The Importance Of Export Diversification

The Importance Of Export Diversification Earlier a countrys economic development was based either on the degree of specialization or diversification of a countrys production and trade structure. Based on Adam Smiths concept towards division of labour and specialization for economic growth and development to Heckscher-Ohlin Samuelson (HOS) model of international trade, countries should specialize in producing and specializing in the goods in which they have a comparative advantage. However, after the Second World War, the idea was that economic growth and development may be achieved by export diversification (not specialization). There were active efforts by the government to promote industrialization and economic growth. Export diversification is often the primary objective of many developed countries. Export diversification is also equally important for many developing countries. Some of the developing countries are dependent on relatively small range of products, generally agricultural commodities. In other words, primary products constitute a large percentage of their overall export earnings. Some economists such as Prebisch have even suggested that there is a long term tendency for primary product prices to decline vis-à  -vis those for manufactured goods. Countries that are commodity dependent or have a narrow export basket usually faces export instability which arises from inelastic and unstable global demand. This can consequently have a significant adverse impact on the macro economy of least developed economies in terms of investment and employment. Thus export diversification is one means to alleviate these constraints. Export diversification refers to the move from traditional to non trad itional exports. Developing countries should diversify their exports since this can; for example, help them to overcome export instability. Diversifying the export portfolio could intensify and accelerate the economic growth. Export instability could discourage necessary investments in the economy by risk-averse firms, increase macroeconomic uncertainty and be damaging to longer term economic growth. Export diversification could therefore help to stabilize export earnings in the longer run (Ghosh and Ostry, 1994; Bleaney and Greenaway, 2001). Countries with the slightest level of export diversification are those which face instability in export earnings. Some examples of countries which have instability in export earnings due to very heavy reliance on exports of one or two commodities are Kiribati, Samoa, Tuvalu and the Marshall Islands. Reasons for export diversification Export diversification may be an important issue for developing countries for several reasons. First, a diversified bundle of export products provides a hedge towards price variations and shocks in specific product markets (Bertinelli et al., 2006; Levchenko and di Giovanni, 2006). Second, the type of products exported might affect economic growth and the potential for structural change (Hausmann et al., 2007; Hausmann and Klinger, 2006; Whang, 2006). Third, export diversification in the direction of more sophisticated products may be beneficial for economic development. Given these potential benefits of export diversification, an important policy question is what a country can do to diversify its exports. For poor countries to grow rich, it is important for them to modify the composition of their exports which will enable them to look more like that of rich countries. For over 50 years, economic and export diversification has been given high importance on the list of priorities for development policy. The argument was based on the observation that dependence on primary commodity production and exportation by developing countries expose them to commodity shocks, price fluctuations and declining terms of trade. As a result, a countrys foreign exchange reserves and the ability to have funds for imported inputs become subject to instability and uncertainty. The debates about the Prebisch-Singer hypothesis (1959) and the need for industrialization gave priority to diversify economies away from primary commodities because of unfavorable and declining terms of trade, slow productivity growth, and relatively low value added. There are several reasons for developing countries to have export diversification. Firstly, diversifying their bundle of exports will protect them from the risk of unpredictable declining trend in international prices of primary exportable commodities that, in turn, lead to unstable export earnings. Export diversification could therefore help out to stabilize export earnings in the longer run (Ostry, 1994; Greenaway, 2001). FAO (2004) maintains that due to the absence of export diversification in developing countries, decline and fluctuations in export earnings have negatively influenced income, investment and employment. Diversification provides the opportunities to extend investment risks over a wider portfolio of economic sector which eventually increase income (Acemoglu and Zilibotti 1997). Romer (1990) believes that diversification can be seen as an input factor that has an effect of increasing the productivity of other factors of production. Through exports it is also possible to build an environment that creates competition and as a result acquire new skills. Overall economic growth and acquisition of human capital may be slow if there is the absence of pressure from outside competitive forces (Husted and Melvin, 2007). Diversification helps countries to hedge against adverse terms of trade shocks by stabilizing export revenues. It enables them to direct positive terms of trade shocks into growth, knowledge spillovers and increasing returns to scale. Other industries in the country can also gain as export diversification can lead to knowledge spillovers from new techniques of production, management or marketing practices (AminGutierrez de Pineresand Ferrantino, 2000). Furthermore economic growth and structural change depends upon the type of products that is being traded (Hausmann et al., 2007; Hausmann and Klinger, 2006; Whang, 2006). Thus through export diversification, an economy can progress towards the production and exportation of sophisticated products which may highly contributes towards economic development. Export diversification allows the government of an economy to achieve some of its macroeconomic objectives namely sustainable economic growth, satisfactory balance of payment situation, employment and redistribution of income. Strategies to promote export diversification As we see there are potential benefits of export diversification, but the question remains that what a country can do to diversify its exports. Potential determinants of export diversification, such as country size and level of development, trade costs, international distance, and the costs of domestic entry are all potentially associated with larger diversification. What can encourage export diversification? All successful high growth economies have had strategies to promote export diversification. These strategies include: 1. Financial sector development and Foreign Direct Investment (FDI) Harding and Javorcik (2007) consider financial sector development and Foreign Direct Investment (FDI) can be helpful in promoting diversification. FDI can encourage exports of host countries by boosting domestic capital for exports, serving to transfer technology and new products for exports, making access to new and large foreign markets easy and improving technical and management skills. 