M Statistics

MAT 300: STATISTICS M&M PROJECT PAPER ALEXANDREA WINT PROFESSOR AZAD, VARGHA June 3, 2012 Purpose of Report The purpose of this project is to find the information for a quality control manager of Masterfoods plant. The manager wants to know about the proportion of candies and if they are the same or different. If there is any difference that exists then the manager wants to know why there is a difference in such cases. A study was conducted and results were obtained and based on these statistical results we will try to gain information about the quality of Masterfoods plant.Part1: Sampling Method Sampling method is used to draw the random sample from the population of candies from different bags is known as the simple random sampling without replacement. 36 bags were drawn from the population of different color of candies and after drawing the 36 samples; the numbers of different candies are calculated. For sample in bag one how many are blue candies, how many are red candies, how ma ny are yellow candies etc. There are six different colors in each bag. So the record is made after collecting the sample. Part 2: Method, Analysis, ResultsIn this section we have made attempts to find the descriptive statistics related to the number of candies or proportion of candies in the bag. The mean number of candies per bag is approximately equaled to 55. This means that we are expecting 55 candies with a standard deviation of 2. 1 in each bag and out of these we also expecting that the proportion of different colors of candies should be equal for each bag. The sample proportion for blue candies is . 1916, for orange candies is 0. 18, for green candies is 0. 1815, for yellow candies is 0. 663, for red candies is 0. 136 and for brown candies is 0. 1446. For this results we have sampled 36 bags which contains 1978 candies overall. Part 3: Method, Analysis, Results For this part the 95% confidence intervals are obtained for each color of candies and also the mean number of candi es. The following results are obtained from the analysis: * 95% confident that the population proportion for blue candies will lies between 0. 1743 and 0. 20895. * 95% confident that the population proportion for orange candies will lies between 0. 1631 and 0. 969 * 95% confident that the population proportion for green candies will lies between 0. 16451 and 0. 19848 * 95% confident that the population proportion for yellow candies will lies between 0. 14992 and 0. 18274 * 95% confident that the population proportion for red candies will lies between 0. 12089, 0. 1511 * 95% confident that the population proportion for brown candies will lies between 0. 12909, 0. 16009. In addition to this we can say that 438 candies should be sampled to obtain a 95% CI of the proportion of blue candies with a 4% margin of error if the known proportion of blue candies is 0. 4. Part 4: Method, Analysis, Results This portion explains the hypothesis testing for population proportion for different types/ colors of candies. Each candy was tested against their standard proportion, which was then fixed by the organization and we have obtained the results using the Z test for proportion. We can conclude below results based on the analysis of data: * The true proportion of blue candies is not equal to 0. 24 at 5% level of significance. * The true proportion of orange candies is not equal to 0. 0 at 5% level of significance. * The true proportion of green candies is not equal to 0. 16 at 5% level of significance. * The true proportion of yellow candies is not equal to 0. 14 at 5% level of significance. * The true proportion of red candies is equal to 0. 13 at 5% level of significance. * The true proportion of brown candies is equal to 0. 13 at 5% level of significance. * The population mean for each bag is more than 54 candies and standard deviation for number of candies per bag 1. 69oz bag is more than 1. at 5% level of significance Part 5: Method, Analysis, Results In this portion a che ck for whether the there is any significant difference in the population proportion of red and brown candies was done. For this we have tested the hypothesis at 5% level of significance. From the results which we obtained we can conclude that we are fail to reject the null hypothesis H0 because we don't have enough evidence to support the claim that the population proportions of red and brown are equal at 5% level of significance. Quality Control:It is obvious that there are 4 candy proportions that do not meet the requirement of set proportion; only red colored and brown colored candies met the specified requirement of proportion. So we want to check why there is a difference in the quality of the output. So some of the reason for this difference can be classified as: * The machine(s) is/are not working properly, is there any difference in the output of one machine? * There is a possibility that due to different workers at the different shifts the variation arises. There is any ass ignable or random cause occurs or in simple words we can say that machines are producing the same colored candies at regular intervals. Conclusion We can conclude from the above results that there quality of output is not at the point where the plant would like it to be, because the standard which are fixed in advance did not work best with the output which we have obtained. The four-population proportion for color blue, orange, green and yellow does not meet the set requirements.

Economic Effects on Easyjet

Coursework Two: Written report evaluating and commenting on the recent developments in monetary, fiscal and exchange rate policy in the UK and abroad and how these impact on easyJet With the new coalition Government of the Conservatives and Liberal Democrats gaining power in 2010, and almost immediately calling an emergency budget, as the Conservatives promised, declaring their primary objective is to reduce the deficit there have been many changes in fiscal policy and reversal of plans by the Labour Government, there has also been changes in the exchange rate which will have considerable impacts all over the world.Additionally the Bank of England has looked to make use of monetary policy. All of the changes in the UK, and in Europe will have an impact on easyJet (as easyJet only flies in Europe). The objective is to identify the changes in macroeconomic policies in the UK and abroad, using data and information from The Bank of England, the European Central Bank, the Institute for Fi scal Studies, the Budget, the easyJet corporate report and other various economic sources.The Main Objectives of Government macroeconomic policy are; sustainable economic growth, stable low inflation, low level of unemployment, and a good position on the balance of payments. It is that final policy that the coalition Government has declared most important.With the deficit growing year on year, with little sight of changing, and as such they have used fiscal policy drastically recently as, especially the Conservatives in the coalition Government, have looked to reduce the budget deficit with across the board cuts (totalling six billion Pounds) in Government spending, this coupled with the various tax rises are extreme measures which seem necessitated by the extreme economic times we are in. Many believe these actions will lead to a double dip recession, one which it could take the UK many years to recover.The Government also increased VAT on the 1st of January from 17. 5% to 20% (the highest it has ever been). Although George Osborne (speaking to the BBC on the 4th of January) thinks â€Å"targeting VAT is more progressive than increasing income tax or National Insurance† many still believe VAT is a very regressive tax, meaning it is more of a burden on those households with lower income. This graph (compiled by the Institute for Fiscal Studies) shows how the poorest 10% will be hit much harder than the other 90%, seeing a percentage loss of net income more than double that of the richest 10%.This is because VAT is on goods including necessities, which means a rise in VAT will not deter people from purchases of said goods, so VAT will have a large impact on their percentage net income. Although overall a rise in VAT will have cost the richest 10% more, as their net income is considerably larger they have to capacity to cope better with the rise, and will cause a smaller decrease in their net income. Another rise is in fuel tax, â€Å"Given that each pen ny increase in fuel duty raises an extra ? 00 million for the Exchequer, it is easy to see why the chancellor is tempted to hike rates,† said the foundation's director, Professor Stephen Glaister. The Government have increased fuel duty by 0. 76p on petrol and diesel, and the rise in VAT will mean another price increase. The AA estimates that â€Å"these increases combined will add approximately 3. 5p to the cost of a litre of both petrol and diesel. † According to HM Tresuary budget report 2010 â€Å"The most urgent task facing this country is to implement an accelerated plan to reduce the deficit.Reducing the deficit is a necessary precondition for sustained economic growth. † As such another part of the recent fiscal policy changes in the UK was announced in The Budget, that public sector net borrowing would remain at 4 per cent of GDP in five years time, the structural deficit would be 2. 8 per cent of GDP by 2014-15, while the structural current deficit woul d be 1. 6 per cent. They also set that public sector pay would see a two year freeze, apart for those earning less than ? 1,000 a year, this is an attempt to stop the rise in wages for the thousands working in the public sector, which will save the Government paying more and more each year and thereby help to reduce the deficit. Yet public sector employees will be hit hard by this policy, as inflation rises – their wages will not, meaning inflation will have a devastating impact on their net income as real prices rise, and taxes are increased. This will lead to public sector employees to purchase less, and thus provide less chance of growth which is one of the main macroeconomic objectives.However corporation tax will be reduced from 28 per cent to 24 per cent, a reduction that will be spread over the next four years from April 2011. This may encourage businesses to expand as they are paying less tax, which could lead to a decrease in unemployment (one of the primary macroeco nomic objectives) The budget also released a plan to â€Å"reduce the main and special rate of capital allowances to 18 and 8 per cent respectively in April 2012. Also capital gains tax will be increased to 28 per cent for higher and additional rate taxpayers† (The Budget), so the higher income households will have to pay a higher than ever before tax.The Government also intends to freeze council tax for 2011-12 by working with the local authorities, this potentional freeze on council tax will help the poorer level income earners, and could help them to escape the poverty trap. An increase in tax for the higher level income earners will not only provide more money for the Government – in an attempt to reduce the deficit – it will also improve the image of the main party in power; the Conservatives whereby they are seen as more favourable to the higher level income earners in the UK.Another policy instated is, what the Treasury call, â€Å"a reversal of the most damaging part of the planned increase in National Insurance Contributions† by instead of reducing it as Labour had planned, they are raising the threshold by ? 21 a week in April 2011. This will also lessen the burden on the poor, and thus with more available incomes they will spend more, which will be an injection into the circular flow (where the flow of payments in an economy is a circular flow, with injections and leakages, the injections being Government spending, investment etc, and the leakages primarily being saving).Europe was also been impacted by the recession over recent years, and their fiscal policy must try to combat its negative effects. Before the Recession, many countries in the EU had a large structural deficit. There was an inability to meet fiscal targets, for example the political pressure against tax increases and spending cuts. One country which has particularly been affected is Greece, with the EU average debt as a % of GDP at an already staggering 78 . 2%, Greece’s is at 122%. They have been hampered by powerful unions which gained considerable public sector wage increases without corresponding increases in productivity.Greece has also struggled to raise taxes and decrease Government spending. The depth of the recession has worsened the Government fiscal position much more quickly than expected; tax receipts have fallen while spending on unemployment benefits has increased dramatically. In Ireland they plan to tighten fiscal policy by more than 4% of GDP next year. However economists (Simon Tilford, Centre for European Reform, November 2010) debate whether a tightening of around 1. 5% in 2011 will derail the UK's economic recovery.Governments usually run a deficit in bad times, and a surplus in good times, yet in these times of recession Germany is running a budget surplus, by making necessary wage adjustments and increases in taxes as they are performing much more strongly than expected. Although The Bank of England was nationalized in 1997 by the then Chancellor of the Exchequer, Gordon Brown, meaning the Government no longer had control over the Bank of England, fiscal policy will have a large impact on the economy and how monetary policy is conducted.The primary tool of monetary policy is the use of interest rates. However in the UK the base rate was  left unchanged at 0. 50%  in the January meeting, the 22nd month in a row. The news of an economic slump, the UK economy contracted 0. 5% in the final three months of 2010,  has reignited fears of a double-dip  recession  and has reduced the likelihood of an early rate rise. Yet two  of the 9 MPC  members voted for a rise in the base rate at the January meeting, a rare split decision. However due to an inflation rise in December the CPI rapidly rose from 3. % to 3. 7%, chances of an early rate increase to control price pressures has raised. The Bank of England predicted in February 2010 that inflation would be at 1. 5% by the end of 2 010, which is far of the actual rate of 3. 7%. The MPC must now hope that price pressures will ease so it can stick with low rates and avoid stagflation. However it may be out of their control; global commodity prices have been, and still are, rising fast and Source tradingeconomics. com are now pushing up the cost of UK exports.The idea of increasing the base rate will encourage saving (a leakage from the circular flow) which will help to decrease spending and therefore inflation. However this could be met with a reduction in growth, or even the economy shrinking. Failing to raise the base rate would seem counter intuitive as the Government CPI target is 2% and inflation it at 3. 7%, well above the 1% band. The Bank of England decided to employ quantative easing by pumping ? 200bn into the system in an attempt to kick-start the UK’s economy.But the GDP shrunk by 0. 5% in the last quarter of 2010, so this policy does not seem to be helping growth. The MPC predicts inflation w ill continue to rise past 4% in the coming months which will encourage higher pay demands and could start up a wage/price spiral, the rising expectations of inflation means people/workers expect prices to continue to rise, so they are unlikely to accept pay rises less than the expected inflation rate because they want to protect the real purchasing power of their incomes, and this pattern continues.Monetary policy is greatly restricted in Europe due to the Euro, being a member of the Euro means that individual countries face limitations such as an inability to employ quantative easing or alter the base rate to affect the economy (this is one major factor in why the UK has not joined the Euro, and that the Coalition Government has stated that while they are in term they will not join the Euro). As such the European Central Bank (ECB) has power over setting the base rate, which since 5/7/2009 has been 1%, almost as long as the UK has been at 0. 5%.The ECB states â€Å"maintaining pri ce stability is the primary objective of the Eurosystem and of the single monetary policy for which it is responsible. † This is laid down in the Treaty on the Functioning of the European Union, Article 127 (1). Yet prices in the Eurozone have been very unstable in the past years. However Germany has seen strong signs of improvement, but t this could actually hamper the rest of Europe’s growth. The CPI measure of inflation is rising at an annual rate of 2. 2%. That's not as high as the UK, but it's above the European Central Bank's (ECB) target for the first time in two years.As Germany is the most important and influential economy in the Eurozone when it comes to setting monetary policy, it means the ECB will have heavy pressure to raise the base rate this year, regardless of how the rest of the region is performing. Which is ironic as when the euro was introduced the base rate was set to a level to suit Germany’s sclerotic (rigid and unresponsive) economy that was still dealing with reunification. But the cheap money turned the strongly-expanding countries, such as Ireland and Greece, into smaller and floundering economies.The UK has operated a free floating exchange rate since September 1992, meaning The Bank of England has not intervened in the markets to influence the Pound’s value. This means that the Exchange rate is purely market determined which leads to many fluctuations, just in the period from August to January displayed in the graph below. A floating rate can be a tool of macroeconomic adjustment – for example a depreciation in the Pound should increase the net export demand and therey stimulate growth.However the BoE would hope the gains from a lower exchange rate are not dissolved in the inevitable higher wage demands or export prices. The countries inside the Euro Zone are hoping for a more competitive exchange rate to create an injection of demand into their struggling economies. Floating exchange rates offer a degree of adjustment, so as is the situation now a large trade deficit puts downward pressure on the exchange rate which will help the export sector and control the demand for Euro’s to Pound Sterling imports as they become relatively expensive.Having no exchange rate target means that short term interest rates can be set to meet domestic macroeconomic objectives such as growth or low inflation. However with a floating exchange rate there is less currency stability which can discourage Date (2010-11) Source x-rates, composed on excel trade and investment, this is one of the reasons why currencies were locked within the Euro Zone for the Euro. Any changes in the prices of imported goods and services will have a  direct effect  on inflation. The Euro is also a floating exchange rate, meaning it’s fluctuations in relation to the UK have considerable affects.An appreciation of the exchange rate (as there has been in January against the Euro) reduces the sterling pric e of imported consumer goods and durables, raw materials and capital goods. The effect of a changing currency on the prices of imported products will vary by type of import and also the  price elasticity of demand  which is affected by the degree of competition within specific markets. All companies will be affected by these policies, both UK and abroad, and easyJet is no exception. The current price of jet fuel is â€Å"$897 a metric tonne compared with $681 a metric tonne a year ago†, easyJet stated in January 2011.This increase in fuel tax and price will cost easyJet ? 1. 17 extra per than in 2010, and is expected to double the losses of the company to approximately ? 140 million, as it will for all companies in the airline market. As for the VAT rise, easyJet have announced they may be able to save millions of Pounds in VAT by registering its new budget holiday company outside Britain, with Lowcost Travel, expected to be in Switzerland. This means they will avoid VAT under the Tour Operator’s Margin Scheme. This could save easyJet ? 0 million in VAT for the next three years. Most European markets saw losses or declines in January with concerns that China will raise interest rates again to slow down economic growth in Europe, and easyJet suffered alike with a fall of 16. 19 percent in the FTSE250 after they predicted heavy losses in the first half of 2011. easyJet announced in January 2011 that it, as all other airlines, was hit by the severe weather in Europe in December 2010 and strike action by French air traffic controllers, coupled together this cost easyJet ? 31 million,. asyJet is also set to close its cut services at Luton Airport by a fifth (which sees 5 million passengers each year) with a view to transferring them to profitable bases in continental Europe. The airline also initially price flights from European destinations in Euros, but customers can choose an alternative price in sterling. However, the price in sterling is set at a lower rate, this is because easyJet decided not to use the Mastercard or Visa rates that the most retailers use, and instead set the interest rate themselves – at a much lower level.Generally the difference between the actual exchange rate and what easyJet offer can be anywhere between 2% and 6%. This generates a lot more income for easyJet by exploiting the exchange rate at the right time, yet it can been seen as a hidden cost, which would not impress easyJet’s customers, and in the long run could actually lose them customers. Elasticity of demand measures how a change of the quantity demanded is affected by an income or price of another good change.As the airline market demand is elastic businesses must be careful with changing prices and must be sure that by decreasing their prices they are still able to increase their market share. easyJet have achieved this, by coming in with very low prices and gaining market share. Another problem facing easyJet is that pas senger duty tax increased from ? 10 to ? 11 in November 2010, which again cost easyJet millions. However, despite these setbacks, the airline said revenue in the final three months of 2010 â€Å"was up 7. 5% to ? 54 million compared with the same period a year ago†. easyJet announced in November 2010 that profits have been â€Å"boosted by a rise in passenger volumes and the group said it will pay its first ever dividend in 2012†, the airline’s chief executive, Carolyn McCall, said â€Å"We therefore intend to commence the payment of an annual dividend based on a dividend cover of five times. † The airline said passenger numbers grew 8% in the full-year to the end of September to 49 million, while profits totalled ? 154 million in the period – against ? 55 million a year earlier. asyJet’s have continued to strengthen with â€Å"market share gains across Europe particularly London Gatwick, Paris Orly (easyJet grew capacity by 22% in France i n 2010) and CDG and Geneva† (easyJet corporate reports, January 2011). Additionally in response to growth in Germany, easyJet carried on refocusing its offering, and increased capacity on key business routes out of Berlin. The total fleet plan over the period to 30 September 2013 is as follows: | easyJet A320 family| Boeing 737-700| GB Airways A320 family5| Total aircraft5| At 30 September 2010| 182| 8| 6| 196| At 30 September 2011| 202| 2| –| 204|At 30 September 2012| 214| –| –| 214| At 30 September 2013| 218| –| 2| 220| Note 5: Four ex-GB Airways A321 aircraft exited the fleet in November 2010. Source: easyJet corporate reports, Jan 2011 By eliminating the Boeing and ex-GB Airways sub-fleets it will reduce costs by simplify operations. easyJet plan to complete this by 2012 and they project cost savings of around ? 30 million each year. They are also set to work with the EU on consumer rules to make sure that they have the right balance between the benefits that low costs brings to consumers over its costs to the industry.The air traffic control strike in 2010 was caused by the economic pressures facing Europe and union concerns about the Single European Sky programme, and easyJet â€Å"expect disruption to continue in 2011† and â€Å"will press for measures to be put in place that alleviate the impact of these strikes and push for faster reform. † (easyJet corporate reports). There has recently been a saturation in the European and UK airline market. Competitors have mimicked easyJet’s strategy and have introduced competitive brands with similar price strategies that have increased competition, and decreased market share.The airline market is best classified as having a monopolistic competition market structure, whereby there are many firms will similar, yet differentiated services. Some companies have contrasting services; easyJet and British Airways for example, one with a strategy to keep costs as low as possible by stripping out almost all non-essentials of air travel (ranges in class etc) and one, BA which offers a higher level of service with a higher cost. It also has many business with similar plans and ideas; easyJet and Ryanair for example.The Herfindahl Hirschman Index (HHI), which measures the degree of competition in one market for the airline market, and is 0. 070210776 (see attached excel document for details). This means that the market is unconcentrated; this indicates that the market is unlikely to have adverse competitive effects, as no companies have a monopoly power. In conclusion, the fiscal policy employed by the coalition Government will have long reaching affects across the economy, including the airline market.It will also have drastic affects on the population, with many tax rises; VAT and fuel in particular, which will reduce the level of net income for all households. However the rise in the National Insurance threshold will be very positive for the low er income households. As for businesses, the reduction in corporation tax over the next four years will be a welcome policy, yet almost all companies will be affected by the rise in fuel tax, particularly the transport market – easyJet.The Bank of England will soon have to look further into raising the base rate, the historically low level of 0. 5% will not help any savers (although it helps those with large mortgages, loans etc. ), and when they decide to raise the rate it can help combat the continually increasing level of inflation. The exchange rate is left as a free-floating, which it will be for the foreseeable future. This is like almost all countries, so the market controls currencies, which will periodically rise and fall, and deal with the level of imports and exports and their competitiveness. asyJet will undoubtedly suffer great losses due to the fuel rises, which are expected to continue to rise as oil becomes a more scarce resource the supply falls – whic h will increase the price. They have plans to deal with VAT, and are looking to cut any unnecessary costs across the board to cope with these rises. The further strikes planned by the ATC for 2011 will again cost easyJet millions, but they believe they will be better equipped to deal with these problems.Any unpredictable, or problems outside their control, snowfall of December and the Icelandic volcanic ash clouds will also cause considerable losses, yet there competitors (and imitators) will see similar losses so it will be highly unlikely that easyJet become less competitive as the airline market continues to combat numerous problems. References Financemarkets. com HM Treasury Budget The European Central Bank website The Bank of England website The easyJet annual, and corporate reports Tutor2u The Institute for Fiscal Studies tradingeconomics. com x-rates. com The Economist

