Argument-driven analysis of the essay Example | Topics and Well Written Essays - 750 words

Argument-driven analysis of the - Essay Example The author has not dealt with the issue at hand in a precise and comprehensive manner, which may easily confuse many readers. This paper will explore an all rounded approach to globalization from the main critical angles which best explain the subject in discussion. The views expressed by the author on globalization suggest absence of any wrong in the presentation of certain practice or object. The blame is set rather on the problem that is the perception of the object. The example of the coffee house and snack shop given by the author does not put blame on the coffee house or the shops, but the reception in different places. It is true in many instances, and people should not blame, Americanization but instead the people ought to change their approach towards such ventures. On the flip side of the above, borrowed cultures are a reality in the current times. It openly means that globalization is responsible for the erosion of some values of other cultures due to the embracing of the Western culture. Jeffrey N. Wasserstrom reasons for failure in the campaign to popularize Disney’s character Mickey Mouse cannot be solely blamed on the way globalization is perceived in different parts of the world. The timing of the animation giant to introduce a character in China was wrong hence the failure of the brand. Jeffrey clearly states presences of a health campaign to get rid of â€Å"laoshu† a Chinese name for a rat (Wasserstrom, 22). The violence received on â€Å"Mi Lushorue† was due to the campaign against rats in China. Wasserstrom fails to present the good side of globalization but concentrates mostly on the failed parts of brands that he relates to globalization. It is important in any analysis not to take sides in presenting your views but to work towards the reader getting the silent voice in the paper that states your position. There are protests in the streets in India with people fearing for their jobs. The above is just one

Experimental economics, summary paper Essay Example | Topics and Well Written Essays - 500 words

Experimental economics, summary paper - Essay Example The people bidding do not know the reserve price. Another rule is that the seller cannot bid on himself to avoid prices going up artificially. This practice is unethical and illegal. â€Å"No auction house that values its reputation – and the long run profits its reputation secures – would systematically engage in this practice† (Ashenfelter). The fact that reserve prices are kept secret is considered by many an illogical tactic. This occurs because the most dominant strategy used is to bid up in regards to the true valuation of the object which makes the optimal reserve price identical irrelevant of the reserve price being known or kept a secret. Another variable that must be considered in the English auction system is buy-in rates. Sometimes buy-in rates are high despite the fact that the reserve price is also high. These types of sellers are looking to maximize their profit both in terms of final price and buy-in revenues. Auctions that are able to get a lot o f bidders to buy-in generate greater profits than places with few bidders participating in the game. Low turnout of bidders is an undesirable marketplace. When this occurs many sellers prefer to take their items off the market temporarily to protect themselves against collusion from the buyers in an attempt to depress the price. The highest bidding in an auction is only accepted if the bid ends up exceeding the reserve price.

Problems Faced By Easyjet

Problems Faced By Easyjet A comment on problems being faced by EasyJet and evaluation of strategies adopted by EasyJet Introduction EasyJet, a British airline company which has been fund in 1995 by Stelios Haji-Ioannou with 2 Boeing airplanes and 2 routs, has now expand to European market with 189 airplanes and more then 400 routes (Suit 101, 2009). Nowadays, EasyJet along with its well known low cost strategy is consisting on capturing larger market share. However, there has generated two main conflicts inside the firm. First, Stelios as the biggest shareholder against managers future growth plan of purchasing more aircrafts. Second, Stelios insist that shareholder of EasyJet should be paid by dividend. In order to examine the current issues of EasyJet, this report will analysis issues relate to EasyJet in aspect of economics and finance. In the economics section, this report will first discuss business objectives of EasyJet while focus on growth as its main objective. After that, the report will look into the separation theory of ownership and control issues and apply it into the discussion of current problems exist between shareholders and managers. Thirdly, this report will describe the market structure of British airline industry and discuss whether the low cost strategy could fit the market. In the finance section, this report will first examine the reflection of strategy adopted by EasyJet on the accounts using ratio analysis and trend inspecting. Then it will move on to a comparison among EasyJet, Jet2 and Ryanair, and explore the investment risk of EasyJet. Finally, this report will make a conclusion as well as recommendations that may probably solve the problems exist in Ea syJet. Part A. Economics A.1 Business Objectives According to Neild and Carysforth (2004, p.47), Business objectives are targets which must be achieved for an aim to be met. Strategies or plans adopted by firms are often based on targets such as profit, sales and growth. A.1.1 Growth Growth as the major objective of EasyJet, it is relatively easy to achieve during recession as well as recovery period. Growth of a company is regarded as expand size and enlarge sales. It is based on the scarification of short-term profit in favor of long-term profit. For example, EasyJet use retained earnings to push fleet growth. As a result, shareholders are not satisfied without dividends. In order to balance interests of both sides, managers have to increase the short profit through enlarge sales. Moreover, as managers are controllers of the company, they are free to choose growth as objective to fulfill their interests such as bonuses and share options based on acquiring a large volume of business (Stokes, 2010, p.477). A.1.1.1 Growth Strategy EasyJet adopts several strategies such as advertising and diversification to stimulate growth and enlarge market. Based on EasyJets dramatic investment programmes such as increase fleet size, EasyJet experienced a high rate growth of revenue even during the recession periods from  £264 million to  £2667 million. It increased nearly 10 times respectively and from 2000 to 2009 (EasyJet, 2009). However, certain growth strategies may result in rising expenditure and reducing price. Increase promotional expenditure While EasyJet already has a total number of 189 airbus A320 and Boeing 737 aircraft in 2010, it is respected to acquire another 59 planes in the next 4 years in favor of adapting increasing number of passengers and various destinations (Flightglobal, 2010). However, in order to get good revenue performance,  £86 million is spent on fuel costs in 2009 which partly lead to a reduction in profit margin (EasyJet, 2009). Decrease price In order to share larger market and promote growth, EasyJet carries out a strategy to make their travel fees as well as cost base lower than other established carriers. Since 1999, EasyJet has been voted as the Best Low Cost Airline by Business traveler Magazine and recognized as the first European carrier that won the award for Best Low Cost Carrier at OAG Airline Industry Awards in 2008 (EasyJet). A.1.2 Other Business Objectives Sales Revenue Maximising Sales revenue maximizing is achieved by increasing products and reducing price. Higher sales could efficiently help to expand and compete for the market. In addition, aim to maximize sale revenue could also benefit managers by enhancing their credibility as well as wages (Jain Khanna, 2009, p.22). EasyJet purchase more airplanes, provide various domestic and international flights and adopts low cost strategy to attract more passengers. According to EasyJet (2009), total revenue per seat has increased 10.9% with total revenue increased 12% from 2008 to 2009. Profit Maximizing Profit is considered as the strongest motivation of the company. Maximizing profit sometimes means maximizing the value of shareholders wealth when net cash flows back to the company in the long run. However, fixed cost may increase in a short term to promote output (Dransfield, 2004, p. 215). In future development, the objective that EasyJet might follow is profit maximizing. Nowadays profit margins are spend on aircraft purchase to meet the needs of passenger and capture larger market share, these will return to positive cash generation beyond the period of higher than normal capital expenditure (EasyJet, 2009). Managerial Utility Maximizing It is