2. Reduce Costs The main debate is associated to cost as export diversification is rather sensitive to costs. Kehoe and Ruhl (2003) with episodes of trade liberalization across 18 countries found variable trade costs to be related with extensive growth margin. Lower cost means that there are fewer obstacles for domestic firm when exporting. The World Bank Doing Business survey through its Trading Across Borders section has included information on the number of procedures required for importing and exporting, as well as the time taken to comply with them. It also included trade costs such as document costs, inland transport costs, customs costs, ports costs, administrative costs and so on. In broad terms, for the promotion of export diversification there must be incentive to make improvement on trade facilitation, i.e. set policy measures to reduce costs. Such policy measures include lowering domestic barriers to entry; facilitate company registration by reducing number of procedures and applying a f ixed registration fee, and removing the need for pre-tax payments. 3. Lowering barriers Lower barriers to firm entry and lower international trade costs, constitutes an important way in which developing countries can help diversify their export baskets. Export margin can be affected by changes in tariff rates and preferences (Debaere and Mostashari, 2005). In policy terms, one efficient way for developing countries to promote export diversification is to center regulatory reform efforts on making entry procedures simpler and less expensive, as well as on trade facilitation measures. 4. Learning-by-doing The endogenous growth model states that exports can be more diversified through learning-by-doing and learning-by-exporting and by adopting practices of developed countries (Pineres and Ferrantino, 1997) 5. Role of Government The government of an economy should play a leading role in the promotion of export. Investment should be directed into various sectors of industry. In so doing, the Government can make sure that investment is not being undertaken on more than just one specific sector so that a diverse industrial base can be built. The Government should provide a favorable environment to attracting new investment in the country. There may also be provision for favorable tax treatment to firms, tax holidays for export oriented undertakings, input used in the production of exports can also be exempted from value-added tax. Subsidies play an important role in promoting exports. Government can introduce cash incentive scheme which may benefit firms such as providing them with subsidies which will consequently encourage trade.. 6. Research and Development Efforts can be put into the RD activities to upgrade the level of industry. This can be done by the help of fiscal and financial incentives which will stimulate RD and technological innovation activities. Besides the Government, the banking system and other financial authorities should offer services to diversify and strengthen a countrys export. The banking system can facilitate diversification by its loan patterns. Schemes to diversify and promote exports need to be complemented by a suitable combination of fiscal, monetary and exchange rate policies in order to be successful. 7. Variation in the structure of demand Imbs and Wacziarg (2003) proposed that a growing demand for a range of goods followed by an increase in a countrys income may lead to diversification. In other word, variation in the structure of demand leads to change in a countrys production pattern. Constraints to export diversification In spite of the liberalization in the export sector, there are still the presence of certain issues which limit export diversification especially in least developed countries. Klinger and Lederman put together on Hausmann and Rodrik (2003) to investigate a causal relationship from market failures to inadequate diversification. There may be clash with other national policies in an attempt to promote exports. Export diversification at times may be hindered by a number of factors: Low income elasticities of Demand Some developing countries are failing to export primary products due to the low income elasticities of demand for their primary products. Furthermore, prospects for developing countries to provide manufactured exports are poor because of the competition faced with the industrialized countries. Lack of finance Lack of adequate export finance is identified as a major constraint. Small and medium exporters tend to be more severely affected by this constraint. A fundamental problem of export diversification is the lack of adequate investment in the country, both domestic and foreign. Exporters may face the problem of acquiring export finance. High rate of interest on bank capital is also a constraint since it discourages them to take loan. In other words, exports are being restricted due deficiency in financing of trade by the countrys banking system. Lack of Adequate Infrastructure Efficient infrastructure is the pre-condition for good export performance. Inadequate functioning of infrastructure may adversely affect enterprises in many ways. There may be difficulty in the transportation of goods due to limitations in infrastructure. It obstructs production activities, delays movement of goods and passengers, leading to delay in the delivery of goods. It adds to business uncertainty and risk and imposes additional costs. Bureaucracy and market access Government rules and regulations relating to exports are complicated and too much paper work is needed. Considerable time is spent and officers should be appointed for sorting out matters with the government and agencies. Market access issues are complex. The major market access problems relate to i) non-tariff and para-tariff barriers, ii) stringent quality and standard requirements, iii) stringent rules of origin, iv) labour and environmental standards. Environmental conditionalities are a kind of new protectionism which can hamper market access. Tariff and non-tariff barriers also obstruct market access. Lack of strength in the public institutions The World Bank noted that the lack of strength in the public institutions hinder private sector activities. There is the weakening of sound policy-making and public management, frustration of private entrepreneurship, prevention of competition and rising of corruption due to heavy regulatory and judicial systems and loss-making state-owned enterprise. Private investment can be deterred due because of poorly regulated