Issues in Accounting Theory and Practice (Case Study National Case - 2

Issues in Accounting Theory and Practice ( National Greenhouse Accounts Factor) - Case Study Example The greenhouse gases include methane, carbon dioxide, specified hydrofluorocarbons, nitrous oxide, sulphur hexafluoride and specified perfluorocarbons. There are four methods used to conclude scope 1 emissions. The first one is fuel combustion that focuses on fuel combustion and the emissions it releases. There is ‘emissions of industrial processes’ that deals with greenhouse gases resulted from carbonates consumption and using fuels as carbon reductants or feedstock. It also focuses on the release of synthetic gases in certain cases. Another method used in scope 1 is fuels’ fugitive emissions, which focus on emissions from the removal, manufacturing and supply of fossil fuels. The fourth method is ‘waste emissions’ that deals with release of GHG from the decay of organic material in facilities handling wastewater. The first method is fuel combustion, and it is appropriate for Contex because the company deals with motor vehicles that release GHG throu gh use of fleet fuel. This is also because the most vital source is GHG emissions from the combustion of fuel that account for more than 60 per cent reported emissions. Scope 2 emissions are in most cases a type of indirect emission. The scope deals with activities that produce electricity, cooling, heating or steam that a facility consumes, but are not part of the facility. They take place mainly at electricity generators because of the consumption of electricity at a different facility. The emissions of scope 2 also come from electricity obtained from outside sources. The scope provides the factors of emissions through the electricity’s supplier or by using the NT’s emission factor. The generation of NT electricity largely represents a combination of the generation of diesel and natural gas, which is a logical equivalent for the fuel mix employed in outside electricity generation. The factors of emission for scope 2 show data depending on on-grid activity

Everybody Needs Somebody Essay Example for Free

Everybody Needs Somebody Essay Many people vacillate to commit themselves to marriage because of the responsibilities involved, but what does the word â€Å"marriage†, that so many desist from means. It’s the state of being united; body, soul and mind to a person of the opposite sex as husband or wife consensual and contractual relationship recognized by both the Lord and the law. Moreover, pledging your allegiance, promising to be there† for better or for worse, in sickness and in health..till death do us path†. A lot of individuals make the decision never to marry; there may be certain circumstances why they may feel that way. For example they may have had awful relationships in their past and of the opinion that their significant other will never be found or plainly the bulk just don’t want that type of commitment. Marriage has its advantages by the bountiful, so if you are in love and sure that you want to subsist the rest of your life with him/her, then unquestionably go ahead and walk down the aisle. I confidently disagree that being single is far more advantageous than being married. Marriage offers companionship. In a healthy marriage, you are never alone. Your spouse will always be there to lend a sympathetic ear. Sometimes, of course, your spouse might not be â€Å"actually† listening to you but it is better to talk to someone than being alone. Additionally, it’s satisfying to have someone you trust completely and love unconditionally to have stimulating conversation with. For instance to discuss ideas, major financial matters and practice your humor and simply want o be consoled at the end of the day. In the period 2008, research done in the USA showed that expressing your feeling, merely talking to your spouse and letting them know how you feel, reduces your chance of divorce, dishonesty and senseless arguments. As well, companionship offers support and can be particularly important at times of misfortune. Thus, the companionship that marriage offer beats being single any day. Marriage opens the gates to a rich social life. Basically by having a partner with you, you can have a social life that is not so readily or easily available for a single person. You can visit romantic places together or holiday together. You can spend meaningful quality time with each other also relaxing without any interruptions for a single person; it may be difficult because usually social life is geared around â€Å"couples†. Hence a single person can often be left out or sometimes just not invited. Although it may be true at times, that having children might seem to encumber your social life but really it brings a pulsating change in your social life also much of that life involves being with your children. Marriage puts a stamp of tolerability in society. Research reveals that married men/women have longer lifespan compared to single individuals. This can result in three points 1. Marriage stabilizers men and women this is so because, the need for multiple partners aren’t considered necessary when you are married besides you can be confident that your trustworthy spouse isn’t going to be adulterous 2. In the case of reducing stress, take for example raising a child, although many single parents do raise children successfully. It seems the stress is less when the tasks are shared with a partner.3. The point of being pleased. Many men/women get satisfied sexually by being married. This is so because by being intimate with someone you pledged your life to and love, you are contented both physically and mentally. Consequently, by having sexual relations when single your mate is random. This type of intimacy is fabricated and has no symbolic meaning. At such times having a marriage has its rewards over being single. As stated above marriage has its advantages, the ones mentioned are just a few to start with. Each marriage is of course different, but the connection that is shared among two married persons who have unexplained love, intimacy and forever commitment is extremely sacred. Being married, said by many people is about accepting a person for who they are, faults include. To be so dedicated and honorable that together you can overcome any type of ordeal life throws also learning to grow from those hardships. It’s about making sacrifices and putting your complete trust in your spouse. Knowing, they would refrain from temptation and be honest when it is needed. There are so many types of definitions that could be used to describe what marriage is nevertheless the one that really carries the most sentimental value is the one shared among married couples. It is forlorn that single people choose to remain unmarried, they may not the joy marriage brings to a person, but marriage is a privilege so why not make use of it.

Islamic Banking Resistance to Securization

Islamic Banking Resistance to Securization Islamic Compliant ABSTRACT Receivables securitization is a vital financial instrument which has faced some resistance in the Islamic world with the exception of Malaysia with the result that its role in Islamic finance is as yet underdeveloped. The reasons behind this resistance are relatively ambiguous, and have not been thoroughly explored, as the existing Islamic literature offers only touches on the topic on a superficial level. This study traces the roots of the concerns of Islamic academics, opens them up to thorough discussion and proposes an objective way forward. While this study identifies three justifications behind the Islamic resistance to receivables securitization that relate to fiat money, gharar (risk), and usury, it could be argued that the key issue driving these objections is a misapplication of the Islamic rules governing gold and silver to fiat money. There is, however, a strong basis for arguing that fiat money is merely a ‘legal commodity and should be regulated by the Islamic commodity rules, removing the obstacle to the use of receivable securitization. Concerns regarding gharar (risk) and interest are valid but can be safely managed by developing an ethics-based form of securitization that protects against such risks as gambling or inability to deliver. In addition, securitization transactions could be structured on usury-free models. Finally, an attention should be drawn to the methodology used by Islamic intellectuals to apply Islamic rules to contemporary concepts. Methodologies need to be re-examined to ensure that they are true to the spirit of Islamic teaching. Introduction While it is still a relatively new concept, securitization has become a vital and effective instrument for raising funds, boosting liquidity, managing risk and allocating capital efficiently. Nevertheless, in a world where consumption has become a way of life and gambling has been raised to the status of a profession or an art form, securitization poses a silent but real threat to economies. The question has been raised as to whether or not securitization has played a role in the recent financial crisis.[1] It is argued that securitization encourages excessive borrowing, limits oversight by lenders and encourages dependence by borrowers, as well as creating what some call the illusion of liquidity.[2] Undoubtedly, the provision of loans and securitization facilitates the realization of individuals goals and creates investment opportunities. But due to the sensitivity of these tools, a disciplined and ethical environment is needed in order to protect against their misuse. This is, according to Hugo Bouleau, what is offered by the principles of Islamic finance[3]; indeed, Islam provides a comprehensive ethical way of life including commerce and investment. Islamic financial system solidly links between real assets, profits and risks. A financial transaction which does not provide these linkages may fail in the Shariah compliance test. However, assessing compliance is not always as simple as it may appear. While the foundations of the Islamic financial system were laid centuries ago, there are still divergences in scholar views concerning details, which has created serious challenges and generated debate in terms of identifying and understanding the gaps in applying the foundations of Islamic Shariah on the contemporary concepts. This has slowed the process of formulating a definite Islamic regulatory framework for financial industry particularly in a purely capitalist world. As one the most debatable issues under Islamic law; this study focuses on the Islamic regulatory framework of receivable securitization which is acknowledged by Shariah scholars and Islamic finance professionals as very important instrument, but at the same time as a critical and sensitive field. The framework of Shariah compliant receivable securitization is not yet firmly established due to the novelty of many economic and financial concepts, the lack of the Shariah scholars consensus on understanding and accommodating contemporary aspects, and, arguably, the expanded application of sadd al-dharai approach which, generally, means banning any permissible activity if it might lead to impressible result, contrary to the Shariah maxim the norm in regards transactions is that of permissibility which simply means that, any transaction, in principal, is permissible until a contradiction to Shariah is proven. This dilemma has given rise to two major directions of thought with regard to an Islamic perspective on receivable securitization; one is originated in Malaysia and the other, generally speaking, representing the rest of the Islamic world. As a result of these factors, receivable securitization is less developed in Islamic financial markets than in the conventional. In fact, individuals or institutions who seek to comply with Shariah rules can find themselves lost in a maze of contradicting views and fatwas (considered opinions of Shariah scholars). In response to this reality, this study provides an analytical examination of the status of Shariah compliant receivable securitization for the sake of identifying the roots of the gaps and challenges. After all, it is not a study specializing in Shariah but an academic and professional tracing, using a simple problem solving technique, of the realistic causes behind challenging receivable securitization under Islamic law. It is a vital step for a clear understanding of the problem toward proposing a rational way forward. The study addresses these issues in three chapters. Chapter One, An introductory platform, establishes the significance of the research topic, reviews the existing literature and demonstrates the value added by this study. Chapter Two, General Background and key underlying concepts, provides an introduction to the concepts of receivable securitization as well as the Islamic financial system in order to assist the reader in engaging with the ideas presented. Chapter Three, the Islamic regulatory framework for receivable securitization, provides a conceptual introduction to Shariah compliant securitization, and examines the roots of causes that behind challenging of the receivables securitization under Islamic law, where Chapter Four, Proposal for a way forward, provides a global proposal for embracing an ethical and disciplined Islamic compliant receivables securitization. Finally, the Conclusion summarizes the overall inputs and outputs of the study including its question and results. Chapter One: AN INTRODUCTORY PLATFORM 1.1 Why it matters Globalization is inescapable. The faiths, cultures and nations of the world are being gathered together into a single economy and trade pool. Despite the diversity of identities, economies are compelled to meet around the global table. At the end, the wisest strategy for any ideological group is to find a way to accommodate international developments while remaining true to its principles and convictions. Islam is the second largest religion of the world, with its followers estimated at 21% of the worlds population.[4] Muslim communities in historically non Muslim countries are growing rapidly. For instance, a 2001 census in the UK indicated a population of 1.591 million Muslims[5]. Although the next census will be in 2011, Richard Kerbaji reported that the growth of Muslim population is 10 times faster than that of other communities within the UK.