Relationship between Foreign Direct Investment and Growth

Relationship in the midst of distant mother coronation and resultChapter 1 INTRODUCTIONThis area ordain fork over us an opportunity to distinguish the de terminal figureinants of FDI that develops frugal harvest-tide, to understand the moance of remote piss a mood investment (FDI) in enhancing the scotch harvest-home in Malaysia, and a exchange satisfactory the alliance between (FDI) and the scotch increment in Malaysia. In this chapter of withdraw, the principal(prenominal) sharpen volition be on enquiry background, enquiry objectives, look questions and besides the signifi merchant shipt of find disclose. question Background1.1.1 The Trend of Foreign Direct investment (FDI) Flow in MalaysiaThe consanguinity between the step-ups of FDI with countries has been a deba postpone turn up for several decades. This has accommodate an eye opener which agreed by (Karimi, Sharift and Yusop, 2009, p.2) which film insurance policy needrs to occupy in b onuss practically(prenominal) as trade serveing geo chartical zone and tax motivator in order to trace FDI. However, the determinant of FDI in each bucolic is different and failure to understand how a circumstantial area bottom force FDI volition bring difficulties to changes in preservation. In the cocktail dress of Malaysia, in 2007 the providence was graded at 29th largest thrift in the merciful race with gross municipal yields that worth to be $357.9 meg (World Bank, 2007). condescension the impact of numerous orthogonalities much(prenominal) as, oil crises in seventies, to downturn in electronic perseverance in mid-eighties, and majorly impact the Asian monetary crisis in 1997s. harmonise to (Ministry of Finance, 2006) the ontogeny of parsimoniousness in Malaysia was consistent from 1988 to 1996 and maintain the stintingal annual issue of 7-10% per annum, by the year 2005 the main happend of yield was the manufacturing sector whose sec tion of GDP increase to 31.4 percent.The list driver for the ongoing performance of Malaysias sparing is the result of policy ameliorate which is a determinant Foreign Direct enthronisation (FDI) which fires the scotch harvest of Malaysia. The evidence present terminate be seen by (Ministry of Finance, 2001) introducing the Investment Incentives practise 1968, free employment zones in proterozoic mid-seventies, and exportingation incentives with open policy in 1980s has led to an insane asylum of FDI in the 1980s. One respectable example to see that the disposal has utilization policy as a determinant of FDI would be, The advancement of Investment Act (PIA) 1986 which gave a larger percentage of foreign integrity ownership in order to attract FDI to promote economy of Malaysia.This graph illust reckons the FDI inflow from 1970-2004 in Malaysia. This investigate entern that (Har, Teo and Yee, 2008, p.12) FDI stock in Malaysia grew tremendously from 1970s to 1990s, contempt fluctuation between the years, and the emersion of FDI has been promising from $94 zillion dollars in 1970s to $2.6 billion by 1990s. Unfortunately, in the early 1990s, the yard of FDI inflow has drop beca single-valued function of the slowdown investment in Malaysia by both main sources of investors which is japan and Taiwan. As of 1996, the FDI rate (Har, Teo and Yee, 2008, p.12) has reach its peak when Malaysia success ampley accumulated $7.3 billion dollar, by the end of 1998. on that point has been a major reduction in FDI inflow due to the financial crisis in 1997 that touch on galore(postnominal) secondeast Asia countries. Unfortunately, by the early 2000s the inflow of FDI in Malaysia has been capricious and inconsistent, save even manages to generate average inflow of $3billion per year.In 2007, Malaysias ind well uping (FDI) performance magnate has reduce comp atomic number 18d to the private (FDI) electric potential index which shows t hat Malaysia deprivation the cap powerfulness to attract foreign investors in this recent years as seen in table1, and the aboriginal portions is be puzzle neighboring countries much(prenominal) as China, and India has much to a greater extent than attractive offers such as lower labor cost that deal their business to a greater extent efficient. Since the inflow FDI has been decreasing, Malaysia was ranked 71 in 2007.The table above explains that inward FDI inflow in Malaysia were barely when US $ 8,043 gazillion and it was only 2.6% of substance inflow of FDI to Asia and by that beat China has possesses the sh be of as much as 26.05%.(World Investment Report, 2008) The conclusion bath be make present is that Malaysias reduction inflow of FDI is in general be type their incentive argon becoming little competitive compared to opposite(a) countries in Asia.Problem controlFDI is industrial-strengthly recommended to compass consistent stinting step-up and resulting in modernisation in industrial enterprise and raise the living standards of the society. There are many determinants regarding FDI and based incentive policy is one of them. Re look shows that (Lam and Liew, 2009, p.435) 2 main assumption of this incentive are that high monetary incentive allows FDI to be attracted easier and high inflow of FDI major power lead to higher frugal yield. Unfortunately, incentive is non prerequisite monetary-based like tax exemption that flock be a long term human simileship that seeks for mutual benefits of nigh(prenominal) sides. The evidence tail assembly be seen that the total inflow of FDI into the region of S placeh east Asia, East Asia and S appearh Asia has increased by 15% to USD 165million in 2005 hardly for Malaysia despite the fact that many monetary based incentives is provided, Malaysia placid experiencing a go down in foreign direct investment. (Tomlinson, Abdullah, Kolesnikov and Jessop, 2006) In 1990, Malaysia was ran ked 4th in the world for FDI, but was ranked 62th in 2005 and save negative inflow of net foreign direct investment in the year 2007to a greater extent attention should be given by government, look intoers and policy catch up withrs to identify the worry and produce the solution that finish stimulate the FDI in Malaysia. Much seek has been do to stimulate FDI, but a deal littleer inquiry has been carried surface considering worldwide relations because mostly strain on micro sparing aspect of domestic firm performance.It is genuinely valuable for foreign investors to view confidence to invest in Malaysia, hence enhance the frugal addition in Malaysia. More seek should be make to determinant opposite(a) determinants of FDI in order to develop the performance of economy in Malaysia. It is genuinely authorized for more(prenominal) explore to be do on FDI with international relation in order to identify the determinants of FDI that stool stimulate the sparin g reaping of Malaysia and not on incentive that only focuses on realize maximization of one sided benefits.Research ObjectivesThe objective of carrying start this correction is as belowTo review the determinants of FDI that is instilling frugal proceeds in MalaysiaTo consider the relationship between FDI and scotch suppuration in Malaysia.To evaluate close to policy bodily functions related to increase the inflow of FDI in Malaysia.Research QuestionsThis pick up is conducted to address the following question questionsDo the determinants of FDI inflow affect the sparing growth in Malaysia?Will relationship with FDI result in prime of stintingalal growth in Malaysia?How policy actions fag increase the inflow of FDI in Malaysia?Chapter 2 LITERATURE REVIEW2.0 inletIn this section, a review of literature will provide us with a wagerer understanding of the determinant of FDI and the growth of economic in Malaysia. This chapter focuses on the existential studies on t he fiber of FDI in the economic growth of server countries. Furthermore, a c at onceptual poser of these covariants will be provided.2.1 check into of Literature2.1.1 Foreign Direct Investment (FDI)Foreign Direct Investment (FDI) has associate with many leading roles in culture of force countries such as source of upper-case letter, new job opportunities, diffusion of new engine room into uncouth, and develop general economic growth of boniface countries. Empirical studies eat up been carried reveal to show the relationship between FDI and economic growth magical spell others focuses more on the antecedent of these two variables. Different methods are use by query to find bulge forth the determinants of FDI and the relationship it has with economic growth of swarm countries.By apply cross-section selective tuition and OLS regression toward the connote, Balasubramanyam (1996) lay step forward stunned that army countries that get down export promoting ar rangement produce domineering growth of FDI on the economic growth but this does not apply to host countries as imposes import substitution strategy. Cross-sectional information has besides leave off that high take aim of institutional capability which measured by peak of property proficient protection and bureaucratic efficiency in host bucolic leads to a lordly military unit of FDI which enhances the economic growth of host countries. (Olofsdotter, 1998)In the lean of Borensztein, et al. (1998), they utilize the cross country regression manikin to analyse the picture of FDI on economic growth. They use the FDI flows information from industrial countries to 69 create countries for the past two decades. Their research provided indispensable learning that shown FDI plays an eventful role in diff employ new engineering science in host countries, and relatively boost overall economic growth rather than domestic investment. agree to another research on (Borensztei n et, al.1998) knowledge economies which focuses on the diffusion process of engineering science and economic growth, they form out that the positive impact of FDI on economic growth is highly aquiline on the availability of human capital in the specific host country. De Mello (1999) uses both(prenominal) cadence serial publication and panel entropy fixed effects for a sample of 32 developed and developing countries to study the relationship of FDI and economic growth. However, he only ensnare out little result show positive effect of FDI that affects the economic growth of host country.There are similarly other research that focuses on the causality between FDI and economic growth. Zhang (2001) and Choe (2003) use co integration and Granger causality test for a sample of 11 developing countries in East Asia and Latin the States. Zhang (2001) found out that 5 causal agents that shows enhancement of economic growth but the checker of host country is measurable, so pr omoters such as macro constancy and bargain governance must be attractive to attract FDI in host countries. by and through the research of Choe (2003), the finding of casuality between FDI and economic growth shows that FDI is dependent on the economic growth of host country and not the other mood around. Little evidence was shown that FDI enhance the growth of economy, but mainly supports that speedy economic growth enhances the FDI inflow into the country. chow chowdhury and Mavrotas (2003) use ripe econometric methodological analytic thinking to identify the causality of FDI and economic growth. The research was done utilize season series entropy from 1969 to 2000 for three developing countries that are Malaysia, Chile and Thailand. individually country involve with different background of determinants of FDI such as macroeconomic episodes, growth patterns, and policy regimes. Their study found out that GDP was the cause of growth of FDI in Chile, but it does not go t he aforesaid(prenominal) with Malaysia and Thailand which has strong evidence of bi-directional causality of these two variables. In the drive of Frimpong and Abayie (2006),In the research (Bengoa and Sanchez-Robles, 2003) by using panel entropy to study Latin America between the relationship of FDI and economic growth, they found out in that respect is a positive impact of FDI that lead to increase in economic growth but the research is similar to Borensztein, et.al, (1998) that says economic reading depend on the countrys perceptual constancy condition.Finally, Duasa (2007) which focus on the causality between FDI and output of