International Human Resource Management in Japanese Firms Essay Example for Free

International Human Resource Management in Japanese Firms Essay During the 1980s, commentators and researchers of almost every stripe witnessed what was invariably seen as a miracle: the juggernaut Japanese economy. It seemed a perfect system, with all cylinders-from the political coordination of the economy through industrial structure and interfirm interactions to human resources management practices and cooperative relationships on the shop floorclicking at high, flawless speed. In the mindset of the time, one question quickly followed: How could the American economic system, with all its contrasting warts and imperfections, hope to compete against this titan? Now, little more than a decade later, that sighting of a miracle has been downgraded rather substantially. In the words of a Fortune analyst (Powell, 2002), Being compared to Japan these days, economically speaking, is about as low as it gets (p. 91). The reasons for this decline are varied but include many of the same factors that supposedly accounted for its ascendance. Now, Keeley pulls back the curtain even more, exposing a system seemingly trapped in neutral. Keeley, a Westerner fluent in Japanese and professor in international management at Sangyo University in Japan, is well positioned to reveal the inner workings of the Japanese corporation, particularly its international human resources management (IHRM) practices, without the infatuation that marked many of the earlier reports. The inescapable conclusion from this volume: These practices create almost insurmountable competitive disadvantages. In addition, Keeley provides a deep look at the tenets of Japanese culture, the management and personnel practices tied to that culture, and the resulting business practices and organizational dynamics that characterize the modern Japanese corporation. In the process, he also offers up a compelling argument for diversity, not simply as an affirmative action accounting of staffing, but rather as a mindset of inclusion and involvement. For all those who read about the Japanese miracle of the 1980s, this book is an important corrective and should go on your reading list. It can also be recommended to anyone interested in the cross-cultural application or transfer of management or human resources practices, or organizational behavior in a global environment. Keeley launches his analysis with the observation that the greatest challenge Japanese companies face in expanding their foreign direct investment is how to integrate host country national (HCN) managers into the management process of their oversees subsidiaries as well as that of the parent companies themselves (p. ). The reasons why such integration is important are clear and simple: competitive advantage in a global economy requires that a multinational company (MNC) be able to tap the talents of local HCN managers; to do this, the MNC must be able attract, retain, and develop talented HCN managers. Absent this, the MNC will forfeit local expertise as well as violate host country antidiscrimination laws, something for which Japanese MNCs have a certain notoriety. More specifically, Keeley argues, the IHRM practices of Japanese MNCs are their Achilles heel, and this is due to the fact that the Japanese system of management is so culture dependent that it is difficult to incorporate nonJapanese into the system, making internationalization of their organizations problematic. (p. 9) This theme is examined more fully in Chapter 2, looking at the issues of cross-culture management and the importance of national culture on organizational dynamics. For example, using Hofstedes (1991) national cultures variables, it is the work group-not the individual-that is the foundation of the Japanese organization. Japanese management techniques, such as lifetime employment, consensual decision making, and rewarding group members equally, are built upon the group. In Chapter 3, Keeley examines the three HRM practices that characterize the larger, global Japanese MNC: lifetime employment, a senioritybased wage system, and company-dominated unions. He also discusses the unique leadership role played by the personnel department. It is