[6] Independent of radical trends, the significance of Islam as a major world religion and the impact of Muslims as a community within the global context have made Islamic considerations a top priority on political and economic agendas within the international arena. Likewise, the global Muslim community cannot afford to be passive but must rationally and objectively engage with global changes and challenges. In a lecture given in 1993, H.R.H. the Prince of Wales stressed the fact that: †¦ The Islamic and Western world can no longer afford to stand apart from a common effort to solve their common problems†¦ We have to share experiences, to explain ourselves to each other.[7] This is, indeed, the reality of where we find ourselves today. And while interaction between civilizations and national and international factors is unavoidable, fundamental beliefs and inviolable principles will continue to exist which must be understood and respected. From finance perspective, while exact s are not available, broad agreement does exist that the size of the wealth and assets and the wide range of business networks of Muslims, both in Islamic countries and in the rest of the world, is significant. The demand for financial services which comply with Islamic law can be expected to increase tremendously, particularly following the recent global recession. It is estimated that there will be about 15 20 % annual growth in the Islamic financial products, with equity fund assets climbing to US $53 billion by 2010.[8] It is clear that a direct correlation exists: whenever the demand for banking products increases, banking debts multiply. This heightens credit risk and threatens the availability of capital and liquidity. Basel II, which represents the international consensus on capital standards, embraces securitization as an effective and helpful tool in this regard.[9] However, unless Muslim intellectuals invest considerable energy in developing clear and reliable regulatory frameworks which comply with Islamic law for the newborn concepts including securitization, Islamic banks will continue to experience difficulties in the areas of liquidity and risk management, and will fail to meet the requirements for international convergence. From another angle, the recent global economic crisis has exposed the fragility of capitalist economics. According to Sam Whimster â€Å"[c]apitalism itself is without morality†¦The finance capitalism of today has some startlingly irrational features and is no longer led by those who possess the requisite moral probity†.[10] As the need for more disciplined and ethical systems becomes increasingly apparent, the potential of Islamic finance as an alternative to conventional finance is gaining attention. As a result, broader awareness is developing in the international community regarding the features of Islamic finance and securitization. Toby Birch comments that the Islamic principles established by a desert-dwelling Bedouin fourteen hundred years ago embody the timeless wisdom which holds the key to the financial crises of today.[11] The recognition of the advantages of Islamic financial systems on objective and professional terms by non Muslim experts places a serious responsibility on Muslims experts and researchers to address and resolve the internal challenges which currently impede the development of Shariah compliant products, including receivable securitization. 1.2 Literature review It could be stated that a wealth of studies on Islamic finance can be found in libraries and on the online resources. In addition, Arabic and English literature typically have many publications on securitization within its conventional sense. However, studies focussing specifically on Shariah compliant receivable securitization, and its underlying challenges, are, noticeably few. The works which have, in fact, played the greatest role in shaping the dominant Islamic view on receivable securitization, are the many working papers that have been submitted at Islamic scholarly forums and conferences, particularly the annual conferences of the International Islamic Fiqh Academy, and the Islamic Fiqh Academy of Muslim World League. For instance, at its 19th conference in April 2009, the International Islamic Fiqh Academy discussed a group of working papers specifically focussing on, or closely related to, receivable securitization. However, by and large, the structures and approach of the papers were virtually identical, which is to be expected as the authors shared the same perspective on the same issue. In terms of its significance, securitization represents one of the most important innovations in the finance sector. It is, as Leon Kendall puts it, â€Å"changing the face of American and world of finance†.[12] This view is shared by many experts in the field, who see securitization as an essential component of the modern financial system. Vinod Kothari makes an identical statement to that of Kendall, and suggests that securitization is more than funding instrument that works beyond financial limitations.[13] This admiration for securitization can be attributed to the advantages which, according to Charles Ston and Anne Zissu, provides in alleviating balance sheet pressure,[14] transferring and fragmentizing credit risk, raising capital and securing liquidity. The importance of securitization is recognized by Islamic Intellectuals. AbdulBari Mushaal points out that receivable securitization is an important instrument in that it provides lenders rapid turnaround on their capital in order to re-inject it into investment and production operations.[15] Fuad Muhaisen identifies nine advantages provided by securitization, including its role in funding and financing privatization projects.[16] Furthermore, the working papers mentioned above which were submitted at the 19th conference of International Islamic Fiqh Academy demonstrate a common acknowledgment of the importance of receivable securitization in the Islamic world. Despite the worldwide recognition of the importance of securitization, another side of it could be recognized. Lawis Ranieri describes securitization as an adventure that involves a dark side, observing that it has contributed to destabilizing the thrift system and industry.[17] This represents one factor in the argument that securitization has been a contributing factor in the global credit crash. Thrift and credit are connected while they are also key components in the greater economic system. Securitization arguably promotes excessive credit creation,[18] encourages a culture of consumerism, and has contributed to the global financial crisis. Niall Ferguson argues that the crisis was caused by the rise and fall of securitized loans.[19] While this assertion deserves consideration, it is possible that it was not securitization but the absence of the ethics that rationalize its use, which was the problem. Islamic finance principles offer a framework with the capacity to fill this void. In his book ‘Islamic Finance Standards: Solving the Global Financial Crisis, Samir Kantaji provides a practical analysis of the global crisis and suggests that Islamic principles of finance provide the ethical and disciplined environment necessary to prevent such a future financial crash.[20] While the principles of Islamic finance were established more than fourteen hundred years ago, they do offer, as implied by Hugo Bouleau, solutions to todays banking problems.[21] The question, however, is whether Shariah scholars have the flexibility to apply these principles meaningfully to contemporary financial concepts, in general, and to securitization, in particular. The dominant philosophy of Shariah scholars is sadd al-dharai (banning any permissible activity if it might lead to an impressible result). This approach has been stressed by the International Islamic Fiqh Academy in its Resolution No. 92 (9/9), issued in April 1995.[22] However, many Islamic intellectuals oppose broadening the application of sadd al-dharai. Akhtar Zaiti emphasizes the contrasting Shariah maxim, â€Å"the norm in regards transactions in that of permissibility†, and the fact that the financial principles, maxims and frameworks provided by the Quran and Sunnah are not detailed because the finance industry and human interests vary over time. She argues that Muslims should be guided by this principle of permissibility as they engage with evolving financial concepts, including securitization, except in cases which present an obvious contradiction with the Quran and Sunna.[23] Similarly, Fuad Muhaisen argues that Islam clearly identifies which activities are prohibited, leaving room for innovation and development over the course of time, and that this is how contemporary financial concepts should be approached.[24] Regardless of the argument, what is certain is that the convictions of some Shariah scholars, coupled with the rapid development of finance and economic concepts and the impossibility of accurately foreseeing all of their potential implications, impede the development of Islamic financial systems. Studies addressing Shariah compliant receivable securitization typically roam around avoidance of Riba (usury) and Gharar (Risk), issues which are subdivided into more focused points such as profit-risk share, tangible asset connection and other underlying sub-issues. However, sale of loan is considered the cornerstone of employing receivable securitization, and is the subject of vigorous debate by Islamic intellectuals. Sale of loan was a topic of discussion at the 1998 International Islamic Fiqh Academy conference. The conference concluded that the sale of loan to a third party, whether at a current or deferred price, is strictly prohibited in Islam because it leads to Riba (usury).[25] But at its 2006 conference, International Islamic Fiqh Academy demonstrated greater flexibility and determined four permissible models for sale of Loan,[26] A similar resolution was issued by Islamic Fiqh Academy of MWL at its 2002 conference stating that some sale of loan models are prohibited because they lead to riba (usury) or Gharar (risk) of the inability of delivery, accordingly, receivable securitization is prohibited.[27] It should be noticed that loan in Islam could be goods, services, usufructs or receivables (cash flow), but none of the mentioned resolutions accepted the sale or securitization of receivables. There is no consensus regarding the prohibition of sale of loan. For example, in his book ‘The theory of loan in Islamic fiqh Ahmed Al-Hajj discusses the different viewpoints supporting and opposing sale of loan and concludes that it is permissible provided that delivery of the sale (repayment of the loan) is not possible[28]. This approach has been embraced by the Malaysian Securities Commission Shariah Advisory Council since 1996 which opened the door wide to receivable securitization in this Islamic country[29], which is, according to Rashid Al-Khan, has been widely criticized by many Middle Eastern scholars.[30] Furthermore, Saiful Rosly and Mahmood Sanusi point out that trading of Islamic bond structured on a sale of loan basis in Malaysia has been found impermissible by the majority of Shariah scholars.[31] Apparently, there is a clear disagreement over the key issues involved in achieving effective Shariah compliant receivable securitization. However, this does not mean that Shariah compliant receivable securitization cannot be utilized until the dilemma is resolved. Nor does it mean that the current position of Shariah scholars is final. The possibility always exists of renegotiating the interfaces that are developed between Shariah and developing technical concepts. The literature already includes a number of publications which discuss the foundational concepts of Islamic finance and attempt to develop an Islamic framework for securitization which brings together Islamic principles and finance innovation. But gaps remain in terms of scope and approaches of studies. To put differently, the existing Islamic literature offers only a superficial and indirect exploration of the reasons for which the permissibility of receivable securitization has been challenged under Islamic law, and handles this discussion within previous immature viewpoints. 1.3 Scope and significance of the study This study provides a panoramic view of the current situation of receivable securitization within the Islamic law. It discusses the dominant Islamic intellectuals approach that banes it, and tackles the question of what are the realistic reasons of challenging receivables securitization under Islamic law. In order to add value, this study is a digging deeper into the roots of the argument. Using a simple problem solving techniques, it traces those roots to out what is, precisely, reason behind the resistance of Shariah scholar to accepting receivables securitization. Differently, this study openly discusses the issues, and it is completely built of the maxim that in principal, any transaction is permissible until a contradiction to Shariah is proven. Furthermore, the study reflects rational viewpoint regarding riba (usury) concept which has been unreasonably exaggerated over the time. Notwithstanding, this study must not be read as a revolt against any of the Islamic schools of thought or organizations, but an objective attempt to re-pull the attention to realistic causes of prohibition of receivables securitization under Islamic law. Overall, this study helps to identify areas where religious perspectives and technical practice do not yet interface with regard to receivable securitization, and spells out the reforms needed to the approach of Islamic intellectuals methodology in terms of Islamic financing in general and securitization in particular. Chapter Two: General Background and Key Underlying Concepts 2.1 Introduction In order to understand the roots of the challenges of Islamic compliant receivable securitization, this chapter highlights key aspects of securitization as created and developed by the conventional finance industry and, on the other hand, the related key aspects of Shariah and Islamic finance. 2.2 An introduction to Securitization 2.2.1 Origin of Securitization While Vinod Kothari states that securitization has a two hundred year history in Denmark and suggests that therefore Denmark should be considered its birthplace, he admits the fact that securitization as a structured finance instrument was developed in the US.[32] Indeed, credit for the innovation of securitization is due the US government which initiated the first mortgage-backed securitization transaction through the Government National Mortgage Association (GNMA) in 1970.