Jose Enrique Rodo's Ariel Essay Example | Topics and Well Written Essays - 500 words

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Sociology-East Indian punjabi society - Essay Example The growing mismanagement, corruption and increasing migration to Indian Punjab is also posing to threat to the otherwise Indian paradise. There are about 88 million Punjabis. Abut 68 million live in Pakistan Punjab, the remaining 20 million lives in Indian State of Punjab. In 1947, the Punjab province was split into West Punjab (Pakistan) and the East Punjab Province in India (Punjab India. Available from http://en.wikipedia.org/wiki/Punjab_India). The Indian Punjab State encompasses Pakistan to Delhi. In 1966, however, the turmoil that arose from Punjabi-speaking state caused the establishment of the current Punjab State. (Punjab state information. Available from http://www.newkerala.com/states-of-india/punjab.php). With the massive river system, majority of Punjab is blessed with abundant plains where irrgination comes from extensive systems of canals. The southeast region is semi-arid and further extends to a desert landscape, the Great Indian Desert. The northeastern part of the state is an undulating Siwalik Ranges extending to the foot of the Himalayas. The Indian Punjab State has a subtropical climate, with hot summers and cool winters. Climatically, there are 3 major seasons, hot weather from April to June, rainy weather from July to September, and cold weather from October to March. Dust storms are common in the hot weather. The temperature drop close to freezing on winter and hard frosts are common (Punjabi. Available from http://www.punjabi.com/history.html). Because of the fertile land of Punjab, it is most ideal for agriculture. In fact, the world’s leading school of agriculture is found in this region. Indian Punjab is called the â€Å"Granary of India† or otherwise â€Å"bread-basket† of India, since it is the biggest source of wheat in the country. Other produce such as rice, sugarcane, cotton, fruits and vegetables are likewise sourced from Indian

Group report Essay Example | Topics and Well Written Essays - 1750 words

Group report - Essay Example Working together on a group project however, one learns that the success of the project is not due to the abilities of one man or one woman and that everyone must work together in tandem in order to ensure the smooth and successful operation of the project. This is new for many of us and we must resist our individualistic urges and sacrifice or self-centered individualism for the betterment of the group. While working on a group project, communitarianism reigns supreme and we must work together in harmony. Seeking to address the ways in which group work can be successful, this brief research paper will explore in holistic fashion the ways in which groups work best together. Accordingly, we turn to our ever important research question which asks, â€Å"Despite all the hype and myths about the nature of groups and teams, is it simply a question of ensuring the right mix of skills and that all the members of the group co-operate with each other. Or is this an over-simplification?† The preceding question will guide our analysis as we aim to provide a comprehensive understanding of group dynamics and how groups work best together. Our assessment will aim to answer the research question above and provide a thorough analysis about our experiences with group work. Working together on a group assignment is not always easy and it takes negotiation and a willingness to compromise in order to be successful. As Americans we guard our individualism and sometimes do not work well with others. What we understood very early on is that organizational is key to any group assignment and that while it is important to ensure that the right mix of skills are present within the group it is also imperative that we are organized and plan appropriately in order to ensure that the work progress is smooth, streamlined and on target. We do not know if there is a philosophy of sorts for group projects but we found early on that

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Morrisons - Essay Example Even though, the organisation faces stiff challenges in the industry but has been able to maintain its commitment to provide the customers with fresh products. The ‘fresh approach’ used by Morrisons have significantly helped in creating awareness regarding the freshness of the foods offered by the organisation along with the organisation’s concern for the environment. To provide the customers with high quality food products, the company has great control over its supply chain which has eventually become a source of competitive advantage for the organisation (Morrisons, 2012). Providing the customers with quality food is the priority of the organisation due to which Morrisons focuses on sourcing fresh produced foods from the local market which is then processed in the company’s own manufacturing facilities. To preserve and conserve the fresh food, the organisation uses its own temperature controlled warehouses along with the packing plants in United Kingdom and other parts of the world. ... This eventually leads to high customer satisfaction level which creates a significant competitive advantage for the organisation. SITUATION ANALYSIS Morrisons is one of the big four retailers in the United Kingdom. Even though, Morrisons is one of the most established retailers in United Kingdom the organisation witnesses decline in its performance along with weak sales as compared to earlier years. This decline in sales in such a fragile market is causing Morrisons decline in market share along with drop in consumer’s confidence (BBC News, 2012). The environment is getting challenging and tough as the competitors have enhanced their performance and product offering. It has been indicated that the due to such weak performance of the organisation in the trading environment led to decline in market share to 11.5 percent from 12 percent a year ago (BBC News, 2012). Such performance of the company is one of the concerns that should be immediately taken into consideration if the or ganisation aims to become the leader in the food market and to become the largest supermarket chain by defeating Tesco, Sainsbury and ASDA in the market. On the other hand, the decline in growth is also one of the challenges that the organisation would face in forthcoming years. The recessionary period affected the organisation’s ability to take the customers into its confidence by providing them with high quality products in the market but as the shopper’s disposable incomes are squeezed (Potter, 2012). This would significantly impact the performance of the company in the market as the customers are constantly going back to their favourites in order to reduce the risk in such disastrous economic times. Even though, Morrisons is one of the four leading retailers in the United Kingdom

