Hewlett Packard Spying Scandal Essay

Corporate misconduct, (or people’s misconduct so to speak) is an issue that has been dominating headline news in the American business world in recent years. Theodore Roosevelt, one time U.S. president was probably right when he said, â€Å"To educate a person in mind but not in morals is to educate a menace to society† (Platt, 1989). The American society has continued to suffer from corporate scandals, despite the fact that people are now better educated because behind each scandal and crisis is a possible lack of morals in the â€Å"educated people† running those corporations (Low et al, 2006). It should be noted that unethical behavior is not a new phenomenon in US business nor it is an issue of the US alone. Research Questions and Objectives The year 2002 witnessed the collapse of giants like Enron, Tyco, Arthur Anderson, WorldCom and less known cases like Morgan Stanley, Dupont and Prudential Financial amongst others all involved in one form of scandal or the other.   Such widespread corporate misbehaviors have left many people (including this writer) to wonder where things are going wrong. Should blame be placed on perceived weaknesses of legislation and accounting standards? Or is it that education is not producing the type of business graduates needed to prevent such scandals? (Low et al).  Ã‚   Do the misdeeds simply involve a few â€Å"bad apples†: a smattering of corporations that make the rest of American business look bad? Or is the problem much broader than that? Further, if it is a widespread issue, what needs to be done? (Clement R. May 2006). Such are the kind of questions this study is out to seek answers to in light of the Hewlett Packard Spying scandal of 2006. Conceptual Framework This section explains what the literature on business ethics suggests for achieving ethical behavior in an organization. It is hoped that this will lay a foundation for the analysis of the recent corporate misdeed of Hewlett Packard. Business Ethics: Business ethics, Black J. (2002) is the branch of ethics that studies what standards businesses should observe in their dealings over and above compliance with the letter of the law. This covers questions such as fair dealing with their labour force, customers, suppliers, and competitors, and the impact of their activities on public health, the environment, and animal welfare. If a good reputation helps to gain and retain business, ethical conduct need not necessarily conflict with profit, but there are bound to be cases where it does. Particularly difficult questions of business ethics arise in multinational firms, where practices such as gifts to officials, which are essential to doing business at all in some countries, are regarded as criminal in others. Previous research works on business ethics have pointed out some measures that can be taken within an organization to help foster a culture of ethical behavior. Many of these studies highlight the role that top management commitment plays in developing an ethical organizational culture. Weaver, Trevino and Cochran (1999) found that the commitment of top management is essential for ethical decision making to be integrated into a firm’s culture; in other words, management’s decisions and actions in promoting the program are more effective than making sure that the program addresses a long list of ethical issues. Trevino and Brown (2004) found that top executives must manage ethical conduct proactively by means of explicit ethical leadership and conscious management of the organization’s culture. To this end, they suggest that top managers should study the cultures of their organizations to see what ethical messages are being sent. The researchers also assert that executives should communicate the importance of ethics, reward ethical behavior, and model that behavior themselves. Holmes et al (2002) found that employees are more likely to engage in ethical behavior if top management is firm in its expectations of ethical behavior of all employees, including themselves (p. 97) while Harrington (1997) concluded that, to achieve ethical behavior, top management needs to gain social consensus through changes in organization culture and by encouraging employees to live up to their responsibilities. What constitutes â€Å"unethical† behavior? It is important to determine the types of corporate behavior to consider unethical, and to decide on the time period over which the data on that behavior should be gathered. Some types of behavior may seem unethical to certain individuals but not to others (Clement R, 2006).   He however identifies three conditions that seem to signal unethical behavior: – A plea of guilty by a firm to charges of misconduct; – by courts or government agencies against a firm as solid evidence of corporate misconduct, even if the firm is still appealing the ruling. – agreement by a firm to settle charges, often by paying a fine or agreeing to other restrictions on company behavior even if the firm is not required to admit guilt. The Hewlett Packard (HP) spying scandal Origins In a Newsweek report by Kaplan D, (2006), the confrontation at Hewlett-Packard started innocently enough in January 2006 when online technology site CNET published an article about the long-term strategy at HP and other information that could only come from a director quoting an anonymous HP source. HP’s chairwoman, Patricia Dunn, fed up with the ongoing leaks told another director she wanted know whom it was. According to an internal HP e-mail, Dun then took the extra ordinary step of authorizing a team of independent electronic-security experts to spy on the January 2006 communications of other 10 directors – not the records of calls (or emails) from HP itself, but the records of phone calls made from personal accounts. That meant calls from directors’ home and their private cell phones were intercepted. Dunn acted without informing the rest of the board and this caused a boardroom fury at the world’s largest technology company. In a related story by Sakuma P. (2007), the HP boardroom-spying scheme erupted into a national scandal , September 2006, after the company disclosed that detectives it hired obtained the private phone records of directors, employees and 9 journalists in an effort to ferret out the source of media leaks. The scandal also introduced the world to â€Å"pretexting,† a shady tactic in which detectives used other people’s Social Security numbers to fool telephone companies into divulging detailed call logs. In an interview with Newsweek, Dunn said she didn’t know that the investigation would reach such heights. Consequences In two separate press releases, HP announced a number of moves that was an outcome of 2 days of teleconferences among the board. – Patricia Dunn was to step down as chairwoman. – CEO Mark Hurd will replace her. – George Keyworth, the longest serving director and one who leaked information to a CNET reporter that led to HP’s investigation was to resign immediately. – Richard Hackborn, who served on the board since 1992 would become â€Å"lead independent director†. – A criminal investigation against Patricia Dunn, Kevin Hunsaker, HP’s former ethics chief who allegedly directed the probe, and 3 private investigators was started on 4 counts: use of false or fraudulent pretenses to obtain confidential information from a public utility; unauthorized access to computer data; identity theft; and conspiracy to commit each of those crimes. Each charge carried a fine of up to 10,000 dollars and 3 years in prison. How and Why HP successfully overcame this scandal Testifying before a congressional in September 2006, Dunn said she was repeatedly reassured by HP’s lawyers about the legality of its detectives’ subterfuge. In a Business Week report, November 2006, a state judge Cunningham in California dropped the above charges against ex-Hewlett-Packard Chair Patricia Dunn after she pleaded guilty. The court however did not accept the pleas of the other three defendants and offered to dismiss the charges against them if they met two conditions – by Sept. 12   2006, they must serve 96 hours of community service and complete any court-filed restitution requests made by victims. In a related story by CNN’s Katy Byron, (September, 2006), the court dismissed Dunn’s charge because of her cancer battle, according to the attorney general’s office. The dismissal came â€Å"not because she’s innocent but because she is sick,† attorney general’s spokesman Barankin told CNN. Dunn had breast cancer in 2000 and melanoma in 2002 and was diagnosed with ovarian cancer in 2004 and is still battling it. She also underwent extensive surgery last year after doctors discovered a malignant tumor in her liver. In a CNBC news report (september 2006) Hewlett Packard agreed to pay $14.5 million to settle the lawsuit brought by California Attorney General Bill Lockyer, whose office accused the company of unfair business practices in its attempts to unmask the source of boardroom leaks. HP also implemented changes to its corporate governance policies to ensure that future internal investigations are conducted legally. There was no finding of liability against HP. The settlement includes an injunction and agreement that the California Attorney General will not pursue civil claims against HP or against its current and former directors, officers and employees. The vast majority of the settlement — $13.5 million — will fund state and local investigations into privacy rights and intellectual property violations, Lockyer said in a statement. The personal efforts of new HP chairman and CEO, Mark Hurd also contributed greatly to HP’s successfull exit from the scandal. He says â€Å"We are pleased to settle this matter with the Attorney General and are committed to ensuring that HP regains its standing as a global leader in corporate ethics and responsibility†. The company shareholders rejected a proposal that would have given investors the right to nominate directors to HP’s board. About 39 percent of HP shares entitled to vote at the company’s annual shareholder meeting favored the measure, which was supported by funds including Calpers, the largest U.S. pension fund, and the California State Teachers’ Retirement System, the No. 3 fund. The above factors culminated in a slight stock price increase of HP in September 2006 despite the fact that September 2006 was a rocky month for the company. Its stock actually rose a bit that month, ending at $36.69. It has since climbed to nearly $40 as HP continues to perform strongly in the PC and printer markets. HP today has regained its leading position as the worlds number one technology company. The Role of Business Ethics in this Success The conceptual framework of this study laid some guidelines on how to identify when a company behavior should be considered ethical or not. In the context of the widely publicized Hewlett Packard spying scandal discussed above, there is no plea of guilt by the firm nor by Patricia Dunn and the other defendents to charges of misconduct, we haven’t seen a ruling against either the Carlifornia court that handled the case nor the Securities and Exchange Commissions against HP for unethical behavior. However, HP agreed to settle charges of $14.5 million to close the case and save the goodwill of the Silicon Valley icon. The payment, by ethical standards could be considered a fine, which is an evidence of unethical behavior, by a firm. HP’s intention, perhaps, as we have seen was to save the company’s image and probably in compliance with a court injunction or lawyer’s advice. Taking a look at HP’s Standards of Business Conduct, (SBC) , we find that it embodies the fundamental principles that govern   ethical and legal obligations to HP. They pertain not only to conduct within the company but also to conduct involving HP’s customers, channel partners, suppliers and competitors. (www.hp.com). As a business, remaining profitable and viable is a must for Hewlett Packard though this is not the only concern for the company. HP seeks uncompromising integrity through what each individual can contribute — to its customers, co-workers, company and communities. HP’s business success is dependent on trusting relationships. Its reputation is founded on the personal integrity of the company’s personnel and its dedication to the principles of: (www.hp.com) – Honesty in communicating within the company and with its business partners, suppliers and customers, while at the same time protecting the company’s confidential information and trade secrets. – Excellence in its products and services, by striving to provide high-quality products and services to its customers – Responsibility for its words and actions – Compassion in its relationships with employees and the communities affected by company business – Citizenship in observance of all the laws of any country in which the company does business, respect for environmental concerns and service to the community by improving and enriching community life. – Fairness to our fellow employees, stakeholders, business partners, customers and suppliers through adherence to all applicable laws, regulations and policies, and a high standard of behavior. – Respect for fellow employees, stakeholders, business partners, customers and suppliers while showing willingness to solicit their opinions and value their feedback. Conclusion From the above, we can say that Dunn’s investigation into the leak was simply in compliance with the first principle (Honesty) of the company’s code of ethics. Her intentions were clear from the outset – to probe into an alleged boardroom leak while at the same time respecting the principles of respect and fairness (last two principles) in the investigation. That in itself shouldn’t have been a scandal. It is the methods of the investigation – pretexting that raised controversy and finally erupted into a scandal. Patricia Dunn was able to prove before congress and the courts that such an act was carried out without her knowledge, though she acknowledged that an investigation was going on, which in itself complied with company ethics.

