Communication Self-Analysis :: Communication

1. I just started working at a clothing store, and it was a great way for me to engage in new conversations and identify the elements that go into interpersonal communication. An essential to this conversation was that she was willing to take her time to get to know me and teach me how to do things, and I was able to listen. The following contexts existed in my conversation with a fellow girl coworker. The physical dimension was that we were at our workplace where it is dimly lit, there wasn’t a lot of people around, and we were surrounded by clothing. The temporal dimension was that it was nighttime when we were working so we were both tired, and I was a new employee whereas she had been working here for a long time and had more experience then I did. That also goes along with the social-psychological dimension in that we had a new relationship, she was in a higher rank then I was in our work, and the situation was friendly and easy going since we were just beginning to know each other. The cultural dimension came into play in that she is originally from Texas and I am from Utah. When she talked she had a slight southern accent and would use slang words like â€Å"ya’ll†, words that I usually don’t use. Noise had a big impact on the conversation as well. There was much physical noise around us from the loud music playing in the store, the sound of people walking the mall, the music playing in the mall, and other conversations going on around us. There wasn’t any obvious physiological noise, but there was psychological noise going on with myself as I wasn’t so focused on what she was saying and more worried about if I was doing my job right and in making a good first impression. Also, it was my first time meeting this person so I tried hard not to make any preconceived ideas about the girl. Semantic noise was the southern accent the girl had. When speaking to this girl I did realized how context and noise can influence the way a conversation goes. 2. One of my roommates just got a new boyfriend, and from the moment I met him my perception process told me that I wouldn‘t like this guy. The first thing I noticed about him was that he reeked of smoke and alcohol.

Critically Analyze the Following Claim: ‘Class Is No Longer Relevant in Australia in the Twenty-First Century’

Critically analyze the following claim: ‘Class is no longer relevant in Australia in the twenty-first century. ’ The relevance of social class in Australia has been disputed as to whether it still exists. There are a lot of arguments and opinions on this issue but class inequality is evidently still in force in twenty first Australia. Contemporary Australian society discriminates the difference of social classes through economic status, education and geographic location.The power struggle in social class is analyzed in theorist Karl Marx’s â€Å"Communist Manifesto† where the Bourgeois (ruling class) and the Proletarians (working class) are discussed as to how classes are shaped in societies which can then be applied in twenty first century Australia. Bill Martin’s â€Å"Class† discusses the distinction between working and middle class in Australia today compared to a generation ago in accordance to materials, geographic location and employmen t.In Australia, economic status, employment and property ownership refers to what the person earns and owns which are very important factors in determining social classes. A person’s economic status is determined by their employment and employment in Australia is classified in white and blue collar workers. The white collar workers fall into the ruling class category where they obtain degrees, maintain high wage and use their skills/knowledge from the degree to obtain an office job wearing white dress shirts (which is where the word white collar is derived from).Whereas the blue collar workers fall into the low-middle class category, where the workers are employed as tradesmen or laborers as they have physical work with standard wage which don’t require high qualifications. These two main tiers of collars are implemented in twenty first Australia which is a fundamental aspect of determining social class as the white collar workers have wealth putting them in power of t he working class which verifies that there is underlying capitalism.In relation to economic status, property ownership is another fundamental aspect of determining a person’s class in Australia as it defines the person’s wealth. Property can consist of houses, investments, cars, savings accounts, land and any materials with value. Property ownership was Marx’s main argument in determining social class as, â€Å"The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and hereby the relations of production, and with them the whole relations of society,† (Marx 771) which argues that if the person doesn’t have some form of ownership then they didn’t have resources for production which would classify them as a laborer putting them in the working class. Property ownership distinguishes the two classes from each other in Australia as it is seen through the works of the Labor party as it has a large group of pe ople in the working class leaving them to manage capitalism.Marx’s infamous quote, â€Å"The history of all hitherto existing society is the history of class struggles,†Ã‚  (Marx 79) makes it clear that class struggle is needed to create the division of classes. Jim Kemeny writes â€Å"Australian capitalism highlights the way in which the Australian ruling class is likely to differ from those of other middle-sized capitalist societies,† (Kemeny 103) where the ruling class in Australia is weakly developed in retrospect to the economy.Capitalists have the capital and the workers own their power to labor which only receives one third of their produce as the other two thirds are taken by the