known that managerial utility could maximize when there is a higher level of output. The case indicates that EasyJet has ordered more airplanes to serve more passengers and explore new market. By increasing sales and profit, managers could provide enough money to make shareholders happy. Meanwhile, extra money could be used to promote salary, bonuses and many other perks as well as develop discretionary projects (Stoke, 2010, p.470). A.2 Ownership and Control Issues A.2.1 Ownership of EasyJet EasyJet is owned by shareholders who invest money for future dividends and for the potential increased value of their shares. Shareholders have been seen as the monitor of the operation and management of a company. Due to their interests on investment returns, they may indirectly influence company to increase share value or maximize profit (Turner, n.d.). On the other hand, shareholders could sale their stocks to express their dissatisfaction on the operation of the company. However, this conduct may lead to a reduction on share price and increase the risk of take-over bid by raider (Stokes, 2010, p. 478). Stelios Hajiloannous owns 38% stocks of the company, followed by Standard Life, who is the second large shareholder, owns 9.45% stocks (London Night Standard, 2010). Due to the family of Sir Stelios is the biggest shareholder, he could possible exercise an effective influence on the company, and directs the decisions made by directors and managers correspond to shareholders interests. A.2.2 Ownership Issues The biggest shareholder as well as Non-Executive Director, Stelios has been strongly opposed to EasyJets rapid expansion strategy and management strategy. Shareholders are more concern profit maximizing rather than sale revenue maximizing. Stelios claims that the capital cost and profit is no longer balanced and the expenditure for new airlines are from the expense of profit margins. Stelios insists that approximately 190 aircrafts is enough to operation and other excess ones should be sold to conserve cash (Flightglobal, 2010). The fleet growth strategy is not suitable for recession period as there are poor economic returns and market changes. Sometimes non executive director has insufficient influence on the Board. As a result, Stelios tries to persuade other shareholders to reject the growth strategy. However, Stelios failed to gain enough support to exert power on managers. Standard Life, who is the second large shareholder, expressed his satisfaction with management team (London Night Standard, 2010). Shareholders have the right to benefit from the company. According to the case (2010), Stelios argues that the firm is a mature company that the share price do not has the capacity to increase. Thus Stelios claims that shareholders should receive reward from dividend payments instead of the share price of the stocks they hold. Huge capital expenditure should be limited while cash should be conserved. Stelios quitted the Board to against growth strategy. There generates another disputation about the brand license. The Easy brand belongs to Stelios Easy Group and was licensed to EasyJet. However, he now is concerns to reclaim the brand and license to another airline (Daily Mail, 2010). A.2.3 Control by Managers EasyJet is controlled by managers. Although shareholders own the company, they left the operation and governance power to the Boards and management. There are two kinds of executive in the board: non-executive director who purely give advice and executive director who really exert power to make decision. The decision made by executive director and managers should be based on the interests of stakeholders to a certain degree. Thus, managers can be viewed as the agents of shareholders (Stocks, 2010, p. 477). On the other hand, managers have their responsibilities be loyal to the company while exercise judgment to operate the company. Managers should be informed the business environment to make decision that benefits the company. Rewards such as bonus are the motivations of managers. However, it may also be the stimulation of risky policy making (Bevans, 2007, p. 220). It is known that appropriate corporate governance is the guidance to achieve success operation of the company. It requires greater administration managers. However, it is difficult to balance different interests between shareholders and managers, thus lead to several problems (Rees Sheikh, 1995, p.145). A.2.4 Control Issues With the aim of growth, EasyJet sets the goal to maintain a growth of 7.5% and increase its European market share from about 7% to 10%. EasyJet believes that its growth plan on fleet size could contribute to occupy larger short-haul European market (Flightglobal, 2010). EasyJet indicates that they earned a profit of  £ 4 million and performed well in the recession period, the expansion plan is under control instead of taking huge risky (London Evening Standard, 2010). Andy Harrisons chief executive position was taken place by McCall due to the disagreement with Sir Stelios (New Statesman, 2010). Although there is a 5% drop of share price due to the long battle between shareholders and managers, EasyJet claims that overall there was a 34% rise of the share price in 10 years which shown a remarkable potential among European airline carriers as well as a sufficient reward to shareholders (Independent, 2010). A.3 Market Structure A.3.1 Market Structure of British Airline Industry According to Moschandreas (2000, p.10), market structure is the characteristics of the market that could have impact on the mode of competition. Those characteristics include product diversification, barriers of entry the market, number of suppliers and the level of price control. The market structure of British airline industry is oligopoly. Oligopoly is an imperfect market with standardized or differentiated products and a high degree of interdependence which dominated by a few companies (Chauhan, 2009, p.65). A.3.1.1 The Characteristics of Oligopoly Few Sellers: The market is dominated by few companies. Figure 1 shows the market share in the UK main airport London Heathrow. British Airways, BMI and Virgin Atlantic have relative higher market shares than others. Figure 1. Top Airlines market share at London Heathrow. AnnaAero. (2008). [One line] Available from: http://www.anna.aero/2008/12/05/flybe-heading-for-no-1-in-uk-domestic-market/ [Accessed 05th December 2008] Product diversification Many companies in oligopoly market established brands and offer various products (Jain Khanna, 2009, p.115). For example, British Airways with the slogan The worlds Best Airline serves more than 300 destinations by 238 aircrafts (British Airways, 2009); BMI with the slogan Better for Business serves various destinations by 43 aircrafts (BMI, 2010). Entry Barriers There are several barriers that protect incumbents from new firms. First, due to diversification of the products, established companies could consolidate market by branding and promotion. As a result, new firms have to spend more money on advertising and branding to conquer customer loyalty to incumbent companies and attract passengers. Second, financial requirements or vital resource also restrict new entrants, such as difficulty in accessing available landing airports and huge cost of purchasing aircraft (Tucker, 2008, p.178) A.3.1.2 Common Strategies of Oligopoly There are several price strategies or non-price strategies which could be used in oligopoly market. A.3.1.2.1 Price Strategy (Stokes, 2010, p.148) Prestige pricing. If one firm increases the price of the product, it may still attractive to customers. This may because of the promotion of quality and service or conspicuous consumption behavior. Price discrimination. Charging different price in different market could help to increase revenue. There are three degree of price discrimination (Dwivedi, 2008, p.328): First degree discrimination exits when sellers charge the highest price of the product that customer willing to buy. For example, BA offer free drinks and snacks, they could charge a higher price compare to EasyJet, who do not offer free airline catering. Second degree price discrimination exits when sellers charge different prices for the different quantities of purchase or different category of consumers (p.328). Such as first-class and economy class charge differently in airline industry as economy class is frequent required by passengers. Third degree price discrimination occurs when different price are charged refer to different submarket. For example, airline companies may offer discounts according to the time that customers book ticket in advance. Limit pricing. Limit pricing occurs when firms pricing products lower but still can get profit. Such strategy could help to deter competitors or new entrants. Price elasticity of demand. When demand is inelastic, increase price could result in revenue increase. On the other hand, when demand is elastic, decrease price could also result in revenue increase. A.3.1.2.2 Non-Price Strategy Non-Price Strategies