Automobile Industry in Korea: Rising or Falling?

Introduction Korea’s Automobile Industry is the fifth largest in the manufacture of cars and its parts merely imported from Japan and U.S.   Today, Korea is also one of the most highly developed in production of automobiles. By 1980s, the ability of Korea in auto industry has increased more than what they have expected. Producing 1.1 million units was really a great achievement, preferably in South Korea. Since economic boosted Korea for the past years, this made them partly one of the influential countries here in Asia. Its government supported the growth of this industry and other programs created to build a strong and developed industrial base, which created opportunities particularly in business and other industries in the country.   Not only in automobile industry that Korea has expertise, but also in the field of electronics, particularly cell phone manufacturing, etc. Discussion Over the past decade, Korea has proved its ability in the production, manufacturing and exporting of automobile way back in 1980. The industry’s growth has expanded five times of what the Korean’s expected. The question is, why or why not make the investment in the Korean automobile industry?  Korea, presently divided into North Korea and South Korea. A small country, yet one of the most civilized one. Because of their advanced technology as of Singapore and Japan, this made them one of the most progressive countries here in Asia. Automobile industry in Korea has been stable in the past years as founded in charts. However, competition is also stable. When the three big companies namely Hyundai Motor Co., Kia Motors, and GM Daewoo of auto industry in Korea were launched, a growing number of competitors immediately followed. Korea’s growing industry changed the lifestyle of the Koreans,   workers regret a jobless revival, everyone protest of increasing land and housing prices but their wages became similar to western countries, labour unions were also banned. South Korea’s investment in China in 2004, mainly steel and cars, passed Japan’s investment. Korean’s believed that they have an advantage in China because they do not suffer from post war hostilities than of companies in Japan. With the growing number of jobs, Korea experienced increased number of labourers and employment suppleness. They even hired workers from other countries just to increase the number of employees that they need in a particular company. Korea is now facing an economic stability and government financial situation. They continue to improve their work, and this means a continued financial problems. Korea has its access to potential and capital markets for their products are renowned globally. Their importers were also acclaimed to be among of the leading countries in Asia and in the world like U.S and Japan, which are also their primary manufacturers.  Despite these problems, Korea still emerged as one of the leading countries in Asia in terms of investments and exports. For the next two years, the automobile industry planned to increase their sales from 28% to 50%. Conclusion Korea proved that it is worth to make an investment with them in automobile industry, for they are financially stable; they had stable workers and are supported by their government policies. Business opportunities also increased due to their implementation of the â€Å"Import Diversification Program†, which pushed Korean firms to transfer purchases from Japan to purchases from U.S. this gave Korea a great opportunity in the business world, especially in automobile industry. One of the dangers of investing in Korea’s auto industry is its competition to other neighboring countries that also manufactures automobile like China, which they say that they would enter the world market. It is also said that China produced over a million automobiles in 2004, which was really a great start.  Another danger is the constantly changing of the country is laboring policies. Korean government controlled the formation of labour unions, which is why their policies are always changing. Because Korea’s economy grew rapidly, costs of necessities increased rapidly. They need more persons to work in their companies, because jobs increased as their economy grew larger and wider. Sure, they have access in other countries like U.S and Philippines; their only problem is the number of workers that would try their luck in working in the country. Though Korea claims that their automobile industry aims a great success, we believed that it is not that worthy to invest there because of China’s entering in the world market, the restrictions of labour unions and the attempts of the labourers to conduct company strikes. Maybe, investors will increase if they still improve the status of their growing business. It is not that bad to invest in the auto industry of Korea, only if China would not be a great competitor. By 2020, industry tycoons do agree that China could produce a mass of 20 million cars yearly. This proves that China could really make it ahead of Korea in the auto industry. China is also one of the most exporters of cars and cell phone units, which range from 27-30% than of Korea that only gained 26-28% in the past years. If Korea could only improve their way of treating exporters, they would probably get as much customers like of China. Korea’s only edge in China is that their currency, the won, improved a lot better for it threatened the cost of U.S dollars as seen in charts and in newspapers. We’re not saying that investing in Korea now is bad, only that the competition is not that healthy than of their previous years. References Savada, Andrea Matles and William Shaw. â€Å"South Korea: A Country Study†. (1990). 17 June 2007. http://countrystudies.us/south-korea/50.htm. Brooke, James. â€Å"The New York Times†. 18 October 2005. 17 June 2007. http://www.iht.com/articles/2005/10/18/business/korea    Jones, Heather S. â€Å"Business America†. 31 August 1987. 17 June 2007. http://findarticles.com/p/articles/mi_m1052/is_v10/ai_5151117.            

Anthony Burgess’ View of the Impact of Wrongful Actions in Humanity as Illustrated In His Book, A Clockwork Orange

Anthony Burgess’ View of the Impact of Wrongful Actions in Humanity as Illustrated In His Book, A Clockwork Orange A Clockwork Orange Anthony Burgess, author of A Clockwork Orange, explains the theme of the necessity of evil in human nature in this novel. The main character, Alex, is despicable because he gives free rein to his violent impulses, but that sense of freedom is also what makes him human. This book was one that I thoroughly enjoyed, even though the language was hard to understand at first. A Clockwork Orange is set in a futuristic dystopia governed by a totalitarian state. Ordinary citizens have fallen into obedient complacency, unaware of the growth of a violent youth. Alex, the protagonist of the story, leads a small gang of criminals (Dim, Pete and Georgie) through the streets, robbing and beating men and raping woman. Alex ends up getting caught in his latest act, breaking into a cottage and beat up the man inside before raping his wife while making him watch, ends up with Alex being taken to prison, where they attempt to brainwash him into being a model citizen. First, I may warn potential readers that this book is not for the squeamish, when the book goes into extreme details about the violent crimes that Alex and his â€Å"droogs† (friends) commit, but the one thing that stuck with me throughout the book was the â€Å"Ludovico† technique, which was set in place by the government to brainwash the criminal into being model citizens. It effectively denies Alex, when it’s used on him, the ability to be a ‘moral agent’ and being able to freely choose between right and wrong. Because of this, Burgess creates the debate of freedom versus enforced obedience and ‘goodness’ as being the best in and for the society. In A Clockwork Orange, Burgess created a dissonant, hyperreal but easily recognisable world. The violence being slapstick and theatrical while also gruesome, and making some readers stomachs churn. The language is also a challenge, but pays off once you come to figure out what means things like ‘friends’ and ‘blood.’ The â€Å"Nadsat† (slang) spoken by the characters does more that confuse the readers at first, but it also draws the readers into Burgess’ world and makes the reader want to figure out what â€Å"droogs,† â€Å"Nadsat,† and â€Å"bezoomny† means (friends, slang, crazy). The language compels the reader to think while reading, having them try to remember what each different word in â€Å"Nadsat† means in English. The way that Alex speaks, both formally and some recurring anticlimax in his voice makes this process seem more sinister and occasionally funny. In this final chapter, Burgess has Alex growing out of his wrongdoings, looking back and regarding it as a little bit sad and embarrassing (the actions of dumb kids) and, as the clichà © goes in books and film alike, determined that his own children won’t make the same mistakes he did at a young age. It’s the redemption, and the stunningly mundane lesson of real life that made Alex grow up and realize all of the mistakes that he made as a teenager. A Clockwork Orange is an amazing book with advanced language, great descriptions and a book that thoroughly explains that theme of the necessity of evil in human nature, with the language, devices used in the text, and through descriptions.

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APPLYING ECONOMIC PRINCIPLES TO EDUCATION - Essay Example This principle amounts to greater competition in the market place. To effectively compete with each other, organizations will be forced to improve the quality of the products or services that they offer in order to give better value to their customers. This will also be advantageous to the consumers because some companies tend to lower their prices to increase their market share. In a free market economy, people â€Å"vote† through their purchases of goods and services. Those getting the most â€Å"votes† are the ones that offer the best value for the people’s money. With support coming from the consumers, these firms have the dollar power to further improve on the quality of their products and services. Those firms who fail to attract enough customers/buyers are those who do not provide a good value. If they do not shape up, these organizations will eventually go by the wayside. 2. Are there other public functions that might benefit from more competition, includ ing competition from private firms? Yes, there are other public functions that might benefit from more competition, including competition from private firms. These organizations would include those in the area of health care (hospitals, day-care facilities & retirement homes), low-cost housing, transportation, telecommunications, and infrastructure.

