical cycle2 Other concepts of Babbie, Gravetter and Forzano applied2 Conclusion2 References2 Introduction The burst of the United States housing market bubble initiated the worldwide financial crisis. Amongst all housing regulations, the community reinvestment act (CRA) may be the most significant. The act passed in 1977 to improve low-income households’ housing opportunities. As such, the act raised the incentives for banks to provide mortgages to low-income households (FFIEC, n. d. ). Over time, several political administrations, like the George H.W. Bush-, Clinton- and George W. Bush-administration, changed the original act, adapting to new challenges in the housing market (Braunstein, 2008). However, as time passed, the act became less important for banks, as the products, mortgages, became more profitable. As a result, more and more financial institutions started offering mortgages to low-income classes. These so cal led subprime mortgages are often associated with high risks (Aalbers, 2009). This point of view can be concluded with the hypothesis that the CRA will be seen as a cause of the financial crisis.Firstly, the different opinions and their respective arguments with regard to the hypothesis are illustrated. Secondly, an explanation is given on how these examples fit in the empirical cycle. Thirdly, three other concepts of Babbie, Gravetter and Forzano are applied to the examples. Finally, a conclusion is drawn with respect to the examples. Real-life examples As a result of the CRA, banks were rated, based on the number of loans given out to low-income households. A bad rating could have had severe consequences for a bank.The fact that the FED did not allow a Hartford, Connecticut bank to acquire a New Hampshire bank on CRA grounds demonstrates this. In order to keep their CRA ratings high, banks had to provide low-income classes with loans. In essence it can be said that the CRA ratings raised the banks’ incentives to provide low-income households with loans (Carney, 2009a). It can clearly be seen that the enforcement of the CRA over time led to a relaxation of lending standards and consequentially to more risk-taking in the banking sector in the form of mortgages. These high-risk mortgages are now seen as part of the problem.Thus, Carney (2009b) concludes, the CRA is part of the cause of the financial crisis. Carney agrees with the hypothesis. Defendants of the CRA simply claim that an act passed in 1977 cannot lead to the creation of a housing bubble in the early 21st century. Nevertheless, the CRA was not a static piece of legislation. The act evolved over the years, as it was mentioned earlier in the introduction. To be more specific, it was more and more enforced over the years. As a conclusion it can be said that the enforcement of the CRA might have been crucial in creating the housing bubble.Therefore the act could have created a housing bubble in th e early 21st century (Carney, 2009a). However, Aalbers (2009) also argues in favor of the CRA and tries to falsify the hypothesis. He states that the majority of subprime loans in 2006 were provided by non-bank lenders. These non-bank lenders, however, were not subject to CRA regulations and thus were not obliged to provide affordable loans to low-income classes. The only logical conclusion that can be drawn from this information is that these loans to low-income classes were an attractive investment.Thus, Aalbers says, the CRA was not the cause of the high-risk mortgages providence to low-income households by banks. By clearly, Aalbers would reject the hypothesis that the CRA was a cause of the financial bubble. Nonetheless, his argumentation has to be questioned. In 1977 most of the loans and mortgages were provided by banks as well as savings and loan associations. The extra mortgages that were provided as a result of the CRA probably increased the demand for houses, which in tur n resulted in an inflation of housing prices.Several years later, due to rising housing prices, subprime mortgages became a more attractive investment for financial institutions. Consequently, the majority of loans issued since the inception of the CRA came from nonbanks that deemed mortgages a good investment. In other words, the CRA created major lending opportunities for financial institutions (Kroszner, 2009). Since the CRA initiated the inflation of housing prices to some extent, it can be argued that the CRA can be hold partly responsible for the creation of the housing bubble. This theory should verify the hypothesis. This argumentation has to be investigated further.As Foote et al. ’s (2008) research concludes, housing price data in Massachusetts reveals that around 70% of all homes lost to foreclosure were actually purchased with prime mortgages. From that information Aalbers (2009) derives that most loans were not used for directly financing new homes, but rather re financing existing loans. Hence, Aalbers insinuates that the extra mortgage lending as a result of the CRA did not cause a rise in housing prices. That information implies that the CRA was not a cause of the creation or inflation of the United States housing bubble. Clearly, this would reject the hypothesis.Nonetheless, Aalbers’ argumentation contains two pitfalls. First, his argumentation solely rests on inductive reasoning. Massachusetts is just one small part of the United States of America. Without any supportive data to back up the thesis that the Massachusetts housing market is representative of the whole nation’s housing market, it has to be concluded that Aalbers overgeneralizes the statistical data provided by Foote et al. As Babbie (2005) mentions, overgeneralization can lead to misdirection or rendering of inquiry. Due to this fact Aalbers’ argumentation is questionable. Second, even if the study of Foote et al. 2008) were representative, Aalbers fail ed to acknowledge the other side of the medal: The supply side, as it is not in favor of his opinion. If the CRA-related loans were used to refinance homes only, it would strongly affect the supply side of the housing market in the way that supply was artificially lowered. Homes were occupied that otherwise would not have been, driving up the prices of real estate. Aalbers falls victim to the fallacy of selective observation. He only looks at the effects of the CRA on the demand-side. Looking at the supply-side would not support his theory and point of view on the topic.That makes this observation a selective one. Empirical cycle This debate fits in the empirical cycle in the way that it started with an observation: The burst of the housing bubble. Consequentially different hypotheses and theories where formulated and tested by reasoning and correlation. As markets nowadays are very complex phenomena, it is difficult to establish a causal relationship between several factors of this system. In spite of that it is possible to use logical reasoning and correlation between these factors to hint at the correctness of a thesis. For example, it can be investigated how many subprime loans were CRA-related.A different question that can be posed is how these CRA-related subprime loans performed against other loans (Kroszner, 2009). The answers to these questions could give an idea of the causal relation between the CRA and the financial crisis. After testing the hypothesis, a new hypothesis and theory might be formulated until a conclusive theory is found. Nevertheless, Kroszner himself admitted the existence of a lack of data to get conclusive answers to the previously mentioned questions. For the empirical cycle, this lack of data means it is very hard to reject or not reject theses, obstructing the formulation of new theses and theories.Other concepts of Babbie, Gravetter and Forzano applied The empirical cycle is not the only concept of Babbie (2005), Gravetter and Forzano (2009) which can be applied to the examples. Another concept that can be applied apart from the empirical cycle is the concept of authority. Carney (2009a), who was mentioned earlier in this paper, started out as a strong defendant of the CRA. He did change his mind though, relying on, among others, the FED Governor Meyer. Since Carney used a quotation of Meyer, it can be concluded that Meyer is a person with authority and strong references in the field of economics.Babbie, Gravetter and Forzano define authority as a person with strong references in certain fields. Authority is used as a source for knowledge and can be referred to. Gravetter and Forzano (2009, p. 11) define rationalism as the search for â€Å"answers by the use of logical reasoning†. This is exactly what Carney (2009b) does to come to the conclusion that the CRA was a cause of the financial crisis. He reasons that the CRA raised the banks’ incentives to provide low-income households with mortg ages. These financial products are now seen as a cause of the housing bubble, which caused the financial crisis.Therefore, Carney concludes, the CRA is a cause of the financial crisis. Theory is described by Babbie (2005, p. 12) â€Å"as a systematic explanation for the observations that relates to a particular aspect of life†. This implies that the argumentations used by Carney (2009a, b), Aalbers (2009) and Kroszner (2009) are parts of different theories as they explain how the CRA caused or did not cause a housing bubble. Conclusion As shown in this paper, there is a huge debate about whether the CRA was a cause of the financial crisis. As Carney (2009b) pointed out, the CRA raised the banks’ incentives to issue risky loans.Critics, however, state that an act passed in 1977 cannot create a housing bubble in the early 21st century. Nevertheless, the act was enforced several times, which implies that an enforcement of the CRA might have a causal relation with the fina ncial crisis. Aalbers (2009) argues also in favor of the CRA: he points out that most subprime mortgages were provided by non-CRA-related institutions. Despite that fact, Kroszner (2009) says there is no reason to believe CRA is not to be blamed. He mentions that the inception of the act increased the demand for mortgages and consequentially, houses.According to Kroszner, this was the start of the housing bubbles. Aalbers on his turn argues that the vast majority of houses bought in Massachusetts was financed with prime mortgages. He concludes that this provides evidence in order for the CRA not be labeled a cause of the crisis. Nonetheless, Aalbers argumentation contains two fallacies. First, he uses inductive reasoning which results in overgeneralization without supportive data. Second, he uses selective observation by ignoring the supply-side of the market. This whole debate fits in the empirical cycle in a way that it started with an observation which was followed by many theses .After the formulation of these theses they were tested by logical reasoning and correlation. As a final step, new theses theories will be formulated. However, this step is obstructed heavily by a lack of data. Other concepts of Babbie (2005), Gravetter and Forzano (2009) can also be applied to the examples. Meyer has authority in Carney’s argumentation, logical reasoning is used by Carney to come to the conclusion that the CRA was a cause of the crisis and the argumentations used by Carney, Aalbers and Kroszner are all parts of theories, described by Babbie, Gravetter and Forzano.References Aalbers, M. (2009). Why the Community Reinvestment Act cannot be blamed for the subprime crisis. City & Community, 8 (3): 346-350. Babbie, E. (2005). The Basics of Social Research (3rd ed. ). Belmont: Thomson Wads worth. Braunstein, S. (2008). The Community Reinvestment Act, 13 February 2008. Retrieved 20 January 2010 from: http://www. federalreserve. gov/newsevents/testimony/braunste in20080213a. htm Carney, J. (2009a). Here’s how the Community Reinvestment Act led to the housing bubble’s lax lending, June 27, 2009. Retrieved 15 January, 2010 from ttp://www. businessinsider. com/the-cra-debate-a-users-guide-2009-6 Carney, J. (2009b). Sorry, folks, the CRA really did require crap lending standards, June 23, 2009. Retrieved 15 January, 2010 from http://www. businessinsider. com/sorry-folks-the-cra-really-did-require-crap-lending-standards-2009-6 FFIEC, (n. d. ). Community Reinvestment Act. Retrieved 20 January 2010 from: http://www. ffiec. gov/CRA/ Foote, C. , Gerardi, K. , Goette, L. & Willen, P. , (2008). Journal of Housing Economics, 17: 291-305. Retrieved 19 January 2010 from: http://www. sciencedirect. om/science? _ob=MImg&_imagekey=B6WJR-4TN0KW9-1-N&_cdi=6885&_user=499911&_orig=search&_coverDate=12%2F31%2F2008&_sk=999829995&view=c&wchp=dGLbVtb-zSkzk&md5=f93e4616adcb03662bac8ef89298dcdc&ie=/sdarticle. pdf Gravetter, F. & Forzano, L. (2009). Research Methods for the Behavioral Sciences (3rd ed. ). Belmont: Wadsworth Cengage Learning. Kroszner, R. (2009). The Community Reinvestment Act and the recent mortgage crisis. Retrieved 15 January, 2010 from http://www. frbsf. org/publications/community/cra/cra_recent_mortgage_crisis. pdf

