...Investigating the Market-Structure - Performance Relationship in the Commercial Banking Sector: Evidence from Jamaica Sherene A. Bailey1 Financial Stability Department Bank of Jamaica January 2007 Abstract This paper employs a two-stage estimation procedure to evaluate the impact of bank concentration on performance. In the first stage of the estimation process, a stochastic cost frontier is estimated for the dominant commercial banks in Jamaica over the period 1989 – 2005, using both translog and Cobb-Douglas cost functions. The translog cost frontier model was found to be a more appropriate fit for the data. As such, efficiency estimates from this cost frontier model served as endogenous inputs in the second stage of the estimation procedure, where a VAR framework was employed to investigate the relationship between efficiency, concentration, and performance in the industry. The findings from the paper suggest that, on average, dominant banks in the industry would only need to reduce costs by 7.0 per cent in order to operate as efficiently as possible. Results from the VAR framework reject the structure-market-performance hypothesis. Rather, improvements in efficiency contribute to increased profitability for the dominant banks. However, improvements in efficiency for these dominant banks may not be reflected in their pricing policies due to the absence of strong competition in the sector. As such, there is further scope for initiatives geared at lowering interest...
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...Industrial and Organization Psychologist April McCormick PSY/435 April 23, 2012 Dorothy Rodwell Industrial and Organization Psychologist Industrial and organizational psychology has been the study of psychology within the workplace since the 1800”s (Spector, 2008). Industrial/Organizational Psychology is the learning of different events within the job surrounding I/O psychology is extremely important within the workplace for employees. I/O psychology helps employee’s behaviors toward each other, customers, and it helps restore the business. Industrial and organizational psychology is an incorporation of psychological principles within a workplace to solve its problems (Spector, 2008). I/O psychology is basically there to improve the environment and the quality for employees, and to increase the efficiency and effectiveness of behavior in a business (Spector, 2008). Evolution of Industrial/Organizational Psychology In the 1800s and early 1900s psychologist was applying the theories of psychology to organization of business (Spector, 2008). The two scientists who started industrial/organizational psychology are Hugo Munsterberg and Walter Dill Scott who was university professors who had an interest in employee, and application of new psychological tests of industry. Scott and Munsterberg wrote two books one in 1903 The Theory of Advertising, and in 1913 Psychology and Industrial Efficiency. In 1911Fredrick Winslow Taylor developed the theory of “Scientific Management”...
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...Forms of Industrial Organization Forms of Industrial Organization In today’s business world companies operate within different market structures, which include pure competition, monopoly, monopolistic competition, and oligopoly. These market structures are characteristic descriptors that reflect the strength of buyers and sellers within the market. This writing will examine each of these market structures and identify a company which operates within the market structure. This writing also examines Quasar Computers, a fictitious company in which the authors participated in a software simulation. Throughout the simulation the Quasar evolved through the four market structures. This writing will identify the findings of that evolution through the life cycle of their products and the changes of buyers and sellers over time. Pure Competition In pure competition, a large number of independent sellers of standardized products characterize the market. Information is free flowing and free entry and exit exist. The seller is the price taker and not the price maker (McConnell & Brue). The firm in perfect competition is a structure that demonstrates the market under degrees of completion, given certain conditions. Pure competition is an unlikely scenario and is rare in the real-world; moreover, this market model is significantly important. One can learn from this model, from various markets, such as form agricultural, fish products, from foreign trade, and metals...
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...Forms of Industrial Organization Forms of Industrial Organization University of Phoenix Introduction Society has a limited amount of land, labor, and capital out of which to make things. Consequently, society must be very attentive when figuring out how to best convert its limited resources into the goods and services that people mostly desire. Firms may or may not face a lot of competition from other firms. At one extreme lies monopoly, in which a firm faces no competition because it is the only firm in its industry. At the other extreme lies what economists call perfect competition, a situation in which a firm competes against many other firms in an industry in which they all produce an identical good. Between the extremes lie two situations: oligopoly, where there are two or more firms in an industry; and imperfect (monopolistic) competition, in which there are many competitors, but each produces a slightly unique good. Market Simulation Market structure is not a concept that is stable. In fact, it is not uncommon for a firm to have more than one market structure over time. It is interesting to examine how the dynamics of market structure evolve by adding competition. The market simulation showed a great example of market structure evolution. In the simulation Quasar entered the computer market with cutting edge technology making it a monopoly. Team B then recognized that investing in advertising was profitable for Quasar only if it reduced the price...