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Case study on United Parcel Service - Essay Example After achieving success with this venture, Jim Casey merged with Evert McCabe’s Motorcycle Messengers. Then as a step towards creating a unique brand, in 1919, the company expanded beyond Seattle and changed their name to United Parcel Service, and then onwards it has been an upward progress. â€Å"From its humble beginnings, UPS has grown into a global giant† (Deresky, 2006, 342) According to the Insiders as well as the industrial circles, UPS’s corporate culture is always on the fast edge of the hard-working culture to compliment it. Even though the job at UPS involves routine tasks, out of the ordinary things tend to happen and the corporate culture of UPS has inbuilt mechanisms to encourage decision-making and feedbacks to solve those things. UPSs e-commerce initiative has developed into a full-fledged one with specific a website (www.ec.ups.com) for operations. It features a fully functional online store with UPS’s e-business tools to guide potential customers. The other initiatives of UPS in e-commerce sector are Usenet, eVentures etc. Electronic Commerce or e-commerce is the term given to denote the virtual marketplace where buying, selling and transactions involving goods, services etc takes place with the Internet as the base. Most major corporations have got themselves involved in this sector as the potential of e-commerce is growing every day with the ever-expanding Internet and information technology. The advantage is, it provides an easy and secure way for customers to effect transactions. It shrinks the physical distances and gives a wider choice to make about products and services. It also gives the feature of fast transactions, where every business can be done in seconds. UPS like the other majors joined the bandwagon of e-commerce, patronizing it fully. That is, with the spread of the Internet in the decade of 90’s, UPS saw the prospects and created a separate department for it in 1996.

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Negotiation skills - QUESTIONS 2 Essay Example | Topics and Well Written Essays - 1500 words

Negotiation skills - QUESTIONS 2 - Essay Example Avoiding in a conflict situation generally means postponing, showing lack of assertiveness or withdrawing from issues (at present time) in order to deal with them later or in other words showing reluctant behavior in terms of solving problem. However this avoidance may be deliberate in order to come up with the better solution later or for so many reasons (Trainer, 2012, p. 3). Moreover using this technique too much can result in creating a communication gap which further leads towards unhealthy co ordination as both parties are unable to know the stance of each other. Similarly if avoiding is overused it may affect the nature of the decision or stance of the other party. Likewise if avoiding is underused it may result in creating a situation which might hurt individuals feeling as usually discretion is not very much opt by individuals. Furthermore if individual is less likely to follow avoiding policy he is likely to be threatened by various issues and conflicts. Accommodating generally means sacrificing ones interest, goals or motives in order to give preference to others for satisfying their concerns. It can be use for number of reasons for instance if an individual is wrong and feels like correcting himself, or if a boss in a company accommodates employees in order to give them chance so they can learn from their previous mistakes (Trainer, 2012, p. 3). Accommodating if overused can lead towards losing of respect as employees are likely to make mistakes and take employer for granted. Moreover employer may lose his overall control over his employees because of overuse of accommodating factor. However if this factor is underused it may result in creating trouble in so many dimensions, for instance in creating goodwill, realizing, and accepting one’s own mistakes. Compromising is a phase in which both parties understand each other’s point of view and are willing to give up

MGM465-0801A-05 Business Strategy - Phase 3 Individual Project Essay

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Discussion Board - Essay Example Furthermore, the Jews believed that God was able to reverse the effects of sin and completely reverse consummate the reconciliation with the humankind. These views are consistent with mine, for I believe it is only God who has the powers and ability to reconcile us with Himself after we fall short of His will. Several changes occurred in the Jewish view on God and the world during this time. Foremost, there was an intensified and revitalized given the events of 6th Century BC when the Jewish nation suffered a series of exiles. The Jewish people also suffered the effects of Hellenism at this period, and the Greek beliefs affected their basic understanding and belief in diminution of anthromorphism (Gee 1995). Although the Old Testament of the Hebrews acknowledges the concept of immortality, the period of intertestamental shift made the Jews lay more focus and emphases on immortality of the soul. In addition, there was a shift from the isolated lifestyle the Jews had lived for the whol e time. They became more open and interactive with other communities, thanks to the effects of Hellenism. The period also marked a change of the Jews’ view of God from His imminence to His transcendence. They refrained from using the name of God in all their undertakings as had been the custom before the Intertestamental Period. ... They called him the Judge, meaning he would deliver justice and fairness to the Jewish nation against oppressing Gentile nations. Another title was the Deliverer, for whom they waited to deliver them forever from Gentile rule. Shepherd mean they were waiting for one who would guide them with love for all and protect them from their enemies. They also referred to him as the Stone, their strength upon which the Jewish nation would be built, not to be shaken by anyone (Carson, Douglas and Julius 2001). Other titles included Elect and The Chosen One, the Righteous or Just One, Son of God or Son of David and Elijah. To a nonbeliever and a new convert, the best title to describe Jesus would be the Righteous or Just One. According to the scriptures, Jesus preached and lived righteousness. There is no single instance in the scriptures the scriptures that reveal an act of unrighteousness in the life of Jesus. He helped the poor and the despised of his time get recognition in the society. He d elivered just judgments to those who were viewed too evil. According to the Jews, Gentiles were considered sojourner in their lands, strangers who had little or no knowledge of God (Carson, Douglas and Julius 2001). Jews viewed the Gentiles as evil people who were not worth associating with (Gee 1995). However, they stood a chance of being in good connections with the creator if they converted to Judaism. God-fearers referred to the class of Gentiles who sympathized with the beliefs of Judaism during the Second Temple Period. Whereas the God-fearers were not bound by any rules to follow Noahide Laws nor adhere to the rules of Jews, procelytes had the obligation to live by these customs and laws (Gee 1995). Procelytes could either be Gentiles converted into Judaism or

The English Language Essay Example for Free

The English Language Essay Language is a constant. It is a component that will be forever intertwined into the fabrication of our global society. This multi-sensory means of communication, consists of not only the verbal and writing, but also touch, smell, sound, body, and gestural elements. As human beings are social animals, people have the instinct to communicate with others, to share our feelings and thoughts, and as a result, language development in each individual becomes an instinct (Pinker, 1994). Since language is the tool used for communication, Wittgenstein says, â€Å"The limits of my language are the limits of my world†. It is implied that people speak just one language and thus live in only one world, and if you are not capable of using the language, your world is narrowed. However, Einstein has an opposite opinion; he devalues the importance of language and says, â€Å"The words of a language as they are written and spoken do not seem to play any role in the mechanism of my thought.† It is widely believed believe that language is the bridge connecting individuals and the outside world; thus, it is a crucial element of human life. Language can be inextricably tied to identity, and it can also be disentangled. In Einstein’s quote, he says that the language of speech and writing doesn’t influence his thought, because the mechanism of his thought is extraordinary. As a widely recognized great scientist, his point might be that people should think something beyond what is already written, and also, â€Å"the sum of human wisdom is not contained in any one language, and no single language is CAPABLE of expressing all forms and degrees of human comprehension.† (Ezra Pound, The ABC of Reading). With language as your tool, you are capable of exploring other worlds. Wittgenstein’s statement failed to include the fact that there are worlds formed based on different languages. It is through such language that one is either included or excluded fro m social groups. Language pervades social life. It is the principal vehicle for the transmission of cultural knowledge, and the primary means by which we gain access to the contents of others minds. Language is implicated in most of the phenomena that lie at the core of social psychology: attitude change, social perception, personal identity, social interaction, intergroup bias and stereotyping, attribution, and so on. Just as language use pervades social life, the elements of social life constitute an intrinsic part of the way language is used. Linguists regard language as an abstract structure that exists independently of specific instances of usage (much as the calculus is a logico-mathematical structure that is independent of its application to concrete problems), but any communicative exchange is situated in a social context that constrains the linguistic forms participants use. How these participants define the social situation, their perceptions of what others know, think and believe, and the claims the make about their own and others identities will affect the form and content of their acts of speaking. For present purposes, it may be more helpful to think about language as a set of complex, organized systems that operate in concert. A particular act of speaking can be examined with respect to any of these systems (G. Miller, 1975), and each level of analysis can have significance for social behaviour. For example, languages are made up of four systems—the phonological, the morphological, the syntactic, and the semantic—which, taken together, constitute its grammar. Australia is often described as one of the ‘classical countries of immigration’. The concept of being a ‘nation of immigrants’ is at the centre of Australian identity. Australia is a unique country, and it has a long history of population growth due to immigration. Australia is a young country and has not fully developed. It is commonly called â€Å"The Land of Opportunity.† Such grammar can be exclusive to specific culture along with social purposes. Melbourne, for example, has many sub-cultures that combine to create the overwhelmingly diverse and generalized culture that defines the city as a whole. We are constantly influence through the language that other cultures have introduced into our traditional linguistics. The English Language has changed and shifted drastically form the Anglo-Saxon version to our current speech. Over time, linguistics from cultures such as French, Latin and Greek have evaded our traditional tongue, creating a new cultural identity; ever evolving and adapting to the modern world. In the modern world, human need to belong still influences language development and identity established through such language. People are proud of their accents, dialects, and languages. It is a mark of uniqueness and simultaneously a mark of belonging and excluding. People who live in different areas are proud to speak the way they do, because they are different from the rest, but are still part of a group. Whereas, accents and dialects are marks of belonging, and something that most people are proud of, language development has been influenced by less idealistic reasons. We can see how important language is in both the purpose of communication and widening the world of an individual; it is a way of knowing. If an individual is not capable of using a language, his world is limited yet it is reasonable to assume that the language used by most people is not always significant in mechanism of everybody’s thoughts, because somebody’s mind might work differently. Throughout history, human needs have affected their behaviour, how they lived, and how their language develops. Food, water, and a place to belong were some of the major needs to begin with, but as time went by, they were joined by other needs. Economic, political and scholarly needs also influence language development. The influence of human development and need will continue to effect language expansion, and will continue to as long as the world lasts.