in oligopolistic markets could help to increase demand and develop loyalty among consumers (Riley, 2005, p.83) Expanding into new markets Develop new markets could help to enlarge network and strengthen market power as well as increase sales. For example, recently EasyJet has lunched new route from Edinburgh to Dortmund, which is expected to carry more than 55000 passengers during the first year (EasyJet, 2010). Diversification of the product A company could be benefit from the diversity of its product against rivals. The more distinct products they sale, the smaller their rivals could occupy the market (Mukherjee, p.460). For example, EasyJet offer 422 flight routes among 27 countries and 114 airports (EasyJet, 2009). Advertising and Branding Advertising and Branding are essential especially for the new entrant. Advertising could establish brand images to customers. For example, EasyJet use orange as its main colors and permitted ITV operating a reality show named Airline that present EasyJet plane in the air to increasing its popularity (Fastcompany, 2002). EasyJet used to advertise its low price flight and claims that people could fly to Scotland for the price of a pair of jeans (Fastcompany, 2002) A.3.2 Low Cost Carriers Strategy of EasyJet EasyJet adopts a low-cost model to attract passengers and seize larger market share (Dunmore Gleave, 2003) Offer cheap fares: EasyJet sale tickets through internet or phone in order to avoid commissions. By the end of 2005, 98% of tickets were sold online (EasyJet, 2005). Customers could book in advance for cheap seats and transform flight for different time schedule without extra charge. Do not offer airline catering. Uniform airplane types: Airbus A320 and Boeing 737. Have higher aircraft utilisation: EasyJet aircrafts operate 11 hours a day which more than 3 hours than BA. Use high seating density airplane and increase load factors to reduce cost base: By the end of June 2010, the load factor has increased to 87.2%, thus reduces per seat costs by 16% compared to BMI (EasyJet, 2010) Use smaller airports to reduce charges: Such as London Luton and Liverpool A.3.3 Low Cost Strategy in Oligopoly Market In the UK oligopolistic market, as oligopolists are interdependent among others, firms are sensitive to competitors actions. A rational company may try to speculate reactions of competitors using game theory before they adopt various strategies such as price changes. However, even one company reduce its price, it is unlikely lead to a price war or significant profit changes. According to the theory, when companies change prices, their competitors will adjust strategies such as advertising to avoid loss (Stokes, 2010, p.152-156). As a result, low cost strategy which aims to enlarge market by reducing price is not typical in oligopoly market. However, due to the conception of price elasticity of demand, reduce price may lead to the increase of demand. Lower price strategy combined with higher frequencies could attract more business passengers who account for a remarkable proportion of passengers for EasyJet. Although such strategy could make overall cost considerably lower, it still enjoys an average growth of 4.4% while 10.5% in some major routs when fist became a low cost carrier. Apparently the successful low cost airlines are more profitable than established carriers, thus easy to survive in the market (EasyJet, 2009). In the first part, this report has discussed the features of growth strategy and low cost strategy adopted by EasyJet. The next part of the report will examine these features by analysing the financial accounts of EasyJet. Part B. Finance B.1 Strategies reflect on EasyJets Accounts B.1.1 Growth B.1.1.1 A Growth Company From Figure B1, it can be seen that sales revenue has shown a consistently upward trend and nearly doubled from  £1341.4 million to  £2666.8 million during the 5 years. Hence, according to product life cycle, EasyJet still being in the period of introduce to the market instead of maturity. Figure B1* Figure B2 shows a significant increase in trade creditors and debtors. However, it can be seen in Figure B2 that EasyJet could pay suppliers more slowly while receive debtor quicker than before. As a result, working capital as well as financial environment may probably get better, which could benefit for its growth strategies. It can be seen from Figure B3 that the market value per share has increased from 2005 to 2007 before it reduce sharply in 2008. However, it has recovering in 2009 after the recession period. The overall trend shows a growth in shareholders wealth as well as the company itself. P: E ratio is the indicator of investors wishes for long term profit. It reduced from 2005 to 2007 followed by an increase since 2008. The upward trend could reveal a huge potential growth in the future. B 1.1.2 Growth Strategies Increase promotional expenditure Figure B5 illustrates a growth of current assets and current liabilities. Current ratio of EasyJet reflects that the growth rate of current assets is slowly than current liabilities, which could reflect EasyJets fast growth of borrowings for increase promotional expenditure, as current ratio shows a downward trend. Nevertheless, the ratio is fluctuating above 1, which means that current assets always more than current liabilities and EasyJet has the ability to pay future bills. However, the more the ratio near 1, the less cash or cash assets could be contributed to short term debt. A large amount of cash of EasyJet is used to pay for aircraft order for future long term profit. Interest cover ratio could reveal whether EasyJet pay interest borrowings by generating enough profits. However, from Figure B5, EasyJet experienced a dramatic decline on interest cover ratio and lower than 1.5 in 2009. Due to the sacrifice on short term profit and large amount of borrowing for airline purchase, EasyJet may burdened by interest of debt. Gearing ratio could be used to describe the proportion of long term liabilities in capital employed. The higher a gearing ratio is, the more debt a company loaned and the more risk a company may take. From Figure B6 one could know that overall the gearing ratio has increased with a peak in 2007. Due to the huge cost of aircrafts, EasyJet is now in serious financial problem. Decrease in short term profit Gross profit and net profit margin ratio is helpful to know the percentage of profit generated from total revenue. Profit margin of EasyJet has shown an upward trend until 2007, both gross profit and net profit margin ratio decreased about 10% by the end of 2009. Such reduction indicates a increase in cost of sales and may not be satisfied by shareholders. However, despite of the rising in tax rate, this trend could reflect EasyJets strategies to explore new market, increase net work as well as route length which lead to a rise of fuel costs, airport charging and advertising costs. Capital employed includes shareholders funds and long term liabilities. Figure B8 indicates that EasyJets capital is rising, which indicates an expansion of EasyJets size. Although the investment of EasyJet has been increasing, profit has been used for further expansion. Hence, large short term profit may not be generated from capital. The situation is reflected on the reduction on ROCE. It also can be seen from Figure B8, return on equity has shown the same trend as that of profit. They both have increased till 2007 and then decreased sharply. Although the reduction of return on equity may due to the tax policy released in 2009 and increasing costs, which lead to a reduction on earnings after tax, it also partly result in the expansion of shareholders funds (EasyJet, 2009). However, overall it shows a lack of ability to return profit for owners investment. Figure B9 shows that after 2005, assets turnover decreased and has been fluctuating around 1, which reflects a poor utilization of assets and less profit return on assets. However, this primarily because of the large bulk of airplane purchase plan during the next few years. As a result, the long term benefits may not be reflected in more than one year. B.1.2 Low Cost strategy Figure B10 shows increase both in sales revenue and number of employee, which indicates the expansion of companys size and growth of finance performance. This may probably base on the low cost strategy. According to low cost strategy, EasyJet offer more frequencies on flight and larger capacities than other companies, thus lead to an increase in passenger flown as well as efficiency in airplane utilities. Aiming to enlarge its market, EasyJet has lunched more airports and increase its route length to various European destinations which result in a raise in cost, especially fuel cost. As a result, it can be seen from Figure B11 that a sharp rise of cost per passenger has increased since 2007. B.2 Compare EasyJet with Jet2 and Ryanair In order to discuss investment risky of EasyJet, this part of the report will compare EasyJet with Jet2 and Ryanair, both of which also adopt low