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...Forms of Industrial Organization To understand Microeconomics it is imperative to understand the respective industries in which businesses operate. Classified into four distinct market structures, industrial organizations lack any kind of homogeny or consistency that would group them together. The four models are pure monopoly, oligopoly, monopolistic competition, and perfect competition. To begin, these market structures vary according to the number of firms in the structure, product type (similar or different), ease of entry, control over price, and marketing strategy (McConnell, Brue, & Flynn, 2009). For this reason, this discussion will focus on four contemporary firms that exemplify the respective differences in competing structures concluding with a summary of how a conceptualized industry evolves through the four structures during its product life-cycle. Pure Monopoly Structure A pure monopoly company does not always fit the description of a company who has no competition or close substitute. The label of a monopolistic company often follows companies such as Microsoft, even when there are similar products in the market. Microsoft currently holds approximately 90% of market share, whereas competing firms like Macintosh and Linux are close in substitution. Although consumers have the option to purchase systems such as Linux and Macintosh, they seem to choose Microsoft. The article Microsoft's Aggressive New Pricing Strategy, describes an approach that Microsoft...
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...Forms of Industrial Organization Forces Influencing Business in the 21st Century MMPBL/501 May 16, 2011 Introduction The goal of any company is to compete and be profitable because in the free market economy all the company needs is demand for their product. The market structures allowed companies to compete and market their products in four different markets pure competition, pure monopoly, monopolistic, and Oligopoly. Some companies like McDonalds have a strong brand and powerful easy to recognize nationally and internationally. McDonalds have found ways to be more efficient keeping their prices low which ensures their profit in the long run. The Electric companies compete, and more than one electric company helps to keep the cost of energy. Other companies compete with exclusive, geographical products like wine, organic foods, shoes, or furniture. The profit in this type of companies is short run, unless they find new ways to cut cost, and become more efficient (Hartman, 2011). Oligopoly Competition Because the number of sellers in an oligopolistic industry is small, the decision of one firm will influence the demand, price, and profit of rivals. The distinguishing uniqueness of an oligopolistic market of rivals is small in number (Southwestern, 2003, p. 259). McDonald’s has no boundaries concerning good food, prices, and fun with more than 32,000 locations in 100 countries around the world (2010-2011, McDonald’s). McDonald introduced the one dollar value...
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...Strategies in U.S. Organizations A key strategic issue for all corporations in the United States involves labor relations (Mello, 2009, p. 540); the programs utilized within U.S. organizations may impact employee morale, productivity, adaptability and cooperation. Labor relations involve management’s ability to or strategies utilized to prevent and resolve workplace issues with employees. For example, Germany's Volkswagen utilizes a program called, Works Councils (Finkin, & Kochan, 2014). This program allows employees to share their work to reduce working hours rather than allow management to lay off employees at the company. On the other hand, Southwest Airlines, and Kaiser Permanente tailored programs specific to fit their individual company needs (Finkin, & Kochan, 2014). Lima Tire Company, a subsidiary of Treadway Tire Company was having issues with high operational cost and high turnover among foremen. Although the programs that were designed to control labor relations for the company; they were not effective as the company hoped. The company still faced the issue of a dysfunctional organization (Skinner, & Beckham, 2008). So, what are some of the strategies utilized by U.S. union free organizations today and why is it critical to the success of an organization to meet its goals and mission? This paper presents a summary of Lima Tire Company, a non-unionized organization, provides an alternative to handling its major problems, and provides a recommendation to help...