Case Study: An English Language Learner

Case Study: An English Language Learner Introduction Second Language Acquisition (SLA) or L2 (language 2) acquisition refers to the process by which a person learns a second language, in addition to their first language (L1). Although it is referred to as SLA, it applies not only to the acquisition of a second language but a third and fourth also, covering any other language apart from the first (Stefà ¡nsson, 2013). The purpose of this case study is to provide a holistic depiction of an L2 English language learner relative to topics such as educational and cultural background, language learning experiences, language learning preference, the status of English in the learners home language as well as the extent to which the learner identifies with being bilingual/multilingual. This case study will draw upon the learners own experience while including relevant theories and literature. Finally, I will conclude this case study by making recommendations on any future developments the learner can make based on their own experience, my analysis of their language as well as drawing on relevant literature. For ethical reasons the learner will be referred to as Jane from here on. Jane is a 22-year-old Aston University student; living in Birmingham, West Midlands with her parents, who are both teachers, and her two siblings. Currently studying Sociology and International Relations, Jane enjoys reading novels in her spare time while holding down a part time job as a Waitress. English is one of three languages spoken by Jane. The first being Urdu, the language used to communicate with her parents and family back in her home country of Pakistan. English is used most commonly, used for daily life at university, work and occasionally at home but only with her two siblings. Lastly, French, which has been picked up as a third language. Jane Doe classes herself as an intermediate French speaker. Having taken a placement year in 2016, she has had the opportunity to develop her French while teaching English to learners in France for a year. Learners Background Although Jane is technically considered an L2 leaner she speaks English as a native speaker would, as well as understanding the grammatical and structural rules of English language, she is well versed in linguistic features such as idiomatic expressions and acronyms. Born in Lahore, Pakistans second largest city, she came to Britain at a young age with no proficiency in English language, neither spoken nor written. By the IELTS speaking band descriptors, Jane was a band one with no relatable English, unable to communicate. At the time the education system in Lahore only required children to start learning English in year 6, which meant she had not had the opportunity to learn English at school as she left in year 4. As English was not spoken in her home, she came Birmingham with only the ability to communicate in her home dialect, Urdu. Coming to Britain at such a young age gave Jane a slight edge when learning English as she found she picked things up a little quicker than if she ha d relocated at an older age. It is very common for primary schools in Birmingham to provide English language assists in primary education due to the high number of migrant families something along this lineà ¢Ã¢â€š ¬Ã‚ ¦ Fortunately, her primary school teacher had a teaching assist who happened to speak her dialect, this greatly aided her English language acquisition, as she had someone who could break down the difficult grammar and vocabulary in a language she understood. As English was not spoken in her home, school was her only medium for learning English and this support system not only improved her English but also her confidence, the ability to interact with native speakers drove her passion to want to learn English. She quickly found herself watching television programmes in English and reading English books. By the time she left primary school at 11, she was fluent in English. After two years of schooling and a combination of English language lessons, her English was already at an advanced level. Generally young learners have more of a positive attitude towards SLA and are highly motivated. Despite studies showing motivation in young learners beginning very high and decreasing over time (Nikolov and Djigunovic 2006), English has become somewhat of a passion for Jane. Although it was a necessary tool for her early years, she thoroughly enjoyed studying English Language and Literature at GCSE and A Level and plans to pursue a higher education programme in English Literature in the future. Effects of Bilingualism Most of the worlds population is multilingual. Two thirds of children globally are brought up in bilingual environments (Crystal, 1997). It is important to consider a learners environment when trying to form a well-rounded analysis of their L2, especially as a bilingual learner as there are more factors to consider. While bilingualism has not proven to have inherent negative effects on language development, there are many variables that affect a bilingual childs progress. These variables include the context in which language is learned, parental attitudes towards bilingualism, the status of the language(s) in the community and the socio-cultural context surrounding the childs growth (Bialystok, Majumder and Martin, 2003). The general encouragement a child receives while learning English as a second language tends differ per learner and their background. Regardless, a positive outcome is more likely to result from the encouragement and respect shown not only towards the second languag e but also the native dialect. Both factor and play an important role in a childs development and attitude towards language (Bialystok, 2008). SPEAK ON HER PARENTS BILINGUALISM ATTITUDES TOWARDS ENGLISH AT HOME AND IN HOME COUNTRY HOW TO THIS AFFECTED HER LEARNING ENGLISH Research Methodology Identify errors first then explain them Data collection is often used to set the direction and boundary for a study. Several factors are considered before data collection begins, including but not limited to: setting a time frame for collecting data (for this case study I only needed an afternoon as the interview took 25 minutes), deciding what type of participant is needed (an English language learner), and a location (Bryman, 2012). As the learner is also a student at Aston University, the interview took place in a private room in the university library. The primary aim of this case study is to devise a well-rounded representation of an English language learner, to do this effectively the planning and completion of an interview with a learner, was essential. Research shows that one of the most flexible and widely used methods of gaining information about a persons experience, feelings and views is through an interview (Oxford Journals, 2016). Interviews are a qualitative approach to data collection; they are one of several methods used to understand the underlying motivations and reasons behind a topic, to gain an insight into a problem or develop a hypothesis. Qualitative methods differ slightly, notably by analysis as opposed to collection. The analysis of quantitative methods employ more of a numerical approach to quantifying a problem, the data is usually transformed into useable statistics which is not a necessity for this study. Dr Nathan Page, a professor at Aston University, organised the pairing of learners. To make the process fair, several names of learners were placed into a hat and I picked a name at random. Prior to my interview I completed an ethics form as well as preparing the questions I planned to ask my learner. As the University Ethics Committee requires all research involving human subjects to submit ethics forms for review, my form had to be approved before I could progress with the interview. This also ensures my research meets the standards of ethical research expected by the University. My interview took place in week 11 of the first term in the 2016/17 academic year. In preparing for my interview I considered some of the ethical issues which could arise from my research such as; the sensitivity behind subject matters, the English proficiency levels of my learner and any discomfort that may arise during the interview. I recorded the interview for research purposes so I also had to conside r any issues which may result from this. To protect the learner, I addressed these issues by expressing their right to anonymity further emphasised with the use of a pseudonym throughout this case study. The recording was taken on a password protected device, not shared and will be deleted as soon as this research is completed. Their right to withdraw was made clear to the learner verbally and on a consent form, along with the other rights, which she signed prior to the interview. Taking point from Mann (2011) I ensured greater focused remained on myself during the interview, by influencing the learners responses to a certain extent I could effectively control the direction of the interview while still giving the learner flexibility to elaborate her answers. This minimised the risk to my safety while remaining mindful of the learner. Using co-construction, I could elicit certain details which were of relevance to my analysis that otherwise, may not have been obtained. Learners Educational Background I would classify Jane a sequential bilingual, Jane began learning English with a high proficiency in Urdu. Jane, Pakistan born, began her education in Lahore the countrys second largest city. The primary education system was slightly different in pre-2002 with English being introduced into the curriculum from year 6, as opposed to recent years where English has been taught to school children at a much earlier age (Coleman and Capstick, 2012). In Janes case learning English was an immediate priority once she arrived in England. During our interview Jane Doe talks about coming to England in 2002 with her family although her parents had relocated years before for work purposes. At 8 and a half, with no prior knowledge of English, she recalls reading newpapers and watching the news to gage some sort of understanding of the language before starting school. Fortunately, upon starting school an English language teaching assistant was present, easing the transition was made easier as the TA spoke her home dialect, Urdu. As the curriculum was taught in English, the teaching assistant ensured Jane Doe did not fall behind in her studies by acting as a translator, while also helping with her English language acquisition. [LINK TO SOME SORT OF STUDY OF TEACHING ASSISTS IN AREAS OF HIGH IMMIGRATION] In her first-year of learning English, Jane had after school classes to improve her English language, these were often very informal with few specialised activities to target grammar. Reflecting an audiolingual approach to teaching which is based on the behaviourist theory of learning, these lessons focused on oral practice, repetition, pronunciation and communication. Janes language teacher adopted more of a communicative approach teaching, which is reflected in the way she speaks today. Communicative language teaching aims to educate the learner on communicative competency as opposed to grammatical competency (Richards, 2006). Jane vividly recalls these lessons focusing more on vocabulary and helpful phrases. While they were helpful, she found her strength in language acquisition came mostly from watching English or Asian programmes with English subtitles or reading books and newspapers. As indicated by Altenaichinger (2003), CLT has been highly favoured by teachers over the past 2 0 years, scholars have also agreed because of the central focus on the learner and CLTs emphasis on communicative proficiency in teaching. In the early 2000s English was not as widely