Key Principles Enshrined In The Shariah Finance Essay - Free Essay Example

Sample details Pages: 12 Words: 3654 Downloads: 10 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? The key principles enshrined in the Shariah which shape the way Islamic finance has evolved are riba, gharrar, maisir and haram. The Quran categorically prohibits the giving or receiving of interest, regardless of the purpose for which the loan is made and regardless of the rate of interest charged. Although there is consensus among the Muslim scholars that riba is banned, some controversy exists over what the concept actually is,  [2]  and consequently what financial transactions are prohibited.  [3]  Dr Siddiqui in his book on Islamic banking attempts to resolve the issue when after examining and debating on the true nature of riba he reaches the conclusion that bank interest in all its forms and intent is riba.  [4] In Islam, to be entitled to a permissible return, money should be invested through the purchase and sale of tangible assets, and income streams should be derived from the economic use of those assets.  [5]  Heavy reliance is placed upon the existence of physical assets in contracts  [6]  so as to avoid riba, as well as gharar. Don’t waste time! Our writers will create an original "Key Principles Enshrined In The Shariah Finance Essay" essay for you Create order This prohibition of riba is the core difference between Islamic Banking and conventional banking. Islamic banking is primarily an equity based system featuring zero based interest rates, equity participation, joint ventures, and mutual funds and leasing. The way that it differs itself from conventional banking is through the replacement of interest rate mechanisms with profit and loss sharing models i.e. mudarabah and musharaka, and other interest free instruments such murabaha, bai istisna, bai salam, ijarah. These all enhance the practical scope of Islamic finance and enable better risk management and diversification. Depositors in Islamic banks play a major role in the financing used by banks as not only do they share in the banks profits made but they also share in the losses as their deposits are not guaranteed. Profit and Loss instruments i.e. mudaraba and musharaka are contractual agreements between two or more parties based on the notion of no fixed rate of return for t he borrower but rather a share in the profits of the venture or if the case may be the liability for the losses of the venture. Both PLS instruments can be used for short term, medium term and long-term projects. Mudarabah, although not based on shariah sources but rather on darrura (necessity) is a means of providing capital to entrepreneurs known who are then known as the mudarib, to go ahead with a project. It can be between the Islamic bank and an individual or a multinational corporation. It is in essence a silent partnership where the partner providing the capital is silent. The Islamic Bank being Rab al mal (financial provider) enters a contract with the mudarib in which he forwards a sum of money to the mudarib to utilise his skills and labour, while having no involvement at all in the management of the project. The mudarabah can be restricted, which is where the Rab al Mal has the right to specify the line of business for the mudarib to work within or specific projects. An unrestricted Mudarabah is where the mudarib has the right to choose any line of business that he wishes without the interference of rab al mal. The Rab al mal, in return for the financing provided does not receive a fixed return but a fixed share of the profits, which are agreed upon by both parties in the contract stage. The financial loss is solely incurred by the Islamic bank. The bank losses the capital invested with the Mudarib as well as the future expected cash flow from the profits gained, whereas the mudarib only loses his time and effort. The risk is therefore all the banks to bear and as a result they have to stringent in the procedure adopted to screen entrepreneurs and the measures taken to ensure a low risk and high return. Musharaka is a hybrid of sharikat and mudarabah, combining the act of investment and management. They are partnerships, where two or more people combine either their capital or labour or even reputations to form a business in which all the partners share in both the profits and the losses in predetermined ratios which reflect their share of input into the business either through the capital invested or the labour and time put in. They all also are liable for the losses in proportion to the capital they put in. Every partner has a right but not a duty to partake in the management of the business. An agreement can be reached for the partnership to be a silent partnership, with only one person managing the business and the rest taking no part in management, but still entitled to his share of the profit. Each and every partner in the musharaka is both the agent and guarantor of the other. There is also a Diminishing musharaka which is used for large assets such as property or machinery. Diminishing musharaka involves both an ijara agreement and a musharaka agreement . The borrower along with a bank purchase a property jointly, with the share in the property reflecting the amount put forward. The borrower at the same time enters into a ijara agreement to rent the banks share of the property. So the borrower owns his share and rents the banks share. Both the amount repaid under the diminishing musharaka agreement and the amount paid under the lease agreement are amalgamated. This is then used to