and undercapitalized commercial banks, problem of telecommunications, infrastructure and law and order problem. Dearth of Skilled Manpower Other constraints include domestic resource scarcity, shortage of skilled labour, and lack of professionalism. There may be lack of skilled manpower in some sectors. Lack of skilled manpower has resulted in under utilization of potential export of services through manpower export as they are catering to only unskilled and semi-skilled needs. Economic growth Economic growth is a long run concept. It is usually defined as an increase in real gross domestic product (GDP), that is, GDP adjusted for inflation. In other words, it is as an increase in the real value of goods and services produced in the economy. For comparing one countrys economic growth to another, GDP or GNP per capita should be used as these take into account population differences between countries. Economic growth can be shown by an outward shift of the Production Possibility Curve (PPC). Economists see dissimilarity between potential and actual growth rates. Potential economic growth represents maximum efficiency with resources. It is determined by the factors of production that a country has as its command. However, actual growth represents resource utilization in practice and shows the result. This is determined by how effectively factors of production available to a nation are developed and combined. There are many factors which determine economic growth in a country. Determinants of economic growth Natural Resources Countries which are gifted with natural resources are expected to have rapid economic growth, assuming that these resources are employed for the production of goods and services. However a large amount of natural resources is not adequate to guarantee economic growth. There are a number of less-developed countries which have high natural resources, but still due to various reasons, they have not been successful in exploiting them. To benefit from economic growth, these natural resources must be converted to useful forms, which will need people to be equipped with appropriate skills. Human Capital Human capital and education are considered to be necessary conditions for economic growth. Lucas (1988) focused on the impact of human capital on long-run growth. The rise in productivity needed for economic growth can be achieved by increasing domestic human resources through education and training. Skills acquisition and the ability to keep on learning throughout the lifecycle are needed to develop individuals. Developing human resources through education and training is considered to be a long term process which will upgrade the innovative capacity of an economy. Apart from affecting factor of production, education and human capital can also have impact on factors such as physical capital and natural resources (Bravo-Ortega and De Gregorio 2002. Azariadis and Drazen (1990) proposed that an economy can experience long-run economic growth if the government designs policies toward the promotion of education and human capital. Lucas (1993) pointed out, the accumulation of human capita l specially, knowledge is a key factor in explaining the growth experiences of countries. Capital Accumulation Capital accumulation refers to buildings, machinery, infrastructure and the amount of tools available to the economy. A necessary prerequisite for economic growth is a large capital stock. Developed countries do spend a significant amount on capital formation. For example, in UK in the year 1998 and 1999, 12% of annual GDP was spent on fixed capital. Capital is a major factor affecting growth. The more an economy has as capital, the more it can produce and the higher will be real income. If there are few machines available, a nation will be able to make fewer goods and services. More machines will mean more income can be generated. Therefore, the larger the capital stock, the larger is the potential income. In short, we can say that investment in capital should increase the productive potential of an economy. Young (1994) found that Asian tigers success resulted from rapid accumulation of capital (through high investment). The Solow model predicts that investment rate is a key determ inant of whether a country is rich or poor. Fingleton (1999) found capital accumulation as being the determinant of European region productivity growth. Technology The most important determinant for an economy to grow is associated to its pace of technological progress. This is because with technology, we can obtain more output from same amount of input as before. Neoclassical economists regarded technological progress as a critical source of economic growth. Romer (1990), Aghion and Howitt (1992), Grossman and Helpman (1994) and Basu and Weil (1998), among others, concentrated on the role of innovation and technological progress on long-run growth. Economies must invest in knowledge just as they must invest in fixed capital. The productivity of capital can be increased if machinery is updated so that firms use the latest technologies available. Technological advances are encouraged when there is investment in research and development. De Long and Summers (1993) has shown that the only variable that have a significant positive effect on growth of less-developed economies is the investment in equipment Technological progress, along with accumula tion of human and capital, is essential in determining a nations rate of growth. For example, the large growth in the U.S. economy during the introduction of the Internet and the technology that it brought to U.S. industry as a whole. The Solow-Swan Growth Model which entailed a series of equations shows the concept of growth as an increased stock of capital goods. According to this view, the role of technological change became crucial, even more important than the accumulation of capital. (e) Openness Openness to international trade accelerates productivity and promotes export as well as economic growth. Romer (1989) stressed on the issue that growth in the volume of trade is positively correlated with the growth of output for a country. Edwards (1993) and Rodriguez and Rodrik (2001) also carried an extensive review of the empirical literature on the growth effects of openness. Increasing importance is being attributed to the opening up of the world economy. Globalization is seen to be good for the Worlds economy. Detailed studies suggest that there is a positive correlation between trade liberalization and an increase in per capita income. In other words, the more an economy is open, the higher is rate of growth. Development in Eastern Europe and the World Trade Organization highlight that during the last twenty years, more and more areas of the world economy have been brought into the competitive market-place. Such openness to trade, investment and competition are clearly import ant determinants to productivity growth. For example until 1858 Japan was inaccessible to world trade. The Japanese Government banished the trade restrictions which allowed