Philippine agenda reaction paper Essay

When our teacher told us that we will be watching a video about political government in the Philippines, I thought that it would be about politics only. But as the videos are playing, I realize that it was more than politics. It is an eye-opener not only for the government officials but also to all Filipinos. They made a documentation to open the eyes of the candidates for the election. It was made to let the government know the current condition of the Philippines with regards to the concern of the Filipinos. PHILIPPINE AGENDA: EDUCATION (EDUKASYON) The video entitled â€Å"Edukasyon† was one of the documentaries presented by Jessica Soho. The film shows the problem on education in our country. Many students and teachers are having a hard time in studying and teaching because of the insufficient facilities in different public schools. This includes the lack of chairs, tables, classrooms, chalkboards, books, and many others. Most teachers also have not undergone a proper training. Well, what they have documented is very true because I too came from a public school. And our school was also facing that kind of problem before. Though in my time, our school has improved a little bit. All of us had been given the privilege to have a book in different subjects one by one. We also have chairs to sit and tables to write on. Our chalkboard also is big enough, though some of it has a hole already. But our neighboring school was facing almost the same fate as the schools in  Masbate, as what the film documented. They have broken chalkboards, not enough classrooms, chairs, tables and books. Their teacher would go to our school to borrow a couple of books for them to use. There were also some privilege schools in our place who was included in the feeding program of the government. Our elementary school was included. The selected students who were malnourished were being feed every afternoon by the teachers and some of the parents. And after the feeding program, there is another program which is the giving of rice, noodles, and canned goods for the students. Each students was given one kilo of rice, some noodles and canned goods. But the program did not last long. The film helps me realize the great problem that our country is facing today with regards to the education for every Filipinos. And I am thankful that I was given the opportunity to have a better education. I also felt pity on the students who are having a hard time in getting the education that they wanted and at the same encouraged to pursue more on my studies to help those who are in need. Just like the students who were showed in the film, even though their fate in acquiring education is not as good as mine, but they still pursue their goals to finish their education to have a better future. These problems in our education today can be solved by giving more funds for education to build enough classrooms, chairs, tables, chalkboards, and other facilities for the students, publish more books, and support the teachers for their training in order for them to enhance their skills in teaching and to help the students to be more productive in their studies. PHILIPPINE AGENDA: HEALTH (KALUSUGAN) â€Å"Health is wealth†. Indeed, health is the true wealth of our nation. But as I watched the film â€Å"kalusugan† reported by Arnold Clavio, I found out the reason why our country is at the bottom of the list when it comes to the richest country. Because even the citizens here in our own nation have suffered from malnutrition. And how can they call our country rich when they have not taken care of the citizen which is the inheritance of our country? Just like the citizens on one of the place in Mindanao. Each children have a disease and are malnourished because there are no one who can monitor their health. It would take four to five hours to walk just to get to a hospital. And what do they get when they arrived there? Only paracetamols good for ten people. How can that cure there diseases when that is the only medicine that is free? Every other medicine has high price which they cannot afford to buy. There are many other places in the Philippines which was not visited by a single doctor. The government must make a move on reaching those citizens who have not yet been checked on their health status. They must act so that there will no more citizen in the Philippines who will die because of lack of food and medical support. Also, there are many places here in our country who are lacking facilities and medicines for the hospitals. Just like here in Bacolod and in Manila. The family of the patient must be the one who will provide a bed for their patient because there are no more vacant room. And there are many patients who have not given any medical attention that’s why some of them just died in the corner of the hospital. And there are many places also who do not have any hospital or health centers at all. The residence on that place was the one who built a health center. And the medicines they are having are just the usual medicine for fever, cough, and other common diseases. They only have one nurse who also became a doctor and a midwife. How can the government take care of the citizens when they let the doctors and nurses flee to another country? They must take care also the needs of the doctors and nurses so that they will not flee from our country. There are budgets given for the health of the people but where did the money go? What do they spend the money for? If they would have spent it wisely for the specific purpose of that money, our country and the people would not be suffering from lack of food and medical support. Each citizen must have been given a good service, maybe not given all that they need, but given just enough to make them feel that the government was not abandoning them. The government officials are educated people who knows how to manage a money and to spend it wisely for the specific purpose of that money. They must stop their corruption because instead of them helping the problems of our country, they were the one making it worst. If only they hear they cries of the family who lost their loved ones because of lack of support from the government. And they must act so that situations like these would not repeat again and again. All I can do now is to take care of myself and my love ones. Eat the right kind of food to avoid being hospitalized. And help those who are in need of my service. PHILIPPINE AGENDA: CORRUPTION (KATIWALIAN) One of the major reasons why our country are suffering from different problems is because of corruption. Even the educated people, like the government officials, are blinded when it comes to money. Their knowledge and discipline were gone when money was in front of them. Thus leads to corruption. Our country is facing some serious problems today like lack of services for the citizens. And they said that they have given a solution by giving a budget to that particular problem. But the question is, where is the budget now? Do the budgets intended for that problem really made a change? Or they just say that there is a budget to calm the people down but not used all of it for the specific purpose intended in that budget? Even the professionals who are educated, have learned the proper attitude, and knows the right discipline can be like a dump person who knows nothing when money is in front of them. They can be bought by just one to three numbers with many zeros on it. And if you think that zero is nothing, well, of put it behind a certain number, then that would change its value. It would not be nothing anymore. It would be something that can bought a life, especially when there are many zeros that are involve in that particular  number. It can either give or save lives, get or bought lives and change lives. Money have that kind of power in our world nowadays. It can make the powerful man even more powerful and it can ruin life. It can make a simple man be a powerful man or a criminal. And people can be crazy when it comes to money. But it can also change the life of a single person and the status of a certain country. It can be an instrument to ruin things but it can also be used to save and change everything. If it is used in a proper and good way, then it can change our lives forever. If only the government would discipline not only the citizens but also themselves, our country would be a better place to stay. It would be harmonious and the citizens would not go to other countries to serve other people just to provide the needs of their families. They would just stay here and serve our fellow Filipinos who needed their service. And if they only use the money intended for that specific purpose and not for their own, there will be less problems that our country would be facing today. And the problems that we are facing will be slowly but effectively be solved. And if there will be less problem, then our country will be a prosperous and harmonious one. And it would be included on the list of the richest country in the world. PHILIPPINE AGENDA: HOUSING (PABAHAY) One of the basic needs of a person is shelter. A good, nice and warm shelter or house for him to be protected from any cold, rain and sunshine. It is also a private place where a man can spend an alone and bonding time for his family. But how can a man be protected from cold and have a family time if he is sleeping under a bridge, in the street or in a squatter’s area where he is sharing his house with four more families? That is what most of the people in the cities where suffering. Most of them left the country, sold their belongings, and transferring to the city to find work. But because of the overpopulation in the city and they did not found any good work, they end up living under a bridge, on the street, and in a squatter’s area, sharing their shelter with two or more families. And  because they cannot go back to the country because they have no more belongings there, some of them have begun a family in city. The government had implemented a housing program and relocation sites. Some of it were already been built. But there are quandaries in the given solution of the said problem. Some have no electricity, the water is not clean, the location is not very suitable and comfortable, and is far from the city because there are no more sites available near the city. And some also are not finished. The government must give more budget for the housing of the citizens who are living under a bridge and in a squatter’s area. There are also some citizen who lost their home because of the natural calamities that struck the country. And many families are still suffering until now because of the slow action of the government. And the one that they have built for the families who were the first victims of the natural disaster had been broken again by the following typhoon that pass the country. They were providing a shelter for the victims but it was not good and long lasting because of the lack of budget for that project. And the government’s point of view is that the shortcomings are not all their fault. There are also people who lacks discipline. They sold their lands in the country, which was given by the government, and migrated to the city thinking that they will find fortune and good life there. Well, I don’t blame the government for that because it is true. They think that by living their comfort zone in the country and moving to the city would be a better idea. Some of them had found luck in the city but luck is just luck. And most of them did not found good luck. They found misfortune and ended up living and having a family under a bridge, on the street and in a squatter’s area. Their luck had run out. And because they did not found any good job and they cannot plant vegetables and other nutritious foods in the place where they live, they end up picking some left overs in the garbage and looking and selling scrap for them to make money to buy food to put on their tummy. And because of this, malnutrition takes place. PHILIPPINE AGENDA: HUNGER (GUTOM) When I was watching the video entitled â€Å"gutom†, I realized that I am lucky I am eating nutritious foods three times a day. There are many people out there who are starving and having a hard time in getting food. They were just eating the left-overs that are found in the trash bins. And they felt contented if they can eat even just one meal a day. And the worst part is, they have so many children. I am always wondering why do they made many children when they themselves are having a hard time in finding food for their own. How can they find food that is enough for them to eat if they have so many kids? Just like one of the family that was shown in the film which had 12 kids. And the mother is still caring a life inside her tummy. She was still pregnant even if they already had many kids. And the result is malnutrition because the children have not eaten the right kind of food and the right amount of vitamins and minerals that are needed in their body. It was hard for them to get nutritious foods because the foods that are prepared on their table is not enough to make their tummy full. And the baby inside the mother’s womb is also malnourished because the food that the mother had eaten is not nutritious enough to make the baby inside of her become healthy. So, even if the baby have not yet been born, it was already malnourished. If only they have planned well in making a family, they would not having a hard time finding food to feed their children because they only have fewer mouths to feed. And they can also eat nutritious foods three times a day. It is heartbreaking to know that there are Filipinos who are starving and have not eaten foods with the right nutrition. While there are many officials who are just expanding their riches and wasting their money instead of helping the Filipinos who are in need and giving them the right service. They are just having a good time with their money, spending it for their own good, not thinking that there are many children who are dying because of hunger and thirst. They did not consider the fact that even the  small amount of their wealth is enough to save a person’s life from dying of hunger. But this concern is not for the officials but also for the Filipinos who have so much wealth. Some of them are not officials but they are business men who are making wealth but not helping their fellow Filipinos. They must open their hearts to share their wealth and help those who are in need. Even a small act of kindness can save a person’s life. I felt pity on the people who are starving and I cannot even help them on my own. All I can do for now is not to waste anything-food, money, time and many others, and helping others who are in need if I have anything that can help them. And most of all, open my heart and mind to my fellow Filipinos who are in need of my help. PHLIPPINE AGENDA: WORK (TRABAHO) Work is essential to every person to earn money and to buy things we need in our every life. Money is needed in every manner to survive. And we cannot have money without working, either in a simple way or a hard way, in a good or bad way. But it is better to earn money in either simple or hard way but in a good way. But here in our own country, most of the citizen don’t have a good job and some of them really did not found a job. How can they provide money for the needs of their family when they don’t have any job at all? Some of them are being kicked out from the company they are working and others are forced to leave because of some reasons, it could be that their performance is not good enough, the company is reducing some workers, the wages are not enough or the company is closing. Because of the technology in our time now, most of the work are being done by machines. Instead of manually doing the work, the company are hiring more machines than hiring actual human to do the job because machines can do the job two to three times faster than humans. That is why they are losing more workers even if their work is getting bigger and faster. The only one who will remain in that company is operator of the machines and other important people who are expert in that field of the  work. And I cannot blame the Filipinos for going out from our own country and work in other countries because the government cannot provide them a good salary that can provide the needs of their family. They have to look for another job in other countries in order for their family to survive and to have a better life. They have finished a professional course here in our country but the salary is the major reason why they leave the country. But not all who go out from our country have found good fortune. And that is not the fault of the government. The citizens are also to be blamed because of lack of discipline. They just wanted to go out of the Philippines and paid a lot of money to a company who are hiring Filipinos to work for abroad, not inquiring if that company is a legal company, thus end up in a work they were not expecting to have in that particular country. And instead of practicing their profession in the place, they end up being a domestic helper, laborer, babysitter, housemaid , and many other work that is not related to their profession. Some got lucky and had a good boss but some of them were being abused by their boss and the owner of the house because of several reasons. They are lacking good skills, their performance in that work was not good enough, their boss is just so strict and abusive, and they were being forced to do things not according to their will and their contract. And some ended up being imprisoned, bullied by the person they work at, and the worst of all is being sentenced to death. Some of them are being hanged and others are being executed through the way they execute a person in that particular country. Some Filipinos also did not go out of our country but did not found a descent work. Thus end up in finding an illegal job like stealing, selling illegal drugs and other illegal products. Others also have become a holdaper and a killer just to have money to provide for their family to survive. They are lacking skills that is why there are no company hires them. These events can be avoided if only the government will not let anyone who go out of the country without a proper training and have undergone a proper procedure to ensure the work they are working in that particular country. And the Filipinos will not go out from our country if the work here in our own country gives enough wages to keep their family from being hungry. If the wages here in our country is enough to let the tummy of the worker’s family be full every day, then we would not be having a problem in giving service to the citizens in places where  services are highly needed, just like in a hospital, schools and other public service company.