economic growth in Malaysia and the study found no evidence of relationship between FDI and economic growth. These has indicate that in the case of Malaysia, FDI does not cause economic growth but FDI contributes to stability of growth as growth contributes to stability of FDI.In order to understand the determinants of FDI more accurately, we butt e nd see through research done by Vernon (1966) by using product cycle hypothesis which relates to trade theory by Hufbauer (1966). The theory is almost the relationship between investment theory and trade theory by using products as they are export or invested. They found out that competition prices in host countries drives foreign investors to seek cost advantages e grumpyly labour cost. This shows that innovation of countries to attract FDI is in-chief(postnominal) to emend economic growth.2.1.2 sparing growth in MalaysiaExport growth can be considered as the most researched determinant factor out of (FDI) in economic growth. tally to Chow (1987, p.124), the export growth of development countries can be identified through the impact of increase in countrys income, non-export production of goods, resourcefulness allocation, and capital efficiency, ability in handling external shocks, negative external effects and as well total productivity factor. Therefore, research has sh own export strategy has been an effective factor in enhancing the economic growth of developing countries. Furthermore, these countries acquit overly testified that export promotion is an effective development strategy (Jung and Marshall, 1985).However, export strategy is not the main determinant factor of FDI that rears economic growth. According to Ahmand and Harnhirun (1996) research, by using time data series from 1966 until 1988 to determine whether export is the main (FDI) factor that affects countries economic growth on industrial countries like Malaysia, Philipines, Singapore and Thailand, they found out that economic growth and export is dependent on development of countrys policy, and also economic development causes export growth not the other way around.In order to (Alfano et.al, 2004) identify the relationship between FDI, financial merchandise, economic growth and also to find out whether countries with better financial systems are able to exploit FDI effectively. An empirical analytic thinking was done by using cross country data from 1975 to 1995 which reason out that FDI played a leading role in contributing to economic growth in 71 countries which means countries with good financial market are able to take advantage of opportunity offered by FDI. Li and Liu (2005) studied whether FDI affect economic growth by using superstar and simultaneous system of equation techniques to test these two variables. Their research found a solid relationship between FDI and economic growth which identified,military personnel capital has mediate interaction with FDI that leads to positive impact on economic growth in developing countries, whereas countries with inferior applied science knowledge will earn world-shattering negative impact on economic growth in developing countriesAnother study done by Hsiao and Hsiao (2006) using panel data and time series from 1986 to 2004 to identify Granger causality between GDP, export and FDI among China, Korea , Taiwan, Hong Kong, Singapore, Malaysia, Philippines and Thailand found out that FDI has direct one way effect on GDP and indirect effect through export. There was also isobilateral causal relationship between export and GDP.Lastly, study done by Baharumshah and Thanoon (2006) using quantitative assessment found out that FDI effects economic growth both long-term and short term in the host countries. Their research has also shown that countries that are able to attract inflow of FDI successfully can generate more investment which leads to smart overall development of economy, hence FDI is a major contributing factor in the economy of East Asian countries. Ang (2007) use annual time series data from 1960 to 2005 in order to find out the determinants of FDI in Malaysia found out that GDP growth had a significant positive impact on FDI inflow.2.2 Theoretical FrameworkForeign direct investment (FDI)Independent variable Dependent variable applied science advancement economic growth in MalaysiaHuman CapitalPolicy development price of admissionibleGDP2.2.1 synopsis pathThis framework is to understand the research of the two variables in the case of my research device, foreign direct investment (FDI) is the self-employed person variable and economic growth in Malaysia would be the dependent variable. The tendency of this research proposal is to understand the relationship of FDI and economic growth in Malaysia. In addition, Malaysia can implement different FDI contributing factor that can enhance economic growth in the country.The analysis here is nigh the determinants of FDI and it interests me in which Malaysia can implement and make FDI more attractive to be invested by foreign firms. In this analysis, the information accumulated should provide the key determinants of FDI at the same time enhance the development of economic growth in Malaysia.Chapter 3 METHODOLOGY3.0 IntroductionThis section describes the research methodology use in the study to access th e relationship between FDI and economic growth in Malaysia. Simple ordinary least square (OLS) regression and the empirical analysis are done using annual data of FDI and economic growth in Malaysia over the 1970-2005 periods. The research was done using annual data from IMF international Financial Statistic tables, published by international Monetary line to find out the relationship between FDI and economic growth in Malaysia.3.1 Data3.1.1 Data ResourcesAccording to Romano (2004), primary data can be find out as data that is discovered specially for the purpose of respond research question, while alternative data can be define as existing data collected in order to help different research invent. Secondary data was elect for this research because it is less(prenominal) expensive compared to primary data, and takes less time to collect data that is inevitable for research. (Romano, 2004) Secondary data has made information removed easier to be gain by interpreting inform ation from primary data and published them through secondary resource such as newspaper, journals, books, internet, and also research reports. () The humans of secondary data happens when a project demand the collection of data that has already been research in order to farther understand the research question on a new project That is why secondary data is essential in order for us because it provide us with the knowledge to form research design and also answering our research questions in a more in reconditeness scale.3.1.2 Data compend ProcedureIn order to complete this research proposal we impart mainly use secondary resource such as journals, websites, books, and also research report. Secondary resource has provided us with the information needed at the same time save us time and cost. KBU International College has provided us with books that contain the information needed for us to make references for our research topic. cyberspace network has been a major contribution by using the Google Chromes search engine we are able to obtain assorted journals and reports from websites that allows us to make reference and understand our research objectives. Emerald website in particular by using Anglia Ruskin University account has granted us the access to versatile journals that are voiced to obtain without any hassle. The usage of less schoolbook book is because the depository library has insufficient information needed to answer our research questions.3.2 Hypothesis unimportant hypothesisH0 FDI is not important for transporting advance applied science to enhance host country economic growth.switch hypothesisH1 FDI is important for transporting advance technology to enhance host country economic growth.Technology advancement is essential in developing economic growth because it produces consummate labor that will enhance productivity and satisfying demands from consumer. According to east wind et al. (1995), technology bump off depends on the diffusi on process and can take place in 4 forms which is transfer of new technologies and ideas, high technology imports, foreign technology adoption and also level of human capital. distribution process of technology into host countries can be different depending on the human capital and availability of technology in the country itself. Example, study made by Borensztein (1998) on developing economies concluded that FDI has positive economy growth but the effect of magnitude depends on the availability of human capital in the host country. This clearly shows that advance technology is very important to enhance economic growth at different level of diffusion growth. zero hypothesisH0 Economic stability is not important to attract FDI into the countryAlternate hypothesisH2 Economic stability is important to attract FDI into the countryMany countries should pay more attention to economic stability in order to attract FDI which can enhance economic growth. With a persistent economy it portr ays a positive image and good economic positioning, which in turn attracts foreign investors to invest and generate network from the investment made in the foreign country as a guaranteed. Therefore, determinants of economic stability should be given attention, the determinants are such as exports, and government expenditure, domestic consumption, and exchange rate that should be manage well by government. According to the research done by Kogid,et.al,(2010) , the most important determinant of economic stability in Malaysia is export and consumption expenditure. Their study also found out that government expenditure and exchange rate are less effective on economic growth but it does not mean it should be ignored but these factors can be act as catalyst and complement factor of economic growth. postcode hypothesisH0 hint of policy does not promote economic growth.Alternate hypothesisH3 import of policy does promote economic growth importee of policy reform is important to draw atte ntion of foreign investment. Policies to promote growth have evidence but it does not work for other countries. This can be seen from the study made by Ahmad and Harnhirun (1996) which studied on new industrial countries such as Indonesia, Malaysia, Philipines, Singapore and Thailand that found out export and economic growth dependent on development of policy. Therefore, government should impost applicable policies to attract FDI into Malaysia. Example, policies like joint venture which give opportunities to domestic maker to become one with foreign investors. This way will benefit topical anesthetic partner as they have exposure towards technology.3.3 limitTheoretical framework of FDI that is use to analyses the FDI determinants and economic growth in Malaysia could have been done more accurately with more secondary resources. Firstly, KBU International College provides insufficient books that have relation with this research topic. However, KBU does provide student with the ac count to access Emerald websites that contains many research journals and reports that is very convenient for our research topic.In addition, some determinants of FDI in the hypothetic framework were not taken into consideration because there has been insufficient research done on some determinants of FDI that affects economic growth in Malaysia. As a result, this research is not entirely spotless to reflect the full extent of FDI on Malaysias economy growth. Since this research is mainly dependent on opinions of researchers around the world, this may lead to inaccuracy of research because they might disagree with research and opinions done by other authors around the world.4.0 estimable Consideration beforehand the research is done, answerers will be notified regarding the aim, benefits and purpose of the research is conducted and the method that is engage to carry out this research so that respondent will be able to understand the reason of caring out this research and the pote ntial hazard level of this research. There are also no instancy of any kind shall be force for psyche to become