Boxing culture Research Paper Example | Topics and Well Written Essays - 1750 words

Boxing culture - Research Paper Example Boxing goes as far back as the second and third millennium BC. Archaeologists have found drawings and tablets that suggest that fist fighting was something that begun a long time ago, it may not have been as sophisticated as it is right now, and usually they would result in dangerous and deadly battles. Homer’s Iliad gives a good depiction of a possibly early era boxing fight. He writes it in the Mycenaean era and sometimes they would beat each other with fists until one of them died. (Fleischer) The very first ever boxing match was documented in 1681 and it took place in Britain. This happened when the Duke of Albemarle initiated a fight between his own butler and butcher and offered a prize to the winner. After a few years, boxing began to grow. All over England, matches were held. Years later, a match resulted to an opponent being killed, and this prompted a man known as Jack Boughton to develop the very first set of rules and had them published in 1743. There were twelve p rominent rules and this was when wearing of gloves was first brought in. This is where the knockout rule came about that stated that if a man was down and couldn’t continue for thirty seconds, then the fight was over. Broughton’s rules had the welfare of the players in mind. Because of his contribution, he is considered â€Å"the Father of Boxing†. The point where boxing really began to revolutionize was in 1865 when John Sholto Douglass, the Eighth Marquess of Queensberry wrote new boxing rules that basically transformed the sport to what it is today. In these new rules, he introduced the time of three minutes per round. He also made the wearing of gloves mandatory and prohibited wrestling during the match. These rules really kicked in when James Corbett defeated John Sullivan with the new established rules. He was the first world heavyweight champion under the Queensberry rules. It was in the early 19th century that boxing was first included in the St. Louis O lympic Games. Beginning with that, many talented fighters all over the world began flocking and they would fight for titles. This went on, really well into the 21st century. In 1927, the National Boxing Association (NBA) was formed. This was the very first authorization body to oversee the sport. The main goal of the NBA was to get talented boxers together to fight, to make sure there were no ethical problems, and to make the sport even more popular than it was at the time. Today, there are three governing bodies over boxing. They are the World Boxing Council (WBC), International Boxing Federation (IBF), and the World Boxing Association (WBA). (Fox) Today, the Marquis of Queensberry rules are still being used. Some of the rules include that there should be up to three judges at ringside to score the game. Each boxer is also assigned a ring corner where he will take breaks, and enter in at. Another general rule of boxing is that hitting below the belt, biting, pushing or any of the l ike is prohibited. To avoid this, the boxer should have his shorts pulled up so as to not hit the genitals. A boxer cannot hold the ropes for support while he is punching or drop anywhere below the waist of the opponent while punching.

Jails and Prisons History and Development Essay Example for Free

Jails and Prisons History and Development Essay Jails and prisons lay at the heart of the Criminal Justice System. These facilities helped forge the concept of rehabilitation. These institutions have changed over time and now reflect the modern methods of housing convicted individuals who need to be reformed or punished. Description of jails The clear concise difference between a jail and a prison is the time limit a convicted person is sentenced to and what offenses were committed. In a jail, prisoners are usually confined because they were convicted of a lesser or petty offense. Examples of petty offenses are driving without a license or a misdemeanor drug possession charge. Most of these offenses come with a sentence of a year or less and anyone with over a year sentence is usually sent to a prison facility (Seiter, 2011). Jails act as holding facilities where inmates rarely get time to be out of their cells, to reflect, or to engage in recreational time. Because jails are so short term the focus is on inward reflection of crime through solitude. Some of these restrictions are a product themselves of the lesser amount of time spent in the correctional facilities. Criminals are charged more in a jail facility with reflecting on their crime by being exposed to sheer solitude. Furthermore, jails rarely have any vocational or rehabilitation programs utilized within their walls. On the other hand, prisons have an ample amount of time to work with, rehabilitate, and reform offenders. Prisons do this with the hope that offenders can eventually be placed back into society and limit their recidivism back to crime. History of state and federal prisons The jail component of the American corrections system came well before the initiation of any prisons, probation, parole, or even halfway houses. The historical origins of jails or local corrections facilities in America come from England. American jails have developed and progressed so much further than that of its roots. Jails served a different purpose in England. Throughout the progression to the modern age, past mentality was altered from a place of confinement before harsh punishment could be administered to a place that rehabilitation and reflection could occur. The historical developments of jails and prisons overtime have gone from detention for purpose of public humiliation or deterrence, to an â€Å"out of sight out of mind† mentality, which segregated convicted individuals from the rest of society. State prisons have their roots in the penitentiary reform ideals of the Age of Enlightenment. The Three Prisons Act is the first law that authorized the establishment of federal prisons. This act was an important milestone for U.S. prison reform. This most important fact is that this act laid the foundation for the federal prison system to be created. Prior to the act being passed there were few penal facilities in the United States. Before this time period and the passing of this act only one facility, the Walnut Street Jail located in Philadelphia, stood the possibility of housing a large capacity of inmates charged with federal crimes. The role of a jail is a diverse one and conducts a very difficult mission. Few offenders skip the step of passing through a jail as they enter the correctional system. Jails hold a variety of offenders: including those arrested; those detained pending trial; those sentenced to short terms of confinement for minor crimes; those awaiting transfer to another facility; and those who are held administratively for a criminal justice agency. Some jail systems are larger than all but a few state prison systems while others are extremely small and have only four or five beds. Jails face unique issues such as dealing with unknown offenders, detoxification and medical problems, and serving the court with security and prisoner transportation. Jails are operated by local authorities and primarily hold pretrial detainees. Other jail inmates are serving time for misdemeanors, while others are held for a variety of reasons. Comparison of security levels The jail-prison distinction, however, is a very simplified label to attach to a very diverse set of facilities. There are in fact a myriad of confinement facilities meant to house criminals of all levels of seriousness. These facilities are broken up by government boundaries of local, state, and federal confinement facilities. The time needing to be served and the severity of the crime determine which of the facilities a convicted person might be sent. Prisons range starting from the most basic minimum security that houses the offenders that are less violent and are often for more administrative type offenses like white collar offenders or drug related crimes where no one else was affected or harmed. These types of prisons are considered more like camps, because they have a relatively low staff-to-inmate ratio, and limited or no perimeter fencing. These institutions are work-and program-oriented and many are located adjacent to larger institutions or on military bases, where inmates help serve the labor needs of the larger institution or base. The next step above the minimum security is low security institutions which have double-fenced perimeters, mostly dormitory or cubicle housing, and strong work and program components. The staff-to-inmate ratio is increased compared to the previous stage. Medium security prisons are