in this context that he reviews other distinctive features, like the long work hours of Japanese managers and the after-hours workgroup socializing that follows. Contending that this practice is essential to Japanese management, it is not common elsewhere, and Japanese managers find it difficult to manage without it. In this chapter, Keeley also does a good job reviewing the key traits of Japanese culture that so affect their HRM practices, including: strong ethnocentrism; an emphasis on the responsibilities of a (corporate) household (like paternalistic familism); harmony and loyalty in the context of vertically defined relationships; and the rigid separation of public face from private, personal feelings. Keeley also discusses how educational institutions are used as recruiting sources for corporate staffing. Although aspects of his review of Japanese culture, history, and institutions may be familiar to some, the coverage of Japanese IHRM practices in Chapter 4 is probably not. According to Keeley, Japanese firms were slow to move into investing in foreign sites and facilities, and it was not until the 1990s that Japan became a major foreign investor. Even so, only 8% of its manufacturing capacity was moved off shore, relatively small compared to the 17% for U. S. and 20% for German firms. On a continuum of IHRM practices, ranging from ethnocentric operations at one end to fully open and integrated global operations at the other, most Japanese firms would be classified as ethnocentric. Further, management positions in Japanese subsidiaries are invariably filled by native Japanese. Over the last 30 years or so, Japanese firms have consistently employed three to four times as many parent country nationals (PCNs) in manager jobs as have U. S. or European subsidiaries. Ethnocentric IHRM practices are also found in such other conditions as lack of local decision-making autonomy, demands for selecting and training PCN managers, substantial communication problems between PCN and HCN managers in Japanese subsidiaries, and even the pariah treatment that repatriating PCN managers experience when returned to Japan. In Chapter 5, Keeley continues his close and critical look at the interactions between culture and organizational behavior by examining communication and decision-making practices. This analysis is supported by the findings of his survey of Japanese subsidiaries in Singapore, Malaysia, and Australia in 1994 and 1996, as presented in Chapter 6. In the final chapter, Keeley draws out the implications of his analysis. HCN managers play a limited role in the management of local subsidiaries, with most decisions made at headquarters in Japan and communicated directly to the Japanese managers on site without local HCN manager involvement. These conditions make working for a Japanese subsidiary unattractive to many ambitious HCN managers, putting Japanese firms at a relative competitive disadvantage in the labor market. More generally, Japanese management practices are difficult to transfer to foreign operations and indeed may actually impede efficient and effective local operations. Both Japanese culture and their business operations create formidable barriers to effective integration. In short, Japanese MNCs seem tuck in an ethnocentric mode of operation that virtually dooms them to long-term mediocrity in the global economy. Keeley concludes that in order for them to succeed in a global economy, Japanese companies must transcend their ethnocentric attitudes and IHRM policies and practices and look at diversity, not as a defeat, but as a strength. Although some firms have recently begun to acknowledge this, most show little interest. International Human Resource Management offers an abundance of information and insight into the global HR operations of Japanese firms. In addition, it also provides an intriguing, more general assessment of the challenges involved in managing cross-culturally and the importance of effective diversity management. The book is well written. The frequent use of acronyms, like HCN and PCN, eventually becomes easy to follow. Though I found Chapter 6 on the authors own research somewhat anticlimatic, all in all this is a fascinating tour book and is recommended without hesitation.