cost strategy as EasyJet. B.2.1 Differences and Similarities in Balance Sheets Apparently from Appendix 1, Appendix 2 ad Appendix 3, EasyJet shows a significant higher increase rate of total assets, liabilities and capital employed, which indicate a rapid expansion of companys size. Ryanair also shows a slightly development of the company. By contrast, although Jet2 experienced an increase in total assets, the total liabilities has reduced, mainly due to the decline of non-current assets. Although the current assets of Jet2 raised sharply from 2008 to 2009, according to Figure 15, unlike Ryanair and EasyJet, the current assets of Jet2 is much lower than current liabilities. Thus Jet2 may not have the ability to pay bills or have enough cash to develop business. By comparing the proportion of total liabilities and shareholders fund in total assets, it can be seen that all three companies liabilities is higher than shareholders funds. Thus, EasyJet, Jet2 and Ryanair are mainly financed by debt. As Ryanair has the largest number of assets while Jet2 has the lowest, one may presume that Ryanair has the largest size of company while Jet2 has the relatively smallest. While the major liabilities of both EasyJet and Ryanair is long term borrowings, Jet2 takes trade payable as major total liabilities and deferred tax as major non-current liabilities. This situation may probably indicate that the working capital of Jet2 could be influenced negatively due to a poor ability of paying debt. B.2.2 Investment B.2.2.1 Comparison among EasyJet, Jet2 and Ryanair By comparing current ratio in Figure 12, it can be see that Jet2 current liabilities is more than current assets, thus Jet2 may have difficulty to pay bills immediately. On the other hand, Ryanairs current ratio has increased to 1.84 in 2009, as current assets in much higher than current liabilities. The figure may indicate a poor utilization of resource. Compared to Jet2 and Ryanair, EasyJet has a better management on assets and liabilities. It can be seen that EasyJet has the highest rate of gearing ratio, as the operation of company is largely depend on borrowings. Meanwhile, according to Figure 12, EasyJet has the relative lower interest cover ratio, which indicates that EasyJet may have more difficulty to pay interest expense than other company. As a result, an investment in EasyJet is more risky than invest in Ryanair and Jet2. Earning per share has been widely used as measurement for the growth of a firm as well as the indicator of the amount of profit could return to each share. Although the EPS of Jet2 rose remarkably, the PE ratio also declined dramatically. On the other hand, it can be seen that the PE ratio of EasyJet as well as Ryanair has increased sharply. It indicates potential capabilities of future growth of the two companies which could give confidence to investors. From Figure B16, it can be seen that Jet2 has the longest time to pay creditors, thus has a longer time to utilities liabilities. However, it also needs the longest time to collect receivables. On the other hand, although Ryanair has to pay creditors quicker compared to the time in 2008, the period is still longer than EasyJet. Moreover, Ryanair could receive debt much quicker than EasyJet. Thus Ryanair may have the best efficiency cash flows which could contribute to company operating. Obviously from Figure B13, Ryanair has much higher figure of return on capital employed, which means that Ryanair could profitably operation the company by using investment. As a result, investor could receive more interests in the short run from Ryanair rather than EasyJet, which has the lowest ROCE ratio among others. B.2.2.2 Brief Evaluation Based on the ratio discussed above, it can be seen that overall Ryanair is the best choice for investors compared to EasyJet and Jet2 despite its lower efficiency on the utilization of assets. It has the highest PE ratio and return on capital employed rate. Moreover, the working capital of cash flows is also considered as the best one among others. Investment on Ryanair could have less risky than EasyJet. Jet2 relatively has a poor condition of capital. It seems that Jet2 may easier fall into the dilemma of debt difficulty. Although EasyJet has a large amount of borrowings, and the lowest return on capital, a more flexible cash flow as well as a proper utilization of capital could be compensations. In addition, higher PE ratio implies a potential power of growth. Thus, investment on EasyJet could have less risky than Jet2 and may probably get better profit in the future. Conclusion To sum up, EasyJet as a growth company has adopt several strategies to compete in oligopoly market. EasyJet utilise low cost strategy to increase it efficiency in business operation will use growth strategy to seize larger market share and expand the size of the company. However, scarification of short term profit may leads to unsatisfactions of shareholders. Moreover, by looking at the accounts of EasyJet, it can be seen that its growth plan of aircraft purchasing lead to a heavy burden on debt. EasyJet has potential risky due to the large proportion of liabilities. In recommendation, EasyJet could reduce its growth plan while pay dividend to shareholder in order to alleviate the conflicts. As a result, the reputation of EasyJet could be maintained and attract more funds invest in the capital. Hence, EasyJet may not need to largely depend on liabilities and the risk of investment could reduce. References AnnaAero. (2008). Flybe Heading for #1 in UK Domestic Market; Overall Demand Down Around 4% in 2008. [One line] Available from: http://www.anna.aero/2008/12/05/flybe-heading-for-no-1-in-uk-domestic-market/ [Accessed 05th December 2008] Bevans, N. R. (2007). Business Organizations and Corporate Law. New York: Thomson Delmar Learning. Chauhan, S. P. S. (2009). Microeconomics: Theory and Applications. New Delhi: Learning Private Limited. Daily Mail. (2010). Stelios Warns He May Reclaim EasyJet Name. [On line] Available from: http://www.dailymail.co.uk/money/article-1287205/Stelios-warns-reclaim-easyJet-name.html [Accessed 16th June 2010] Dransfield, R. (2004). Business for Foundation Degrees and Higher Awards. Oxford: Heinemann Dwivedi, D. N. (2008). Microeconomics: Theory and Applications. New Delhi: Dorling Kindersley Ltd. EasyJet. (2009). Annual Report and Accounts 2009. [On line] Available from: http://2009annualreport.easyjet.com/files/pdf/easyJet_AR09.pdf EasyJet. (2010). EasyJet to Launch Two NEW Routes: Edinburgh to Dortmund and Dortmund to Thessaloniki. [On line] Available from: http://www.easyjet.com/en/news/new_routes_dortmund_edinburgh_thessaloniki.html EasyJet. (n. d.) EasyJet Awards and Tributes. [On line] Available from: http://www.easyjet.com/EN/About/Information/infopack_awards.html Fast Company. (2002). Stelios Makes Growth Look Easy. [On line] Available from: http://www.fastcompany.com/magazine/64/ioannou.html [Accessed 31st October 2002] Flight Global. (2010). Haji-loannou Bids to Overturn EasyJet Expansion Strategy. [On line] Available from: http://www.flightglobal.com/articles/2010/05/14/342001/haji-ioannou-bids-to-overturn-easyjet-expansion-strategy.html [Accessed 14th May 2010] Jet2. (2009). Annual Report 2009. [On line] Available from: http://www.dartgroup.co.uk/pdf/DartReport09.pdf Kothari, J. E, Barone. (2006). Financial Accounting. An International Approach. Essex: Pearson Education Limited. London Evening Standard. (2010). Standard Life Backs EasyJet after Stelios Quits. [On li

Research And Development - Bus Essay -- essays research papers

Research and development is an important process for business today. Consumers needs and wants are always changing and so it is vital for the business to meet these demands with R&D to hopefully exceed customer expectations. It is also important for businesses to keep with advances such and technological and medical. Otherwise they will be left behind in the competition. As before, R&D is very important and relies on market research information. After the research the company has to have good confidence that the product is fit for sale before they produce it. If not, they will lose money due to the large cost of production. The product specifications vary depending on consumer needs, wants and competition from other firms. For example Sony have released the smallest minidisc in the world which creates competition and also covers the consumers wants/needs. Improving the operational processes, developing new ones and developing new/improved products are part of the research and development commercial function. R&D should be looking at two areas, which are to: A) Take as much care for the environment as possible.   Ã‚  Ã‚  Ã‚  Ã‚  B) Make use of materials in the most efficient way.  Ã‚  Ã‚  Ã‚  Ã‚   By doing this they must calculate their costs and make sure they can do the above without getting into debts from the costs they produce. The businesses labs keep links between the universities so that they can exchange research findings wh...