capitalists which keeps the classes separated; this is evident in Australia due to technological advancements where the laborers are being replaced by technology putting people out of jobs which explains how the rich get richer and the poor get poorer.This division of labour in Australia can also be analysed by sociologist Max Weber as he thought Marx’s theory was too simplistic, indeed there were different classes but they were classed according to property, power and prestige (class, power and status). Weber’s theory also applies in Australia as Australians value mateship and children have the opportunity to enter a different class through their manner of speech, respect in the society, education achievements and social leisure habits which can increase their â€Å"life chances†.Power is doing anything you desire while being able to control other people whether they object or not. In Australia, power is exercised by the government, controlling the nation’s rights and keeping the classes separated. Prestige/status is how the person is perceived in the community/society. Property will usually lead to prestige and power but property is mostly held by the people working in white collar jobs. Social welfare is provided by the Austr alian Government to the working where Centrelink provides economic assistance for the people out of work.The income support system can help with Austudy Allowance,  Carer Allowance,  Disability Support, Pension Payment, Orphans Allowance, Newstart Allowance,  Maternity Payment,  Parenting Payment, Special Benefit Payment and  Youth Allowance  which are conducted by a means test (which is usually taken advantage of). The article â€Å"Welcome to bludgetown† by Caroline Marcus discusses the different nationalities and demographics of certain suburbs that rely on Centrelink classing them in the lower tier.The geographic location of where people reside has an effect on whether they are categorized into working or ruling class as the suburbs of Greenacre, Punchbowl and Villawood (South-west Sydney) would rather accept Centrelink than find a job. The article reads â€Å"Mr Trad said Muslims suffered from discrimination when it came to applying for jobs. ‘I wonder if this gentleman has ever experienced discrimination in the workplace himself,’ he said. ‘Certainly, people with a Muslim-sounding name are not given the same opportunities †¦ s people with an Anglo-sounding name. ’† (Marcus pars. 16-18) Discrimination can be a possible explanation as to why some of these cultural groups are not employed in this multicultural country which ultimately disadvantages their children as they are automatically categorized in the working class but their geographic location has also disadvantaged them because they are influenced by other people from their culture making them reluctant to even apply for employment which leaves them to stay in the working class.Geographic location can affect a person’s class which is evident in â€Å"Class† by Bill Martin which tours around in three shopping centres in Adelaide. Martin identifies the different stores, cars, clothing, education and occupation in regards to three d ifferent suburbs. The ruling class is evidently Eastside where most of the stores are upmarket, half the cars in the car park are mostly European, clothes are chosen carefully, their children go to private schools and have a dominant occupation of doctors, lawyers, accountants etc.Putting them in the ruling class as opposed to Rosedale where there are discount shops through connected malls, most of the cars in the car park are Holdens, Fords and Toyotas, their clothes are old, their children attend public schools that are trying to defeat drug problems with very few that attend university and have a dominant occupation of public servants, delivery drivers and secretaries.Martin clearly distinguishes between the two suburbs in their two tiers of class. It is evident that the children growing up in Eastside are a lot more likely to become members of the ruling class and the children being raised in Rosedale are more likely to stay in the working class as they are almost destined to ca rry out the same outcome as their parents and very few follow through to higher education to obtain high wage and status.In Australia, the media plays an important role in distinguishing between the classes in Australia as stereotypes are portrayed in the media to make it obvious that class is still an existing factor in society. The Australian nation may want to believe that there isn’t class discrimination and that everyone is middle class but this claim is evidently false which can be understood in the article â€Å"Whatever happened to the classless society? by Thornton McCamish. The article identifies Australians as an unequal country in reference to class discrimination as McCamish writes about how Australians are portrayed in TV shows such as Summer Heights High where Jamie, a high class ‘snob’ attends a public high school for a semester as opposed to her private girls college and assumes that everyone attending public schools are living in poverty (†˜povvo’) classing them in the working class.This assumption isn’t widely made or accepted among Australians as the TV show exaggerates reality but people watching the series may take that into account and might reassess their social status in terms of school placement but the fact of the matter is working class parents can only afford public schools which have higher risks to drug abuse and teen pregnancy. It shows that Australia went from a very egalitarian country to a country with underlying class discrimination issues, that may not necessarily be evident as to where the dividing line is but it is present in twenty-first century Australia.The article reads â€Å"Ignoring class didn't make socio-economic divides go away, just harder to get your head