Problem of Induction: An Analysis of the Validity of the Humean Problem of Induction

Induction refers to â€Å"a method of reasoning by which a general law or principle is inferred from observed particular instances† (Flew, 1986, p. 171). The method of inductive inference, in this sense, may be considered as the primary means through which justifications are formulated to show the relationship of evidence towards particular assumptions (Goodman, 1983, p. 13). The process of induction, thereby, may be seen as arising whenever we note that evidence lends support to a hypothesis while in the process failing to establish its deductive certainty. In relation to the aforementioned method, Hume argued that since no necessary connections exists between empirical phenomena, it is always possible that a future observation will prove our inferences wrong no matter how appealing it may have been or how richly supported by past observations. This problem has been referred to as the problem of the uniformity principle [in this sense the lack of such uniformity]. According to the argument, nature has no uniformity. If such is the case, it thereby follows that there is no voucher that ensures the consistency of man’s most refined predictions. Consider for example, the statement â€Å"Whenever I drop a piece of chalk it will fall†. Two claims may be inferred from such a statement: (1) Dropping a piece of chalk causes it to fall and (2) Dropping a piece of chalk tomorrow will thereby cause it to fall. According to Hume, such claims assume the uniformity of nature. The problem however is evident if one considers that if all knowledge of causation is based on experience and all knowledge of experience is based on the faculties of cognition, in order for knowledge of causation to be valid [at all times] it is necessary that the faculties of cognition are infallible. However, such is not the case since conditions for the attainment of understanding are based upon fallible faculties. If such is the case, it follows that man’s understanding of the empirical world is obscure thereby providing no solid grounds for the formation of inferences that determine the uniformity of nature from which man derives his causal laws regarding the workings of nature. At this point, it is worthwhile to consider that the aforementioned problem [commonly referred to as Hume’s problem of induction] stems from Hume’s critique of the Cartesian claims regarding the powers of reason. According to Descartes, man is in possession of an infallible faculty of clear and distinct perception which if properly exercised is able to grasp various general causal principles a priori. In addition to this, Descartes claims that possession of such faculties enables man to establish the essence of the mind [which is thinking] and the body [which is extension] through the use of pure intellectual insight. If such is the case, man is thereby privy to the acquisition of a priori knowledge regarding the behavior of minds and of things. If such is the case, it follows that man is also privy to the knowledge of the workings of the external world [external to the mind and hence the physical realm]. As was noted at the onset of this paper, Hume’s critique of Descartes’ conception of the powers of reason has thereby resulted to the critique of the process of induction and hence the critique of the assumption regarding the uniformity of nature. It is important to note that Hume’s claim [as an opposition to Descartes’ aforementioned claim] may be understood in two ways. In the first case, Hume’s claim may be understood as setting the limits of man’s intellectual capacities [which is evident in his emphasis on the fallibility of our faculties for cognition]. In another sense, one may understand Hume’s claim as enabling a naturalistic conception of knowledge acquisition thereby enabling the dissolution of Descartes’ dualism [evident in Descartes’ distinction of the mind from the body]. The importance of such lies in its emphasis on the necessity to set solid foundations for the acquisition of belief. Within these grounds, it is thereby possible to understand Hume’s subtitle to A Treatise of Human Nature, which states, â€Å"Being an Attempt to Introduce the Experimental Method of Reasoning into Moral Subjects†. Hume’s naturalized epistemology may thereby be seen as an attempt to enable the provision of valid and indubitable grounds for the formation of beliefs within both the empirical and moral realms of human existence.

Film papers Essay Example | Topics and Well Written Essays - 500 words

Film papers - Essay Example Eventually the girls find them amid troubles and hysteric breakout of the fact of their witchcraft trial which culminate into gruesome climax and put the girls into tremendous trouble culminating into the death sentence of John and other convicts who show the guts to tear the confession and embrace death reciting the Lord’s Prayer which they end before they could say the word â€Å"Amen†. The film is an exact representation of the myriad myths and punitive measures that were undertaken for the practice of witchcraft. The film ‘The Crucible’ viewed from the historical perspective would definitely take its audience back to the play by Arthur Miller on which it is based and to the basic historical events with which the book deals. The main purpose of the film is to project and evolve awareness amid people far beyond the constraint of time frame, the actual reason behind the myths and superstitions are only for the fulfilment of some different desire altogether . The scene in the film which depicts the climax is very much relevant with history and bears much resemblance with the book.

Compose one job application using information from the narrative Essay

Compose one job application using information from the narrative below. A Solicited Job application letter in block format - Essay Example I used to supervise in and out flow of the products. I also learned about the shipping lanes, the shipping cost, insurance policies and the restricted goods for different countries. During the summer 2007 I worked as a loader and dock worker in the same company. I know about the high risk of shipping over the ocean and also about loading the containers with or without cranes. So I have all the basic knowledge about the commercial merchant ships, about their speed, design and the crew. I have worked as a laborer as well as a member of the management team so i know the in and out of the whole business. Moreover I am energetic, disciplined and quick learner and have a real gusto for hard work. Thank you for your consideration. Please see my resume for additional information. I can be reached anytime via email jackst@yahoo.com or my cell phone 23456034809. Sincerely, Jack S. Turner

HS 5600 ASSIGNMENT 1 Example | Topics and Well Written Essays - 250 words - 1

HS 5600 1 - Assignment Example In addition, the system is non-linear. This provides a contradiction in the proportionality of the output in the context of the input. Other differentiating characteristics include the system being deterministic. This denotes the notion that chaotic behavior is random. Complexities are the factors that make a situation or event inexplicable. In this context, the author describes complexity as the inability to equate the real cause of any chaotic behavior in any situation. In addition, the chaos theory contains complex systems that contain numerous independent elements that continually interact with spontaneous organization and reorganization over time into elaborate structures. Meteorological predictions provide a foundation for determining the consequences as a result of various actions that affect the environment. In this context, predictions in the chaos theory attempt in giving a detailed report into the expected repercussions as a result of chaotic behavior. Also, they help in reducing fatalities and the prevention of chaotic behavior. During the Cold war, deterrence was quite successful despite the fact that there were one or two hitches focused towards preventing the war. Historically, however, deterrence seemed to work much less due to the fact that the cold war, with its bipolar simplicity and strong command on both sides. The threat of mutual, nuclear annihilation represents an extreme case of deterrence . Certainly, deterrence has broken down more often since the end of the Cold War than during it.Based on the case theory we can assume that the international system to be a state of self organizing critically, then we can consider that the Cold war, which was brought about by a breakdown in deterrence, is an instance in which at least parts of the of the system spill into chaos. 5. The article provides an example of a similar formula of deterrence involving nations. Using the formula

Data Mining for Auditing Essay Example | Topics and Well Written Essays - 2000 words

Data Mining for Auditing - Essay Example However, with increased use of databases, comes a new challenge: how to make sense of the abundant data Auditors are overwhelmed with massive collection of data. Omnipresent personal computers, low cost multi-gigabyte disks, ubiquitous electronics and new generation database languages have made it very simple for companies to capture data and save it without any worries of loss of space, time or computing power. This benefit of databases to companies is also the bane to auditors. However, the effective utilisation of one robust technology will bring sense to the chaos generated by databases: Data Mining. Data Mining aims at converting data to sensible information. It intends to extract information from the data repositories in a manner as needed by the auditor. The auditors, with the help of data mining techniques can 'mine' for the relevant information needed to perform their assessment without having to bother about the irrelevant data. This report aims at analysing the benefits brought about by applying data mining technologies to auditing. As a part of the process of analysing the benefits, the paper also presents the technological overview of data mining, the problem faced by auditors and the tools and techniques data mining provides to alleviate the problems. Auditing: An Introduction to the Problem Domain Auditing is commonly defined as the process of accumulating and analysing information to detect the degree of conformance of the information with the pre-set criteria (Arens & Loebbecke, 2000). During its inception, auditing was an activity performed only to check financial compliance with the goals set. However today, it is an activity that is carried rigorously across all the domains of an enterprise. Auditing involves analysing the information from all departments including manufacturing, operations, human resource, finance and other verticals. Generally, companies hire independent auditors from outside the company to ascertain whether the statements of the company are in conformity with the generally accepted accounting principles (GAAP). However auditing is facing very tough challenges. The demise of major companies such as Enron and Anderson are live examples to limn the depth of negative impact that can be brought about by improper auditing. The complexity of business transactions coupled with investor's complex business practises to gain more profits makes the job of an auditor very challenging (Vijayalakshmi, 2003). To ensure that an objective assessment is reached, an auditor must be presented with data at all levels. The company creates huge databases of statements, records and other data that an auditor is expected to analyse. However due to timing and cost constraints, auditors can not examine every detail behind the stacks of records. With massive improvements in technology such as the development of Supply Chain Management Systems and Enterprise Resource Planning applications, the amount of business transactions performed everyday has grown exponentially. Since, in most cases, a company hires an

Perspectives of Indonesia to Become Economic Powerhouse in Asia by Essay

Perspectives of Indonesia to Become Economic Powerhouse in Asia by 2030 - Essay Example This essay offers comprehensive analysis of the current state of Indonesian economy and assess its perspectives in becoming Asian economic powerhouse by 2030. Indonesia is an independent republic in Southeast Asia. Indonesia has about 17,000 islands and a population of more than 238 million people, which forms a good foundation for its economy Notably, Indonesia has the largest economy in Southeast Asia and the 16th largest economy in the world. It is also a member of the G-20 major economies and is one of the industrialized and emerging economies in the world Economy refers to the state of a country with respect to natural resources, production, and consumption of goods and services and the supply of money. In Indonesia, the economy or financial value is different and never balances. Today, it is one of the emerging powerhouses in Asia with a large population that offers labor and market as well as a wealth of natural resources. Indeed, its population enhances labor productivity improvements, which boost its economy. Domestic consumption and productivity growth in Indonesia offers a good combination for economic growth. This makes Indonesia stand out in the world as many nations lack this fundamental combination. In fact, after China, Indonesian economy is the fastest growing economy among the G-20 members. However, there are numerous economic challenges hurting the Indonesian economy. There is a recommendation for the government continue to address these challenges with a view of attaining its economic goals. Table of Contents Table of Contents 3 Introduction 4 Methodology 7 Discussion 8 Conclusion 14 References 15 Introduction Indonesia is an independent republic in Southeast Asia. Indeed, Indonesia has about 17,000 islands and a population of more than 238 million people, which forms a good foundation for its economy (Ananta et al, 2011). It is an internationally recognized nation where it ranks fourth in the most populous nations in the world and the second richest country in the world. Notably, Indonesia has the largest economy in Southeast Asia (Belford, 2010) and the 16th largest economy in the world (Oberman et al, 2012). It is also a member of the G-20 major economies in the world and is one of the industrialized and emerging economies in the world (Oberman et al, 2012). The capital city of Indonesia is Jakarta, which is an industrious city. Most assuredly, Indonesia is a very rich country with a wide range of resources, a productive community, and large population. Indeed, Indon esia has many natural resources in earth oil, spice, and agriculture (Ananta et al, 2011). In this context, economy refers to the state of a country with respect to natural resources, production, and consumption of goods and services and the supply of money. In Indonesia, the economy or financial value is different and never balances. Today, Indonesia is one of the emerging powerhouses in Asia with a large population that offers labor and market as well as a wealth of natural resources (Wie & Thee, 2012). Indeed, its population enhances labor productivity improvements, which boost its economy. Notably, the domestic consumption and productivity growth in Indonesia offers a good combination for economic growth. This makes Indonesia stand out in the world as many nations lack this fundamental combination. In addition, Indonesia’s manufacturing industry, chemical industries, automotive, agricultural, and electronic industry enjoy a robust growth thus boosting the overall economic growth of the Southeast Asia nation (Ananta et al, 2011). In fact, after China, Indonesian economy is the fastest growing economy among the G-20 members with an economic growth rate of 6.3 percent in 2012 (Oberman et al, 2012). The country equally boasts of Gross Domestic Product of about $1 trillion at 6.2 % (Asian Development Bank, 2013). Moreover, the government of Indonesia plays a major role in enhancing a market-based economy where the state owns about 141 enterprises and sets prices for various basic goods like electricity, fuel, and rice (Michigan State University, 2013). This ensures that unscrupulous investors do not destabilize the country’s economy. Indonesia participates in global trade where it sells unripe oil to big oil companies like Shell, Castro, and Hexon at competitive prices that guarantee huge returns to the nation. More so, the nation sells raw oil