spoken in Pakistan, she found it difficult to rely on her parents for assistance as they had only began learning English two years prior and had little knowledge to help. Research shows that children find it easier to learn a second language as they are still learning the mechanics of their first language, they have not yet developed the advanced elements of grammar and still use simpler syntax making the standard fluency much lower (The Telegraph, 2013). Jane took it upon herself to learn English, she explains although it was necessary for school she genuinely enjoyed reading and still does, she frequently reads books and articles to improving her lexis. the extent to which the learner identifies with being bilingual/multilingual Analysis of Learners English As Jane acquired English through a largely unstructured approach, I will begin her language analysis by using Ellis and Barkhuizens (2005) Error Analysis (EA). Error analysis is a very important area of SLA and foreign language learning (FLL) (Jabeen, 2015). It is typically a good first step in analysis due to its systematic nature and while errors are not always bad, they play a crucial part in the process of learning a language. The theoretical framework of analysis will mirror Corders (1974) classification of errors into four principle categories; addition, omission, selection and ordering. Consider the sample below, an extract taken from my interview with Jane: J A N E: So yeah just like erm at some point it was like I need to teach them how to do this but you know erm- I NT E R V I E W E R: -mhm hmm- J A N E: -I donno know how to do it myself because Ive just learnt it- I NT E R V I E W E R:- you just picked it up J A N E: -Ive just picked it up so Ive never really learnt it from a book or anything erm speaking of grammar so it was just like you know we take it for granted that I can speak it but actually its really difficult to learn it, the English language, and I felt like that actually French was much easier to learn I NT E R V I E W E R: mhm hmm- J A N E: -than English was. _____________________________________________________________________________ Table 1 Lines 17 to 27 of Partial Transcription of Interview The sample of learner language in Table 1 was collected from a partial transcription of my brief and informal 25-minute interview with Jane, whose L1 is Urdu. It is important to consider these environmental factors when analysing the language. The sample was collected as part of this study, throughout the interview semi structured questions were used which allowed the learner to speak more freely. Some learners are exposed to different varieties of English language which differ from the standard dialect (Ellis, 1994). For example, in comparison with the norms of British standard English the utterance: Ive just picked it up so Ive never really learnt it from a book or anything is perfectly normal and often considered a colloquial form of speech. However, grammatically speaking including really falls under the category of an addition. Dulay, Burt and Krashen (1982), as part of their surface strategy taxonomy of errors, define additions as the presence of an item that must not appear in well-formed utterances. With that said, it is important to note never really has become normalised in British spoken English, especially in younger generations. Therefore, I would class this as more of a mistake than an error. Generally, errors arise from lack of knowledge and competency, which doesnt seem to be the case here, rather a processing problem in which the learner has fallen back on an alternative, non-standard rule that they find easier to access. Mistakes are a regular feature of native-speaker speech and can arise for several reasons; memory limitations, competing plans or lack of automaticity. By the IELTS speaking band descriptors, Jane falls within the remit of a band 8 (British Council), communicating fluently with occasional repetition with little self-correction. Points are developed coherently and appropriately while sentences remain error-free with a few non-systematic mistakes which can be overlooked. Consider the sample below, an extract taken from my interview with Jane: J A N E: You know when you go to the shops or the malls, they all [Pakistan locals] speak their own language, but now that I go back its a lot more modernà ¢Ã¢â€š ¬Ã‚ ¦ I do live in a city Im not from the village sideà ¢Ã¢â€š ¬Ã‚ ¦ I live in the second biggest city of Pakistan so now that Ive been back its quite modern- I NT E R VI E W E R: -mhmm hmm J A N E: So you know people will er dress er in er a erm westernised wayà ¢Ã¢â€š ¬Ã‚ ¦ its very westernised so they speak English as well in their everyday lives they, they speak English maybe with their parents as well- I N T E R V I E W E R: -mhmm hmm Table 2 Lines 44 to 53 of Partial Transcription of Interview This data is extracted from my informal interview with Jane using unstructured open interview questions. Lets consider ordering. Dulay, Burt and Krashen describe misordering as the incorrect placement of a morpheme or groups of morphemes in an utterance. While discussing the status on English in her home country, Jane says: But now that I go back its a lot more modern Taylor (1989) points out the reason for this error may be psycholinguistic, sociolinguistic, or epistemic. Psycholinguistic reasons are more to do with the learners knowledge of language and difficulties with producing this knowledge. Sociolinguistic sources stem from the learners ability to adjust their language with the social context. Epistemic reasons centre around result of lack of world knowledge. As the error is repeated: so now that Ive been back its quite modern It has been disregarded as a mistake and as such will be analysed as an error. Competency errors can happen for three reasons, Richards (1971) distinguishes these as; interference, intralingual and unique. Interference errors can occur as a result of the use of elements from one language while speaking another. It is quite possible Jane has transferred the rules of discourse from her L1, Urdu, as the morphemes may be arranged that way in an equivalent sentence. The interview took on a very informal structure, the conversation reflected that of two friends talking in a social context. Therefore, analysing her language proved quite difficult to some degree, Janes speech reflects a native and many of her mistakes or errors are a feature present in native language speech. USE MORE EXAMPLES J A N E: -not a lot of people spoke Englishà ¢Ã¢â€š ¬Ã‚ ¦ I N T E R V I E W E R: à ¢Ã¢â€š ¬Ã‚ ¦hmm Recommendations for Learner For language learners, I believe it is vital to be exposed to opportunities which allow them to explore language in a classroom and to practice it in a social context. The notion that language is learned by doing has been at the forefront of teaching for many years however it doesnt necessarily relate to all learners. Although studies show that children learn language best through imitations, games and singing, moving forward I feel the activities that would benefit Jane most are those which focus on grammar. In spoken discourse, her fluency and accuracy enable her to converse very well with native English speakers. However, she is keen to build up her vocabulary and improve the complexity of language. By improving her grammar, Jane should find it easier to form more complex sentences without too much hesitation. 6) Recommendations for learner (relate to any identified development needs/what specific activities would you recommend? Why? can be linked to theories/literature) Bibliography Bialystok, E. (2008). Second-Language Acquisition and Bilingualism at an Early Age and the Impact on Early Cognitive Development. York University: Canada. Rev Ed Bialystok E, S. Majumder, MM. Martin. (2003). Developing Phonological Awareness: Is there a bilingual advantage? Applied Psycholinguistics; 24(1):27-44. British Council. https://takeielts.britishcouncil.org/sites/default/files/IELTS_Speaking_band_descriptors.pdf Bryman, A. (2012) Social Research Methods. Oxford: Oxford University Press. Coleman, H. Capstick, T (2012). Language in Education in Pakistan https://www.teachingenglish.org.uk/sites/teacheng/files/Language%20In%20Education%20in%20Pakistan.pdf Corder, S. P. (1974). Error Analysis. In J. P. B. Allen, S. Pit Corder (Eds.), Techniques in Applied Linguistics. London: Oxford University Press. Crystal, D. (1997). English as a Global Language. Cambridge University Press Dulay, H, M.Burt and S.Krashen. (1982). Language Two. New York: Oxford University Press Ellis, R (1994). The Study of Second Language Acquisition. Oxford: Oxford University Press Ellis, R. Barkhuizen, G. (2005). Analysing Learner Language. Oxford: Oxford University Press. Jabeen, A (2015) PDF on Destop Mann, S. (2011) A Critical Review of Qualitative Interviews in Applied Linguistics. Applied Linguistics, 32(1) 6-24 Oxford Journals, 2016 http://www.oxfordjournals.org/our_journals/tropej/online/ce_ch14.pdf Richards, J. (1971). A non-contrastive approach to error analysis. English language teaching journal 25: 204-19 Richards, J. (2006). Communicative Language Teaching Today. New York: Cambridge University Press Skehan, P. (2001). Tasks and Language Performance Assessment in Bygate, M, Skehan, P and Swain, M (eds). Stefà ¡nsson, E. G. (2013). Second Language Acquisition: The Effect of Age and Motivation http://skemman.is/stream/get/1946/15018/35741/1/BA_EinarG.pdf The Telegraph, 2013 http://www.telegraph.co.uk/education/educationopinion/10315238/Are-children-really-better-at-foreign-language-learning.html Appendix 1 Partial Transcription of Interview Interviewer: what are your thoughts about the English Language, specifically what are the feelings towards English in your home language and is it spoken in comparison to other languages? Is not spoken at all? (.) like whats the kind of status of it? Jane: erm (.) I think we take it for granted because erm (.) I think like in terms of like learning the grammar and so on Ive seen how difficult it is teaching English myself in France I: mhm hmm J: and I think we just take it for granted that we can speak English really well but erm (.) I: so you can (.) sorry to interrupt so you taught English while you were in France J:yeah I was teaching [English I: [that was your erm (.) [placement J: [yeah that was my job I: Interesting J: So yeah just like (.) erm at some point it was like I need to teach them how to do this but you know erm (.) I:mhm hmm J: I dont know how to do it myself because Ive just learnt it (.) I:you just picked it up J:Ive just picked it up so Ive never really learnt it from a book or anything erm (.) speaking of grammar (.) so it was just like you know we take it for granted that I can speak it but actually its really difficult to learn it (.) the English language (.) and I felt like that actually French was much easier to learn (.) I: mhm hmm J:than English was I:can you give me an example of the grammar (.) do you have any exercises that you perhaps were trying to use (.) to teach grammar (.) how were you trying to teach grammar and how was it harder J:erm (.) I did have a example but its just gone out my mind now erm (.) can we come back to that question I: yeah we can come back to that I: so going back to English in your home country, do people speak (.) if you went to a shop or you went to the cinema or you were in public (.) would people speak English or is it not really a language that is spoken? J: erm back then (.) so when I came here we used to go back to Pakistan every single [year I: [what year was that? J: that was (.) we came here in 2002 I:mhmm hmm J:and up until 2006(.) 