calculate how much of the property owned by the bank the borrower has purchased through monthly instalments. At the end of the agreements, the bank will pass the title of ownership to the borrower after a single and last payment after which the borrower owns 100% of the property. There are two types of risk associated specifically with PLS contracts. One is the risk of the investment itself, the risk of rate of return, while the other is the risk associated with the moral conduct of the entrepreneur and his integrity. The first can be minimised through strict practices of selecting potential investments and calculating the risk and profit potential. But it cannot be fully eradicated. The second stems from t he existence of imperfect markets and asymmetric information. Islamic scholars and jurists consider PLS to be a centre pillar in Islamic financing, which it was during the early stages of the emergence of the Islamic financial markets. However, sampling from ten Islamic banks during 1994-1996, show that the percentage weight of musharakah and mudarabah in the total activities was only 7% each, with murabaha, a non-PLS method claiming 70% of the total financing  [7]  . The reason for this being that Islamic banks made considerable losses and as a result have almost completely stopped using PLS methods of financing. This is due to more than just one factor, but the most dominant are the effects of asymmetric information on the relationship between the bank and the customer and the detrimental effects that this has on the profits made by the bank. The first problem encountered by the Islamic bank, is the adverse selection problem. Islamic banks as we know do not operate with interest but instead use profit sharing schemes, where they are entitled to a specific predetermined share of a projects profit. Potential borrowers have inside information about their activities and intent and their prospective projects likelihood of success that the bank cannot verify easily. Due to the nature of PLS contracts, Islamic banks will attract applicants with inside knowledge that their project is highly risky, and borrowers who will inflate their declared profit expectations in the hope of being quoted a lower profit-sharing ratio by the bank.  [8]  As a result, the rate offered by banks rather than being tailored to specific projects is averaged out to minimise losses. The low risk and high profit projects refuse to pay what in effect is a higher rate for them due to their low risk and as a result do not enter into the market at all leaving only low risk projects for the banks to invest with. Once the borrower has been transferred the funds needed for the speci fic project, the bank has limited control over the funds and how they are used. With unrestricted mudaraba the mudarib has complete discretion to do with the money as he wishes. The mudarib, once given access to the funds can potentially undertake riskier projects without the banks knowledge, indulge in perquisites and mislead the bank about profits earned, leading him to have more information than the bank. This is essentially a moral hazard problem. The third and most significant problem arises as a direct result of the corporate relationship between the management of a project and owners, which is attributed as a major cause of the lack of PLS contracts being practised by Islamic banks. Once the contract has been entered into by both parties, the mudarib as manager and agent not only has no incentive to act in the banks best interest as principals but also has a disincentive to do so. This immorality and lack of integrity impose risks on the bank and their bottom line. The age ncy problem, as this is, is essentially the conflict of interests that arise between the manager and the owners. The principal as owner engages the agent as a manager to act on his behalf in the day to day management and long term success of the company, and as such, expects the agent to act in the principals best interest as financier/owner of the company. However, the mudaraba contract as a silent partnership inherently limits the control rights of the financier, while they are exposed to the financial risk of the project. Due to the nature of the agents role as manager of the company, he is privy to information that the principal is not, thus has an advantage over the principal. Here, the borrower acting as the agent has the incentive to deceive the principal with regards to profits earned. Because the principal has a predetermined fixed share (although uncertain), by manufacturing lower profits statements or even showing no profits at all the mudarib can keep 100% of the profits and offer the rab al mal nothing in return for its financing. They can also deflate the profits earned by taking excessive perks or extra leisure, empire building or resorting to accounting subterfuges to disguise the deceit. Islamic banks would have to incur costly monitoring expenses to ascertain whether the declared profits are a true reflection of the activities of the projects or not. This argument is based on the idea that parties to a business transaction will shirk if they are compensated less than their marginal contribution in the production process, and as this happens in the case of PLS, the capitalists hesitate to invest on PLS basis.  [9] Firstly, Islamic banks lack the regulatory frameworks and tools needed in order to successfully assess the risk profile of each borrower and determine whether they are a viable investment to avoid the adverse selection problem. Secondly, the costs that would be incurred to monitor the borrowers activities and finances outweigh a ny possible gain from the project and prohibit the bank from conducting any monitoring activity. Barring any of these problems Islamic banks still face other issues such as taxation and poor accounting standards which limit the success of these banks. Any attempts to re-establish PLS methods of finance would be met with great opposition especially by the customers of the banks who would almost immediately withdraw their deposits due to the fear that the bank will lose the money through the PLS modes. To avoid the problems of asymmetric information and to subdue the worries of the depositors the Islamic banks need to utilise other permissible Islamic finance modes such as ijara and trade based financing. Explain carefully how Islamic banks may mitigate the effects of moral hazard and agency costs in practice and compare Islamic banks strategies with those used by conventional banks. Islamic banks as mentioned before have made considerable losses through the use of PLS instruments in the past mainly due to the problems associated with asymmetric information. These problems being, adverse selection before the contract is agreed upon and both moral hazard and the agency problem after the funds have been extended. Due to the impact these losses have had on the finances of the Islamic banks, they have resorted to using other less risky means of Islamic financing such as ijara contracts. In Malaysia PLS instruments only account for 0.5% of Islamic bank financing, and this is the case across many other countries in the Middle East.  [10] Islamic banks have to some extent tried to mitigate the problems that have arisen from the PLS contracts but none the less they have not been successful in limiting the losses incurred. Conventional Banks are prone to the same problems, although not as poignant as the Islamic banks because the musharaka contracts are mainly equi ty based, but regardless, they have managed to minimise the risks associated with financing in a way that the Islamic banks cannot compete with. In order to rectify the markets and attract the high profit low risk project associated with the contracts, the bank has to individualise its rates but it then faces the problem of trying to screen potential projects. This in itself is extremely difficult for a bank to do in an imperfect market where information asymmetries exist. Barring this the bank is left with the only other alternative, which is to not extend credit to anyone at all which would have a devastating effect on the banks profit. The bank can to some extent avoid this final situation by negotiating different rates with each individual potential mudarib based not only on the risk associated with the project but also additional signalling devises that low risk persons can use in order to prove to the bank that they are indeed low risk. The first problem addressed was th e adverse selection problem. Being able to distinguish between the high quality low risk borrowers and low quality high risk borrowers is essential to a bank in order to eliminate the potential problems that can occur once the contract is undertaken, such as the borrowers inability to pay and the complete failure of the project. Conventional banks have successfully minimised the risks of adverse selection through techniques of initial screening and guarantees of finance. Banks decide who to make loans to based on the borrowers credit worthiness. They use the borrowers financial statements and other public information they can access such as the value of the borrowers assets, as well as using the borrowers credit rating obtained through other specialised companies. They also use the private information they may hold if they have done business with the borrower in the past. They have established an effective and cost reducing standard screening method that applies to most cases. Th ey also have standardised contracts and do not need to tailor each contract to the individual borrower. Restrictive covenants are also used and dictate who the funds go to specifically, when they can be used and for what. Using all the information gained from screening they forecast and value the borrowers probability of default and potential profitability. Alongside screening, banks also require the borrower to offer collateral for the loan. This guarantees that if the borrower defaults on the loan the bank can seize the collateral and sell it to regain the capital lost. The bank also has to do its due diligence in checking up on the borrower and valuating the project and potential cash flow stream. Islamic banks have more to lose from the problems of adverse selection than conventional banks and as a result need to put more effort into screening potential borrowers. Islamic banks initially apply a moral and ethical screen, which screens the business of the borrower and the prod ucts to make sure that they are shariah compliant which comes at a very high cost. Once it is established that they are shariah compliant the Islamic bank can then screen the borrowers finances. Screening imposes a great cost on the firm, the cost of information, which to some extent can be lowered by implementing a more efficient and effective standard screening system which the conventional banks have done. After the preliminary screening the bank has to do its due diligence in investigating the borrowers financial plan for the proposed project to ensure that the estimates are correct, the business strategy and management are capable of producing the profits expected and that the project itself is viable. Then