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...Problem Set 1 1. MPL = 30 MPL/MPK = w/r MPK = 24 r = 15 30/24 = w/15 w = 18.75 2a. A = E > C = B > D 2b. A = C > B 3a. Q = 5KLL w = 8 r = 15 MPL/MPK = w/r = 8/15 3b. rK = (15)(10) = 150 wL = 150 8L = 150 L = 18.75 4a. Q = 2KLLL K = 2 Q = 2(2)LLL = 4LLL At L = 1, Q = 4 At L = 2, Q = 32 At L = 3, Q = 108 At L = 4, Q = 256 MPL for 4th worker = 256 - 108 = 148 4b. This production function exhibits increasing returns to scale. 5a. AVC = ATC since AFC = 0 Price = 2.50 MC = 1.20 5b. No, they are not at a long run equilibrium, producers are benefiting for a surplus and in a long run more firms will enter the industry bringing the surplus to 0, pricing will be at P = MC. 6. Rule of thumb pricing P = MR = MC MR = P + P (1/E) = MC P = MC/ ((1 + (1/E)) C = 125 + 25Q MC = dC/dQ = 25 P = 25/((1 +(1/-3)) = 37.5 7a. P = 1100 - 2Q C=Q Total Revenue = P x Q = (1100 -2Q) x Q = 1100Q – 2QQ Marginal Revenue = dTR/dQ = 1100 – 4Q Marginal Cost = dC/dQ = 1 MR = MC 1100 – 4Q = 1 Q = 274.75 P = 550.5 7b. MC=1 MR = 550.5 Markup = (P – MC)/P = 0.9982 = 99.82% 7c. Profit = Marginal...
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...Legal Status of Unions Legal Status of Unions The history of the American labor movement coincides with the development of labor unions in the United States, from the initial local craft unions like the Federal Society of Journeyman Cordwainers (shoemakers), to the formation of national unions such as the National Labor Union (NLU) and the Knights of Labor, creation of the American Federation of Labor (AFL), and the Congress of International Organizations (CIO), the merger of the AFL-CIO, and its breakup through the defection of the national unions that formed the Change to Win (CTW) coalition (Fossum, 2012, pp. 27-34, 53-54). Paralleling the union development was a series of national labor legislation: Railway Labor Act (1926), Norris-LaGuardia Act (1932) legitimizing collective bargaining, National Industrial Recovery Act (1933), ruled unconstitutional in 1935, National Labor Relations Act (Wagner Act, 1935) establishing the National Labor Relations Board (NLRB), Taft-Hartley Act (1947), and Landrum-Griffin Act (1959) (Fossum, 2012, pp. 63-75). This paper will examine this evolution of the legal status of American unions and what union activities were restricted by laws and courts; the major contributing causes to the failure of uplift unionism; advantages and disadvantages of a business union vs. labor political party approach; leading personalities contributing to the definition of labor relations in the United States; and the most effective union leaders during the...
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...Industrial and Organizational Psychology Ronda White Industrial and Organizational Psychology PSY 435 April 2, 2012 Ronald Goodnight Industrial and Organizational Psychology Although industrial and organizational (I/O) psychology is an invention of the 20th century, roots of the profession begin in the late 1800s, and early 1900s with the infancy of psychology itself. These pioneers concerning themselves solely upon the industrial side of the profession had interests in placing into work new principles of psychology to improve efficiency in organization, and job performance. Through this beginning, I/O psychology continues to expand and develop into the psychological discipline it is today. A simple definition or practical applications of I/O psychology are the mere pinnacles in understanding the scope of the discipline. Examining the evolution of I/O psychology, in addition to explaining the role of research and statistics in I/O psychology will reveal the foundation upon which the pinnacles rest (Spector, 2008). Evolution of I/O Psychology The credit for the development of I/O psychology lies with Walter Dill and Hugo Münsterberg. Both individuals were professors and experimental psychologists who began applying principles of psychology to organization’s problems. Münsterberg’s interests in employee selection processes brought about the use of psychological testing. His inability to gain acceptability and respect for his theories at Harvard, or...
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...Apart from the factor of money, the companies and organizations outsourcing the jobs are also in charge of the welfare and safety of the people they employ, thus providing them with a safeguard. Conclusion Outsourcing work has benefitted both ways, countries like U.S and U.K get cheaper labor compared to what they might have to pay in their own country, leading to cost cutting. Items from a simple DVD player to maintaining an aircraft has gone down. Unemployment rates slashed and people provided with a safety of their future in India and China like countries. Thus, positive aspects outweighing the negative aspects. Moreover it is a business strategy used by companies to counter-act the lack of expertise present locally. In the end the future of outsourcing seems bright and moving in the positive direction. In the near future more and more organizations seem to adopt to the idea of outsourcing clearly showing bright signs in the outsourcing industry. 2.) AGRICULTURE TO MANUFACTURING AND SERVICES TRANSFORMATION The boom in the manufacturing and services society in today’s time is alarming. With the evident supply of raw goods from developing countries at cheaper rates the focus...