the next level up. They are stronger facilities with hardened perimeters that have double chain link fences and an electronic monitoring system surrounding the facility and its corridors. Confinement in the medium-security prisons is cell type but treatment programs are available to convicts to help propel them forward in their reformation. Here the ratio is reversed and the staff greatly outnumbers the inmates. The strictest of prison facilities is the high or maximum security institution. Within its walls are some of the most severe criminals who have committed some of the most heinous acts. This final type of institution is comprised of reinforced fences and walls. Prisoners are contained in solitary cells and their movements are controlled and monitored extremely closely. Because of the severity of the crimes committed by the convicted individuals that are incarcerated in these maximum security facilities, there is an extremely high ratio of staff to inmates (Prison Types General Information, 2012). For prisons to be safe and secure there must be sufficient physical security, consistent implementation of security practices, established methods to control inmate behavior, and adequate preparation to reduce the likelihood or to respond to inmate unrest. For prison staff to provide effective rehabilitative services there must be an assessment of the needs and best practices of a programs focusing on substance abuse, mental health, religious services, education recreation, rehabilitation, and work opportunities. Fully understanding the importance of these programs and implementing them effectively is crucial for prisons to accomplish their dual mission of confinement and rehabilitation. Factors that influence growth The United States currently incarcerates more people of its citizens per capita than any other country in the world. If you count the amount of prisoners which currently reside in the U.S. prison system, it is approximately two million. This would mean that one out of every hundred and fifty residents are incarcerated in a U.S. prison of jail at any given time. Some of the factors that have led to the explosion of the prison population are poverty driven crime and the increased regulation of human and social behaviors (Ruddel, 2011). In the 21st century, we are still contemplating the dilemmas of overcrowding and the best way to correct criminal’s behaviors. The world needs to constantly evolve its correctional systems to meet the concerns of its society and effectively reform criminal behavior to create less of a strain on law abiding citizens. Jails and Prisons are a tremendous and vital piece to the Criminal Justice process. These facilities have been a part of the correctional system for over 200 years. It stands to reason that while the system will change based on new technologies and ideas, the principals of reform and correction will always hold true (U.S. Prison Populations-Trends and Implications, 2012). Conclusion It is hoped that justice will prevail through the rehabilitation and reform of convicted individuals, and our prison system is the best way of correcting the factors that may influence a person to commit such offenses. Incarcerated individuals today should feel fortunate that the times and ideals of prison life have changed and criminals are classified and housed based on the type and severity of the crime, rather than one large melting pot of criminals. Crime will never be completely eradicated therefore the necessity for facilities to incarcerate offenders will perpetually be needed. Free will is one of the greatest inherent rights human kind has but this right makes some people commit crimes and others remain compliant with the rules and regulations of society. The fact that we have free will conclude that criminal behavior will not ever truly disappear and every attempt should be made to inform/reform and rehabilitate offenders, making them act in an appropriate manner that is so cially acceptable. References: Prison Types General Information. (2012). Retrieved from http://www.bop.gov/locations/institutions/index.jsp Ruddel, R. (2011). American Jails: A Retrospective Examination. U.S. Prison populations-trends and implications. (2012). Retrieved from http://www.prisonpolicy.org/scans/sp/1044.pdf Mackenzie, D. L. (2001). Sentencing and Corrections in the 21st Century:Setting the Stage for the Future. College Park, Maryland: Department of Criminology and Criminal Justice. Seiter, R. (2011). Corrections an Introduction (3rd ed.). Upper saddle Hall, NJ: Pearson/Prentice Hall.

Consumer Buying Behaviour Analysis

Consumer Buying Behaviour Analysis CONSUMER BUYING BEHAVIOUR Consumer is the king and it is the consumer determines what a business is, therefore a sound marketing programme start with a careful analysis of the habits, attitudes, motives and needs of consumers. In particular a marketer should find answer to the following questions: What are the products they buy? Why they buy them? How they buy them? When they buy them ? Where they buy them? How often they buy them? A buyer makes a purchase of a particular product or a particular brand and this can be termed â€Å" product buying motives† and the reason behind the purchase from a particular seller is â€Å" patronage motives† When a person gets his pay packet, and if he is educated ,sits down along with his wife and prepares a family budget, by appropriating the amount to different needs. It may happen that after a trip to the market, they might have purchased some items, which are not in the budget, and thus there arises a deviation from the budgeted items and expenditure. all the behaviour of human beings during the purchase may be termed as â€Å"buyer behaviour†. HOW CONSUMER BUY 1. Need/Want/Desire is Recognized In the first step the consumer has determined that for some reason he/she is not satisfied (i.e., consumers perceived actual condition) and wants to improve his/her situation (i.e., consumers perceived desired condition). For instance, internal triggers, such as hunger or thirst, may tell the consumer that food or drink is needed. External factors can also trigger consumers needs. Marketers are particularly good at this through advertising, in-store displays and even the intentional use of scent (e.g., perfume counters). 2. Search for Information Assuming consumers are motivated to satisfy his or her need, they will next undertake a search for information on possible solutions. The sources used to acquire this information may be as simple as remembering information from past experience (i.e., memory) or the consumer may expend considerable effort to locate information from outside sources (e.g., Internet search, talk with others, etc.). How much effort the consumer directs toward searching depends on such factors as: the importance of satisfying the need, familiarity with available solutions, and the amount of time available to search. 3. Evaluate Options Consumers search efforts may result in a set of options from which a choice can be made. It should be noted that there may be two levels to this stage. At level one the consumer may create a set of possible solutions to their needs (i.e., product types) while at level two the consumer may be evaluating particular products (i.e., brands) within each solution. For example, a consumer who needs to replace a television has multiple solutions to choose from such as plasma, LCD and CRT television. 4. Purchase In many cases the solution chosen by the consumer is the same as the product whose evaluation is the highest. However, this may change when it is actually time to make the purchase. The â€Å"intended† purchase may be altered at the time of purchase for many reasons such as: the product is out-of-stock, a competitor offers an incentive at the point-of-purchase (e.g., store salesperson mentions a competitors offer), the customer lacks the necessary funds (e.g., credit card not working), or members of the consumers reference group take a negative view of the purchase (e.g., friend is critical of purchase). 