Analyse an aspect of organisation using realist and relativists Essay

Analyse an aspect of organisation using realist and relativists perspectives - Essay Example The realist and relativist viewpoints can both lead to different perspectives and approaches which are a part of various types of business perspectives and organizational behaviors (Dwyer, 39: 2001). One of the aspects that are created from these perspectives is an understanding of how communication works within the internal structure of a business. This is essential for the success of the business as well as the way in which the corporation can continue to grow. From a realist viewpoint, there are specific ways of approaching communication, specifically by leaders and managers of a corporation. However, this is one which comes from the individual personality and understanding of diversity (Ng et al, 474-2006). The incorporation of this viewpoint first comes from a relativist viewpoint which allows individuals to begin practicing specific theories while trying to build an understanding of how to community. When examining this topic, there will be an analysis of how communication work s in the corporation through both viewpoints. This will be followed by a discussion of the literature and an organizational analysis that shows how specific corporations can use this element for their success or failure. Through these different analysis and reviews, there will be an understanding of how both viewpoints are required for communication to work in favor of the corporation. The concept of communication in the workplace is one which is first defined by the concept of the relativistic perspective. This states that everything is relative, or theoretical in nature. The relativism which is created in the workplace is one which is essential to notice, specifically because it is known to cause the main conflicts and disputes within a workplace. The lack of communication is one which is based on the perspective associated with a given organization. The perspective

Operation Iraqi Freedom Research Paper Example | Topics and Well Written Essays - 1750 words

Operation Iraqi Freedom - Research Paper Example The history of America's wars can aptly start from the defense of the New York city carried out by George Washington against the British colonizing army (Weigley, 1977, p.4). That defense transformed itself into a protracted war which finally gave America its independence (Weigley, 1977, p.15-17). From this war, up to 2002, America has been found to have â€Å"employed military force more than 220 times in its history, yet has declared war only five times† (qtd. In Secunda and Moran, 2007, p.4). It is not only these officially declared wars of America that come under the purview of this paper but the undeclared wars as well, in an attempt to place America's war in Iraq in the correct historical and political perspectives. That is to say that war is being discussed here is in its all formal and informal forms, not limited by technical definitions. And it is concluded that Operation Iraqi freedom is nothing but a continuation of America's war agenda at large, supported by econom ic interests more than anything else. After independence, the major war waged by America was the Spanish-American war (Secunda and Moran, 2007, p.5). Then came the first and second world wars and indeed the cold war (though not fitting into the conventional definitions of war) against the communist block that succeeded them, and which â€Å"lasted fifty years† (Secunda and Moran, 2007, p.5). ... ielding a higher moral ground than other nations (which is similar to the age-old notion of white man's superiority), that has eventually led to America being sarcastically called as the 'world police' by its critics (Khatib, 2006, p.180). The Korean and Vietnam wars, which were part of the wider canvas of the cold war, showed the world how much obsessively compulsive was America's urge to wipe out communism (Donaldson, 1996, p.3). And the Vietnam war ended up for the US as a total coup ditat of sorts (Donaldson, 1996, p.70). Even the Americans despised the Vietnam war and the US government had to withdraw from the war scene disgraced and defeated both on the war front and at home (Secunda and Moran, 2007, p.6). The US military intervention in Lebanon, Grenada and Panama city did not invite much global attention, but â€Å"the Persian Gulf war of 1990-91† turned out into a macabre television spectacle for the world (Secunda and Moran, 2007, p.6). This was the moment when the w orld started discussing America's real intentions in its wars, and even the national leadership came very close to admitting that what was really at stake for the US was the cheap and incessant supply of oil (Secunda and Moran, 2007, p.6). It was also observed that the United States went to war in Korea and Vietnam, among many other reasons, â€Å"to show the third world that the United States was the one nation willing and able to stand up to communism anywhere in the world† (Donaldson, 1996, p.70). And since the second world war, it was becoming clear that America wanted to be â€Å"the leader of the world† (Donaldson, 1996, p.192). In the Persian Gulf war of 1990, this became more evident. An added element of interest for America regarding the Gulf region was its need to oppose any â€Å"dangerous

Single Civilization Research Paper Example | Topics and Well Written Essays - 250 words

Single Civilization - Research Paper Example Siege was his troupes’ basic tactic of war. Akaddian armies used weapons that helped them accomplish their goal of building a powerful dynasty. Sargon was keen to empower his empire to a point where no one of his1 enemies would beat him economically, politically and most importantly in war. His focus was to use warfare as his instrument of conquest. He took the time to study prevalent weaponry of the time and noted an interesting aspect about it. Heavy weaponry curtailed the flexible mobility of the armies during the war. This became a focal issue in his endeavor to overcome his foes.1 Sargon decided to embark on how to come up with alternative armament that would give his armies an advantage over their opponents. Akkadian armies went to war with the armies of Sumer in around 2334B.C. After the war, Sargon came up with what he thought was the best weapon to use with his troupes. He made bows and trained his armies on their use. Sargon was inspired by his observation of the heavy weight of the armor of the Sumerian armies. They wore copper or bronze helmets and carried shields. Their maneuverability in war was quite difficult despite their military tactics. Arming his troupes with bows and ensuring they did not wear heavy armor, Sargon gained quite an advantage over the Sumerians.2 Bows allowed the Akkadian troupes to maneuver with flexibility adding to the fact that they did not wear copper armor that would weigh them down. The use of bows also made it possible to counter or attack their 2enemies from a distance. Their efficient mobility permitted swift siege and quick victory. The bowmen were able to reduce the strength of the Sumerian shield troupes and breakthrough their foot soldiers while still at a distance. This also meant that Akaddian Bowman could suppress several Sumerian soldiers while keeping his ground. The bow had a technical advantage that other weapons

A View Inside The Westboro Baptist Church Essay Example for Free

A View Inside The Westboro Baptist Church Essay Unlike most modern religious groups, the Westboro Baptist Church is unique in the fact that the organization doesn’t meet in a modern church setting. Instead, the Westboro Baptist Church meets on Sundays to picket and protest the funerals of people whom they feel have created blasphemous acts against God. This recently included the funeral of Apple’s co-founder Steve Jobs. In an October 7th cbsnews. com article journalist Edecio Martinez quoted Margie Phelps as posting on twitter, â€Å"He had huge platform†¦gave God no glory and taught sin. This in return yielded a great a greatly deal of responses by media, family, and some other government officials as well. This is the story behind the Westboro Baptist Church and its opposing counterparts. It is first important to understand the dynamics of the Westboro Baptist Church. Known for its fight against the alternative lifestyles of the homosexual community, the members of the Westboro Baptist Church have often times been referred to as the serial protesters and also have been characterized as a hate group. This church is an independent church founded by Fred Phelps in 1955. The group contains 71 members most of which are of Phelps family. Their congregations include picketing and the desecration of the American flag. Theologically speaking they refer to themselves as Calvinist. The church’s view is that most religious groups are Satan worshipers, frauds, and teach lies. They believe that â€Å"God Hates fags† and that it should be a crime. The two most notable groups that Westboro Baptist Church has chosen to picket are homosexuals and celebrities. This organization is without a question unique in its own rights. Since the Westboro Baptist Church popped up on the scene in Nov. 27, 1955, the public has had something to say about them. In efforts to expires the disapproval of the Westboro Baptist Church other groups have met in areas where the church was picketing and turned away from churches protesters. Perhaps one of the most famous counter protests happened after the September 11 attacks. One young man Jared Dailey , stood across from the group and held a sign that displayed, â€Å"NOT today Fred. † Two days later the number shifted from 1 to 86 people standing across from the group. In future protest against the group the slogan that began Dailey used has been popular in use. As a means to counter the Westboro Baptist church organizations such as, The Boston Center for the Arts and an ad-hoc group in Richmond countered the protest by doing pledges and then donating the money to LGBT (Lesbian, Bisexual, and Trans-gender) organizational projects. Others have arranged protest and hackers have been known to hack the Westboro batiste Church websites and disable them from the internet. There have been violent actions also against the group. There have been recorded incidents of angry mob attempting to attack the group, a fire near their meeting lace estimated at $10,000 in damage, and also Army Veteran Ryan Newell was arrested with ammo and an attempt on an attack of the group. For the most part the general public objects to the Westboro Baptist Church and their beliefs. Arguments on both sides of the debacle have both taking time out to use the First Amendment in their defense. The Westboro Baptist Church found themselves in hot water when the father of the Marine Lance Corporal Matthew A. Snyder sued them for defamation of character, invasion of privacy, and intentional infliction of emotional distress on June 5,2006. Although the court threw out the defamation and privacy suits due to the First Amendment the trial still went on for other charges. The family argued that even though the first amendment gives an American citizen the right to free speech it still is limited. On the judges mark the first amendment was recited and let it be known that if vulgar, offensive, or shocking statements were made, then that would be grounds of a guilty plea. The Plea was guilty on behalf of Fred and the other members of the Phelps family. The Westboro Baptist Church also took action as well, on July 21,2006; the ACLU (The American Civil Liberties Union) of eastern Missouri filed a suit for Shirley L. Phelps-Roper. This suit stated that the Missouri law saying that no one was allowed to picket in front of a church or a funeral an hour before or an hour after was preventing her from utilizing her right to religious liberty and free speech. Although the argument was relevant the courts still shot down the suit stating that â€Å"in individual states and cities the law is interpreted as they see fit because the amendment is vague as to the terms and conditions. The Phelps family continued on still to federal court in hopes of a win. On both sides of the argument each have had valid point that the first amendment protects both sides. As the situation continued, it called for the Supreme Court to step in. The Supreme Court stated that even though they do not agree with the Westboro’s acts they still have to aside with them due to the First Amendment of freedom of speech. The Supreme Court quoted â€Å"that freedom of speech is so central to the nation that it protects cruel and unpopular protests even, in this case, at the moment of a familys most profound grief. The Westboro Baptist Church is an organization of people with their own beliefs and opinions. Their religion no matter how extreme it may be is still what they believe to be a religion. Time has shown the world many interpretations of God worshipers, and many interpretations of religion, and the Bible. This is not the first group to have these views and probably won’t be the last. The world is a big place with many different people and it is important to look past the ignorance and see the importance of accepting everyone for who they are like it or not.