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...Organizational Behavior December 7, 2014 Bhaskardeb Maitra 2201 192nd ST SE #L4, Bothell, WA 98012 December 7, 2014 Bhaskardeb Maitra 2201 192nd ST SE #L4, Bothell, WA 98012 Introduction The industrial catastrophe that occurred on the midnight of December 2, 1984 at Union Carbide India Limited pesticide plant in Bhopal, India was the worst industrial accident in the world. The official count was around 3000 deaths, but unofficial estimates are around 8000 – 10000 deaths (Bogart, 1989). Since then, a report in NY Times indicates the death toll has reached a high of 14,410 due to the chronic diseases caused by the gas leakage (NYT, 08/02/2002) Chemical industry officials are particularly disturbed that in an accident such as Bhopal could occur in what is reported to be the safest manufacturing industry in the United States. The tragedy stimulated moves in the United States that will change the handling and production of toxic chemicals as well as the dissemination of information on potential hazards and safety precautions for toxic and hazardous substances to the public. Key questions to understand how this disaster impacts on organizational behavior During this analysis, I will try to make an attempt to understand the following key questions - probable impact on organization behavior: 1. This disaster itself and the way in which the aftermath of it are being handled – it is a classic case of misapplication of the CSR (Corporate Social Responsibility). What led to...
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...behavior is a broad part of an organization that examines how individuals perform in organizations. Managers can use concepts and practices of organizational behavior to develop management guidelines for successfully working with and influencing workers to achieve organization objectives. The area of organizational behavior has advanced from the scientific study of management during the industrial era, administrative theories of the manager’s role, principles of bureaucracy, and human relations studies of employees’ needs (Scott, 1992). Organizational behavior investigates the effect that individual, groups and structure have on conduct within an organization, and apply such knowledge towards improving an organization’s effectiveness. It studies three determinates of behavior in an organization: individuals, groups, and structure. Furthermore, organizational behavior relates the knowledge gained about individuals, groups, and the effect of structure on behavior in order to make the organizations work more effectively. (Robbins, S. & Judge, T., 2009) According to Denhardt, Denhardt, & Aristigueta individual behavior was not a significant concern for management until the 1930s. From the view of early management theorists, people were mainly viewed as extensions of their tools and machines. It was assumed that if employees were unhappy at work then it was imperative to motivate them by money in order for them to contribute to the organization. It was also assumed that workers...
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...measure of small retail shops, houses, eateries, poultry ranches, and telecom/phone shops have been made and overseen productively by Nigerians who might have been unemployed till date. The business people have thus given occupations to different Nigerians, who serve as bolster, specialized and authoritative staffs for them. 1. It has empowered independent work for some adolescents both in the rustic and urban zones. The soul of effective business enterprise has assumed control over the psyche of Nigerians, who put stock in themselves and in the objective of independent work, rather depending on government occupations. In the phone retail and rental employments, a ton of young people and Nigerian have stayed independently employed. Their organizations have extended to the level of utilizing some other unemployed individuals. 2. Through the foundation of labor advancement bolster plans, and their association in the preparation and retraining of business people, small scale businesses have given a pool of potential business visionaries who are very much prepared to begin and effectively oversee commercial enterprises whether small or vast in Nigeria, as well as...
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...What is an organization? Definition Organizations are social entities that are goal directed, with deliberately structured activity systems, and with a link to the external environment. Types of Organizations We will study both large and small organizations. We will also look at manufacturing and service organizations, for-profit and nonprofit organizations. Importance of Organizations Organizations create value for owners, customers, and employees by their activities. They bring together resources to accomplish specific goals, whether those goals are putting on the Olympics or planting new trees in the city. Organizations produce goods and services, using innovative techniques and modern manufacturing technology, for competitive pricing. Organizations adapt to and influence the environment and its globalization while accommodating the challenges of diversity, ethics, and the motivation and coordination of employees. Perspectives on Organizations Open Systems A closed system does not depend on its environment, but focuses on running things efficiently. Open systems [Exhibit 1.2] must interact with the environment to survive, and managers realize they must pay close attention to what is going on with their customers, suppliers, and competitors. A system, in general, is a set of interrelated elements that acquires inputs from the environment, transforms them, and discharges outputs to the external environment. Subsystems perform functions such as production, boundary...
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