5. After-Purchase Evaluation Once the consumer has made the purchase they are faced with an evaluation of the decision. If the product performs below the consumers expectation then he/she will re-evaluate satisfaction with the decision, which at its extreme may result in the consumer returning the product while in less extreme situations the consumer will retain the purchased item but may take a negative view of the product. Such evaluations are more likely to occur in cases of expensive or highly important purchases. To help ease the concerns consumers have with their purchase evaluation, marketers need to be receptive and even encourage consumer contact. Customer service centers and follow-up market research are useful tools in helping to address purchasers concerns. TYPES OF CONSUMER PURCHASE BEHAVIOR Consumers are faced with purchase decisions nearly every day. But not all decisions are treated the same. Some decisions are more complex than others and thus require more effort by the consumer. Other decisions are fairly routine and require little effort. In general, consumers face four types of purchase decisions: * Minor New Purchase these purchases represent something new to a consumer but in the customers mind is not a very important purchase in terms of need, money or other reason (e.g., status within a group). * Minor Re-Purchase these are the most routine of all purchases and often the consumer returns to purchase the same product without giving much thought to other product options (i.e., consumer is brand loyalty). * Major New Purchase these purchases are the most difficult of all purchases because the product being purchased is important to the consumer but the consumer has little or no previous experience making these decisions. The consumers lack of confidence in making this type of decision often (but not always) requires the consumer to engage in an extensive decision-making process.. * Major Re-Purchase these purchase decisions are also important to the consumer but the consumer feels confident in making these decisions since they have previous experience purchasing the product. For marketers it is important to understand how consumers treat the purchase decisions they face. If a company is targeting customers who feel a purchase decision is difficult (i.e., Major New Purchase), their marketing strategy may vary greatly from a company targeting customers who view the purchase decision as routine. In fact, the same company may face both situations at the same time; for some the product is new, while other customers see the purchase as routine. The implication of buying behavior for marketers is that different buying situations require different marketing efforts Consumer Buying Decision Process â€Å"Nothing is more difficult and therefore, more precious, than to be able to decide is quoted to be the words of Napoleon. This is amply true in the case of consumer too. It is for this reason that the marketers are bound to have a full knowledge of the consumer buying decision process. However it should be remembered that the actual act of purchasing is only one stage in the process and the process is initiated at the several stages prior to the actual purchase. Secondly even though we find that purchase is one of the final links in the chain of process, not all decision processes lead to purchase. The individual consumer may terminate the process during any stage. Finally not all consumer decisions always include all stages. Persons engaged in extensive decision making usually employ all stages of this decision process. Where as those engaged in limited decisions making and routine response behaviour may omit some stages. The consumer decision process is composed of two parts, the process itself and the factors affecting the process. SURVEY BY THE MARKETING TEAM A survey conducted by the marketing team of shoppers stop Ltd. Reveals the psychography of the modern shopper. Acordingly the survey classifies customers in to the four segments namely * Convenience Shoppers * Value Shoppers * Image Shoppers * Experience Shoppers Convenience shoppers for instance ,are people who consume relatively less amount of time while shopping. Also they look out for the width and depth of the range they purchase and conduct their annual shopping at one shot. Value Shoppers always hunt for value for money ; Prefer quality reassurance and benchmark offerings among other related attributes. Image Shoppers are fashion- conscious and look out for the latest trends and labels. On the other hand , Experience Shoppers are attentive and prefer personalized services look out for the right ambience, prefer giving personal advice on clothing at the time of purchase , and prefer not to buy at one sold. ECONOMIC FACTOR AFFECT THE BUYERS BEHAVIOUR 1.Disposal personal income : The economists made attempts to establish a relationship between income and spending. Disposal personal income represents potential purchasing power that a buyer has. The change in income has a direct relation on buying habits. 2.Size of family income : The size of family and size of family income affect the spending and saving patterns. Generally large family spend more and short family spend less, in comparison. 3. Income expectations : The expected income to receive in future has a direct relation with the buying behaviour. The expectation of higher or lower income has a direct effect on spending plans. 4.Propensity to consume and to save : This goes to the habit of spending or saving with the disposal income of buyers. If the buyers give importance to present needs, then they dispose of their income. And buyers spend less if they give importance to future needs. 5. Liquidity of Fund : The present buying plans are influenced greatly by liquidity of assets i.e., cash and assets readily convertible into cash, eg bonds, bank balances etc., 6. Consumer Credit : â€Å" Buy now and pay later† plays its role effectively in the rapid growth of markets for car, scooter, radio, furniture and the like. Economic model suggests behavioural hypothsis : * Lower the price of the product, higher the sales. * Lower the price of substitute products, lower the sales of this product * Higher the real income, higher the sales of the product. * Higher the promotional expenses, higher the sales. Internal influences of buyers * psychographics (lifestyle), * personality, motivation, knowledge, * attitudes, * beliefs, and * feelings. * demographics, consumer behaviour concern with consumer need consumer actions in the direction of satisfing needs leads to his behaviour behaviour of every individuals depend on thinking process. EXTERNAL INFLUENCES OF BUYERS * culture, * sub-culture, * Locality, * royalty, * ethnicity, * family, * social class, * reference groups, * lifestyle, and * market mix factors.

Classic Vampirism and Recent Changes Essay -- Mythology

CLASSIC VAMPIRISM AND RECENT CHANGES Change often occurs due to the simple nature of time. What once stood as a finite and steadfast definition will shift and evolve. Genres bleed into one another and mix mythologies. The realm of the supernatural in literature does not lie outside this trend. Wizards no longer call themselves Merlin and spend their days under the patronage of a heroic king; the average wizard now goes by common names like Harry or Ron and attends school, saving the world on the side. Cyclops presently means a man with laser eyes who wears leather and fights crime, not a one-eyed island beast. Vampirism does not escape such change. No longer can one consistently find a vampire to be the bloodthirsty life-sucking demon of a story. Recent popular fiction humanizes vampires, embodies them with the common individual struggles of humans, and twists the vampire ethos to suit such reformation. This trend exists outside of works traditionally classified as Vampire Literature and spans the breadth of fiction. Sa mples from across the spectrum of vampires in literature, Stephenie Meyer’s popular teen romance series Twilight and Christopher Moore’s absurd humor novels Bloodsucking Fiends and You Suck, demonstrate the common humanized portrayal of vampires and its effects. To understand the evolved nature and image of vampirism in recent popular fiction, one must first know of the previous representations and assumed standards. Vampires, and all monsters for that matter, typically exist to represent one of the greatest fears of humankind: fear of the unknown. Vampires embody this through many facets, namely death and the dark world of the night. Rosemary Ellen Guilley, Ph. D. and vampire scholar, succinctly summarizes th... ...ated with their kind. They technically come from deceased humans and thereby have no body heat or need to eat, breathe, or go to the bathroom. As soon as the sun peaks over the horizon, Moore’s vampires automatically collapse and enter the â€Å"sleep of the dead† and survive only by drinking blood (Fiends 28). The vampires also possess heightened senses and immense strength, capable of completing impossible feats such as running up the side of a building and hearing the heartbeats of those around them (Fiends 24). Unable to be harmed by traditional means, Moore’s creatures experience little pain and heal at a rapid rate. The vampires possess the ability to shape shift from human form into mist. Moore bestows his vampires with the unique ability to see the auras of the humans around them. Healthy humans radiate a bright pink glow; the sickly emit a dim gray light.