[33] The introduction of securitization was promoted by a severe shortage of liquidity which caused by a withdrawal of traditional lenders who turned to more profitable investments.[34] However, the perception of securitization as a magic wand that could make fund and liquidity problems disappear, together with a credit crush, dramatically expanded the usage of securitization. In the years since, extensive experience and lessons have been, and are being, learned in tailoring and structuring securitization transactions. 2.2.2 Concept of Securitization Little documentation exists regarding the origin of the term ‘securitization. Lewis Ranieri claimed that this term was not a real word, and it was used for the first time by the Wall street Journal in 1977.[35] As an emerging concept, therefore, securitization does not yet have a universally accepted definition. According to Leon Kendall, securitization is a process of packaging individual loans and other debt instruments, converting the package into a security or securities, and enhancing their credit status or rating to further their sale to third-party investors.[36] While this definition describes the process of securitization, Peter Jeffrey focuses on the objective of securitization and suggests that in its simplest form it is a secured borrowing, whereby a company borrows against an asset or group of assets.[37] This is exactly what was concluded by a United Kingdom VAT Duties Tribunal in Capital One Bank (Europe) Plc v Revenue and Customs [2005] when it stated that secu ritization is â€Å"nothing more than a sophisticated means of borrowing money†.[38] From a different angle, Vinod Kothary called attention to the philosophy of securitization and pointed out that it is in its widest sense is every process that converts financial relation into a transaction. However, he defined the term asset securitization as a device of structured financing in which an entity seeks to pool together its interest in identifiable cash flows over time, transfer the same to investors either with or without the support of further collaterals, and thereby achieve the purpose of financing.[39] Securitization can be also defined as â€Å"The transformation of a loan portfolio or other assets such as property into securities that can be sold in the primary market and traded in the secondary market†.[40] Another definition that is ascribed to Ernst and Young states that securitization is: â€Å"Any transaction under which a securitization vehicle directly or indirectly acquires receivables or bears risk associated with commitments taken or activities carried out by third parties and issues in exchange securities whose return is directly linked to the risks borne†.[41] While clearly many definitions exist for the terms ‘securitization and ‘asset securitization'[42] which describe them in either the simplest or broadest terms and approach the concept from various perspectives, all concur that securitization is a process of packaging and transforming a specific bulk of assets through a special purpose vehicle(s) into marketable securities for the purpose of liquidity and/or risk management. A key point to be addressed here is that the term ‘asset securitization is commonly used to describe the process of securitizing financial claims or receivables, notwithstanding the fact that balance sheets include other types of assets that can be subject to securitization, particularly under Islamic law (i.e. lease structure). In this context, the verb securitize, according to the Concise Oxford Dictionary means to convert an asset, specially a loan, into marketable securities, typically for the purpose of raising cash.[43] This confirms the fact that other assets can be securitized but accounts receivable and loans are the most common type of securitizable assets, perhaps because they constitute the bulk of the assets of financial firms and credit institutions. 2.2.3 Structure of and Parties to Receivable Securitization Receivable securitization can be structured on a typical funded, synthetic or collateralized debt obligation (CDO) structure.[44] However, in order to avoid dispersion and complexity; the focus here will be on the typical funded structure. A typical funded structure of receivables securitization (see 1) basically involves borrowers, an originator, an issuer and investors. These form the backbone of a typical funded securitization structure; nevertheless, a credit enhancer, rating agency and an underwriter/lead manager are also considered key players for the sake of regulatory compliance and in order to introduce an attractive opportunity for the targeted investors. Borrowers: Given that receivable securitization is a process that deals with loans; borrowers are considered the cornerstone of a securitization transaction. As they are responsible for paying the underlying loans, structuring a receivable securitization must take into account their credit capability. Some regulatory frameworks may require their consent. Originator: In receivable securitization, lenders or creditors are usually the originators of a securitization transaction. The originator can be a governmental agency or any financial, credit or investment institution such as a commercial bank, investment bank or captive finance company. The role of the originator does not start only at the point of the agreement with the SPV, but begins earlier,[45] specifically, from the moment that the originator recognizes the need for, or the feasibility of, securitizing a bulk of receivables. The origination process includes many steps involving, but not limited to, planning and structuring the securitization transaction, identifying and segregating the assets, notifying the borrowers, establishing the SPV(s), concluding the consultation and services agreements and handling any mediation activities between the borrowers and the SPV. Furthermore, the originator might continue to play the role of ‘servicer, providing, among other services, customer services, payment and collection services as well as default management and collateral liquidation.[46] An issuer: The key point of the securitization process is the issuance of the securities that resulted from pooling and transforming the assets. This issuance is usually performed by an SPV, which is normally a new and independent entity established for the purpose of taking over the position of the originator as a lender or creditor in the credit relationship. In other words, once a securitization takes place, borrowers no longer have a credit relationship with the originator, but rather with the SPV. A rating agency: For a successful securitization, a good rating of the credit quality of the transaction should be secured from a very well-established rating agency. Professional rating agencies usually provide a professional evaluation of the type and quality of the underlying assets, including any related risks.[47] Credit enhancer: Credit enhancement is a very important process for attracting investors to be involved in a securitization transaction. It provides them with a certain level of protection in the event that the originator fails to meet his commitments or the cash flows for the securitized assets are insufficient to cover the projected return of the securities. Another point, which will be discussed further below, is that credit enhancement can be secured internally through guarantees provided by the originator or on the basis of the quality of the securitized assets. Having noted that, a credit enhancer appears as a party in a securitization structure only if the credit enhancement is provided by a third party enhancer (i.e. by a letter of credit). In such a case, the enhancer must have a high credit rating in order to secure the confidence of the investors. Underwriter / lead manager: The offering of the issued securities public or to private investors is usually handled by a professional firm, typically, a bank which plays the role of underwriter in the securitization process. The key role of the underwriter is to manage the process of selling the securities to investors in order to achieve the securitizations targets. It should be noted that the trend among financial professionals today is to call this party a ‘lead manager, rather than an ‘underwriter, because the guarantee provided is, in principal, a commitment to make every effort to ensure that the securities are sold. There is, however, no guarantee in terms of the prices and quantity of the securities sold.[48] Investors: The ultimate objective of the securitization process is to transfer risk to investors and/or to generate liquidity from them. A securitization transaction may target specific kinds of investors through a private placement process or open it to the public. In both cases, the key investors are usually fund managers, pension funds, governmental funds, commercial banks and insurance companies.[49] 2.2.4 Process of Securitization It goes without saying that the securitization process involves detailed, complex and overlapping steps. In this paper, however, the focus is on the key steps which have strong significance in terms of the research objectives, namely, the packaging and transferring of the underlying receivables as well as the issuance of securities. 2.2.4.1 Packaging the Underlying Receivables The most vital step in a securitization transaction is packaging the underlying assets. This begins with identifying the targeted receivables, which may include any assets that generate cash flows over a period of time, such as mortgages, credit cards loans, consumers loans, corporate loans, auto loans, s Islamic Banking Resistance to Securization Islamic Banking Resistance to Securization Islamic Compliant ABSTRACT Receivables securitization is a vital financial instrument which has faced some resistance in the Islamic world with the exception of Malaysia with the result that its role in Islamic finance is as yet underdeveloped. The reasons behind this resistance are relatively ambiguous, and have not been thoroughly explored, as the existing Islamic literature offers only touches on the topic on a superficial level. This study traces the roots of the concerns of Islamic academics, opens them up to thorough discussion and proposes an objective way forward. While this study identifies three justifications behind the Islamic resistance to receivables securitization that relate to fiat money, gharar (risk), and usury, it could be argued that the key issue driving these objections is a misapplication of the Islamic rules governing gold and silver to fiat money. There is, however, a strong basis for arguing that fiat money is merely a ‘legal commodity and should be regulated by the Islamic commodity rules, removing the obstacle to the use of receivable securitization. Concerns regarding gharar (risk) and interest are valid but can be safely managed by developing an ethics-based form of securitization that protects against such risks as gambling or inability to deliver. In addition, securitization transactions could be structured on usury-free models. Finally, an attention should be drawn to the methodology used by Islamic intellectuals to apply Islamic rules to contemporary concepts. Methodologies need to be re-examined to ensure that they are true to the spirit of Islamic teaching. Introduction While it is still a relatively new concept, securitization has become a vital and effective instrument for raising funds, boosting liquidity, managing risk and allocating capital efficiently. Nevertheless, in a world where consumption has become a way of life and gambling has been raised to the status of a profession or an art form, securitization poses a silent but real threat to economies. The question has been raised as to whether or not securitization has played a role in the recent financial crisis.[1] It is argued that securitization encourages excessive borrowing, limits oversight by lenders and encourages dependence by borrowers, as well as creating what some call the illusion of liquidity.[2] Undoubtedly, the provision of loans and securitization facilitates the realization of individuals goals and creates investment opportunities. But due to the sensitivity of these tools, a disciplined and ethical environment is needed in order to protect against their misuse. This is, according to Hugo Bouleau, what is offered by the principles of Islamic finance[3]; indeed, Islam provides a comprehensive ethical way of life including commerce and investment. Islamic financial system solidly links between real assets, profits and risks. A financial transaction which does not provide these linkages may fail in the Shariah compliance test. However, assessing compliance is not always as simple as it may appear. While the foundations of the Islamic financial system were laid centuries ago, there are still divergences in scholar views concerning details, which has created serious challenges and generated debate in terms of identifying and understanding the gaps in applying the foundations of Islamic Shariah on the contemporary concepts. This has slowed the process of formulating a definite Islamic regulatory framework for financial industry particularly in a purely capitalist world. As one the most debatable issues under Islamic law; this study focuses on the Islamic regulatory framework of receivable securitization which is acknowledged by Shariah scholars and Islamic finance professionals as very important instrument, but at the same time as a critical and sensitive field. The framework of Shariah compliant receivable securitization is not yet firmly established due to the novelty of many economic and financial concepts, the lack of the Shariah scholars consensus on understanding and accommodating contemporary aspects, and, arguably, the expanded application of sadd al-dharai approach which, generally, means banning any permissible activity if it might lead to impressible result, contrary to the Shariah maxim the norm in regards transactions is that of permissibility which simply means that, any transaction, in principal, is permissible until a contradiction to Shariah is proven. This dilemma has given rise to two major directions of thought with regard to an Islamic perspective on receivable securitization; one is originated in Malaysia and the other, generally speaking, representing the rest of the Islamic world. As a result of these factors, receivable securitization is less developed in Islamic financial markets than in the conventional. In fact, individuals or institutions who seek to comply with Shariah rules can find themselves lost in a maze of contradicting views and fatwas (considered opinions of Shariah scholars). In response to this reality, this study provides an analytical examination of the status of Shariah compliant receivable securitization for the sake of identifying the roots of the gaps and challenges. After all, it is not a study specializing in Shariah but an academic and professional tracing, using a simple problem solving technique, of the realistic causes behind challenging receivable securitization under Islamic law. It is a vital step for a clear understanding of the problem toward proposing a rational way forward. The study addresses these issues in three chapters. Chapter One, An introductory platform, establishes the significance of the research topic, reviews the existing literature and demonstrates the value added by this study. Chapter Two, General Background and key underlying concepts, provides an introduction to the concepts of receivable securitization as well as the Islamic financial system in order to assist the reader in engaging with the ideas presented. Chapter Three, the Islamic regulatory framework for receivable securitization, provides a conceptual introduction to Shariah compliant securitization, and examines the roots of causes that behind challenging of the receivables securitization under Islamic law, where Chapter Four, Proposal for a way forward, provides a global proposal for embracing an ethical and disciplined Islamic compliant receivables securitization. Finally, the Conclusion summarizes the overall inputs and outputs of the study including its question and results. Chapter One: AN INTRODUCTORY PLATFORM 1.1 Why it matters Globalization is inescapable. The faiths, cultures and nations of the world are being gathered together into a single economy and trade pool. Despite the diversity of identities, economies are compelled to meet around the global table. At the end, the wisest strategy for any ideological group is to find a way to accommodate international developments while remaining true to its principles and convictions. Islam is the second largest religion of the world, with its followers estimated at 21% of the worlds population.