An Analysis of The McDonaldization of Society by George Ritzer Essay

An Analysis of The McDonaldization of Society by George Ritzer - Essay Example In today's' complicated and ever changing society, we often try to achieve a sense easier is by implementing a function now known as "McDonaldization", which Ritzer describes in various ways. For instance Ritzer states that the concept of McDonaldization is defined as "the process by which the principles of the fast food restaurant are coming to dominate more and more sectors of American society as well as the rest of the world." The success of McDonalds, and of McDonaldization as a whole, is due to four basic factors--efficiency, calculability, predictability, and control. carry their own food, and throw out the garbage. This is not as efficient for the consumer, but it saves time for the workers. Education, health care, and the work place are all becoming McDonaldalized in order to become more efficient. Efficiency in McDonaldization has streamlined many processes, simplified goods and services, and forces the consumer to do work as well. Ritzer continues these ideas in marshalling the abundance of evidence which makes this trend very compelling. Using many examples from such disparate social institutions as family life, higher education, the funeral business, health care, and entertainment, Ritzer illuminates the broader trends within the "taken for granted" daily routines of life. He does so with a keen sociological eye, but also with a very wry sense of irreverence that adds a sarcastic touch of humor to the expose.The fast-food model, according to Ritzer, has a manner of pushing us towards ever greater reliance on the fostering of quantity over quality, attainment of efficiency, creation of predictability, and reducing much of our life experience to a coldly calculated "value." As one reads further and takes in the diverse landscape of specific illustrations for these trends, one begins to see the "McDonaldized" influence everywhere. Then too, one will also grasp why so many of us are complaining about the demise of free time in our lives, and how we have become unwitting captives of mindless inertia of "I want it fast, I want it now, I want what's next" mentalities. Just another issue and dimension of

Financial Report on Apple Company Essay Example | Topics and Well Written Essays - 5000 words

Financial Report on Apple Company - Essay Example novative products of the company are- Macintosh PC, iPhone, iPad, iPod, Apple TV, Xserve, software applications such as Mac OS, iOS operating systems, applications and contents on iTunes Store and a collection of support offerings. The company has appointed wide variety of channels such as company owned stores, online, direct sales; value added resellers, telecom operators, wholesalers, retailers to sell the products. The target markets for the company are education, enterprise, government institutions, and individual consumers. Apple has a strong supply chain and ethics in manufacturing which has led the company to increase its customer base and meet market demands. Apple has more than 46,600 full time employees and 2800 contract employees who work full time. The company has annual sales of US$ 65 billion and an annual growth rate of 47 % year on year. The company optimizes user experience through its products, services, software etc. The unique ability of the company to design and manufacture innovative products enables the company to make user experience simple and great adding the â€Å"wow factor† to it. Apple has grown manifold with introduction of iTunes for consumers, where third party applications can be installed. The experience and ease of use offered by Apple products has been the key unique selling proposition of the company. The company has a strong distribution network around the world to make its product available for consumers and also provide after sales service. The company is uniq uely positioned in the market as most innovative with its products of unique design and excellent user experience. The major area of focus for the company has always been research and development, marketing and advertising which allow the company to remain competitive in the market and offer products which add value to the life of consumers. The company employs unique selling points for its products which offer lifestyle to the end users. Apple has established a direct

External Envrionment Essay Example | Topics and Well Written Essays - 1000 words

External Envrionment - Essay Example Mr. Curran Dandurand was thinking of the dynamics of the organizations international marketing operations. For more that fifteen years, the company had sold products outside the united states of America. However, when it came to 1992, out of the totals sales of $1billion, the company’s international sales accounted for only 11 per cent. This is opposite to Avon, a rival company which delivered more that 55 per cent of a total of $3.6 sales from the international markets in the same year. The company got a chance to venture into the international market. Among the international market ventures included launching of its operations in Japan. Japan is considered a mature market but then it happens to be lucrative in its operations. The other major market is the rapidly upcoming market in china. China happens to be quite unknown but the potential is enormous. Mary Kay Cosmetics Company was in competition for customers in both direct selling and cosmetics industries. Just to mention , the major competitor in the united states in 1992 were four companies. They included Avon, L’Oreal, Revlon and Procter & gamble. When it came to international marketing, Argentina and Australia were not chosen because of reasons bent on the company’s strategy. However, the company had a presence in many other countries and was hoping to do extremely well. In Canada, the Mary Kay cosmetics company was perceived as outdated, a clear indicator of its poor market analysis as a new entrant. This was in accordance to the research that was conducted. All this happened in the year 1992. This definitely tainted their image. Mary Kay Company needs a renewed approach that pays attention to the needs and culture of the local markets. Customers’ thoughts about a product are of utmost importance, because it determines how they shall respond to the same product. The Mary Kay cosmetics company had a lot of work to do after it suffered a low brand image. This may as well mean that the company never took enough time to understand the market requirements of the Australians. The brand image was positive in Mexico. Many people were aware of the brand in the same country. The company had rapid expansion in Taiwan, which was able to raise $3.3 million through sales. One of the mistakes Mary Kay Cosmetics Company did was to apply US market strategies directly without an acute understanding of the other markets. To be more specific, the company used the same marketing strategies used in the United States in new markets. These strategies were not even modified to pay any special attention to the new market requirements. This can be done through forecasting which could play a great role in learning the behavior of the market (Mullins, Boyd & Walker, 2010). Instead, Avon paid attention to the needs of the local markets. This included setting apart enough resources for international marketing strategies. This was important as a new entrant. Avon did not ignore other new market entrants. Mary Kay Company downplayed the implications and threats of other new entrants. Besides, in some markets the consumers were not aware of the products and services associated with Mary and Kay Cosmetics Company. Definitely, this led to low brand awareness that ended up hurting the overall sales of Mary Kay incorporated. One of the requirements of successful marketing is an acute understanding of the needs of the market. This on its own is not enough. After understanding the needs

ADVERTISEMENT Essay Example | Topics and Well Written Essays - 500 words

ADVERTISEMENT - Essay Example In marketing theory, certain product brands focus on the tangible benefits of product in order to gain consumer following and interest. Purell sells its products in a very saturated environment where there are many competing brands such as Johnson and Johnson sanitizers and even many store brands from companies such as Wal-Mart and Walgreens Pharmacy. Because there are so many different products available that provide similar benefits, Purell must use interesting and eye-catching promotional advertising to make their product stand out. There is a marketing concept known as differentiation that is an effort to show consumers how one product can be more effective than another when they have very similar function and benefits. Purell is making its product seem more attractive and exciting using cartoons and clever advertising messages as a means of accomplishing this differentiation. What the company is also attempting to do is remind consumers of the importance of making sure that they are healthy and safe. By making the Purell product seem more menacing, it gives consumers a psychologically-based impression that this brand can accomplish more in their lifestyles. By showing germs that are terrified of being anywhere near the product, it makes it so that they will recall this brand name more quickly over competing brands and, ultimately, reach for Purell. This advertisement also reinforces a belief in effectiveness, even though it maintains many benefits similar to competing products, so that buyers are given the impression that this is a superior product. The clever messages being used in the advertisement also create humor with the consumer. It is usually those that are concerned with health and well-being for themselves and their families that will be buying hand sanitizer products. By using cartoon characters that are fearful of the power of Purell, it also creates psychological connections with those who value

The Person I Want to Be Essay Example for Free

The Person I Want to Be Essay According to Artistotle, the virtuous person is one who finds a suitable balance among their many desires and passions. Finding that happy medium is a goal I wish to accomplish through careful thought and consideration of my personal desires. I have set the primary goal of having a successful career, with a latter goal of having the ideal work- life balance when I begin a family. Referring back to Aristotle, I want to determine how to proportion my desires to find eudaimonia. At this stage in my life, my primary goal is to have a successful career. Having the desire to succeed can be fueled by the virtue of motivation. I believe I am currently embracing the happy medium, for I am very driven to do my best but not to the point of it interfering with my personal life and other hobbies. One main step in embracing motivation is to have your goal clear in your mind. I always imagine a concrete image of where I am trying to get and what the road that will get me there looks like. It’s important also to understand beforehand the potential roadblocks that can deter you from reaching your goal, and to predetermine the route that will be taken to avoid or overcome them. Another important virtue to foster in having a successful career is modesty. I take a lot of pride in my work but often find myself comparing scores with peers and feeling a sense of satisfaction when I score higher. I know that I’m leaning towards the vice of excess by being boastful at times, which is why modesty is one of the virtues I want to work on balancing as I continue my college career and my professional growth. In an accounting firm, the goal is to succeed as one and to grow as a team rather than an individual. Maintaining a strong sense of modesty is a goal I am aiming to achieve because I too often find myself concerned with how I compare to others, and I would rather support the success of everyone. Confidence and commitment are two virtues that are cornerstone to accomplishing the goals I have set for myself. My standards are high and my goals may seem far- fetched to some, but through perseverance and commitment I know that they are achievable. In my academic career, I have set the goal to be on the Dean’s List each semester until I graduate. In addition to excellent grades, I am determined to have a winter 2014 accounting internship with a well-respected firm. The opportunity to get an internship does not come easily; the interviews are challenging and the competition is fierce. Confidence is the virtue that can help me best achieve my goal because I know that in order for the firm to think I’m the best candidate, I have to feel as if I’m the best candidate. Confidence is a virtue that will follow me throughout my life, and is a key ingredient to the recipe for happiness. Having a solid work- life balance is an important aspect to keep in mind. Although I have a relentless drive to succeed academically and professionally, it is not my only desire. In the future, I hope to be a loving wife and mother to a wonderful family. Several characteristics that are most important to have when being a part of a family are honesty, trust, patience, and love. I know that if I make decisions with those characteristics in mind, I will be making decisions with the heart rather than the mind. In my personal life, letting my heart make the decisions is always the best course of action that leads to the utmost happiness. Keeping business and pleasure apart from one another is an integral way to keep a suitable work- life balance. The ideally concocted recipe for happiness would result in the harmony of an accomplished career and the balance of a family. The virtues I hope to strengthen and maintain culminate to create the perfect recipe for happiness. Without any one ingredient, the recipe will not turn out as planned. Adding too much or too little of one ingredient will also lead the recipe to fail. I have laid out all the ingredients I plan to use to create my ideal recipe for happiness, my next step and challenge is to decide the proportions I want to add to my mixing bowl called life.