trading with the rest of the world. Consequently this had lead to a 65% rise in real national income (Huber, 1971; Husted and Melvin, 2007). FDI Inflow There are various channels through which FDI can positively affect economic growth: technological transfer, capital accumulation, access to international markets, managerial and marketing practices and employment (Lall [2000], Te Velde [2001], Borensztein [1998]). FDI can increase competition which will eventually make domestic companies more efficient and encourage diversification. FDI benefits economic growth at large as it contributes to the domestic accumulation of resources. Many studies have been carried out which demonstrated a positive link between FDI an economic growth. Campos and Kinoshita (2002) examined the effects of FDI on growth for 25 Central and Eastern European and former Soviet Union economies and found a positive relationship between them. However there are certain studies which are undertaken that do show any influence of FDI on economic growth for example, Carkovic and Levine (2002), Bacha (1974), Saltz (1992) and Alfaro et al. (2002). Inflation There are many evidence which suggest that sustained high rate of inflation can be detrimental to real economic growth even in the long run. Fisher (1993) found negative links between inflation and growth in pooled cross-section, time series regressions for a large set of countries. Investors may face uncertainty about future profitability of investment projects. Barro (1995) put forward that inflation diminishes the propensity to investment which eventually decreases growth. Inflation may also have a negative impact on the balance of payments as it reduces a countrys international competitiveness by making export dearer. Inflation can affect growth by altering borrowing and lending decisions. However whether inflation is good or bad for economic growth depends on its degree. That is, at lower rates of inflation, the relationship is not significant or even positive; but at higher rates, inflation has a significantly negative effect on growth. In their analysis, Bruno and Easterly (19 98) showed that some countries did not go through adverse consequences even if they were experiencing sustained inflations of 20% to 30%. On the other hand, once the rate of inflation go beyond certain critical level (which Bruno and Easterly estimated to be about 40 %), this causes negative effect to growth. However besides the factors mention above, there are also other factors that affect growth. Non-economic factors such as political and social factors too play an important role. The geographic location of a country may also affect economic growth. Government also can adopt both demand and supply-side measures in order to stimulate economic growth. Factors such as population growth, rapid growth of manufactured exports, stable macroeconomic and institutional environment creating confidence in policy makers, exchange rate, and labour force can affect growth in an economy. Link between economic growth and export diversification Policy-makers have tended to emphasize the potential benefits that export diversification can bring to the host economy. One of the main advantages which has been put forward by economists is that export diversification tends to increase economic growth in the host economy. There has been little empirical research on the relationships between export diversification and economic growth. There are two essential questions that the literature on this matter has tried to answer: Does export diversification affect long run economic growth? Can a country improve its economic performance by exporting different types of goods? (Gutià ©rrez-de-Pià ±eres and Ferrantino, 2000). The primary questions are why do countries diversify their exports and does it always benefit countries economic growth? Export instability can adversely affect growth in an economy. Countries which are dependent on a limited amount of commodities may suffer from export concentration. This is because commodity products are often subject to volatility in market prices leading to swings in foreign exchange revenues. Volatility and instability can thus discourage investment in an economy by risk adverse firms, reduce import capacity, increase macroeconomic uncertainty and thus be detrimental to longer-economic growth. There are several channels through which diversification may influence growth. It is therefore essential to make a difference between horizontal and vertical diversification. Both of them are positively related to economic growth. Horizontal diversification means the alteration of the primary export mix in order to neutralize the volatility of global commodity prices. Horizontal export diversification benefits an economy in such a way that it diminishes dependence on a narrow range of commodities that are subject to major price and volume fluctuations. Dawe 1996, Bleaney Greenaway (2001) discovered that horizontal export diversification may present considerable development benefits as this may lead to well-directed economic planning and also contribute towards investment. Vertical export diversification on the other hand refers to contrive further uses of existing and new innovative commodities using value-added venture such as processing and marketing. The Prebish-Singer thesis is o f the view that a tendency towards declining terms of trade of primary products (Athukurola 2000) may make vertical diversification into manufactures more useful. By highlighting the role of increasing returns to scale and dynamic spillover effects (Amin Gutià ©rrez de Pià ±eres and Ferrantino 2000), the endogenous growth theory suggested that it can be assumed that export diversification affects long-run growth. Export may benefit economic growth through generating positive externalities on non-exports (Feder, 1982), increased scale economies, improved allocative efficiency and better ability to produce dynamic comparative advantage (Sharma and Panagiotidis, 2004). Esfahani (1991) concluded that export enables developing countries to alleviate the import shortage they may face up to. Speaking differently, revenue from exports can fill the foreign exchange gap which is identified as barrier to growth. A number of empirical studies have shown that export diversification is contributing to higher per capita income growth. The main theory is that, compared to nations with concentrated export structures, those countries with more diverse economic structures have greater possibilities to sustain periods of high economic growth. Love (1986) suggest that a country should avoid heavy dependence on limited products as it diminishes a countrys potential of partially offsetting fluctuations in some export sectors with sectors in which stability prevails. In his study, Al-Marhubi (2000) put forward that market investment becomes riskier because instability in export earnings is a main cause of economic uncertainty in many commodity-exporting nations. In other words, this may adversely affect investments and