[4] Muslim communities in historically non Muslim countries are growing rapidly. For instance, a 2001 census in the UK indicated a population of 1.591 million Muslims[5]. Although the next census will be in 2011, Richard Kerbaji reported that the growth of Muslim population is 10 times faster than that of other communities within the UK.[6] Independent of radical trends, the significance of Islam as a major world religion and the impact of Muslims as a community within the global context have made Islamic considerations a top priority on political and economic agendas within the international arena. Likewise, the global Muslim community cannot afford to be passive but must rationally and objectively engage with global changes and challenges. In a lecture given in 1993, H.R.H. the Prince of Wales stressed the fact that: †¦ The Islamic and Western world can no longer afford to stand apart from a common effort to solve their common problems†¦ We have to share experiences, to explain ourselves to each other.[7] This is, indeed, the reality of where we find ourselves today. And while interaction between civilizations and national and international factors is unavoidable, fundamental beliefs and inviolable principles will continue to exist which must be understood and respected. From finance perspective, while exact s are not available, broad agreement does exist that the size of the wealth and assets and the wide range of business networks of Muslims, both in Islamic countries and in the rest of the world, is significant. The demand for financial services which comply with Islamic law can be expected to increase tremendously, particularly following the recent global recession. It is estimated that there will be about 15 20 % annual growth in the Islamic financial products, with equity fund assets climbing to US $53 billion by 2010.[8] It is clear that a direct correlation exists: whenever the demand for banking products increases, banking debts multiply. This heightens credit risk and threatens the availability of capital and liquidity. Basel II, which represents the international consensus on capital standards, embraces securitization as an effective and helpful tool in this regard.[9] However, unless Muslim intellectuals invest considerable energy in developing clear and reliable regulatory frameworks which comply with Islamic law for the newborn concepts including securitization, Islamic banks will continue to experience difficulties in the areas of liquidity and risk management, and will fail to meet the requirements for international convergence. From another angle, the recent global economic crisis has exposed the fragility of capitalist economics. According to Sam Whimster â€Å"[c]apitalism itself is without morality†¦The finance capitalism of today has some startlingly irrational features and is no longer led by those who possess the requisite moral probity†.[10] As the need for more disciplined and ethical systems becomes increasingly apparent, the potential of Islamic finance as an alternative to conventional finance is gaining attention. As a result, broader awareness is developing in the international community regarding the features of Islamic finance and securitization. Toby Birch comments that the Islamic principles established by a desert-dwelling Bedouin fourteen hundred years ago embody the timeless wisdom which holds the key to the financial crises of today.[11] The recognition of the advantages of Islamic financial systems on objective and professional terms by non Muslim experts places a serious responsibility on Muslims experts and researchers to address and resolve the internal challenges which currently impede the development of Shariah compliant products, including receivable securitization. 1.2 Literature review It could be stated that a wealth of studies on Islamic finance can be found in libraries and on the online resources. In addition, Arabic and English literature typically have many publications on securitization within its conventional sense. However, studies focussing specifically on Shariah compliant receivable securitization, and its underlying challenges, are, noticeably few. The works which have, in fact, played the greatest role in shaping the dominant Islamic view on receivable securitization, are the many working papers that have been submitted at Islamic scholarly forums and conferences, particularly the annual conferences of the International Islamic Fiqh Academy, and the Islamic Fiqh Academy of Muslim World League. For instance, at its 19th conference in April 2009, the International Islamic Fiqh Academy discussed a group of working papers specifically focussing on, or closely related to, receivable securitization. However, by and large, the structures and approach of the papers were virtually identical, which is to be expected as the authors shared the same perspective on the same issue. In terms of its significance, securitization represents one of the most important innovations in the finance sector. It is, as Leon Kendall puts it, â€Å"changing the face of American and world of finance†.[12] This view is shared by many experts in the field, who see securitization as an essential component of the modern financial system. Vinod Kothari makes an identical statement to that of Kendall, and suggests that securitization is more than funding instrument that works beyond financial limitations.[13] This admiration for securitization can be attributed to the advantages which, according to Charles Ston and Anne Zissu, provides in alleviating balance sheet pressure,[14] transferring and fragmentizing credit risk, raising capital and securing liquidity. The importance of securitization is recognized by Islamic Intellectuals. AbdulBari Mushaal points out that receivable securitization is an important instrument in that it provides lenders rapid turnaround on their capital in order to re-inject it into investment and production operations.[15] Fuad Muhaisen identifies nine advantages provided by securitization, including its role in funding and financing privatization projects.[16] Furthermore, the working papers mentioned above which were submitted at the 19th conference of International Islamic Fiqh Academy demonstrate a common acknowledgment of the importance of receivable securitization in the Islamic world. Despite the worldwide recognition of the importance of securitization, another side of it could be recognized. Lawis Ranieri describes securitization as an adventure that involves a dark side, observing that it has contributed to destabilizing the thrift system and industry.[17] This represents one factor in the argument that securitization has been a contributing factor in the global credit crash. Thrift and credit are connected while they are also key components in the greater economic system. Securitization arguably promotes excessive credit creation,[18] encourages a culture of consumerism, and has contributed to the global financial crisis. Niall Ferguson argues that the crisis was caused by the rise and fall of securitized loans.[19] While this assertion deserves consideration, it is possible that it was not securitization but the absence of the ethics that rationalize its use, which was the problem. Islamic finance principles offer a framework with the capacity to fill this void. In his book ‘Islamic Finance Standards: Solving the Global Financial Crisis, Samir Kantaji provides a practical analysis of the global crisis and suggests that Islamic principles of finance provide the ethical and disciplined environment necessary to prevent such a future financial crash.[20] While the principles of Islamic finance were established more than fourteen hundred years ago, they do offer, as implied by Hugo Bouleau, solutions to todays banking problems.[21] The question, however, is whether Shariah scholars have the flexibility to apply these principles meaningfully to contemporary financial concepts, in general, and to securitization, in particular. The dominant philosophy of Shariah scholars is sadd al-dharai (banning any permissible activity if it might lead to an impressible result). This approach has been stressed by the International Islamic Fiqh Academy in its Resolution No. 92 (9/9), issued in April 1995.[22] However, many Islamic intellectuals oppose broadening the application of sadd al-dharai. Akhtar Zaiti emphasizes the contrasting Shariah maxim, â€Å"the norm in regards transactions in that of permissibility†, and the fact that the financial principles, maxims and frameworks provided by the Quran and Sunnah are not detailed because the finance industry and human interests vary over time. She argues that Muslims should be guided by this principle of permissibility as they engage with evolving financial concepts, including securitization, except in cases which present an obvious contradiction with the Quran and Sunna.[23] Similarly, Fuad Muhaisen argues that Islam clearly identifies which activities are prohibited, leaving room for innovation and development over the course of time, and that this is how contemporary financial concepts should be approached.[24] Regardless of the argument, what is certain is that the convictions of some Shariah scholars, coupled with the rapid development of finance and economic concepts and the impossibility of accurately foreseeing all of their potential implications, impede the development of Islamic financial systems. Studies addressing Shariah compliant receivable securitization typically roam around avoidance of Riba (usury) and Gharar (Risk), issues which are subdivided into more focused points such as profit-risk share, tangible asset connection and other underlying sub-issues. However, sale of loan is considered the cornerstone of employing receivable securitization, and is the subject of vigorous debate by Islamic intellectuals. Sale of loan was a topic of discussion at the 1998 International Islamic Fiqh Academy conference. The conference concluded that the sale of loan to a third party, whether at a current or deferred price, is strictly prohibited in Islam because it leads to Riba (usury).[25] But at its 2006 conference, International Islamic Fiqh Academy demonstrated greater flexibility and determined four permissible models for sale of Loan,[26] A similar resolution was issued by Islamic Fiqh Academy of MWL at its 2002 conference stating that some sale of loan models are prohibited because they lead to riba (usury) or Gharar (risk) of the inability of delivery, accordingly, receivable securitization is prohibited.[27] It should be noticed that loan in Islam could be goods, services, usufructs or receivables (cash flow), but none of the mentioned resolutions accepted the sale or securitization of receivables. There is no consensus regarding the prohibition of sale of loan. For example, in his book ‘The theory of loan in Islamic fiqh Ahmed Al-Hajj discusses the different viewpoints supporting and opposing sale of loan and concludes that it is permissible provided that delivery of the sale (repayment of the loan) is not possible[28]. This approach has been embraced by the Malaysian Securities Commission Shariah Advisory Council since 1996 which opened the door wide to receivable securitization in this Islamic country[29], which is, according to Rashid Al-Khan, has been widely criticized by many Middle Eastern scholars.[30] Furthermore, Saiful Rosly and Mahmood Sanusi point out that trading of Islamic bond structured on a sale of loan basis in Malaysia has been found impermissible by the majority of Shariah scholars.[31] Apparently, there is a clear disagreement over the key issues involved in achieving effective Shariah compliant receivable securitization. However, this does not mean that Shariah compliant receivable securitization cannot be utilized until the dilemma is resolved. Nor does it mean that the current position of Shariah scholars is final. The possibility always exists of renegotiating the interfaces that are developed between Shariah and developing technical concepts. The literature already includes a number of publications which discuss the foundational concepts of Islamic finance and attempt to develop an Islamic framework for securitization which brings together Islamic principles and finance innovation. But gaps remain in terms of scope and approaches of studies. To put differently, the existing Islamic literature offers only a superficial and indirect exploration of the reasons for which the permissibility of receivable securitization has been challenged under Islamic law, and handles this discussion within previous immature viewpoints. 