Recruitment and Retention of Volunteers: An Analysis

Recruitment and Retention of Volunteers: An Analysis This dissertation will look at the recruitment and retention of volunteers within St Lukes Hospice Charity Shops, based in London. Whilst some aspects will be similar to the recruitment and retention of paid employees, it is essential to understand the differences between the two groups of staff. The recruitment and retention of volunteers raises many of the same challenges as those involving paid workers, but the solutions may differ (Suff, 2008). However, Olga Aikin points out that the legal status of volunteers and the duties owed to them by employers are not necessarily clear. She believes that the ambiguity is caused by the term volunteer having no universal meaning. Aiken (2009) explains that at common law level the status is relatively simple. The status can be determined by asking the question did the parties have a binding contract? For an agreement to become a binding contract there has to be mutuality of obligations and an intention for the agreement to be legally binding. At common law the parties can agree that the agreement will not be legally binding (a so-called gentlemans agreement) (Aikin, 2009) Aiken goes on to clarify that it if often wrongly thought that a contract relating to employment must include monetary benefit, however this is not the case. For there to be a contract there must be mutuality of obligation, meaning that each party must receive some benefit, and be under some obligation. The individual must receive some consideration for his or her work. This consideration does not have to be money; it could include other benefits such as training or accommodation, however, mandatory training, or training to allow a volunteer to carry out their role is not excluded (Aikin, 2009). Due to this it is essential that volunteers do not receive benefits for their role. Whilst the paying of expenses is acceptable, St Lukes would be restricted in offering volunteers other benefits which fall outside of this. It is important to establish from the outset that the person is working in a voluntary capacity, to avoid the organisation facing problems further down the line, including possible claims for payment and other benefits related to employment. Formal volunteering is defined as unpaid voluntary work carried out with, or under the auspices of, an organisation., whilst informal volunteering is defined as unpaid or voluntary work carried out outside organisations, often at neighbourhood level, but outside the immediate family (Volunteer Development Agency, 2007). Phil Hope from the Cabinet Office (Association of Volunteer Managers, 2007) defines volunteering as: any non-compulsory activity which involves spending time, unpaid, doing something which is of benefit to others (excluding relatives), society or the environment The Volunteer Development Agency (2005) defines volunteering as The commitment of time and energy for the benefit of society and the community, the environment or individuals outside ones immediate family. It is undertaken freely and by choice, without concern for financial gain. The difference between paid staff and volunteers is often not clear. Kate Engles (Volunteering England, 2006) says that: Although both permanent staff and volunteers can be motivated by the cause of the organisation, for the former there is always the additional motivation of remuneration. So it is very important that volunteer managers are aware of the wider motivations that volunteers have, because that is why they are there. A paid employee will have a contract of employment and have clear workplace rights. A volunteer does not, so the relationship is based on reasonable expectations. It is important that the terminology in a volunteering agreement refers to role, and not job, description, for example, so that it is not inferred that the volunteer is a paid employee. Similarly, volunteers should only be reimbursed for out-of-pocket expenses, as any subsistence or payment could be construed as a wage. One of the other major differences between volunteers and paid staff is in the recruitment process. When recruiting paid staff the process results in the most suitable person for the job being appointed. With volunteers however, the approach is often different, with the process being a lot more flexible, allowing the organisation to tailor roles to suit the individual. If an individual if unsuitable for the role for which they have applied, it is often possible to point them in the direction of an alternative department or role, for which the organisation would be able to use them. This is a tactic that St Lukes use, predominantly when individuals under the age of 18 apply to volunteer within the hospice setting. Engles continues to say that there are some requirements which help to differentiate between the two groups. These include the organisation having a volunteering policy which sets out how the volunteering arrangement should work in practice, covering recruitment, supervision, training and development and reimbursement of expenses. WRVS also recommends having good-practice policies in place to manage the volunteer workforce, mirroring the approach of policies which are in place for permanent staff. This should include documentation which clearly sets out expectations for both volunteers and the organisation about what can be expected from volunteering. (Volunteering England, 2006) This was something that was implemented in 2008 at St Lukes Hospice, called a Statement of Mutual Expectation. The Statement of Mutual Expectation is a document which clearly states what is expected of volunteers whilst working at St Lukes, and what volunteers can expect from St Lukes whilst working for the organisation. It was drawn up in agreement with a volunteer focus group, to ensure that volunteers were in agreement and that the expectations were realistic from both parties. Suff (2008) believes that having the right person, in the right place, at the right time, is central to organisational performance. Recruitment is an essential activity for organisations as a whole, not just for the HR team, but also for line managers who have become increasingly involved in the selection process (CIPD, 2009). This principal does not just relate to the recruitment of paid employees, but to volunteers too. The volunteer recruitment process should reflect that of paid staff. Prior to recruiting for a position the CIPD recommends investing time to gather information relating to the role, including the roles purpose, the outputs required by the role holder and how it fits into the organisations structure. When considering the role it is also important to take in to account the skills and personal attributes needed to perform the role effectively (CIPD, 2009). This should be the first step in the recruitment process. This should also include looking at how volunteers will be supported and managed whilst working with the organisation. By including both paid staff and current volunteers in the planning process, it ensures that everyone has an input and understands the volunteers involvement. By involving senior management and board members in any planning, this ensures that the organisation has commitment at strategic level. The National Centre for Volunteering agrees that successful recruitment is heavily dependent upon organisations identifying what is needed from potential volunteers by understanding the specific roles, and recruiting to them (McCurley and Lynch, 1998). McCurley and Lynch (1998) found that there is evidence that shows potential volunteers are attracted to the type of tasks or the nature of the role when being recruited to an organisation. It is therefore important that these are in place before the recruitment process starts. As well as being attracted to the roles offered, each volunteer has a reason for wanting to give their time for free. By identifying these motivations, the organisation will be able to match the needs of the volunteer with the needs of the organisation. Motivation factors include a commitment to the organisation. Within a local Hospice this may be that a friend or relative has received care, meeting people and socialising, gaining skills, or utilising existing skills (Volunteering England, 2006). The 2008 Institute for Volunteering Research paper Young people help out: Volunteering and giving among young people explain that the volunteering agenda believes young people volunteering has a positive impact, including increasing skills and employability, enhancing social cohesion, integrating young people in to society and reducing crime and anti social behaviour. Once the role has been planned for, the organisation needs to generate interest from external individuals. This can be done by advertisements in newspapers, on commercial job boards and on websites, including the organisations (CIPD, 2009). Regional newspapers often offer free advertisement space to charities, which can benefit both the organisation and the publisher. CIPD believes that as the use of technology in recruitment increases, organisations are adapting, and creating databases or pools of ready candidates, who can be kept in reserve, for as and when positions in the organisation arise, without the need to re-advertise (CIPD, 2009). This is not an area that St Lukes have attempted, due to lack of technology within the organisation. Also, with so many voluntary positions in the organisation, the majority of people can be placed immediately. As well as the recruitment process identifying suitable individuals, it can also be used to allow candidates to find out more about the organisation. It is also used for the individual to assess the organisation, and decide whether it is the right environment for them to work. As the experience of all applicants impacts on their view of the organisation, it is vital that each stage of the recruitment process is managed effectively and to the best of the organisations ability (CIPD, 2009). This is particularly important in an organisation such as St Lukes Hospice, who are community based, and rely heavily on word of mouth for recruitment and support. WRVS uses a variety of methods to attract potential volunteers. These include local media, attendance at events, local recruitment campaigns and word of mouth. One consideration with word-of-mouth approaches is that there could be an impact on diversity if people of similar backgrounds are coming forward, so we balance that method with other promotional activities, head of people volunteering at WRVS Chris Dobson says The CIPD Recruitment, Retention and Turnover Annual Survey 2009 found that the number of voluntary, community and not-for-profit organisations experiencing difficulty in recruiting for one or more category of vacancy in 2009 has decreased, compared to the 2008 figure, from 82% to 79%. However, the same report found that organisations with fewer than 250 employees are increasingly finding difficulty in recruiting for one or more category of vacancy in 2009 at 83%, up from 80%. The previous year CIPD also believe that effective recruitment is crucial to organisations for successful day to day running, and that it should not only be carried out to fulfil current needs, but should consider future needs, which will impact on the organisations resourcing (CIPD, 2009). However, in such a small organisation, the luxury of future planning is not always possible. With so many volunteer roles needing filling, planning for the future is not a priority. For recruitment to be effective, it is essential that there needs to be some understanding on where potential volunteers would look for current opportunities. Volunteer Development Scotland (VDS) research (2006) shows that 69% of existing volunteers became involved in volunteering through being asked to help. VDS however found that from the group of people asked, comprising of existing volunteers and non volunteers that the most popular places people believed they would look include the library, internet, direct to the organisation which they are interested in, a volunteer centre, or by speaking to their family and friends. These findings differ from the reality. Organisations can use a variety of methods to recruit volunteers. One of these is promoting itself to potential volunteers. Ways of doing this include informal methods, such as word of mouth by existing volunteers, as well as more formal methods, such as advertising. Word of mouth should not be under estimated. In a community charity it is a very powerful tool. Danson (2003) found that those who did not have access to these networks would become excluded from volunteering. à ¢Ã¢â€š ¬Ã…“However, the socially excludedà ¢Ã¢â€š ¬Ã‚ ¦ are the least well informed about volunteering and the least networked into existing volunteers (Danson, 2003). For young people, aged 16 24 years, word of mouth was the most popular route in to volunteering (Institute for Volunteering Research, 2008). Institute for Volunteering Research (Gaskin, 2003) conducted research, using volunteers and non volunteers, and found that recruitment messages can be targeted to particular groups of people through advertising. What Gaskin was demonstrating, was that for a modern image of volunteering, organisations should use innovative media, emphasising the benefits of volunteering. For an outreach approach, organisations should be using talks, road shows and presence at public events, which could be incorporated with fundraising events. Lastly, for maximising word of mouth recruitment organisations should be encouraging current volunteers to act as ambassadors for volunteering within the organisation. Baird (2005) has found that often, non-volunteers have little knowledge of the activities undertaken by volunteers, or the number of hours and commitment which would be required of them to join an organisation. Baird also found that potential volunteers like to know how their time can make a difference to others, the organisation, or the environment and what they themselves could gain from volunteering. Whilst some volunteers like to know what they gain personally, this would also depend on their motivation for volunteering, as mentioned by Volunteering England. It is therefore important when planning and designing the volunteer role, to include information such as amount of time involved and any ongoing commitment requirements. It is vital to remember that volunteers are an important, if not invaluable resource for many organisations, and their recruitment and retention needs to be treated with as much care and detail as that of paid employees. Whilst motivational factors may differ between paid employees and volunteers, many aspects of people management remain the same. Volunteering is a major activity in the UK, with the  governments citizenship survey (2007) identifying that three-quarters (73%) of all adults in England and Wales undertook some form of volunteering in the previous 12 months, with almost half (48%) of adults surveyed claiming to do voluntary work on a regular basis, at least once a month (Suff, 2008). However, the extent to which volunteers are used within organisations varies considerably, ranging from organisations who solely depend on unpaid staff, to organisations who have minimal volunteer involvement. The Institute for volunteering Research (2008) found that in the previous year, 59% of organisations surveyed had experienced some problems with recruiting enough volunteers, with a similar proportion (57%) reporting difficulties in recruiting volunteers with the skills their organisation required. Kate Engles, Policy and Information Officer at Volunteering England, says that there is a range of support available for charities trying to attract volunteers, including volunteer centres, who offer advice to organisations on working with volunteers. They also advertise