Management Accounting Research

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Burns and Yazdifar (2001) asked UK qualified management accountants to highlight the ten most perceived management accounting important tasks, tools and techniques of 1995-00 and 2000-05.They founded that both sets of results, management accountants placed emphasis on traditional management accounting roles such as performance evaluation, budget planning and management, management accounts interpretation and presentation, cost and financial control. It was founded th at management accountants perceived budgets as the most important task also highly ranking variance analysis in the late nineteenth century. Nevertheless, numerous new areas such as ABC, balanced scorecard were attributed as low significance.They also founded the expected importance of future tasks considerably changed with more emphasis being placed on newer tasks particularly in strategic planning and implementation, valued-added identification and implementation, new information system implementation, operational information interpretation. It was also founded that despite budgets and variance analysis being highly rated in the 21st century, more importance was placed on ABC, balanced scorecards. Thus, future years have more emphasis on ‘strategy-aligned analysis’ and less emphasis on ‘cost control and cutting’.Identifying the requirements of management accounting practitioners can enable researchers to place more emphasis on such requirements during inv estigations in order to maintain its currency with practitioners. Burns et al (2001) questioned the reasons for changes in management accounting modelling the tasks as well as roles of management accountants. Consequently, they asked UK qualified management accountants to highlight what they considered to be vitally important contributions to change in management accounting.They founded that information technological advances including accountancy software advances and organisational restructuring as well as the new styles of modern management to be a vital contribution in driving change in the tasks and roles of management accountants. However, Scapens et al (2003) founded that customer orientated initiatives and globalisation were the two fundamental drivers for change. Johnson and Kaplan (1987) argued the existence of a ‘relevance gap’ between management accounting research and practice.They based their argument on fact that companies had one information system and e xternal financial reporting statutory requirements would take preference over the information required by internal management accountants. Burns et al founded modern technological advances including database capabilities enabled the storage of vast amounts of information which can be analysed in various ways meeting the needs of a number of users. Thus, managers can easily access variances and performances.Modern technology has contributed to the change of management accounting roles. Fundamental advances in management operations and productions such as just-in-time have challenged previous methods such as Ford’s mass production. Manufacturing automation has resulted in increased the relation of fixed costs to variable (Bromwich and Bhimani, 1994). New forms of competitiveness such as customer service, differentiation and innovation of products, quality. Hence, more importance is placed on the monitoring of crucial non-financial variables.Scapens et al (1996) argued that mana gers not necessarily management accountants have the necessary technology, access of data and in numerous cases the necessary skills to be their own ‘pseudo’ accountants. Burns et al (2001) founded that globalisation, customer focus and new forms of competitiveness have affected the roles of management accountants. There has been increased global competition, market volatility and shorter product life cycles contributing to the reform of management accounting roles.There has also been an increased focus on overheads as they now contribute to a substantial proportion of business costs. Consequently, there is increased focus on investigating the value added by overhead processes. Nevertheless, the analysis of overheads is a weak section of traditional management accounting. Considering the emphasis placed on traditional methods, it is questionable whether modern management accounting research is gaining recognition by practitioners despite such research anticipating chang es in modern day.Burns et al (2001) argued to the contrary of Johnson and Kaplan stating that a relevance gap does not exist. They argued that management accounting research has highlighted issues concerning management accounting change. Practice frequently searches for a quick fix to problems failing to address fundamental issues. Practitioners and professional sponsors fail to appreciate modern important investigations and management accounting research often seeking solutions to problems using traditional methods.Arguably, the problem does not lie in management accounting research which has accommodated changes but the way in which it is taught and generally accepted. It’s a shame that new management accounting solutions are not thoroughly researched independently in the way new medicines are. Researchers have acknowledged the requirements of incorporating social science theories, other social and economic elements into accounting in order to expand practice effectively. T his was seen with the development of a ‘reward and control systems deriving from micro-economics, in particular agency theory, and social psychology’ (Merchant, 1998).However, professional textbooks do not mention such investigations and the way in which research communicated is questionable to the sustainability of the subject. It is argued that professional bodies place more emphasis on the examination and training of traditional management accounting methods. Thus, practitioners are denied access to vital knowledge relevant to their tasks. Arguably, if practitioners do not possess adequate grasp of knowledge based on modern research and theory, they are more likely to accept new methods with questionable validity only to find limitations following implementation.Burns et al founded a growth in international management accounting researchers in the last 30 years despite it being dominated by the West. Thus, management accounting research is now dealing with new issues such as culture and ethnicity (Harrison and McKinnon, 1999), diverse political system regulation and governance (Puxty et al 1987), dispersion of accounting knowledge internationally (Jones and Dugdale, 2002). Arguably, management accounting research is now broader and more flexible accommodating cultural variations. Management accounting research is now anticipating challenges encountered by practitioners.This includes areas such as ‘contingent system design, motivations and rewards, environmental scanning and strategy, and non financial aspects of control’ (Burns et al 2004, pg. 16). However, it is questionable the level of emphasis placed on new methods anticipating changes in the real world and still the majority of contributions come from traditional methods which have been thoroughly tried and tested. Thus, considering the changes occurring in management accounting research and practice, practitioners need to adopt a cumulative continuous learning approach to upd ate ones knowledge.Langfield-Smith (1997) founded that traditional methods in management accounting have become more automated as supposed to disappearing supporting the findings of Burns et al. They stated that increased and changed forms of competition, combined with technological advances, have resulted in flexibility and flatter organisations reforming the roles of management accountants. Despite Burns et al concluding that researchers are accommodating the changing roles and requirements of practitioners, their research findings can be criticised by the findings of Lawal (2002).Lawal (2002) founded that academics and practitioners have different opinions of the important topics ought to be taught. Lawal (2002) founded that academics highly valued budgets, organisational behaviours and IT in comparison to practitioners. Lawal (2002) also founded that academics placed less importance on skills required by practitioners such as time-management, negotiation and team-working. She al so founded little innovative and participative teaching methods for example videos, field studies and outside business speakers.Thus, Lawal (2002) argued a reform in teaching methods to incorporate case studies, real-life projects, group work and presentations and increased involvement by practitioners in teaching, in-depth research projects. This would arguably help management accounting research maintain its’ currency with practitioners. New managements accounting researches, proposals