1.3 Scope and significance of the study This study provides a panoramic view of the current situation of receivable securitization within the Islamic law. It discusses the dominant Islamic intellectuals approach that banes it, and tackles the question of what are the realistic reasons of challenging receivables securitization under Islamic law. In order to add value, this study is a digging deeper into the roots of the argument. Using a simple problem solving techniques, it traces those roots to out what is, precisely, reason behind the resistance of Shariah scholar to accepting receivables securitization. Differently, this study openly discusses the issues, and it is completely built of the maxim that in principal, any transaction is permissible until a contradiction to Shariah is proven. Furthermore, the study reflects rational viewpoint regarding riba (usury) concept which has been unreasonably exaggerated over the time. Notwithstanding, this study must not be read as a revolt against any of the Islamic schools of thought or organizations, but an objective attempt to re-pull the attention to realistic causes of prohibition of receivables securitization under Islamic law. Overall, this study helps to identify areas where religious perspectives and technical practice do not yet interface with regard to receivable securitization, and spells out the reforms needed to the approach of Islamic intellectuals methodology in terms of Islamic financing in general and securitization in particular. Chapter Two: General Background and Key Underlying Concepts 2.1 Introduction In order to understand the roots of the challenges of Islamic compliant receivable securitization, this chapter highlights key aspects of securitization as created and developed by the conventional finance industry and, on the other hand, the related key aspects of Shariah and Islamic finance. 2.2 An introduction to Securitization 2.2.1 Origin of Securitization While Vinod Kothari states that securitization has a two hundred year history in Denmark and suggests that therefore Denmark should be considered its birthplace, he admits the fact that securitization as a structured finance instrument was developed in the US.[32] Indeed, credit for the innovation of securitization is due the US government which initiated the first mortgage-backed securitization transaction through the Government National Mortgage Association (GNMA) in 1970.[33] The introduction of securitization was promoted by a severe shortage of liquidity which caused by a withdrawal of traditional lenders who turned to more profitable investments.[34] However, the perception of securitization as a magic wand that could make fund and liquidity problems disappear, together with a credit crush, dramatically expanded the usage of securitization. In the years since, extensive experience and lessons have been, and are being, learned in tailoring and structuring securitization transactions. 2.2.2 Concept of Securitization Little documentation exists regarding the origin of the term ‘securitization. Lewis Ranieri claimed that this term was not a real word, and it was used for the first time by the Wall street Journal in 1977.[35] As an emerging concept, therefore, securitization does not yet have a universally accepted definition. According to Leon Kendall, securitization is a process of packaging individual loans and other debt instruments, converting the package into a security or securities, and enhancing their credit status or rating to further their sale to third-party investors.[36] While this definition describes the process of securitization, Peter Jeffrey focuses on the objective of securitization and suggests that in its simplest form it is a secured borrowing, whereby a company borrows against an asset or group of assets.[37] This is exactly what was concluded by a United Kingdom VAT Duties Tribunal in Capital One Bank (Europe) Plc v Revenue and Customs [2005] when it stated that secu ritization is â€Å"nothing more than a sophisticated means of borrowing money†.[38] From a different angle, Vinod Kothary called attention to the philosophy of securitization and pointed out that it is in its widest sense is every process that converts financial relation into a transaction. However, he defined the term asset securitization as a device of structured financing in which an entity seeks to pool together its interest in identifiable cash flows over time, transfer the same to investors either with or without the support of further collaterals, and thereby achieve the purpose of financing.[39] Securitization can be also defined as â€Å"The transformation of a loan portfolio or other assets such as property into securities that can be sold in the primary market and traded in the secondary market†.[40] Another definition that is ascribed to Ernst and Young states that securitization is: â€Å"Any transaction under which a securitization vehicle directly or indirectly acquires receivables or bears risk associated with commitments taken or activities carried out by third parties and issues in exchange securities whose return is directly linked to the risks borne†.[41] While clearly many definitions exist for the terms ‘securitization and ‘asset securitization'[42] which describe them in either the simplest or broadest terms and approach the concept from various perspectives, all concur that securitization is a process of packaging and transforming a specific bulk of assets through a special purpose vehicle(s) into marketable securities for the purpose of liquidity and/or risk management. A key point to be addressed here is that the term ‘asset securitization is commonly used to describe the process of securitizing financial claims or receivables, notwithstanding the fact that balance sheets include other types of assets that can be subject to securitization, particularly under Islamic law (i.e. lease structure). In this context, the verb securitize, according to the Concise Oxford Dictionary means to convert an asset, specially a loan, into marketable securities, typically for the purpose of raising cash.[43] This confirms the fact that other assets can be securitized but accounts receivable and loans are the most common type of securitizable assets, perhaps because they constitute the bulk of the assets of financial firms and credit institutions. 2.2.3 Structure of and Parties to Receivable Securitization Receivable securitization can be structured on a typical funded, synthetic or collateralized debt obligation (CDO) structure.[44] However, in order to avoid dispersion and complexity; the focus here will be on the typical funded structure. A typical funded structure of receivables securitization (see 1) basically involves borrowers, an originator, an issuer and investors. These form the backbone of a typical funded securitization structure; nevertheless, a credit enhancer, rating agency and an underwriter/lead manager are also considered key players for the sake of regulatory compliance and in order to introduce an attractive opportunity for the targeted investors. Borrowers: Given that receivable securitization is a process that deals with loans; borrowers are considered the cornerstone of a securitization transaction. As they are responsible for paying the underlying loans, structuring a receivable securitization must take into account their credit capability. Some regulatory frameworks may require their consent. Originator: In receivable securitization, lenders or creditors are usually the originators of a securitization transaction. The originator can be a governmental agency or any financial, credit or investment institution such as a commercial bank, investment bank or captive finance company. The role of the originator does not start only at the point of the agreement with the SPV, but begins earlier,[45] specifically, from the moment that the originator recognizes the need for, or the feasibility of, securitizing a bulk of receivables. The origination process includes many steps involving, but not limited to, planning and structuring the securitization transaction, identifying and segregating the assets, notifying the borrowers, establishing the SPV(s), concluding the consultation and services agreements and handling any mediation activities between the borrowers and the SPV. Furthermore, the originator might continue to play the role of ‘servicer, providing, among other services, customer services, payment and collection services as well as default management and collateral liquidation.[46] An issuer: The key point of the securitization process is the issuance of the securities that resulted from pooling and transforming the assets. This issuance is usually performed by an SPV, which is normally a new and independent entity established for the purpose of taking over the position of the originator as a lender or creditor in the credit relationship. In other words, once a securitization takes place, borrowers no longer have a credit relationship with the originator, but rather with the SPV. A rating agency: For a successful securitization, a good rating of the credit quality of the transaction should be secured from a very well-established rating agency. Professional rating agencies usually provide a professional evaluation of the type and quality of the underlying assets, including any related risks.[47] Credit enhancer: Credit enhancement is a very important process for attracting investors to be involved in a securitization transaction. It provides them with a certain level of protection in the event that the originator fails to meet his commitments or the cash flows for the securitized assets are insufficient to cover the projected return of the securities. Another point, which will be discussed further below, is that credit enhancement can be secured internally through guarantees provided by the originator or on the basis of the quality of the securitized assets. Having noted that, a credit enhancer appears as a party in a securitization structure only if the credit enhancement is provided by a third party enhancer (i.e. by a letter of credit). In such a case, the enhancer must have a high credit rating in order to secure the confidence of the investors. Underwriter / lead manager: The offering of the issued securities public or to private investors is usually handled by a professional firm, typically, a bank which plays the role of underwriter in the securitization process. The key role of the underwriter is to manage the process of selling the securities to investors in order to achieve the securitizations targets. It should be noted that the trend among financial professionals today is to call this party a ‘lead manager, rather than an ‘underwriter, because the guarantee provided is, in principal, a commitment to make every effort to ensure that the securities are sold. There is, however, no guarantee in terms of the prices and quantity of the securities sold.[48] Investors: The ultimate objective of the securitization process is to transfer risk to investors and/or to generate liquidity from them. A securitization transaction may target specific kinds of investors through a private placement process or open it to the public. In both cases, the key investors are usually fund managers, pension funds, governmental funds, commercial banks and insurance companies.[49] 2.2.4 Process of Securitization It goes without saying that the securitization process involves detailed, complex and overlapping steps. In this paper, however, the focus is on the key steps which have strong significance in terms of the research objectives, namely, the packaging and transferring of the underlying receivables as well as the issuance of securities. 2.2.4.1 Packaging the Underlying Receivables The most vital step in a securitization transaction is packaging the underlying assets. This begins with identifying the targeted receivables, which may include any assets that generate cash flows over a period of time, such as mortgages, credit cards loans, consumers loans, corporate loans, auto loans, s

Faith Healing: How Many More Children Will Die ? :: Exploratory Essays Research Papers

Faith Healing: How Many More Children Will Die ? June 18, 1997-- â€Å"Only six more days until my birthday! Wow! I can’t believe I’m going to be seventeen finally! Even though I’m excited, I wish I could start feeling better. I’m not really too sick, but I still am a little scared. In my heart, I wish I could go see a doctor, but I know that I could never tell my mom and dad that. Even if they heard me say it, they still wouldn’t listen to me, no matter how sick I was. I know I’m supposed to have faith that God will heal me, but right now I’m so afraid. I can’t die now. There is too much stuff I still want to do; I have so many hopes and dreams for my future...† Shannon Nixon never lived to see her 17th birthday. On June 21, 1997, only three days before her birthday, Shannon went into a diabetic coma and died shortly after. In all her life, she had never been to a hospital, seen the inside of an ambulance or even visited her local doctor’s office. Even at birth, she was delivered without the aid of a doctor or nurse. Shannon’s parents refused to seek medical help for her or any of their other nine children. Her parents are members of the Faith Tabernacle Church, where all the members solely believe in the power of faith healing (Dowell). Faith healing is defined by Webster as a method of treating diseases by prayer and exercise of faith in God. The members of the Faith Tabernacle church, as well as many other groups in the United States including the Christian Scientists and the Followers of Christ, believe that the right and power to heal is solely God’s. â€Å"Like many fellow Pentecostals, the Followers believe the Bible prescribes prayer and the laying on of hands to cure physical ills. Unlike most, however, Followers reportedly refuse medical treatment-- for themselves or for their children† (Biema). The Followers believe that any medicine or doctoral attention is putting faith in people instead of God. Whether it’s something as minor as a mere finger cut, or as dangerously deadly as diabetes or leukemia, the family refuses to seek medical contact or attention. This belief has been around since Biblical times. James 5:14 says, â€Å"Is any one of you sick? He should call the elders of the c hurch to pray over him and anoint him with oil in the name of the Lord (NIV).

