Media Industries Development Scenario Sample College Essay

Abstract

A public relations research paper which details the current scenario of electronic media and print media in the Asian countries of Australia, Malaysia and Japan. The newspapers for Malaysia, Australia and Japan are The Star, The Sun Herald and the Asahi respectively. Their online and print presence is analyzed and the growth pattern of their online and print media is correlated. Finally, the advantage of electronic media in form of online media publications is highlighted, to encourage PR professionals to integrate online media avenues in their future marketing and promotional endeavors.

Introduction

The internet has now become one of the most dominant media in the world today. It has touched almost all spheres of entertainment, education and commerce and is most likely to replace traditional media in the near future. Internet advertising and internet publishing is now affecting the market share of traditional media and publication channels. One of the most threatened traditional media channels at this juncture are newspapers. It is speculated that the US newspaper market will dwindle in the next ten years, as an effect to the soaring popularity of online media. The decline in newspapers can range from 5% to as much as 25% in the next few years. Nonetheless, the effect of the internet on newspapers varies from region to region. In countries such as Japan, Germany and the United Kingdom, the threat is comparatively lower than it is in the US. In the Asian and South American countries, the threat level is even lower, partly owing to the fact that internet access is limited in the developing nations of Asia and Latin America.

This report is intended to give a clearer picture of the current scenario of the print and the electronic media industries, especially in Asia. The report also juxtaposes electronic media with traditional media, and attempts to highlight the feasibility of electronic media in today’s age. A text analysis on the print and electronic media of three Asian countries Japan, Malaysia and Australia are conducted in this report, which will enable the PR practitioners to comprehend the benefits of this emerging media and utilize online media for their future marketing and communication activities.

Main Body

The first few pages of the report elaborate on the pros and cons of traditional media in form of newspapers and electronic media in the form of online publications. The report then goes on to discuss three publication companies of Japan, Malaysia and Australia. Their print and online circulation is analyzed and the results are then correlated.

AMCB 2005, states that ‘the role of media, particularly newspapers and magazines in native languages in South Asia is very interesting.’ Print media in the shape of newspapers and magazines have always been the most important communication vehicle for journalists and people belonging to the entertainment industry. Print media designs can be intricate and attractive, and can still create a bigger impact than electronic media such as websites and television can. About two decades ago, when a person needed to get updated with the latest news and happenings in his region or around the world, newspapers were the only option. But now, there is another kind of media which is providing a more dynamic and interactive approach to reading the news: the internet. Convergence is the new word in media today. Cunningham and Turner 2000, mention the importance of functional convergence in today’s world.

The internet is one of the fastest growing communication mediums in the world today. It has a number of advantages over the traditional print media and that’s why more and more people nowadays are using it. Comparing a newspaper (print media) with an e-newspaper (electronic media), we will find that e-newspapers have a number of advantages. First of all, the internet has unlimited space, so the amount of content it can hold is comparatively larger than what a newspaper can hold. Secondly, the publication of news is much faster in one media than in traditional media. Thirdly, the reading experience can be greatly enhanced in electronic media with the help of colors, video and sound (Berger, 1998). Next, electronic media is more interactive and facilitates faster communication with other readers as well as the editors. In the long run, electronic media is cheaper than traditional media too. Last but not the least; an e-newspaper is accessible globally because it’s on the internet, whereas a traditional newspaper has limited access.

According to Breslin 2007, e- Newspapers have their disadvantages too, but they are just a few. The first disadvantage of e-newspapers is that they might get lost or the news article might be deleted. Hence, it cannot be archived as well as traditional newspapers can. Secondly, several journalists and editors have a mental block towards e-newspapers and magazines. They feel news should be communicated in form of newspapers, as it’s traditional. Probably that is the reason why number of successful newspapers do not have an online presence on the net (ANC, 2006).

Printed materials have their share of advantages also. First of all, printed material such as a newspaper uses a technology which is time tested and is stable. Printed materials are tangible too and hence are easy to store and archive. Traditional newspapers are still more portable than electronic media and can easily be carried around. Reading from the internet requires scrolling the pages. So it’s a scrolling experience which is two dimensional as opposed to a print material which is three dimensional and the graphics and layout are rendered in a way which allows the eye to shift from overview of the news to details of the news in a second. Another important advantage of printed material is their inherent security features. Although newspapers don’t require any security because there isn’t any confidential information in it, other printed materials such as bank documents do. This gives printed material an edge over electronic media, which is mired by security issues. According to Gross 2009, there is a fair bit of history associated with the print media like the newspaper. The history of newspapers goes back a few centuries, making traditional newspapers a preferred choice among people who are habituated with newspapers or the people who are not internet savvy. These are some of the reasons which maintain the popularity of newspapers even in this era, where the internet has permeated almost every aspect of our lives.

