China is a country in East Asia whose key industries include manufacturing, agriculture, and mining. With a 68.8% contribution to the country’s Gross Domestic Product (GDP), manufacturing is, by far, the biggest of the productions (Sawe, 2017). In the past decade, the country has surpassed the global leaders in this industry. Currently, China accounts for up to 19.8% of global production total (Richter, 2020). The nation’s mining sector boasts a 9.2% share of the world’s total mining market in such minerals as gold, copper, coal, and tin (Sawe, 2017). Lastly, although only about 15% of China’s land is arable, the country’s agriculture industry is strong enough to feed its enormous population (Richter, 2020). All these sectors are mainly capital intensive because they require a large amount of investment in their production. They also have a high percentage of fixed assets, including equipment, plant, and property.
China is at the risk of the middle-income trap (MIT) for a number of reasons. First, the country is experiencing a massive macroeconomic imbalance, especially after leaving the East Asian development model and allowing a rise in inequality (Islam, 2015). The situation has led to social tensions and declining capital efficiency, which may lead to the middle-income trap. Second, China has recently had a few financial crises due to unsound trade liberalization (Holland, 2017). For this reason, the country is expected to experience a growth lower than that of high-income economies or stagnation in the middle-income category, which may cause the MIT. Lastly, Yao (2015) notes that any economy which “plucks the low-hanging fruit of industrialization and urbanization” is likely to be trapped in the middle-income trap (para. 9). In recent times, China has enjoyed a sharp rise in its key industries: mining, agriculture, and manufacturing. Thus, this situation is likely to ensnare this East Asian country in the MIT.
References
Holland, T. (2017). The risk of the middle-income trap just increased for China. South China Morning Post. Web.
Islam, S. N. (2015). Will inequality lead China to the middle income trap? UN Department of Economic and Social Affairs (DESA) Working Papers. Web.
Richter, F. (2020). These are the top 10 manufacturing countries in the world. World Economic Forum. Web.
Sawe, B. E. (2017). The biggest industries in China. WorldAtlas. Web.
Yao, Z. (2015). How can China avoid the middle income trap? China & World Economy, 23(5), 26-42. Web.
Organizational Design Of Johns Hopkins Hospital
Introduction and background
Community development and welfare is a chief component of the society and healthcare and hospitals are fundamentally responsible for the development. (Lieber, 2008) The Johns Hopkins Hospital was opened in late 19th centaury, in 1889, at Baltimore, Maryland, when the medical education community of American was in a complete turmoil. After four years, Johns Hopkins University School of Medicine was also opened which paved a new age by making the requirements of entering into a medical institution very rigid thus, raising the standards of medical schools.
They upgraded the curriculum of the schools by giving more emphasis on scientific education along with practice research and integrated The Johns Hopkins University School of Medicine and Johns Hopkins Health System Corporation or JHHS giving it the dominating name – Johns Hopkins Medicine. The massive medical enterprise is a $4 billion dollar association uniting the doctors, scientists and medical students of the School of Medicine and the facilities and professionals of the JHHS. (Fallon, 2008)
The Johns Hopkins Medicine organization
Johns Hopkins Medicine revolutionized medical education and practices all over America by becoming the first genuine teaching hospital rigorously training the nurses and doctors so that they can rapidly apply their knowledge for better care of the patients. The processes and structure of Johns Hopkins Medicine was unprecedented as it integrated patient care with excellent and innovative medical researches and education. It is defined as one of the prime leaders of medical innovation. The organization holds its vital position even today. Johns Hopkins Medicine was formed when most of the medical schools were considering medicine for granted.