Investment Banking Essay

â€Å"A specific division of banking related to the creation of capital for other companies. Investment banks underwrite new debt and equity securities for all types of corporations. Investment banks also provide guidance to issuers regarding the issue and placement of stock†. Investment banking involves raising money (capital) for companies and governments, usually by issuing securities. Securities or financial instruments include equity or ownership instruments such as stocks where investors own a share of the issuing concern and therefore are entitled to profits. They also include debt instruments such as bonds, where the issuing concern borrows money from investors and promises to repay it at a certain date with interest. Companies typically issue stock when they first go public through initial public offerings (IPOs), and they may issue stock and bonds periodically to fund such enterprises as research, new product development, and expansion. Companies seeking to go public must register with the Securities and Exchange Commission and pay registration fees, which cover accountant and lawyer expenses for the preparation of registration statements. A registration statement describes a company’s business and its plans for using the money raised, and it includes a company’s financial statements. Before stocks and bonds are issued, investment bankers perform due diligence examinations, which entail carefully evaluating a company’s worth in terms of money and equipment (assets) and debt (liabilities). This examination requires the full disclosure of a company’s strengths and weaknesses. The company pays the investment banker after the securities deal is completed and these fees often range from 3 to 7 percent of what a company raises, depending on the type of transaction. Investment banks aid companies and governments in selling securities as well as investors in purchasing securities, managing invest ments, and trading securities. Investment banks take the form of brokers or agents who purchase and sell securities for their clients; dealers or principals who buy and sell securities for their personal interest in turning a profit; and broker-dealers who do both. The primary service provided by investment banks is underwriting, which refers to guaranteeing a company a set price for the securities it plans to issue. If the securities fail to sell for the set price, the investment bank pays the company the difference. Therefore, investment banks must carefully determine the set price by considering the expectations of the company and the state of the market for the securities. In addition, investment banks provide a plethora of other services including financial advising, acquisition advising, divestiture advising, buying and selling securities, interest-rate swapping, and debt-for-stock swapping. Nevertheless, most of the revenues of investment banks come from underwriting, selling securities, and setting up merg ers and acquisitions. When companies need to raise large amounts of capital, a group of investment banks often participate, which are referred to as syndicates. Syndicates are hierarchically structured and the members of syndicates are grouped according to three functions: managing, underwriting, and selling. Managing banks sit at the top of the hierarchy, conduct due diligence examinations, and receive management fees from the companies. Underwriting banks receive fees for sharing the risk of securities offerings. Finally, selling banks function as brokers within the syndicate and sell the securities, receiving a fee for each share they sell. Nevertheless, managing and underwriting banks usually also sell securities. All major investment banks have a syndicate department, which concentrates on recruiting members for syndicates managed by their firms and responding to recruitments from other firms. A variety of legislation, mostly from the 1930s, governs investment banking. These laws require public compa nies to fully disclose information on their operations and financial position, and they mandate the separation of commercial and investment banking. The latter mandate, however, has been relaxed over the intervening years as commercial banks have entered the investment banking market. An investment bank is a financial institution that assists individuals, corporations and governments in raising capital by underwriting and/or acting as the client’s agent in the issuance of securities. An investment bank may also assist companies involved in mergers and acquisitions, and provide ancillary services such as market making, trading of derivatives, fixed income instruments, foreign exchange, commodities, and equity securities. Unlike commercial banks and retail banks, investment banks do not take deposits. From 1933 (Glass–Steagall Act) until 1999 (Gramm–Leach–Bliley Act), the United States maintained a separation between investment banking and commercial banks. Other industrialized countries, including G8 countries, have historically not maintained such a separation. There are two main lines of business in i nvestment banking. Trading securities for cash or for other securities (i.e., facilitating transactions, market-making), or the promotion of securities (i.e., underwriting, research, etc.) is the â€Å"sell side†, while dealing with pension funds, mutual funds, hedge funds, and the investing public (who consume the products and services of the sell-side in order to maximize their return on investment) constitutes the â€Å"buy side†. Many firms have buy and sell side components. An investment bank can also be split into private and public functions with a Chinese wall which separates the two to prevent information from crossing. The private areas of the bank deal with private insider information that may not be publicly disclosed, while the public areas such as stock analysis deal with public information. An advisor who provides investment banking services in the United States must be a licensed broker-dealer and subject to Securities & Exchange Commission (SEC) and Financial Industry Reg ulatory Authority (FINRA) regulation. Investment banking is a field of banking that aids companies in acquiring funds. In addition to the of new funds, investment banking also offers advice for a wide range of transactions a company might engage in. In commercial banking, the institution collects deposits from clients and gives direct loans to businesses and individuals. In the United States, it was illegal for a bank to have both commercial and investment banking until 1999, when the Gramm-Leach-Bliley Act legalized it. Through investment banking, an institution generates funds in two different ways. They may draw on public funds through the capital market by selling stock in their company, and they may also seek out venture capital or private equity in exchange for a stake in their company. Investment bankers give companies advice on mergers and acquisitions, for example. They also track the market in order to give advice on when to make public offerings and how best to manage the business’ public assets. Some of the consultative activities investment banking firms engage in overlap with those of a private brokerage, as they will often give buy-and-sell advice to the companies they represent. The line between investment banking and other forms of banking has blurred in recent years, as deregulation allows banking institutions to take on more and more sectors. With the advent of mega-banks which operate at a number of levels, many of the services often associated with investment banking are being made available to clients who would otherwise be too small to make their business profitable. Careers in investment banking are lucrative and one of the most sought after positions in the money markets. A career in investment banking involves extensive travelling, gruelling hours and an often cut-throat lifestyle. While highly competitive and time intensive, investment banking also offers an exciting lifestyle with huge financial incentives that are a draw to many people. HISTORY & DEVELOPMENT OF INVESTMENT BANKING: Investment banking began in the United States around the middle of the 19th century. Prior to this period, auctioneers and merchants—particularly those of Europe—provided the majority of the financial services. The mid-1800s were marked by the country’s greatest economic growth. To fund this growth, U.S. companies looked to Europe and U.S. banks became the intermediaries that secured capital from European investors for U.S. companies. Up until World War I, the United States was a debtor nation and U.S. investment bankers had to rely on European investment bankers and investors to share risk and underwrite U.S. securities. For example, investment bankers such as John Pierpont (J. P.) Morgan (1837-1913) of the United States would buy U.S. securities and resell them in London for a higher price. During this period, U.S. investment banks were linked to European banks. These connections included J.P. Morgan & Co. and George Peabody & Co. (based in London); Kidder, Pea body & Co. and Barling Brothers (based in London); and Kuhn, Loeb, & Co. and the Warburgs (based in Germany). Since European banks and investors could not assess businesses in the United States easily, they worked with their U.S. counterparts to monitor the success of their investments. U.S. investment bankers often would hold seats on the boards of the companies issuing the securities to supervise operations and make sure dividends were paid. Companies established long-term relationships with particular investment banks as a consequence. In addition, this period saw the development of two basic components of