Multimedia Courseware Shell Proposal Essay Example for Free

Multimedia Courseware Shell Proposal Essay A new experimental degree program, the Bachelor of Applied Business Program (BAB), was launched Spring Quarter 1994 by Continuing Education and Extension. BAB is a practitioners’ degree for the working adult student. The emphasis in the program is on learning skills and accessing information to apply to solving practical workplace problems in a rapidly changing business world. The program was developed with substantial involvement of the Inver Hills Community College, the business community in the Twin Cities area, and the University of Minnesota’s Continuing Education and Extension (CEE) unit. This is the first degree program offered by CEE, and—if successful—it will serve as a model for redefining â€Å"outreach† in the urban corridor to fulfill part of the land grant mission of the University of Minnesota. We are currently in the process of developing the course materials and selecting faculty to teach in the program for Fall Quarter 1994. Note that the three distinguishing features of the BAB program include a number of technical features, graphic elements, or applications that could be significantly enhanced by multimedia courseware: †¢ Courses are being designed with substantial involvement of area businesses to give students â€Å"hands on† experience, including leading and participating in group work; skills for managing upward and downward business relationships; storing, accessing, and retrieving information; creating and implementing budgets, operations flowcharts, schedules, and staffing plans. †¢ Learning outcomes will be specified for each course and applications-related competencies will be integrated into courses across the curriculum. These will include emphases on writing, speaking, and visual communication; using technology and information management techniques, engaging in applied problem-solving and critical thinking skills, working in teams, quality in the workplace, ethics, and the dynamics and management of a diverse workforce. †¢ Practicum/project work will also be an important aspect of the BAB curriculum and students will be encouraged to develop and maintain a portfolio of their coursework and practical experiences which can later be used as evidence of the competencies that they have developed. Our business partners stressed that the BAB upper division courses must be applied and skills-oriented, making use of interactive learning modules that model actual workplace situations. Moreover, the courses must integrate both medium and message into a fast-paced, electronically connected, multimedia learning environment that requires that students take the initiative and work on real projects with limited supervision. Project Description Under an earlier MinneMac grant the principal investigator, Elizabeth Michaels, collaborated with Deborah Henderson and Ann Douglas to create WAC (Writing Across the Curriculum), a courseware shell, for delivering instruction in writing, pharmacy, and business courses. This shell has been used extensively in the English Department since 1990, at Grace High School since 1991, and for the past two years, in five Central and Eastern European countries: Bulgaria, the Czech Republic, Hungary, Poland, and Slovakia. The major shortcomings of WAC are its lack of graphics or visual capabilities and its lack of integration with other software packages. However, if we could integrate the basic principles of text delivery that we have already developed in WAC with the capabilities of the PowerMac 7100—specifically with its AV Video, CD-ROM, and color display, we could develop a powerful multimedia component that will teach students how to manage a business â€Å"from their desktops.† Moreover, by linking to other programs, like Microsoft Projectâ„ ¢, Excelâ„ ¢, or Directorâ„ ¢, we can create a multi-functional learning tool that can be used in labs and for distance learning throughout Minnesota. The multimedia courseware shell we propose to develop will provide an innovative and easily updated method of delivering timely, practical, high quality business courses to working adults. The PowerMac 7100 which we are requesting will be used initially by the multimedia courseware development team: Elizabeth Michaels, Principal Investigator (English); Mr. Pat Lingren, Program Director (CEE); and our project consultant, William Rudel (Carlson School of Management). After the courseware has been developed and alpha tested, faculty designing the target courses will be trained in the