in turn negatively impact economic growth. Using a cross-country sample of 91 countries for the period of 1961-88, Al Marhubi concluded that there is a positive and strong relationship bet ween export diversification and economic growth. His regression was undertaken by adding different variables affecting export concentration to the basic growth equation. Regressions on cross-sections of countries (Sachs and Warner 1995, or more recently Gylfason 2004) and panels (de Ferranti et al. 2002) proposed that export concentration is certainly statistically related with slow growth, mostly when export concentration reflects the high proportion of primary products. A broad literature review on export diversification and economic growth was offered by Hesse (2008), where he estimated a simple augmented Solow growth model to examine the connection between export diversification and income per capita growth. There was strong support in Hesses findings that export concentration, measured by a Herfindahl index, is harmful to economic growth in developing countries. The relationship between a countrys productivity and sectoral export variety was studied by Feenstra and Kee (2004). From an estimation of a translog GDP function system for a sample of 34 countries going from 1984 to 1997, they found that a 10 percent boost in export variety of all industries leads to a 1.3 percent increase a countrys productivity. Moreover another model of export diversification and economic growth was developed by Agosin (2007) where countries which lack technology, expand their comparative advantage by learning from and adapting to existing products. The cross-sectional regression of Agosin (2007) found that export diversification strongly affect economic growth. In addition, models in the product life cycle literature (Vernon, 1966; Krugman, 1979; Grossman and Helpman, 1991) gained variety of export products by advancement made by the North and consequently the South adopting and exporting the products from countries where labour cost are low. In his cross-country panel model, Lederman and Maloney (2007) concluded that one cause of diminution in growth prospects is the concentrations in export earnings. The advantages of export diversification for economic growth have been examined both empirically and theoretically in a new literature by Hausmann and Rodrik (2003), Hausmann, Hwang, and Rodrik (2006), and H ausmann and Klinger (2006). Their studies demonstrated that comparative advantage do not lead to economic growth. Instead, growth is achieved when countries diversify their investments into new or a range of activities. The model of Hausmann and Rodrik (2003) explained that there are various uncertainties related to cost in the production of new goods. They believed that the government should help in industrial growth and structural transformation by encouraging entrepreneurship and providing incentives to motivate entrepreneurs to invest in a new range of activities. Hausmann, Hwang, and Rodrik (2006) developed an indicator (EXPY) that determines the productivity level related with a countrys export basket. This measure is significantly affecting economic growth. Faster growth is achieved by countries that produce high-productivity goods than countries with poorer productivity growth. Economic growth is experienced when a country shift its resources from lower-productivity to highe r productivity goods with elastic demand of these goo

george :: essays research papers

On May 18, 1952 George Strait was born into a loving family in Poteet Texas, U.S.A. Strait the second son of a schoolteacher was raised in Pearsall, Texas. As a young teen he developed an interest in farming after his father took over the family ranch. Strait had listened to country music his whole life but the record that really cemented his love for the music was Merle Haggard’s A Tribute to the Best Damn Fiddler Player in the World, that’s when it all began.   Ã‚  Ã‚  Ã‚  Ã‚  George Strait dropped out of college to be with his girlfriend, Norma. Shortly after, he joined the U.S army. There he began playing country music. Things really starting getting good for him in 1977 when he started having shows in Nashville. Then came a downfall. Strait realized he was to shy to do himself any justice. The only highlight in his life at that time was Norma and him had recently gotten married. Being the believing wife she is Norma would continuously remind him he had the talent and could do it, she urged him not to give up. Needless to say Strait did not give up and before he knew it he was titled the Entertainer of the Year.   Ã‚  Ã‚  Ã‚  Ã‚  George is not only loved because of his music, it is also the man himself. â€Å"George Strait is the best!!! My six year old daughter and I would just like for him to know that he is the greatest, He never let’s his fans down, he is a true country music artist. We also appreciate his values, he is a one of a kind man.â€Å" (SonicNet.com George Strait Bulletin Boards) Says Stacy Langston from Houston, Texas.   Ã‚  Ã‚  Ã‚  Ã‚  George Strait earned himself an entry into the Country Music Hall of Fame, four American Music Awards, eleven Academy of Country Music Awards, fifteen Country Music Associations Awards and Trade and Achievement Awards. The annual George Strait country music festival has been attended by more than three million fans. Amusement Businesses named it Touring Country Act of the Decade.   Ã‚  Ã‚  Ã‚  Ã‚  George Strait opened the eyes for country music. He is not only known for his amazing music but he is named the leader of country music. He has left a legacy behind him so he will never be forgotten.

The Lost Duke of Wyndham Chapter Twelve

Jack did (eventually) find his bedchamber, but even though he knew he'd likely still have been happily asleep if he hadn't been determined to join Grace at breakfast, when he lay down atop his covers, intending to take a restorative nap, he found himself unable to do so. This was profoundly irritating. He had long prided himself on his ability to fall asleep at will. It had come in handy during his years as a soldier. No one ever managed to acquire the correct sleep, either in quality or amount. He would steal his slumber where he could, and his friends had been eternally jealous that he could prop up against a tree, close his eyes, and be asleep within three minutes. But not, apparently, today, even though he'd traded a knobby tree for the finest mattress money could buy. He closed his eyes, took his customary long, slow breaths, and†¦nothing. Nothing but Grace. He'd like to have said she was haunting him, but that would have been a lie. It wasn't her fault that he was a fool. And in truth, it wasn't just that he was completely desperate for her (although he was, and most uncomfortably, too). He couldn't get her out of his mind because he didn't want to get her out of his mind. Because if he stopped thinking about Grace, he would have to start thinking about other things. The possibility of his being the Duke of Wyndham, for one. Possibility†¦Bah. He