investment banking: underwriting and syndication. Because some of the companies seeking to sell securities during this period, such as railroad and utility companies, required substantial amounts of capital, investment bankers began under-writing the securities, thereby guaranteeing a specific price for them. If the shares failed to fetch the set price, the investments banks covered the difference. Underwriting allowed companies to raise the funds they needed by issuing a sufficient amo unt of shares without inundating the market so that the value of the shares dropped. Because the value of the securities they underwrote frequently surpassed their financial limits, investment banks introduced syndication, which involved sharing risk with other investment banks. Further, syndication enabled investment banks to establish larger networks to distribute their shares and hence investment banks began to develop relationships with each other in the form of syndicates. The syndicate structure typically included three to five tiers, which handled varying degrees of shares and responsibilities. The structure is often thought of as a pyramid with a few large, influential investment banks at the apex and smaller banks below. In the first tier, the â€Å"originating broker† or â€Å"house of issue† (now referred to as the manager) investigated companies, determined how much capital would be raised, set the price and number of shares to be issued, and decided when the shares would be issued. The originating broker often handled the largest volume of shares and eventually began charging fees for its services. In the second tier, the purchase syndicate took a smaller number of shares, often at a slightly higher price such as I percent or 0.5 percent higher. In the third tier, the banking syndicate took an even smaller amount of shares at a price higher than that paid by the purchase syndicate. Depending on the size of the issue, other tiers could be added such as the â€Å"selling syndicate† and â€Å"selling group.† Investment banks in these tiers of the syndicate would just sell shares, but would not agree to sell a specific amount. Hence, they functioned as brokers who bought and sold shares on commission from their customers. From the mid-i800s to the early 1900s, J. P. Morgan was the most influential investment banker. Morgan could sell U.S. bonds overseas that the U.S. Department of the Treasury failed to sell and he led the financing of the railroad. H e also raised funds for General Electric and United States Steel. Nevertheless, Morgan’s control and influence helped cause a number of stock panics, including the panic of 1901. Morgan and other powerful investment bankers became the target of the muckrakers as well as of inquiries into stock speculations. These investigations included the Armstrong insurance investigation of 1905, the Hughes investigation of 1909, and the Money Trust investigation of 1912. The Money Trust investigation led to most states adopting the so-called blue-sky laws, which were designed to deter investment scams by start-up companies. The banks responded to these investigations and laws by establishing the Investment Bankers Association to ensure the prudent practices among investment banks. These investigations also led to the creation of the Federal Reserve System in 1913. Beginning about the time World War I broke out, the United States became a creditor nation and the roles of Europe and the United States switched to some extent. Companies in other countries now turned to the United States for investment banking. During the 1920s, the number and value of securities offerings increased when investment banks began raising money for a variety of emerging industries: automotive, aviation, and radio. Prior to World War 1, securities issues peaked at about $ 1 million, but afterwards issues of more than $20 million were frequent. The banks, however, became mired in speculation during this period as over 1 million investors bought stocks on margin, that is, with money borrowed from the banks. In addition, the large banks began speculating with the money of their depositors and commercial banks made forays into underwriting. The stock market crashed on October 29, 1929, and commercial and investment banks lost $30 billion by mid-November. While the crash only affected bankers, brokers, and some investors and while most people still had their jobs, the crash brought about a credit crunch. Credit became so scarce that by 1931 more than 500 U.S. banks folded, as the Great Depression continued. As a result, investment banking all but frittered away. Securities issues no longer took place for the most part and few people could afford to invest or would be willing to invest in the stock market, which kept sinking. Because of crash, the government launched an investigation led by Ferdinand Pecora, which became known as the Pecora Investigation. After exposing the corrupt practices of commercial and investment banks, the investigation led to the establishment of the Securities and Exchange Commission (SEC) as well as to the signing of the Banking Act of 1933, also known as the Glass-Steagall Act. The SEC became responsible for regulating and overseeing in-vesting in public companies. The Glass-Steagall Act mandated the separation of commercial and investment banking and from then—until the late 1980—banks had to choose between the two enterprises. Further legislation grew out of this period, too. The Revenue Act of 1932 raised the tax on stocks and required taxes on bonds, which made the practice of raising prices in the different tiers of the syndicate system no longer feasible. The Securities Act of 1933 and the Securities Exchange Act of 1934 required investment banks to make full disclosures of securities offerings in investment prospectuses and charged the SEC with reviewing them. This legislation also required companies to regularly file financial statements in order to make known changes in their financial position. As a result of these acts, bidding for investment banking projects became competitive as companies began to select the lowest bidders and not rely on major traditional companies such as Morgan Stanley and Kuhn, Loeb. The last major effort to clean up the investment banking industry came with the U.S. v. Morgan case in 1953. This case was a government antitrust investigation into the practices of 17 of the top investment banks. The court, however, sided with the defendant investment banks, concluding that they had not conspired to monopolize the U.S. securities industry and to prevent new entrants beginning around 1915, as the government prosecutors argued. By the 1950s, investment banking began to pick up as the economy continued to prosper. This growth surpassed that of the 1920s. Consequently, major corporations sought new financing during this period. General Motors, for example, made a stock offering of $325 million in 1955, which was the largest stock offering to that time. In addition, airlines, shopping malls, and governments began raising money by selling securities around this time. During the 1960s, high-tech electronics companies spurred on investment banking. Companies such as Texas Instruments and Electronic Data Systems led the way in securities offerings. Established investment houses such as Morgan Stanley did not handle these issues; rather, Wall Street newcomers such as Charles Plohn & Co. did. The established houses, however, participated in the conglomeration trend of the 1950s and 1960s by helping consolidating companies negotiate deals. The stock market collapse of 1969 ushered in a new era of economic problems which continued through the 1970s, stifling banks and investment houses. The recession of the 1970s brought about a wave of mergers among investment brokers. Investment banks began to expand their services during this period, by setting up retail operations, expanding into international markets, investing in venture capital, and working with insurance companies. While investment bankers once worked for fixed commissions, they have been negotiating fees with investors since 1975, when the SEC opted to deregulate investment banker fees. This deregulation also gave rise to discount brokers, who undercut the prices of established firms. In addition, investment banks started to implement computer technology in the 1970s and 1980s in order to automate and expedite operations. Furthermore, investment banking became much more competitive as investment bankers could no longer wait for clients to come to them, but had to endeavour to win new clients and retain old ones. ORGANIZATIONAL STRUCTURE & CORE BANKING ACTIVITIES: Investment banking is split into front office, middle office, and back office activities. While large service investment banks offer all lines of business, both sell side and buy side, smaller sell side investment firms such as boutique investment banks and small broker-dealers focus on investment banking and sales/trading/research, respectively. Investment banks offer services to both corporations issuing securities and investors buying securities. For corporations, investment bankers offer information on when and how to place their securities on the open market, an activity very important to an investment bank’s reputation. Therefore, investment bankers play a very important role in issuing new security offerings. Front Office: Investment Banking: Corporate finance is the traditional aspect of investment banks which also involves helping customers raise funds in capital markets and giving advice on mergers and acquisitions (M&A). This may involve subscribing investors to a security issuance, coordinating with bidders, or negotiating with