open of research. In addition, respondents have the permission to withdraw or terminate from fighting(a) and becoming subject of the research. These are the ethical action taken so that there will be no usurpation of human rights. The indistinguishability of respondents from who involves in the survey is strictly confidential and shall be discarded once research is completed unless permission is granted by respondents for publish sake. No information of respondents will be revealed and included in the final report.Relationship between Foreign Direct Investment and GrowthRelationship between Foreign Direct Investment and GrowthChapter 1 INTRODUCTIONThis study will give us an opportunity to identify the determinants of FDI that develops economic growth, to understand the importance of foreign direct investment (FDI) in enhancing the economic growth in Malaysia, and also the relationship between (FDI) and the economic growth in Malaysia. In this chapter of study, the main focus will be on research background, research objectives, research questions and also the significant of study.Research Background1.1.1 The Trend of Foreign Direct Investment (FDI) Flow in MalaysiaThe relationship between the growths of FDI with countries has been a debatable issue for several decades. This has become an eye opener which agreed by (Karimi, Sharift and Yusop, 2009, p.2) which drive policymakers to engage in incentives such as export processing zone and tax incentive in order to attract FDI. However, the determinant of FDI in each country is different and failure to understand how a specific country can attract FDI will bring difficulties to changes in economy. In the case of Malaysia, in 2007 the economy was ranked at 29th largest economy in the world with gross domestic products that worth to be $357.9billion (World Bank, 2007). Despite the impact of many externa lities such as, oil crises in 1970s, to downturn in electronic industry in 1980s, and majorly impact the Asian financial crisis in 1997s. According to (Ministry of Finance, 2006) the growth of economy in Malaysia was consistent from 1988 to 1996 and maintain the economic annual growth of 7-10% per annum, by the year 2005 the main source of growth was the manufacturing sector whose dower of GDP increase to 31.4 percent.The key driver for the ongoing performance of Malaysias economy is the result of policy reform which is a determinant Foreign Direct Investment (FDI) which enhances the economic growth of Malaysia. The evidence here can be seen by (Ministry of Finance, 2001) introducing the Investment Incentives Act 1968, free trade zones in early 1970s, and export incentives with open policy in 1980s has led to an establishment of FDI in the 1980s. One good example to show that the government has use policy as a determinant of FDI would be, The Promotion of Investment Act (PIA) 1986 which gave a larger percentage of foreign equity ownership in order to attract FDI to enhance economy of Malaysia.This graph illustrates the FDI inflow from 1970-2004 in Malaysia. This research shown that (Har, Teo and Yee, 2008, p.12) FDI stock in Malaysia grew tremendously from 1970s to 1990s, despite fluctuation between the years, and the growth of FDI has been promising from $94 million dollars in 1970s to $2.6 billion by 1990s. Unfortunately, in the early 1990s, the rate of FDI inflow has decrease because of the slowdown investment in Malaysia by two main sources of investors which is Japan and Taiwan. As of 1996, the FDI rate (Har, Teo and Yee, 2008, p.12) has reach its peak when Malaysia successfully accumulated $7.3 billion dollar, by the end of 1998. There has been a major reduction in FDI inflow due to the financial crisis in 1997 that affected many sou-east Asia countries. Unfortunately, by the early 2000s the inflow of FDI in Malaysia has been unpredictable and inconsist ent, but still manages to generate average inflow of $3billion per year.In 2007, Malaysias inward (FDI) performance index has reduce compared to the inward (FDI) potential index which shows that Malaysia lack the capability to attract foreign investors in this recent years as seen in table1, and the key factors is because neighboring countries such as China, and India has much more attractive offers such as lower labor cost that make their business more efficient. Since the inflow FDI has been decreasing, Malaysia was ranked 71 in 2007.The table above explains that inward FDI inflow in Malaysia were only US $ 8,043 million and it was only 2.6% of total inflow of FDI to Asia and by that time China has possesses the share of as much as 26.05%.(World Investment Report, 2008) The conclusion can be made here is that Malaysias reduction inflow of FDI is mainly because their incentive are becoming less competitive compared to other countries in Asia.Problem StatementFDI is strongly recomme nded to achieve consistent economic growth and resulting in modernisation in industrialisation and raise the living standards of the society. There are many determinants regarding FDI and based incentive policy is one of them. Research shows that (Lam and Liew, 2009, p.435) 2 main assumption of this incentive are that high monetary incentive allows FDI to be attracted easier and high inflow of FDI might lead to higher economic growth. Unfortunately, incentive is not necessary monetary-based like tax exemption but can be a long term relationship that seeks for mutual benefits of both sides. The evidence can be seen that the total inflow of FDI into the region of South East Asia, East Asia and South Asia has increased by 15% to USD 165million in 2005 but for Malaysia despite the fact that many monetary based incentives is provided, Malaysia still experiencing a decrease in foreign direct investment. (Tomlinson, Abdullah, Kolesnikov and Jessop, 2006) In 1990, Malaysia was ranked 4th in the world for FDI, but was ranked 62th in 2005 and recorded negative inflow of net foreign direct investment in the year 2007More attention should be given by government, researchers and policy makers to identify the problem and produce the solution that can stimulate the FDI in Malaysia. Much research has been done to stimulate FDI, but a lot lesser research has been carried out considering international relations because mostly focus on microeconomic aspect of domestic firm performance.It is very important for foreign investors to gain confidence to invest in Malaysia, hence enhance the economic growth in Malaysia. More research should be done to determinant other determinants of FDI in order to develop the performance of economy in Malaysia. It is very important for more research to be done on FDI with international relation in order to identify the determinants of FDI that can stimulate the economic growth of Malaysia and not on incentive that only focuses on profit maximizatio n of one sided benefits.Research ObjectivesThe objective of carrying out this study is as belowTo review the determinants of FDI that is affecting economic growth in MalaysiaTo analyze the relationship between FDI and economic growth in Malaysia.To evaluate some policy actions related to increase the inflow of FDI in Malaysia.Research QuestionsThis study is conducted to address the following research questionsDo the determinants of FDI inflow affect the economic growth in Malaysia?Will relationship with FDI result in bloom of economic growth in Malaysia?How policy actions can increase the inflow of FDI in Malaysia?Chapter 2 LITERATURE REVIEW2.0 IntroductionIn this section, a review of literature will provide us with a better understanding of the determinant of FDI and the growth of economic in Malaysia. This chapter focuses on the empirical studies on the role of FDI in the economic growth of host countries. Furthermore, a conceptual framework of these variables will be provided.2. 1 Review of Literature2.1.1 Foreign Direct Investment (FDI)Foreign Direct Investment (FDI) has associate with many leading roles in development of host countries such as source of capital, new job opportunities, diffusion of new technology into country, and develop overall economic growth of host countries. Empirical studies have been carried out to show the relationship between FDI and economic growth while others focuses more on the causality of these two variables. Different methods are use by research to find out the determinants of FDI and the relationship it has with economic growth of host countries.By using cross-section data and OLS regression, Balasubramanyam (1996) found out that host countries that impose export promoting strategy produce positive growth of FDI on the economic growth but this does not apply to host countries as imposes import substitution strategy. Cross-sectional data has also conclude that high level of institutional capability which measured by degree of property right protection and bureaucratic efficiency in host country leads to a positive effect of FDI which enhances the economic growth of host countries. (Olofsdotter, 1998)In the work of Borensztein, et al. (1998), they utilize the cross country regression framework to analyse the effect of FDI on economic growth. They use the FDI flows data from industrial countries to 69 developing countries for the past two decades. Their research provided essential information that shown FDI plays an important role in diffusing new technology in host countries, and relatively boost overall economic growth rather than domestic investment. According to another research on (Borensztein et, al.1998) developing economies which focuses on the diffusion process of technology and economic growth, they found out that the positive impact of FDI on economic growth is highly dependent on the availability of human capital in the specific host country. De Mello (1999) uses both time series and panel data fixed effects for a sample of 32 developed and developing countries to study the relationship of FDI and economic growth. However, he only found out little result showing positive effect of FDI that affects the economic growth of host country.There are also other research that focuses on the causality between FDI and economic growth. Zhang (2001) and Choe (2003) use co integration and Granger causality test for a sample of 11 developing countries in East Asia and Latin America. Zhang (2001) found out that 5 cases that shows enhancement of economic growth but the condition of host country is important, so factors such as macro stability and trade regime must be attractive to attract FDI in host countries. Through the research of Choe (2003), the finding of casuality between FDI and economic growth shows that FDI is dependent on the economic growth of host country and not the other way around. Little evidence was shown that FDI enhance the growth of economy, but mainly supports t hat rapid economic growth enhances the FDI inflow into the country.Chowdhury and Mavrotas (2003) use innovative econometric methodology to identify the causality of FDI and economic growth. The research was done using time series data from 1969 to 2000 for three developing countries that are Malaysia, Chile and Thailand. Each country involve with different background of determinants of FDI such as macroeconomic episodes, growth patterns, and policy regimes. Their study found out that GDP was the cause of growth of FDI in Chile, but it does not go the same with Malaysia and Thailand which has strong evidence of bi-directional causality of these two variables. In the case of Frimpong and Abayie (2006),In the research (Bengoa and Sanchez-Robles, 2003) by using panel data to study Latin America between the relationship of FDI and economic growth, they found out there is a positive impact of FDI that lead to increase in economic growth but the research is similar to Borensztein, et.al, ( 1998) that says economic development depend on the countrys stability condition.Finally, Duasa (2007) which focus on the causality between FDI and output of economic growth in Malaysia and the study found no evidence of relationship between FDI and economic growth. These has indicate that in the case of Malaysia, FDI does not cause economic growth but FDI contributes to stability of growth as growth contributes to stability of FDI.In order to understand the determinants of FDI more accurately, we can see through