Internationalization of Asian Multinational Enterprises

Internationalization of Asian Multinational Enterprises INTRODUCTION Background Internationalization can be defined as the desire to be a member of the international society by satisfying a certain standard, or strengthening the influence of a nation on other nations. It becomes the process where multinational enterprise (MNE) engaging, it is very important for these companies to penetrate international market if they want to be accepted and remain successful. (Sreenivasan Jayashree and Sahal Ali Al-Marwai). The internationalization process helps MNEs in maturate their operation in foreign market and enhance their competitive position abroad. According to Hedman (1993), three main alternatives for distributing the enterprises product exist, that is, indirect export, direct export and alternatives to export. When distributing indirectly, the different distribution activities are assigned to one or several intermediaries in the home market. When distributing directly, the producer itself conducts the distribution activities, such as distribution to a foreign importer, which in his turn forward the products to another intermediary or the end customer. (Molnar, 1990) the third alternative, alternatives to export, can take place through, for instance, own production in the target country, or licensing (Hedman, 1993). The rapid changes in todays business world call for new models of internationalization (Fillis, 2001; Meyer and Gelbuda, 2006), especially to be able to capture the early phase of internationalization in a better manner than the traditional models (Johanson and Vahlne, 2003). In contemporary research, Coviello and McAuley (1999), in line with Leonidou and Katsikeas (1996), have pointed at three theory directions that are preferable for studying internationalization, namely Foreign Direct Investment (FDI)-theories (a.k.a., the theory of the Multinational Firm), Stage models and Network theory. Even though these are different theory directions, they are seen to be complementary views where a combination of views is preferred since it is difficult to capture the internationalization concept using only one theoretical framework (Bell et al., 2003; BjÃÆ' ¶rkman and Forsgren, 2000; Coviello and Munro, 1997; Meyer and Skak, 2002). Network theory is increasingly being combined with stage theory in order to understand and explain the rapid internationalization of the firm (in Bell et al., 2003; Johanson and Vahlne, 1990, 2003; Meyer and Skak, 2002). The process of internationalization has been the subject of widespread theoretical and empirical research (for example, Johanson and Wiedersheim-Paul 1975; Johanson and Vahlne 1977; Bilkey 1978; Cavusgil 1980; Turnbull 1987; Welch and Loustarinen 1988) and finds a general acceptance in the literature (Bradley 1991; Buckley and Ghauri 1993; Leonidou and Katsikeas 1996). The internationalization process is described as a gradual development taking place in distinct stages (Melin 1992). Internationalization processes in emerging markets, as in international markets in general, take place in a stepwise manner (Jansson, 2007). Companies commit themselves through a gradual learning process. Learning is incremental and takes place by doing. Firms learn about doing business abroad, for example, learning about the conditions in particular markets. Companies tend first to establish themselves in geographically and culturally proximate markets and increase their commitment, starting with agents, and passing through sales companies to manufacturing companies (Johanson and Vahlne, 1977; Johanson and Wiedersheim-Paul, 1975). Within the last decades, the business world has changed drastically through globalization and internationalization à ¢Ã¢â€š ¬Ã¢â‚¬Å"creating a new and fierce business environment for companies. We can now see a third wave of internationalization of firms in which companies domiciled in mature Western markets establish themselves on a large scale in emerging markets such as Central and Eastern Europe (CEE), Russia, China and India (Jansson, 2007). A recent phenomena of firm from Asian capital exporting countries were internationalizing and multinationalizing their business activities and have emerged or are emerging as Asian multinational enterprises (World Bank, 1993). They started the internationalizing activities and investing and setting up operation in other countries since mid-1980. Research interest which focus on these Asian enterprises and their direct investment activities arise in recent years (Ting, 1985; Ulagado et al., 1994; Yeung 1994, 1997). Foreign direct investment (FDI) started on the early 1980s. According to studies done by Lall, 1983;Well, 1983; Kumar and McLeod, 1981; Khan, 1986; Monkiewicz, 1986; Aggarwal and Agmon,1990; Tolentino, 1993, FDI of Third World multinational enterprises (TWMNEs), slightly different with the traditional MNEs from the western developed countries in term of their characteristic. The growth of East Asia (World Bank, 1993) in late 1980 and early 1990, has increased intra-regional direct investment. The directed investment process from Japan , followed by Korea, Taiwan, Hong Kong and Singapore and the activities transferring from one level of economies to another in Malaysia, Indonesia and Thailand has been depicted as wild flying geese pattern. (Toh and Low,1994; Guisinger, 1991). As a result, these Asian capital exporting countries firm internationalizing and multinationalizing their business activities and have emerged or are emerging as Asian multinational enterprises (World Bank, 1993). Problem Statement During these extremely competitive times, the international business environment is one that is normally full of immense uncertainty, volatility as well as a high rate of failure when it comes to international expansion The research on the nature, organization and operations of these emerging Asian international and multinational enterprises are limited. This is because research in international business and trade has been dependent largely upon economistic and western-centric theories developed predominantly in industrial and institutional economics (Buckley and Casson, 1985; Dunning, 1988, 1993). A study shown internationalization is the crucial factor for a firm to grow and develop economically and technologically (Syed Zamberi Ahmad and Fariza Hashim, 2007). Hence, it is very important for multinational companies to conduct a comprehensive examination of the various important factors that could influence the type of strategy that is to be selected for international market entry. 1.3 Objectives This research is dedicated to all local Malaysian companies who are looking at ways and means to internationalize their operations to a foreign market and would be of tremendous assistance to them in determining the correct strategic path and improve the understanding of the Asian MNEs characteristic. 1.4 Research Question According to the problem statement above, the author has formulated some question to meet the research objective. The questions are: What are the key characteristics and success of their foreign ventures? What are the motives for internationalization? What are the entry strategies? What are the strategic advantages and traits? Research Contribution Government: Through this study, government can carry out some government policy to lead more firm success in their international proses in expanding their business. Firms: This study provides information to provide better understand characteristic and strategy for the purpose of internationalization which can increase the net profit of the firm. Economic: This study enable economist to better understand how development of economic on a country can help MNEs in their internationalization process. 1.6 Summary This study proposal consists 3 chapters. Chapter 1 provides the overview of the recent phenomena of internationalization, the problem statement, objectives, and question. Chapter 2 displays literature review by past research, followed by concept and theories, and research framework. Chapter 3 describes the research methodology, sampling technique, data collection, data analysis and research planning that use to analysis the finding in Chapter 4. CHAPTER 2 LITERATURE REVIEW 2.1 Introduction This chapter reviews the past studies about the concept and theory which included internationalization process, entry notes and process, eclectic explanation, foreign direct investment, regional and global internationalization processes, Uppsala model and Asian context. After that it follows by the research framework. 2.2 Concept and Theory 2.2.1 Internationalization processes Internationalization processes in emerging markets, as in international markets in general, take place in a stepwise manner (Jansson, 2007). Companies commit themselves through a gradual learning process. Learning is incremental and takes place by doing. Firms learn about doing business abroad, for example, learning about the conditions in particular markets. Companies tend first to establish themselves in geographically and culturally proximate markets and increase their commitment, starting with agents, and passing through sales companies to manufacturing companies (Johanson and Vahlne, 1977; Johanson and Wiedersheim-Paul, 1975). Research on the exports of mainly North American companies has reached similar results (Bilkey, 1978; Cavusgil, 1980; Czinkota, 1982; Reid, 1981). Such process theories are highly useful especially when studying international 66 H. Jansson, S. Sandberg / Journal of International Management 14 (2008) 65à ¢Ã¢â€š ¬Ã¢â‚¬Å"77 business in CEE. Learning processe s are essential since the company needs to adapt to an emerging and different business context, such as exists in the CEE (Meyer and Gelbuda, 2006). As noted by Sharma and Blomstermo (2003b) a basic assumption in internationalization process theory is that knowledge accumulation is continuous and dependent upon the duration of foreign operations. The longer firms have been involved in foreign operations, the more knowledge they accumulate about such operations. There is a relationship between knowledge accumulation and risk so that the more knowledge a firm has, the less uncertain they perceive the foreign market to be. Firms that lack knowledge about foreign markets even tend to overestimate risks. This corresponds to what Jansson (1989) found concerning establishment processes in a regional perspective, namely that the pace of investments in Southeast Asian countries accelerated, the more experienced the firms became in an area. Johanson and Vahlne (1990) stated that Uppsala model of internationalization indicated firms reveal an evolutionary process in internationalizing through a series of evolutionary stage. 2.2.2 Entry nodes and entry processes Firms entering emerging markets face several barriers according to Meyer (2001). These barriers include a lack of information, unclear regulations and corruption. According to traditional research on internationalization processes, market entries either take place through intermediaries such as agents or distributors or through a firms own representative in the exporting/importing country, mainly a subsidiary. In terms of research in this area, scholars have found that relationships are at the core of the internationalization process (Axelsson and Johanson, 1992; Ford, 2002; HÃÆ' ¥kansson, 1982; HÃÆ' ¥kansson and Snehota, 1995; Hammarkvist et al., 1982; Jansson, 1994, 2007; Johanson and Vahlne, 2003; MajkgÃÆ' ¥rd and Sharma, 1998). According to the network approach to internationalization, entries into local market networks take place through establishing relationships. The international marketing and purchasing of products and know-how through a direct exporter/importer network means that a vertical network in the exporting region (e.g. a suppliers supplier network) is indirectly connected to another vertical network in the importing region (e.g. a buyers buyer network). This large vertical network will, in turn, be embedded in other regional and national networks, such as a financial network (Jansson, 2006, 2007). From a network perspective, establishment points in foreign market networks are defined as entry nodes. There are various routes into these networks, or nodes by which a firm can enter a network. Entries through trade either take place H. Jansson, S. Sandberg / Journal of International Management 14 (2008) 65à ¢Ã¢â€š ¬Ã¢â‚¬Å"77 67 directly with customers or indirectly through intermediaries. Direct relationships, dyads, can be established between buyer and seller in the respective countries. Indirect relationships, triads, involve an outside party or other type of entry node, usually an intermediary such as an agent, dealer or distributor. Dyads can also be established through the entry mode FDI (a subsidiary in the importing country). Entry processes take place by building relationships to form networks in foreign markets. Irrespective of entry node, the development of international buyer/seller relationships tends to follow a five stage pattern (Ford, 1980, 2002; Ford et al., 1998). Each stage of the entry process can be described by a number of relationship factors, such as how the experience, commitment and adaptations of the parties increase across the stages and how the distance and uncertainty between them are reduced across the stages. The first stage includes the taking-up of marketing/purchasing activities before a formal relationship begins. The next three stages show how direct buyerà ¢Ã¢â€š ¬Ã¢â‚¬Å"seller relationships within networks are established: from their beginning and to their deepening. Experience indicates the amount of experience the respective parties have with each other. They will gauge their partners commitment to the relationship, e.g. by the willingness to make adaptations. Distance is multifaceted and it can be split into social, cultural, technological, time and geographic distance. Uncertainty deals with the fact that at the initial stages, it is difficult to assess the potential rewards and costs of the relationship. In the fifth and final stage, the relationship is extensively institutionalized and habitual, with commitment being taken for granted. Based on Terpstra and Sarathy, 1991; and Baek, 2003, joint ventures with host governments and local partners in the host country were among the preferred entry strategies for international operational operation. Petronas in South Africa entered into a commercial alliance with Engen in 1996 as a strategic partner. The acquisition was to enable both companies to implement a shared growth strategy in Africa and the Indian Ocean Rim, while allowing the development of potential operational synergies between the two business entities (Padayachee and Valodia, 2002). 