around. Especially once the Howard government took to our class structure with a rhetorical Dymo, replacing labels such as †ruling class† or †working class† with new ones such as †elitesâ⠂¬  and †battlers† – a category that seemed to embrace anyone with a swinging vote. Meanwhile, our very rich (not part of the †elites†, puzzlingly) got very much richer. † (McCamish pars. 6)Masking the names of the ruling or working class doesn’t make class discrimination irrelevant and evidently ignoring the divides doesn’t make class irrelevant either. To conclude, it is obvious that class is still an existing factor in twenty-first century Australia making it relevant especially due to the socio-economic status regarding employment, property ownership and geographic location. Conducted studies by the ABC show that 86% of Australians believe that class is still relevant in Australia.Theories from centuries ago about social classes are still relevant when comparing social discrimination to Australia’s social classes making it therefore evident that it still exists. WORKS CITED Henslin, James M. Global Stratification,  "Essentials of Sociology: A-Down-To-Earth Approach Eighth ed. Boston: Pearson/Allyn and Bacon, 2009. 170-95. Print. Kemeny, J. Capitalism- the Australian way, Arena  (Melbourne) 1978. No. 51, 94-103. Print. Marcus, Caroline. â€Å"Welcome to Bludgetown, Western Sydney. The Daily Telegraph 10 Jun. 2012. Print. Martin, B. Class, in P. Beilharz and T. Hogan (eds. ) â€Å"Sociology: Place, Time and Division†, South Melbourne: Oxford University Press, 2006. pp. 402-405. Print. Marx, Karl – Engels, Friedrich. The Communist Manifesto. United Kingdom: Penguin Books, 2002. Print. McCamish, Thornton. â€Å"Whatever happened to the classless society. † The Age 16 Aug. 2009. Print. Weber, M. The Protestant Ethic and the spirit of Capitalism, Unwin Hyman Limited London- 1985. Print.

Economic and Sociological Perspective on the Book,...

Outcasts United from Economic and Sociological Perspective Outcasts United by Warren St. John is a wonderful book about a community of refugees who live in Clarkston, Georgia and their struggles to adapt with foreign environment of the United States. The book tells the stories of refugees that come from different background and countries in which they are connected together by an American- educated Jordanian woman called Luma Mufleh. Despite their difficulties in establishing new identity, they found their passion in soccer and with Luma Mufleh as their coach they create a soccer team called Fugees. In the early chapters of the book, it illustrates the difficulties to make a group of kids from different background unite and work together†¦show more content†¦Similar to the concept of incentives in economics that describe people make decision according to incentives offered which is further clarified in the law of demand where consumers have the incentives to buy more when pr ice is lower. Both families’ situations have given them the incentives to come to the United States for better living. The incentives are freedom from political persecution, greater opportunities for jobs, and economic stability. Opportunity cost will also occur when it comes to making choices whether in economic decision or in daily basis. In this situation, the opportunity cost for those refugees are loss of trust in their countries, broken relationship with their familiar neighborhood, and deviation from their familiar tradition and culture. Incentives and opportunity cost are then used to measure their economic profit by moving to the United States just like the way economists calculate economic profit in economic context. The difference is that in economic context we are provided with quantitative data while in this case we are provided with qualitative data. However the logic remains the same, if gains from the decision are greater than the opportunity cost it is econom ic profit. The refugees in this case have more incentives to come to United States because of the gains obtained from moving exceed their opportunity cost which is also known as theirShow MoreRelatedThe Issue of Homelessness Essays2064 Words   |  9 Pagesepidemic which affects approximately 2% of the total population share of Michigan. 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Development Of A Nation s Development - 968 Words

By definition development means ‘the act or process of developing; growth; or progression’. The world’s nation-states are commonly categorized based on their state of development; nations who have reached the end-state, that being developed, are colloquially termed as ‘developed nations’ or ‘first world nations’. In contrast, nations working towards this end-state are referred to as ‘developing nations’ or ‘third world nations’. However obvious or apparent these designations may seem, the constituents affecting the status of a respective nation’s development is quite convoluted. What qualifications do developed nations hold over developing nations; what does it mean exactly to be developed or developing. The process of development is dynamic, and so is the system by which nations received their designation. A series of indicators, institutions and measures are used to assess the state of a nation’s development; historically, these indicators have varied throughout time and space. Development theory has been largely presupposed to the fact that the only institutions of importance were those directly expediting market activity. Directly following World War II, the health of a nation was predominately based off its gross domestic product (GDP). This view of the ‘market as the magic bullet’ dominated the social construct of development; however, this paradigm began to shift come the late 1980s/early 1990s. 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Personal Statement Science Quizzes And Co Curricular...

Personal Statement – Sistla Divya As a child, the most fascinating incident which planted the first seeds of medicine into my brain was a renal transplant performed on one of my close relatives. This incident not only proved my assumption that only inanimate objects were reparable wrong, but also inspired me to choose medicine as my definite career choice. My aspiration to be of service to humanity in conjunction with my belief that human race is safeguarded from infinite diseases by white-coated medical professionals, right from cradle to grave, shaped my personal ambition to become a doctor. Coupled with the motivation to accomplish, curiosity drove me to keep learning. Participation in science quizzes and co-curricular activities helped me build my logical reasoning skills. My favorite ways to relax - solving newspaper puzzles and watching detective shows sharpened my deductive reasoning skills. At medical school, I found Internal medicine to be the best method of applying my innate analytical and reasoning skills . Furthermore, with a broad range of illnesses that can be treated with the help of Internal Medicine and the vast amount of scope to study, Internal medicine, without hesitation became my preference to transform myself into a complete physician. Best diagnosis, according to me, is a product of extensive investigation and history taking. As an acting intern, at the bedside clinics I worked in, I molded myself into a better physician by building skills ofShow MoreRelatedStatement of Purpose4243 Words   |  17 PagesStatement of Purpose My name is Jasleen kaur. I have done my schooling from one of the prominent school of India. I joined it in 19.. and passed my schooling in 200... The decade inculcated the bulk of the learning I possess today. There after I joined .a.b.c†¦. college Barnala and did my graduation with Commerce. Completing my graduation I came through certain phases which led me to pursue management at PG level. Looking at the trend in the market, where there is a great competition in the economyRead Morecibm7098 Words   |  29 Pageshistory of management module Additional reading: Pfeffer, J. (2010). Building sustainable organizations: The human factor.  The Academy of Management Perspectives,  24(1), 34-45. COY, P (2007) Cog or Co-Worker Business Week Online Available at: http://www.businessweek.com/stories/2007-08-19/cog-or-co-worker [accessed 06/08/13] Khurana, R., Nohria, N. (2008). Its Time to Make Management a True PROFESSION. Harvard Business Review, 86(10), 70-77. KINGSMILL, D (2009) How Experience Failed Us

A Worn Path Summary Example For Students

A Worn Path Summary The essay named A Worn Path by Eudora Welty title suggests that the path that the main character Phoenix takes and the obstacles that she faces are paths and obstacles that all people have to face in their lifetime. Phoenixs journey on the path is both a literal journey as well as a metaphorical journey. The story begins when Phoenix makes her way into a forest abundant with wildlife. The animals that she is afraid of symbolize her first obstacle in her journey. She tells the animals Dont let none of those come running my direction. I got a long way. This shows that even at the very beginning of a persons journey there will be things that will make a person fearful, but it is best just to keep on going and push those fears aside. Then Phoenix is confronted with her next obstacle in the form of a bush grabbing at her dress. She at first says that she was fooled by the bush thinking that it was a pretty little green bush, when it actually is something that grabs a hold of her dress and almost tears it. This part of the journey shows that the temptations that life may offer might look good or seem like a good idea, but as soon as you get close enough to them they make troubles. Phoenix seems to get into one place in the bush thinks that she is finally out, but just gets stuck again in the bush. Life seems to do exactly what the bush in Phoenixs journey does. As soon as a person thinks that the struggle is over, another problem seems to come up. Phoenix then has to cross over a log laying across a creek. Putting her right foot out, she mounted the log and shut her eyes. When a person has to face something or cross over a tough spot in life, sometimes it is better if that person just closes their eyes and has faith that they will reach the end of their problem. Phoenix did just that. Then she opened her eyes and she was safe on the other side. When Phoenix takes a break it showed that after going through many struggles it is best to stop, rest, and enjoy the view. Phoenix also is thankful that in winter snakes curl up and sleep. The same is true in life, a person must be thankful for the little things that make a journey easier and not focus on all of the negative things that happen. Next in Phoenixs journey a big black dog jumps up and knocks her into a ditch. Afterwards the dog just sat there happy to watch the old woman suffer. The black dog symbolizes a persons enemies in life. They are happy to see you fall down and not be able to get back up. A white man then rescues Phoenix from her suffering. After he helps her though he seems to tease her and make her uneasy with his gun. The situation comes out well for Phoenix though when the man mistakenly drops a nickel. This shows that sometimes bad situations can be a blessing in disguise. At the end of Phoenixs journey it is revealed why Phoenix had traveled all of that way and it was not for herself, but her little grandson. She had forgotten after her whole entire journey, what it was she had came for. Life is the same way. People can live their whole lives searching for something without even knowing what they are looking for. It is not discovered until the final part of her journey that Phoenix discovers what she went through all that for. A Worn Path truly brings out the struggles that every man and woman goes through. Whether it be fear, deception, or any other obstacle like Phoenix faced in this essay.

Kamp Motors free essay sample

Several of the components for Kamp’s engines are supplied by other businesses. In some cases, they supply standard components, in other cases, components produced according to Kamp’s specifications. Together with various essential components produced by Kamp itself, the components supplied by other businesses are used by Kamp in different types of engines. Table 1 contains some financial information on Kamp relating to 2001. Kamp produces four main types of car engines. Type 1 is a quite conventional type which is supplied mainly to businesses outside the Vecu concern. The more high-tech types 2, 3, and 4 are supplied only internally. The reputation of Vecu’s car makes has always been based on their powerful and noiseless engines. Not all of the Vecu models are fitted with Kamp engines. A considerable number of engines is purchased externally. Whenever a new car model is being developed for one of the Vecu makes, the company has to decide whether to fit it with a Kamp engine or an engine purchased from an external supplier. We will write a custom essay sample on Kamp Motors or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Kamp’s engines, i. e. the types 2, 3, and 4, are often selected for the more exclusive Vecu models. The fact of the matter is that other manufacturers generally cannot supply attractively priced engines which meet Vecu’s specifications. Kamp has managed to incorporate major new technology into its engines every few years, with the result that they are technically superior to other manufacturers’ engines. In fact, Kamp engines are so successful because of their efficient fuel consumption, power and noiselessness. Table 1. Some financial data on Kamp Motors, 2001; x â‚ ¬1 million |Sales |361 | |External costs*) |204 | |Staff costs | 98 | |Depreciations | 20 | |Number of employees |2,303 | ) External costs: costs of raw materials and auxiliary materials, purchased components, contracted work, etc. Vecu is made up of a number of relatively independent divisions which have been subdivided into business units. Kamp is a business unit and profit centre within the Make A division (MA division). Make A is seen as the showpiece of Vecu; the MA division produces exclusive models only. In addition to this division, the Make B and Make C divisions (MB and MC divisions) are also supplied with quite a lot of engines by Kamp. Make A cars are expensive, yet they have held a very strong position in the market for years on end. This is due to their design and their high-quality engines. Like Make A, Vecu’s other passenger cars (Make B and Make C) are not intended for customers who are interested mainly in a reliable, safe car that does not cost too much. MB and MC are to project the image of sporty, stylish and fun cars. Although the MB and MC divisions buy a lot of engines externally, the ‘glamour’ of Kamp engines enhances the image of their cars. Incentives At the end of 2000, the board of the Vecu concern decided to give the divisions and business units stronger incentives. Consequently, the incomes of managers at various levels were made more dependent on the profits made by their units. It was expected that this would encourage the divisions and business units to strive more strongly for efficiency and higher sales proceeds. Ultimately, Vecu needed to increase its returns, as the board stated during the big annual meeting of managers of divisions and business units at Lyon. At the beginning of 2002, the board of Kamp noticed that the management of some segments of Vecu were entitled to considerable bonuses over 2001. The board was very sorry to conclude that the management of Kamp were not in the same position. The board would not take this lying down and started to look for possibilities of increasing the profit of their own business unit. Sadly, they found that there were only limited possibilities. Kamp is obliged to supply certain engines, namely the types 2, 3, and 4, internally at costs per unit plus a small mark-up for profit, as was ordained by the boards of the MA division and Vecu several years ago. Type 1 yields a nice profit, but Kamp cannot increase the numbers of engines sold externally and their prices forever. Even a reduction in the costs of types 2, 3, and 4 will not result in an increase in Kamp’s profit if the decrease is taken into account when the unit costs for those types are calculated. Vecu has strict rules for determining unit costs. Kamp, too, has to determine the basic cost per unit (bcpu) of each type of engine first, as follows: bcpu = external cost per unit + (staff and depreciation costs) : standard capacity. To arrive at the cost per unit, the basic cost per unit is increased by a mark-up for some other direct and indirect costs. In the formula for basic cost per unit, external cost is the cost of purchased materials and components. This cost is in principle proportionally variable. External cost is based on the cost per unit for average-sized buying orders. Buying large or small amounts can be to Kamp’s advantage or disadvantage. Its standard capacity has been set at 90% of its maximum production capacity. Obviously, the rule for determining cost per unit is clear. However, even the strictest rule has to be interpreted. And the board of Kamp thinks it is safe to assume that, in actual practice, the boards of the MA division and Vecu hardly concern themselves with the level of unit costs. Kamp is wondering whether the top management of the division and concern are really well-informed about Kamp’s production process and costs, and whether the senior executives are really interested in Kamp as long as it is run reasonably well. The board of Kamp is therefore considering reducing costs by reorganizing its organization and not reducing the units costs of the types 2, 3, and 4 to the same extent. With a view on this, a reorganization of Kamp’s cost information system is also considered. That might result in more profit for Kamp. In addition, the board is thinking about changing the department of Research and Product Development. It is a large department because Kamp wants to remain a leader in the field of technology. At present most of the departmental staff are employed on a permanent basis. However, the board of Kamp is contemplating much closer collaboration with technical universities in order to save costs and increase profits. Besides through cost reductions, profits can also rise if sales proceeds increase. That is why the board of Kamp is wondering whether the company might benefit from supplying the types 2, 3, and 4 externally as well. At present Kamp’s mostly very specialized machinery is sometimes operating considerably below maximum capacity, e. g. when the development, production or sale of certain car models is stagnating. External sales might result in fewer fluctuations in Kamp’s capacity usage and an increase in its production, profit and profitability. Seeing that other car manufacturers regularly approach Kamp, its board is convinced that there is a sizeable market for Kamp outside Vecu. There are not many engines on the market which are comparable to Kamp’s, qualitatively speaking. The board of Kamp is certain that external sale prices will be considerably higher than the prices at which Kamp has to supply engines to Vecu. An important order However, even the board of Kamp cannot afford to spend its time daydreaming about Kamp’s almost certainly wonderful and profitable future. Although Kamp holds a strong position within Vecu, no order is a certainty. That proved to be true in March 2002, when Guy Mercier, a senior manager from the MB division, contacted Robert Drover, who is in charge of Commercial Affairs at Kamp. Mercier and Drover discussed whether Kamp could supply engines for a new exclusive car model (model MB99) which was being developed by the MB division. Further consultations showed that Kamp would be able to supply engines for the MB99 and that the MB division would probably need 5,000 of these engines annually. Kamp would have to alter the type 2 engine slightly, i. e. develop type 2a for the MB99. Type 2a is not really an average engine, but it is not a typical Kamp engine either. In other words, it is not a genuinely sophisticated engine. Mercier indicated that the MB division was also talking with two other potential suppliers, namely the British company Black and the Italian company FER. Mercier expected that these two companies would also be able to supply an engine which met most of his requirements. In addition to the technical qualities of the engine, its price was an important criterion for the MB division’s decision. ‘Now that Vecu wants to increase its returns across the board, the MB division wants to improve its profit figures too’, said Mercier. ‘We would like to get our engines from Kamp, but only if they are exceptional, technically speaking, and are reasonably priced. Be fair, until now we have had to pay quite high prices for Kamp engines, I think’, Mercier added. Subsequently Robert Drover gave a brief account of his talks with Mercier to the board. Well, Robert’, said Tracey de Cock, financial manager of Kamp, ‘I do not like the sound of it. We have always treated the MB division decently in our business dealings so that they and we would do reasonably well. Of course we hardly made a profit by supplying e ngines to them, but our costs were adequately covered. They never complained to us about our unit costs. It seems that Mr Mercier is now trying to pressurize us to raise his profit figures and his bonus. But I’m damned if I’m going to do business that way. An order for 5,000 engines is not to be sneezed at, but Kamp’s survival does not really depend on it’. ‘Wait a minute, Tracey’, said Michel Dingman, general manager of Kamp. I agree with you that Mercier’s way of doing business with us differs from what we were used to, but maybe we should adapt to the new situation. Anyway, we should not turn down a possible order just like that. It is true that 5,000 engines do not amount to much, but how much does each of those engines bring in? Could we increase the degree of capacity utilization for our current production machinery somewhat? If that new model is a success, the annual figure may increase in the coming years. And what about our sp ecific costs? They may be rather low, because we will only have to adapt an existing type of engine. And if MB develops a relationship with an external supplier of advanced engines, will we not run the risk of losing even more sales in the future? I think we should continue talking with Mercier and should try to do the best possible deal. If necessary, Robert, I will join you in negotiating with Mercier at crucial moments’. ‘Well, you may be right’, said Tracey, ‘but we should always be wary of unprofitable orders. We, too, want to increase our profit. Actually, we cannot supply engines at lower prices until we have cut costs and that will take time. If we really want to make money, we must ask ourselves if we should not supply more engines externally and if we should not stop supplying engines internally at cost per unit plus a small mark-up for profit. But those questions will be dealt with in the long term’. After that, Robert Drover contacted Mercier, who then sent further details about the MB division’s requirements with regard to the type 2a engine. Next, a few staff members in Kamp’s department of Research and Product Development checked the technical ramifications of an order. And staff from the Production Planning and Finance departments looked at the consequences for the production machinery and the costs involved. After some calculations, Kamp concluded that its engine meets Mercier’s technical requirements more than adequately. Furthermore, the first 5,000 engines could probably be produced relatively easily with its available production machinery. However, since the demand for cars and engines is xpected to rise steeply in the coming years, capacity may become a problem, especially if Kamp is allowed to supply engines of the types 2, 3, and 4 to external customers. [2] If Kamp is allowed to sell externally, it will probably supply external customers with en gines yielding a profit of at least â‚ ¬750 per unit. If the full cost per unit for the type 2a engine is calculated in the usual way, it will amount to â‚ ¬4,000. In that case, the full cost per unit includes a part of the development costs of the type 2 engine, namely â‚ ¬200 per engine. In fact, these development costs are also covered by the income from the production of the type 2 engine. The relatively low, additional cost of developing type 2a (by adapting type 2) will be covered if some cheaper components for type 2a are not taken into account when the cost per unit is calculated. The variabele costs per engine are set at â‚ ¬2,500. Kamp does not yet know the exact prices of the engines which Black and FER have offered to Mercier, but it suspects that they range between â‚ ¬3,750 and â‚ ¬4,250. Technically speaking, the Black and FER engines are probably not as good as the Kamp engines, but they probably meet Mercier’s requirements. Now they know all this, Robert Drover and Michel Dingman are preparing themselves for another meeting with Guy Mercier, during which they want to put forward a proposal for the price at which Kamp is willing to supply the type 2 engine. Drover and Dingman want to get a transfer price which will satisfy Kamp in the near as well as the more distant future. Suggested assignment Being a consultant, you have been asked to make a report for the board of the Vecu concern in which you are to answer the following questions. 1. What transfer price should Kamp insist on, in your opinion, if it were to supply the type 2a engine to the MB division now and in the future? Please give arguments for your proposal. You should at least consider the principle ‘minimum transfer price = variable cost per unit + opportunity costs for the supplier’ and the guidelines Vecu has for transfer prices. Please draw ttention to the interests of Kamp Motors as well as those of Vecu as a whole. Taking into consideration Vecu’s transfer price policy, what do you think of Guy Mercier’s attitude? 2. Please discuss the possibilities of increasing Kamp’s profit by using the formula for basic cost per unit and by reorgani zing. Please use a concrete example to indicate how the board of Kamp can manipulate the unit costs for the types 2, 3, and 4 by reorganizing its cost information system. How, do you think, can the boards of the Vecu concern and the MB division determine whether Kamp manipulates data on unit costs? 3. Within the Vecu concern, Kamp is obliged to supply engines at cost per unit plus a mark-up for profit. Please compare Vecu’s transfer price system with Vecu’s system of responsibility centres and with Eccles’s theory on transfer pricing. 4. Taking into consideration the product differentiation strategy adopted by Kamp and Vecu, what do you think of Kamp’s idea to collaborate more closely with technical universities and to sell the types 2, 3, and 4 externally as well? (See for example Colbert and Spicer, 1995. ) [1] Authors: Henk J. ter Bogt and G. Jan van Helden, Faculty of Economics – University of Groningen (the Netherlands) [2] Each engine that is produced, i. e. type 2, 2a, 3 or 4, takes up the same amount of Kamp’s production capacity.