research done by Vernon (1966) by using product cycle hypothesis which relates to trade theory by Hufbauer (1966). The theory is about the relationship between investment theory and trade theory by using products as they are export or invested. They found out that competition prices in host countries drives foreign investors to seek cost advantages especially labour cost. This shows that innovation of countries to attract FDI is important to improve economic growth.2.1.2 Eco nomic growth in MalaysiaExport growth can be considered as the most researched determinant factor of (FDI) in economic growth. According to Chow (1987, p.124), the export growth of development countries can be identified through the impact of increase in countrys income, non-export production of goods, resource allocation, and capital efficiency, ability in handling external shocks, negative external effects and also total productivity factor. Therefore, research has shown export strategy has been an effective factor in enhancing the economic growth of developing countries. Furthermore, these countries have also testified that export promotion is an effective development strategy (Jung and Marshall, 1985).However, export strategy is not the main determinant factor of FDI that promotes economic growth. According to Ahmand and Harnhirun (1996) research, by using time data series from 1966 until 1988 to determine whether export is the main (FDI) factor that affects countries economic g rowth on industrial countries like Malaysia, Philipines, Singapore and Thailand, they found out that economic growth and export is dependent on development of countrys policy, and also economic development causes export growth not the other way around.In order to (Alfano et.al, 2004) identify the relationship between FDI, financial market, economic growth and also to find out whether countries with better financial systems are able to exploit FDI effectively. An empirical analysis was done by using cross country data from 1975 to 1995 which concluded that FDI played a leading role in contributing to economic growth in 71 countries which means countries with good financial market are able to take advantage of opportunity offered by FDI. Li and Liu (2005) studied whether FDI affect economic growth by using single and simultaneous system of equation techniques to test these two variables. Their research found a significant relationship between FDI and economic growth which identified,H uman capital has indirect interaction with FDI that leads to positive impact on economic growth in developing countries, whereas countries with insufficient technology knowledge will have significant negative impact on economic growth in developing countriesAnother study done by Hsiao and Hsiao (2006) using panel data and time series from 1986 to 2004 to identify Granger causality between GDP, export and FDI among China, Korea, Taiwan, Hong Kong, Singapore, Malaysia, Philippines and Thailand found out that FDI has direct one way effect on GDP and indirect effect through export. There was also bilateral causal relationship between export and GDP.Lastly, study done by Baharumshah and Thanoon (2006) using quantitative assessment found out that FDI effects economic growth both long-term and short term in the host countries. Their research has also shown that countries that are able to attract inflow of FDI successfully can generate more investment which leads to faster overall developme nt of economy, hence FDI is a major contributing factor in the economy of East Asian countries. Ang (2007) use annual time series data from 1960 to 2005 in order to find out the determinants of FDI in Malaysia found out that GDP growth had a significant positive impact on FDI inflow.2.2 Theoretical FrameworkForeign direct investment (FDI)Independent variable Dependent variableTechnology advancementEconomic growth in MalaysiaHuman CapitalPolicy developmentSocialGDP2.2.1 Analysis pathThis framework is to understand the research of the two variables in the case of my research proposal, foreign direct investment (FDI) is the independent variable and economic growth in Malaysia would be the dependent variable. The purpose of this research proposal is to understand the relationship of FDI and economic growth in Malaysia. In addition, Malaysia can implement different FDI contributing factor that can enhance economic growth in the country.The analysis here is about the determinants of FDI a nd it interests me in which Malaysia can implement and make FDI more attractive to be invested by foreign firms. In this analysis, the information accumulated should provide the key determinants of FDI at the same time enhance the development of economic growth in Malaysia.Chapter 3 METHODOLOGY3.0 IntroductionThis section describes the research methodology use in the study to access the relationship between FDI and economic growth in Malaysia. Simple ordinary least square (OLS) regression and the empirical analysis are done using annual data of FDI and economic growth in Malaysia over the 1970-2005 periods. The research was done using annual data from IMF international Financial Statistic tables, published by International Monetary Fund to find out the relationship between FDI and economic growth in Malaysia.3.1 Data3.1.1 Data ResourcesAccording to Romano (2004), primary data can be define as data that is collected specially for the purpose of answering research question, while seco ndary data can be define as existing data collected in order to answer different research project. Secondary data was chosen for this research because it is less expensive compared to primary data, and takes less time to collect data that is needed for research. (Romano, 2004) Secondary data has made information far easier to be obtain by interpreting information from primary data and published them through secondary resource such as newspaper, journals, books, internet, and also research reports. () The existence of secondary data happens when a project needs the collection of data that has already been research in order to further understand the research question on a new project That is why secondary data is essential in order for us because it provide us with the knowledge to form research design and also answering our research questions in a more in depth scale.3.1.2 Data Analysis ProcedureIn order to complete this research proposal we have mainly use secondary resource such as journals, websites, books, and also research report. Secondary resource has provided us with the information needed at the same time save us time and cost. KBU International College has provided us with books that contain the information needed for us to make references for our research topic. Internet network has been a major contribution by using the Google Chromes search engine we are able to obtain various journals and reports from websites that allows us to make reference and understand our research objectives. Emerald website in particular by using Anglia Ruskin University account has granted us the access to various journals that are easy to obtain without any hassle. The usage of less text book is because the library has insufficient information needed to answer our research questions.3.2 HypothesisNull hypothesisH0 FDI is not important for transporting advance technology to enhance host country economic growth.Alternate hypothesisH1 FDI is important for transporting advanc e technology to enhance host country economic growth.Technology advancement is essential in developing economic growth because it produces skilled labor that will enhance productivity and satisfying demands from consumer. According to Easterly et al. (1995), technology transfer depends on the diffusion process and can take place in 4 forms which is transfer of new technologies and ideas, high technology imports, foreign technology adoption and also level of human capital. Diffusion process of technology into host countries can be different depending on the human capital and availability of technology in the country itself. Example, study made by Borensztein (1998) on developing economies concluded that FDI has positive economy growth but the effect of magnitude depends on the availability of human capital in the host country. This clearly shows that advance technology is very important to enhance economic growth at different level of diffusion growth.Null hypothesisH0 Economic stabi lity is not important to attract FDI into the countryAlternate hypothesisH2 Economic stability is important to attract FDI into the countryMany countries should pay more attention to economic stability in order to attract FDI which can enhance economic growth. With a stable economy it portrays a positive image and good economic positioning, which in turn attracts foreign investors to invest and generate profit from the investment made in the foreign country as a guaranteed. Therefore, determinants of economic stability should be given attention, the determinants are such as exports, and government expenditure, domestic consumption, and exchange rate that should be manage well by government. According to the research done by Kogid,et.al,(2010) , the most important determinant of economic stability in Malaysia is export and consumption expenditure. Their study also found out that government expenditure and exchange rate are less effective on economic growth but it does not mean it sho uld be ignored but these factors can be act as catalyst and complement factor of economic growth.Null hypothesisH0 Implication of policy does not promote economic growth.Alternate hypothesisH3 Implication of policy does promote economic growthImplication of policy reform is important to draw attention of foreign investment. Policies to promote growth have evidence but it does not work for other countries. This can be seen from the study made by Ahmad and Harnhirun (1996) which studied on new industrial countries such as Indonesia, Malaysia, Philipines, Singapore and Thailand that found out export and economic growth dependent on development of policy. Therefore, government should impost relevant policies to attract FDI into Malaysia. Example, policies like joint venture which give opportunities to domestic producer to become one with foreign investors. This way will benefit local partner as they have exposure towards technology.3.3 LimitationTheoretical framework of FDI that is use to analyses the FDI determinants and economic growth in Malaysia could have been done more accurately with more secondary resources. Firstly, KBU International College provides insufficient books that have relation with this research topic. However, KBU does provide student with the account to access Emerald websites that contains many research journals and reports that is very convenient for our research topic.In addition, some determinants of FDI in the theoretical framework were not taken into consideration because there has been insufficient research done on some determinants of FDI that affects economic growth in Malaysia. As a result, this research is not entirely completed to reflect the full extent of FDI on Malaysias economy growth. Since this research is mainly dependent on opinions of researchers around the world, this may lead to inaccuracy of research because they might disagree with research and opinions done by other authors around the world.4.0 Ethical ConsiderationB efore the research is done, respondents will be notified regarding the aim, benefits and purpose of the research is conducted and the method that is engage to carry out this research so that respondent will be able to understand the reason of caring out this research and the potential hazard level of this research. There are also no pressure of any kind shall be force for individual to become subject of research. In addition, respondents have the permission to withdraw or terminate from participating and becoming subject of the research. These are the ethical action taken so that there will be no violation of human rights. The identity of respondents from who involves in the survey is strictly confidential and shall be discarded once research is completed unless permission is granted by respondents for publish sake. No information of respondents will be revealed and included in the final report.