Obsession gone wrong Essay

It is often said â€Å"there’s a thin line between genius and insanity†. From Einstein with his shaggy hair and stuck-out tongue to Archimedes running about the street naked shouting â€Å"eureka! † after making a discovery, one can’t help but agree with whoever made that statement. Mary Shelley, Nathaniel Hawthorne, John Steinbeck and Jeremy Bernstein all wrote stories of scientists who were all geniuses – they all had devoted years of study into their fields. Yet, some of them acted irrationally without considering the consequences of their actions (Frankenstein; Aylmer), some did things against their nature (Frankenstein; Phillips), and you couldn’t help but question the sanity of others (the narrator in Bubble and Squeak; Aylmer). In Mary Shelley’s Frankenstein, Victor Frankenstein was â€Å"forced to spend days and nights in vaults and charnel-houses†. Of course, no one forced him to– he was driven by the ambition to discover the source of life. And when he did, an even greater ambition drove him – to create and give life to a human being and eventually, â€Å"a new species would bless me as its creator and source; many happy and excellent natures would owe their being to me†. To make this dream a reality, he subjected himself to many experiences that the next human would find extremely repulsive and disgusting. In his own words, â€Å"†¦often did my human nature turn with loathing from my occupation. † But the ambition always overpowered his human nature. A beautiful summer came and passed, but he was too busy with his studies to notice. He had also lost touch with his family and friends, even though he knew his father would be anxious. It was telling on him, too. He had become emaciated, and many sleepless nights had his eyes bulging from their sockets. He deteriorated to the extent that he became a nervous, solitary wreck, and a fever came upon him every night. Nathaniel Hawthorne in his book â€Å"The Birthmark† said the scientific hero Aylmer had â€Å"devoted himself too unreservedly to scientific studies to be weaned from them by any second passion. His love for his young wife might prove the stronger of the two, but it could only be by intertwining itself with his love for science and uniting the strength of the latter to his own. † Aylmer had a young, beautiful wife; unfortunately Georgiana had a tiny flaw on her face, which made her imperfect in his sight. From then on, his obsession was to get rid of the birthmark from her face, and he had come to hate it so much that the sight of it made him shudder. Other men saw the birthmark and saw beauty and charm, Aylmer saw it and saw a defect, a representation of all imperfections. Even Aminadab, Aylmer’s lab assistant, said that â€Å"if she were my wife, I’d never part with that birthmark. † Because the birthmark was in the shape of a tiny hand, it was often remarked that it was the print of a fairy’s hand on her cheek, which made her â€Å"hold such sway over all hearts. † However, Aylmer was a man of science, and most likely did not believe in fairies and all the whatnot, and so he considered the birthmark as â€Å"a frightful object, causing him more trouble and horror than Georgiana’s beauty, whether of soul or sense, had given him delight. † In other words, his horror at the birthmark for making Georgiana imperfect became stronger than his appreciation of Georgiana’s beauty. Further along in the story, Aylmer became extremely devoted into creating a mixture to get rid of the birthmark that he secluded his wife. Once, Georgiana followed him into his lab and was frightened, not by the scientific apparatus, but by what she saw of her husband. â€Å"He was pale as death, anxious and absorbed. † Georgiana once wondered if she could satisfy him, and realized that she couldn’t, as â€Å"his spirit was ever on the march, ever ascending, and each instant required something that was beyond the scope of the instant before. † Dr Phillips in John Steinbeck’s â€Å"The Snake† was a man who â€Å"could kill a thousand animals for knowledge, but not an insect for pleasure. † He had no problem with killing for study, as was shown when he was petting cats and feeding them in one minute, and in the next put one of them into a killing chamber for biology classes. His research about the starfish also shows that. But we know killing animals is not in his nature when he â€Å"felt that it was profoundly wrong to put a rat into the [rattlesnake’s] cage, deeply sinful† when the strange woman asked him to feed the snake. It was something he did regularly himself, when he needed to feed the snakes, but because the snake had already had its rat for the week, Dr Phillips felt sickened. Probably because he felt the rat was going to die for no reason. For science, Dr Phillips went against his nature. Jeremy Bernstein’s â€Å"Bubble and Squeak† is the story of a mathematician who had become so analytical it was comical. For example, normal people emphasize the scariness of ghosts in ghost stories; instead, he tries to explain ghosts as apparitions caused by atmospheric densities. He always tried to draw a mathematical and scientific parallel to everything he saw. He calculated probabilities of events, and even wondered if it was possible to measure feelings. What these four scientific heroes had in common was obsession. Victor Frankenstein’s obsession was to become a creator of humans; Aylmer’s obsession was perfection, as expressed by wanting to get rid of his wife’s birthmark; Dr Phillips numbed his nature for the study of science, he was obsessed with biology; and the narrator in Bubble and Squeak had become too mathematical and scientific for his own good. Science in its nature is rather addictive. The more you discover, the more you want to discover – It’s like a never quenching thirst for knowledge. In the words of Victor Frankenstein, â€Å"†¦ in a scientific pursuit there is a continual food for discovery and wonder. † It is as a result of this persistent pursuit of science that many inventions that we take for granted today, the same inventions we can’t imagine living without, were created. However, the danger is in letting our pursuit of knowledge or any other thing control us, such that we do things that are against our nature, or fail to appreciate the simple pleasures of life. As Victor Frankenstein eventually learnt, â€Å"A human being in perfection ought always to preserve a calm and peaceful mind and never to allow passion or a transitory desire to disturb his tranquility. I do not think that the pursuit of knowledge is an exception to this rule. If the study to which you apply yourself has a tendency to weaken your affections and to destroy your taste for those simple pleasures in which no alloy can possibly mix, then that study is unlawful, that is to say, not benefitting the human mind. † (Shelley 40) SADE MABA HUM 101 WORK CITED: Lynch, Robert; Swanzey, Thomas and Coakley, John. The Example of Science. 3rd ed. Boston: Pearson Custom Publishing, 2003. Shelley, Mary. Frankenstein. 30th ed. New York: New American Library, Penguin Group (USA) Inc. , 2000.