knew it was true. His parents had been married. All that was needed was to locate the parish register. He closed his eyes, trying to push back the overwhelming feeling of dread that was bearing down on him. He should have just lied and said that his parents had never wed. But blast it, he had not known the consequences when he said that they had. No one had told him he'd be crowned the bloody duke. All he'd known was that he was so damned furious with the dowager for kidnapping him and with Wyndham for staring at him like he was something to be swept under the rug. And then Wyndham had said, in that smarmy, superior voice of his: If indeed your parents were married†¦. Jack had snapped out his reply before he had a chance to consider the consequences of his actions. These people were not better than he was. They had no right to cast aspersions on his parents. It was too late now, though. Even if he tried to lie and recant his words, the dowager would not rest until she'd burned a trail through Ireland in search of the marriage documents. She wanted him to inherit, that much was clear. It was difficult to imagine her caring for anyone, but she had apparently adored her middle son. His father. And even though the dowager had not shown any particular fondness for him – not that he had made much of an effort to impress – she clearly preferred him over her other grandson. Jack had no idea what had transpired between the dowager and the current duke, if anything. But there was little affection between the pair. Jack stood and walked to the window, finally admitting defeat and giving up on the notion of sleep. The morning sun was already bright and high in the sky, and he was suddenly seized by a need to be out of doors, or rather, out of Belgrave. Strange, that one could feel so closed-in in such a massive dwelling. But he did, and he wanted out. Jack strode across the room and snatched up his coat. It was satisfyingly shabby atop the fine apparel of Wyndham's he'd donned that morning. He almost hoped he bumped into the dowager, just so she could see him all dusty and road-worn. Almost. But not quite. With quick, long strides he made his way down to the main hall, just about the only location he knew how to get to. His footsteps were annoyingly loud on the marble as he walked forth. Everything seemed to echo here. It was too big, too impersonal, too – â€Å"Thomas?† He stopped. It was a female voice. Not Grace. Young, though. Unsure of her surroundings. â€Å"Is that – I'm so sorry.† It was indeed a young woman, of medium height, blond, with rather fetching hazel eyes. She was standing near the doorway of the drawing room he had been dragged into the day before. Her cheeks were delightfully pink, with a smattering of freckles he was sure she detested. (All women did, he'd learned.) There was something exceptionally pleasant about her, he decided. If he weren't so obsessed with Grace, he would flirt with her. â€Å"Sorry to disappoint,† he murmured, offering her a roguish smile. This wasn't flirting. This was how he conversed with all ladies. The difference was in the intention. â€Å"No,† she said quickly, â€Å"of course not. It was my mistake. I was just sitting back there.† She motioned behind her to a seating area. â€Å"You looked rather like the duke as you walked by.† This must be the fiancee, Jack realized. How interesting. It was difficult to imagine why Wyndham was dragging his heels on the marriage. He swept into a gracious bow. â€Å"Captain Jack Audley, at your service, ma'am.† It had been some time since he'd introduced himself with his military rank, but somehow it seemed the thing to do. She bobbed a polite curtsy. â€Å"Lady Amelia Willoughby.† â€Å"Wyndham's fiancee.† â€Å"You know him, then? Oh, well, of course you do. You are a guest here. Oh, you must be his fencing partner.† â€Å"He told you about me?† The day grew more interesting by the second. â€Å"Not much,† she admitted. She blinked, staring at a spot that was not his eyes. He realized that she was looking at his cheek, which was still discolored from his altercation with her fiance the day before. â€Å"Ah, this,† he murmured, affecting mild embarrassment. â€Å"It looks much worse than it actually is.† She wanted to ask about it. He could see it in her eyes. He wondered if she'd seen Wyndham's blackened eye. That would certainly set her curiosity on fire. â€Å"Tell me, Lady Amelia,† he said conversationally, â€Å"what color is it today?† â€Å"Your cheek?† she asked with some surprise. â€Å"Indeed. Bruises tend to look worse as they age, have you noticed? Yesterday it was quite purple, almost regally so, with a hint of blue in it. I haven't checked in the mirror lately.† He turned his head to offer her a better view. â€Å"Is it still as attractive?† Her eyes widened, and for a moment she seemed not to know what to say. Jack wondered if she was unused to men flirting with her. Shame on Wyndham. He had done her a great disservice. â€Å"Er, no,† she replied. â€Å"I would not call it attractive.† He laughed. â€Å"No mincing words for you, eh?† â€Å"I'm afraid those blue undertones of which you were so proud have gone a bit green.† He leaned in with a warm smile. â€Å"To match my eyes?† â€Å"No,† she said, seemingly immune to his charms, â€Å"not with the purple overlaying it. It looks quite horrible.† â€Å"Purple mixed with green makes†¦?† â€Å"Quite a mess.† Jack laughed again. â€Å"You are charming, Lady Amelia. But I am sure your fiance tells you that on every possible occasion.† She did not reply. Not that she could; her only possible answers were yes, which would reveal her conceit, or no, which would reveal Wyndham's negligence. Neither was what a lady wished to show to the world. â€Å"Do you await him here?† he asked, thinking to himself that it was time to end the conversation. Lady Amelia was charming, and he could not deny a certain level of entertainment that came from making her acquaintance without Wyndham's knowledge, but he was still a bit wound up inside, and he was looking forward to time out of doors. â€Å"No, I just – † She cleared her throat. â€Å"I am here to see Miss Eversleigh.† Grace? And who was to say that a man could not acquire a bit of fresh air in a drawing room? One had only to crack open a window. â€Å"Have you met Miss Eversleigh?† Lady Amelia asked. â€Å"Indeed I have. She is most lovely.† â€Å"Yes.† There was a pause, just long enough for Jack to wonder at it. â€Å"She is universally admired,† Lady Amelia finished. Jack thought about making trouble for Wyndham. A simple, murmured, It must be difficult for you, with so beautiful a lady in residence here at Belgrave, would go a long way. But it would make equal trouble for Grace, which he was not prepared to do. And so instead he chose the bland and boring: â€Å"Are you and Miss Eversleigh acquaintances?† â€Å"Yes. I mean, no. More than that, I should say. I have known Grace since childhood. She is most friendly with my elder sister.† â€Å"And surely with you, as well.† â€Å"Of course.† Lady Amelia acceded. â€Å"But more so with my sister. They are of an age, you see.