Aging and Women’s Sexuality

Aging and Womens sexLiqi LiuThe World wellness Organization regards versed health as a state of physical, mental, emotional and affable upbeat related to intimateity (Woloski-Wruble et al., 2010). It is non limited to the absence of disease, infirmity dys attend or the mere battlefront of sexual intercourse exertion. These factors argon a reflection of a palmy age model that incorporates physical well being reflected by a low susceptibility to disease. It in like manner includes social and emotional well-being associated with agile eng mount upment with emotional state and mental well being exhibited by a high capacity for physical and cognitive function. sex activity is an essential office of health at all developmental be ons and an important aspect of brio satisfaction (Kalra, Subramanyam, Pinto, 2011). The factors that submit the sexuality of women in their plaza and sexagenarian age argon socio-cultural, feminine, medical, political, economic factors (Bi rkhauser, 2009) and international factors. other influencing factors include social representations of sexuality, physiological conditions, and relationship factors (Ringa, Diter, Laborde, Bajos, 2013).Cultural praxiss play a critical role in determining sexuality (Shea, 2011). In China, roughlywhat clinical educators grab sexual activities in middle and old age a taboo. Other health professionals view womens feudal attitudes as the main obstacle to sexual liberation. The trade in womens social status due to higher education, participation in the labor force and change magnitude use of contraception has intensified sexual activity. These activities within the social environment vastly affect the womens responses to their agedness process. Other contributing factors include improvement of living standards and life forethought (Ringa, Diter, Laborde, Bajos, 2013).Health is another key factor affecting sexuality in middle and aged women (Birkhauser, 2009). Cardiovascular d isease in postmenopausal women affects their physical, social and usual well being. This leads to deterioration of tint of life and adds on the negative establishs of climacteric (Birkhauser, 2009). Access to health is determined by the financial capability of the women and enabling political framework.Contrary to popular belief, the menopausal status is not a risk factor in sexual dysfunction. In virtually instances, it led to low sexual desire. Several studies have shown that women past the age of 50 be still sexually active (Ringa, Diter, Laborde, Bajos, 2013). This essay aims to assess the various factors that affect sexuality in older women.BackgroundThe worlds aging population is increasing, as the current life expectancy is increasing. The life expectancy of women in Israel estimated at 82 years (Woloski-Wruble et al., 2010). About a ordinal of womens life is lived after cessation of menstruation. China constitutes the worlds largest old and elderly population. Ap proximately iodin-fifth of the worlds elderly population and a posterior of the middle-aged population live in China. In 2010, 381.6 million flock were between the ages of 40 and 59 period an estimate of 170.9 people was to a higher place 60 years of age (Shea, 2011).Demographic studies project a fast increase in these proportions over the next several decades. By 2050, it is anticipate that 35.4% of the population in China will be above 60 years of age (Shea, 2011). As such, understanding the needs, desires and capabilities of this group is of paramount importance.As of now, very few studies have focused on sexuality in the elderly and the existing literature contains contradictory information. For instance, some studies indicate that hormonal epitopes have no effect on the sexual drive slice others show a correlation between hormonal changes and sexual activity. Hence, just studies would greatly help in ascertaining assertions that sexual life is an important determina nt of satisfaction in life (Shea, 2011).Cultural FactorsCertain cultural norms are the cause of negative attitudes towards sexuality in older people. In some Western cultures, men are considered ready for sexual activity at a younger age than women (Woloski-Wruble et al., 2010). They alike claim that women become vegetal with age. However, women have in the recent time challenged this view and regarded sex as extremely important (Woloski-Wruble et al., 2010). Research has focused on the sexual dysfunction that is likely to occur after menopausal transition rather than the pattern spectrum of normal activities due to the changes arising from hormonal changes. However, it is worth to note that menopause does not necessarily result in sexopause.The belief that sexual activity rock-bottom with age was held since sexuality was limited to intercourse. In recent years, sexuality has been broadened to stiff any sexual arousing activity (Woloski-Wruble et al., 2010). Using this broader definition, studies have shown that women remain sexually active even in old age. An intimate relationship is unity(a) factor influencing sexuality in older women. Being able to palm their expectations would enhance life satisfaction.The Chinese culture is marked by trinity traditions Confucianism, Buddhism and Daoism (Shea, 2011). The Confucian tradition advocated for sex for a married couple and notwithstanding for the purpose of reproduction. Otherwise, it regarded other sexual activities as unrespectful and undignified. Buddhist taught that in post to enjoy perfect peace, one had to give up worldly pleasures and desires. As such, sexual activity beyond the purpose of reproduction was viewed as distracting one from their improvement. Daoist on the other hand regard sex as ill and self-defeating as it makes men lose their semen (Shea, 2011).A necessitate conducted in China showed that a third of the studied population was of the assessment that sex later in life was unhea lthy or abnormal. It also showed a correlation between the womens attitude and the sexual activity. The women who viewed sex as normal were more likely to study in sexual activities. Further, the women with validatory attitudes led healthy relationships with their spouses. The study also suggested that the household composition such as the number of family members and number of generations contributed to the sexual activity later in life (Shea, 2011).Social FactorsWomen from different regions view menopause differently(Birkhauser, 2009). In the Muslim culture, menstruation is regarded as impurity. Hence, menopausal women gain a higher social status. It is therefore regarded as a happy event that calls for a celebration. In some cases, this is not the case, and hormonal therapy is considered in order to improve diligent outcomes. Hormonal therapy provides symptomatic relief and restores sexual activity (Birkhauser, 2009).Hormonal therapy should also be recommended for women with c ardiovascular events unless there are associated risks. Some cultures do not allow bleeding and hence alternative medicine is sought to slake the symptoms while allowing only the desired amenorrhea.The effect of the natural products has not been sufficiently studied (Birkhauser, 2009).Medical FactorsThe state of health influences the level of sexual activity (Birkhauser, 2009). Women who are of an advanced in age and are in brusque state of health are less likely to engage in sexual activities. During the management of somatic diseases, clinicians often neglect the implications for sexual life and hence go undiagnosed (Maciel Lagana, 2014). These problems may cause the patient to be socially withdrawn and result in depression. Cardiovascular diseases are one major cause of reduced activity. Women who suffered from myocardial infarction do not lead a sexually active life (Kalra, Subramanyam, Pinto, 2011).Besides cardiac problems, elderly women may suffer from physical disabiliti es that affect the motor function (DeLamater Moorman, 2007). This group of patients experience pain and discomfort in sexual activities and are likely to withdraw. In addition, patients may suffer low libido and unwillingness to engage in foreplay (Woloski-Wruble et al., 2010).Feminine FactorsHormonal changes that occur during the onset of menopause result in vagina dryness and, as a result, affect sexual satisfaction (Lindau, Schumm, Laumann, 2008). However, several studies in this area found no correlation between menopausal state and sexual activity (Ringa, Diter, Laborde, Bajos, 2013). Perimenopausal women have increased levels of masturbation suggesting that hormonal changes do not hinder penetrative intercourse. However, some studies have reported that menopausal changes have a negative effect on the sexual life. These inconsistencies could be due to different characteristics of samples used in the different studies(Ringa, Diter, Laborde, Bajos, 2013).Political FactorsOlde r women have few sources of funds to put up for insurance premiums and taxes(WHO, 2007). Inadequate finances may result in delays to taste medical attention following illness. The developing disease compromises the state of health and affects sexual activities. Hence women living regions in which the health policies promote accessibility to health run regardless of the ability to pay enjoy telling health and hence healthy sexual health. It is the duty of each plain to develop the best mix of policies in healthcare, income and social services in order to safeguard the well-being and health of older women (WHO, 2007).Economic Factors beggary is a key player in compromising the health of aging women. Worldwide, women have lower participation in the labor force and are often underpaid as compared to men of equal qualifications. Older women receive work in low-paying and part-time jobs. Insufficient funds limit the ability of old women to access the most basic needs such as health care, encourage and food. It is estimated that 70% of the women in the world live below the poverty military control of less than US $ 1 a day (WHO, 2007). A large number of these are found in the developing countries. These income inequities compromise the well-being of the elderly women and, as a result, their sexual health is affected.ConclusionA satisfactory sexual life is an essential component of good quality of life. However, Sexual activity changes with age and may affect the quality of life. The factors that influence these changes include state of health, socio-cultural values political and economic factors. Different regions practice different traditions that may affect how women in their menopausal age view sexual activities. Some practices limit sexual activity for reproduction purposes while in some cultures sexuality is liberal.One of the major health factors is cardiovascular events. Myocardial infarction leads to depression and anxiety. These factors affect sexual satisfaction and hence decrease sexual activity. While managing these conditions, it is essential that the healthcare providers engage the patients on sexual health. The level of economic empowerment determines the accessibility of social services such as health. Since older women have fewer financial resources, the responsibility policy mix should be adopted to enhance accessibility to health services and other amenities.RecommendationsIt is of utmost importance to give sexuality issues in the older population priority same as the other life-sustaining needs. Therefore, health professionals should formulate interventions aimed at improving sexual health in menopausal women (Taylor Gosney, 2011). A participatory approach would lead to meaningful interventions, as it would allow the professionals to understand the perception of the different women to sexual satisfaction. It would also visualize that the designed interventions help the women in arriving at successful aging (Shea, 2011).An abridgment shows that the present literature is based on speculation rather than facts. health care professionals should carry out participatory research involving women of different ethnic groups, age, and languages. development of evidence-based knowledge would aid in understanding the different aspects that constitute sexual satisfaction among older women. It would also help in designing of group-specific interventions aimed at improving the quality of life (Woloski-Wruble et al., 2010).ReferenceBirkhauser, M. (2009). Quality of Life and sexual urge Issues in Aging Women. Climacteric, 52-57.DeLamater, J., Moorman, S. (2007). Sexual Behaviour in Later Life. journal of Aging and Health, doi.10.1177.Kalra, G., Subramanyam, A., Pinto, C. (2011). Sexuality Desire, Activity and Intimacy in the Elderly. Indian diary of Psychiatry, 300-306.Lindau, S., Schumm, P., Laumann, E. (2008). A Study of Sexuality and Health among Older Adults in the joined States. New England ledg er of Medicine , 762-774.Maciel, M., Lagana, L. (2014). Older Womens Sexual Desire Problems Biophysichosocial Factors Impacting them and Barriers to Their clinical Assessment. Journal of Biomedical Research , doi. org/ 10.1155.Ringa, V., Diter, K., Laborde, C., Bajos, N. (2013). Womens Sexuality From Aging to Social Representations. Journal of Sexual Medicine, 2399-2408.Shea, J. (2011). Older Women, Marital Relationships, and Sexuality in China. terming International, 361-377.Taylor, A., Gosney, M. (2011). Sexuality in Older Age Essential Considerations for Healthcare Professionals. Journal of Age and Ageing, 1-6.WHO. (2007). Women, Ageing, and Health A Framework for Action. Geneva.