organisations volunteering opportunities to the local community. However, this is an approach that St Lukes have previously tried, using volunteer centres in Harrow and Brent, with little success. Chris Dobson, head of people volunteering at WRVS explains the demographic changes since the formation of WRVS 70 years ago (Volunteering England, 2009): Since WRVS was formed 70 years ago, peoples lifestyles have changed significantly. For example, at first there was a big group of women who did not work, but today most women do work and so do not necessarily have the free time to volunteer. This means we have to work a bit harder and be a bit more creative in how we attract potential volunteers. St Mungos, a homeless charity based in London, use a range of approaches to promote volunteering opportunities, including free advertising in London newspapers. This is an approach that St Lukes have tried in the past; however this was not very successful in terms of recruiting volunteers but did provide free press coverage to a large reader group. (Volunteering England, 2009) St Mungos is also registered with several national volunteering databases, as well as having forged links with University College London and London Metropolitan University, due to the universities course provision relating to the work done by St Mungos. St Lukes work closely with Thames Valley University, by providing accredited modules in Palliative Care as part of their degree programme. However, students who spend time at St Lukes as part of the module do not volunteer for the charity whilst training to become specialist palliative care nurses. They carry out supervised placements within the hospice, but no students have so far extended their time to volunteering outside of the module. When recruiting volunteers for the organisation it is important to understand diversity and the role which it should play. Diversity includes physical and non physical differences, with a number of personal characteristics covered by discrimination law. These give people protection against being treated unfairly, with the protected characteristics including age, race, disability, sex, religion and belief and sexual orientation. Diversity in volunteering should mean that people from diverse backgrounds, with diverse skills, can volunteer, regardless of any of these characteristics (CIPD, 2010). There are many compelling reasons to attract a diverse mix of volunteers, such as reflecting the community or client group, encouraging inclusion and encouraging new skills and backgrounds into the organisation, because there is greater flexibility in the recruitment process for volunteers, there is greater scope to encourage greater diversity. Kate Engles (Volunteering England, 2009) observes. The Institute for volunteering Researchs 2008 study found that more than half of participating organisations (56%) had experienced problems recruiting volunteers from a wide range of social and community backgrounds. Volunteer Development Agency (2005) states that when talking about a diverse organisation, it is one that represents the community that it is in. In an area as diverse as Harrow and Brent, this is a particularly relevant challenge, and one that needs to be overcome to ensure the future of volunteers within the hospice. Over the past 5 years WRVS has worked to implement a diversity strategy. This is in an attempt to enhance its reputation and image, resulting in widening its potential recruitment pool. The reason for WRVS implementing this was that it views volunteers as the public face of the organisation, and believes that if they reflect todays diverse society, then individuals will more easily identify with it (Volunteering England, 2009). For St Lukes, this is also an influencing factor, along with the need to diversify to continue to attract volunteers from the local community. The CIPD give several examples of why an organisation would want to become more diverse. To be competitive, everyone within the organisation needs to make their best contribution. By employing a diverse workforce, this allows for a more diverse skills mix. A diverse workforce can help in market competitiveness, opening up new market opportunities, increasing market share or expanding an organisations customer base. It can benefit the organisation by brining fresh ideas and perspectives from people with different experiences and backgrounds. It can also help to ensure that the services the organisation offers are relevant to the community (Volunteer Development Agency, 2005). To implement a diversity strategy within an organisation, it needs to start with buy in from senior management, and include changes in workplace behaviour, communication and training (CIPD, 2010). CIPD Recruitment, Retention and Turnover Annual Survey 2009 found that 94% of voluntary, community or not for profit organisations surveyed monitored recruitment to gain information on gender, ethnic origin, age and disability and 70% train interviewers to understand what diversity is and the impact on stereotypes. The benefits of having a diverse workforce are also highlighted in the Institute for Volunteering research paper Regular and occasional volunteers: How and why they help out (2008). The report found that although there are no significant differences between regular and occasional volunteers when it comes to gender or ethnicity, the age of the volunteer can make a difference. Volunteers aged 25 à ¢Ã¢â€š ¬Ã¢â‚¬Å" 44 years old and more likely to be occasional volunteers, whilst those aged over 65 are more likely to commit to regular volunteering opportunities. Retention is the process in which employees are encouraged, through various means, to remain working for the organisation. This can be ongoing, or until the completion of the project. Employee retention is beneficial for both the organisation and the individual, and it is seen as the responsibility of the employer to ensure that the employee stays working for the organisation by using compensation, environment, support, growth and relationship. (CIPD, 2010) Retention of volunteers is just as important as the recruitment. Previous literature has cited negative experiences within organisations as well as personal factors, as reasons why people leave volunteering. Examples include lack of relevant training, poor supervision within the role and uninteresting duties (Alexander, 2000). Other factors include feelings of being overburdened and undervalued (Locke, Ellis Davis-Smith, 2003). Whilst it is not a fail safe way of ensuring high retention figures, there are many processes in place within the Shops Company which work towards addressing these issues. All volunteers are issued with a manual when commencing their role, which needs completing in agreement with the shop manager. Volunteers have set roles within the shops, and have regular parties to show appreciation for their hard work and commitment, along with birthday cards set as a sign of thanks. A thorough induction programme is also thought to be essential, to make volunteers feel comfortable, welcome and able to carry out their role with confidence. It should include an introduction to the organisation, including the organisations ethos and how they can personally contribute as a member of the volunteer team, an introduction to staff and volunteers with whom they will be working, an introduction to their new role, and also cover legislation, including health and safety (Help the Hospices, 2004). Beugen (in Recruitment and Retention of Volunteers, 2007) found that it is important to recognise that the needs and motivations of volunteers change over their time volunteering for an organisation. He believes that volunteers progress through a motivation life cycle, much the same as paid employees in any organisation. The first stage of Beugens life cycle of volunteers is the exploratory stage. This is when the new volunteers are still exploring the possibilities of being a volunteer, and trying out their new role within the organisation. At this stage Beugen believes that it is important to give reassurance to the volunteer, to find out their expectations and to discuss any uncertainties that they may have. The second stage of the life cycle is the period where volunteers are developing themselves and their role. They do this by analysing what they are doing and improving on their performance. Support for the volunteer doesnt need to be as intensive as the first stage during stage two, however it is still important to maintain contact with and encourage the volunteer. (Recruitment and Retention of Volunteers, 2007) Ongoing training is important during the second stage to allow for continual development. Beugen believes that this helps to create a sense of commitment to the organisation, resulting in higher retention rates. He also thinks that it is also important to recognise volunteers achievements and to acknowledge the value of their contribution to the organisation. Recognition can be formal (e.g. certificates, long service awards) or informal (e.g. birthday cards, cakes). The final stage of Beugens life cycle is maturity. This is where the volunteer is ready to share their skills and knowledge, and to support and lead other volunteers. In an organisation with a lot of volunteers, this stage of the life cycle is important, as it allows established volunteers to share their experiences and knowledge to newer volunteers, and to possibly give a different perspective on the role than that of a paid member of staff. By involving existing volunteers in this knowledge sharing it is preventing them from losing interest and motivation. Beugen points out that it is important to recognise that total retention isnt necessarily a good thing. He believes that once a volunteer has gained new skills and interests they may be ready to move on to another organisation. This may not be necessary if the organisation is large enough to have a range of roles to keep the volunteer motivated and interested. Holmes (in Recruitment and Retention of Volunteers, 2007) comments that the recruitment and retention procedures advised by many organisations are over-formal and similar to the personnel practices for paid staff. Despite this formal approach having advantages to both managers and volunteers in its structured approach research has found that volunteers often find this approach off-putting (Gaskin, 2003; Holmes, 2004). The Institute for volunteering Research (2003) asked volunteers what factors contribute to a satisfying and enduring volunteering experience in order to help organisations recruit and retain. IVR found that what puts volunteers off is feeling used, not appreciated, not consulted and not accommodated. They found that volunteers want to feel welcome, secure, respected, informed, well used and well managed. Since they do not have the incentive of financial gain, rewards must be supplied in other ways. Kate Engles (Volunteering England, 2009) comments: Many volunteer-involving organisations use volunteers Week in June to give awards or celebrate their volunteers by an outing or picnic, for example. Saying thank you costs nothing and goes a long way. Birthday cards or small gifts can also have a lot of meaning for the recipient. Birthday cards for all volunteers are sent annually, with tea parties held during volunteers week in June as recognition of the volunteer teams extensive work at St Lukes. At St Mungos, the belief if that if volunteers can see that they are making a difference within the charity, and that they are working for a professional organisation then this will  help boost retention. This is done by integrating volunteers in to the Mungos family, by making them feel like a part of the permanent workforce (Volunteering England, 2009). Similarly to the integration of volunteers at St Mungos, St Lukes have invested time in altering its culture. Historically, within St Lukes, volunteers and paid staff have been treated very differently, with separate inductions, handbooks, social events etc. However, since 2007 work has been carried out at St Lukes, to establish a less them and us culture. This work started with the setting up of several focus groups, to enable volunteers to have more input in to the organisation. Yet, since this work in 2007, retention rates have not improved. Approximately half of the organisations surveyed in the Volunteer Development Agency 2009 survey said that during the first quarter of 2009 the number of people applying to volunteering within their organisation had stayed the same, with 39% or organisations seeing an increase. The most common reason for an increase in applicants was that people wanted to increase their employability skills to aid finding paid work. The most common reason for decreases in volunteer applications because people had less time to come forward for volunteering. The organisations who stated that they saw an increase in volunteer application in the first quarter of 2009 were asked to clarify the % increase that they had seen compared to the same period in 2008. 59% said that they had seen an increase of 1-25% and 27% had seen a 26-50% increase. Looking towards the future, the organisations surveyed predicted that the major challenges facing them over the coming 6 months were related to funding / limited resources and the need to adapt to changing motivations / expectations of volunteers. 90% of the organisations who responded to this survey were from the Voluntary and Community sector. The remaining 10% were split between organisations with a remit in church / faith, sports and social enterprise. The largest had 1080 volunteers. Although extremely difficult the quantity, the perceived monetary worth of one hour of volunteers time to the organisations surveyed average out at  £9.24, which ranged from  £0- £30. With over 700 volunteers, it is estimated that St Lukes saves in excess of over  £1,000,000 per annum. Participating organisations are quoted as saying à ¢Ã¢â€š ¬Ã…“Volunteers at present are needing greater flexibility, this is ok to a point but does cause our organisation problems. Volunteers are not committing themselves for long periods any more, in the past the average duration for volunteers was 2-3 years, now that is down to 6-12 months (Volunteer Development Agency, 2009). à ¢Ã¢â€š ¬Ã…“The majority of our volunteers are women and to date a few of them were unavailable to volunteer because they have had to look for paid work when their husbands became unemployed. This trend may increase (Volunteer Development Agency, 2009). In the report Volunteering in UK Hospices: looking to the future Smith, J (2004) estimates that each Hospice volunteer contributes approximately  £1,500 a year worth of work, using nearly  £200 of management time. Using this calculation it becomes clear how invaluable Hospice volunteers are, as the Shops operation would not be able to operate to such an extensive profit without them. With plans for the Hospice to continue expanding, and the opening of more shops in the local area, it is essential that the Hospice has a strategy in place to ensure that there is a constant supply of volunteers joining the workforce to allow this to happen. As well as looking at new ways of recruiting volunteers, it is vital that the Hospice acknowledges the need to retain the volunteers is currently utilises, as they have a wealth of knowledge. As well as knowledge, Smith, J (2004) identified that volunteer commitment increases with length of service. Statistics released by Volunteering England (2009) show that demand for volunteer placements in the 6 months prior to the report (March à ¢Ã¢â€š ¬Ã¢â‚¬Å" September 2009) increased in 86% of volunteer placement centres. A recent survey by Howard Lake (2009) for Institute of Fundraising found that Hospices were bucking the economic gloom. Lake found that people in the South East of England were still volunteering, and believes this to