use of the courseware shell to develop their own multimedia course modules. The project we propose, therefore, is to design an interactive, multimedia courseware shell, initially for four key courses in the curriculum. The BAB MultiMedia Courseware shell (BAB-MMC) will enable us (1) to develop multimedia case studies and (2) to create course materials which will enable students to integrate various project planning, database, spreadsheet, business graphics, and electronic mail packages with textual information in their classes. The BAB-MMC will serve two purposes: as a training tool for innovative and experimental curriculum development for BAB faculty and as a teaching/learning tool for BAB students. The following is a description of the four courses and how we will use the BAB-MMC in each of them. 1. Planning and Implementing at the Business Unit Level (4 cr.) This course focuses on creating and implementing plans such as operations flowcharts, budgets, schedules, and staffing plans at the business unit level. The BAB-MMC will integrate these flowcharts, budgets, schedules, and staffing plans as well as the presentational software for creating written and oral briefings for presenting, monitoring, and revising these plans. It will also contain strategic planning instruction and forecasting techniques. Moreover, the course will make use of multimedia case studies to give students practice in solving real logistics and planning problems. 2. Project Management in Practice (4 cr.) This course has two objectives: (1) to teach students about project management and the various tools and techniques available to the project lead in such areas as scheduling, coordinating, allocating resources, and monitoring project activities; and (2) to provide students with the opportunity to carry out a field project and put the tools of project management into practice. These projects will be carried out in teams whenever possible. The BAB-MMC will integrate into the course a number of the abovementioned project management tools which will then be used by the students in recording and reporting on their field experiences. The students will also communicate electronically with the instructor and regularly post messages to a class bulletin board as a means of communicating progress and requesting help with problems. 3. Accessing and Using Information Effectively (4 cr.) This course begins with a conceptualization of the role of information in business operations including information systems and data management. The BAB-MMC will serve as a tool for developing short case studies and exercises, which include data-based, text-based, oral, written, and multimedia elements. Students will learn to access external information for the firm through library resources, information search services, CD-ROMs, and periodicals and internal information through desktop database systems, e-mail, or computer conferencing. 4. Practicum (4 cr.) Two of the three forms the practicum could take are (1) to develop a business plan for a new venture or (2) to complete a portfolio of projects which demonstrate transferable skills from previous courses or fieldwork. The BAB-MMC will take the current course materials that we have developed for the business plan and convert them into self-study units which will integrate spreadsheet, cash flow analysis, financial analysis, and graphics packages capable of creating organizational charts and other business graphics to enhance and simplify the preparation of a complete business plan and its pro formas. The third form a practicum could take is a supervised project at the student’s workplace or at another location. For this option, the BAB-MMC will set up a course Website where the students report electronically to the instructor and other students. This will minimize the need for site visits and enable one professor to manage and respond to the individual need s of six to eight students who are enrolled in the practicum in any quarter more efficiently. Evaluation The BAB-MMC will be evaluated by the developers conducting user testing on the shell and sample modules and by instructors developing modules for their courses to determine its ease of use and effectiveness as a classroom tool. Students will be asked to evaluate the BAB-MMC as part of their regular course evaluations at the end of each quarter. We will also have two representatives of the Digital Media Center conduct an independent evaluation of the multimedia courseware shell as a teaching/learning tool. Quantitative and qualitative data will be collected.