Surveys conducted around the world are showing a change of global preferences, regarding print and electronic media. Surprisingly, the sale of English-language newspapers has dropped almost 11% since 1990 in the United States. In Australia, the scenario is even worse. Surveys have shown that the popularity of traditional media such as television and newspapers has dropped 34% from 1998. However, the last decade has witnessed a sharp rise in the circulation of traditional media in ethnic languages. The Spanish newspaper market has grown dramatically in the last ten years. In the United States, more than five hundred Asian media outlets have been opened and the number keeps increasing every month (Medoff, 2004).

In many ways, the rise of internet news affected the sale of newspapers and magazines. In the US, more than 55% of internet users aged between 18 and 34 keep themselves abreast with the latest happenings through online news, according to UCLA. Furthermore, an IABC survey has revealed that print materials are increasingly being replaced by websites, emails, electronic newsletters and DVD’s.

The Star is Malaysia’s leading English language daily. The daily was first published in Penang in 1971. In only five years, the star was successful in beating the 140 year old new straits times as the Malaysia’s best selling newspaper. The star has been named by the Audit Bureau of circulations, Malaysia as the leading English language newspaper in Malaysia. The daily circulation estimated by the Audit Bureau is somewhere between 290000, and 300,000. Moreover, the Asahi News Network has made The Star one of the members (Turow, 2008). The Malaysian Chinese Association, which happens to be the second largest party in the present alliance called Barisan Nasional, are the owners of the star Malaysia. The two other competitors of the star are the new straits, times and the Sun, which is basically a tabloid in the English language. The daughter of the former Malaysian Prime Minister Mahathir Mohammed, Marina Mahathir writes a biweekly column for the star.

The star and the Sunday star are published in four editions and the printing plants of Star Media Hub and Star Northern Hub handle the printing job of all four editions. The paper contains three segments: the Star Biz, Star Two and the main paper. The main paper consists of international and local news stories while the Star Two compromises of articles in entertainment, recreation and lifestyle. Star Biz on the other hand covers the latest business headlines and articles. Many people have expressed their disappointment with the Star’s new page layout. They feel the number of advertisements in the paper have increased, and as a counterbalance to the excessive advertisements, unnecessary articles are being added in the paper, making it bulkier but not adding any true value.

The newspaper offers weekly sections as well. The Star Maritime (Monday) covers shipping and maritime trade news, Star in Tech (Tuesday and Thursday) focuses on information technology, Youth 2(Thursday) is meant for the young generation and star Weekend (Weekends) contains travel and leisure write-ups. Additionally, the Star Biz Week (Saturday) is also offered, which is a weekly business magazine. Star Metro and the Star Mag are two other newspaper supplements which are offered to the readers of The Star also. The Sunday Star is the special weekend edition of the Star which comes with added with an Education and Career section and an extensive ‘Your Lifestyle Companion’ section.

Readership/Circulation of the Star and Sunday Star
Readership/Circulation of the Star and Sunday Star. Source: Audit Bureau of Circulations, Malaysia – 1st Jul 2007 – 30th Jun 2008

The company has moved its headquarters to Petaling Jaya from Kuala Lumpur to accommodate the growing number of employees. In 1995, the Star publication hit the headlines for launching their World Wide Web Star newspaper edition, since the Star was the first Malaysian publishing house to do so and the third newspaper company in Asia to have a web edition of their newspaper.Source: Audit Bureau of Circulations, Malaysia – 1st Jul 2007 – 30th Jun 2008

The Herald Sun is Australia’s top selling daily which was first published in 1990, and the Herald and Weekly Times (HWT) publishes three of its popular publications-the Herald Times, The Sunday Herald and the Weekly Times. All of these titles are printed at the Port Melbourne print site. The HWT also prints the Tasmania and Victoria editions of The Australian and Sunday Telegraph. The Herald Sun is considered to be one of the world’s most successful dailies, in market penetration and circulation, selling more than 500,000 copies each day. The readership of the Herald Sun crosses 1.5 million people.

The publishers of the Herald times are The Herald and Weekly Times Ltd, which is a subsidiary company of media mogul Rupert Murdoch’s News Limited. The Herald Sun is predominantly circulated in Melbourne and other parts of the state Victoria, Australia. Several of the news articles in the Herald Sun are exclusive while some of the articles are shared with other newspapers circulated in Australia belonging to News Limited. The Herald Sun is by far the highest selling newspaper in all of Australia, ahead of other dailies such as The Australian, The Australian Financial Review, The Daily Telegraph and The Age.

The Herald and Weekly Times Company has made a huge investment recently, spending more than $300 million for its Port Melbourne print site and its Southgate precinct headquarters in Melbourne. The HWT supports a number of events and causes throughout Australia. The Herald Sun also boasts of an updated website, which is based on the Web 2.0 technology. The website incorporates a social media content management system (CMS) by the name of Matchbin, which helps Herald Sun to be an online community newspaper.