† â€Å"Ah, the plight of the younger sibling,† he murmured. â€Å"You share the experience?† â€Å"Not at all,† he said with a grin. â€Å"I was the one ignoring the hangers-on.† He thought back to his days with the Audleys. Edward had been but six months younger, and Arthur a mere eighteen months after that. Poor Arthur had been left out of any number of escapades, and yet wasn't it interesting – it was Arthur with whom he had ultimately formed the strongest bond. Arthur had been uncommonly perceptive. They shared that. Jack had always been good at reading people. He'd had to. Sometimes it was his only means of gathering information. But as a boy he'd viewed Arthur as an annoying little whelp; it wasn't until they were both students at Portora Royal that he realized that Arthur saw everything, too. And although he had never come out and said it, Jack knew that he'd seen everything in him as well. But he refused to grow maudlin. Not right now, not with a charming lady for company and the promise of another at any moment. And so he pushed more happy thoughts of Arthur to the forefront of his mind and said, â€Å"I was the eldest of the brood. A fortuitous position, I think. I should have been most unhappy not to have been in charge.† Lady Amelia smiled at that. â€Å"I am the second of five, so I can appreciate your sentiments as well.† â€Å"Five! All girls?† he guessed. â€Å"How did you know?† â€Å"I have no idea,† he said quite honestly, â€Å"except that it is such a charming image. It would have been a shame to have sullied it with a male.† â€Å"Is your tongue always this silver, Captain Audley?† He gave her one of his best half smiles. â€Å"Except when it's gold.† â€Å"Amelia!† They both turned. Grace had entered the room. â€Å"And Mr. Audley,† she said, looking surprised to see him there. â€Å"Oh, I'm sorry,† Lady Amelia said, turning to him. â€Å"I thought it was Captain Audley.† â€Å"It is,† he said with a very slight shrug. â€Å"Depending upon my mood.† He turned to Grace and bowed. â€Å"It is indeed a privilege to see you again so soon, Miss Eversleigh.† She blushed. He wondered if Lady Amelia noticed. â€Å"I did not realize you were here,† Grace said after bobbing a curtsy. â€Å"There is no reason why you should have done. I was heading outside for a restorative walk when Lady Amelia intercepted me.† â€Å"I thought he was Wyndham,† Lady Amelia said. â€Å"Isn't that the oddest thing?† â€Å"Indeed,† Grace replied, looking acutely uncomfortable. â€Å"Of course I was not paying much attention,† Lady Amelia continued, â€Å"which I am sure explains it. I only caught sight of him out of the corner of my eye as he strode past the open doorway.† Jack turned to Grace. â€Å"It makes so much sense when put that way, does it not?† â€Å"So much sense,† Grace echoed. She glanced over her shoulder. â€Å"Are you waiting for someone, Miss Eversleigh?† Jack inquired. â€Å"No, I was just thinking that his grace might like to join us. Er, since his fiancee is here, of course.† â€Å"Is he returned, then?† Jack murmured. â€Å"I was not aware.† â€Å"That is what I have been told,† Grace said, and he was certain that she was lying, although he could not imagine why. â€Å"I have not seen him myself.† â€Å"Alas,† Jack said, â€Å"he has been absent for some time.† Grace swallowed. â€Å"I think I should get him.† â€Å"But you only just got here.† â€Å"Nonetheless – â€Å" â€Å"We shall ring for him,† Jack said, since he wasn't going to allow her such an easy escape. Not to mention that he was rather looking forward to the duke discovering him here with both Grace and Lady Amelia. He crossed the room and gave the bellpull a yank. â€Å"There,† he said. â€Å"It is done.† Grace smiled uncomfortably and moved to the sofa. â€Å"I believe I will sit down.† â€Å"I will join you,† Lady Amelia said with alacrity. She hurried after Grace and took a seat right beside her. Together they sat, stiff and awkward. â€Å"What a fetching tableau the two of you make,† he said, because really, how could he not tease them? â€Å"And me, without my oils.† â€Å"Do you paint, Mr. Audley?† Lady Amelia inquired. â€Å"Alas, no. But I have been thinking I might take some lessons. It is a noble pursuit for a gentleman, wouldn't you say?† â€Å"Oh, indeed.† Silence, then Lady Amelia nudged Grace. â€Å"Mr. Audley is a great appreciator of art,† Grace blurted out. â€Å"You must be enjoying your stay at Belgrave, then,† Lady Amelia said. Her face was the perfect picture of polite interest. He wondered how long it had taken her to hone the expression. As the daughter of an earl, she would have any number of social obligations. He imagined that the expression – placid and unmoving, yet not unfriendly – was quite useful. â€Å"I look forward to touring the collections,† Jack replied. â€Å"Miss Eversleigh has consented to show them to me.† Lady Amelia turned to Grace as best she could, considering that they were wedged up against one another. â€Å"That was very kind of you, Grace.† Grace grunted something that was probably meant to be a response. â€Å"We plan to avoid cupids,† Jack said. â€Å"Cupids?† Lady Amelia echoed. Grace looked the other way. â€Å"I have discovered that I am not fond of them.† Lady Amelia regarded him with a curious mixture of irritation and disbelief. Jack glanced at Grace to gauge her reaction, then returned his attention to Lady Amelia. â€Å"I can see that you disagree, Lady Amelia.† â€Å"What is there not to like about cupids?† He perched himself on the arm of the opposite sofa. â€Å"You don't find them rather dangerous?† â€Å"Chubby little babies?† â€Å"Carrying deadly weapons,† he reminded her. â€Å"They are not real arrows.† He made another attempt to draw Grace into the conversation. â€Å"What do you think, Miss Eversleigh?† â€Å"I don't often think about cupids,† she said tersely. â€Å"And yet we have already discussed them twice, you and I.† â€Å"Because you brought them up.† Jack turned to Lady Amelia. â€Å"My dressing room is positively awash in them.† Lady Amelia turned to Grace. â€Å"You were in his dressing room?† â€Å"Not with him,† Grace practically snapped. â€Å"But I have certainly seen it before.† Jack smiled to himself, wondering what it said about him that he so liked making trouble. â€Å"Pardon,† Grace muttered, clearly embarrassed by her outburst. â€Å"Mr. Audley,† Lady Amelia said, turning to him with determination. â€Å"Lady Amelia.† â€Å"Would it be rude if Miss Eversleigh and I took a turn about the room?† â€Å"Of course not,† he said, even though he could see in her face that in fact she did think it was rude. But he did not mind. If the ladies wished to share confidences, he was not going to stand in their way. Besides, he enjoyed watching Grace move. â€Å"Thank you for your understanding,† Lady Amelia said, linking her arm through Grace's and pulling them both to their feet. â€Å"I do feel the need to stretch my legs, and I fear that your stride would be far too brisk for a lady.† How she uttered that without choking on her tongue, he did not know. But he merely smiled and watched them as they moved as one to the window, leaving him behind and out of earshot.