The History Of Greek Goddess Athena

The History Of Greek Goddess Athena The history of Greece was filled with gods and goddesses. The greatest god was Zeus, and his daughter Athena showed to be nothing less of him. Athena carried with her the traits of a successor of the great Zeus. She was born right out of his head. Zeus at the time was married to Metis, and she was fated to give birth one of two children- a girl or a boy. If a boy, he would one day prove more powerful than Zeus (Gall and Gall 1). Zeus not wanting that threat, swallowed the pregnant Metis before she could give birth (Gall and Gall 2). Soon Zeus began complaining about headaches and ordered Hephaestus to open up his head. By doing this, Athena sprang from his head, fully grown and dressed in full armor (Gall and Gall 2). Her powers and skills gave her the title of being goddess of war, wisdom, and the practical arts. Even though Ares was the official god of war, she was considered the goddess of war. Unlike Ares, who was known for his madness and furry of war, Athena showed the people a new way of battle, a way being more strategic and intelligent (Gall and Gall 2). Athenas known look depicts her wearing a helmet and carrying the aegis, a round shield or breastplate with Medusas head in the center (Gall and Gall 1) Besides her tactics, Athena also taught the people of Cyrene the art of taming horses, showed Erichthonius how to harness the first war chariots, and was present while Jasons companions were building the first ship Argo (Athena, Greek Goddess of [à ¢Ã¢â€š ¬Ã‚ ¦]). Athena uses her abilities of battle to extend her protection not only to individuals but also to entire cities, and those cities in return, symbolize her using the Palladia or statues of herself which had, it was claimed, fallen from heaven (Athena, Greek Goddess of [à ¢Ã¢â€š ¬Ã‚ ¦]). Athena also participated in many of the Greek wars, taking part in the war against the giants, killing Pallas and hurling her chariot against Enceladus whom she crushed under the island of Sicily (Athena, Greek Goddess of [à ¢Ã¢â€š ¬Ã‚ ¦]). In another battle, she overthrows Ares. Also, in a battle against the titans, the titans threw a dragon at her, but with her mighty shield, flung the dragon into the skies, becoming the constellation Draco (Athena, Greek Goddess of [à ¢Ã¢â€š ¬Ã‚ ¦]). After she got armed, Athena mounted on to the chariot of Diomedes, seized the whip and reins herself, and flung the horses against Ares, whom she stretched on the ground with a blow of her spear (Athena, Greek Goddess of [à ¢Ã¢â€š ¬Ã‚ ¦]). The aggression of this goddess proved her to be manly. She was the virgin goddess in a world that knew no original sin, no sinfulness sex, no Vestal Virgins (Cavendish 165) Another name Athena possessed was Goddess of Wisdom. In one of her well known stories, Athenas wisdom outmatches Poseidons. Both of them wanted to be honored in the city of Athens, so they decided to compete for the peoples votes on who could give the city the best gift (Moulton 80). Poseidon caused a salt water spring to burst forth, while Athena planted an olive tree (Moulton 80). The people decided that Athenas olive tree, providing both oil and fruits, was of more use to them than Poseidons water fountain (George). Athena is not only honored in one city, but in many others, such as at Elis (Cavendish 166). Even though Athena is honored in more than one city, Athens still remains the one that honors her the most. Inside the temple Parthenon, a 37- foot ivory and gold statue of the goddess Athena was built in her honor (Gall and Gall 5). And Pisistratus, ruler of Athens, put Athenas head on the citys coins, built her a new temple, and made the Great Panathenea more splendid (Cavend ish 162). Almost every god or mortal respected Athena for her abilities, and wisdom was one of the most respected. A symbol representing her was the owl, and it symbolizes wisdom throughout the land (Gall and Gall 1). Besides the owl, the snake and olive branch were her symbols (George). The last name Athena went by was the goddess of the practical arts. She was goddess of many of the arts such as agriculture, navigation, and the production of wool. This included spinning weaving, and needle work. Her excellence of arts inspired the construction of the worlds first ship and the Trojan horse. (Gall and Gall 1) Athena was also credited for the creation of the flute, but she denies it, calling the instrument neither powerful nor beautiful enough. (Athena, Greek Goddess [à ¢Ã¢â€š ¬Ã‚ ¦]) Although she was known for many of these arts, the one she excelled in the most was mainly weaving. The most famous story in which Athena shows her weaving and magic skills is Arachnids Challenge. A mortal human lady challenged Athena to a weaving contest, saying that her skills were better than Athenas. At the end, Athena admitted the human ladys skills equaled her own. After hearing this, the lady was so excited, bragging that she had beaten Athena in a weaving contest. Athena, furiou s, used her magic and transformed her into Arachnid, cursed to walk the earth weaving her beautiful threads (Athena, Greek Goddess [à ¢Ã¢â€š ¬Ã‚ ¦]). Athenas greatness in the Greek stories stood out among the other Gods. She ruled over victory, wisdom, arts, and commonly known as the war goddess. Athens for particular worshipped her. Though being honored in many other cities, Athens was considered her city, no one elses. The Athenians built a temple, Parthenon, on the Acropolis to honor the goddess, which became one of the greatest shrines in Greek history (Moulton 80). Athena, lives on forever in their hearts, and what she contributed lasts us all an eternity. Modern Greek cities and small towns names derived from Athena. One of the biggest modern references is the great city of Athens. Work Cited Athena, Greek Goddess of Wisdom Craftsmanship. Goddessgift.com. 07 Dec. 2008 . Cavendish, Richard., ed. Man, Myth Magic an illustrated encyclopedia of the supernatural. New York: Marshall Cavendish corporation, 1970. Gall, Timothy, Susan Gall., ed. Greek Roman Mythology. Cleveland, Ohio: The Lincoln Library Press, 2006. George, Roy. The Goddess Athena. Goddess-Athena.org. 2001. 03 Dec. 2008 . Moulton, Carroll., ed. Ancient Greece and Rome. New York: Charles Scribners Sons, 1998.