According to Silverman 2004, some critics of the Herald Sun point out that the newspaper has a bias towards the right-wing. Some even believe the newspaper reflects the tastes of Rupert Murdoch, the chief executive officer of the parent company of Herald Sun. The new Herald and Weekly Times website allows people to contribute content, making the website extremely reader friendly and interactive. The objective of Herald Sun’s web presence was to make the e-newspaper develop an online community, which it has succeeded in creating in a few years. The Herald Sun website is growing in popularity and offers HWT a major portion of its advertising revenues. The Herald Sun website is also growing at a remarkable pace. From 2006 to 2007, the ‘heraldsun.com.au’ website has grown 44.8%. Interestingly, the data revealed by Alexa.com shows that the Herald Sun’s maximum percentage of web traffic comes from outside Australia. Australia only contributes to about 10% of the web traffic.

One of Japan’s leading newspaper companies for several years has been the Asahi Shimbun Company, which truly has a long history. The first edition of the Asahi was published in 1879, and since then, the newspaper company has grown from strength to strength. The newspaper has a large readership and is one of the most trusted and informative newspapers in the country. The Asahi Shimbun is among the top five circulated newspapers in Japan. It’s second only to Yomiuri Shimbun in terms of readership and circulation. Asahi Shimbun has a daily circulation of around 8 million and is associated with the television network TV Asahi. Mainichi Shimbun is the third ranked newspaper, while Nikkei Shimbun and Sankei Shimbun are ranked fourth and fifth respectively. The Asahi Shimbun newspaper is also affiliated to the New York Times owned International Herald Tribune. What’s more, Asahi Shimbun also shares a partnership with the Communist Party of China’s official newspaper, People’s Daily. A survey conducted in 1994 named Asahi Shimbun as one of the world’s eight best newspapers. The others on the list were El Espectador of Colombia, The New York Times of the United States, Izvestia of Russia, Al Ahram of Egypt, and Times of India, People’s Daily of China and Financial Times of the United Kingdom.

The Asahi Shimbun publishes the morning papers and the evening papers, for which he readership is 8 million and 3.4 million copies respectively. The company has five domestic publishing offices in Osaka, Nagoya, Hokkaido, Seibu and Tokyo. There are overseas publishing offices in London, New York, Los Angeles, Heerlen, Hong Kong and Singapore. The headlines which were printed in the Asahi Times from the year 1945 to 1999, has been indexed in a CD-ROM database which a number of libraries and universities use.

Advertising Expenditures in Japan
Source: Dentsu, 2006 Advertising Expenditures in Japan

The Asahi Shimbun allows readers to access international as well as local Japanese news in one newspaper. The readers of Asahi Shimbun are 45% non-Japanese and 55% Japanese. Most importantly, business decision makers and top level corporate are one of its primary readers, making the newspaper more valuable. What’s more, the Asahi newspaper reaches a major segment of affluent Japanese people and also the Nikkei subscribers. Almost 20% of Nikkei subscribers read Asahi Times. The Asahi also publishes a few weekly magazines. The Shukan Asahi and the AERA are two trendsetters in the Japanese magazine industry.

The Asahi.com website was launched by the company in 1995, and now the website has almost 10 million visitors each month. The website is based on the latest web technology and incorporates rich media and graphical content, helping to make the online version of the paper Japan’s number one online news website. The Asahi website also succeeds in capturing all the target segments by strategically structuring its website in a number of segments. The segments or web pages range from education, lifestyle, business, sports to technology, cars, classifieds and travel. This wide range of topics ensures that the Asahi website gets a number of advertisements from a variety of companies, thereby assisting the website to earn revenues for the Asahi Shimbun group.

In Australia, the newspapers and their online counterparts enjoy a high readership. However, it’s been noted that the overlap in the readership of traditional newspapers and it’s online version is 20%. Hence, the readers of the Morning Herald and the ‘smg.com.au’ are 20% common. The Australian newspaper Herald Sun had a circulation of 600,000 but in the 1990’s the circulation had plummeted to 200,000. This was primarily caused by the impact of satellite television in the 1990’s. Eventually, the Herald and the weekly Times merged to form the Herald Times, as a direct consequence of the cable television. This statistic shows how vulnerable traditional media like newspapers have always been to the influence of emerging media such as television and online media.

Daily Page Views of Australian Online Newspapers
Daily Page Views of Australian Online Newspapers. Source: Alexa.com

The Australian newspaper market though will not be as affected by the internet phenomena, and experts predict that the Australian advertising market will be worth $12 billion in 2013, in which the major medium for advertising being the newspaper medium ($ 3.9 billion). The online advertising medium on the other hand will grow exponentially and will contribute almost $3 billion to the Australian advertising industry. Currently, the online medium generates about $1.9 billion for the advertising industry, so the growth rate of the online media clearly indicates that online media will dominate the Australian advertising and Media industry in a decade’s time.