a merger target. Another term for the investment banking division is corporate finance, and its advisory group is often termed mergers and acquisitions. A pitch book of financial information is generated to market the bank to a potential M&A client; if the pitch is successful, the bank arranges the deal for the client. The investment banking division (IBD) is generally divided into industry coverage and product coverage groups. Industry coverage groups focus on a specific industry, such as healthcare, industrials, or technology, and maintain relationships with corporations within the industry to bring in business for a bank. Product coverage groups focus on financial products, such as mergers and acquisitions, leveraged finance, public finance, asset finance and leasing, structured finance, restructuring, equity, and high-grade debt and generally work and collaborate with industry groups on the more intricate and specialized needs of a client. Sales and Trading: On behalf of the bank and its clients, a large investment bank’s primary function is buying and selling products. In market making, traders will buy and sell financial products with the goal of making money on each trade. Sales is the term for the investment bank’s sales force, whose primary job is to call on institutional and high-net-worth investors to suggest trading ideas (on a caveat emptor basis) and take orders. Sales desks then communicate their clients’ orders to the appropriate trading desks, which can price and execute trades, or structure new products that fit a specific need. Structuring has been a relatively recent activity as derivatives have come into play, with highly technical and numerate employees working on creating complex structured products which typically offer much greater margins and returns than underlying cash securities. In 2010, investment banks came under pressure as a result of selling complex derivatives contracts to local municipalities in Europe and the US. Strategists advise external as well as internal clients on the strategies that can be adopted in various markets. Ranging from derivatives to specific industries, strategists place companies and industries in a quantitative framework with full consideration of the macroeconomic scene. This strategy often affects the way the firm will operate in the market, the direction it would like to take in terms of its proprietary and flow positions, the suggestions salespersons give to clients, as well as the way structures create new products. Banks also undertake risk through proprietary trading, performed by a special set of traders who do not interface with clients and through â€Å"principal risk†Ã¢â‚¬â€risk undertaken by a trader after he buys or sells a product to a client and does not hedge his total exposure. Banks seek to maximize profitability for a given amount of risk on their balance sheet. The necessity for numerical ability in sales and trading has created jobs for physics, mathematics and engineering Ph.D.s who act as quantitative analysts. Equity Research: The research division reviews companies and writes reports about their prospects, often with â€Å"buy† or â€Å"sell† ratings. While the research division may or may not generate revenue (based on policies at different banks), its resources are used to assist traders in trading, the sales force in suggesting ideas to customers, and investment bankers by covering their clients. Research also serves outside clients with investment advice (such as institutional investors and high net worth individuals) in the hopes that these clients will execute suggested trade ideas through the sales and trading division of the bank, and thereby generate revenue for the firm. There is a potential conflict of interest between the investment bank and its analysis, in that published analysis can affect the bank’s profits. Hence in recent years the relationship between investment banking and research has become highly regulated, requiring a Chinese wall between public and private fun ctions. Asset Management:[pic] The asset management division manages money for institutions, such as mutual funds, and wealthy individuals. The business is divided into three sub-divisions. Asset Management Division has the responsibility to co-ordinate and facilitate in term of Strategic and Development Programme in Asset Management. Data Management, Performance Managing and Information in Asset Management. †¢ Fund Management: This division manages a number of funds, each with a different focus and strategy. For example: the asset management division may have three funds, one focused on private equity investments in emerging markets, another dealing with arbitrage trades, and yet another that buys and holds corporate debt. Clients can choose to place their money with either of these funds. Some banks, such as Bank of New York Mellon, manage exchange-traded funds that are accessible to retail investors. The bank earns revenue by charging a fee for assets under management, and sometimes by charging a commission based on returns. †¢ Private Banking and Wealth Management: The division manages banking activities of extremely wealthy individuals. Apart from providing regular banking services, such as check clearing, the division also advise such individuals on tax strategy and investments. They work closely with other parts of the asset management division to provide a comprehensive service, e.g. work with fund management to invest in different strategies. †¢ Prime Brokerage: The division deals with professional asset managers, such as mutual funds and hedge funds. Their services include executing trades on behalf of these clients, holding custody of their assets, and advising them on potential opportunities. For example: When Berkshire Hathaway (BRK) needs to buy a certain security from public markets, it uses a prime broker to buy and hold the security on its behalf. The division works closely with the Sales and Trading division. Additionally, the prime brokerage can also help its clients (hedge funds) to find investors. Middle Office: This area of the bank includes risk management, treasury management, internal controls, and corporate strategy. Risk management involves analyzing the market and credit risk that traders are taking onto the balance sheet in conducting their daily trades, and setting limits on the amount of capital that they are able to trade in order to prevent â€Å"bad† trades having a detrimental effect on a desk overall. Another key Middle Office role is to ensure that the economic risks are captured accurately (as per agreement of commercial terms with the counterparty), correctly (as per standardized booking models in the most appropriate systems) and on time (typically within 30 minutes of trade execution). In recent years the risk of errors has become known as â€Å"operational risk† and the assurance Middle Offices provide now includes measures to address this risk. When this assurance is not in place, market and credit risk analysis can be unreliable and open to deliberate manipulation. Additionally, corporate treasury is responsible for an investment bank’s funding, capital structure management, and liquidity risk monitoring. Financial control tracks and analyzes the capital flows of the firm, the Finance division is the principal adviser to senior management on essential areas such as controlling the firm’s global risk exposure and the profitability and structure of the firm’s various businesses via dedicated trading desk product control teams. In the United States and United Kingdom, a Financial Controller is a senior position, often reporting to the Chief Financial Officer. Corporate strategy, along with risk, treasury, and controllers, also often falls under the finance division. Back Office: Operations: This involves data-checking trades that have been conducted, ensuring that they are not erroneous, and transacting the required transfers. Many banks have outsourced operations. It is, however, a critical part of the bank. Due to increased competition in finance related careers, college degrees are now mandatory at most Tier 1 investment banks. A finance degree has proved significant in understanding the depth of the deals and transactions that occur across all the divisions of the bank. Technology: Every major investment bank has considerable amounts of in-house software, created by the technology team, who are also responsible for technical support. Technology has changed considerably in the last few years as more sales and trading desks are using electronic trading. Some trades are initiated by complex algorithms for hedging purposes. Firms are responsible for compliance with government regulations and internal regulations. †¢ Principal Investing and Proprietary Trading:[pic] Investment banks have attempted to increase their return on equity by investing their own capital into certain ventures. The bank invests its own capital by taking a equity or debt stake in corporations with the aim of influencing the management. The motive is very similar to that private equity investors — the bank tries to profit by turning around companies. The bank can also take short-term positions in the market with its own capital. This is known as proprietary trading, and the bank attempts to earn a profit by correctly predicting market movements. Proprietary trading is very different from normal sales and trading operations — where the banks revenue is primarily dependent on the volume of trade it executes on behalf of its client. The notion of the bank risking its own capital can be traced back ever since banking was invented. J.P. Morgan, founder of J P Morgan Chase, was an extremely successful investor. However, in