The Three Paradigms In Society Essay -- essays papers Sociology

â€Å"The Three Paradigms in Society† Functionalist paradigm, conflict paradigm, and symbolic interaction paradigm are the three major paradigms that function in today’s society. Functionalist, and conflict paradigms are macro-sociological paradigms. Symbolic interaction is a micro-sociological paradigm. Functionalist paradigm focuses on the integration of society, while social conflict focuses on the issue of division among society. Symbolic interaction works on communication and social change as a consequence. The three paradigms are completely different from each other in a social point of view. The macro-sociological paradigms view America as an inequality state. The social conflict paradigm fits today’s society. The functionalist paradigm focuses on the integration of society, and how society how its own groups which has their own functions to help improve the peoples lives. Functionalist paradigm fits in the category of macro-sociology, because it focuses on the patterns that shape an entire society. Functionalists believe that society is maintained through the thought of trust and consensus on moral values for ideal behavior. Working together will result in a stable social environment that will create equality. Conflicts or dysfunctions will be view as a disease in the social system. Social conflict paradigm believes that society is divided into many groups that have their own goals, and that certain parts of the world have the luck of benefiting economic dominan...

Divine Comedy - St.Augustine in Dante’s Inferno :: Divine Comedy Inferno Essays

St.Augustine in the Inferno It is hard to place St. Augustine within just one of the levels of Dante’s hell for his sins were varied and not great. Today many of his sins are commonplace. For example, most people attempt to better their own lives without regard of others. They attempt to increase their standard of living and gain more worldly possessions. They are neither good nor evil but are just trying to make a living and keep up in today’s fend-for-yourself society. Before Augustine’s conversion, this was his goal. He was continually searching for â€Å"honors, money, (and) marriage† (Confessions, 991). This allows Augustine to be placed in the first area of hell, the Vestibule. It is a place for opportunists such as Augustine was before his conversion. It is a place for the â€Å"nearly soulless. . . who were neither for God nor Satan, but only for themselves† (Inferno, 1295). Augustine never intentionally hurt anyone, but his actions were led by his instincts to succee d and gain praise. These actions included kissing up to the Emperor, his study of law and the art of persuasion, and the mocking of newcomers to his profession. Since each of these sins also falls within a different realm of Dante’s hell, they will be discussed later in this paper. The second level of Dante’s hell, Limbo, does not apply to Augustine because he was baptized and was blessed with the knowledge of Jesus Christ’s existence. Therefore, Augustine can not be placed within this first circle of hell. The second circle of hell, a realm for those who fell victim of their carnal desires, is another level at which to place Augustine’s soul for he was consumed by lust in his pre-conversion days. He was encouraged by his family to learn the art of persuasion and making of fine speech when he was only sixteen. He used these skills, which he developed very well, along with his good looks to seduce as many women as possible. It was â€Å"in that sixteenth year of my life in this world, when the madness of lust. . . took complete control of me, and I surrendered to it† (Confessions, 987). He was in love with being in love. Yet, he was unable to discern between love and lust. His carnal desires overpowered his soul for the majority of his life.

The Growing Problem of Teenage Violence in Schools Today Essay

The Growing Problem of Teenage Violence in Schools Today There is a growing problem with teenage violence today in school. The problem is teenagers are getting more and more violent. Many of them resort to violence as a way to deal with anger and stress. Most of teenage violence starts with the so called thugs who think they rule the school. Not just the thugs but anybody in general who thinks they can beat up on people and act all tough and push everyone around. Another source of this violence is the outcasts or nerds that the bullies pick on because they’re different, but the worst type of violence is racism, like Nazis who hate people because of there race, religion, or there sexual preference. This violence may be coming from how they were raised because of there parents, due to there racism, or abuse. Simply put, something needs to be done to eliminate and reduce this violence and return a safe environment in schools. A result of this is increased violence is that many students are frightened while in school. Why should somebody be afraid to walk the halls of school because they are Jewish, or even gay, or both? If there is a student who is extremely violent, it affects the whole school. I’m talking about the people who will pull out a gun on you if you say something about his mother, you know, those so called thugs. Seriously, if someone dies, it affects the whole school. Like Chris Rock Says, â€Å"If you are at a movie theater and someone steps on your foot, let is slide, why spend the next 15 years in prison because somebody smudged your puma† (Chris Rock No Sex in the Champaign Room). In other words, don’t fight over reasons that can be settled in a game of twister. There are many causes of teenage violence, but I think it comes from their friends or family. For instance, if someone’s father, is a Nazi, and his dad was in the Ku Klux Klan, the student is of course going to inherit a hatred for Jews, and queers, like in the movie Porkys, where that one guy lost a fight with a Jew and then got beat up by his Dad, because he lost the fight. Therefore, parents are a big source of teenage violence. The biggest problem I believe is friends. Friends have a greater impact on the lives of teenagers than anybody. People aren’t born violent. Nazi’s for instance, if you grow up with a friend who turns Nazi because of there parents or something, ... ...east 30% of every class should be consisted of non-white people. So the basis of stopping violence of hate is to stop the racism. I was watching MTV, and they were saying a story about how this guy died because of the fact that he was gay. That was kind of sad that someone died for doing nothing to anybody. It’s one thing not to like gay people, its another thing to start a fight with one of them for no reason at all. Those people are called bigots, and there usually drunk, so alcohol is not the answer to this problem, weed is. Overall, parents, siblings, role models, television, bullies, Nazism, and the stress of growing up in today’s society may cause violence. So violence is a big part of school today. Is it really ever going to stop or get better? I believe that no matter what we make better, something else is going to get worse. All this violence may effect the high suicidal teens there are today. I know at least 10 girls who tried to kill themselves or are bulimic. All the guys I know are ok though. In conclusion violence is to big of a problem to stop, so be considered a loser, and a nark and call the cops if someone harasses you, it’s the only way to stop this.