and methods are criticised by practitioners often highlighting various inadequacies and limitations. Thus, many new proposals are discarded questioning whether management accounting research is maintaining its currency with practitioners.When evaluating new systems, practitioners often fail to refer to academic research findings on the potential obstacles and/or effectiveness. It is questionable as to whether management accounting research has been successful considering its little practical impact. This is vastly to do with the training and education which has excluded modern researches. Arguably, there have been poor mechanisms and incentives for turning research findings into suitable techniques and policies as well as incorporating such findings into teaching programmes as the roles and skills of management accountant’s change.Observations have found that professional accounting courses including many bodies emphasise on facts and methods abandoning fundamental theory and new research. Consequently, practitioners are sceptical of research having unrealistic expectations attempting to find quick and easy explanations/solutions to difficult problems. Practitioners do not obtain sufficient research skills from professional training. Burns et al (2004) founded that academics and practicing management accountants have different career paths obstructing shared interaction as well as understanding.Academics progression is based on research accomplishments as suppose d to professional involvements. Thus, academics place less emphasis on practitioner focussed research considering the little benefit to them. The issues relating to management accounting research maintaining its currency with practitioners lie in the communication. A method needs to be adopted whereby the two are closely interrelated. The research by Burns et al (2004) has helped provide an insight into the changing roles and skills required of management accountants as well as the changes that have occurred in management accounting research.Such research by Burns et al is vital in understanding the reasons for changes in practitioner roles as well as requirements in order for management accounting research to maintain its currency with the practitioners. Arguably, research has kept up with times to accommodate changing requirements of management accountants. However, its application in practice is questionable and whether management accounting research is actually maintaining itâ⠂¬â„¢s currency with practitioners. Thus, methods should be adopted whereby research is accompanied with supporting evidence involving tried and tested methods.Suitable mechanisms and incentives for turning research findings into suitable techniques and policies should be developed and incorporated into teaching programmes. Management accountants are part of professional bodies that can incorporate new developments to the area in teaching. Professional bodies often release publications and this method should be used to communicate new management accounting research theories and findings that can be successful in practice. New management accounting research and theories are available on the internet but it is questionable whether such findings are actually used.Thus, practitioners should be encouraged to read upon new publications of management accounting research. Considering research is constantly developing with roles of management accountants changing, there should be increased p ublications by professional bodies for members in order for research to maintain its currency with practitioners. Management accounting research is crucial to the healthy development of management accounting and maintaining its’ currency with practitioners. Management Accounting Research Management accounting research has thrived producing substantive findings relevant to industry, but its’ application in practice is questionable. The requirements for management accountants have changed over the years in terms of the roles, skills and knowledge base required. Thus, arguably, industries should look at greater continued participation into higher education. Management accounting research has gone beyond the traditional costing for large industries. Traditional management accounting roles have been reformed and/or faded away.Burns et al argued that the new reformed roles of management accountants necessitate new education and training. Considering the changes/emergence and popularity of new occupational management accounting roles including business analysts, strategic management accountants and management controllers, less prominence should be placed on traditional learning methods but more on ‘case studies, practical projects and group research assignments ’ (Scapens 1999). If such changes are to be implemented, large challenges lie ahead including cost constraints.Burns et al (2004) looked at management accounting research exploring the changes in terms of the expansion of topics, methods and problems making comparisons with the changes in management accounting practices. Burns et al (2004) also examined the skills and knowledge requirements by management accountants and how these aspects may also require a reform in education and management accounting curriculum. Burns and Yazdifar (2001) asked UK qualified management accountants to highlight the ten most perceived management accounting important tasks, tools and techniques of 1995-00 and 2000-05.They founded that both sets of results, management accountants placed emphasis on traditional management accounting roles such as performance evaluation, budget planning and management, management accounts interpretation and presentation, cost and financial control. It was founded th at management accountants perceived budgets as the most important task also highly ranking variance analysis in the late nineteenth century. Nevertheless, numerous new areas such as ABC, balanced scorecard were attributed as low significance.They also founded the expected importance of future tasks considerably changed with more emphasis being placed on newer tasks particularly in strategic planning and implementation, valued-added identification and implementation, new information system implementation, operational information interpretation. It was also founded that despite budgets and variance analysis being highly rated in the 21st century, more importance was placed on ABC, balanced scorecards. Thus, future years have more emphasis on ‘strategy-aligned analysis’ and less emphasis on ‘cost control and cutting’.Identifying the requirements of management accounting practitioners can enable researchers to place more emphasis on such requirements during inv estigations in order to maintain its currency with practitioners. Burns et al (2001) questioned the reasons for changes in management accounting modelling the tasks as well as roles of management accountants. Consequently, they asked UK qualified management accountants to highlight what they considered to be vitally important contributions to change in management accounting.They founded that information technological advances including accountancy software advances and organisational restructuring as well as the new styles of modern management to be a vital contribution in driving change in the tasks and roles of management accountants. However, Scapens et al (2003) founded that customer orientated initiatives and globalisation were the two fundamental drivers for change. Johnson and Kaplan (1987) argued the existence of a ‘relevance gap’ between management accounting research and practice.They based their argument on fact that companies had one information system and e xternal financial reporting statutory requirements would take preference over the information required by internal management accountants. Burns et al founded modern technological advances including database capabilities enabled the storage of vast amounts of information which can be analysed in various ways meeting the needs of a number of users. Thus, managers can easily access variances and performances.Modern technology has contributed to the change of management accounting roles. Fundamental advances in management operations and productions such as just-in-time have challenged previous methods such as Ford’s mass production. Manufacturing automation has resulted in increased the relation of fixed costs to variable (Bromwich and Bhimani, 1994). New forms of competitiveness such as customer service, differentiation and innovation of products, quality. Hence, more importance is placed on the monitoring of crucial non-financial variables.Scapens et al (1996) argued that mana gers not necessarily management accountants have the necessary technology, access of data and in numerous cases the necessary skills to be their own ‘pseudo’ accountants. Burns et al (2001) founded that globalisation, customer focus and