Intrapreneuship-Global

Slide: Many big companies had benefitted from the ideas of their employees that not just bringing innovation but adding to its revenue stream. Several global cases have been renowned especially to big companies’ history on how their respective intrapreneurs made the business to be the pioneer of a certain business idea. 1. Most renowned â€Å"Skunk Works† 2. Spencer Silver and Art Fry’s development of post-it notes at 3 M company Modern Day 1. Steve Jobs and a group of 20 Apple Computer engineers created the Macintosh computer 2. Intel's core chip-making business. . Google 4. Microsoft 5. Sony playstation I. Global Case Intrapreneurs take existing businesses and transform them. Whereas an entrepreneur would take an idea and build a business around it, an intrapreneur takes an existing business and branches it out into uncharted waters. In a September 1985 Newsweek article, Steve Jobs was quoted as saying, â€Å"The Macintosh team was what is commonly known as in trapreneurship; only a few years before the term was coined—a group of people going, in essence, back to the garage, but in a large company. (http://infospace. ischool. syr. edu/2012/06/25/intrapreneurship-what-who-and-why-its-important/) Intrapreneurship is being practiced in a corporate management style that integrates risk-taking and innovation approaches, as well as the reward and motivational techniques that are more traditionally thought of as being the province of entrepreneurship. Many big companies had benefitted from the ideas of their employees that not just bringing innovation but adding to its revenue stream.Several global cases have been renowned especially to big companies’ history on how their respective intrapreneurs made the business to be the pioneer of a certain business idea. I. Global Case * Skunk Works is an official alias for Lockheed Martin’s Advanced Development Programs (ADP), formerly called Lockheed Advanced Development Projects. Thi s working group within the well-known defense manufacturer has been responsible for the development of numerous cutting edge aircraft and other innovations since 1943, when it was established to work on secret projects for the United States Air Force.In some companies, a working group of intrapreneurs may be referred to as a â€Å"skunkworks project† in reference to Lockheed's famous subdivision. (http://www. wisegeek. com/what-is-an-intrapreneur. htm#did-you-know) Skunk Works is responsible for a number of famous aircraft designs, including the U-2, the SR-71 Blackbird, the F-117 Nighthawk, and the F-22 Raptor. Currently its largest officially known project is the F-35 Lightning II, which will be used in the air forces of several countries.Skunk works devoted their work revolutionary projects outside of the company’s * Spencer Silver and Art Fry’s development of post-it notes at 3m is also an impressive example of intrapreneurship. Way back in when a 3m employe e couldn't keep his hymns marked properly in his church choir book. After attempting various methods, he decided he'd try using some non-permanent adhesive that was available at his workplace. By placing this adhesive on the back of his markers, he found he could keep them secured in place and then easily peel them off when he was done.Modern day * Intel also has a tradition of implementing intrapreneurship. Intel established an in-house â€Å"new business initiative† in 1998 to bootstrap new businesses that employees propose, regardless of whether the concepts had anything to do with Intel's core chip-making business. In contrast to a venture capital program that Intel has had in place for a decade, the new business initiative provides financing for businesses that the company's own employees start. The idea for the whole thing came from our employees, who kept telling us they wanted to do entrepreneurial things,† said Craig Barrett, president and chief executive offic er of Intel. â€Å"They saw that we were putting a lot of investments into external companies and said that we should be investing in our own ideas. † (http://www. utdallas. edu/~chasteen/Reinventing%20the%20intrapreneur. htm) * Steve Jobs and a group of 20  Apple Computer  engineers created the Macintosh computer without â€Å"adult supervision,† mainly to compete with Apple's mainstay, the Apple II — not to mention Mr.Jobs's nemesis, Apple CEO John Scully * Microsoft Microsoft , one of the companies that poached great Xerox technology, has suffered from a brain drain that may pose a bigger threat than any U. S. Supreme Court decision, as veteran executives use their own millions to start their own firms. That's why both of these companies are now emphasizing internal entrepreneurial efforts. They are among the following ten corporations that have made intrapreneurship a keystone of their business. Seamus Blackley, a game designer, joined Microsoft in early 1999.His last big project, â€Å"Trespasser,† a dinosaur-shooting game based on Michael Crichton's The Lost World (Knopf, 1997), bombed in the market. He figured he'd keep a low profile as a graphics programmer, but then he dreamed up a new idea on an airplane flight and quickly banded with three other engineers to create a video game console using personal computer technology. (http://www. utdallas. edu/~chasteen/Reinventing%20the%20intrapreneur. htm) * Google is also known to be intrapreneur friendly, allowing their employees to spend up to 20% of their time to pursue projects of their choice.

Strategies of Emirates Airlines Marketing

Strategies of Emirates Airlines Marketing Advertising We will write a custom proposal sample on Strategies of Emirates Airlines Marketing specifically for you for only $16.05 $11/page Learn More Abstract/Summary Emirates Airline is currently the largest airline company in the Middle East. This company was founded in the year 1985 (â€Å"Emirates Airline Profile†, 2012). The company is the â€Å"flagship and national airline of Dubai, United Arab Emirates† (â€Å"Emirates Airline Profile†, 2012, p.1). It is based outside the Dubai International Airport. Emirates Airline Company undertakes the operation of the four known longest flights across the globe and has â€Å"the largest order of A380 aircrafts† (â€Å"Emirates Airline Profile†, 2012). In the present day, this airline has more than one hundred destinations in over seventy nations across the world and has a fleet of over one hundred and eighty aircrafts (â€Å"The Emirates Story†, 2012). The company has been realizing constant expansion of its network even if it is fully owned by the state. Its growth has been realized through competition and not through state protection (â€Å"Emirates Airline Profile†, 2012). The company has been engaging in competition with the constantly increasing number of international airlines which capitalize on the â€Å"open-skies† policy that Dubai has put in place (â€Å"The Emirates Story†, 2012). The company’s success can be attributed to its effective marketing that enables it to win the competitive advantage and make profits (â€Å"The Emirates Story†, 2012). Putting place effective marketing strategies and methods have enabled the Emirates Airline Company to be very successful in the global market. Although the company has not been in business for a long time like most of its competitors, it has witnessed constant growth which has enabled it to become the leading airline in the Middle East and having destination s in all the continents of the world. Beginning from the time the company started its operations, it has been working hard to improve on its marketing in order to gain a higher market share.Advertising Looking for proposal on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The company has been using its innovative power to come up with the best marketing strategies that have enabled it to grow. However, with the ever advancing technology and coming up of new challenges with each coming day, there is need for the company to continue being innovative and keep on improving its marketing strategies to ensure they become the world’s leading airline and be able to remain at the top. This research will aim at identifying any loopholes that may be in the marketing methods and strategies that have been put in place by Emirates Airline and how to bridge them. Bridging these loopholes or gaps in the strategies will enable this company to improve its performance beyond the present state in order to meet the ever increasing challenges in the market. Relevant objectives as well as research objectives have been set up in this proposal which will serve to guide this research project. Objectives To investigate the Emirates airline’s advertisement and marketing methods and strategies that enable it to gain competitive advantages. To examine how Emirate Airline’s marketing affects its global success. To identify the marketing changes that have occured in the company beginning from the time the company was established to the present. Project Outcomes Emirates Airline Advertisements and Marketing Methods and Strategies It has been found out that this company engages in aggressive advertisement in order to increase its market share (Marketing strategy and customer satisfaction, 2012). As a way to realize customer attraction to the highest level possible, the company advertises itself by u sing a number of slogans. The strategies employed by this company are aimed at ensuring that there has been exploitation of a number of issues concerning the business environment. Among these company’s branding slogans has been â€Å"Fly Emirates†. Emirates Airline Company has been offered a quite unique environment to market its business operations by Dubai. Some of the other slogans that have been used by the company in the course of time include â€Å"’the Finest in the Sky’, ‘Be Good to Yourself by Fly Emirates’, Fly Emirates – Keep Flying’, and ‘When was the last time you did something for yourself’† (Kumar 2012, p.1). Basing on the researches that have been conducted in the past about the use of the slogans by business organizations, it has been found out that some of the slogans used contribute quite positively towards the business performance by these organizations (Marketing strategy and customer sat isfaction, 2012).Advertising We will write a custom proposal sample on Strategies of Emirates Airlines Marketing specifically for you for only $16.05 $11/page Learn More It is pointed out that customers tend to abide by business slogans which seem to point out or deal with the needs that the company can meet (Marketing strategy and customer satisfaction, 2012). In the course of time, the Emirates Airline Company has been using the business slogans to hit back at other slogans used by the competitors which had exhibited themselves as being the best airline companies. Such business slogans as â€Å"’Be Good to yourself’ and ‘when was the last time you did something for yourself’ by the Emirates Airline ensure that customers feel treasured and cared for† (Marketing strategy and customer satisfaction, 2012, p.1). Just like most other airlines, Emirate Airline has engaged in diversifying the operations it carries out in various industries that are related. This approach has been used by the company in order to make sure that there is capitalizing on any other potential opportunity. It is reported that, in the past this company has utilized the â€Å"Flex-tracks program† with an intention of planning and fully optimizing the efficiency of a number of business routes as well as load factor (Marketing strategy and customer satisfaction, 2012). According to other reports, it has been found out that another strategy used by this company is the utilization of what is referred to as â€Å"tailored arrivals† and this strategy has been employed in putting the uplinks to aircrafts on route under control 9 Marketing strategy and customer satisfaction, 2012). For airline companies to bring up the level of their efficiencies of their operations, most of them in different parts of the world bring down the level of costs by making use of aircrafts like Boeing 777-3000ER. Such an aircraft makes use of one en gine â€Å"to taxi aircraft engine thus increasing the efficiency of the whole process† (Marketing strategy and customer satisfaction, 2012, p.1).Advertising Looking for proposal on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More It is true to point out that the Emirates Airline Company has actually been able to put itself in a quite strategic position within the industry. The constant flourishing of the business market in Dubai and this nation’s constant cooperation with the rest of the world has gone on contributing towards Emirates airline’s improved performance. However, according to the researches that have been conducted, it has been clear that customer satisfaction levels in a large number of the airline companies have remained low (Marketing strategy and customer satisfaction, 2012). As a result of this, customers across the world have turned out to be â€Å"switchers†; moving their loyalties from one company to the other, on a constant basis. They move with a hope that they would possibly come across an honest company that they could trust. In the airlines industry, customer satisfaction involves making sure that the clients are given the services about which they have expectati ons of obtaining from the company on the basis of the price they pay for these services. This also involves making sure that clients arrive at their respective destinations via the shortest route available in the shortest time and at a minimum cost possible. Emirates Airline has been making efforts to capitalize on the existing opportunities and this company has been doing this by ensuring that it positions itself as the excellent global carrier since this airline by-passes some of the well-known hubs as it moves to various other destinations across the world (Marketing strategy and customer satisfaction, 2012) Another strategy that can be employed in order to realize customer satisfaction has involved finding out from the customers in a direct manner in order to be in a position of getting to know what the actual needs of these customers may be. The use of technology has as well been implemented to a high level to make sure there is integration of the needs of the customers into th e business operations in the shortest time and at a lowest cost possible (Marketing strategy and customer satisfaction, 2012, p.1). A number of measures have been taken to make sure that there is receiving by the company’s management of the feedbacks that are given by the clients. These feedbacks may be in line with a number of issues that arise in the company which may be linked to the customer satisfaction either in a direct manner or an indirect one (Marketing strategy and customer satisfaction, 2012). As another strategy, this company engaged in launching a global campaign referred to as â€Å"Kids Go for Free† which has been very successful. Under this