Effects of Harmonization of Railway Infrastructure

Effects of Harmonization of Railway Infrastructure Abstract Historically, rail transport systems in Europe have been running as per national standards through the monopolistic and vertically integrated state owned operators. Most of the railway network in Europe is designed for different technical and operational standards of the member states, which makes it impossible or expensive for rail transport across borders. With a vision of achieving a single European railway network, in 1991, the European commission adopted a policy of revitalizing the railway sector to harmonize the technical and operational standards across the member states. This policy promotes a single set of Technical Specifications for Interoperability (TSIs)todefine common railway system architectureanda common approach to railway safety management. The long-term objective of such a policy is to open up the rail passenger and freight market for competition and promote the rail transport as sustainable means of transportation. The future of the rail supply industry in Europe is linked to the creation of sustainable transport system, which can only be achieved by increasing the competition in the industry to provide cost effective solutions. Harmonization of the railway networks in Europe will be one of the important driving forces in shaping the rail supply industry in Europe. This paper analyses the current structure of the German rail supply industry and how the industry may evolve given the current drive for interoperability through harmonization of standards and technologies. The policies of interoperability were conceived during the early 90s, but the impact of such policies are yet to be seen due to the lack of co-ordination between the manufactures, the regulatory mechanism, insufficient funding and the political will. Though the rail supply industry of Europe is in favour of achieving the common technical standards, the resulting market dynamics due to the common European market remains unanswered. 1. Introduction The purpose of this paper is to analyse the effects of harmonization of railway infrastructure in Europe on the rail supply industry in Europe with focus on Germany. Various directives and regulations of European commission have set off a series of dramatic changes in the European railway sector. The liberalization process has seen unbundling of the vertically integrated state owned operators. The directive of interoperability is enforcing the member states to transition from the existing signalling systems to common rail traffic management systems across Europe. Besides the control systems, there is significant thrust by the European commission to harmonize the technical and operational standards of the other components of the railway infrastructure like the tracks, electrification, power supply substations etc. These would render common product characteristics across the infrastructure segments with some exceptions in the stations and tunnel construction as the nature of these requ irements varies depending on the local needs and resource restrictions and also these components doesnt contribute to the desired interoperability. Thus the harmonization process would increase the size of the accessible market for companies in rail supply industry. Hence harmonization is bound to have a significant effect on how the industry is structured and the competition within the industry. The German railway infrastructure is the key component of the entire railway transport industry, where in the state owned operator and Logistics Company, Deutsche Bahn AG owns the entire infrastructure. Deutsche Bahn AG (DB) has a monopoly on the upstream of the value chain of German railway industry and at the same time DB exists as a monopsony at the downstream of the value chain. Thus, DB is a single buyer of the infrastructure services and products with very high bargaining power over their suppliers. The processes of harmonization and liberalization in the European railway sector have been shaping the complete value chain of industry. The increasing competition among the railway operator has brought in many benefits to the consumers and also to all other stakeholders involved in the industry. The German rail supply industry is highly fragmented with small to large companies involved in different segments of infrastructure services. The Fragmented nature of the industry has given rise to aggressive competition in the industry with many large players trying to claim their stakes in the market. The presence of only a single buyer, Deutsche Bahn, has defined the competition as price oriented, with many infrastructure companies trying to innovate on the technology and process to provide the infrastructure as per the national standards and at lower costs. This paper will discuss the benefits of the standardization in the industry and would also discuss how the rail supply industry in Germany may restructure to the changing market dynamics once the single European market is in place for the railway sector. Chapter 2 of this paper presents entire value chain of the German railway transport industry. This will be followed by the description of the key stake holders of the industry and the interaction mechanism between them. Further the analysis will focus on the railway infrastructure part of the value chain. The analysis in this section will try to evaluate the forces that drive the industry and the bargaining power of the decision makers. Chapter 3 of the document discusses process of harmonization through the EU directives of interoperability and safety. The analysis here will try to explain the various regulation, time frames and governing bodies involved in the process. The discussion will also highlight the progress of harmonization and the issues and obstacles to achieving the desired targets of interoperability. Chapter 4 will discuss the benefits of harmonization to the industry and chart out the current strategic environment of the German rail supply industry. This section will include a note on the key causal factors and actors influencing harmonization and will develop and discuss few scenarios as to how the industry may evolve post harmonization of the railway infrastructure in Europe in general and Germany in particular. The analysis in this section will draw inferences from the views of some opinion leaders and academics who are involved with the industry. Finally the conclusions of the study will be presented in the chapter 5 which will summarize the findings and hypothesis of chapters 3 and 4 respectively. The conclusion will highlight the limitations of this research paper and will also suggest further research options concerning the rail supply industry. 2. The Value chain of German Railway Industry 2.1. Over view of value chain The German railway industry is composed of various players along the value chain. A brief overview of the Railway industry value chain is as shown the figure1. The first link in the value chain of German railway industry is the infrastructure construction, which includes the building and maintaining various infrastructure components that support the railway network. The infrastructure components can be track, electrification, power supply substation, electro mechanical works, signalling and command control, railway stations, maintenance and upgrade of tracks and public announcement, displays, ticketing devices etc. Many private companies as well as the subsidiaries of DB are active in this part of the value chain. The second component of the value chain is the infrastructure management, which is driven by many stake holders, but is controlled mainly by DB Netze, which owns the complete mainline and high speed railway network in Germany. The infrastructure for the urban transport is usually owned by the urban transport operators. The governing bodies like Federal Railway Authority of Germany and the Public Transport Authorities of the various states are the key decision makers for infrastructure management. The most important component of the value chain is the network operation and logistics. This segment of the industry caters to the rail transport market, by providing services to the end customers. The main players in this segment are the Deutsche Bahn, which is a monopoly with around 85% of market share in Germany. The liberalization process has led to the advent of few private operators, who lease the infrastructure from the DB Netze. The urban transport operators are active players in the metro/ tram segment of the railway transport market. The last link of the value chain includes the end customers, which is constituted of both the passenger and freight transport market. Customers are the central focus for the various reforms in the industry as the growth is dependent on the ability of the industry to provide the transport services at affordable prices in comparison with other alternatives like road and air transport. The details of different segments of the rail transport market and the related statistics are provided in Appendix 1. As seen from the figure 1, the intensity of the competition increases as we move up the value chain from the network operators to the infrastructure suppliers. The process of liberalization has induced competition amongst the operators, but the very high sunk costs involved, have erected a strong barrier for new entrants. Further up the value chain, there are many players involved in infrastructure management and infrastructure construction due to the attractive market size. Though the liberalization process has contributed to the opening up of this market, historically many small and big players are involved in this part of the value chain leading to an increased competition. 2.2. Key players of German railway infrastructure management To understand the rail infrastructure industry in Germany, It is essential to understand the various stakeholders in the industry and their contribution and importance in driving the market dynamics. Figure 2 is a schematic of the industry structure with a focus on infrastructure management. 2.2.1. European Commission European Commission is a governing body which is one of the important demand drivers for the infrastructure market. The federal and local governments of the member states in the European Union are obligated to adhere to the regulations and policies devised by European Commission. European commission reviews and responds to the transportation needs of the member states of EU, which has the construction of modern, safe and integrated railway network in Europe as priority to fuel the growth of intra and international trade among the EU members. Hence, the reformatory regulations and their periodic reviews lie within the gamut of European commissions functions. European Commission has set up the European Railway Agency (ERA) to oversee the creation of integrated European railway network by enforcing and implementing safety and interoperability through standardizations and harmonization. ERA works as a coordinating body between the railway sector companies, national authorities, European Commission and other concerned parties. ERAs main task is to develop common technical standards and approaches for the European railway systems and infrastructure. ERA is also the system authority for the implementation of the European Rail Traffic Management Systems (ERTMS) project. Source: Adapted from the article separation of operators from infrastructure 2.2.2. Governments The German government oversees the overall transport sector through the Federal ministry for Transport, Building and Urban affairs. The Federal Railway Authority (Eisenbahn Bundesamt: EBA) is the supervisory authority for 30 railroad traffic operators and for 5 infrastructure companies mainly for the Deutsche Bahn AG. The functions of EBA include issuing licenses for infrastructure companies, providing investments and funding for infrastructure projects, making railroad access discrimination free, facilitates innovation within the accepted safety standards, ensures value creation for customers and also checks for unfair competitive practices. The supervisory authority of the urban transport lies with the 31 Public Transport Authorities (PTA) in the different federal states of Germany. The duties of the PTA are similar to those of EBA, but within the context of urban transport. PTAs work in conjunction with EBA for the infrastructure planning and funding activities at the local level. The political decision makers own the responsibility to define the legislative framework to fully integrate the European railways, in terms of enhanced market access, interoperability and safety rules. A sound legislative framework that works in tandem with the EU commission is expected to accelerate the harmonization process. 2.2.3. Network Operators/ Owners In Germany most of the mainline and regional rail networks infrastructure are owned and operated by the DB Netze AG , DB Regio Netz Infrastruktur GmbH, DB Station Service AG, DB Railionand the DB reise und touristik , who are all directly owned by the Federal Government. The DB Netze AG is responsible for track installations, coordination of network usage time tables and pricing. The DB Station Service AG operates, maintains and develops the passenger stations and also ensures the provision of services to travellers and railway undertakings. The DB Regio Netz Infrastruktur GmbH is responsible for local and regional traffic operation and infrastructure management. DB Railion is responsible for operation of freight traffic and DB Reise und touristik is responsible for long distance traffic operation. Besides these many new private traffic operators like Veolia Transportation, TX logistics, AKN Eisenbahn AG, Ostdeutsche Eisenbahn GmbH, S-Bahn Hamburg GmbH, etc have entered the German railway market. Railway operators are responsible for improving the quality of services in terms of information accessibility, customer comfort, reservation and ticketing, network accessibility, availability of services, punctuality and reliability. The infrastructure managers or the network owners are responsible for optimising the capacity utilization of the available network infrastructure; ensure fair and non discriminatory access to network for all railway undertakings and also to ensure operational efficiency and safety. 2.2.4. Infrastructure providers Infrastructure providers are the companies that supply the railway transport industry with various infrastructure services like the rolling stock, track, electrification, maintenance etc. The infrastructure providers can also be termed as rail supply industry focused on the infrastructure development as per the standards and regulations set by the other stakeholders listed above. The rail supply industry is responsible for organising themselves to provide the ready to use equipment and infrastructure needed by the railway undertakings and infrastructure managers. The research and development of new products to promote the process of harmonization depends on the capabilities of rail supply industry. 2.2.5. Associations and Organizations Many organizations and agencies of the railway industry in Europe work closely with the EU and the national governments of the member states to support and promote the rail transport by setting technical standards and promoting fair competitive practices in the industry. Some of the important associations and agencies that are relevant to the rail supply industry are UNIFE, ERRAC, UITP, UIC, CER, EFRTC etc. Details of these associations are provided in the Appendix 2. 2.3. Overview of German rail supply market Worldwide, total rail supply market volume exceeds â‚ ¬ 120 bn. Of which, the size of the rail supply market in Germany is estimated to be around â‚ ¬ 6.3 bn. Based on the railway network type and usage characteristics, the rail supply markets can be further classified as High speed and very high-speed lines, conventional and regional rail lines and the urban rail transport networks. While Deutsche Bahn is the single customer in the high speed and very high speed lines and the conventional and regional lines segments, the different public transport authorities are the customers in the urban rail infrastructure market. High speed and very high-speed lines: These are usually the rail networks that spans across the borders to enable faster connectivity across Europe. The high speed lines between the important cities within the country also fall into this category, as they have the future potential to be integrated with cross border traffic. In Germany, this segment is currently small in size and is expected to grow especially due to the increasing need of cross border traffic. Conventional and regional lines: These are usually referred to as main lines and consist of the rail networks that connect the different regions with in a country. So, the entire regional rail transport networks that support the intra train transport with in a country and the freight transport networks can be grouped into this category. Currently this segment is built and operated as per the national standards set by the Federal railway authority and the volume of this network is very huge and is highly heterogeneous and is also operationally underutilised. Urban rail networks: This market segment consists of metros and the commuter/sub urban rail networks which support the public transport with in a city. The product requirements within this segment can vary depending on the local geographical characteristics and funds availability. This segment is mostly independent of and incompatible with the other segments and so provides many avenues of differentiation for the companies that are active in this segment. As of now there are no regulations enforcing harmonization of these networks. 2.4. Structure of rail supply industry in Germany The rail supply industry in Germany is classified into four segments namely; Rolling stock, Infrastructure, Signalling and control system and services. Figure 3 represents a schematic of the different segments of the German rail supply industry. Rolling stock: The products in this segment are characterized by all the vehicles that run on the railways like locomotives, railroad cars, coaches and wagons. Due to the high capital investments, this segment usually consists of large companies like Bombardier, Siemens and Alstom. Infrastructure: This segment is characterized by the infrastructure components like tracks, electrification and stations. Many companies with diversified products serve in one or more of the components of this segment. Signalling and control systems: The infrastructure components like the track side signal installations, on board control equipment, control stations etc are grouped as signalling and control systems. Services: This segment includes the service and maintenance for all the other segments. This segment also comprises the project management and turnkey solutions. In Germany most of the maintenance and project management is carried out by the subsidiaries of Deutsche Bahn. 2.5. Segmentation of the German rail supply market Putting the rail supply market and the rail supply industry segmentation together will provide a complete segmentation matrix, which will help in the better understanding and analysis of the market. The segmentation matrix is provided in figure 4. Figure 4: German rail supply Market Segmentation matrix In the above matrix, the shaded regions indicate an overlap of product and service similarities in the different infrastructure components and the market segments of the railway industry. 3. Harmonization For a successful, larger and integrated Europe, the availability of efficient transport systems is essential for supporting sustainable economic growth and social development. Passenger and freight transportation by rail is a potentially effective instrument to combat congestion, pollution, global warming and traffic accidents. These negative externalities undermine the capability and efficiency of European economy and the health of future generations. The growing European Union and the globalization of the world economy have necessitated an international transport market, to support the outpacing economic growth. Today, the rail sector faces an ever increasing demand of accommodating higher transport volumes, a result of transport growth, and of policies favouring competition in the sector. Rail transport in Europe is a future-oriented industry, striving to offer attractive, affordable, safe, clean, competitive and reliable transport mode. Harmonization is the process of standardization of infrastructure components like types of track gauges, different types of power supply, speed control systems, train safety systems and technologies as well as the job profiles of drivers. The objective of harmonization is to achieve interoperability between the heterogeneous railway networks of the member states with in EU. Harmonizing products and technologies through innovation is a necessity for the rail supply industry to deploy its potential, and for its stakeholders to deliver cost-effective services for intermediate and final clients. 