new forms of competitiveness have affected the roles of management accountants. There has been increased global competition, market volatility and shorter product life cycles contributing to the reform of management accounting roles.There has also been an increased focus on overheads as they now contribute to a substantial proportion of business costs. Consequently, there is increased focus on investigating the value added by overhead processes. Nevertheless, the analysis of overheads is a weak section of traditional management accounting. Considering the emphasis placed on traditional methods, it is questionable whether modern management accounting research is gaining recognition by practitioners despite such research anticipating chang es in modern day.Burns et al (2001) argued to the contrary of Johnson and Kaplan stating that a relevance gap does not exist. They argued that management accounting research has highlighted issues concerning management accounting change. Practice frequently searches for a quick fix to problems failing to address fundamental issues. Practitioners and professional sponsors fail to appreciate modern important investigations and management accounting research often seeking solutions to problems using traditional methods.Arguably, the problem does not lie in management accounting research which has accommodated changes but the way in which it is taught and generally accepted. It’s a shame that new management accounting solutions are not thoroughly researched independently in the way new medicines are. Researchers have acknowledged the requirements of incorporating social science theories, other social and economic elements into accounting in order to expand practice effectively. T his was seen with the development of a ‘reward and control systems deriving from micro-economics, in particular agency theory, and social psychology’ (Merchant, 1998).However, professional textbooks do not mention such investigations and the way in which research communicated is questionable to the sustainability of the subject. It is argued that professional bodies place more emphasis on the examination and training of traditional management accounting methods. Thus, practitioners are denied access to vital knowledge relevant to their tasks. Arguably, if practitioners do not possess adequate grasp of knowledge based on modern research and theory, they are more likely to accept new methods with questionable validity only to find limitations following implementation.Burns et al founded a growth in international management accounting researchers in the last 30 years despite it being dominated by the West. Thus, management accounting research is now dealing with new issues such as culture and ethnicity (Harrison and McKinnon, 1999), diverse political system regulation and governance (Puxty et al 1987), dispersion of accounting knowledge internationally (Jones and Dugdale, 2002). Arguably, management accounting research is now broader and more flexible accommodating cultural variations. Management accounting research is now anticipating challenges encountered by practitioners.This includes areas such as ‘contingent system design, motivations and rewards, environmental scanning and strategy, and non financial aspects of control’ (Burns et al 2004, pg. 16). However, it is questionable the level of emphasis placed on new methods anticipating changes in the real world and still the majority of contributions come from traditional methods which have been thoroughly tried and tested. Thus, considering the changes occurring in management accounting research and practice, practitioners need to adopt a cumulative continuous learning approach to upd ate ones knowledge.Langfield-Smith (1997) founded that traditional methods in management accounting have become more automated as supposed to disappearing supporting the findings of Burns et al. They stated that increased and changed forms of competition, combined with technological advances, have resulted in flexibility and flatter organisations reforming the roles of management accountants. Despite Burns et al concluding that researchers are accommodating the changing roles and requirements of practitioners, their research findings can be criticised by the findings of Lawal (2002).Lawal (2002) founded that academics and practitioners have different opinions of the important topics ought to be taught. Lawal (2002) founded that academics highly valued budgets, organisational behaviours and IT in comparison to practitioners. Lawal (2002) also founded that academics placed less importance on skills required by practitioners such as time-management, negotiation and team-working. She al so founded little innovative and participative teaching methods for example videos, field studies and outside business speakers.Thus, Lawal (2002) argued a reform in teaching methods to incorporate case studies, real-life projects, group work and presentations and increased involvement by practitioners in teaching, in-depth research projects. This would arguably help management accounting research maintain its’ currency with practitioners. New managements accounting researches, proposals and methods are criticised by practitioners often highlighting various inadequacies and limitations. Thus, many new proposals are discarded questioning whether management accounting research is maintaining its currency with practitioners.When evaluating new systems, practitioners often fail to refer to academic research findings on the potential obstacles and/or effectiveness. It is questionable as to whether management accounting research has been successful considering its little practical impact. This is vastly to do with the training and education which has excluded modern researches. Arguably, there have been poor mechanisms and incentives for turning research findings into suitable techniques and policies as well as incorporating such findings into teaching programmes as the roles and skills of management accountant’s change.Observations have found that professional accounting courses including many bodies emphasise on facts and methods abandoning fundamental theory and new research. Consequently, practitioners are sceptical of research having unrealistic expectations attempting to find quick and easy explanations/solutions to difficult problems. Practitioners do not obtain sufficient research skills from professional training. Burns et al (2004) founded that academics and practicing management accountants have different career paths obstructing shared interaction as well as understanding.Academics progression is based on research accomplishments as suppose d to professional involvements. Thus, academics place less emphasis on practitioner focussed research considering the little benefit to them. The issues relating to management accounting research maintaining its currency with practitioners lie in the communication. A method needs to be adopted whereby the two are closely interrelated. The research by Burns et al (2004) has helped provide an insight into the changing roles and skills required of management accountants as well as the changes that have occurred in management accounting research.Such research by Burns et al is vital in understanding the reasons for changes in practitioner roles as well as requirements in order for management accounting research to maintain its currency with the practitioners. Arguably, research has kept up with times to accommodate changing requirements of management accountants. However, its application in practice is questionable and whether management accounting research is actually maintaining itâ⠂¬â„¢s currency with practitioners. Thus, methods should be adopted whereby research is accompanied with supporting evidence involving tried and tested methods.Suitable mechanisms and incentives for turning research findings into suitable techniques and policies should be developed and incorporated into teaching programmes. Management accountants are part of professional bodies that can incorporate new developments to the area in teaching. Professional bodies often release publications and this method should be used to communicate new management accounting research theories and findings that can be successful in practice. New management accounting research and theories are available on the internet but it is questionable whether such findings are actually used.Thus, practitioners should be encouraged to read upon new publications of management accounting research. Considering research is constantly developing with roles of management accountants changing, there should be increased p ublications by professional bodies for members in order for research to maintain its currency with practitioners. Management accounting research is crucial to the healthy development of management accounting and maintaining its’ currency with practitioners.