Strategic Management Accounting - 1773 Words

STRATEGIC MANAGEMENT ACCOUNTING This report will attempt to explain what Strategic Management Accounting (SMA) is, how it developed, why Traditional Management Accounting (TMA) is not sufficient to provide information for strategic decisions and the difference between SMA and TMA. It will further outline some of the essential analytical tools or techniques in SMA such as Activity Based Costing (ABC) and the Balanced Scorecard (BSC). SMA is an extremely broad concept, so in order to give a bird’s eye view of the subject this report mainly focus on comparing SMA to TMA and finally describes the importance and criticisms of SMA. What is Strategic Management Accounting? â€Å"A form of management accounting in which emphasis is placed on†¦show more content†¦Bromwich, (1990) contends that SMA enables the management to have a bird’s eye view of the competitors’ procedure and business techniques business and to take decisions accordingly. In this way a major hallmark of SMA is its inclusion of non-financial aspects for the purpose of decision making. Lords (1996) identifies the following functions which are commonly associated with SMA: 1. Collecting information related to the competitors. 2. Using accounting for strategic decisions. 3. Cutting costs on the basis of strategic decisions. 4. And, gaining competitive advantage through it. Wilson and Chua (1993) tabulate ten key differences between MA and SMA as following: | Traditional MA | Strategic MA | 1 | Historical | Prospective | 2 | Single entity | Relative | 3 | Introspective | Out-ward looking | 4 | Manufacturing focus | Competitive focus | 5 | Existing activities | Possibilities | 6 | Reactive | Proactive | 7 | Programmed | Un-programmed | 8 | Data orientation | Information oriented | 9 | Based on existing systems | Unconstrained by existing systems | 10 | Built on conventions | Ignores conventions | Critics have regularly complained that TMA focuses too much on internal business functions of accounting in order to meet the requirements of the internal managers. Some argues that while special attention is given to the internal affairs of the business sight is lost of the externalShow MoreRelatedStrategic Management Accounting13457 Words   |  54 Pagesof this journal is available at www.emeraldinsight.com/0951-3574.htm AAAJ 21,2 Strategic management accounting: how far have we come in 25 years? Kim Langï ¬ eld-Smith Monash University, Melbourne, Australia Abstract Purpose – The purpose of this paper is to provide a review of the origins of strategic management accounting and to assess the extent of adoption and â€Å"success† of strategic management accounting (SMA). Design/methodology/approach – Empirical papers which have directly researchedRead MoreStrategic Management Accounting2093 Words   |  9 PagesWhat is Strategic Management Accounting? And why, Strategic Management Accounting? Simple definition: Management Accounting in the context of business strategies being planned and implemented by an organisation. 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This led to a close up on conventional management and cost accounting practices and sparked criticismRead MoreQuestions On Strategic Management Accounting2396 Words   |  10 PagesOver the past recent years a new term namely â€Å"Strategic Management Accounting† has been introduced in management accounting discussion. In the following years and still today, a debate about what SMA comprises has been oriented. It is considered widely by organizations while drafting and implementing strategic planning and control system in an organization. This essay will elaborate the understanding and analyzing of work done by CIMA and some other surveyors in r elation to this field. SecondaryRead MoreManagment Accounting, Financial Control, Management Control, Strategic Management Accounting (Sma)3965 Words   |  16 PagesIntroduction: To better understand differences between many similar types of terms in accounting such as management accounting and financial accounting, management control and financial control and strategic management accounting we will explore the case study of TNT and how the company has been able to implement these important concepts practically in this case. Firstly, we will see how the management and financial controls were used in order to achieve what Taylor say’s is Critical Mass. We willRead MoreStrategic Management Accounting and Balanced Score Card11170 Words   |  45 PagesCHAPTER 17: ACCOUNTING FOR STRATEGIC MANAGEMENT CHAPTER OUTLINE ï  ± ï  ± ï  ± Learning outcomes Introduction Organisational strategy o Definition o Cumulative strategy (strategising) ï  ± Strategic management accounting (SMA) o Definition o Components of SMA o Does SMA still exist; or, what is it becoming? ï  ± The balanced scorecard o Its origins and its purpose o Elements and characteristics of a balanced scorecard o Designing a balanced scorecard o Features of a balanced scorecard o Why hasRead MoreStrategic Management Accounting : Cost Advantage And Differentiation Advantage996 Words   |  4 PagesTraditional management accounting is cost driven with short-term pricing and profit motive. It is fragmented and has internal and financial focus. Strategic management accounting is market driven with long-term pricing and profit motive. It is integrated and has value and external focus. Strategic management accounting raises the issues and addresses the weaknesses of traditional management accounting in the modern market place. Strategic management accounting requires the application of strategic management