2007(.) used to visit our family every single year so at that time (.) I:mhmm hmm J: not a lot of people spoke English I: hmm J: You know when you go to the shops or the malls (.) they all [referring to Pakistan locals] speak their own language (.) but now that I go back its a lot more modern (.) I do live in a city Im not from the village side (.) I live in the secondbiggest city of Pakistan so now that Ive been back its quite modern I:mhmm hmm J: So you know people will er (.) dress in a erm (.) westernised way (.) its very westernised so they speak English as well in their everyday lives they, they speak English maybe with their parents as well (.) I:mhmm hmm J: cause Ive seen my cousins erm whenever I speak to them over Skype (.) I:yeah J: or over the phone er (.) sometimes we just start speaking English and itsnormal so its like okay (.) I: thats so interesting J: you speak English really well and thats because its quite common to teach English now in schools because obviously teaching in year 6 is quite late (.) I: right J:so theyve started teaching them [earlier I:[so theyve moved the age up J:yeah I: so do you think if you were a child in Pakistan now (.) J:yeah I: say you left in year 4 again, do you think your English would have been better J: I would know er (.) some of the language if not like all of it (.) it would er (.) it wouldnt be like starting from scratch I: okay (.) so what are your thoughts on the English language on a global slash international scale (.) J: erm I:to give an example a lot of (.) political leaders (.) J: hmm I: a lot of conferences (.) a lot of important things are relayed in English J: mhmm hmm I: and (.) some people find that weird because English is only actually spoken by 8% of the world J: yeah I: by that (.) or any of your experiences (.) what are your thoughts (.) about English language on an international scale (.) obviously coming from being born in Pakistan coming here (.) and reflecting on how different it was then (.) J:mhmm hmm I: and now (.) and youve said yourself its westernised (.) what are your thoughts (.) Im not sure if Im making [much sense J: [I think (.) I think a lot of people associate the English language with being like intelligent (.) I:mhmm hmm J: so if youre able to speak English er you must be intelligent or you know you must be like highly educated or something but its (.) its just a language to me erm (.) cause Ive travelled (.) Ive travelled to so many places and (.) its just (.) among those languages English is just another language to [me I: [yeah J: so its not like (.) I understand erm you know a lot of (.) of these leaders they speak English and so because I think English is the one language that is (.) widely spoken but thats just (.) what we think I: yeah J: even though its not widely spoken but we assume that people (.) that wherever we go people will just know how to speak English I: mhmm hmm J: whereas they dont (.) so erm (.) does that answer your question I: yeah (.) J:[yeah I: [yeah it does answer my question J: okay I: so tell me about some of the difficulties you encountered while learning English erm (.) did it affect any of the languages you already speak or have spoken or (.) J: mhmm hmm I: did it improve them (.) did having another language already help you help English à ¢Ã¢â‚¬  - J: erm I think the difficulties I faced was erm (.) just (.) erm (.) well actually I dont know (.) just the difficulties that (.) erm you know just (.) the time it took me to learn the language I: mhmm hmm J: I mean I think it took me almost two and a half years (.) to be able to speak English fluently I:hmm J: so I could say that I did erm (.) affect (.) my school life I: hmm J: not in a (.) in a (.) like a bad way or something but because erm (.) its not like I got bullied or anything for my English or anything like that (.) erm I had a really good childhood but (.) I think it just kind of put me behind other students Causes Of Deficit: The Financing In Pakistan Causes Of Deficit: The Financing In Pakistan The aim of any government is to fulfill the socioeconomic responsibilities in order to break the vicious cycle of poverty and also uplift the economic conditions. In Pakistan it has been practiced that the aggregate of tax collection and no tax collection revenues are not ample to meet the government expenditure. To fulfill the gap between the spending and revenues so the economist used the perception of deficit financing. The government borrowing from banking and non banking sector and printing new currency is called deficit financing. Deficit financing shows the difference between projected expenditure and projected spending. To fill the gap of government borrows from 1) state bank of the country 2) borrow from commercial banks 3) borrows from non financial sector such as saving centers, insurance companies 4) the last source is printing new notes known as deficit financing. Deficit financing is a situation where government spends more money than its revenue collection. Deficit financing is used for different purposes the main purpose of deficit financing is used to end the recession when the economic activity slow down in order to retrieve the economy in the better situation. In the third world countries like Pakistan the deficit financing becomes the requirement due to bad governance, insufficient spending policies, corruption, tax evasion, and insufficient tax collection. In the west the phrase Deficit Financing is used to explain the intentionally create a difference between public revenues and expenditures or the budget deficit. This gap or difference can be filled by public borrowing, commercial banks, and central bank. The idle saving of is used to fill this gap that in turn increase the employment and output of the country. Deficit financing is the most important tool of generating capital in developing and underdeveloped countries. In developed nation the new currency notes are used to support the public investment that in turn increases the growth rate of a country. The government used the borrowed money for the development purposes i.e. railways, roads, air services, social overhead capital, schools, hospitals etc. The deficit financing is also used to increase the economic activity of a private sector in the country. The monetary expansion in developing countries attached with high rate of borrowing from banks and international sources to finance their budget deficit, budget deficit is the one factor that contributes in disequilibrium in the balances of payments. In developing countries governments are unable to mobilize or use their domestic resources due to inefficient tax system, in such countries the capital market are also underdeveloped and the interest rate determines institutionally. In such circumstances the supply of money increase that causes an increase in the price level. There are different sources of financing the economic development; these resources are domestic resources and foreign resources. Domestic resources are those in which the government finances through taxation, public borrowing, and the saving of government that include the surplus and also include the deficit financing. The foreign source of finance consists of loans, grants, and private investment. The significance of both domestic and foreign resources has their own in developing countries. The most important thing is used to execute these resources in a way that maximum benefit can be achieved for rapid development. 1.1 Background of the problem Pakistan is a large country with a population of 17.50 million in 2010. The economy of Pakistan is still facing the low level of per capita income that is stranded at 699 US $ in December 2012. In Pakistan the ratio of the budget deficit is different in different years. From last two decades the budget deficit is 5.4% to 8.7% of GDP. The average deficit rate was 6% in the period of 1970and it was 7.6% in the period of 1980.In 1990s the deficit ratio was decreased to 6.4% of GDP due to a reduction in development expenditure. The ratio was not achieved by enhancing the tax system but due to the reduction in the development expenditure. The Pakistan tax system is still narrow and punctured due to the poor and weak tax administration. The balance of payments deficit has become a permanent problem of Pakistans economy. For the last fifty years Pakistan has been facing continuously from a current account deficit. The international loans are used to finance the deficit. The debt service charged more than 5% of the GDP of the country. With large budget deficit there is need of rapid growth of domestic credit. In underdeveloped countries the role of free capital markets is limited. The main source of government deficit is financed by the banking system. Like other developing countries Pakistan is also facing a large budget deficit as the most outstanding problem. Deficit financing is also responsible for high inflation rate, decrease growth rate, and low opportunities for private investment. Pakistan faces different rates of the budget deficit in different years. In last two decade the budget deficit ratio was 5.4% -8.7% of GDP. The ratio was 7.6% in 1980s the ratio became 7.6% in 2001- 2002. The rate of budget deficit in Pakistan has grown consistently with the passage of time. At the time of 80sthe budget deficit has increased as much as faster than the early periods and touched the ratio of 8.4% in 1987-88. The rate of budget deficits has decreased to 7% but that ratio was also considered high one of the experts. Due to large budget deficit there was a high rate borrowing is used to responsible for an increase in the domestic debts since 1980-81. In the period of 90s the severe situation faced by the State Bank of Pakistan to control inflation within the targeted limit and make sure the macroeconomic stability. In the fiscal year of 1998 and 2003 the rate of inflation was 4.6% that were relatively lesser the best rate. In early 1973 and 1980 the inflation rate was two digit figures that were 14.3%. The rate of inflation controlled in the period of 1980 that was 7.2% per annum but unfortunately the rate of inflation again grown to 10% per annum. The high rate of inflation also caused due to excess money supply, fiscal imbalances, and deficit finance sources. 1.2 Problem Formulation Chaudhary and Hamid (2001) Pakistan are facing severe obstacles of generating public revenue. The persistent failure in attainment of public revenue leads the public sector to depend on public borrowing. The result is that the public debt goes to increase the rate of 90% of GDP and the rate of budget deficit increase to 8% of GDP. The figure of budget deficit lead to double digit inflation (ref). These imbalances adversely affect the economy. These problems all are interconnected with each other in order to decrease the public revenues that in turn create the hindrance to meet the needs of the public expenditures. In this regard the efforts are made to improve the taxation system that is not based on the scientific approach, thats why the to attain the target of achieving the projected target failed continuously. The result is that it is not only used to meet the demands of development projects because at that time it not able to meet the demand of the current expenditure. In Pakista n the less than 1% population is taxpayer. According to the economic survey of (1998-99) Pakistan has experienced the sustainable growth rate more than three decades till 1990. Pakistans economy grew at the rate of 6% per annum more than three decades but the situation became adverse in 1990. The collection of tax also became very adverse at a satisfactory level. The other developing nations like Pakistan at the age of early growth need to get higher revenue than the developed nations. Due to the obstacles that prevail in getting the higher growth rate this could lead to the unsustanability to survive. According to the economic survey of 1998-99 the growth rate of Pakistan goes to down at 4.5% per annum, the ratio was about 6% in the last 3 decades and same ratio was 3% for few years. The deficit finance is the result of failure in an increase in the public sector to increase their savings. The trend shows that the efforts made in collecting taxes do not meet the demand of the public. It is important to note that Pakistan is not attaining the targeting revenue through tax. According to world development report (1979, 1991and 1997) the rate of tax collecting in the other developing countries is 25%. In the period of 1998-99 the tax shortfall was approximately 20%; it shows that there is need of detailed study of the tax reform system. The economic crises over in 2008, Pakistan have enjoyed greater economic activity. The policy maker in Pakistans fights a battle against the crisis hit in 2008-2009. The sudden increase in the oil prices also causes the alarming situation for the deficit in foreign debt and also decrease the value of the rupee. Pakistan made efforts to seek the international monetary fund after the allies of China, USA, and Saudi Arabia to refuse to provide the funds to the country in October 2008. Pakistan has provided the US$ 1 billion loan for 23 months. Pakistan asked the IMF to raise their loan from US47.6 billion to US$ 12.1 billion in February 2009. In august 2009 the IMF increases the time span to 25 months and increase the grant to US$11. 