In Japan, the explosion of the internet and the internet culture has been more pronounced. It is partly because of the Japanese government’s new communication plans. Davie, 2005, states that, the new respectability of the press was in part a logical accompaniment to party rule. In the 1990’s, the government helped in the propagation and expansion of communication networks such as fiber optics, mobile networks, satellites and wireless throughout Japan. This established the internet infrastructure and assisted in the rapid growth of the internet. By 2000, Japan was one of the world’s leading internet savvy countries. This led to a major change in the media industry in Japan.

Traditional media companies now know that diversifying into the electronic medium is imperative for them to survive. The online media has already impacted the newspaper and magazine publications in Japan. In the last couple of years, around 170 magazines and publications have been suspended in Japan, which is a record (Ryan, 2004). However, a recent research conducted by the World Association of Newspapers (WAN) gives a glimmer of hope to the Japanese print media industry. Japan has featured among the top five countries with a growing newspaper market. China topped the list with 93.5 million copies. India was second with 78.8 million followed by Japan in the third position with 70.4 million copies.

The distribution network of newspapers and magazines in Japan has also been affected by the rapid growth of the online media. Although more than 300 bookstores were opened in the last two years, about 100 bookstores were closed down. These disappointing statistics for the print media in Japan are largely due to the popularity of online books and online publication sites in Japan. The number of online bookstores from 2006 to 2008 has risen 30%, and a sale of 40 billion yen has been registered. This testifies online media’s reach and its increasing acceptability among the Japanese people.

In Malaysia, the circulation of newspapers is rising from 1998. It seems that Malaysia hasn’t yet been affected greatly by the internet revolution as much as other countries such as the US and UK have. A research study by Nielsen Media index conducted from 1996 to 2008 has shown that the newspaper circulation has remained steady in Malaysia despite the rising popularity of the internet. Another report published by the Omnicom Media Group’s PHD agency has shown that internet browsing times for Malaysian has risen from three hours in 2006 to four and a half hours in 2008. This survey proves that the electronic media is growing faster than traditional media such as newspapers in Malaysia. However PHD thinks there’s a positive for the print media in Malaysia. Since Malaysians are apparently good in multi-tasking, the internet will not completely overshadow the print media in the next few years.

The reach of newspapers in Malaysia is also about 50% for all the age groups. The PHD has also found that people over the age of 30 read newspapers for an hour daily whereas teenagers spend around half an hour each day on the newspaper. Since about 40% of young Malaysian spend time on the internet as compared to 7% for Malaysians over 30, the reason why the young adults spend so less time reading the newspaper is quite evident. Another surprising data collected in 2008 is that Malaysians aged over 50 spend as much time on the internet as teenagers do.

The data collected in Malaysia points at the growing popularity of the internet among the young age groups. Nielsen Media Index has suggested that traditional media such as newspapers need to use the internet as another channel of promoting news. Online forms, social networking and feedback are important features that traditional media companies in Malaysia need to integrate in their marketing strategy.

According to Priest 2009, the print and electronic media data for all the three Asian countries (Malaysia, Japan and Australia) suggest that traditional media isn’t in the same position as it was in the past. The mass media in all the three countries is gradually moving to multi-stream from mainstream. Online media is the new and emerging media which is cutting across all demographic and socio-economic barriers in Asian countries. The UCLA has found that about 60% of internet users who are aged between 18 and 34 read the news online.

Conclusion

There are some traditionalists who firmly believe that the future of the newspapers and magazine are not as gloomy as predicted by market research agencies. Just as the advent of the television in mid 20th century couldn’t bring down the market share of newspapers, so won’t the internet. Undoubtedly, newspapers have their unique attributes such as immediacy, credence, consistency, portability and creativity which hardly any other media can match. The unique features of newspapers could help them survive in the next decade or so. Nevertheless, PR professionals should recognize electronic media as an important part of their promotional campaign, because electronic media will eventually overshadow the traditional media avenues (Kipphan, 2004).

Reference list

Australian News Commentary. (2006).Journalist code of ethics- oxymoron? Web.

Asian Media and Communication Bulletin. (2005).AMIC annual conference in Beijing draws distinguished participation. Web.

Berger, A.A. (1998). Media research techniques. California: Sage Publications.

Breslin, J.R. (2007). Making media: Foundations of sound and image production. Boston: Focal Press.

Cunningham. S., & Turner, G.(2000). The media and communications in Australia. Australia: Griffin Press.

Davie, W.R. (2005). Principles of electronic media. Boston: Allyn & Bacon.

Gross, L.S.(2009). Electronic media: An introduction. New York: McGraw-Hill.

Kipphan, H.(2004) Handbook of print media. New York: Spinger.

Medoff, N. (2004). Electronic media: then, now, and later. Boston: Allyn & Bacon.