This made them complacent of their position and as a result, they were decreased to a position nothing greater than trade schools. Nevertheless, Johns Hopkins Medicine improved the quality of healthcare by improving and setting a standard par excellence in a number of fields, including clinical area, education and research. Its organizational structure provides both the individual and community with a diverse environment which nurtures our intellectual innovations creating and mobilizing advanced scientific knowledge among all and medical leadership for improving our health. (Pavlova, 2009)
JHHS is an evolutionary non-profit healthcare and hospital organization with more than 16000 employees completely dedicated towards providing quality physical and mental health care to the patients. It is an academic health care organization and consists of the following:
- The Johns Hopkins Medical Management Corporation, which is a health care services and management organization responsible for managing, organizing and developing a local medical delivery service to serve the physicians of the School of Medicine and the various JHHS hospitals
- The Johns Hopkins Medical Services Corporation, which is a non-profit organization and works along with the Uniformed Services Family Health Plan for providing and organizing health care to the military veterans and retirees and also for the family members of those on active duties
- The Johns Hopkins Community Physicians, which is the biggest and major Care Group Practice in Maryland and also includes a non-profit networking system consisting of fifteen health care organizations all over the state
- The Howard County General Hospital, which is also a non-profit and community based medical association that offers the public a wide variety of Acute Care Inpatient services along with Extensive Outpatient services
- The Johns Hopkins Bay view Medical Center, Inc., which is also a non-profit association that manages the community oriented training hospital and offers a wide variety of outpatient and inpatient services along with permanent health care facilities
- The Johns Hopkins Hospital, which is a world known medical and academic facility providing a intensive variety of modern quaternary and tertiary health care and has also been constantly accepted as being among America’s top infirmary. (Marchal, 2008)
After the formation of the Johns Hopkins Medicine, two more operational wings of the medical facility were added to cater to the ever-growing demands of the public. They were:
- The Johns Hopkins HealthCare LLC, which is an association that is responsible for managing and developing relations with physicians, employers, care organizations, hospitals and various other health caregivers
- The Johns Hopkins Home Care Group, Inc., which is also a non-profit organization that takes healthcare services to the homes of the patients by providing them nurses, social workers, therapists, home aides, durable equipments for respiratory or medical problems, pharmaceuticals and pharmacy services.
The demand for more accountability has helped Johns Hopkins Medicine in a positive way as it has expanded its areas of services for reaching out to the patients in an improved manner. The infrastructure at Johns Hopkins Medicine has always adapted itself to meet the safety requirements of the patients and improve its quality of care giving. As improvements in the hospital requires the support of the heads of the organization, they have a Board of Trustees and a Patient Safety Committee that sets goals for initiating better safety of patients, monitoring their progress, themselves educating the care givers and also seeing to it that these goals are maintained.
Even the staff members devote their valuable time to insure that they provide error free health care. In 2002, they also started The Center for facilitating health care system, which centers on the patient thus, developing an efficient and errorless service. They also have a Johns Hopkins University Quality and Safety Research Group whose members are experts in the fields of psychology, medicine and nursing, and are responsible for refining the treatment and assessment tools of the hospital and developing scientifically feasible and valid methods for improving safety of the patients and the quality of caregivers. (Hollingsworth, 2008)
With growing responsibility, Johns Hopkins Medicine has started to involve the patients and their families more by inviting them to raise concerns for their patients by participating actively in their treatment procedures. Another major area where they have shown great progress is in reducing infection and the length of stay of the patients. Through simple standards, like frequent hand washing, has helped them reduce infection among patients by almost 75%. Their cost efficiency and reduced rate of infection has made it possible for he patients to leave for home earlier. In addition, the traditional morning rounds made by the senior doctors have been eliminated by developing temporary goals for each patient thus, increasing the amount of time the physicians can devote to the hospital. (Fallon, 2008)
Conclusion
For the 18th time in a row now, Johns Hopkins Medicine has been ranked as number 1 by the famous U.S. News and World Report. It has been given number 1 rank in otolaryngology, rheumatology and urology and placed at high positions in the others. The hospital also includes renowned centers like the Johns Hopkins Children’s Center, the Sidney Kimmel Comprehensive Cancer Center, the Wilmer Eye Institute and the Brady Urological Institute. They also provide most of the charity care in Baltimore than all of the other hospitals in the area. (Pavlova, 2009)
References
Fallon, L. Fleming, L Fleming Fallon Jr, Eric J. Zgodzinski; 2008; Essentials of Public Health Management; Edition: 2; Jones & Bartlett Publishers.
Hollingsworth, Bruce; 2008; The measurement of efficiency and productivity of health care delivery; Health Economics; 17, 10, 1107-1128; Centre for Health Economics, Faculty of Business and Economics, Monash University, Melbourne, Australia.
Lieber, J.G. & McConnell C.R. (2008). Management Principals for Health Professionals. (5th ed.), Sudbury, MA: Jones and Bartlett.