the bank can value the net present value of the project and calculate the rate of return needed to compensate it for the risk taken. This is not only costly but, both the screening and the due diligence take considerable time and resources. There are 2 solutions for the m oral hazard issue, monitoring and control of the borrower. Through the PLS contract itself the Islamic bank can impose penalties on the borrower for non compliance or bad behaviour that jeopardises the banks profits. This would entail placing restrictive covenants in the contract itself to prohibit the borrower from conducting certain and to legally allow the bank to act to protect its own interests. However in order to enforce these penalties and covenants the Islamic bank has to effectively monitor the borrowers behaviour and financial actions. The cost of monitoring is high and ongoing throughout the entire length of the contract between the bank and the borrower and therefore uses a substantial amount of resources and time. For both Islamic and conventional banks, U.K. regulations for companies under the Companies Act 2006 require public companies to submit annual financial reports of the company which can be viewed by everyone. These reports include the firms financial accou nts. This enables the banks in the UK at least to have easier access to the information needed to assess the financial welfare of the borrower. There is similar regulation in place across the European Union and U.S.A. however, countries where Islamic banks are the norm i.e the Middle East and South-East Asia have little if not any regulation for companies, which makes it even more difficult to screen and monitor borrowers. Conventional banks primarily use a combination of incentive contracts, monitoring and collateral as mechanisms to align the interests of the borrowers and the lender. However, the use of collateral in Islamic banks is limited due to the nature of Islamic instruments. PLS instruments are collateral free instruments due to the equity nature of them. Islamic banking itself also to some extent relies on the moral and ethical standards that Islam itself places on people. Professor Rodney Wilson argues that there is a higher level of trust between Islamic banks and t heir clients than is the case with conventional banks and hence the moral hazard risks are less.  [11]  Higher levels of trust reduce risk and uncertainty that banks face. The agency problem is the most detrimental problem that Islamic banks face with PLS contracts. Islamic banks are affected on both the asset side and liability side. The principal-agent problem is essentially the conflict of interest of managers and shareholders, which causes the manager to shirk effort and indulge in perquisites and damage shareholder value. Therefore, a standard contract that aligns both these interests and covers all possibilities is the best way to mitigate the agency problem. Monitoring has to also be used in conjunction with the contracts to ensure that the asymmetric information is not exploited and that the terms of the contract are adhered to. Without monitoring it would be impossible to implement or enforce any contractual obligations on the borrower. Islamic banks have implemen ted alternative PLS contracts where the banks share of profits is altered. The borrower keeps 100% of the profit until the profit reaches a certain limit, after this the bank receives it predetermined share of profits, which essentially makes this a debit like instrument. This has been done in Malaysia in the Bank Muamalat and has had great success. The debt contract with deterministic monitoring (in case of default) (Diamond, 1984) or stochastic monitoring (Townsend, 1979) has been shown to be optimal for financial intermediation between a large number of savers and a large number of entrepreneurs.  [12]  Although Townsend has shown that stochastic monitoring, that is monitoring and verification is done in a random way. He has shown that not only does this limit the costs associated with monitoring but also creates an incentive for honesty on the part of the borrower.  [13] Monitoring of the borrower is an essential part of guaranteeing returns. Monitoring can be done t hrough investigating the borrowers financial situation through financial statements and annual reports. The borrower has a contractual duty to provide the Islamic bank with financial reports. Islamic banks can also impose a member of their bank (usually a bank manager) as a director over the borrower. This allows the bank much greater access to the borrowers financial information and enables easier and more effective monitoring and control of activities. Advocates of Islamic banking, therefore argue that a primary advantage of PLS banking is that it leads to a more efficient allocation of capital because the return on capital and its allocation depend on the productivity and viability of the project.  [14]  However, Islamic banks lack the regulatory framework and structure to be able to achieve this efficiency and are constantly being overcome by asymmetric information problems. Even if banks were to now try and adopt the PLS methods again with the solutions to counter the pr oblems faced in the past, the depositors would almost immediately withdraw funds. The depositors do not trust banks who conduct PLS banking unless the legal framework to protect both them and the bank was implemented and regulatory and supervisory structure for companies is put in place. This is especially the case in the under developed Muslim countries were company law and regulatory bodies are few.