recent years, Goldman Sachs has been the leader in this field — in 2007, the bank profited greatly from the proprietary trades that it made against the sub-prime market. In many cases, the banks allow other investors to invest in such ventures (and charge a management fee). This puts them in direct competitor with hedge funds and private equity firms for both investors and investing opportunities. INVESTMENT BANKING IN THE 20TH CENTURY: In the mid-20th century, large investment banks were dominated by the dealmakers. Advising clients on mergers and acquisitions and public offerings was the main focus of major Wall Street partnerships. These â€Å"bulge bracket† firms included Goldman Sachs, Morgan Stanley, Lehman Brothers, First Boston and others. That trend began to change in the 1980s as a new focus on trading propelled firms such as Salomon Brothers, Merrill Lynch and Drexel Burnham Lambert into the limelight. Investment banks earned an increasing amount of their profits from proprietary trading. Advances in computing technology also enabled banks to use more sophisticated model driven software to execute trades and generate a profit on small changes in market conditions. In the 1980s, financier Michael Milken popularized the use of high yield debt (also known as junk bonds) in corporate finance and mergers and acquisitions. This fuelled a boom in leverage buyouts and hostile takeovers (see History of Private Equity). Filmmaker Oliver Stone immortalized the spirit of the times with his movie, Wall Street, in which Michael Douglas played the role of corporate raider Gordon Gekko and epitomized corporate greed. Investment banks profited handsomely during the boom years of the 1990s and into the tech boom and bubble. When the tech bubble burst, it precipitated a string of new legislation to prevent conflicts of interest within investment banks. Investment banking research analysts had been actively promoting stocks to investors while privately acknowledging they were not attractive investments. In other instances, analysts gave favourable stock ratings to corporate clients in the hopes of attracting them as investment banking clients and handling potentially lucrative initial public offerings. These scandals paled by comparison to the financial crisis that has enveloped the banking industry since 2007. The speculative bubble in housing prices along with an overreliance on sub-prime mortgage lending trigged a cascade of crises. Two major investment banks, Bear Stearns and Lehman Brothers, collapsed under the weight of failed mortgage-backed securities. In March, 2008, the Federal government began using a variety of taxpayer-funded bailout measures to prop up other firms. The Federal Reserve offered a $30 billion line of credit to J.P. Morgan Chase to that it could acquire Bear Sterns. Bank of America acquired Merrill Lynch. The last two bulge bracket investment banks, Goldman Sachs and Morgan Stanley, elected to convert to bank holding companies and be fully regulated by the Federal Reserve. Moving forward, the recent financial crisis has weakened both the reputation and the dominance of U.S. investment banking organizations throughout the world. The growth of foreign capital markets along with an increase in pools of sovereign capital is changing the landscape of the industry. The growing international flow of capital has also opened up opportunities for investment banking in new financial centers around the world, including those in developing countries such as India, China and the Middle East SIZE OF THE INDUSTRY: Global investment banking revenue increased for the fifth year running in 2007, to a record US$84.3 billion, which was up 22% on the previous year and more than double the level in 2003. Subsequent to their exposure to United States sub-prime securities investments, many investment banks have experienced losses since this time. The United States was the primary source of investment banking income in 2007, with 53% of the total, a proportion which has fallen somewhat during the past decade. Europe (with Middle East and Africa) generated 32% of the total, slightly up on its 30% share a decade ago. Asian countries generated the remaining 15%. Over the past decade, fee income from the US increased by 80%. This compares with a 217% increase in Europe and 250% increase in Asia during this period. The industry is heavily concentrated in a small number of major financial centres, including City of London, New York City, Hong Kong and Tokyo. Investment banking is one of the most global industries and is hence continuously challenged to respond to new developments and innovation in the global financial markets. New products with higher margins are constantly invented and manufactured by bankers in the hope of winning over clients and developing trading know-how in new markets. However, since these can usually not bepatented or copyrighted, they are very often copied quickly by competing banks, pushing down trading margins. For example, trading bonds and equities for customers is now a commodity business, but structuring and trading derivatives retains higher margins in good times—and the risk of large losses in difficult market conditions, such as the credit crunch that began in 2007 . Each over-the-counter contract has to be uniquely structured and could involve complex pay-off and risk profiles. Listed option contracts are traded through major exchanges, such as the CBOE, and are almost as commoditized as general equity securities. In addition, while many products have been commoditized, an increasing amount of profit within investment banks has come from proprietary trading, where size creates a positive network benefit (since the more trades an investment bank does, the more it knows about the market flow, allowing it to theoretically make better trades and pass on better guidance to clients). The fastest growing segments of the investment banking industry are private investments into public companies (PIPEs, otherwise known as Regulation D or Regulation S). Such transactions are privately negotiated between companies and accredited investors. These PIPE transactions are non-rule 144A transactions. Large bulge bracket brokerage firms and smaller boutique firms compete in this sector. Special purpose acquisition companies (SPACs) or blank check corporations have been created from this industry.

Critical Thinking Assignment Essay

The memorandum from Salvador Monella to the Board of Directors addresses the rising costs of employee healthcare benefits at Penn-Mart. His communication includes an explanation of his purpose in addressing the healthcare costs, findings regarding Penn-Mart’s benefits costs, a recommended program to implement for cost reduction, and a discussion containing support for their recommendation. While some business people may be tempted to simply accept the information presented in Mr. Monella’s memorandum, it is my opinion, after reading Browne and Keeley’s Asking the Right Questions (2012), that adopting a critical thinking approach is the most effective way to evaluate the document. Using a critical thinking approach to evaluate this business document will help a reader to know when to accept and when to reject information they are presented. The reader knows that information that passes the critical thinking questions they ask is worth accepting. Implementing strong-sense critical thinking and using the same skills to evaluate all claims, even one’s own, prevents falling to conventionality. In the tenth edition of Asking the Right Questions (Browne & Keeley, 2012), there are ten critical questions to ask that are presented. The ten questions are: What are the issues and the conclusions?, What are the reasons?, Which words or phrases are ambiguous?, What are the value and descriptive assumptions?, Are there any fallacies in the reasoning?, How good is the evidence?, Are there rival causes?, Are the statistics deceptive?, What significant information is omitted?, What reasonable conclusions are possible? (Browne & Keeley, p. 9) After asking and evaluating each of these questions, a reader will have a solid basis on which to decide if Mr. Monella’s recommendations should be accepted. It is my opinion that his recommendations should not be accepted until more information is provided. Each of the ten critical thinking questions will be evaluated in order to demonstrate how this conclusion was reached. The first question a critical thinker must ask when reading is, â€Å"What are the issues and conclusions?† (Browne & Keely, p. 18) As a reader, it is  important to identify the issue the author is discussing and the conclusion they have drawn in order to successfully form an opinion regarding the information presented. The issue is the topic that an author is addressing, while the conclusion is the message they intend to convey to the reader. There are two types of issues- descriptive issues and prescriptive issues. A descriptive issue poses questions regarding descriptions of the past, present, or future. Prescriptive issues pose questions about actions that should be taken, what is ethical or moral, and what is good or bad; they are issues that require prescriptive answers. In the memorandum, Mr. Monella presents a descriptive issue that requires an answer to describe how the work place will be in the future. How can Penn-Mart control the cost of employee healthcare benefits? The conclusion presented is to implement a new wellness program call the â€Å"Get Well† program. The second question that must be addressed is, â€Å"What are the reasons?† (Browne & Keeley, p. 29) Reasons are the statements an author provides that support or justify their conclusion. As the book states, â€Å"you cannot determine the worth of a conclusion until you identify the reasons.