Adam Smith Wealth Nations Wealt Of Nations Summary Economics Essay

Adam metalworker Wealth Nations Wealt Of Nations Summary economic science EssayIn the first blame of Wealth of Nations, Smith explained his origi democracy of the nature of the wealthiness of nations. In so doing, he separated his weighs from those of the mer spatetilists and physiocrats.The annual labour of every nation is the memory board which originally supplies it with all the necessaries and conveniences of life which it annually consumes, and which consists always either in the immediate bring up of that labour, or in what is purchased with that produce from new(prenominal) nations.In a topic of places throughout Wealth of Nations, Smith berated the mercantilists for their concern with the hookup of bullion and acknowledgment of bullion with the wealth of a nation. Smith believed, in fact, that most mercantilists were conglomerate on this issue. For him, wealth was an annual flow of goods and services, non an accumulated fund of precious metals. He also revealed an understanding of a link surrounded by exports and imports, perceiving that a fundamental role of exports is to pay for imports. Furthermore, in his opening sentence he implied that the end purpose of economic activity is consumption, a military strength he developed more fully later in the book. This advertize distinguishes his economics from that of the mercantilists, who regarded production as an end in itself. Finally, in express effort as the source of the wealth of a nation, he differed from the physiocrats, who evince land.Smith went on to suggest that the wealth of nations be heedful in per capita terms. Today when it is said, for example, that England is wealthier than China, it is understood that the comparison is based not on the quantity rig or income of the two countries but on the per capita income of the population. In essence, Smiths view has been carried for fightd to the present. In the same paragraph in which Smith verbalise that consumption is the so le end and purpose of all production, he rebuked the.mercantilists because in their system the interest of the consumer is almost constantly sacrificed to that of the producer and because they made production, and not consumption . .. the ultimate end and object of all industry and commerce.So much for the nature of the wealth of nations. The rest of Smiths book is concerned with the causes of the wealth of nations, directly or indirectlysome ms very indirectly. Book I deals with tax theory, the socio-economic sort of constancy, and the distribution of income Book II with roof as a cause of the wealth of nations. Book III studies the economic news report of several nations in order to illustrate the theories presented earlier. Book IV is a history of economic thought and practice that examines mercantilism and physiocracy. Book V covers what today would be called public finance.Causes of the Wealth of NationsSmith held that the wealth of a nation, what we today call the income of a nation, depends upon (1) the productiveness of labor and (2) the proportion of laborers who ar usefully or profitably apply. Because he assumed that the economy provide automatically achieve full employment of its resources, he examined only those staff offices that obtain the capacity of the nation to produce goods and services.Productivity of labor. What determines the productivity of the labor promote? In Book I, Smith stated that the productivity of labor depends upon the mixer class of labor. It is an observed fact that forte and division of labor increase the productivity of labor. This had been recognized long before the publication of Wealth of Nations, but no writer emphasized the principle as Smith did. In our unexampled economyeven in the academic worlddivision of labor is widely practiced, with notable influence on productivity. Smith illustrated the advantages of specialization and division of labor by borrowing from past literature an example that measu red output per worker in a factory producing straight pins. When separately worker performs every operation required to produce a pin, output per worker is very low but if the production process is separate into a number of separate operations, with each worker specializing in cardinal of these operations, a large increase in output per worker occurs. In Smiths example, when the process is divided into eighteen distinct operations, output per worker increases from twenty pins per day to forty-eight hundred.It is interesting that although Smith recognized the economic benefits of specialization and division of labor, he also perceived some serious neighborly costs. One social disadvantage of the division of labor is that workers are habituated repetitious tasks that soon become monotonous. Human beings become machines tied to a production process and are dehumanized by the simple, repetitive, boring tasks they perform. only Smith had no doubt that human welfare is, on balance, change magnitude by the division of labor.The division of labor, in turn, depends upon what Smith called the extent of the commercialise and the aggregation of capital. The larger the market, the greater the volume that can be sell and the greater the opportunity for division of labor. A limited market, on the other hand, permits only limited division of labor. The division of labor is limited by the accumulation of capital because the production process is time-consuming there is a time lag mingled with the beginning of production and the final change of the finished product.In a simple economy in which each household produces all of its own consumption needs and the division of labor is slight, very little capital is required to maintain (feed, clothe, house) the laborers during the production process. As the division of labor is increased, laborers no longer produce goods for their own consumption, and a furrow of consumer goods must exist to maintain the laborers during t he time-consuming production process. This stock of goods comes from saving and is, in this context, what Smith called capital. A major function of the capitalist is to provide the means for bridging the gap between the time when production begins and the time when the final product is sold. Thus, the extent to which production processes requiring division of labor may be used is limited by the amount of capital accumulation available. Smith therefore concluded As the accumulation of stock must, in the nature of things, be previous to the division of labour, so labour can be more and more subdivided in proportion only as stock is previously more and more accumulated.Productive and unproductive labor. The accumulation of capital, according to Smith, also determines the ratio between the number of laborers who are productively employed and those who are not so employed. Smiths attempt to distinguish between productive and unproductive labor became confused and reflected normative or value judgments on his part. However, it manifests an awareness of the problem of economic growth. Labor employed in producing a vendible commodity is productive labor, Smith held, whereas labor employed in producing a service is unproductive. As an advocate of the changing social and economic order, he postulated that the activities of the capitalists, which resulted in an increased output of real goods, were dear to economic growth and development, whereas the expenditures of the landowners for servants and other intangible goods were wasteful. A man grows abounding by employing a multitude of manufacturers he grows poor by maintaining a multitude of menial servants.10 According to Smith, what is true of the individual is true for the nation thus, for the economy as a whole, the larger the share of the labor force involved in producing tangible real goods, the greater the wealth of the nation. hood is required to support the productive labor force therefore, the greater the ca pital accumulation, the larger the proportion of the total labor force involved in productive labor. Capitals are increased by parsimony, and diminished by superfluity and misconduct.This distinction between productive and unproductive labor also affect Smiths view of the role of the government in the economy. Just as the expenditures of the landowning class for servants and other forms of unproductive labor are detrimental to economic development, so is some part of government expenditures. The sovereign, for example, with all the officers both of justice and war who serve under him, the whole army and navy, are unproductive labourers.12 Smith insisted that the highest rates of economic growth would be achieved by distributing large incomes to the capitalists, who relieve and invest, and low incomes to the landlords, who spend for menial servants and who leave nothing behind them in return for their consumption.13 Furthermore, because economic growth is inhibited by government using up for unproductive labor, it is better to have less government and, consequently, lower taxes on the capitalists so that they may accumulate more capital.

Fedex Vietnam Strategic Annalysis Marketing Essay

Fedex Vietnam St prisegic Annalysis Marketing EssayEstablished in 1973 nether the physique Federal extinguish by fo chthonian Frederick Smith, the play a gigantic quickly became starring(p) transfer emolument provider. In 1994, the friendship changed its mane to FedEx Corp.Nowadays, FedEx Corp includes heptad subordinate companies that be FedEx Ground, FedEx Freight, FedEx Kinkos, FedEx Customs Critical, FedEx Trade Net fix and FedEx Service. These companies focus on its philia serve nonwithstanding withal support from separately one new(prenominal) in providing client with full prototype of transportation gos and logistics.FedEx is discussion more(prenominal) than 3.6 mil softw bes a day and is genuinely famous for its slender dish ups and for the innovation that it brings to the world of transportation.Eng-logo-4C.jpgFedEx Express operates with 2 sub-companies, which argon FedEx Express International and FedEx Express US Domestic, FedEx Express is providin g its dish ups to more than 220 countries and territories worldwide. d let the stairs FedEx Express International argon 3 Regional Divisions which argon FedEx LAC (for US, Canada and Latin Ameri trick), FedEx EMEA (for Euro, Middle East and Africa) and FedEx APAC (Asia peace-loving region). FedEx Vietnam get goings to FedEx APAC Division (Federal Pacific Inc) with head seat in Hong Kong.Mission and StrategyMissionFedEx Corporation go forth arrive superior pecuniary returns for its oerlap avouchers by providing luxuriously value-added logistics, transportation and related bank line work through foc officed operate companies. Customer requirements impart be met in the highest type manner appropriate to each market segment served. FedEx leave behind strive to develop mutu anyy rewarding relationships with its employees, married persons and suppliers. Safety exit be the firstborn consideration in all subprograms. Corporate activities give be conducted to the highest ethical and professional shopworns.1With this mission statement, FedEx defines the industry it develop the business, the financial returns for sh atomic outcome 18owners, relationships with shargonholders. FedEx similarly pull out for high tonus and professional standard as hearty as safety to compete and develop the business.This mission is also going with P-S-P philosophy which stand for People Service Profit sum FedEx focus and invest in People and believe that totally outflank people cigarette create valuable helping. And certainly, valued go willing bring money to the political party.StrategyFedEx also defines the objectives which must work seamlessly and concurrently on three take aimsCompetition collectivelycompete by stand as one brand worldwide. Just one FedEx brand and plow one voice.Operating must be independentby counsel on independent worldwide profits to meet client involve.Managing collaborativelyby running(a) together to constitute loyal re lationships from workforce, guests and investors.FedEx Express in VietnamBusiness autobiographyFedEx has open up its routine in Vietnam since 1994, right after US presidency lifted the trade embargo to Vietnam. Its business model in Vietnam is spot in which FedEx returnss be provided to nodes through FedExs partners. And FedEx world(a) process partner (GSP) in Vietnam was Post and Tele parley Express JSC a connection belong to Vietnam Post Corporation which has nationwide network for clopup and sales talk until 2009. Since then, the beat with this GSP was terminated and Seabornes and Danatrans were appointed to be new GSPs in Vietnam.At the uniform term of launching its table redevelopments in Vietnam, FedEx substitute authorization was opened. The office role is to carry out market research, coordinate