The Current Chinese Government Fits Into The Category Of...

The current Chinese government fits into the category of Authoritarian Regimes because Chinese government just use the coercion to limit political pluralism in order to maintain their power, but allows some social pluralism and does not use ideology or coercive mobilization to shape citizen’s interests, or support for the regime. However, China had been in a category of totalitarian regimes once after the World War 2 ended. After the world war 2, under the Mao’s control, China’s sovereignty imposed strict controls over everyday life and cost the lives of tens of millions of people, which is the totalitarian regime. When China was under Mao’s control, citizen’s interest and identities were shaped by the ideology created by the government, and the ideology motivated Chinese citizen to act politically in particular way. The ideology that China promoted under Mao’s control was the communist ideology, which they believe that efforts should be made to redistribute economic wealth as much as possible and that a single political party should direct the government and control the state. After 1978, Mao’s successor Deng and other leaders focused on market-oriented economic development and by 2000, output had quadrupled. Therefore, after 1978, China changed the system of government to allow more freedom for citizens instead of the total control over citizens by the coercive mobilization.For much of the population, living standards have improved dramatically and the room for personalShow MoreRelatedThe Political and Legal Environments Facing Business4014 Words   |  17 Pagesthey encounter dynamic and challenging political and legal environments. Chapter Three provides a conceptual foundation for the examination of the political and legal dimensions of international business operations. 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Significance of Virginity as a reflection of the hypocrisy in the society Essay Example For Students

Significance of Virginity as a reflection of the hypocrisy in the society   Essay The novella â€Å"Chronicle of a Death Foretold† by Gabriel Garcia Marquez is part fiction part history, and is based on an incident that took place in Sucre in 1951, where Marquez had been living with his family. In this melodramatic incident, a landowner, Miguel forsook his wife, Margarita, when he found on his wedding night that she was not a virgin. Through a journalist style, and the genre of magic realism, Marquez blends facts and fiction to show the farcical honor codes and double standards of the people of the society. This novel is a reflection of a society wherein every one is closely related to the other, yet the people are indifferent and elusive to the moral and ethical actions that are violated in the name of honor, religion and double standards. The use of the setting, characters and conflict help Marquez lash upon the virginity paradox, the hypocritical thinking and superficial religious values prevailing in Columbia. To begin with, Marquez chooses the Columbian town, which is deeply engulfed in the Latin American culture to show the poignancy of the importance of virginity and honor codes. The setting of this town is very instrumental in understanding the cultural and societal norms prevailing here. Through the setting, Marquez speaks of the people whose lives are filled with alehouses, whorehouses and gambling places. Marquez uses the natural setting of Columbia to establish surrealism, and also gives the reader a sense of what Latin culture is, which makes the death of Santiago much more personal. Marquez’s focus is on the cultural setting of the town rather than the historical setting. The quote â€Å"On the upper deck, beside the captains cabin, was the bishop in his white cassock and with his retinue of Spaniards† indicates that the Bishop, although a 20th century priest, is still wrapped in the vestiges of Spanish culture. He has his retinue and dress code, everything of which is a reminiscent of the long gone Spanish colonization. The Bishop is a man of authority for the people gathered around to welcome him. The reader does not understand why the Columbian people are still living in the shadows of the culture of the colonist country, although Columbia has long been liberated from the clutches of Imperialism. The setting shows that the people of the town are zealot catholic Christians, who wait on the river bank for the arrival of Bishop on every festive occasion. The novel is a strong depiction of a society that has stereotyped values and sets for men and women. Man is the breadwinner. He has every right to enjoy his life, and exercise his prerogative to choose from plenty of girls for marriage. Every woman in the society is earmarked as a conventional bride from her very childhood. The role of the women is confined to â€Å"sewing,† â€Å"stitching† and â€Å"embroidering.