Marchal, Bruno & Guy Kegels; 2008; Focusing on the software of managing health workers: what can we learn from high commitment management practices?; The International Journal of Health Planning and Management; 23, 4, 299-311; Department of Public Health, Institute of Tropical Medicine-Antwerp, Belgium.
Pavlova, Milena, Apostolos Tsiachristas, Gerhard Vermaeten, Wim Groot; 2009; Potential barriers to the application of multi-factor portfolio analysis in public hospitals: evidence from a pilot study; The International Journal of Health Planning and Management; 24, 1, 43-68; Department of Health Organization, Policy and Economics, Faculty of HMLS, Maastricht University, The Netherlands.
ZZZZ Best Company: Strength And Weaknesses
Analysis of Barry Minkow
Barry Minkow was born on the 17th day of March 1967 in Reseda California state (Akst). During his childhood, he stayed with his Jewish parents in a middle-class suburb in the San Fernando Valley. His parents operated a garage while the mother was working as a telephone operator for a carpet cleaning firm. It is claimed that at the age of twelve Barry Minkow was introduced to carpet cleaning work by his mother (Akst). According to available governmental regulations on the opening of businesses, the carpet cleaning industry does neither require licensing nor apprenticeships, but only a small capital to start (Akst).
These cheap opening restrictions are blamed for the entry of Barry Minkow into the carpet cleaning industry by founding the ZZZZ BEST Company in 1982, at the age of sixteen (Akst). However, based on the fact that this type of business is very common in the US, Barry Minkow was faced with stiff competition, a factor that sufficiently threatened his ability to earn a livelihood. According to him, customer complainants and nagging vendors’ demands for payments from his company proved a major challenge to the development of the company (Akst).
In addition, owing to his poor background, Barry Minkow could not successfully raise enough capital to sustain his newly established business. In addition, he could not get financial assistance from the local banks. As a result of these reasons, Barry Minkow developed a unique way of financing his business. Barry Minkow employed dubious means to expand his business capital. They raged from cheating insurance companies to gain unwarranted compensation, kiting of checks as well as constantly forging credit cards to acquire money (Lieberman). It is believed that Barry Minkow’s age and personal charm are the direct results of his escaping from law enforcement for his early age illegal but creative fund sourcing practices.
This was boosted by his enthusiasm to create a sustainable network of friends and acquaintances. Among these friends is Tom Padgett, an insurance claims adjuster, who helped Minkow secure loans from a local bank in the claim that ZZZZ BEST had obtained insurance restoration contracts (Akst). This success is thought of as the beginning of the extensive fraud activities by Minkow’s ZZZZ best company.
Description of the ZZZZ Best Carpeting Fraud case
The Red Flags that existed
ZZZZ BEST had a number of weaknesses in its internal control. According to the congress subcommittee investigating the fraud scam, the retention of ERNST & WHINNEY as auditors of the ZZZZ BEST Company was the biggest barrier to the early identification of the fraud (Lieberman). From available information, ERNST & WHINNEY did not contact the outgoing auditor of the company Greenspan.
From the agreement between ZZZZ BEST and ERNST & WHINNEY, the auditors were to engage in auditing, preparing a registration statement under the securities act, and write a letter for the underwriters (Wells 16). The auditors fulfilled these entire objectives even without finding out whether the claimed insurance restoration contracts were in existence or not.
Another internal weakness was brought by the high-profile Los Angeles law firm which represented ZZZZ Best as a legal counsel (Akst). According to investigation reports, the law firm defended ZZZZ BEST as legally operating despite the doubtful activities which were eminent in its operations. This is a negation of the provision laid down for legal counsel.
Management’s and/or auditor’s contribution or approval to the fraud
The management of ZZZZ BEST Company was evidently involved in covering up the fraud activities of the company (Baliga 8). These include the fact that it helped its CEO, Barry Minkow, to carry out his illegal acts. (Baliga 14). Based on this reasoning, the management evidently and with substantial knowledge contributed to approving the fraud activities by Barry Minkow.
Another incidence where the ZZZZ management contributed to approving the fraud is evident in the event when Larry Gray, an engagement audit partner for ZZZZ BEST demanded to visit their restoration contract sites in Sacramento. According to available information, there was no site in existence (Wells 16). However, Barry Minkow commissioned his employees to go and find a building either under construction or renovation to cite it as their multimillion-dollar contract. The execution of this plan meant that the management approved the fraud.