2.2.3 Eclectic Explanation Eclectic Paradigm is a proverbial known explanation of international production. Dunnings (1977, 1988, 1993, 1995). Eclectic Paradigm stated that the extent and pattern of international production is determined by: 1) Ownership advantages (for example, proprietary technology, products, expertise and skill) 2) Internalization advantages (for example, transaction costs reduction, maximize economic return), and 3) Location advantages of host and home countries These OLI (Ownership Location Internalization) variables listed above explain the reason internationalization occurs but overlook the dynamic process of internationalization. The Eclectic paradigm is provided by the Investment Development Path (Dunning, 1981, 1986) with a dynamic dimension, and relates the net outward investment of a country to its stage of economic development. Five stages of IDP ( Investment Development Path) Stage 1: At low level of economic development, there is little inward or outward investments. Stage 2: Inward investment becomes attractive, especially in import substitution projects as the country develops. Some outward investment may take place in neighborly countries which at lower stages of development. Most developing countries with some outward investments are at this stage. Stage 3: With economic development move forward, net inward investment declines while outward investment increases (relative to inward investment). Increasing of outward investment may take place in countries at lower IDP stages in order to overcome cost disadvantages in labour intensive industries and also to seek markets or strategic assets. Singapore, Taiwan and South Korea are said to be at this stage. Stage 4: As production being multinationalized, net outward investment becomes positive. Most developed countries are at this stage. Stage 5: The shift from advantages based more on factor endownment to those based on internalizing international market convergent outward and inward investment flows. Empirical research on Third World (including Asian) multinationals has given general support to the IDP concept (Dunning, 1986; Tolentino, 1993; Dunning Narula, 1996; Lall, 1996). Dunning and Narula (1996) acknowledge that country factors may influence the IDP pattern of a country, such as resource endownment, home market size, industrialization strategy, government policy, and the organization of economic activities. TWMNEs were smaller than their counterparts from developed countries and have limited number of overseas operations. The competitive advantages of TWMNEs were based on cost advantages (particularly labour cost) and greater responsiveness to host country needs which is different from western MNEs. They served market niches which were not covered by the traditional MNEs and so were not in direct competition with them. The major motivation for these FDI was protecting export markets rather than exploiting rent from proprietary technological know-how (or other ownership spe cific advantages characteristic of western MNEs) explained in theories, such as the eclectic paradigm of Dunning (1977, 1995). TWMNEs possessed first or second generation labour-intensive technologies and produced standardized products mainly for the domestic host country market which at stage 4 of IDP. Wells (1983) presupposes a pecking order hypothesis to suggest that the TWMNEs technologies could fill the technological gap between the advanced technology of developed country MNEs and the rudimentary technology of less developed countries (LDCs) in a pecking down order. Lall (1983) emphasized the flexibility and adaptability of TWMNEs technologies to be more suitable or appropriate to LDC situations. 2.2.4 Foreign Direct Investment (FDI) It may seem surprising that there is significant number of foreign direct investments by some firms from developing countries because it is usually credited to more developed countries. A number of studies indicate that FDI flows not only from the industrialized or well-developed countries, as well as developing countries. Scholars such as Lecraw (1981, 1993), Wells (1977, 1981), Lall (1983a, and 1983b), Kumar and Lim (1984), Ulgado et. al., (1994) are only some of those who have carried out empirical studies and researched FDI flows from developing country firms in the 1970s and 1980s. Comparisons between the nature of international expansion of firms from developing countries and the nature of those corporations that originated from developed countries are made in most of these studies (Dunning, 1986; Vernon-Wortzel and Wortzel, 1988). In general, it has been depicted that the competitive advantages of MNCs from developed country are derived from advanced proprietary technology or other superior resources (Yeung, 1994). While ability to reduce costs of imported technology through de-scaled manufacturing or smaller scale of production is focus of the competitive advantage from developing country MNCs were derived from their This is a process whereby technologies from industrialised countries are adapted to suit smaller markets by reducing scale, replacing machinery with manual labour, and relying on local inputs (Ramamurti, 2004). Outward direct investment from developing countries started to grow rapidly to a sizeable magnitude during the mid-1980. This became the main tool of developing country multinationals in demanding that their constituent firms prepare for the drastically international competition that they were about to face(Kumar, 1996, 1997). The emergence of new technologies in the late 1980s somehow decreases the interest in outward direct investment from developing countries subsided (Kumar, 1996; Oh et. al., 1998; Pananond and Zeithaml, 1998; van Hoesel, 1999). Pananond and Zeithaml(1998) and van Hoesel(1999) recounted that aggregate analyses of developing country MNEs conducted at the industry level get attention from scholars and yielded interesting results by the early 1990s. They concluded that there were marked differences in characteristics between developing country MNEs in the 1980s and 1990s. Scholars posited that these two groups of MNEs belonged to two different waves of development i n term of their respective historical backgrounds, nature of businesses, extent of the role of government in operations and transactions, geographical direction, and mode of internationalisation activity. MNEs in the 1980s are more concerned with cost competitiveness with their competitors (van Hoesel, 1999). In contrast, developing country MNEs in the 1990s placed greater emphasis on the development and reset business strategies due to the dynamic changing patterns of world business structure brought about by trade liberalisation and economic globalisation (Dunning et al., 1997). Besides this, they put more effort on technological competence as the source of competitive advantage (Pananond and Zeithmal, 1998). They noted that notwithstanding these differences, there existed several significant interrelated points of convergence between the two groups (Dunning et al., 1997; van Hoesel, 1999). 2.1.5 Regional and global internationalization processes In analyzing the early internationalization steps of smaller and less experienced companies, the internationalization process model by Johanson and Vahlne (1977) is regarded as a highly useful tool. In internationalization research, few studies have been conducted on higher level internationalization where companies are established in several countries and have fully-owned businesses (Meyer and Gelbuda, 2006). The more countries in a region a firm exports to, the more extensive is the regional internationalization process. The more regions a firm exports to, the more global is the internationalization process. New stages of internationalization are established when a firm extends its business from one major type of market to another or from one type of foreign environment to another. The main factor behind these stages is experiential knowledge, meaning that firms gradually build a knowledge base through operating in foreign markets. They learn from past experience by transforming this experience to useful knowledge. There are three types of such knowledge (Eriksson et al., 1997). Internationalization knowledge about how to perform international operations is an expression of a firms current stock of knowledge in the form of its resources and capabilities. The more novel the foreign environment, the more difficult it is for the firm to apply its current stock of knowledge to that foreign market. This means that there is a gap between a firms present internationalization knowledge and the knowledge the company has about how to do business in the specific foreign market, i.e. concerning its network experiential knowledge and institutional knowledge (Blomstermo et al., 2004). Based on a firms experiential knowledge process, internationalization processes are often divided into different degrees of internationalization. Johanson and Mattsson (1991) discuss the internationalization process for firms with various degrees of internationalization and propose that the process is mainly valid during the early stages of a firms internationalization: inexperienced firms tend to follow a traditionally slow and gradual pattern, while the internationalization of a more experienced company is less slow and gradual. 2.2.6 Uppsala model The Uppsala model (Johanson Weidersheim-Paul, 1975; Johanson Vahlne, 1977) provides an explanation of the dynamic process of internationalization of individual firms. The Uppsala model emphasize on the importance of gaining knowledge and experience about the characteristics of foreign markets along the internationalisation path, and helps MNEs reduced risks and levels of uncertainty in unfamiliar foreign environments before investing (Wiedersheim-Paul et al., 1978). The successive steps of increasing highly commitment are based on knowledge acquisition. Foreign activities started with export to foreign country through independent representative or agent, after that establish sales subsidiary and finally start production in the host country. The internationalization of the firm across many foreign markets was particularly related to psychic distance which included differences in language, education, business practices, culture and industrial development. Firstly, enter foreign market which closer in term of psychic distance, followed by subsequent entries in markets with greater psychic distances. Same goes to entry mode of foreign market. The incremental expansion of market commitment meant that the initial entry was typically some form of low commitment mode and followed by progressively higher levels of commitment. Obviously, commitment of the level of ownership in different markets was correlated with their psychic distance. The Uppsala model had received general support in empirical research (Welch and Loustarinen, 1988; Davidson, 1980, 1983; Erramilli et al., 1999) and its largely intuitive nature and evolutionary learning perspective made it attractive as an explanatory model. A related view regards learning was that TWMNEs built up their advantages through the accumulation of technology and skills. Lall (1983) emphasized on the localization and adaptation of technology to suit local markets by TWMNEs. Tolentino (1993) focused in term of the accumulation of technological competence in the expansion of firms from developing countries which was consistent with the resource-based view of building competitive advantage in strategic management. The accumulation of knowledge and competence especially its knowledge of developing markets and not so much its technology by the CP Group in Thailand was the key to its internationalization. There are also differences between the CP Group and Western MNEs (Pananond and Zeithaml, 1998). Mathews (2002, 2006) postulated that emerging firms could foster internationalization via leverage of their contractual linkages with other foreign firms to acquire resources and learning new capabilities. He indicated that this explanati on complemented the OLI framework and could be used to explain the rise of such latecomer firms which he dubbed as Dragon multinationals. 2.2.7 Asian Context Yeung (1999); Zutshi Gibbons (1989) portrayed that western theories on internationalization have neglect the active role played by the state and overlooked the institutional or contextual perspective in the internationalization of Asian. Asians state always plays a direct and active role in the internationalization of its MNEs. For example, the Singapore government played a key and direct role in the promotion of outward FDI (e.g., growth triangles, industrial parks in foreign countries), particularly from the early 1990s in its regionalization programs (Pang, 1994; Tan, 1995; ESCAP/UNCTAD, 1997). Incentives and other programs for instance tax incentives, finance schemes, training also provided to foster the rapid development of local entrepreneurship in the regionalization efforts. In Malaysia, the government took a very active role in promoting the internationalization of Malaysian firms. Investment promotion missions abroad were organized and often lead by the Prime Minister. The government provided incentives including tax abatement in 1991 and subsequently full tax exemption in 1995 for income earned overseas and remitted back to Malaysia. An overseas investment guarantee program was instituted. Malaysian government instructed firms to defer non-essential overseas investment in order to reduce the impact of the effects of the 1997 Asian financial crisis. In the Asian context, the state has played a very active and direct role in promoting the internationalization of its national firms. This is much different with the western context, where the role of the state is benign and indirect. 2.3 Summary This chapter first discussed the internationalization process in terms of entry notes and process, eclectic explanation, foreign direct investment, regional and global internationalization processes, Uppsala model and Asian context. The following chapter discusses the research method, survey development, and sample selection CHAPTER 3 METHODOLOGY 3.1 Introduction This chapter provides an overview of the research method. It starts by explaining the appropriateness of the research method. Then discusses the research design which consists of seven steps: questionnaire development, literature review, proposal, data collection, data analysis, discussion and conclusion, and write-up. Next the data collection and sample selection is discussed with reasons for each of the decisions involved. The next section discusses the statistical methods. Lastly, a Gantt chart will be use to estimate the times use in each activity. 3.2 Sampling Technique A case study approach will be using in this paper. It tends to provide in depth information and intimate details about the particular case being studied. This approach was used to collect comprehensive and holistic data (Eisenhardt, 1989; Internationalization Strategies of Emerging Asian MNEs 491 Yin, 1994) about firms that have internationalized their operations over time. The focus here is on MNEs from Malaysia (a fast developing country). Case studies mean that the research investigates few objects in many respects (Wiedersheim-Paul, Eriksson, 1991). Case studies are most suitable if you like to get a detailed understanding about different kinds of process (Lekvall Wahlbin, 1987). The researches may, for instance, choose a line of business and an enterprise, and conduct an in depth investigation (Wiedersheim-Paul, Eriksson, 1991). Yin (1994) states, that when the form of the questions is why and how, the case study strategy is most likely to be appropriate. The research problem I have investigated was how the internationalisation process of a MNEs when entering to foreign market can be characterised , which was divided into four research questions. 