† In contrast to this, â€Å"The brothers were brought up to be men but the girls had been reared to get married.† The quote claims that men are the rulers of the patriarchal society, who have the right to merry making and indulge in sexual pleasures. Wine, women, gambling and promiscuity are the order of the day for them. Santiago is a philanderer who went nipping the bud of any wayward virgin who began showing up in those woods. Garcia tells about, Maria Alejandrina Cervantes, the town whore, It was she who did away with my generations virginity.† At the death of Santiago, she is there with her mother, an allusion that reminds the readers of the presence of Mary Magdalene at the death of Jesus. The reference shows the importance of the â€Å"madam of the local Bordella† in the town, but it is the irony of human kind that the other women have to lead a stereotyped life. Marquez’s quote is is remarkable in that it shows how the Columbian society has perceived the notions of the Spanish culture that has obliterated the native culture and values of Columbia. The reader is surprised to see the prevalence of the stereotyped roles of men and women even in the 20th century Columbia. Marquez uses the word â€Å"broth ers† to show that the brothers act as a unit for the family. But the â€Å"girls† are reared to marry separately, and that they are disintegrated form the family soon after the wedding. .u48f832eb6ec85f65f1dbea36e210af7c , .u48f832eb6ec85f65f1dbea36e210af7c .postImageUrl , .u48f832eb6ec85f65f1dbea36e210af7c .centered-text-area { min-height: 80px; position: relative; } .u48f832eb6ec85f65f1dbea36e210af7c , .u48f832eb6ec85f65f1dbea36e210af7c:hover , .u48f832eb6ec85f65f1dbea36e210af7c:visited , .u48f832eb6ec85f65f1dbea36e210af7c:active { border:0!important; } .u48f832eb6ec85f65f1dbea36e210af7c .clearfix:after { content: ""; display: table; clear: both; } .u48f832eb6ec85f65f1dbea36e210af7c { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .u48f832eb6ec85f65f1dbea36e210af7c:active , .u48f832eb6ec85f65f1dbea36e210af7c:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .u48f832eb6ec85f65f1dbea36e210af7c .centered-text-area { width: 100%; position: relative ; } .u48f832eb6ec85f65f1dbea36e210af7c .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .u48f832eb6ec85f65f1dbea36e210af7c .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .u48f832eb6ec85f65f1dbea36e210af7c .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .u48f832eb6ec85f65f1dbea36e210af7c:hover .ctaButton { background-color: #34495E!important; } .u48f832eb6ec85f65f1dbea36e210af7c .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .u48f832eb6ec85f65f1dbea36e210af7c .u48f832eb6ec85f65f1dbea36e210af7c-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .u48f832eb6ec85f65f1dbea36e210af7c:after { content: ""; display: block; clear: both; } READ: Analyse the various forms of prejudice you encounter in the novel EssayMarquez reflects on the closely-knit people of the society who gather at the bank of the river to wait for a Bishop, who hates them. The word â€Å"hates† is not commensurate with the profession of the Bishop. But he does not bother any more than to wave his hand from the boat and turn back. Marquez shows how religion has been reduced to corrupted man made traditions, customs and superstitions. The town is still revolving around communal values set hundreds of years ago, thereby showing the laxity and reluctance of the people to overcome these values, and adjust themselves to modern values. Placi da Linero tells the readers of the hatred of the Bishop for this town by this quote â€Å"He won’t†¦. this town.