campaign the two parents can travel with two kids who are below the age 16 years without paying for them. A discount is also given to these families at the biggest shopping malls within Dubai (Emirates Airline, 2010). From this initiative, it can be seen that children are turning out to be most vital client groups i n a number of industries. It is reported that the â€Å"Kids Go Free† promotion was quite successful in 2009 and served to attract more than twenty thousand travelers originating from seventy countries having Dubai as their destination. Basing on a particular survey in relation to this campaign, it was found that â€Å"the average family of four from Europe could save as much as 3000 pounds by taking advantage of the offer† (Bundhun, 2010). Other than the campaign enabling this company to increase its profitability, it also enabled the families to save large amounts of money. It is reported that, it was not only Emirates Airline that had knowledge about how important the kids market can be but an increasing number of companies also engaged in launching this campaign in order to increase their performance level as well the â€Å"customer awareness index† (McNeal, 1999). The campaign served in assisting Emirates Airline specifically and Dubai in general, to distin guish themselves as â€Å"cost-competitive alternative to other destinations† (Kotler, Bowen, Makens, 2010). This promotion left a great impact in that the companies in the airlines industry came to a realization of the way to utilize the products of kids in order to draw the attention of families and give encouragement to the parents to engage in purchasing. This campaign is healthy for the domestic tourism and in the year 2008, it made a direct contribution of nineteen percent to the GDP of Dubai (Bundhun, 2010). How Emirates Airline Marketing affects their Global Success Over eight hundred Emirates aircrafts leave Dubai every week to other destinations across the world (Calleja, 2009). It is reported that this company’s flight form about forty percent of the total number of flight movements from and into Dubai and at some point, the Emirates Airline, was targeting to bring up their market share to about seventy percent by the year 2010 without having to compromise their standing for quality (Calleja, 2009, p.3). It is also important to point out that value creation and goal achievement are very vital strategic principles in the process of globalization. This company has been constantly undertaking its operation with an aim of making their services better in the global market. In the recent past, this company realized a fresh milestone as â€Å"it touched down to vibrant beats of African drums at Cape Town – its 100th global destination in South Africa and also launched a new service to Brazil; a daily non-stop Dubai-Sao Paulo operation effective 1st July 2008† (Travel Daily News, 2008, p.1). According to Calleja (2009), â€Å"attracting customers is the major strategic global principle†( p.3). This company has all the time been seeking fresh ways to innovate. The company engaged in opening innovative lounge at the â€Å"Brisbane International Airport† thus â€Å"unveiling the facility that offers a stunning 360 de gree view and is the first airline lounge in Australia capable of boarding passengers directly to the aircraft, including the upper deck of the Airbus A380† (Travel Daily News,2008, p.1). This brings in convenience to the clients and therefore it is a great achievement especially in regard to offering quality and superior value attainment by the customers in comparison with other companies in the industry. In its marketing, Emirates Airline has also used what is referred to as â€Å"global aviation strategy† (Calleja, 2009, p.3). This marketing strategy has enabled the company to achieve success in the global market. In the course of the last one and a half decades, the â€Å"Dubai International Airport† has immensely grown to become among the greatest hubs in the global aviation. The strategy has been employed by the Emirates Airline Company basing on the fact that â€Å"its planes can reach any point on the globe nonstop from Dubai and can connect any two city pairs with just one stop in the Middle East† (International Herald Tribune, 2007, p.1). This company is reported to be having a geographic advantage over all other companies in the industry and â€Å"within eight thousand miles, they can reach something like 80% of the world† (Calleja, 2009, p.3). Marketing Changes in Emirates Airline Company from its Establishment until Now There has been integration of a number of strategies in this company’s marketing strategies in the course of time (Marketing strategy and customer satisfaction, 2012). There is a great correlation between marketing concepts within the airline industry and the marketing strategies which are chiefly utilized in such other industries as the hotel industry and tourism among others across the world. Just recently, Emirates Airline flourished after making sure the focus of their services is put on the â€Å"target market† (Marketing strategy and customer satisfaction, 2012, p.1). It is repo rted that at the time the year 2000 was ending, this company had plans to come up with a â€Å"very ultra-long-haul service† (Marketing strategy and customer satisfaction, 2012, p.1). The plan for this service is that it be situated in the â€Å"East coast and the West Coast part of the United States of America† (Marketing strategy and customer satisfaction, 2012, p.1). There were also plans to have more services in Argentina and Australia. It is also reported that â€Å"Fly Emirates business strategies employed in the recent past have seen the business organization overall output increase and the specific traffic flow rate increase to twenty percent from the year 1999 to the year 2000† (Marketing strategy and customer satisfaction, 2012, p.1). Seven years ago, in 2005, this company commenced on its operations of the airline to the New York City and this was on a continuous basis. Emirates Airline strategy put in place in this regard enabled the company to comme nce undertaking operation of A340-500 flight to JFK airport. In the course of time, the company has also realized creation of several partnerships with some airlines in the Delter airlines and in the U.S (Marketing strategy and customer satisfaction, 2012, p.1). The initiation of such operations was undertaken in 2001.The enhancement of the company’s growth has been realized through implementation of various strategies in the past. By the year 2007, Emirates Airline was able to mark its â€Å"new non-stop air operation services between most of its major destinations† (Marketing strategy and customer satisfaction, 2012, p.1). The company has also been able to continuously capture traffic to Southern Asia as well as North America. By the company introducing Airbus A380-800, this served as a great move towards making sure it has a better performance within the business market. The strategy put in place in order to ensure creation of additional space in flights played a bi g role in enabling the company to achieve significantly higher profits resulting from the flights between Bangkok and Dubai 9 Marketing strategy and customer satisfaction, 2012). Why the Interest in the Project Considering that there is continued complication as well as competition witnessed in the airline industry, it is important that the marketing methods and strategies that have been and are currently used by the Emirates Airline Company be examined in order for any gaps that are there in these strategies be established and necessary changes which need to be carried out be implemented and submissions of proposals be made to the management. Indeed, this research will be beneficial not only to the Emirates Airline Company but also to the investors into the industry as well as shareholders and stakeholders in making sure that they receive maximum gains from this company. I am also interested in this research project because it will offer very important information that relate to th e present situation of the business market in which airlines carry out their operations. This information that will be obtained will also be helpful in the optimization of real performance of the small as well as big businesses. Questions to be answered What are the Emirates airline’s greatest competitive advantages? What are the biggest challenges that Emirates Airline encounter in their operations both in the local and global market in relation to their marketing strategies? In what ways do the Emirate Airline’s present marketing methods and strategies give a reflection of its future targets within the market? Research Methods The methods that will be used in this research will involve the use of primary data as well as secondary data collection. Considering primary data, this will be dependent of data collection from the company regarding the strategies they use with the objective of winning the competitive advantage through customer satisfaction. The opinion of t he clients and the potential clients will be collected. A number of opinions of various stakeholders will be put into consideration. The administering of questionnaires will play a big role in making sure that the different respondents who might be in different locations and those that cannot be reached physically can still take part in this research. Research design Since the Emirates airline is a multinational company that serves wide array of clients across the globe, it is imperative to note that it has numerous employees and clients from various locations across the globe. Therefore, a suitable research design will be required as part of methodology in order to address this kind of diversity (Creswell 1994, p. 76). Therefore, a well designed and suitable research methodology will have to incorporate a thorough research study in order to understand how employees are motivated at the Emirates Airlines. Therefore, the research design that will be applied will take into considerati on the number of employees in the company and how employees are represented in the company both regionally and continentally. In addition, the research design to be employed will address all the major international airports and offices of the company that can be used to facilitate communication. This kind of information will be useful as part of the research design because it will enhance gathering of primary data and subsequent analyses. Due to the complex nature of the ethical and cultural practices experienced at the Emirates Airlines, a qualitative research design will be utilized in order to map out expenses to be incurred in the process of conducting this research study (Doganis 2002, p.54). Besides, more focus will be laid on the descriptive research method so that the acquired data can be understood. It is important to reiterate that this kind of research design is highly suitable for the study because it gives more emphasis on the much needed information when the actual res earch study will be conducted. In addition, the qualitative approach will be used to carry out the methodology part of this research study. As a matter of fact, there will be a well defined method of collecting data from the field. Data collection Data collection is an integral part when conducting any research study. This study aims to collect the much needed data using various methods. However, the mode of data collection will have to be compatible with the research design that was chosen above (Hiatt Creasey 2003, p.163). Therefore, the aforementioned descriptive research design will employ survey as one of the methods of data collection. The use of survey method in data collection will be made possible through well designed questionnaires. The latter will save both time and expenses needed to collect raw data from the field. Some of the suggested interview questions that will be contained in the questionnaire include: Are you satisfied as an employee at Emirates Airlines? Woul d you move away from the Emirates Airlines if you secure another job opportunity? What are the outstanding attributes of this company? Kindly enlist them. Do you feel like working with Emirates Airlines on every single day? What motivates you at workplace? Primary and Secondary Data Sources That are Intended to Be Used in This Project The primary data collection will involve obtaining information about the strategies that are employed by this company in order to realize customer satisfaction. A direct response from the interviewees through the use of the questionnaires will make it possible for the researcher to formulate, in sufficient manner, a perfect understanding of how efforts geared towards realizing customer satisfaction can be carried out. Moreover, primary data will make it possible for the researcher to be in a position of obtaining the up-to-date information that will assist in comparing between the past data sources and the sources which are the most recent. The second ary data sources will include journals, websites and information in books and sources written on Emirates airline. This information will be very important in the identification of a number of roles that have been played by a number of stakeholders in dealing with all concerns that are linked to different marketing strategies used within the airline industry. There will be availing of a number of issues concerned with the most effective marketing strategies, which have formerly been used and their success patterns through comprehensive studying of the sources which are available, containing the secondary data. Gantt Chart Task Person(s) Responsible Start Date End Date Questionnaire Drafting Researcher (Myself) 01 Oct 10thOct Data Collection Researcher (Myself) 11thOct 18thOct Data Analysis Researcher (Myself) 19stOct 30 Oct Dissertation Writing Researcher (Myself) 01 Nov 10 Nov References Bundhun, R., 2010. Double the â€Å"Kids go free† on holidays to Dubai. Web . Calleja, J., 2009. Global business – case study: Emirates Airline. Web. Emirates Airline Profile, 2012. Web. Creswell, J. W. 1994. Research design: qualitative quantitative approaches, Sage Publications, New York. Doganis, R. 2002. Flying off course: the economics of international airlines, Routledge, New York. Emirates Airline, 2010. Family focus for Dubai and Emirate airline this summer. Web. Hiatt, J. Creasey, T. J. 2003. Change management: the people side of change, Prosci Learning Center, Madison. International Herald Tribune, 2007. As other airline suffer, Emirate Airline prospers. Web. Kotler, P., Bowen, T. B., Makens, C. J., 2010. Marketing for hospitality and tourism, Pearson Education Inc., New Jersey. Kumar, C., 2012. Emirates. Web. Marketing strategy and customer satisfaction, 2012. Web. McNeal, J. U., 1999. The kids market: myths and realities, Paramount Market Publishing, New York. The Emirates Story, 2012. Web. Travel Daily News, 2008. Emirates increases B razil service to daily. Web.