Hartwick College Essay

In this extract, we are shown insight into what Pips character has become, by reacquainting him with the convict Magwitch. In this second visit, we can see the contrast between Pips first encounter, and this more shocking scene – how Pips persona has changed from an innocent youth, to a selfish, egocentric ‘gentleman. ‘ Also, we are given the startling revelation of Pip’s true benefactor, in a cumulative peak of excitement enriched with Dickens unique writing style. Throughout the text, Pip’s manner towards others, his way of thinking and even his narrative voice transform to create two reasonably different characters. The extract pictures him as a selfish, pompous young man who shows great ingratitude towards Magwitch – asking â€Å"inhospitably enough† whether he would like to come in and pushing away a plea for affection, from one who has worked hard all his life merely to provide Pip with a great wealth, and an undemanding lifestyle. When Magwitch returns to greet his beneficiary, he is treated with less than minor courtesy. Pip’s younger character however appears far more innocent, showing respect and even compassion towards a convict, who threatens and oppresses him, glad that his stolen food is â€Å"enjoyed† by a complete stranger. This highlights a stark contrast between the Pip displayed in the extract, and Pips younger self. Indeed Dickens seems to point out the irony of such a title – at the point in time when society considers him ‘gentleman’ he is anything but gentle – instead he appears malicious and critical of his former friend Joe whose visit he awaits with â€Å"mortification. † The wealthy gentleman is now a moral shadow of the impoverished yet guiltless Pip we are introduced to at the beginning of the story. His simultaneous ascent to aristocracy and fall into selfish spendthrift, leading to his subsequent redemption, are reminiscent of the ‘education’ novel popular at the time. These tales of ‘apprenticeship’ were often of mistreated orphans who managed to become wealthy and successful. The stories featured the many obstacles that the hero/heroine would have to overcome, and their popularity peaked around Dickens time. Typically, they explore â€Å"the youth and young adulthood of a sensitive protagonist† who is â€Å"in search of the meaning of life and the nature of the world† (David Cody, Associate Professor of English, Hartwick College.) They tended to contain autobiographical elements, and were sometimes influenced by contemporary social and industrial transformations. There are also some other genres on which the story touches upon, namely the ‘sensation novel’ – the numerable plot twists and shocking revelations form a large part of the structure – in this extract we see the startling disclosure of Pips true benefactor, which most contemporaneous readers would perhaps not have guessed. Indeed, these climatic scenes are pivotal to the books success as a serialisation, as well as a novel. To maintain interest in a book that is staged in weekly instalments, Dickens uses a variety of sub-plots to keep the reader engrossed. This eccentric writing style gives the text a unique quality, and the overall effect on the reader is one of shock and intrigue. The rendezvous with the convict in the graveyard, and his death, Miss Havisham’s fire, and the showdown with Orlick are among the most memorable climax’s we experience – as well as Pips second meeting with Magwitch. In this passage, we can see how the writer cultivates tension and makes the most of Magwitch’s secret. When extract reaches a pinnacle of excitement, many sentences become long and drawn out, and sentence complexity increases, leaving the shorter, snappier â€Å"why, Wemmick† and â€Å"would it be J? † to further promote interest in the plot, and give a tense, nervous atmosphere. As the scene draws to its zenith, as Pip’s â€Å"heart (beats) like a heavy hammer of disordered action,† we see powerful metaphors, and repetition of prominent, emotive language (â€Å"dangers, disgraces, consequences†) to give a sense of anxiety and intensify the scene. Language is also used here to alienate the convict from Pip himself. The rich, throaty slang of Magwitch’s â€Å"arterwards,† â€Å"spec’lated† and â€Å"warmint† contrasts against Pip’s more noble speeches of how he â€Å"cannot wish to renew that chance intercourse† and inquires of the messenger â€Å"since he undertook that trust. † The way Dickens estranges Magwitch from Pip is significant: it symbolizes the delusional notion that Pip is a gentleman, and that he is superior to the convict. Pip believes himself to be changed since that first chance meeting in the graveyard, and thinks that he is now above Magwitch, who is after all a criminal. The irony experienced by the reader is that Pip’s great wealth and upper class lifestyle is solely attributable to Magwitch himself, and this too is the source of the shock Pip describes. The way Dickens depicts Pips feelings is extremely powerful, as we see Pip â€Å"suffocating† merely from the shock of this news, news that his almost successful attempt to become a gentleman was funded by the dark relic of his youth, who’s felonious past appears further from gentry as is possible. This is of course, not the first time we see Pip’s character interrupted by members of his childhood – there was his meeting with Mr Pocket on his arrival to London, and more important, Joe’s visit to Pip in his London flat. This meeting, like the one with Magwitch we see in the extract, stresses the change we have seen in Pip’s character by comparing his manner towards someone he knew as a boy, and how he acts towards them now. Upon his visit, Joe is not treated with hostility as such, but Pip denotes that he â€Å"certainly would have paid money† to keep him from coming. As a boy, Pip always stayed friends with Joe despite his obvious stupidity and clumsiness, yet now he wishes more than anything to avoid him. Pips dismissal of Joe in this way turns the reader against him slightly – up until now we have supported Pip as the ‘good guy. ‘ Pips corruption from an innocent youngster to a snide gentleman, and then back into a more honourable businessman. This cycle of purity, corruption and redemption is an ongoing theme in Great Expectations, and makes subtle references to Christian beliefs of how the life of greed and sin that Pip lived in London, on the wealth of a convict, lead to a corroded innocence that was only liberated through his consequent illness and then his new beginning with Estella. The other theme that appears in the novel, is that of justice and the just punishment of crime. We first see this in the appearance of a convict (though this method of punishment was stopped in 1868 several years after the novel was written) and Dickens portrayal of him as an honest man, who admits to the theft of â€Å"some broken wittles† and â€Å"a dram of liquor† to save Pip from his sister, Mrs Joe. And again, Mrs Joe herself ties in to the punishment theme, her harsh disciplining of her husband and brother again lets us sympathise with those who are chastised, and not the chastisers. Later in the book, we see another example of this when Magwitch is caught. And more subtle instances of punishment such as Mrs Havisham burning for her corruption of Estella (corruption almost being a theme in itself) are also present in the text, giving us a thorough impression of how those who commit crime will always be brought to justice. The time setting of the novel allows Dickens to include these ideas of corporal punishment, convicts and public hangings. To a modern reader, these archaic, brutal methods of upholding the law appear old-fashioned. However, readers of the time would most probably have experienced these events fist-hand, in one way or another. Moral preaching’s of more passive action towards prisoners and criminals would be relatively new to them, whereas nowadays such views are accepted as standard. The feelings created by the views Dickens has on delinquency, and its retribution, are therefore significantly different between readers of-the-time and present day students. As a modern audience, we also feel compelled, excited, and fascinated by the books intricate plotlines, particularly in this extract. To inspire such strong emotions, Dickens uses many lingual and structural functions, the aforementioned effectiveness of metaphors and imagery to name one. He also writes in the 1st person, which is pivotal to the feelings the book creates: the story is far more personal and involving. Dickens also entwines his plots and subplots very carefully to create a prominent air of tension. As he builds up to the climax of one plot twist, he continues to insert little mini-dramas that leave us waiting for the main storyline to continue. He does this quite often in the novel, and it makes the reading most tense and far less predictable. To a less observant reader, Magwitch’s return would be a complete surprise – this is where the majority of this extract’s attraction lies. Overall, this extract is in fact one of the most outstanding scenes in the book. The build up of excitement before the final revelation of â€Å"Pip – your him! † is done with a variety of complex, literary devices, and the twist in the plot and return of a familiar character add to its success. It calls attention to Pip’s new assumed role, as a self-centred ungrateful gentleman, and is characteristic of Dickens writing style.