† The character of the bishop that is reflected in the eyes of the readers is that of a man who loves coxcomb soup, may be a sexual innuendo, more than the people. The Bishop either fails in his duty, or perhaps he understands that this town is in the imprecation of heinous honor codes. The confused reader does not understand the reason behind his hatred for this town and rather feels confused as to why the Bishop gives the obligatory blessing. Marquez uses short sentences to show the pauses in the flow of Placida’s ideas. She knows the routine affair of the Bishop but she too does not understand why he behaves so. The honor codes have a predominant role in the Columbian culture. Since the people in the town are very closely knit, it is very important for every family to maintain its sense of honor. The women have to keep their virginity intact, and the men have to wreak vengeance if some one violates the honor of a family. â€Å"Honor is love† Angela’s mother says to to show how deeply honor dwells in the psyche of the Columbian women. The main honor lies in protecting the girls from getting wayward, as a deflowered girl becomes alienated from this rigid society. This is the reason Angela’s blind father always accompanies her outside home. The reader is shocked to see that although there have been so much furor on honor codes, the women are secretly indulging in the forbidden fruit. Honor code is nothing but a farce, and it has lost its values in the eyes of the modern women. Marquez uses a very short sentence in â€Å"Honor is love† to show that the people of Colum bia are never going to compromise with the honor codes although they know it very well that the concept is losing its hold on the people. The murder of Santiago Nasar creates a conflict in the mind of the characters. Some consider the murder threat only an absurdity while others leave Santiago to his malignant fate. Some are of the opinion that he must be killed for violating the honor of Angela Vicario. It appears that this society is so staunchly ruled by honor codes that â€Å"death† can be â€Å"foretold† and truly Santiago â€Å"died without understanding his own death.† The quote â€Å"There had never been a death so foretold† shows the paradoxical beginning of the novella wherein the death of Santiago is foretold. Santiago’s murder is pronounced but as fate would have it, he is, fortuitously, aloof to the echoes of this proclamation. He is lost in merry making, in the â€Å"apostolic lap of Maria,† and it is the irony of his fate that no one bothers to warn him. The â€Å"foretelling† tells the negligence of the people of Columbian society. The reader is surprised to find the indifference of the people to a murder, which is yet to take place. Marquez uses an oxymoron in the very title of the novella. He fills the reader with tension and suspense, and makes him desperate to see the outcome of this threat. It is Marquez’s literary genius and powerful style that he starts the novella straightaway with the murder of the protagonist. .u2e8ecff414d19721017f7fec5c095995 , .u2e8ecff414d19721017f7fec5c095995 .postImageUrl , .u2e8ecff414d19721017f7fec5c095995 .centered-text-area { min-height: 80px; position: relative; } .u2e8ecff414d19721017f7fec5c095995 , .u2e8ecff414d19721017f7fec5c095995:hover , .u2e8ecff414d19721017f7fec5c095995:visited , .u2e8ecff414d19721017f7fec5c095995:active { border:0!important; } .u2e8ecff414d19721017f7fec5c095995 .clearfix:after { content: ""; display: table; clear: both; } .u2e8ecff414d19721017f7fec5c095995 { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .u2e8ecff414d19721017f7fec5c095995:active , .u2e8ecff414d19721017f7fec5c095995:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .u2e8ecff414d19721017f7fec5c095995 .centered-text-area { width: 100%; position: relative ; } .u2e8ecff414d19721017f7fec5c095995 .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .u2e8ecff414d19721017f7fec5c095995 .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .u2e8ecff414d19721017f7fec5c095995 .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .u2e8ecff414d19721017f7fec5c095995:hover .ctaButton { background-color: #34495E!important; } .u2e8ecff414d19721017f7fec5c095995 .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .u2e8ecff414d19721017f7fec5c095995 .u2e8ecff414d19721017f7fec5c095995-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .u2e8ecff414d19721017f7fec5c095995:after { content: ""; display: block; clear: both; } READ: English Literature An Inspector Calls EssayTo conclude, Marquez is very successful in showing that the Columbian society is ruled by primitive customs of virginity and honor codes. The men take advantage of religion to impose virginity on women, in order to enjoy â€Å"fresh meat.† But the women are not to be considered less smart than them. They use â€Å"old wives’ tricks† and are dexterous enough to blindfold the men. Through the use of characters and conflict Marquez penetrates the gossamer of the farcical Columbian society with which it is woven. The novel successfully shows that Columbia is still in the specter of the Latin American culture, and the people have to pay the price of following a foreign culture blindly.