3.1. Need for harmonization Prior to the formation of European Union, the railway systems in Europe were run at the national level and were managed and operated by vertically integrated state owned companies. These railway systems were designed under different national operational rules, policies and standards. This resulted in the lack of interoperability in the railway transport sector which hampered the goal of growth in European economy through increased trade activities amongst the member states. The EU thus envisaged a goal of unified railway transport network across the EU member states to promote the trade and thus foster the economy. This goal transformed into a number of directives and regulations to achieve a Trans European network. 3.2. Components of harmonization To transition from the heterogeneous railway networks to a homogenised railway transport infrastructure across Europe, different components of harmonisations were evaluated by the European commission. European commission defined the homologation process in terms of interoperability, safety and signalling systems. 3.2.1. Interoperability Interoperability of the rail systems renders a safe and uninterrupted movement of trains, while accomplishing the required and specified levels of performance. Interoperability rests on all the technical, operational and regulatory conditions that must be met in order to satisfy the essential requirements. Interoperability has been mandated by several EU directives. The first one is the Directive 96/48/EC, which was passed in 1996 and is only concerned with the interoperability of the Trans- European high speed rail system. The second one is the Directive 2001/16/EC, which applies interoperability to lines within the trans-European transport network and other infrastructure facilities. Both these directives were later modified by the directive 2004/50/EC along with the corrigendum for the former directives. Most recently the directive 2008/57/EC was passed to include the community railway systems within the scope of interoperability. A consolidated history of regulatory framework evolution concerning interoperability in European railways is provided as Appendix 3. To overcome the technical fragmentation of rail networks, the interoperability directives provided that the Community legislation is gradually establishing mandatory so called Technical Specifications for Interoperability, commonly referred to as TSIs. The European Railway Agency owns the responsibility to draw up and revise the TSIs, on the basis of inputs provided by the member states and other stakeholders of the railway sector. Several subsystem constituents of interoperability of railway transport for both conventional and high speed lines are as below: Infrastructure( track works, tunnels, bridges and stations) and energy (electrification system) Operation and telematic application for passengers: related equipment and procedures to enable a coherent operation of different subsystems and also the requirements of professional qualification for the skilled labour involved in operations. Rolling stock: vehicle dynamics, superstructure, on board command and control system equipment, current-collection devices, traction units, energy conversion units, braking, coupling and running gear and suspension, doors, man/machine interfaces, passive or active safety devices. Maintenance: procedures and processes, technical documentation, related equipments, logistics centres for maintenance work. 3.2.2. Safety Safety is one of the important components of the railway systems which is highly regulated at both national and EU level. Safety is one of the prime concerns of the customers of rail transport and hence there is a special focus on the safety standards which have to be designed in line with the interoperability directives. Hence common safety standards, practices and targets have to complement interoperability to successfully achieve the desired homologation of the trans-European railway network. The European commission issued many directives to mandate the safety methods to support the harmonization process. These directives include Directive 2004/49/EC, Directive 2007/59/EC, the directive on certification of train drivers and other relevant EU legislation. ERA acts as a supporting organization to the European commission to develop the further implementation plans for the EU directives by networking with the national bodies of the member states. ERA has structured four different business sectors concerning railway safety and provides central support to the stakeholders involved in the complete process from formulation of regulation to implementation and periodic reviews. The four different segments are: Safety Assessment: developing common safety methods for risk evaluation and assessment and common safety targets according to articles 6 and 7 of the Directive 2004/49/EC. This unit assists each member state to define their safety targets and develop a methodology for calculating and assessing the achievement of those targets. This unit also collaborates to define safety requirements for TSIs and to support technical opinions to be given to European commission. Safety Certification: define, develop and evaluate implementation of common safety methods for certification of railway undertakings as well as certification for train drivers and authorization of infrastructure managers. The objective of this unit includes proposing a migration strategy towards a single Community Safety certificate. Safety Reporting: Monitors and analyzes the development of safety on Europes railways and disseminates information, reports biennially on the safety performance of railways within the European Union. Functions also include developing and maintaining public databases of safety related documents such as safety certificates, licenses, national safety rules, investigation reports and indicators. Responsibility of coordinating with the national investigation bodies concerning safety and facilitating information exchange between them lies with this unit Safety Regulation: Functions include, validating the notification of national safety rules, register and notify the national safety rules accepted by the commission, analyze the way in which the national safety rules are published, maintain the communication protocol between the member states and the responsible organizations for railway regulation. 3.2.3. ERTMS The command control and signalling systems is an important instrument that should also be harmonised to support the much required interoperability of the trans-European railway network. ERTMS is considered to be a first major step in fostering the creation of single European railway market. ERTMS would also address the increasing costs of operation due to the incompatible and obsolete signalling systems across Europe. Currently around 20 signalling systems are in place across Europe, most of which are adopted by the network operators of the member countries as stipulated by national standards. These different signal systems impose a restriction on the rail transport across the borders of the member states of EU, as the costs of incorporating compatibility with the international networks increases. A common standards and systems for intra as well as international rail traffic management in the EU member countries would enhance the attractiveness of rail transport making it affordable and environment friendly. The idea of common traffic management systems for European railways was conceived during the late 1980s, but the process of drawing up technical specification was started during 1998, following the interoperability directive of 1996. The ERTMS specification was approved by EU in 2000, followed by which, between 2005 and 2008, the implementations plans were charted out for the six freight corridors across Europe and the memorandum of understanding was signed between the EU, member states and the other railway stakeholders. The implementation plan was devised considering the national implementation plans of the member states, which was then consolidated taking into consideration the priority for the freight corridors connecting different member states. The proposed completion of implementation of ERTMS across Europe is by the end of 2020. UNIFE and a consortium of railway signal equipment manufacturers are working closely with the European commission and the infrastructure managers of member companies for the development and implementation of cost effective technical solutions concerning ERTMS implementation. 3.3. Process of Harmonization For successful harmonization of European railways, close cooperation of the institutional bodies, political representations and also commitment of the railway operators and rail supply industry are required. The harmonization and standardization process to achieve European railway interoperability can be grouped into two stages: 3.3.1. Directives to Standards The directives of the European Commission are transformed into the TSIs by ERA, which are then validated against the standards requirement at the national and the EU level by relevant standardization organization like CEN, CENELEC and ETSI. At the end of this stage a detailed documentation of the standards, while adopting the TSIs are produced. Figure 5 provides and illustration of this process. Source: Dealing with standardization in liberalized network industries by Dr Marc Laperrouza 3.3.2. Standards to Products Once the directives are turned into standards, the next challenge is to transform the standards into the products. The standards are again reviewed by the ERA and then passed over to the European Union for the legal process. Once the compliance with legal process is established, the standar Effects of Harmonization of Railway Infrastructure Effects of Harmonization of Railway Infrastructure Abstract Historically, rail transport systems in Europe have been running as per national standards through the monopolistic and vertically integrated state owned operators. Most of the railway network in Europe is designed for different technical and operational standards of the member states, which makes it impossible or expensive for rail transport across borders. With a vision of achieving a single European railway network, in 1991, the European commission adopted a policy of revitalizing the railway sector to harmonize the technical and operational standards across the member states. This policy promotes a single set of Technical Specifications for Interoperability (TSIs)todefine common railway system architectureanda common approach to railway safety management. The long-term objective of such a policy is to open up the rail passenger and freight market for competition and promote the rail transport as sustainable means of transportation. The future of the rail supply industry in Europe is linked to the creation of sustainable transport system, which can only be achieved by increasing the competition in the industry to provide cost effective solutions. Harmonization of the railway networks in Europe will be one of the important driving forces in shaping the rail supply industry in Europe. This paper analyses the current structure of the German rail supply industry and how the industry may evolve given the current drive for interoperability through harmonization of standards and technologies. The policies of interoperability were conceived during the early 90s, but the impact of such policies are yet to be seen due to the lack of co-ordination between the manufactures, the regulatory mechanism, insufficient funding and the political will. Though the rail supply industry of Europe is in favour of achieving the common technical standards, the resulting market dynamics due to the common European market remains unanswered. 1. Introduction The purpose of this paper is to analyse the effects of harmonization of railway infrastructure in Europe on the rail supply industry in Europe with focus on Germany. Various directives and regulations of European commission have set off a series of dramatic changes in the European railway sector. The liberalization process has seen unbundling of the vertically integrated state owned operators. The directive of interoperability is enforcing the member states to transition from the existing signalling systems to common rail traffic management systems across Europe. Besides the control systems, there is significant thrust by the European commission to harmonize the technical and operational standards of the other components of the railway infrastructure like the tracks, electrification, power supply substations etc. These would render common product characteristics across the infrastructure segments with some exceptions in the stations and tunnel construction as the nature of these requ irements varies depending on the local needs and resource restrictions and also these components doesnt contribute to the desired interoperability. Thus the harmonization process would increase the size of the accessible market for companies in rail supply industry. Hence harmonization is bound to have a significant effect on how the industry is structured and the competition within the industry. The German railway infrastructure is the key component of the entire railway transport industry, where in the state owned operator and Logistics Company, Deutsche Bahn AG owns the entire infrastructure. Deutsche Bahn AG (DB) has a monopoly on the upstream of the value chain of German railway industry and at the same time DB exists as a monopsony at the downstream of the value chain. Thus, DB is a single buyer of the infrastructure services and products with very high bargaining power over their suppliers. The processes of harmonization and liberalization in the European railway sector have been shaping the complete value chain of industry. The increasing competition among the railway operator has brought in many benefits to the consumers and also to all other stakeholders involved in the industry. The German rail supply industry is highly fragmented with small to large companies involved in different segments of infrastructure services. The Fragmented nature of the industry has given rise to aggressive competition in the industry with many large players trying to claim their stakes in the market. The presence of only a single buyer, Deutsche Bahn, has defined the competition as price oriented, with many infrastructure companies trying to innovate on the technology and process to provide the infrastructure as per the national standards and at lower costs. This paper will discuss the benefits of the standardization in the industry and would also discuss how the rail supply industry in Germany may restructure to the changing market dynamics once the single European market is in place for the railway sector. Chapter 2 of this paper presents entire value chain of the German railway transport industry. This will be followed by the description of the key stake holders of the industry and the interaction mechanism between them. Further the analysis will focus on the railway infrastructure part of the value chain. The analysis in this section will try to evaluate the forces that drive the industry and the bargaining power of the decision makers. Chapter 3 of the document discusses process of harmonization through the EU directives of interoperability and safety. The analysis here will try to explain the various regulation, time frames and governing bodies involved in the process. The discussion will also highlight the progress of harmonization and the issues and obstacles to achieving the desired targets of interoperability. Chapter 4 will discuss the benefits of harmonization to the industry and chart out the current strategic environment of the German rail supply industry. This section will include a note on the key causal factors and actors influencing harmonization and will develop and discuss few scenarios as to how the industry may evolve post harmonization of the railway infrastructure in Europe in general and Germany in particular. The analysis in this section will draw inferences from the views of some opinion leaders and academics who are involved with the industry. Finally the conclusions of the study will be presented in the chapter 5 which will summarize the findings and hypothesis of chapters 3 and 4 respectively. The conclusion will highlight the limitations of this research paper and will also suggest further research options concerning the rail supply industry. 2. The Value chain of German Railway Industry 2.1. Over view of value chain The German railway industry is composed of various players along the value chain. A brief overview of the Railway industry value chain is as shown the figure1. The first link in the value chain of German railway industry is the infrastructure construction, which includes the building and maintaining various infrastructure components that support the railway network. The infrastructure components can be track, electrification, power supply substation, electro mechanical works, signalling and command control, railway stations, maintenance and upgrade of tracks and public announcement, displays, ticketing devices etc. Many private companies as well as the subsidiaries of DB are active in this part of the value chain. The second component of the value chain is the infrastructure management, which is driven by many stake holders, but is controlled mainly by DB Netze, which owns the complete mainline and high speed railway network in Germany. The infrastructure for the urban transport is usually owned by the urban transport operators. The governing bodies like Federal Railway Authority of Germany and the Public Transport Authorities of the various states are the key decision makers for infrastructure management. The most important component of the value chain is the network operation and logistics. This segment of the industry caters to the rail transport market, by providing services to the end customers. The main players in this segment are the Deutsche Bahn, which is a monopoly with around 85% of market share in Germany. The liberalization process has led to the advent of few private operators, who lease the infrastructure from the DB Netze. The urban transport operators are active players in the metro/ tram segment of the railway transport market. The last link of the value chain includes the end customers, which is constituted of both the passenger and freight transport market. Customers are the central focus for the various reforms in the industry as the growth is dependent on the ability of the industry to provide the transport services at affordable prices in comparison with other alternatives like road and air transport. The details of different segments of the rail transport market and the related statistics are provided in Appendix 1. As seen from the figure 1, the intensity of the competition increases as we move up the value chain from the network operators to the infrastructure suppliers. The process of liberalization has induced competition amongst the operators, but the very high sunk costs involved, have erected a strong barrier for new entrants. Further up the value chain, there are many players involved in infrastructure management and infrastructure construction due to the attractive market size. Though the liberalization process has contributed to the opening up of this market, historically many small and big players are involved in this part of the value chain leading to an increased competition. 2.2. Key players of German railway infrastructure management To understand the rail infrastructure industry in Germany, It is essential to understand the various stakeholders in the industry and their contribution and importance in driving the market dynamics. Figure 2 is a schematic of the industry structure with a focus on infrastructure management. 