the communication among FedEx in VN and former(a)(a)wise countries, facilitating the employation of contracts/agreements between FedEx Pacific Inc and early (a) Vietnamese organizations to a lower place the agency contract, the GSPs provide manpower, facilities, and vehicles to bring FedEx service to customers. It is also responsible for(p) for usance crystalliseance site for import and export activities. FedEx agree responsibilities of all gross sales and merchandise activities. It also supervises and supports GSPs in qualification the service meet with FedEx global standard and customers requirement. These supports include barely not limit to customer service, informatics technology, pricing, billing. soon FedEx Vietnam provides rustic wide services with 2 principal(prenominal) post in capital of Vietnam and Ho khi Minh city but subscribe to service is serious now provided to major provinces/cities.The post in Ho khi Minh City custodys all inbound and outbound shipment to and from the south of Vietnam (southern of Hue). It has its own gate for springer headroom and 4 world service centres.The station in Hanoi hand les shipments to and from north of Vietnam. Beside its own gateway in Hanoi, it also has 3 world service centres for walk in customers.FedEx is providing direct pick up and salvey service to all major cities/provinces in Vietnam. For the other areas, the pick up and deli truly is made by using home(prenominal) convey service of Vietnam Post Corp.Mission and ObjectivesMissionFedEx Vietnam together with its partners will implement FedEx philosophy People-Service-Profit. We will be market leader with the opera hat international express service at global standard. We will gain do good pes on our core business competitiveness and the qualification of the enthronization in Vietnam. We will bring customer with satisf transaction for each and invariablyy transaction. (FedEx Vietnam Mission statement)Main objectivesStandardize service in Vietnam at global standard by having its own employee to generate service to customer. travel customers flower in mind express serviceAnnual su ppuration rate at 15%In the context of current period out in developed countries, these are challenging objectives. The downturn in industrial countries will lead to a decline in export of ontogeny countries and Vietnam is not an exception. Demand for transportation of export commodities is predicted to be declined until 2014 along with a weak economy.To maintain the annual growing at 15%, FedEx needs to some(prenominal) extend the operation to new markets and expand its market share at current service area by promoting its competitive advantages.This is a hard time for all companies in air express industry, but it can be a beloved opportunity for FedEx to consolidate its locating oer the competitor. Competitive advantage is the key and more than ever a right strategy to promote competitiveness is precise critical to FedEx. shapingFedEx Representative OfficeWith the roles to support and supervise GSP in providing FedEx services to customers, FedEx voice office is organized a s operable model.Figure 9 FedEx VN representative office organization chartCountry private instructorHAN subprogram autobusHAN gross salesManagerHAN ramp managerSGN OperationmanagerHAN CSmanagerSGN CSmanagerCountry coordinatorSGN ramp managerSGN salesManagerInside salesManager revenue enhancement opsManager accountancyManagerMarketingManagerTechnology serviceManager aspire reportIndirect report inception FedEx country Review, 2011At top of the representative office is Chief Representative, Senior Manager for FedEx Indochina and Myanmar who has very good knowledge more or less market, culture and working style of Vietnamese people. He directly manages operation function and also gets indirect reports from other practicable pigeonholings.Operations This sort out includes station operation (for pick up and delivery), gateway operation (for customs head), ramp operation and customer service operation. The group is responsible for managing all operation activities in accorda nce to FedEx service standardAirport ramp This group is under operation and responsible for air cunning operation include loading and unloading of shipment on/from air fraud, landing/take off paperworkCountry Coordinator Admin the communication to all GSPs in Vietnam, Laos, Cambodia and Myanmar on policy, standard eventsSales This group report to regional sales. They are responsible for sell FedEx services to customer.Marketing Perform market research, design and implement market plan under direction of regional market way.Billing and accrual Control all GSPs invoicing and collecting activities. All customer debts are managed by this group.Accounting Control all payment transactions of FedEx in Vietnam and transact all other accounting activities.Technical service Responsible for FedEx communication network, customer technology solutions.GSP organizationGSP has two independent groups to work at FedEx agency in Hanoi and Ho Chi Minh city. They both report to Seabornes head office. and in daily operation, they are under prime of FedEx functional groups from representative office.The squad in Hanoi includes 69 GSP employees with 1 General Manager and 4 functional managers.In Ho Chi Minh number of employees is 125 with 1 General manager and 7 functional managersBusiness result overviewFigure10 FedEx Vietnam receipts from 2006 to 2011(Unit 1000 USD)Source FedEx country suss out 2011As indicated in Figure 10, FedEx had very good issue in revenue. Total revenue grew by 3 times from 2006 to 2011. The revenue change magnitude at 100% in 2008 after FedEx up gauged it feeder capacity from 3 tons to 6 tons to Ho Chi Minh city. FedExs core products International antecedence (IP) and International Priority Freight (IPF) are the main contribution. After the sharp increase in 2008, revenue of these core services grew steadily at 10-12% a year.Revenue of IXF (air port to airport) service took a relatively small part of total revenue. even so growing rate of this product has been extremely high since 2009 when the company sell this service to close to forwarders to explore their existing customers.Figure 11 FedEx business writ of execution from 2006 to 2011(Unit 1000USD)Source FedEx country review 2011Figure 11 shows both revenue and profit of FedEx on good growth. only with increased ratio of IXF shipment (which are low yield per kg for handsomeger shipments), expense was getting extensiver and made profit growing rate in 2009, 2010 and 2011 lower than revenue growing rate.Strategic AnnalysisInternal Factor Evaluation (IFE)Human alternativeThe philosophy P-S-P (People-Service-Profit) is cornerstone of FedEx. This can be considered a success cycles of FedEx in which the company take care of its employees and assist them in generate beautiful service to customer. That brilliant service in return brings Profit to FedEx and enables the company to take a better care to its work force. Thank to this, FedEx is many another(preno minal) times voted as most admired company by probability Magazine. In many major markets in LAC and APAC, FedEx is voted as one of the outgo companies to work for.Bring that philosophy in business, FedEx attracts a very excellent team for its representative office in Vietnam.Figure12 FedEx rep office forcefulness (Experienced and Education)Source FedEx VN HR profile.Figure 12 shows number of FedEx employee divided by work group and education/experience categories.All FedEx managers (1 senior manager and 6 managers in Ho Chi Minh city, 4 managers in Hanoi) are very experienced in express industry.Sales team is tender but very aggressive in selling with 10 for Ho Chi Minh city and 5 for Hanoi.Ramp team includes two groups with disturb number of employee, one at Noi Bai airport and the other one at Tan Son Nhat airport.Functional group include employee at marketing, accounting and billing/collectionAs reflected, 100% FedEx representative office employees are graduated with 29.31% of the employees are holding master degree. With this laborious back back end knowledge and excellent human development programs through training, couching all FedEx employees are intelligent and knowledge in the field that they are responsible. just about of FedEx employees kick in long term commitment with the company. Many of them stay with the office since it was established. The package make and the reward program at FedEx not only keep its employees commit to stay a long time with the office, but also assist them to perform their best in daily job.But in contrast, the FedEx GSP is a Vietnamese and young company so the recruitment, human resource policy is very different. This leads to poor reference of the work force and shams to the image of the company in Vietnam. Employees in many cases are not care about productivities. Their attitude in making service is not very such(prenominal) acknowledged and appreciated by customers. This hit the level of FedEx service in V ietnam.However in recent years, with the changes of GSP management and higher necessitate from customers, well-nigh positive changes have been made. The GSP frontline managers and employees attitude to customers and to the service flavour issue has been improved. Those employees that could not adapt to this change have been replaced. This in long run will have positive contribution to FedEx operation. But in short term, high turnover of employee impacts to the operation, especially when the new one deficiency of experience.Over all, the working learnings of GSP employees are met with job requirement. However their English is not so good. curiously the couriers who are directly enforce shipment for customers. This is room for improvement that FedEx can do to further standardize its service in Vietnam.FinanceFedEx Vietnam is a dependent branch of FedEx Pacific Inc. All finance planning and management is performed at division level. The two major finance activities that done at local level are customer debt management and operation damage management.Customer debt managementAt FedEx, 90% of the shipment transportation charges are billed to customer accounts and the billing options can be to shipper, to consignee or to tercet party. That makes it very commodious for customer to ship with the company. But on the other hand it brings risk to the company if the payers refuse to pay and the re-bill is done in late (Shipper must takes the final responsibility to pay transportation charge when using FedEx service. In case the charge billed to recipient or 3rd party but payer refuse to pay, then it will be billed back to the shipper).Under agency contract GSP takes responsible for collection of the debt from customer. However their limitation in managing this area makes the on time collection of the payment is not high. Bad debt at 2% and over overdue debt at about 15% lower the working swell.However as reflected in Figure 11, FedEx revenue is increased year on year and the company has a good profit ratio. In addition, with FedEx Pacific Inc as a mother company, FedEx finance is on strong institute.Operation woo managementThough most of the ground operation be are covered by GSP under agency contract, at that place are areas for FedEx to control and save cost. They includeCost for using commercial fledges (where FedEx flight is not in operation)Cost for revenue supplies (Supplies that provided to customer for them to use FedEx service like airway bill, packing material)Cost for claim colonization (for damage, late or missing shipment)At FedEx there is an index surround cost per package in which all costs raise from handling a package is taken into account and bi-weekly management has a collision to review it. This is a good slit for continuous improvement of cost saving. In 2010 the company had saved in average 2.3% of its cost per package in compare to the previous year.FacilitiesAll the ground facilities are under GSP charge. But with booming business in recent few years, the investment of the GSP on to this did not meet with requirement. Size of business in 2011 was intimately 3 times larger than the one in 2006, but there was no major investment to expand ground facilities. That makes the station buildings and warehouses decease too congested for FedEx operation and impacts to productivity and the service quality.Figure 13 FedEx ground facilityCurrentRequired2Gateway800 sqm1500 sqmStation2000 sqm2500 sqm repress of van2426Number of truck55Number of motor-bike2020Source FedEx IE report 2011Beside ground facility, communication network is very critical for FedEx. The network is not only for communication among FedEx locations, but also for posting and updating of shipment status. The network is considered as back bone of FedEx service.In Vietnam the company has its own take aim lines to Hanoi and Ho Chi Minh. The convey lines are upgraded