The auditors on the other side are to be blamed for their failure to identify, prevent, and report the fraud. When Greenspan was the company’s auditor, it is evident that the fraud was taking place. However, instead of reporting or preventing it, he decided to quit his post, a factor that never solved the problem (Berman 19). Still, he failed to involve the incoming audit company in his audit reports and any irregularities.
Another auditor contribution was by ERNST & WHINNEY. According to the investigation into the matter, ERNST & WHINNEY should have had insight after conducting an audit of the company’s financial statements for the three months ending July 31, 1986, that there were some irregularities (Akst). Even with the objection from the company on visiting their insurance restoration contract sites, the auditor did nothing to force for evidence. This, coupled with failure to report the irregularities when they resigned is indicative of their failure to prevent the ZZZZ BEST fraud.
Recommendations on identification or prevention of the fraud by the auditor
The sole purpose of an auditor is to conduct an authentic audit of the financial statements of an organization. This means that they must gain access to any information cited in the financial statement. Based on this reasoning the auditors of the ZZZZ BEST could have identified or prevented the fraud by qualifying any information that was given in the statements (Lieberman). The growth of the ZZZZ BEST carpeting company was abnormally huge compared to other similar companies in the country. This could have served as a source for suspicion among the auditing officials.
None of the auditors to the ZZZZ BEST gained access to the actual finance dealing of the company (Wells 23). However, the law gives an auditor the power to refuse to authenticate a financial statement upon failing to find substantial proof of the figures. Therefore, the auditor should provoke such legal provisions to enforce effective preparation of financial statements with sufficient levels of accuracy and backed by available support on demand (Lieberman). Auditors must always dictate the provision of tangible evidence of a culture of integrity from a company.
Explanation of GAAP violation
The ZZZZ BEST fraud case violated various GAAP principles. First, the accounting practices in ZZZZ BEST did not follow the principle of regularity (Lieberman). This is because; such practices never at any level followed the underlying rules and laws on accounting standards. Another violated principle is that of prudence. It is a crime for an accountant to give or record financial information that is not certain. However, most of the financial statements given by the ZZZZ BEST were corrupted (Akst).
According to the GAAP, it is mandatory for a company to allow coherence and comparison of its financial statements (Lieberman). This means that it has to give sufficient evidence of the stated amounts in the statement. Nevertheless, this was evidently missing in ZZZZ best financial statements. Therefore, ZZZZ BEST violated the GAAP principle of permanence of methods. Other GAAP violations are the principles of full disclosure and utmost good faith as well as those of sincerity in preparing financial statements (Lieberman).
Excepts from SEC reports/releases
The function of the SEC is to protect the investment of securities investors while still promoting the business interests of listed companies (Berman 27). However, in the case of ZZZZ Best, the SEC failed in protecting the financial interests of securities investors. This is because, how the shares of ZZZZ Best grew in value for a short time remained questionable given the fact that it was never quite commonly known in the public domain (Lieberman). Therefore, SEC reports and releases should be guided by accurate and reliable financial information from the company. This is quite crucial in mitigating fraud dealing in the securities market.
Conclusion
The rise and fall of Barry Minkow signify the struggles of a brilliant youth to earn a sustainable livelihood from a humble background. He struggled with the problem of finances for his business leading to the indulgence in illegal sourcing of funds for the company. However, the fraud activities are to be termed as a failure by auditors, legal counsels, and SEC, whom played a big role in failing to identify or prevent the fraud. This is why the Sarbanes-Oxley should be seen as a solution to the problem of financial scandals by companies.
Works cited
Akst, Daniel. “ZZZZ Best Founder Minkow Indicated on Racketeering and fraud Charges.” ZZZZ Best Founder Minkow Indicated on Racketeering and fraud Charges. 1988. Web.
Baliga, Wayne. “U.S. District Court makes Summary Judgment Ruling.” Journal of Accountancy 179 (1995): 8-46
Berman, Ron. “Ernst & Young Not Liable in zzzz Best Case.” Journal of Accountancy 172 (1991): 4-31.
Lieberman, Paul. “Last Loose End Wrapped Up in ZZZZ Best Fraud Case.” Last Loose End Wrapped Up in ZZZZ Best Fraud Case. 1994. Web.
Wells, Joseph. “Follow Fraud to the Likely Perp.” Journal of Accountancy 191 (2001): 16-33.