† (p. 29) In order to identify the reasons supplied by an author, a critical thinker must ask why the author believes their conclusion. In the memorandum, the reasons stated support the conclusion of initiating a â€Å"Get Well† program. The memorandum states that data â€Å"indicates that individuals who voluntarily neglect their health account for the greatest impact on the growth in benefits costs.† The data includes smokers, individuals who do not exercise, and those who avoid preventative care in the group in question. The second reason given is that the program will make employees more aware of their own health status and identify issues they can improve to becom e more fit. Other reasons provided by the memorandum are that the initiative aligns with other public health initiatives, there have been other studies on obesity, the initiative will provide initiative for employees to adopt healthier lifestyles, and it will make employees feel better about themselves. After identifying the basic structure of a message, a critical thinker must ask, â€Å"What words or phrases are ambiguous?† (p. 40) An ambiguous word or phrase is one that has multiple possible meanings.  Ambiguous words or phrases in an argument create the need for clarification of the meaning before a reader can fully evaluate the argument. When reading a document such as the memorandum, it is helpful to mark ambiguous words or phrases in statements as they occur. The ambiguous terms identified in the memorandum have been italicized. â€Å"The objective of the ‘Get Well’ program is to†¦help them identify issues that they could mitigate on their own to become more fi t.† (p. 2) â€Å"The ‘Get Well’ initiative completely aligns with other current public health and fitness objectives†¦Ã¢â‚¬  (p. 2) â€Å"There have been numerous research studies on obesity published in scholarly journals.† (p. 2) â€Å"We firmly believe that many Penn-Mart employees want to get fit and that the ‘Get Well’ initiative will provide the necessary incentives†¦ Giving a blood sample and filling out a survey form is not intrusive or burdensome – these are two things that people do routinely. Those who might oppose â€Å"Get Well† are either unfit, or they have something to hide.† (p. 2) â€Å"These recommendations have been thoroughly researched and represent state-of-the-art in our field.† (p. 2) Each of the italicized phrases can either have multiple meanings, or is not specific enough to use to determine the statement’s validity. For example, the suggested program is intended to help identify employee health â€Å"issues,† however different people may consider different things to be health issues. While one person may consider smoking to be a health issue, others may not. â€Å"Completely align[ing]† with objectives may mean that initiatives are designed by the same person, implemented for the same group of people, and intended to accomplish the same goal; however it also may mean that it has the same general objective. Each ambiguous term has the same possibility of containing various meanings. Next a critical thinker must ask the fourth critical question, â€Å"What are the value and descriptive assumptions?† Assumptions are beliefs that are generally taken for granted that support the reasoning and conclusion of an argument. Value assumptions demonstrate a preference for one value over another. Descriptive assumptions demonstrate beliefs about the world. In the memorandum both value and descriptive assumptions are demonstrated. The value assumption demonstrated is equality versus individualism. Mr. Monella states that is unfair to young, healthy people to let employees unequally use healthcare insurance resources. This demonstrates a preference for individualism over equality. The descriptive assumption in the memorandum involves beliefs about Penn-Mart’s healthcare benefits strategy and controlling the cost of the employee healthcare program. It assumes that there are no other ways to control spending, other than by implementing the Get Well program. Fifth, a critical thinker must ask, â€Å"Are there any fallacies in the reasoning?† (p. 74) Fallacies are logic tricks an author may use to lure a reader into accepting their conclusion. There are multiple fallacies in the memorandum. First, the authors claim that the â€Å"Get Well† will make Penn-Mart employees feel better about themselves, which appeals to emotions. The memorandum states that the recommendations have been thoroughly researched and represent state-of-the-art in our field, which appeals to questionable authority; the researchers and qualifications for being state of the art have not been specified. Those who might oppose â€Å"Get Well† are claimed to be either u nfit, or they have something to hide, which attacks person rather than ideas. The final statement, â€Å"to quote the famous Charles Darwin, ‘survival of the fittest’ is a natural part of evolution,† introduces a red herring. The next step in evaluating the conclusion is to ask, â€Å"How good is the evidence?† (p. 92) The memorandum cites data from underwriters that indicates individuals who voluntarily neglect their health account for the greatest impact employee healthcare benefits costs, which is the author using a case example as evidence. The underwriters believe that many Penn-Mart employees want to get fit, which generalizes the desires of a portion of the employees to the entire population. Cited published research studies on obesity appeal to authority. A research study is used as evidence with data from underwriters is cited twice. The â€Å"Get Well† program is claimed to make Penn-Mart employees feel better about themselves, generalizing from the research sample. Finally, an employee survey about satisfaction with their benefits could be a biased survey. â€Å"Are there rival causes?† (p. 128) This question helps evaluate an argument’s strength by examining any other reasonable causes for the event in question. Rival outcomes would provide different causes for the rising employee healthcare benefits costs at Penn-Mart. The memorandum states that the rise in benefits costs is driven by causes such as an aging workforce with tenure. However, other possible causes exist, such as inflation for common medical procedures such as physical examinations. The memorandum also demonstrates the  fundamental attribution error by citing individuals who â€Å"voluntarily neglect their health† (p. 1), although there may be other reasons they do not exercise, such as preexisting conditions like arthritis. While statistics may seem like impressive additions to an argument, they may also be deceptive. They frequently do not â€Å"prove what they appear to prove.† (p. 142) Knowing the unreliableness of statistics makes it important for a critical thinker to ask, are the statistics deceptive? (p. 142) Statistics stating that wages and benefits make up roughly 40 percent of Penn-Mart’s annual budget are cited, however 40% is not clearly defined or accurately identified. Also cited is data from underwriters indicating that participation in voluntary health benefits programs â€Å"peaked at 5% of total FTE’s in 2006† (p. 1), but what does 5% of total FTE amount to? The 5% is again not clearly defined or accurately identified. Equally as significant as the information included in an argument is the significant information that is omitted. Omitting significant information from an argument shapes the reasoning in favor of the author. In order to judge the quality of an argument’s reasoning, a critical thinker must ask, what significant information is omitted? (p. 153) For example, in Penn-Mart’s situation, the potential long-term negative effects of the Get Well program are omitted. Could the program have negative consequences? The suggestions state that employees who do not comply with the terms of â€Å"Get Well† should be given the possibility of paying a fine, declining future healthcare benefits, resigning, or being fired. However, the memorandum does not address what the consequences might be of the majority of employees refusing Get Well would be to Penn-Mart. If the company selects to fire those employees, they may lose many workers, causing the whole organization to suffer. The final question to ask in the critical thinking model is, what reasonable conclusions are possible? (p. 163) As a critical thinker, the objective is to determine and accept the most reasonable conclusion(s) to an argument that most closely adheres to personal value preferences. There are frequently alternative conclusions or multiple conclusions that are possible given the reasoning of an argument. For example, one conclusion to the Penn-Mart situation is that the Get Well program is the best solution to rising healthcare costs. Another conclusion may be that there is another program that may be a better fit for Penn-Mart. After asking and evaluating  all ten of the critical questions to ask, I believe that I have determined the most reasonable conclusion. To determine the best conclusion, it would be necessary to obtain clarification about the ambiguous terms before evaluating the argument’s strength. Without that information it is not possible to make a firm opinion about the strength of reasoning. Until the clarification is provided, it is my opinion that the suggestions of the consultant company should not be accepted. There are too many ambiguous terms and fallacies employed to determine that the argument is strong enough for acceptance. Resources Browne, M. N., & Keeley, S.M. (2010). Asking the right questions: A guide to critical thinking (10th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall.