Advantages and Disadvantages of Adopting the Euro

Advantages and Disadvantages of Adopting the Euro A Study of the Benefits and Costs which Might Result for UK-based Firms Should the UK Adopt the Euro Name: Louise Tibagalika Introduction The euro is the single currency established in 1999, currently shared by 18 countries of the European Union’s Member States (Ec.europa.eu, 2014). Due to the number of advantages such as the stimulation of trade and disadvantages such as economic instability, the decision for the UK to adopt the euro is a big economic and political debate at present which will affect businesses and the public in many ways. The following report will look at the advantages and disadvantages for businesses and answer the question as to whether the UK government should proceed with the decision. Objectives Assess the benefits of the UK adopting the EURO Assess the drawbacks associated with the UK adopting the EURO How businesses can utilise these benefits and survive in the international market Look at the political, economic, social and environmental factors Provide workplace and personal experience Methodology In order to achieve the goals identified above, a variety of different sources have to be explored. The core text; International business by Wall, S., Minocha, S. and Rees, B. and Macroeconomics By Edward Gamber and David C Colander are good places to start as they give a good background on international business and the different factors that effect businesses looking to expand on an international level. To fully assess and answer the posed question the following sources will be useful; Adopting the Euro in Central Europe, Challenges of the Next Step in European Integration: Occasional Paper. 234 (IMFs Occasional Papers) by Susan Schadler; Britain and the European Union Frequently Asked Questions By Stuart Notholt; Britain, the Euro and Beyond by Baimbridge and Whyman European Economic and Monetary Integration, and the Optimum Currency Area Theory by Mongelli, F. P. These sources give good background on the problem and also give different opinions as to the pros and cons associated with adopting the euro. They also provide links to various other sources and explain why this has been an on-going debate for the UK since the European Union formed. As the debate about the UK adopting the euro is consistently in the news and is a much talked about issue due to the economic and political implications, there will be a number of web based sources that will be explored such as; Ec.europa.eu 2014; The euro European Commission S-cool.co.uk. 2014: A-level Economics The Euro Revision Should the UK Join the Single Currency? News.bbc.co.uk. 1997: BBC News | Single currency | Pros and Cons. Wei, L. 2009: Your portal to the world: Pro Cons For UK When Adopting Euro. European Commission Europa. 2011. How the euro benefit us all. Econ.economicshelp.org. 2007. Economics Essays: Why the UK will never join the EURO These amongst other online sources will also give different opinions on the question asked and will be useful as a source before further reading or research is carried out. With the various forums online and the above sources, there will be a large amount of information Main Body Advantages of the Euro The Economic and Monetary Union (EMU) was established to allow the European economy to function well bringing more jobs and greater prosperity for Europeans (European Commission Europa, 2011). There are many benefits to adopting the euro for the UK and for businesses alike which include eliminating risks and cutting costs. The main benefit for businesses is that due to the single currency there will be no costs in exchanging currencies with EU countries which will result in the uncertainty for businesses being reduced. This will help to improve economic welfare and also remove the risk of unforeseen exchange rate revaluations or devaluations (Historylearningsite.co.uk, 2013; Irons and Colander, 2002). Due to the fluctuating exchange rates, businesses would have to take into consideration either export prices being higher or companies being discouraged from exporting within a single market. Therefore by adopting the euro the UK will have more opportunities for cross-border trade (Ec.europa.eu, 2013; CenuÃ…Å ¸e and Drigă, 2010). This would be more beneficial to medium sized UK businesses as they cannot currently take advantage of operating in the euro-zone and gaining profit like Shell and Vodafone and other larger companies. The interest rate of the Bank of England and other central banks is known to be volatile. With a single currency the European Central Bank will focus on economic conditions across the board helping to lower the interest rate. This will be beneficial for investment and growth as the strength of the currency will improve (Ec.europa.eu, 2013). By keeping the interest rate low or stable, this can improve profitability of exports and more businesses will want to invest in UK firms. Also less volatile interest rates will allow businesses to borrow at cheaper rates and also invest more confidently in the long term (Ec.europa.eu, 2013; Irons and Colander, 2002). For this reason the Japanese company Mitsubishi Corporation is keen for the switch and the By joining the EU, UK businesses will be open to price transparency and reduction of information costs. The single currency will also allow consumers and businesses to compare prices which will help reduce the costs of raw materials and further make their customers happy with lower prices (Baimbridge and Whyman, 2008; Ec.europa.eu, 2013). For example new cars in Europe cost less than new cars in the UK, a single currency will remove this price differential. Also the euro will allow better access as investors will no longer be limited to a local market and investors can move capital to areas where it will be used more effectively (Baimbridge and Whyman, 2008; Ec.europa.eu, 2013). The UK is also known to have a very successful labour market and within a single currency this would be highly beneficial not only in that the inflation rate will go down but also as competitiveness will be sustained (Mongelli, 2008). This could also be very useful for SMEs as well as large organisations due to prices going down and hopefully competitiveness will promote more business. Arguments against adopting the Euro Although the arguments for adopting the euro seem strong, some of the positives can be changed into points to support the UK keeping the sterling. By adopting the euro, the UK may be open to instability, lower growth, higher unemployment and economic decline due to not being able to set their own interest rates based on the national economy (Kern, 2002). Although devaluations can be detrimental in some cases, it has been demonstrated in the past that well-chosen devaluations can help an economy out of difficulties. For example during the economic downturn in 2008, many economies of countries within the euro, such as Spain, could not stimulate their own economy by devaluing their currency and therefore increasing exports, this saw their businesses and economies failing and finding it difficult to recover (Historylearningsite.co.uk, 2013; Baimbridge and Whyman, 2008). The physical conversion from sterling to euros will have many costs for banks and retailers which the UK Government is unlikely to cover, such as training staff, changing computer software, creating open euro bank accounts and educating customers. The British Retailing Consortium estimates that British retailers will have to pay between  £1.7 billion and  £3.5 billion to make the changes necessary (Baimbridge and Whyman, 2008). This will affect SMEs, which will not benefit directly from the adoption of the euro and they could potentially force marginal firms out of business and give countries that are not in the euro a competitive advantage. According to the KPMG report, an estimated 3,000 à ¯Ã‚ ¬Ã‚ rms face total costs of up to â‚ ¬56.5 million ( £35.8 million) (Baimbridge and Whyman, 2008). UK Businesses may also have to drive down prices due to the combination of improved availability of information and price transparency. This will be especially troublesome for products that are accessible to cross border trade and will be reinforced by internet shopping (Baimbridge and Whyman, 2008). Inefficient firms will suffer mostly from this and profits will be reduced due to higher levels of competition. Joining the euro would mean that the UK would have to adhere to new labour rules which in some cases govern how employees are hired and fired (Baimbridge and Whyman, 2008; Econ.economicshelp.org, 2007)). As the labour market is more flexible in the UK than it is in others in the euro and UK firms have more independence with employment, joining would be detrimental for the firms as the cost of production would increase and unions would have more power (S-cool.co.uk, 2014; Brugesgroup.com, 2014). Results and Conclusions Based on the findings above the general benefits for the UK businesses adopting the euro are as follows; Lower transaction costs Reducing the uncertainty affecting the profitability of international transactions Lower cost of capital Improved allocation of capital Better use of the common monetary reserves Reducing losses due to different rates of inflation within EMU member countries Improving macroeconomic management and cooperation Improving macroeconomic stabilisation within EU Member States The costs for UK businesses on the other hand are as follows; Deflation and economic instability Costs of change Loss of income resulting from issuing currency Increase of costs necessary to make shock adjustments; Lower economic growth rates Less flexible labour market Comparing the two lists, it would seem that it wold be best for the UK to adopt euro as businesses would benefit from the lower transaction costs, lower cost of capital and better price transparency which could lower invoices and costs of raw materials. This as discussed would benefit customers and could help to boost business. So ultimately it seems that the higher capital costs and an overvalued exchange rate are the results of not joining the euro as well as receiving fewer European visitors (Rickard, S 2002). The costs of the UK adopting the euro seem short term, such as the costs of change and the loss of income due to issuing the new currency. However the less flexible labour market, deflation and the lower economic growth seem to be major factors that have caused the UK to delay the decision to adopt the euro. Those who support the single currency must consider that loss of control over monetary and exchange rate policy may weaken national economic management which, looking at previously strong economies like Germany will have a large impact on trade and business (CenuÃ…Å ¸e, M, Drigă, 2010; Baimbridge and Whyman, 2008) Ultimately there are many factors that need to be considered should the UK decide to adopt the euro or stick with the sterling. The fact that there are political and economic arguments makes it harder to come to a simple decision, and although it appears that the benefits are great, the costs need to be carefully considered as businesses need a strong economy to survive and flourish. Baimbridge and Whyman (2008) quote Healey (2000: 19–20) who states that ‘while the beneà ¯Ã‚ ¬Ã‚ ts are signià ¯Ã‚ ¬Ã‚ cant, cumulative over time and reasonably uncontroversial, the costs are much more uncertain, widely exaggerated and almost certain to diminish with the passage of time’ Bibliography Baimbridge, M. and Whyman, P. 2008. Britain, the Euro and beyond. Aldershot, England: Ashgate. eBook Collection (EBSCOhost), EBSCOhost [Viewed 9 February 2014]. Brugesgroup.com. 2014. From Single Market to Single Currency: Evaluating Europes EconomicExperiment. [online] Available at: http://www.brugesgroup.com/mediacentre/index.live?article=74 [Accessed: 10 Feb 2014]. CenuÃ…Å ¸e, M, Drigă, 2010, Advantages And Disadvantages Of The Euro, Annals Of The University Of Petrosani Economics, 10, 3, pp. 61-68, Business Source Complete, EBSCOhost, [Viewed 9 February 2014]. Currencysolutions.co.uk. 2011. The Unpredictable Character of British Pound And The Euro Exchange Rate. [online] Available at: http://www.currencysolutions.co.uk/euro/the-unpredictable-character-of-british-pound-and-the-euro-exchange-rate [Accessed: 9 Feb 2014]. Ec.europa.eu. 2013. Business benefits European Commission. [online] Available at: http://ec.europa.eu/economy_finance/euro/why/business/index_en.htm [Accessed: 8 Feb 2014]. Ec.europa.eu. 2014. The euro European Commission. [online] Available at: http://ec.europa.eu/economy_finance/euro/ [Accessed: 9 Feb 2014]. Econ.economicshelp.org. 2007. Economics Essays: Why the UK will never join the EURO.. [online] Available at: http://econ.economicshelp.org/2007/03/why-uk-will-never-join-euro.html [Accessed: 9 Feb 2014]. European Commission Europa. 2011. How the euro benefit us all. [online] Available at: http://ec.europa.eu/economy_finance/general/pdf/how_the_euro_benefits_us_all_en.pdf [Accessed: 8 Feb 2014]. Historylearningsite.co.uk. 2013. What are the arguments for and against joining the Euro. [online] Available at: http://www.historylearningsite.co.uk/euro.htm [Accessed: 8 Feb 2014]. Irons, J. S. and Colander, D. C. 2002. Study guide [for] Macroeconomics [by] David C. Colander, Edward N. Gamber. Upper Saddle River, N.J.: Prentice Hall. Kern, D. 2002. British Chamber of Commerce Economic Briefing, paper presented at British Chamber of Commerce Economic Briefing, London, 17 February. London: British Chamber of Commerce. Mongelli, F. P. 2008. European economic and monetary integration, and the optimum currency area theory. Brussels: Office for Infrastructures and Logistics. News.bbc.co.uk. 1997. BBC News | Single currency | Pros and cons. [online] Available at: http://news.bbc.co.uk/1/hi/special_report/single_currency/25081.stm [Accessed: 8 Feb 2014]. Rickard, S 2002, E-Day: the Impact of the Euro on UK Business, Credit Control, 23, 1, p. 14, MasterFILE Premier, EBSCOhost, [Viewed 9 February 2014]. S-cool.co.uk. 2014. A-level Economics The Euro Revision Should the UK Join the Single Currency? | S-cool, the revision website. [online] Available at: http://www.s-cool.co.uk/a-level/economics/the-euro/revise-it/should-the-uk-join-the-single-currency [Accessed: 10 Feb 2014]. Wall, S., Minocha, S. and Rees, B. 2010. International business. Harlow, England: Pearson/ Financial Times Prentice Hall. Wei, L. 2009. Your portal to the world: Pro Cons For UK When Adopting Euro. [online] Available at: http://econsguide.blogspot.co.uk/2009/02/why-is-uk-considered-wise-to-choose.html [Accessed: 9 Feb 2014].

Peters and Waterman’s Eight Attributes of Excellence Essay

Some things can be learned about leadership by studying organizations directly. Tom Peters and Robert Waterman drew on their experience at Mckinsey and Company, a well-known consulting firm, and on further study of a number of businesses they identified as exceptional. Their message is that traditional methods of managing and leading need to be replaced with new methods and new modes of thought. They provide a provocative perspective on the history and practice of management and leadership and identify eight attributes associates with excellence and innovation: a bias for action, staying close to the customer, autonomy and entrepreneurship, productivity through people, hands-on value driven, stick to the knitting, simple form-lean staff, and simultaneous loose-tight properties. The Peters and waterman study used a fairly large sample of sixty-two financially successful firms across six industries that were considered to be excellent but did not attempt any comparison with unsuccessful firms. The Pride in Excellence team slowly transformed the three Peters and Waterman attributes into Toro values. They worked to translate the values into specific behaviors. They were pioneers, and they found few ready-made answers to their questions. Personal and company values systems became jumbled. More than once, team members wondered how they could talk about this stuff at work and still be taken seriously. From the start, they concentrated on ways to get the values down to the level of individual jobs. This was relatively easy when talking about values such as Service or Quality. However, Toro wanted to adopt Peters and Waterman’s productivity through people attribute as well. That led to values such as Respect and Trust. Their final statement even uses the word â€Å"compassion. †

Complex Ions and Precipitation Reactions

Among the most common reactions in the qualitative analysis are those involving the formation or decomposition of complex ions and precipitation reactions. These reactions may be performed directly by adding the appropriate anion, or a reagent such as H2S or NH3 may dissociate in water to furnish the anion. Strong acid may be used to dissolve precipitates containing a basic anion. Ammonia or sodium hydroxide may be used to bring a solid into solution if the cation in the precipitate forms a stable complex with NH3 or OH-. A cation is usually present as a single principal species, which may be a complex ion, free ion, or precipitate. If the reaction goes to completion the principal species is a complex ion. The precipitate is the principal species if most of the precipitate remains undissolved. If a cation forms a stable complex, the addition of a complexing agent at 1 M or greater generally will convert the free ion to complex ion. The dissociation constant Kd can be used to determine the extent to which a cation is converted to a complex ion. The solubility product constant Ksp can be used to determine the fraction of cation remaining in a solution after precipitation. Kd and Ksp are both required to calculate the equilibrium constant for dissolving a precipitate in a complexing agent. Complexes of Cations with NH3 and OH- Cation NH3 Complex OH- Complex Ag+ Ag(NH3)2+ -- Al3+ -- Al(OH)4- Cd2+ Cd(NH3)42+ -- Cu2+ Cu(NH3)42+ (blue) -- Ni2+ Ni(NH3)62+ (blue) -- Pb2+ -- Pb(OH)3- Sb3+ -- Sb(OH)4- Sn4+ -- Sn(OH)62- Zn2+ Zn(NH3)42+ Zn(OH)42-

Homozygous A Genetics Definition

Homozygous refers to having identical alleles for a single trait. An allele represents one particular form of a gene. Alleles can exist in different forms and diploid organisms typically have two alleles for a given trait. These alleles are inherited from parents during sexual reproduction. Upon fertilization, alleles are randomly united as homologous chromosomes pair up. A human cell, for example, contains 23 pairs of chromosomes for a total of 46 chromosomes. One chromosome in each pair is donated from the mother and the other from the father. The alleles on these chromosomes determine traits or characteristics in organisms. In-Depth Homozygous Definition Homozygous alleles may be dominant or recessive. A homozygous dominant allele combination contains two dominant alleles and expresses the dominant phenotype (expressed physical trait). A homozygous recessive allele combination contains two recessive alleles and expresses the recessive phenotype. For example, the gene for seed shape in pea plants exists in two forms, one form (or allele) for round seed shape (R) and the other for wrinkled seed shape (r). The round seed shape is dominant and the wrinkled seed shape is recessive. A homozygous plant contains either of the following alleles for seed shape: (RR) or (rr). The (RR) genotype is homozygous dominant and the (rr) genotype is homozygous recessive for seed shape. In the image above, a monohybrid cross is performed between plants that are heterozygous for round seed shape. The predicted inheritance pattern of the offspring results in a 1:2:1 ratio of the genotype. About one-fourth will be homozygous dominant for round seed shape (RR), half will be heterozygous for round seed shape (Rr), and one-fourth will have the homozygous recessive wrinkled seed shape (rr). The phenotypic ratio in this cross is 3:1. About three-fourths of the offspring will have round seeds and one-fourth will have wrinkled seeds. Homozygous Versus Heterozygous A monohybrid cross between a parent that is homozygous dominant and a parent that is homozygous recessive for a particular trait produces offspring that are all heterozygous for that trait. These individuals have two different alleles for that trait. While individuals that are homozygous for a trait express one phenotype, heterozygous individuals may express different phenotypes. In genetic dominance cases in which complete dominance is expressed, the phenotype of the heterozygous dominant allele completely masks the recessive allele phenotype. If the heterozygous individual expresses incomplete dominance, one allele will not completely mask the other, resulting in a phenotype that is a mixture of both the dominant and recessive phenotypes. If the heterozygous offspring express co-dominance, both alleles will be expressed completely and both phenotypes will be observed independently. Mutations Occasionally, organisms can experience changes in DNA sequences of their chromosomes. These changes are called mutations. Should identical gene mutations occur on both alleles of homologous chromosomes, the mutation is considered a homozygous mutation. Should the mutation occur on only one allele, it is called a heterozygous mutation. Homozygous gene mutations are known as recessive mutations. For the mutation to be expressed in the phenotype, both alleles must contain abnormal versions of the gene.