3.3 Data Collection 3.3.1 Secondary data Eriksson Wiedersheim-Paul (1997) points out that secondary data is data, which already has been collected by someone else, for another purpose. Statistics, and reports issued by governments , trade associations, and so on, are some sources of secondary data (Chisnall, 1997). The annual report and the enterprises homepage, are another sources of secondary data (Wiedersheim-Paul, Eriksson, 1991). Secondary data research should always be carried out before doing any field survey (Chisnall, 1991). When I had defined the research area, I started to search for relevant literature. The databases that I have used to find relevant literature are EBSCOhost, Science Direct, Libris, ABI/INFORM, and Helecon. The keywords used when searching the databases were international business, Malaysian MNEs, internationalization, strategies, mode of entry. These words were combined in different ways, to maximise the number of hits. 3.3.2 Primary d Internationalization of Asian Multinational Enterprises Internationalization of Asian Multinational Enterprises INTRODUCTION Background Internationalization can be defined as the desire to be a member of the international society by satisfying a certain standard, or strengthening the influence of a nation on other nations. It becomes the process where multinational enterprise (MNE) engaging, it is very important for these companies to penetrate international market if they want to be accepted and remain successful. (Sreenivasan Jayashree and Sahal Ali Al-Marwai). The internationalization process helps MNEs in maturate their operation in foreign market and enhance their competitive position abroad. According to Hedman (1993), three main alternatives for distributing the enterprises product exist, that is, indirect export, direct export and alternatives to export. When distributing indirectly, the different distribution activities are assigned to one or several intermediaries in the home market. When distributing directly, the producer itself conducts the distribution activities, such as distribution to a foreign importer, which in his turn forward the products to another intermediary or the end customer. (Molnar, 1990) the third alternative, alternatives to export, can take place through, for instance, own production in the target country, or licensing (Hedman, 1993). The rapid changes in todays business world call for new models of internationalization (Fillis, 2001; Meyer and Gelbuda, 2006), especially to be able to capture the early phase of internationalization in a better manner than the traditional models (Johanson and Vahlne, 2003). In contemporary research, Coviello and McAuley (1999), in line with Leonidou and Katsikeas (1996), have pointed at three theory directions that are preferable for studying internationalization, namely Foreign Direct Investment (FDI)-theories (a.k.a., the theory of the Multinational Firm), Stage models and Network theory. Even though these are different theory directions, they are seen to be complementary views where a combination of views is preferred since it is difficult to capture the internationalization concept using only one theoretical framework (Bell et al., 2003; BjÃÆ' ¶rkman and Forsgren, 2000; Coviello and Munro, 1997; Meyer and Skak, 2002). Network theory is increasingly being combined with stage theory in order to understand and explain the rapid internationalization of the firm (in Bell et al., 2003; Johanson and Vahlne, 1990, 2003; Meyer and Skak, 2002). The process of internationalization has been the subject of widespread theoretical and empirical research (for example, Johanson and Wiedersheim-Paul 1975; Johanson and Vahlne 1977; Bilkey 1978; Cavusgil 1980; Turnbull 1987; Welch and Loustarinen 1988) and finds a general acceptance in the literature (Bradley 1991; Buckley and Ghauri 1993; Leonidou and Katsikeas 1996). The internationalization process is described as a gradual development taking place in distinct stages (Melin 1992). Internationalization processes in emerging markets, as in international markets in general, take place in a stepwise manner (Jansson, 2007). Companies commit themselves through a gradual learning process. Learning is incremental and takes place by doing. Firms learn about doing business abroad, for example, learning about the conditions in particular markets. Companies tend first to establish themselves in geographically and culturally proximate markets and increase their commitment, starting with agents, and passing through sales companies to manufacturing companies (Johanson and Vahlne, 1977; Johanson and Wiedersheim-Paul, 1975). Within the last decades, the business world has changed drastically through globalization and internationalization à ¢Ã¢â€š ¬Ã¢â‚¬Å"creating a new and fierce business environment for companies. We can now see a third wave of internationalization of firms in which companies domiciled in mature Western markets establish themselves on a large scale in emerging markets such as Central and Eastern Europe (CEE), Russia, China and India (Jansson, 2007). A recent phenomena of firm from Asian capital exporting countries were internationalizing and multinationalizing their business activities and have emerged or are emerging as Asian multinational enterprises (World Bank, 1993). They started the internationalizing activities and investing and setting up operation in other countries since mid-1980. Research interest which focus on these Asian enterprises and their direct investment activities arise in recent years (Ting, 1985; Ulagado et al., 1994; Yeung 1994, 1997). Foreign direct investment (FDI) started on the early 1980s. According to studies done by Lall, 1983;Well, 1983; Kumar and McLeod, 1981; Khan, 1986; Monkiewicz, 1986; Aggarwal and Agmon,1990; Tolentino, 1993, FDI of Third World multinational enterprises (TWMNEs), slightly different with the traditional MNEs from the western developed countries in term of their characteristic. The growth of East Asia (World Bank, 1993) in late 1980 and early 1990, has increased intra-regional direct investment. The directed investment process from Japan , followed by Korea, Taiwan, Hong Kong and Singapore and the activities transferring from one level of economies to another in Malaysia, Indonesia and Thailand has been depicted as wild flying geese pattern. (Toh and Low,1994; Guisinger, 1991). As a result, these Asian capital exporting countries firm internationalizing and multinationalizing their business activities and have emerged or are emerging as Asian multinational enterprises (World Bank, 1993). Problem Statement During these extremely competitive times, the international business environment is one that is normally full of immense uncertainty, volatility as well as a high rate of failure when it comes to international expansion The research on the nature, organization and operations of these emerging Asian international and multinational enterprises are limited. This is because research in international business and trade has been dependent largely upon economistic and western-centric theories developed predominantly in industrial and institutional economics (Buckley and Casson, 1985; Dunning, 1988, 1993). A study shown internationalization is the crucial factor for a firm to grow and develop economically and technologically (Syed Zamberi Ahmad and Fariza Hashim, 2007). Hence, it is very important for multinational companies to conduct a comprehensive examination of the various important factors that could influence the type of strategy that is to be selected for international market entry. 1.3 Objectives This research is dedicated to all local Malaysian companies who are looking at ways and means to internationalize their operations to a foreign market and would be of tremendous assistance to them in determining the correct strategic path and improve the understanding of the Asian MNEs characteristic. 1.4 Research Question According to the problem statement above, the author has formulated some question to meet the research objective. The questions are: What are the key characteristics and success of their foreign ventures? What are the motives for internationalization? What are the entry strategies? What are the strategic advantages and traits? Research Contribution Government: Through this study, government can carry out some government policy to lead more firm success in their international proses in expanding their business. Firms: This study provides information to provide better understand characteristic and strategy for the purpose of internationalization which can increase the net profit of the firm. Economic: This study enable economist to better understand how development of economic on a country can help MNEs in their internationalization process. 1.6 Summary This study proposal consists 3 chapters. Chapter 1 provides the overview of the recent phenomena of internationalization, the problem statement, objectives, and question. Chapter 2 displays literature review by past research, followed by concept and theories, and research framework. Chapter 3 describes the research methodology, sampling technique, data collection, data analysis and research planning that use to analysis the finding in Chapter 4. CHAPTER 2 LITERATURE REVIEW 2.1 Introduction This chapter reviews the past studies about the concept and theory which included internationalization process, entry notes and process, eclectic explanation, foreign direct investment, regional and global internationalization processes, Uppsala model and Asian context. After that it follows by the research framework. 2.2 Concept and Theory 2.2.1 Internationalization processes Internationalization processes in emerging markets, as in international markets in general, take place in a stepwise manner (Jansson, 2007). Companies commit themselves through a gradual learning process. Learning is incremental and takes place by doing. Firms learn about doing business abroad, for example, learning about the conditions in particular markets. Companies tend first to establish themselves in geographically and culturally proximate markets and increase their commitment, starting with agents, and passing through sales companies to manufacturing companies (Johanson and Vahlne, 1977; Johanson and Wiedersheim-Paul, 1975). Research on the exports of mainly North American companies has reached similar results (Bilkey, 1978; Cavusgil, 1980; Czinkota, 1982; Reid, 1981). Such process theories are highly useful especially when studying international 66 H. Jansson, S. Sandberg / Journal of International Management 14 (2008) 65à ¢Ã¢â€š ¬Ã¢â‚¬Å"77 business in CEE. Learning processe s are essential since the company needs to adapt to an emerging and different business context, such as exists in the CEE (Meyer and Gelbuda, 2006). As noted by Sharma and Blomstermo (2003b) a basic assumption in internationalization process theory is that knowledge accumulation is continuous and dependent upon the duration of foreign operations. The longer firms have been involved in foreign operations, the more knowledge they accumulate about such operations. There is a relationship between knowledge accumulation and risk so that the more knowledge a firm has, the less uncertain they perceive the foreign market to be. Firms that lack knowledge about foreign markets even tend to overestimate risks. This corresponds to what Jansson (1989) found concerning establishment processes in a regional perspective, namely that the pace of investments in Southeast Asian countries accelerated, the more experienced the firms became in an area. Johanson and Vahlne (1990) stated that Uppsala model of internationalization indicated firms reveal an evolutionary process in internationalizing through a series of evolutionary stage. 2.2.2 Entry nodes and entry processes Firms entering emerging markets face several barriers according to Meyer (2001). These barriers include a lack of information, unclear regulations and corruption. According to traditional research on internationalization processes, market entries either take place through intermediaries such as agents or distributors or through a firms own representative in the exporting/importing country, mainly a subsidiary. In terms of research in this area, scholars have found that relationships are at the core of the internationalization process (Axelsson and Johanson, 1992; Ford, 2002; HÃÆ' ¥kansson, 1982; HÃÆ' ¥kansson and Snehota, 1995; Hammarkvist et al., 1982; Jansson, 1994, 2007; Johanson and Vahlne, 2003; MajkgÃÆ' ¥rd and Sharma, 1998). According to the network approach to internationalization, entries into local market networks take place through establishing relationships. The international marketing and purchasing of products and know-how through a direct exporter/importer network means that a vertical network in the exporting region (e.g. a suppliers supplier network) is indirectly connected to another vertical network in the importing region (e.g. a buyers buyer network). This large vertical network will, in turn, be embedded in other regional and national networks, such as a financial network (Jansson, 2006, 2007). From a network perspective, establishment points in foreign market networks are defined as entry nodes. There are various routes into these networks, or nodes by which a firm can enter a network. Entries through trade either take place H. Jansson, S. Sandberg / Journal of International Management 14 (2008) 65à ¢Ã¢â€š ¬Ã¢â‚¬Å"77 67 directly with customers or indirectly through intermediaries. Direct relationships, dyads, can be established between buyer and seller in the respective countries. Indirect relationships, triads, involve an outside party or other type of entry node, usually an intermediary such as an agent, dealer or distributor. Dyads can also be established through the entry mode FDI (a subsidiary in the importing country). Entry processes take place by building relationships to form networks in foreign markets. Irrespective of entry node, the development of international buyer/seller relationships tends to follow a five stage pattern (Ford, 1980, 2002; Ford et al., 1998). Each stage of the entry process can be described by a number of relationship factors, such as how the experience, commitment and adaptations of the parties increase across the stages and how the distance and uncertainty between them are reduced across the stages. The first stage includes the taking-up of marketing/purchasing activities before a formal relationship begins. The next three stages show how direct buyerà ¢Ã¢â€š ¬Ã¢â‚¬Å"seller relationships within networks are established: from their beginning and to their deepening. Experience indicates the amount of experience the respective parties have with each other. They will gauge their partners commitment to the relationship, e.g. by the willingness to make adaptations. Distance is multifaceted and it can be split into social, cultural, technological, time and geographic distance. Uncertainty deals with the fact that at the initial stages, it is difficult to assess the potential rewards and costs of the relationship. In the fifth and final stage, the relationship is extensively institutionalized and habitual, with commitment being taken for granted. Based on Terpstra and Sarathy, 1991; and Baek, 2003, joint ventures with host governments and local partners in the host country were among the preferred entry strategies for international operational operation. Petronas in South Africa entered into a commercial alliance with Engen in 1996 as a strategic partner. The acquisition was to enable both companies to implement a shared growth strategy in Africa and the Indian Ocean Rim, while allowing the development of potential operational synergies between the two business entities (Padayachee and Valodia, 2002). 