Priest, S.R. (2009). Doing media research: An introduction. California: Sage Publications.

Ryan, M. (2004). Writing for print and digital media. New York: McGraw-Hill.

Silverman, D. (2004). Doing qualitative research. California: Sage Publications.

Turow, J. (2008). Media today: An introduction to mass communication. New York: Taylor & Francis.

Case Write Up, Enron And WorldCom

Introduction

Recent years, companies pay more and more attention to business ethics and problems caused by violation of ethical and moral rules. The law is a guarantor of social stability. The law provides for collective safety and security. The ethics is a crucial element of every profession because it reflects social mores. And often the law demonstrates imperfections and uncertainties. The ethics, above all, embodies social principles, ideals that must not be violated easily or at all. In the realm of white-collar crime, in which personal enrichment is surely a major factor, there are also motivational complications. Accounting scandals in the USA unveiled a problem of business ethics in accounting profession and possible violations affected all countries around the world. After Enron and WorldCom accounting scandals, many UK firms established strict codes of ethics for accountants in order to avoid violation of standards and unethical behavior. A major dimension of white-collar crime, one especially pertinent to working accountants who daily face the temptations of altering information in the pursuit of gain, is the factor of divided loyalties.

Enron

The case of Enron Corporation was one of the most vivid example of accounting errors and unethical behavior followed by the company’s management. This case had a great impact on other companies and auditing and reporting standards and procedures (Healy and Palepu 2009). After the collapse of the energy company Enron in January 2002, financial statements seem a lot less hard and objective than they once did. Enron caused many problems occurred among equity shareholders, as a company with an equity market capitalization of over $70 billion became worthless in just over a year (Burton 2002). The Enron fiasco focused attention on US accounting practices, and highlighted the relationship between companies and the accounting firms who as auditors were meant to confirm the accuracy of financial statements. For many years corporate governance experts had worried over potential conflicts of interest when accounting firms acted as both consultants and auditors to the same firm, but these conflicts burst out into the open after Enron. The auditors to Enron were Arthur Andersen, one of the top five firms who dominate the global accounting market (SEC Says Corporate 2002).

WorldCom

The case of WorldCom and immoral practices of its leader Bernard Ebbers (who used he common stock of the company for personal gain) shows that violation of accounting principles and issues can lead to bankruptcy and legal responsibility of the company’s executive team. WorldCom’s collapse was also a calamity to many of its employees, who not only lost their jobs, but saw the value of their 401k pension plans invested in WorldCom stock disappear. Inquiries into WorldCom’s collapse indicated that it resulted from major failures of corporate governance. Certain senior WorldCom executives appeared to have made significant profits from secret deals made with the company. The board of directors appeared to have failed to control such behavior, just as it rubber-stamped the production of accounts that failed to disclose material factors such as significant off-balance sheet debt. The Enron board also seemed to ignore reports from middle ranking executives exposing dubious practices. In February 2002 US Treasury Secretary Paul O’Neil announced changes in the law making it easier to punish corporate executives guilty of misleading shareholders (Kaplan and Kiron 2007).

Capital Market Assess and Participation

The fallout from Enron’s collapse left Andersen facing legal challenges including a criminal charge from the US Department of Justice. About the same time, the SEC announced that it might seize the profits of company executives who made profits by selling company stock while earnings were inflated. It noted that Enron executives had sold $1 billion in company shares before the share price collapsed on news that charges would reduce earnings by $585 million, and revelations of off-balance-sheet debt The SEC also announced that it would assess the performance of the audit committee of any company whose financial reporting was investigated by the SEC (‘Socially Responsible Firm Publishes 2002). In March 2002 Domini Social Investments (DSI) issued new proxy voting guidelines that had been revised in the light of Enron (‘Socially Responsible Firm Publishes 2002).

The damage to WorldCom’s reputation also led to a number of its major clients replacing it with alternative auditors. The new guidelines stated that DSI would vote against the appointment of auditors who were not independent, while it would also vote against companies whose boards did not have a majority of non-executive directors. Applying modern theories of ethics and social corporate responsibility, it is evident that WorldCom violated ethics and moral standards. In terms of utilitarian approach, WorldCom behaved wrong as it ruined life of many people and deprived them stable work. In terms of Christian ethics, telling the truth is the root of all contracts. It is also fundamental to criminal law; that is why we swear (sometimes on the Bible) to be honest in a criminal trial. The law reflects our social mores: school desegregation is an illustration. And often the law demonstrates our imperfections and uncertainties (Kaplan and Kiron 2007). That is why affirmative action is such a controversial topic. Our society, and thus our law, is not yet settled on this difficult problem. The law, above all, embodies social principles, ideals that must not be violated easily or at all. Just as biblical authority tell us, “thou shalt not steal,” so does secular law prohibit burglary and theft (Healy and Palepu 2009).