European Airlines Essay

The European Airline industry is facing one of the most challenging environments in its history. A global economic recession coupled with the terrorist attacks of September 11, 2001 have led to a decrease in passenger traffic, reduction in revenue per mile flown, and rising labor costs. In addition to that, disintegration in pricing power and a shift in the buying behavior of business travelers, coupled with fierce competition from low cost airlines, are forcing major airlines to restructure their operations or face the prospect of going out of business. The airline industry has responded to this difficult environment by taking measures to reduce their costs. Airlines announced layoffs of employees immediately in order to reduce the cost incurred by the airlines. To make matters worse for the industry, it has been predicted that only a gradual recovery in passenger traffic during the coming years would be seen. The European airline industry went through a deregulation process in the late 20th century. Prior to deregulation, almost one third of all passengers did not have a choice of selecting an airline. The growth in the number of passengers flying can be attributed to increased competition, innovations in marketing & operations resulting in lower cost of flying, introduction of new services and improvements in service quality. Macro-economic Analysis The industry became a perfect competition marketplace in that no single firm can influence the price of the product, consumers (for the most part) view the products of all firms as perfect substitutes and consumers will purchase a product from the firm with the lowest price. In late 1990s, during the technology bubble and the increased globalization of business, the airline industry grew at a rapid pace. However, the industry has suffered quite a few setbacks after experiencing that boom. Pummeled by poor profits and scarred from terrorist attacks against the West, the airline industry finds itself on an uncertain course. In an industry which is already taken over by tough competitions, airlines have tried to breakeven at least to survive the threat of close down. Many state administered airlines still operate based on the pacts and treaties signed by other states to decide the schedule of flights for the respective airline. The European countries, started to sign open air treaties as part of the deregulation mechanism being introduced. To get around national laws and regulatory problems, airlines have formed global alliances such as Star (United Airlines and Lufthansa), Oneworld (American Airlines, British Airways, etc. ), and SkyTeam (Delta Air Lines, Air France, and AeroMexico). Through such alliances, airlines benefit from each other’s resources, which include additional routes and marketing strategies as well as code-sharing agreements, without incurring the high costs of expansion. The costs involved with increased security precautions and route changes will force the airlines to examine their agreements and consider expansions of the same. For customers, airline alliances offer broader frequent flier programs, streamlined travel, and simplified systems for purchasing tickets, but those benefits may do little to allay passenger concerns regarding safety. Advances in communication technology have also played a role in the airline industry’s recent troubles. Advances such as video conferencing, internet chat and internet telephones allow firms to conduct business without having their executives get on the plane and visit their customer’s site. Further, coast to coast business class period has become history. Businesses are currently focusing on cutting costs and reducing overheads. While the volume of passengers getting on the planes is slowly increasing, there is no significant increase in people traveling business class or first class, which is a key component in any airline’s profit margins. According to a survey business travel volume in the EU fell by nearly 6% in 2008. More and more passengers continue to look at offers from airlines in form of packages and cheap fares. Nearly 80% of business travelers are stating that their company has implemented travel policies that, among other things, place restrictions on the class of air service. The results have left airlines struggling to come up with ways of attracting more premium passengers. Due to the rise in terrorist attacks and exacerbation in an existing trend of decreased demand and reduced industry revenues. The impact of the global war against terrorism was so huge on the industry that the governments had to intervene in order to support the industry to stabilize it. Although passenger volumes have shown signs of improvement, they remain low and as a result, several airlines are facing severe economic difficulties. Reacting to a drop in the number of passengers and rising costs for security, airlines have laid off staff and trimmed services in effort to keep flying.