Panera Bread Company

Panera Bread’s Strategy Panera Bread Company has expanded its business rapidly considering the demand of the US market; in addition, it focused on distinctive menu, prompt services, and signature cafà © design to achieve long-term objectives and to become the dominant restaurant operator (Thompson 615).Advertising We will write a custom case study sample on Panera Bread Company specifically for you for only $16.05 $11/page Learn More However, this company has already launched a catering service in order to expand its market, for instance, people need such service to arrange parties or other gatherings; as a result, this company should carry out this type of effective services while it had earned more than $80 million in the fiscal year 2004/05 from this service. Most closely fit strategy from the five generic competitive strategies: Figure 1: The best strategy of Panera Bread Broad differentiation strategy would fit with this company because Tho mpson (615) stated that the prime objective of Panera Bread is to attract local customers with quality food menu at reasonable price (typical meal costs $7 – $12) and achieve loyal customer base; however, type of competitive advantages are – it offers quality food items, atmosphere and rapid services to attract target consumers. SWOT Analysis of Panera Bread Company Advertising Looking for case study on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Figure 2: SWOT Analysis of Panera Bread Company Source: self-generated Strengths Main strongest points are – High customer satisfaction rate in accordance with the survey report of Power and Associates’ and Sandleman Associates; It has more than 66,000 loyal customers who like the products due to excellent taste, flavour and quality; Panera Bread is committed to offer healthy food items; It has well trained employees, chefs, and dealers; Panera B read management team had long experience and outstanding leadership quality to develop good supply chain and distribution channels; It has already received several awards due to maintaining quality of food items; Weaknesses Panera Bread Company needs to focus on the price of raw materials and operating expenses to compete with the rivals; Some competitors have more establishment and brand awareness; Opportunities Thompson (2) stated that Panera Bread has opportunity to expand its business in the international market using broad market appeal, brand awareness and existing customer base; Rising demand and earning from franchise operation would create new business dimension to diversify product line; Financial strength creates new scope to consider vertical diversification; Threats Many large competitors like Atlanta Bread Company offer similar products at affordable costs; Strategies along with marketing policies of the other competitors including franchise food companies; Locat ion and menu selection Core Competencies or Distinctive Competencies According to the view of Thompson (167), Panera’s lineup of bread varieties, quality products and skilled employees are the key success factor and core competencies of this company; therefore, many food its including Panera’s signature sourdough bread, Asiago Cheese items, traditional Italian flatbread Focaccia, Tomato Basil, Artisan Sesame Semolina and classic French bread become more popular items day by day. Panera’s Closest Competitors in Accordance with the Information of Exhibit 9 Thompson pointed out key variables of different fast-casual restaurant chains (about 21 renowned companies), such as, number of locations, financial condition and menu categories to assess completive position; however, considering the presence of different states, it can argued that Chili’s Grill and Bar, Cracker Barrel, and Starbucks are the main competitors of Panera Bread. According to the data of exh ibit nine, Cracker Barrel has about 527 combination retail stores as well as restaurants in 42 states, Chili’s Grill operates in more than 1074 sites in 49 states and 23 nations, Starbucks has business operation in 3000 places in the global market and more than 7500 locations in the local market. However, number of outlets and business operation in the international place are not only criteria to find out closest competitors; however, California Pizza Kitchen, Jason’s Deli, Brinker International, Cracker Barrel, Qdoba Mexican Grill, and Starbucks offer some signature food items and popular dishes.Advertising We will write a custom case study sample on Panera Bread Company specifically for you for only $16.05 $11/page Learn More On the other hand, Thompson analysed the financial position, for instance, in 2005, Au Bon Pain earned $245 million, California Pizza Kitchen generated about $480 million, Qdoba Mexican Grill earned $2.5 billion and Starbucks generated $6.4 billion; however, Panera’s closest competitors is Starbucks considering all variables. The Strategic Concerns and Problems Those Need to Concentrate by the Management The management team of this company should broaden the target market because this company highly targeted urban employees and suburban dwellers to increase demand of the bakery and cafà ©; on the other hand, large competitors have focused more on the mass population. At the same time, the management of Panera Bread Company has concentrated more on the marketing strategy to enhancing the quality and demand of its breads and baked items; however, other strategic issues and problems are – The company has experienced success by selecting suitable place for the restaurant; therefore, the management should always penetrate new market considering market survey reports and population of the area; The management team carry out new campaign like â€Å"chill out† campaign because t hey had gained competitive advantages by taking some successful marketing initiatives to develop awareness and increase multiple meal times; Since the position of the competitors is one of the main strategic concerns, the management needs to increase customer demand and new customer base; The management teams eager to open a number of franchised bakery-cafà ©s in order to meet growth target, but the company not grant single unit franchises, which creates hindrance to expand its business This case study on Panera Bread Company was written and submitted by user Joy Hansen to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.