Market Dynamics and Regulatory Oversight

For cases of both corporations show that the law is both a set of structures for social stability and a set of moral guideposts. When the law is broken, in the cases that reach a court, the moral drama of a society trying to right a wrong. Loyalty to the truth embodied in the very notion of objectivity-is fundamental to accounting (Duska and Duska 2002). Accounting firms have placed emphasis upon marketing as a function of the firm. While auditing may be the “bread and butter” of an accounting organization, increasingly we find that consulting is where the profits lie in the accounting profession. In fact, concern has frequently been expressed that competitive pressure, particularly price competition, is reducing the audit to a mere commodity. With pride in a quality audit and the attending external and internal rewards in danger of extinction, the audit could be reduced to nothing more than a means to entry for lucrative management advisory service work. Following deontology, Enron also violated ethical principles as its failure led to collapse of the corporation. The principle is veracity (truth telling); the assumption about consequences is that airing a grievance will lead to conflict resolution and that all parties, including society per se, will be better off if legal and moral norms are adhered to (Duska and Duska 2002).

Leadership and Organizational Culture

The case of WorldCom shows that the company was rules by weak and inexperienced leaders unable to predict and foreshadow changes and coming failure. Inadequate organizational structure and lack of ethical principles, prevented the company from ethics audit and control. Though independence and objectivity are basic to accounting practice, the sources of data and thus the bases for financial interpretation–most often reside with the client. If audits were designed to detect all fraud they would become prohibitively expensive (Kaplan and Kiron 2007). When routine conflicts of moral duties and ethical behavior arise–when the role of accounting professionals, for example, impinges upon one’s personal values the struggle for a solution to a dilemma is no less difficult. Conflicts of moral duty come in various shapes, sizes, and intensities. Managers cannot anticipate all such problems. But what such conflicts have in common is both situational and philosophical (Healy and Palepu 2009).

After the failure of the WorldCom in mi 2000 and the energy giant Enron in January 2002, financial statements seem a lot less hard and objective than they once did. Enron caused widespread distress among equity shareholders, as a company with an equity market capitalization of over $70 billion became worthless in just over a year (Burton 2002). The failure of Enron is a result of ineffective leadership skills and lack of managerial control overt he company’s resources and activities. Lack of shared vision, strong ethical and cultural values of managerial staff are the main causes of collapse and legal responsibilities (Kaplan and Kiron 2007). Enron and WorldCom’s collapse was also a disaster to many of its employees, who not only lost their jobs, but saw the value of their 401k pension plans invested in Enron stock disappear. Inquiries into Enron’s failure indicated that it resulted from major failures of corporate governance. Lack of communication between employees and managers lead to undesirable consequences for both the company and its staff. In March 2002 Domini Social Investments (DSI) issued alternative voting guidelines that had been revised in the light of Enron (‘Socially Responsible Firm Publishes 2002).

Conclusion

These facts prove that Enron and WorldCom did not follow the main principles of organizational behavior based on trust, fair treatment of all employees and ethics. Indeed, the Enron disaster focused attention on US accounting practices, and highlighted the relationship between companies and the accounting organizations who as auditors were meant to confirm the accuracy of financial reporting. Enron and WorldCom disregarded planning and control functions of the organization. The fallout from Enron’s failure left Andersen facing legal challenges including a criminal charge from the US Department of Justice. About the same time, the SEC announced that it might hold the profits of company leaders who made profits by selling company stock while earnings were inflated. It noted that Enron leaders and managers had sold $1 billion in company shares before the share price collapsed on news that charges would decrease earnings by $585 million, and revelations of off-balance-sheet debt. The main problem of Enron and WorldCom’s was lack of moral, ethical and social responsibility values of the company’s executive team. The failure of Enron and WorldCom led to the damage to their reputation. The new ethical guidelines stated that DSI would vote against the engagement of auditors who were not clearly independent, while it would also vote against that organization whose boards did not have a majority of non-executive directors. The Failure of Enron and WorldCom’s vividly portrays that a company should follow theories of organizational behavior and strict ethical norms established by the industry in order to meet interests of shareholders and avoid financial collapse and legal claims.

References

Duska, R. F., Duska, B. S. (2002). Accounting Ethics. Wiley-Blackwell.

Burton Malkiel, ‘(2002). The Lessons o Enron, Wall Street Journal.

Healy, P., Palepu, K. (2009). “The Fall of Enron”. Harvard Business Review, pp. 1-17.

Kaplan, R., Kiron, D. (2007). Accounting Fraud at WorldCom. Harvard Business Review, pp. 1-17.

SEC Says Corporate Audit Panels under Scrutiny in Agency Probes, (2002). Bloomberg newswire.

‘Socially Responsible Firm Publishes 7th Annual Proxy Voting Guidelines Tightening Auditor Independence Requirements in Wake of Enron Collapse’, (2002). Bloomberg newswire.

