The Economics of Running a Genomics Company

Genset IPO Prof. Nahata FIN 9774 1. What are the economics of running a genomics company? What is the role of large pharmaceuticals in genomics? How competitive is the genomics industry? Running a genomics company is extremely capital intensive. Research and development, patenting, and developing marketable products cost a lot of money. The associated dangers of working with patents are also at issue here. Genset must be able to defend its patent in court against patent trolls, which can layer additional costs upon the capital intensive primary business activities of the firm. At this point in time, the patent situation surrounding mapped genes is also tentative. The US courts have yet to rule on the patent status of genes, making the market for patented genes suspect. The other difficulty of the genomics industry is turning research into revenue. It takes a very long time to turn a patented gene into a medical product, which has to pass through several rounds of scrutiny before entering the market. Even if Genset is able to find a major gene, they might not see returns for several years. Large pharmaceutical companies are integral to the genomics industry. Genset researches genes that are related to a wide variety of diseases. However, many mapped genes will not be linked to any underlying genetic disorder. The genes that are linked to treatable disorders must be researched to discover chemical compounds that interact with genes to treat the underlying disorder. While Genset has the intellectual capability to research the genes, they are not capable of developing drugs to interact with the genes they have mapped. Through licensing agreements, genomics companies could decrease the risk and amount of time before they could report positive earnings. The licensing agreements generated revenue immediately by selling some or all of the rights to future applications of specific genes. Thus the genomics companies did not have to wait for the future applications to mature before they could realize positive earnings. The industry is also extremely competitive. There are 114 biotechnology companies in France, with an additional 1,050 in the United States. Several genomic companies have already passed through their IPOs with mixed success. Competition is fierce to discover every human gene. It is a race to see who finds and catalogues all the human genes by the end of the millennium. By early 1996, there was an intense race to map all genes and genomics companies were getting closer to finishing the task every day. There is also heavy competition between the genomic companies and pharmaceutical companies. 2. What is happening at other genomics companies? What is Genset's competitive position in the genomics industry? Many genomics companies have passed through IPOs and private funding rounds. At 250 employees, Genset is larger than all the other comparable companies provided in the case. Many other companies are operating in the sequencing business, developing libraries of sequenced genes. Beyond private companies, many research universities, government-sponsored facilities, and research institutions are also sequencing genes. While progress has not been lightening fast, it is worth noting that there is a finite supply of genes in the human genome. The amount of genes that are functional from Genset’s perspective is unknown. While competition to discover every gene was fierce, Genset was engaged in the systematic and comprehensive analysis of the genetic map of the humans to identify and patent genes and regulatory regions related to selected common diseases. Genset was a unique firm because it was both creating a library of genes and researching the genetic causes of diseases. They intended to discover drugs to treat these diseases and enter into strategic partnerships with pharmaceutical companies to develop and market these drugs. Genset not only researches genes, but it also is the world’s largest creator of synthetic DNA. Bradys believes that this line of business is extremely important to Genset’s future. Part of the desired $70 million will be devoted to tripling the output of synthetic DNA by updating its sequencing machines and increasing its workforce. Part of the money was needed to finance more equipment purchases and further research for its DNA mapping and sequencing operations to beat its competition. The industry is expanding quickly, with many small, nascent firms popping up, searching for private funding. The landscape is expanding quickly, with each firm trying to find ways to monetize their findings as quickly as possible. 3. What are the key success factors in genomics? What are the risk factors? What is the nature of cash flows in genomics? To be successful in genomics, a firm must have capital to acquire the necessary equipment and personnel to quickly map and patent genes. Given the finite amount of genes available to map, the genomics industry is truly deadlocked in a race to sequence the human genome. While raising the necessary capital is difficult, the more difficult aspect of the genomics industry is finding ways to monetize their research. Genset is fortunate to be the world leader in synthetic DNA. While their research may take years to pay off, their synthetic DNA operation gives them a reliable revenue stream. Genset is unique within the genomics industry in that respect and another: they are not just sequencing genes; they are also researching the genetic causes of diseases. This additional research makes their genetic patents and research more valuable to pharmaceutical companies that will be assured that they are pursuing worthwhile genes. To achieve profitability, Genset needed to successfully discover genes related to particular diseases, find partners to develop the products, conduct clinical trials, get regulatory approvals, and successfully manufacture and market such products. But the risk with this plan was that, Genset was based in France and patented its discoveries in France and the Euro zone countries. They were also unsure if the discovered gene fragments or genes (without known functions) could be patented. This was a BIG risk, in that any other firm could discover the gene’s function and patent it. Also