2.2.3 Eclectic Explanation Eclectic Paradigm is a proverbial known explanation of international production. Dunnings (1977, 1988, 1993, 1995). Eclectic Paradigm stated that the extent and pattern of international production is determined by: 1) Ownership advantages (for example, proprietary technology, products, expertise and skill) 2) Internalization advantages (for example, transaction costs reduction, maximize economic return), and 3) Location advantages of host and home countries These OLI (Ownership Location Internalization) variables listed above explain the reason internationalization occurs but overlook the dynamic process of internationalization. The Eclectic paradigm is provided by the Investment Development Path (Dunning, 1981, 1986) with a dynamic dimension, and relates the net outward investment of a country to its stage of economic development. Five stages of IDP ( Investment Development Path) Stage 1: At low level of economic development, there is little inward or outward investments. Stage 2: Inward investment becomes attractive, especially in import substitution projects as the country develops. Some outward investment may take place in neighborly countries which at lower stages of development. Most developing countries with some outward investments are at this stage. Stage 3: With economic development move forward, net inward investment declines while outward investment increases (relative to inward investment). Increasing of outward investment may take place in countries at lower IDP stages in order to overcome cost disadvantages in labour intensive industries and also to seek markets or strategic assets. Singapore, Taiwan and South Korea are said to be at this stage. Stage 4: As production being multinationalized, net outward investment becomes positive. Most developed countries are at this stage. Stage 5: The shift from advantages based more on factor endownment to those based on internalizing international market convergent outward and inward investment flows. Empirical research on Third World (including Asian) multinationals has given general support to the IDP concept (Dunning, 1986; Tolentino, 1993; Dunning Narula, 1996; Lall, 1996). Dunning and Narula (1996) acknowledge that country factors may influence the IDP pattern of a country, such as resource endownment, home market size, industrialization strategy, government policy, and the organization of economic activities. TWMNEs were smaller than their counterparts from developed countries and have limited number of overseas operations. The competitive advantages of TWMNEs were based on cost advantages (particularly labour cost) and greater responsiveness to host country needs which is different from western MNEs. They served market niches which were not covered by the traditional MNEs and so were not in direct competition with them. The major motivation for these FDI was protecting export markets rather than exploiting rent from proprietary technological know-how (or other ownership spe cific advantages characteristic of western MNEs) explained in theories, such as the eclectic paradigm of Dunning (1977, 1995). TWMNEs possessed first or second generation labour-intensive technologies and produced standardized products mainly for the domestic host country market which at stage 4 of IDP. Wells (1983) presupposes a pecking order hypothesis to suggest that the TWMNEs technologies could fill the technological gap between the advanced technology of developed country MNEs and the rudimentary technology of less developed countries (LDCs) in a pecking down order. Lall (1983) emphasized the flexibility and adaptability of TWMNEs technologies to be more suitable or appropriate to LDC situations. 2.2.4 Foreign Direct Investment (FDI) It may seem surprising that there is significant number of foreign direct investments by some firms from developing countries because it is usually credited to more developed countries. A number of studies indicate that FDI flows not only from the industrialized or well-developed countries, as well as developing countries. Scholars such as Lecraw (1981, 1993), Wells (1977, 1981), Lall (1983a, and 1983b), Kumar and Lim (1984), Ulgado et. al., (1994) are only some of those who have carried out empirical studies and researched FDI flows from developing country firms in the 1970s and 1980s. Comparisons between the nature of international expansion of firms from developing countries and the nature of those corporations that originated from developed countries are made in most of these studies (Dunning, 1986; Vernon-Wortzel and Wortzel, 1988). In general, it has been depicted that the competitive advantages of MNCs from developed country are derived from advanced proprietary technology or other superior resources (Yeung, 1994). While ability to reduce costs of imported technology through de-scaled manufacturing or smaller scale of production is focus of the competitive advantage from developing country MNCs were derived from their This is a process whereby technologies from industrialised countries are adapted to suit smaller markets by reducing scale, replacing machinery with manual labour, and relying on local inputs (Ramamurti, 2004). Outward direct investment from developing countries started to grow rapidly to a sizeable magnitude during the mid-1980. This became the main tool of developing country multinationals in demanding that their constituent firms prepare for the drastically international competition that they were about to face(Kumar, 1996, 1997). The emergence of new technologies in the late 1980s somehow decreases the interest in outward direct investment from developing countries subsided (Kumar, 1996; Oh et. al., 1998; Pananond and Zeithaml, 1998; van Hoesel, 1999). Pananond and Zeithaml(1998) and van Hoesel(1999) recounted that aggregate analyses of developing country MNEs conducted at the industry level get attention from scholars and yielded interesting results by the early 1990s. They concluded that there were marked differences in characteristics between developing country MNEs in the 1980s and 1990s. Scholars posited that these two groups of MNEs belonged to two different waves of development i n term of their respective historical backgrounds, nature of businesses, extent of the role of government in operations and transactions, geographical direction, and mode of internationalisation activity. MNEs in the 1980s are more concerned with cost competitiveness with their competitors (van Hoesel, 1999). In contrast, developing country MNEs in the 1990s placed greater emphasis on the development and reset business strategies due to the dynamic changing patterns of world business structure brought about by trade liberalisation and economic globalisation (Dunning et al., 1997). Besides this, they put more effort on technological competence as the source of competitive advantage (Pananond and Zeithmal, 1998). They noted that notwithstanding these differences, there existed several significant interrelated points of convergence between the two groups (Dunning et al., 1997; van Hoesel, 1999). 2.1.5 Regional and global internationalization processes In analyzing the early internationalization steps of smaller and less experienced companies, the internationalization process model by Johanson and Vahlne (1977) is regarded as a highly useful tool. In internationalization research, few studies have been conducted on higher level internationalization where companies are established in several countries and have fully-owned businesses (Meyer and Gelbuda, 2006). The more countries in a region a firm exports to, the more extensive is the regional internationalization process. The more regions a firm exports to, the more global is the internationalization process. New stages of internationalization are established when a firm extends its business from one major type of market to another or from one type of foreign environment to another. The main factor behind these stages is experiential knowledge, meaning that firms gradually build a knowledge base through operating in foreign markets. They learn from past experience by transforming this experience to useful knowledge. There are three types of such knowledge (Eriksson et al., 1997). Internationalization knowledge about how to perform international operations is an expression of a firms current stock of knowledge in the form of its resources and capabilities. The more novel the foreign environment, the more difficult it is for the firm to apply its current stock of knowledge to that foreign market. This means that there is a gap between a firms present internationalization knowledge and the knowledge the company has about how to do business in the specific foreign market, i.e. concerning its network experiential knowledge and institutional knowledge (Blomstermo et al., 2004). Based on a firms experiential knowledge process, internationalization processes are often divided into different degrees of internationalization. Johanson and Mattsson (1991) discuss the internationalization process for firms with various degrees of internationalization and propose that the process is mainly valid during the early stages of a firms internationalization: inexperienced firms tend to follow a traditionally slow and gradual pattern, while the internationalization of a more experienced company is less slow and gradual. 2.2.6 Uppsala model The Uppsala model (Johanson Weidersheim-Paul, 1975; Johanson Vahlne, 1977) provides an explanation of the dynamic process of internationalization of individual firms. The Uppsala model emphasize on the importance of gaining knowledge and experience about the characteristics of foreign markets along the internationalisation path, and helps MNEs reduced risks and levels of uncertainty in unfamiliar foreign environments before investing (Wiedersheim-Paul et al., 1978). The successive steps of increasing highly commitment are based on knowledge acquisition. Foreign activities started with export to foreign country through independent representative or agent, after that establish sales subsidiary and finally start production in the host country. The internationalization of the firm across many foreign markets was particularly related to psychic distance which included differences in language, education, business practices, culture and industrial development. Firstly, enter foreign market which closer in term of psychic distance, followed by subsequent entries in markets with greater psychic distances. Same goes to entry mode of foreign market. The incremental expansion of market commitment meant that the initial entry was typically some form of low commitment mode and followed by progressively higher levels of commitment. Obviously, commitment of the level of ownership in different markets was correlated with their psychic distance. The Uppsala model had received general support in empirical research (Welch and Loustarinen, 1988; Davidson, 1980, 1983; Erramilli et al., 1999) and its largely intuitive nature and evolutionary learning perspective made it attractive as an explanatory model. A related view regards learning was that TWMNEs built up their advantages through the accumulation of technology and skills. Lall (1983) emphasized on the localization and adaptation of technology to suit local markets by TWMNEs. Tolentino (1993) focused in term of the accumulation of technological competence in the expansion of firms from developing countries which was consistent with the resource-based view of building competitive advantage in strategic management. The accumulation of knowledge and competence especially its knowledge of developing markets and not so much its technology by the CP Group in Thailand was the key to its internationalization. There are also differences between the CP Group and Western MNEs (Pananond and Zeithaml, 1998). Mathews (2002, 2006) postulated that emerging firms could foster internationalization via leverage of their contractual linkages with other foreign firms to acquire resources and learning new capabilities. He indicated that this explanati on complemented the OLI framework and could be used to explain the rise of such latecomer firms which he dubbed as Dragon multinationals. 2.2.7 Asian Context Yeung (1999); Zutshi Gibbons (1989) portrayed that western theories on internationalization have neglect the active role played by the state and overlooked the institutional or contextual perspective in the internationalization of Asian. Asians state always plays a direct and active role in the internationalization of its MNEs. For example, the Singapore government played a key and direct role in the promotion of outward FDI (e.g., growth triangles, industrial parks in foreign countries), particularly from the early 1990s in its regionalization programs (Pang, 1994; Tan, 1995; ESCAP/UNCTAD, 1997). Incentives and other programs for instance tax incentives, finance schemes, training also provided to foster the rapid development of local entrepreneurship in the regionalization efforts. In Malaysia, the government took a very active role in promoting the internationalization of Malaysian firms. Investment promotion missions abroad were organized and often lead by the Prime Minister. The government provided incentives including tax abatement in 1991 and subsequently full tax exemption in 1995 for income earned overseas and remitted back to Malaysia. An overseas investment guarantee program was instituted. Malaysian government instructed firms to defer non-essential overseas investment in order to reduce the impact of the effects of the 1997 Asian financial crisis. In the Asian context, the state has played a very active and direct role in promoting the internationalization of its national firms. This is much different with the western context, where the role of the state is benign and indirect. 2.3 Summary This chapter first discussed the internationalization process in terms of entry notes and process, eclectic explanation, foreign direct investment, regional and global internationalization processes, Uppsala model and Asian context. The following chapter discusses the research method, survey development, and sample selection CHAPTER 3 METHODOLOGY 3.1 Introduction This chapter provides an overview of the research method. It starts by explaining the appropriateness of the research method. Then discusses the research design which consists of seven steps: questionnaire development, literature review, proposal, data collection, data analysis, discussion and conclusion, and write-up. Next the data collection and sample selection is discussed with reasons for each of the decisions involved. The next section discusses the statistical methods. Lastly, a Gantt chart will be use to estimate the times use in each activity. 3.2 Sampling Technique A case study approach will be using in this paper. It tends to provide in depth information and intimate details about the particular case being studied. This approach was used to collect comprehensive and holistic data (Eisenhardt, 1989; Internationalization Strategies of Emerging Asian MNEs 491 Yin, 1994) about firms that have internationalized their operations over time. The focus here is on MNEs from Malaysia (a fast developing country). Case studies mean that the research investigates few objects in many respects (Wiedersheim-Paul, Eriksson, 1991). Case studies are most suitable if you like to get a detailed understanding about different kinds of process (Lekvall Wahlbin, 1987). The researches may, for instance, choose a line of business and an enterprise, and conduct an in depth investigation (Wiedersheim-Paul, Eriksson, 1991). Yin (1994) states, that when the form of the questions is why and how, the case study strategy is most likely to be appropriate. The research problem I have investigated was how the internationalisation process of a MNEs when entering to foreign market can be characterised , which was divided into four research questions. 3.3 Data Collection 3.3.1 Secondary data Eriksson Wiedersheim-Paul (1997) points out that secondary data is data, which already has been collected by someone else, for another purpose. Statistics, and reports issued by governments , trade associations, and so on, are some sources of secondary data (Chisnall, 1997). The annual report and the enterprises homepage, are another sources of secondary data (Wiedersheim-Paul, Eriksson, 1991). Secondary data research should always be carried out before doing any field survey (Chisnall, 1991). When I had defined the research area, I started to search for relevant literature. The databases that I have used to find relevant literature are EBSCOhost, Science Direct, Libris, ABI/INFORM, and Helecon. The keywords used when searching the databases were international business, Malaysian MNEs, internationalization, strategies, mode of entry. These words were combined in different ways, to maximise the number of hits. 3.3.2 Primary d