Mike O’ Callaghan Federal Hospital And Loma Linda Medical Centre: Marketing Strategies

Introduction

Marketing is one of the most important elements for the success of a firm. There are various strategies that enable a firm to conduct effective marketing. Some of these strategies relate to positioning and differentiation. In marketing effective positioning is one of the strategies that firms use to attain a competitive advantage. Positioning refers to the process through which a firm creates a superior image of its products and services to a particular market segment. The management of various firms develops their positioning strategies in a unique way from that of the competitors so as to develop a competitive edge. In addition, for a firm to effectively position itself, it must incorporate the concept of differentiation. Differentiation refers to the process through which a firm produces its products or services in a unique way.

In the 21st century, various firms in different economic sector are increasingly incorporating marketing concepts in their operation. Examples of firms that are changing their marketing strategy include hospitals. More hospitals are formulating strategies geared towards developing a superior brand image for their services as a strategy to improve their visibility. Marketing of healthcare is different from marketing of products. This is due to the intangible characteristic of the healthcare services (‘Positioning and differentiation of services’, 2009, ¶ 3).

Examples of firms within the healthcare industry in the US include Mike O’Callaghan Federal Hospital and Loma Linda Medical Centre. Both firms operate under the US Department of Veteran Affairs. The discussion of this paper entails an analysis of the positioning and differentiation strategies incorporated by these firms in their operation.

Profile of Mike O’ Callaghan Federal Hospital

Mike O’Callaghan Federal Hospital (MOFH) is a firm in the medical field. The firm is located at Las Vegas, Nevada and was formed through a joint venture. In 1993, the firm was transformed into a Veteran Affair Medical Center (‘Mike O’Callaghan Federal Hospital’, 2009, ¶ 2).

Positioning strategy

Offering of secondary care

Mike O’Callaghan Federal Hospital has effectively positioned itself as a healthcare facility that deals with the provision of secondary care. Secondary care refers to the special healthcare that is given by specialist such as physicians to patients who have been recommended such kind of a care by providers of primary care. Primary care forms the initial point of contact between the patients and the healthcare consultant. The hospital has developed a superior image in the mind of its clients as a firm that delivers effective secondary care services. Through provision of secondary care, Mike O’Callaghan Federal Hospital has been able to effectively minimize veteran beneficiaries who are referred to other Veteran Affair Medical Centers (VAMCs) to obtain inpatient care services (‘Mike O’Callaghan Federal Hospital’, 2009, ¶ 2).

Differentiation strategy

The firm has differentiated itself through delivery of services that are associated with psychiatric and intensive care, surgical and medical services.

Strategic location

The hospital is strategically located in a community that is fast growing in United State. In addition, the area has an approximate population of 200,000 veterans. This means that the hospital is able to effectively deliver healthcare services to a large number of clients. This has been achieved by investing in a number of inpatient and outpatient facilities.

Effective affiliation

In delivering effective service to its clients, Mike O’Callaghan Federal Hospital has affiliated itself with a number of organizations. Some of these organizations include, University of Nevada School of Medicine, Graduate School of Social Work, College of Health Sciences, South California College of Optometry, Department of Heal Care Administration and University of Nevada School of Nursing (‘Mike O’Callaghan Federal Hospital’, 2009, ¶4).

Special programs

Mike O’Callaghan Federal Hospital offers a number of special programs such as neurology, cardiology, radiology, urology, oncology and gynecology amongst others. The firm has also differentiated itself by offering TriCare Program. This is a healthcare program that under the Department of Defense that is specially designed for the retired and active-duty members of the various uniformed services, survivors and their families (Medical services, 2009, ¶ 7).

Loma Linda Medical Centre

Positioning strategy

The hospital has positioned itself by adopting a mission aimed at honoring all the American veterans through provision of exceptional and high quality healthcare so as to improve on the wellbeing and health of the veterans. This has resulted into the firm developing a positive image amongst the veterans.

Affiliation with Desert Pacific Healthcare Network

The management of VA Loma Linda has appreciated the importance of people in marketing its services. As a result, A Loma Linda Medical Centre has effectively differentiated itself by affiliating itself with well established medical schools that are located in Southern California through the Desert Pacific Healthcare Network (DPHN). This enables the firm to differentiate itself through delivery of quality services. DPHN consists of a network of five major healthcare systems through which the staff is trained. During the one year program, the employees are rotated within the five departments of DPHN. This enables them to acquire more knowledge on how to deliver services their clients. This is due to the fact that they are able to make use of the services of professional medical consultants (Billy, 2009, ¶ 4).

The hospital is also has an affiliation with Loma Linda University through which it conducts dental education and postgraduate medical programs. In addition, the hospital also has an affiliation with other 51 educational institutions. This enables the firm to effectively train its health specialists (VA Loma Linda Healthcare System, 2009, ¶ 4).