3 billion to meet their financial needs. 1.3 Previous Studies Ishfaq and Chaudhary (1999)The debt history of Pakistan started in 1984-85, when the surplus revenues turned into a deficit. The fiscal deficit and debt converted into multiple rates. The total deficit rate was Rs 89.2 billion in 1990-91 that rate was increased to 66% in 1997-98 and approximately to Rs 148 billion. The domestic debt was increased to 185 percent the amount increased Rs 448 billion to Rs 1280 billion and foreign debt increased to 156 percent the amount was Rs 272 billion to Rs 697 billion in the same time period. Pakistan has an opportunity to do some measures for the establishment of the macroeconomic indicator rather than to go for deficit financing for generating the revenue. In the mid of the 2008 the Pakistan started registering the imbalance in the overall economy. At the end of the 2008 the Pakistan fiscal deficit was increased to $ 5.6 billion that exceed to $ 8 billion. The trade deficit also increases to $ 13 billion to $ 18 billion. Foreign reserve has fallen to decrease to $ 6.5 billion. (Baig, 2011) Pakistan forced to take the help from the IMF in order to get financing for the deficit finance of their economy. The help provided by the IMF was the package of $6.7 billion that was later increased to $ 11.3 billion in 2009. The IMF also helped Pakistan by providing bilateral and multilateral aid that also causes to increase external debt and liabilities to $ 54 billion from $ 41 billion in January 2008. Pakistan is also used to sovereign bonds and sindak bonds in order to use another form of deficit financing. This also creates a problem for a country to repurchase these bonds according to their specified time table or schedule because different countries have different foreign currencies. In these situation investors does not show their concern toward the investment. (Baig, 2011) These both measures are taken by the international market that is not so enough for the needs of the Pakistan and then government compelled toward the third mode of deficit finance monetization. The Pakistani government relies on the domestic borrowing that is the cause of disparities in the debt dynamics. The domestic debt borrowing increased to 24% in the mid of 2008. Pakistan domestic debt was multiplied from Rs 2610 to Rs 4490 in the fiscal year of 2007.At the end of March 2010 Pakistan domestic debt was $ 53.2 billion which was appoximately30.6% of GDP. All the source of the deficit finance is failing to attain the desired results and lead the economy toward the negative direction. By the mid of 2010 Pakistans total domestic debt reached to $ 100 billion and there is already paid interest about $5.6 billion and debt servicing amounted $ 7.6 billion annually that was expected to cross the limit of $ 10 billion after the fiscal year of 2010-11. (Baig, 2011) Deficit finance works only when there are such sound policies that direct the planners that how to spend money in a way that raise debt, generate revenues and also plan some actionable ideas that directs that how to repay the debt. For the attainment of all these targets there should be a need of honest and sincere governors that Pakistan does not have. In this way we are able to increase the debt and rising the liabilities that is useful for the upcoming generation to pay off that. The money that is used to spend on the future of the Pakistani people should also be spent on the future of Pakistan that could be served as the bureaucracy, foreign visit, corruption and government functionaries. Today the Pakistan debt situation is alarming and we have no plans that how to raise sustainable revenues and having no idea that how to accumulate the external and domestic debt. We have very few and tough choices to make serious and valuable decisions. (Baig, 2011) Causes of Deficit Financing in Pakistan The main causes of deficit financing in Pakistan are: Increase in government expenditure: The government expenditures both development and non development are increasing as time passes. The government has not been able to meet the expenditure by its revenues. Ineffective budget deficit: There are ineffective fiscal policies implemented in Pakistan and fiscal indiscipline also result the public debt. Fiscal deficit: The average fiscal deficit in 1990s was 7% of GDP. The public debt increased from 66% of GDP in 1980 that almost 100% by the mid of 2000. In 2004-2005 the fiscal deficit was 3.3% of GDP however; it increased to 4.2% in 2006-2007. Low saving: The people of Pakistan are consumption oriented. Due to high consumption rate the saving ratio was lower than 16%. Rapid population growth: The rapid population growth also a main cause to slow down the economic activity of a country. According to economic survey of 2007-2008 the population growth was 1.8%. In underdeveloped countries the increase in money supply is one of the major causes of disequilibrium in the balance of payment with heavy government borrowing from banks and as well as from international source of finance. In such developing countries government relies on the deficit financing due to unable to use their domestic sources due to the inflexible tax structure. The capital market of such underdeveloped nations is not able to determine the interest rate and the interest rate was determined by the institutions that in case the result of excess money supply. 1.4 Purpose Statement The rationale of this study is used to test the theory of association that relates the dependent variables and independent variables. Here in this study the factors (exchange rate, inflation, tax, interest rate) that is affected by the deficit financing are independent variables and GDP is dependent variable. Its individuality will be statistically restricted in this study. 1.5 Objective of Study The following objective will be paying consideration to guide the study: To study the impact of deficit finance on the exchange rate To analyze the effect of deficit financing on the tax rates. To study the impact of deficit finance on the interest rate. 1.6 Significance of Study Our study is about the impact of exchange rate, inflation, taxes and interest rate on deficit financing. In which we will see that how the factors are directly or indirectly affect by the deficit financing. LITERATURE REVIEW Mukhtar and Zakaria (2011) explain their study that, In the economic journalism, frequent models have been designed to examine the long-run association between inflation, money supply and budget deficit. However the proof from the observed literature is diverse. In 1990 De Haan and Zelhorst investigate the link between government deficit in budget and money growth in underdeveloped nations. The general conclusion of this study does not offer much sustained for the suggestion that government budget deficit causes monetary expansion and, therefore, leads to price increases. Vieira at (2000) examines the association between economic deficit and inflation in the case of six major European economies. The domino consequence present modest support for the proposal that the deficit in the budget was a significant causal reason for inflation in these economies over the most recent 45 years. Drivel and Ndungu (2001), as an active error correction model of inflation for Kenya, find that money s upply affect price only in the short-run. Though, the study by Catao and Terrones in 2003 shows that there is a strong positive affiliation between budget deficits and inflation among the underdeveloped countries as well as countries characterized by high inflation, but not among advanced economies with low-inflation. In the case of Pakistan, the study conducted to inspect the part of fiscal deficit as a major determinant of inflation also give mixed results. Bilquees in (1988) discover no connection stuck between deficit in the budget and inflation. In 1998 Neyaptis experiential study based on the data set for 44 underdeveloped and less developed nations indicates that the positive involvement between the deficit in the budget and inflation is not statistically important for a number of nations as well as Pakistan. On the other hand, in comparison to these studies, in 1994 Shabbir and Ahmed locate a constructive connection linking budget deficits and inflation in Pakistan. According to their result, if there will be a 1 percent increase in budget deficit there will be 6 to 7% increase in the general price level. According to Chaudary and Ahmed in 1995 explain that if internally finance the budget deficit mainly from banking system then there will be an inflationary pressure in the long run. The o utcome point to a constructive affiliation stuck between budget deficit and inflation during sharp inflation periods of the 1970s. The authors also find that money supply is not exogenous; rather, it depends on the location of global funds and fiscal deficit. Khan and Qasim in 1996 expose that the expansionary fiscal policy standpoint has been reflected in a weakening balance of payments position and has induced frequent down amendment in the rupee, which has caused the price level to increase. (Mukhtar and Zakaria, 2011) Afreen Baig in 2011 used to examine and study the impact of deficit financing in developed countries. The US government responded with unprecedented bank bailouts worth $700 billion and further $787 billion fiscal stimulus package. According to data compiled by Bloomberg, the US has spent or guaranteed bail outs worth $11.6 trillion, only little less than the worth of their total GDP. With Interest rates lingering around zero percent and around $300 billion already given in tax cuts this had to be the best possible approach. The wars after 911, in Afghanistan and Iraq, forced the national debt to swell from $5 trillion to $13.5 trillion today. Since 1770s, the US national debt has soared higher à ¢Ã¢â€š ¬Ã‚  fueled by wars, economic recessions and accumulated budget deficits. The USA had to deficit finance their economy out on every occasion, consequentially raising the debt to about 100% of their GDP. These days, USAs GDP is $14.3 billion dollars and a community debts of $13.92 billion dollars. Furthermore, the USA has a trade lack of $0.501 billion dollars and funds lack of $1.4 09 billion dollars. Their supplies are a negligible $129 billion dollars in evaluation of their nationwide failures, insufficient to back up the imbalances designed in the overall financial system. For