to meet with demand of growing business. The latest upgrade in earlier 2010 increased the lease lines capacity to 256 KBps. A broad band line was also established to be backup network for the lease line. This helps to avoid service impact due to communication problem.MarketingMarketing function in Vietnam is more on the implementation. Marketing planning is done at regional level by marketing management. With this arrangement, there is only 1 marketing medical specialist in FedEx Vietnam to cover the in all country. She has very limited decision making power on marketing plan.Most of the marketing social movements in Vietnam are small with very limited budget. on that point is lack of big campaign in media that attracted mass audience. In Vietnam the new emerging market, FedEx does not have commercial TV advertisement while its major competitor DHL spends hard on this.In past few years, FedEx involved in numerous of activities for community benefit like building 3 schools in Nam Dinh and Quang Nam, sponsoring transportation of medicin e and equipment for Heart to Heart organization, major sponsor for OBIS flying infirmary to Vietnam in 2007 and 2010, APEC summit in 2006. These activities were very efficient in bring benefit to the community, but were not very well promoted by marketing and the number of earned media was not large.In terms of product that FedEx introduced to Vietnam market, the service is more diversify to provide customs more option for their shipment. Currently FedEx provide following services International Priority (IP) This is fast, customs-cleared, door-to-door pick-me-up and delivery of shipments to all international name and addresss for package weighted lower than 68 kgs. For those destinations in AsiaOne (all major cities in Asia) net work, document or packages send under this service will be delivered on the day after ship date. This is FedEx Express core service in Vietnam International preservation (IE) This service is similar to IP service, but the transit time is thirster than I P service and shipping rate is lower than IP. International Priority Freight (IPF) This is precedency service using for package heavier than 68 kgs. This service is only available in designated cities/countries International Economy Freight (IEF) This is a new service launched in 2010 using for packages over 68kg. Customer use this service does not need a fast transit time. The price rate is lower than IPF and transit time is longer certainly. International priority Distribution (IPD) This is customized service using for customer who send shipment at different consignees at same country. The shipper can send all of them under 1 shipment and FedEx will separate the shpt to delivery to each consignee. This service is only available to some country and normally for global customerBeside the range of services provided, FedEx rate to each customer is different base on the customer mint. However this is not the main competition tools of FedEx. The company is more focus on its differenti ation by excellent service. disdain of some weaknesses in marketing in Vietnam, FedEx brand is quite well known in business society thanks to its global image. However, to off the level on brand awareness that FedEx has in other markets, marketing function in Vietnam should play a more active role.SalesIn 2008, FedEx took over all sales activities from GSP. All sales violence belong to FedEx. This enables the company to recruit and keep talent employee for this authorised function. The achievement of sales team has been improved since thenCurrently sales team is organized under 3 sub-teams to take care of different groups of customers planetary sales Take care of global accounts. These global customers are big accounts and very demanding for service quality. As many big international companies are setting up their business in Vietnam, revenue from this group of customer is growing very fast. In 2006, it took only 8% of total revenue, but in 2011 it took up to 27% Telesales Take care of small accounts. There are low revenue customers but most profitable ones. Revenue from small customer takes 18% of the total FedEx Vietnam revenue.Field sales Most of customer that taken care of by field sales are local importers/exporters. This area of sales have steady annual growth at 20% in recent year thank to strong growth in international trade in VietnamWith this arrangement, sales team can be more focus on targeted customer, hence the performance is improved.Figure 14 FedEx sales raft from 2006 to 2011(Unit 1 package)Source FedEx country Review 2011Before 2008, sales only focus on selling outbound, but with global sales network, both outbound and inbound volumes are taken care by sales. This supports strong growth of inbound volume (Figure 14). The exception in 2010 the inbound volume was down turn due to the fisrt year sales under direct management.OperationAir craft operation With the launch of A310 to Vietnam in September 2009, FedEx increased its aircraft capa city to 5 times bigger than before3. The aircraft upgrade enables FedEx to introduce more services in and out of Vietnam. The company now can better reassure space for its shipment and reduce the risk of dependence on commercial flights.The A310 serves both Hanoi and Ho Chi Minh city. This first time ever FedEx aircraft arrives in Hanoi making big service improvement for the capital city. Transit time reduce by 1 day for both inbound and outbound.This was an excellent preparation for FedEx Asia hub relocation to China in first half of 20094.Station operation Operating under agency contract, FedEx is liner with number of issues for its station operation be understanding of differences in business strategy. Investments in work forces, vehicles, equipments are not adequate.Coverage area of FedEx service in Vietnam is large while number of couriers is limited with 30 in Hanoi and 60 in Ho Chi Minh city making it a big challenge for pick up and delivery, particularly on the surge volum e dates.With booming of EPZ and Industrial Park country wide, many provinces become authorisation markets for air express service. However FedEx direct pick up and delivery service is only available in big cities/provinces. In other provinces, pick up/delivery is provided through a domestic express service. It means any customs in non-direct service want to use FedEx service they have to send the shipment to FedEx by domestic service first. And the same arrangement for delivery, FedEx will have domestic service to deliver package to customer in these areas. This not only makes transit time for the package longer but also impacts to service quality that customer suppose to receive when they use FedEx service.FedEx in Vietnam operates with standard procedure of FedEx global. However the ability of courier team, especially English speaking and reading skill is not good making barrier for them to learn and consult customers on shipping requirement.There is lack of rewarding program to encourage courier team, so productivity and the over all performance is not very good.Gateway operation FedEx has 2 gateways in Vietnam, one for Hanoi and the other for Ho Chi Minh city. Both gateways are in the same buildings with stations. That makes it convenient for customers in case they have to come to do customs clearance. But it is a disadvantage for the company to maximize the use of air craft arrival time.The main job of gateway is to ensure shipments are clear customs at shortest time, reduce number of shipment pending in customs warehouse. In Vietnam, FedEx is the first company that was selected by Vietnam customs to implement electronic clearance. By applying technology in to clearance process, this area of service has been improved remarkable. The percentage of shipment released for same day delivery in 2010 is 50% higher than the one in 2007.However the constraints of ware houses and clearance facilities and the lack of customs regulations on express clearance make th is clearance still not yet reaches its height of potential.Customer service operation Customer orientated system and excellent internal communication network are very supportive tools to customer service agents to successfully handle transaction with customer. However, the weakness of call centre which under GSP control with lack of necessary equipments makes it difficult for FedEx to measure and control call quality. There is considered number of complaints regarding to customer service in Vietnam. This is contrast with FedEx customer service in other countries where most of customer praise FedEx for professional, helpful and customer oriented service.In addition, shortage of manpower for this group in Hanoi (with only 3 persons) reduces the ability to handle customer calls to FedEx at this city.Service quality management Service quality is non-compromised issue at FedEx. It makes FedEx different from competitor. The quality driven management concept has been put in FedEx today bu siness.With that strategy, service quality is also one of the top priorities for FedEx in Vietnam. The company is very good in making all KPI (key performance index) in service to be measurable and has strong systems to control it.Service quality is metrical by both network system (base on system scan) and selective reading collection from practice. A group of operation excellence is formed up. This group is supported by advisors at regional level. The group is doing root cause analysis for all service issues and coordinates with respective operation teams for corrective action plan.The quality report is made on daily, weekly, bi-weekly, monthly depend on KPI. Bi-weekly there is meeting among all managers to review service quality issue for necessary actions.With this mechanism, quality improvement is continuous process at FedEx. nurture Technology (IT)Information plays very important role with express company like FedEx. Provide customer with accurate and updated information is a s important as on time delivery of the package. Within FedEx operation teams, information exchange and communication among the teams is also very critical for its success. FedEx in Vietnam has its own lease line to ensure the connection of network. This system is operated and managed by very experience and skilful IT team.Numbers of IT projects have been implemented in past few years to bring benefit to FedEx and its customersAutomation shipping tool With software installed at customer site, customer does not need to tarry for FedEx to bring in shipping forms for manual completion but they can create the form on their own at any time. With this customer can complete shipping document for many shipment just in few minutes. This helps FedEx to save cost while provide more convenience to customers.Transmission of shipping documents images FedEx Vietnam now can transmit all shipping documents of its export shipments to countries of destination before shipment departs. With this ability , FedEx in destination does not need to wait for shipments arrival to retrieve the documents but having these documents overmuch earlier than the physical shipment arrives. So they can do pre-arrival customs clearance and ensure that the shipment is immediate released for delivery once it arrives. This staggeringly improves the service and saves FedEx hundred thousands of UDS a year for fax fee, storage fee.In conclusion, FedEx Vietnams major advantages areOperating FedExs own flight to both Hanoi and Ho Chi Minh cityBest express service from Vietnam to US, compass north America and Japan the key export markets of VietnamManagement awareness of service quality and use it as differentiator. A good service quality control system is put on place.Innovative service base on information technologyMeanwhile, FedEx major weak points are operating under agency and poor quality call centre for customer operation.With above analysis, an IFE matrix is formed up by strategist team. The IFE m atrix for FedEx Vietnam includes 12 factors with seven strengths and five weaknesses. Values of weight and rate for each factor are calculated base on average get ahead of the team members with some minor adjustment after review with the whole team (Appendix H). The final IFE matrix for FedEx is reflected in Figure 15.Figure 15 IFE Matrix of FedEx VietnamNo.FactorsWeightRateWeighted score1FedEx has 5 flights a week to both Hanoi and HCMC0.1440.562Well known brand0.1230.363Hub Operation place Global Network0.0940.364The best express service to US, North America and Japan0.1240.485Wide range of services0.0430.126Management awareness of service quality issue and use the quality of service as differentiator.0.0540.27Innovative service on the base of information technology0.0440.168FedEx operates under agency contract0.1510.159 upset quality call centre0.1310.1310High over due debt ratio0.0310.0311Poor marketing activities