Diversity of services and total healthcare

In addition, Loma Linda Medical Centre has differentiated itself effectively by delivering diverse healthcare to the veterans through incorporation of the multidisciplinary concept. These healthcares are categorized into specialty care, mental healthcare, outpatient and inpatient health care, long term or home care and acute hospital care. The outpatient and prevention healthcare consists of sub-specialty and specialty healthcare services. This has enabled the hospital to position itself as a total healthcare system (VA Medical Center Loma Linda, 2009, ¶ 1).

Loma Linda Medical Centre has also differentiated itself by offering a number of primary care services. It has a skilled team which ensures that primary care is effectively delivered. The primary care is mainly focused at preventing illnesses. On the other hand, the specialized services such as surgery, medicine, neurology, and behavioral medicine are focused at preventing hospitalization

By adopting the total healthcare system in its operation, Loma Linda Medical Centre is able to deliver healthcare services according to the demands of the customers more effectively. This is because the firm can deliver both curative and preventive healthcare to its clients. This enables the firm to position itself more effectively in the market.

Special programs

In addition, the firm has also differentiated itself by offering several special programs. Some of the special healthcare programs offered relate to individuals who have got co-occurring abuse and mental disorders. Other healthcare services offered include trauma recovery, mammography, oncology, sleep disorder, hemodialysis and vocational rehabilitation (Buddy, 2009, ¶ 3).

Certification

Loma Linda has also been effectively positioned through certification. Some of the firms that have accredited the hospital include the Commission on Accreditation of Rehabilitation Facilities (CARF) and the Joint Commission on Accreditation on Health Care Organization (JCAHCO). This has resulted into a positive public image

Similarities

Both Loma Linda Medical Centre and Mike O’Callaghan Federal Hospital have targeted delivering their services to a common audience which includes the veterans and their beneficiaries. This has enabled the firm to effectively differentiate themselves from other firms in the healthcare industry.

Both firms offer a number of services which include ambulance, emergency, diagnostic, pharmacy and casualty services. This has enabled the firm to position themselves effectively in their target market.

In addition, these firms have incorporated the concept of affiliation with major medical schools to ensure effectives service delivery. Both firms have differentiated themselves by incorporating the current technology in delivering services to their clients.

Differences

Mike O’Callaghan Federal Hospital serves approximately 200,000 clients which is relatively higher compared to that of Loma Linda Medical Centre which serves approximately 59,000 clients and their beneficiaries. Unlike, Mike O’Callaghan Federal Hospital which specializes in secondary care, Loma Linda Medical Center has differentiated itself by providing primary care to the veterans.

Conclusion

Positioning and differentiation is an important element for a firm in the process of marketing its products or services. Positioning and differentiation of services is relatively different from that of products due to the intangible nature of the services. Currently, hospitals are incorporating the concept of positioning and differentiation in delivering healthcare services. Examples of firms which have incorporated the concept of positioning and differentiation are Mike O’Callaghan Federal Hospital and Loma Linda Medical Centre. Both firms are established within the Department of Veteran Affairs and target the veterans and their beneficiaries. Both Loma Linda Medical Center and Mike O’Callaghan Federal Hospital have effectively positioned themselves by offering primary and secondary care respectively. Secondary care enables Mike O’Callaghan Federal Hospital to conduct effective referral services. In addition, the firm has differentiated itself through strategic location in United States. The hospital is located in an area that has a large population of veterans. This has enabled the firm to effectively invest in both inpatient and outpatient facilities to ensure effective service delivery.

Both firms have differentiated themselves by offering different special programs to the veterans and their beneficiaries. This has enabled them to develop a superior image amongst the veterans.

Loma Linda Medical Centre has incorporated the concept of multidisciplinary in delivering healthcare services to its clients. This has enabled the firm to delivery diverse healthcare services to its clients. In addition, the firm has also effectively differentiated itself in the market through certification by various organizations. This has resulted into creation of a positive public image for the firm’s healthcare services.

Both firms’ have incorporated the concept of strategic alliance in their differentiation strategy. This has been achieved through affiliation with various medical schools. Affiliating with these institutions enable the firms to be competitive by developing its human resource capital.To ensure that the quality of healthcare services delivered is superior, both firms have incorporated the current technology in their operation.

Reference list

Bill, J.M.(2009). VA medical centre. Web.

Buddy, T. (2009). Jerry L Pettis Memorial VA Medical Centre of Loma Linda California. Web.

ICMR. (2009). Case studies and management resources: positioning and differentiation of services. Web.

Nellis Airforce Base. (2009). Medical services. Web.

United States Department of Veteran Affairs. (2009). Mike O’Callaghan Federal Hospital. Web.

United States Department of Veteran Affairs. (2009). VA Loma Linda Healthcare System. Web.

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