USA, Deficit funding has not assisted generate that good incidents, to generate sufficient earnings, in order to get over the yearly failures or decrease their community debts. The economy shall keep warm up, unless the directing concept implemented is that of long term revenue creation and stability in the macro-economic signs with regard to their GDP. However, since Money is the source money in the world, there is hardly any possibility of US sovereign standard. (Baig, 2011) Similarly, the Economy of UK has not been that perfect, and decades of lack funding, including the present trance of relief and quantitative reducing, value around  £1.122 billion dollars and interest prices cut as low as 0.5%, in previous times two decades several weeks, from 4.5% in 2008 has not provided a substitute design for long-lasting financial development and durability. Today, UK the globes 5th biggest financial system, has a GDP of around $2.15 billion dollars and a public debt of $9.12 billion dollars. Furthermore, they have a business lack of $123 billion dollars and a fund deficit of $312 billion dollars, accented by their pitiable international supplies of $53 billion dollars. UKs external debt as the amount of their GDP has rocketed to 424% and the perspective to 2011 is as perturbing, as throughout the economic downturn period of 2007-2010, even after the various ways of deficit financing Despite whatever upgrades the financial experts predict, most of the Western economies keep warm up, are vulnerable to the tiniest sign of financial recession and the recovery begins flagging in any case, despite all efforts at lack reducing. The only reason for this warming up is that they have become amongst the globes maximum struggling with debt countries, due to years of lack funding, with their income creation not adequate to back up their development on their own. Most of these Western financial systems have become disaster-prone, unless they create resolute attempts to lower their debt to GDP rate, and further create sure you bring about equilibrium in their significant financial signs, even if they cannot accomplish budget surplus. (Baig, 2011) China providers however, has been in a fairly good position, mainly due to its balanced macro-economic signs and sensible guidelines. Genuine and identified cost-effective changes of late 70s set the stage for balance in an investment, industrial, local consumption, exports and income generation. Today, China providers an economic system with a GDP of above $5 billion money has a limited group cost-effective financial debt of merely $347 billion money dollars, a positive business excess of $190 billion money dollars, and a little budget absence of $109 billion money dollars. Extremely, China providers also maintain the planets biggest collected sovereign funds, foreign resources of $2.648 billion money. These encouraging set of macro-economic indicators enabled China providers to prevent international results of financial issues easily, however providing its local consumption, in wake up of low business goals. Lack financing worked for China providers it shored up on extra group s pending, as its group financial circumstances remained continuous throughout. The stimulus measures or absence financing, wishes to increase Chinas group cost-effective financial debt hardly by 3% of their GDP, without creating any problem. (Baig, 2011) Chinas projects to get over the repercussions of financial issues are much more commendable and more sensible, than any other country in the world. While most nations spend huge on bailing out financial institutions and financial companies to improve indirect resources for trading markets, China providers have offered direct employment and money activity in the trading markets. China providers released upon the most sensible of absence financing. (Baig, 2011) The government will be able to fund only 5% of its resources absence with international loans, throwing the rest of the economy problem on family sources of financing, helping the possibility of continuous excellent bolstering, excellent prices and low economic growth during economical period 2012. As a result of the cancellation of the $11.3 billion money dollars Globally Financial Finance (IMF) bailout program, which activated other worldwide loan providers to delay their financing as well, the government will be remaining with less than $526 million (Rs46 billion) in net external financing during the economical period completing May 30, 2012. This amount is just 5.3% of the resources absence, approximated at Rs856 billion money dollars or 4% of the complete size of the marketplace during the next economic period. Many professionals have regarded the concentrate on good at best. The rest of the Rs810 billion money dollars will have to be raised for the family market, for which the government is likely to turn to two sources, neither of which is delicious from the economical perspective. The first is credit from professional banking organizations, which drives out lending towards the personal market and reduces economical growth. The second choice is to power the main financial institution to simply make money, which is the single biggest cause of bolstering in the country. (The Express Tribune, May 26th, 2011) The government credit for funding of financial lack has improved the attention transaction to 58. 5 percent of the complete net approximated income during the present financial season, official documents revealed. The government has reserved Rs 699 billion dollars in the present financial season budget for attention transaction, which has now been improved to Rs 727 billion dollars due to credit by the government for funding of financial lack and great attention rate by the Condition Financial institution of Pakistan to acquire the blowing up. The complete approximated net income available with the government is Rs 1,242 billion dollars after Rs 993 billion dollar transfers to the regions against attention transaction of Rs 727 billion dollars during 2010-11. The Fund Ministry also acknowledged that community industry lack plays a role in inflationary pressure and shows dangerous for financial commitment and growth by increasing household investment and forcing up prices. The problem with the Condition Financial institution of Pakistan of funding the government financial lack is a negative aspect of the macroeconomic situation and deteriorates its ability to engage in a sound monetary plan. The reason behind this is that the funding of the lack takes up funds in the personal and banking industry which would otherwise be used for the financial commitment. The funding of the lack forced the Central Financial institution of Pakistan to keep prices great which get smaller credit to the personal industry and ultimately undermin es financial commitment. According to Fund Ministry after several decades from 2000 forward the country s community financial debt reduced and brought under a degree of management, the trend since 2008 has been towards improved indebtedness. This is true both for household financial debt, which had carried the main part of the problem of funding the community industry lack, and two exterior financial debts, in which the inevitable options to credit up to 9 billion dollars from the IMF to address the 2008 economic crisis, has left a heritage of substantial exterior financial debt repayment obligations for the coming 3-4 decades. This problem substantially reduces room for manoeuvring in community industry funding. This all happened because of a failure by the government to implement the financial plan as on the one side it was able to mobilize resources by bringing casual areas in the tax net while however it was not ready to manage investments. (31 May 2011 BUSINESS RECORDER WWW. FO REXPK .COM) Gaber in 2010 explain the financial plan symbolizes strong instrument which through community expenditure and taxation can have an impact on the combination need for goods and solutions in the economic system. The budget lack plan, excessive community financial commitment upon collecting community earnings, is started because of the economic growth impact. Through the household and organization choices that modify the money supply or level of taxation, there is oblique impact of the combination need bend. But with public expenditure involved from the government, there is a direct impact on the aggregate need bends. If we assume that the government made a buy of some community good, for example flat lands, it will improve the combination need. But is the amount of change the same as the preliminary community expenditure? Therefore, we are faced with two macroeconomic results. The first, multiplier impact indicates that the movement in the combination need will be bigger than they buy, but the second one crowding out indicates that the combination need modify will be smaller than the preliminary community financial commitment that can be seen the latter. However, improved need leads to with bigger engagement of the workforce and higher earnings of the organization. That kind of modern impact is relocated to the worker wages and other organization earned, which results to improve of consumption of different goods and solutions. So the state need for planes increases the need for other companys products in the economic system. Because an increase in the combination need is bigger than the preliminary government financial commitment, it is said that the government investing has growing impact on the aggregate demand. This implies that there is a review between the greater aggregate demand and the earnings which consistently leads towards greater need, then again to greater earnings etc. All these results imply that the total impact on demand goods and solutions will be bigger in respect to kick off point of the government financial commitment. Also, that could start response from the financial commitment side as a reply to the increased need of goods and solutions. That would mean an additional investment in the plain organization for new plant, equipment and so on. In this case, the higher government investing produces greater financial commitment products need. This is known as financial commitment decrease. (Gaber,2010) Multiplier effect could be obtained from the individual investing multiplier where the minor tendency to eat (MPC) is the essential factor the aspect of the extra income that the family takes in instead of preserving it. The multiplier = 1+MPC+MPC2+MPC3+=1/ (1-MPC). It shows the need for products and services created upon 1 European of government financial commitment. The multiplier reasoning indicates to any part of the GDP, and not only to the government financial commitment, as customer investing, financial commitment and net trade. So, if it acquires decrease in the net trade of some nation, for example, in the amount of 1 million European, the decrease in nations products will put stress on the national Income and therefore will decrease the household customer investing. With MPC=4, the net trade decrease of 1 thousand European will mean shrinkage in the aggregate need from 4 thousand European. (Gaber,2010) This is only the first device of the financial plan, public financial commitment, but there is another taxation, which also can have effects on nationwide income. That can be seen through the personal income tax. Decrease in this tax will improve the household income that the individuals take home. One aspect is stored and the other is consumed. Because of taking changes, there is action in the aggregate demand bend to the right. Reverse, tax improve will decrease investing and move the combination need bend to the left3. Therefore, the multiplier and frequenting out effect is also regular for the second instrument of the financial plan. When the