2.2.1. European Commission European Commission is a governing body which is one of the important demand drivers for the infrastructure market. The federal and local governments of the member states in the European Union are obligated to adhere to the regulations and policies devised by European Commission. European commission reviews and responds to the transportation needs of the member states of EU, which has the construction of modern, safe and integrated railway network in Europe as priority to fuel the growth of intra and international trade among the EU members. Hence, the reformatory regulations and their periodic reviews lie within the gamut of European commissions functions. European Commission has set up the European Railway Agency (ERA) to oversee the creation of integrated European railway network by enforcing and implementing safety and interoperability through standardizations and harmonization. ERA works as a coordinating body between the railway sector companies, national authorities, European Commission and other concerned parties. ERAs main task is to develop common technical standards and approaches for the European railway systems and infrastructure. ERA is also the system authority for the implementation of the European Rail Traffic Management Systems (ERTMS) project. Source: Adapted from the article separation of operators from infrastructure 2.2.2. Governments The German government oversees the overall transport sector through the Federal ministry for Transport, Building and Urban affairs. The Federal Railway Authority (Eisenbahn Bundesamt: EBA) is the supervisory authority for 30 railroad traffic operators and for 5 infrastructure companies mainly for the Deutsche Bahn AG. The functions of EBA include issuing licenses for infrastructure companies, providing investments and funding for infrastructure projects, making railroad access discrimination free, facilitates innovation within the accepted safety standards, ensures value creation for customers and also checks for unfair competitive practices. The supervisory authority of the urban transport lies with the 31 Public Transport Authorities (PTA) in the different federal states of Germany. The duties of the PTA are similar to those of EBA, but within the context of urban transport. PTAs work in conjunction with EBA for the infrastructure planning and funding activities at the local level. The political decision makers own the responsibility to define the legislative framework to fully integrate the European railways, in terms of enhanced market access, interoperability and safety rules. A sound legislative framework that works in tandem with the EU commission is expected to accelerate the harmonization process. 2.2.3. Network Operators/ Owners In Germany most of the mainline and regional rail networks infrastructure are owned and operated by the DB Netze AG , DB Regio Netz Infrastruktur GmbH, DB Station Service AG, DB Railionand the DB reise und touristik , who are all directly owned by the Federal Government. The DB Netze AG is responsible for track installations, coordination of network usage time tables and pricing. The DB Station Service AG operates, maintains and develops the passenger stations and also ensures the provision of services to travellers and railway undertakings. The DB Regio Netz Infrastruktur GmbH is responsible for local and regional traffic operation and infrastructure management. DB Railion is responsible for operation of freight traffic and DB Reise und touristik is responsible for long distance traffic operation. Besides these many new private traffic operators like Veolia Transportation, TX logistics, AKN Eisenbahn AG, Ostdeutsche Eisenbahn GmbH, S-Bahn Hamburg GmbH, etc have entered the German railway market. Railway operators are responsible for improving the quality of services in terms of information accessibility, customer comfort, reservation and ticketing, network accessibility, availability of services, punctuality and reliability. The infrastructure managers or the network owners are responsible for optimising the capacity utilization of the available network infrastructure; ensure fair and non discriminatory access to network for all railway undertakings and also to ensure operational efficiency and safety. 2.2.4. Infrastructure providers Infrastructure providers are the companies that supply the railway transport industry with various infrastructure services like the rolling stock, track, electrification, maintenance etc. The infrastructure providers can also be termed as rail supply industry focused on the infrastructure development as per the standards and regulations set by the other stakeholders listed above. The rail supply industry is responsible for organising themselves to provide the ready to use equipment and infrastructure needed by the railway undertakings and infrastructure managers. The research and development of new products to promote the process of harmonization depends on the capabilities of rail supply industry. 2.2.5. Associations and Organizations Many organizations and agencies of the railway industry in Europe work closely with the EU and the national governments of the member states to support and promote the rail transport by setting technical standards and promoting fair competitive practices in the industry. Some of the important associations and agencies that are relevant to the rail supply industry are UNIFE, ERRAC, UITP, UIC, CER, EFRTC etc. Details of these associations are provided in the Appendix 2. 2.3. Overview of German rail supply market Worldwide, total rail supply market volume exceeds â‚ ¬ 120 bn. Of which, the size of the rail supply market in Germany is estimated to be around â‚ ¬ 6.3 bn. Based on the railway network type and usage characteristics, the rail supply markets can be further classified as High speed and very high-speed lines, conventional and regional rail lines and the urban rail transport networks. While Deutsche Bahn is the single customer in the high speed and very high speed lines and the conventional and regional lines segments, the different public transport authorities are the customers in the urban rail infrastructure market. High speed and very high-speed lines: These are usually the rail networks that spans across the borders to enable faster connectivity across Europe. The high speed lines between the important cities within the country also fall into this category, as they have the future potential to be integrated with cross border traffic. In Germany, this segment is currently small in size and is expected to grow especially due to the increasing need of cross border traffic. Conventional and regional lines: These are usually referred to as main lines and consist of the rail networks that connect the different regions with in a country. So, the entire regional rail transport networks that support the intra train transport with in a country and the freight transport networks can be grouped into this category. Currently this segment is built and operated as per the national standards set by the Federal railway authority and the volume of this network is very huge and is highly heterogeneous and is also operationally underutilised. Urban rail networks: This market segment consists of metros and the commuter/sub urban rail networks which support the public transport with in a city. The product requirements within this segment can vary depending on the local geographical characteristics and funds availability. This segment is mostly independent of and incompatible with the other segments and so provides many avenues of differentiation for the companies that are active in this segment. As of now there are no regulations enforcing harmonization of these networks. 2.4. Structure of rail supply industry in Germany The rail supply industry in Germany is classified into four segments namely; Rolling stock, Infrastructure, Signalling and control system and services. Figure 3 represents a schematic of the different segments of the German rail supply industry. Rolling stock: The products in this segment are characterized by all the vehicles that run on the railways like locomotives, railroad cars, coaches and wagons. Due to the high capital investments, this segment usually consists of large companies like Bombardier, Siemens and Alstom. Infrastructure: This segment is characterized by the infrastructure components like tracks, electrification and stations. Many companies with diversified products serve in one or more of the components of this segment. Signalling and control systems: The infrastructure components like the track side signal installations, on board control equipment, control stations etc are grouped as signalling and control systems. Services: This segment includes the service and maintenance for all the other segments. This segment also comprises the project management and turnkey solutions. In Germany most of the maintenance and project management is carried out by the subsidiaries of Deutsche Bahn. 2.5. Segmentation of the German rail supply market Putting the rail supply market and the rail supply industry segmentation together will provide a complete segmentation matrix, which will help in the better understanding and analysis of the market. The segmentation matrix is provided in figure 4. Figure 4: German rail supply Market Segmentation matrix In the above matrix, the shaded regions indicate an overlap of product and service similarities in the different infrastructure components and the market segments of the railway industry. 3. Harmonization For a successful, larger and integrated Europe, the availability of efficient transport systems is essential for supporting sustainable economic growth and social development. Passenger and freight transportation by rail is a potentially effective instrument to combat congestion, pollution, global warming and traffic accidents. These negative externalities undermine the capability and efficiency of European economy and the health of future generations. The growing European Union and the globalization of the world economy have necessitated an international transport market, to support the outpacing economic growth. Today, the rail sector faces an ever increasing demand of accommodating higher transport volumes, a result of transport growth, and of policies favouring competition in the sector. Rail transport in Europe is a future-oriented industry, striving to offer attractive, affordable, safe, clean, competitive and reliable transport mode. Harmonization is the process of standardization of infrastructure components like types of track gauges, different types of power supply, speed control systems, train safety systems and technologies as well as the job profiles of drivers. The objective of harmonization is to achieve interoperability between the heterogeneous railway networks of the member states with in EU. Harmonizing products and technologies through innovation is a necessity for the rail supply industry to deploy its potential, and for its stakeholders to deliver cost-effective services for intermediate and final clients. 3.1. Need for harmonization Prior to the formation of European Union, the railway systems in Europe were run at the national level and were managed and operated by vertically integrated state owned companies. These railway systems were designed under different national operational rules, policies and standards. This resulted in the lack of interoperability in the railway transport sector which hampered the goal of growth in European economy through increased trade activities amongst the member states. The EU thus envisaged a goal of unified railway transport network across the EU member states to promote the trade and thus foster the economy. This goal transformed into a number of directives and regulations to achieve a Trans European network. 3.2. Components of harmonization To transition from the heterogeneous railway networks to a homogenised railway transport infrastructure across Europe, different components of harmonisations were evaluated by the European commission. European commission defined the homologation process in terms of interoperability, safety and signalling systems. 3.2.1. Interoperability Interoperability of the rail systems renders a safe and uninterrupted movement of trains, while accomplishing the required and specified levels of performance. Interoperability rests on all the technical, operational and regulatory conditions that must be met in order to satisfy the essential requirements. Interoperability has been mandated by several EU directives. The first one is the Directive 96/48/EC, which was passed in 1996 and is only concerned with the interoperability of the Trans- European high speed rail system. The second one is the Directive 2001/16/EC, which applies interoperability to lines within the trans-European transport network and other infrastructure facilities. Both these directives were later modified by the directive 2004/50/EC along with the corrigendum for the former directives. Most recently the directive 2008/57/EC was passed to include the community railway systems within the scope of interoperability. A consolidated history of regulatory framework evolution concerning interoperability in European railways is provided as Appendix 3. To overcome the technical fragmentation of rail networks, the interoperability directives provided that the Community legislation is gradually establishing mandatory so called Technical Specifications for Interoperability, commonly referred to as TSIs. The European Railway Agency owns the responsibility to draw up and revise the TSIs, on the basis of inputs provided by the member states and other stakeholders of the railway sector. Several subsystem constituents of interoperability of railway transport for both conventional and high speed lines are as below: Infrastructure( track works, tunnels, bridges and stations) and energy (electrification system) Operation and telematic application for passengers: related equipment and procedures to enable a coherent operation of different subsystems and also the requirements of professional qualification for the skilled labour involved in operations. Rolling stock: vehicle dynamics, superstructure, on board command and control system equipment, current-collection devices, traction units, energy conversion units, braking, coupling and running gear and suspension, doors, man/machine interfaces, passive or active safety devices. Maintenance: procedures and processes, technical documentation, related equipments, logistics centres for maintenance work. 3.2.2. Safety Safety is one of the important components of the railway systems which is highly regulated at both national and EU level. Safety is one of the prime concerns of the customers of rail transport and hence there is a special focus on the safety standards which have to be designed in line with the interoperability directives. Hence common safety standards, practices and targets have to complement interoperability to successfully achieve the desired homologation of the trans-European railway network. The European commission issued many directives to mandate the safety methods to support the harmonization process. These directives include Directive 2004/49/EC, Directive 2007/59/EC, the directive on certification of train drivers and other relevant EU legislation. ERA acts as a supporting organization to the European commission to develop the further implementation plans for the EU directives by networking with the national bodies of the member states. ERA has structured four different business sectors concerning railway safety and provides central support to the stakeholders involved in the complete process from formulation of regulation to implementation and periodic reviews. The four different segments are: Safety Assessment: developing common safety methods for risk evaluation and assessment and common safety targets according to articles 6 and 7 of the Directive 2004/49/EC. This unit assists each member state to define their safety targets and develop a methodology for calculating and assessing the achievement of those targets. This unit also collaborates to define safety requirements for TSIs and to support technical opinions to be given to European commission. Safety Certification: define, develop and evaluate implementation of common safety methods for certification of railway undertakings as well as certification for train drivers and authorization of infrastructure managers. The objective of this unit includes proposing a migration strategy towards a single Community Safety certificate. Safety Reporting: Monitors and analyzes the development of safety on Europes railways and disseminates information, reports biennially on the safety performance of railways within the European Union. Functions also include developing and maintaining public databases of safety related documents such as safety certificates, licenses, national safety rules, investigation reports and indicators. Responsibility of coordinating with the national investigation bodies concerning safety and facilitating information exchange between them lies with this unit Safety Regulation: Functions include, validating the notification of national safety rules, register and notify the national safety rules accepted by the commission, analyze the way in which the national safety rules are published, maintain the communication protocol between the member states and the responsible organizations for railway regulation. 3.2.3. ERTMS The command control and signalling systems is an important instrument that should also be harmonised to support the much required interoperability of the trans-European railway network. ERTMS is considered to be a first major step in fostering the creation of single European railway market. ERTMS would also address the increasing costs of operation due to the incompatible and obsolete signalling systems across Europe. Currently around 20 signalling systems are in place across Europe, most of which are adopted by the network operators of the member countries as stipulated by national standards. These different signal systems impose a restriction on the rail transport across the borders of the member states of EU, as the costs of incorporating compatibility with the international networks increases. A common standards and systems for intra as well as international rail traffic management in the EU member countries would enhance the attractiveness of rail transport making it affordable and environment friendly. The idea of common traffic management systems for European railways was conceived during the late 1980s, but the process of drawing up technical specification was started during 1998, following the interoperability directive of 1996. The ERTMS specification was approved by EU in 2000, followed by which, between 2005 and 2008, the implementations plans were charted out for the six freight corridors across Europe and the memorandum of understanding was signed between the EU, member states and the other railway stakeholders. The implementation plan was devised considering the national implementation plans of the member states, which was then consolidated taking into consideration the priority for the freight corridors connecting different member states. The proposed completion of implementation of ERTMS across Europe is by the end of 2020. UNIFE and a consortium of railway signal equipment manufacturers are working closely with the European commission and the infrastructure managers of member companies for the development and implementation of cost effective technical solutions concerning ERTMS implementation. 3.3. Process of Harmonization For successful harmonization of European railways, close cooperation of the institutional bodies, political representations and also commitment of the railway operators and rail supply industry are required. The harmonization and standardization process to achieve European railway interoperability can be grouped into two stages: 3.3.1. Directives to Standards The directives of the European Commission are transformed into the TSIs by ERA, which are then validated against the standards requirement at the national and the EU level by relevant standardization organization like CEN, CENELEC and ETSI. At the end of this stage a detailed documentation of the standards, while adopting the TSIs are produced. Figure 5 provides and illustration of this process. Source: Dealing with standardization in liberalized network industries by Dr Marc Laperrouza 3.3.2. Standards to Products Once the directives are turned into standards, the next challenge is to transform the standards into the products. The standards are again reviewed by the ERA and then passed over to the European Union for the legal process. Once the compliance with legal process is established, the standar