since they did not have any patents in America, where they were considering raising money put a big question on the viability of the plan. There was also the possibility that the patents, mainly on which the firm’s value was based on, were broad enough to give the firm a competitive advantage besides any patent could be challenged, invalidated or circumvented by others. . Are Genset's cash flow projections reasonable? How much cash does the company need and when? To achieve profitability, Genset needed to successfully discover the genes associated with particular diseases and find appropriate strategic partners to develop products, conduct clinical trials and obtain regulatory approvals. Genset entered into a three-year strategic alliance with Syntehlabo SA which fo cused on discovering genes associated with prostate cancer. They were also under discussions with an affiliate of Johnson & Johnson to target schizophrenia. Their financial projections showed that in the future the company expected its revenues to come primarily from these types of contract revenues. The company has also filed three patent applications in France relating to its gene sequencing techniques. They are projecting their revenues based on successfully discovering these genes. Genset is looking to acquire approximately $70 million to finance more equipment purchases and further research. The company needed $30 million for capital expenditures including expansion of its TGS high throughput sequencing facility, the construction of a new mapping facility and polymorphism scanning lab. Another $40 million would fund ongoing research and development expenses. The funds were needed almost immediately. Without this technology and research, Genset would fall behind with no chance to recover. Raising this capital would be Genset’s largest financing project and would augment the $54. 2 million of funding raised through private equity (70. 4%), bank loans (13. 5%), government bonds (7. %) and other loans (8. 9%). We believe that Genset’s cash flow projections could be overstated since a major part of their cash flow source is contract revenues which would have to be made with Pharmaceutical firms. The case mentions that currently all the patents that Genset has are registered and protected in Europe. Most pharmaceutical firms on the other hand are based in North A merica with it being the largest market and unless all the patents that Genset are are registered and protected in North America, we believe they would not be in a position to achieve those cash flows. Hence we have discounted these cash flows by 40% initially. Also we believe that post an IPO and strategic investors from North America, Genset will develop the capability and expertise to pursue these patents listed in N. A and achieve the growth that they expect now. Thus we have a terminal growth rate of 5% factored in our model. However we have factored in the capital expenditure schedule that the firm has planned on the onset and that has been factored in the model since these expenses are essential in the pursuit of the firm’s future projections. 5. What is the current state of the financial markets? Are they conducive for an initial public offering by Genset? Would a private placement be a better alternative? The current state of the financial markets is healthy. Recent IPOs by other genomics firms have fared very well, despite the inherent risk in the business. Gene research is seen as the future of science, just as physics was the driving science of the early twentieth century. Given the success of recent offerings (with Human Genome Sciences and Myriad Genetics being the most successful), Genset is correct o investigate the possibility of a public offering. US capital is flowing into genomics at a steady clip, making it an appealing source of funding. The conditions associated with private funding make it less appealing to Genset. Genset is also unlikely to be able to raise their capital requirements through private funding alone. They have already received $54. 2 million in private funding, with 59. 3% of their shares owned by private investors. Private investment in biotechnology is at an all-time high, but funds are restricted from putting more than 10% of their total capital into any one business. This may require that Genset form deals with multiple funds, further dividing their remaining equity. Also there is a possibility that post these deals, while Genset would further dilute their equity there could be a situation where they could again be short of funds and raising funds in the future via this route could/could not be difficult. However once you access the public markets there is always the option of accessing the markets continuously for multiple capital raising activities. Thus going public sounds much more attractive. Also in the future, given the right strategic partner and if making continued contract revenue agreements becomes difficult they could also enter into a partnership or joint venture. Given that the firm would then have stock that is listed on the bourses makes this much more easier and hence going public is an extremely attractive choice. 6. Should Brandys take such extreme measures to issue stock in both France and the US? Why is he doing it? What additional costs and requirements are raised in doing so? Bradys is understandably weary about issuing stock in both France and the US. The offering would cost Genset twice as much, losing roughly 20% of their raised capital to fees and services. Before the offering, Genset would need to review their financials and prepare their past statements to comply with both US and French law. They would also need to secure accountants, lawyers, and underwriters in both France and the US, which will cost the firm a hefty price. Bradys is pursuing this option to expose the firm to as many possible sources of funding as possible. The US capital market is deeper than that of France. However, since the firm is French, it is able to draw some of the most talented French scientists to its firm. The US genomics market is deeper, making the pursuit of human capital more difficult. Bradys understands that if he were to only make an offering in France, he would be incapable of raising their required funds. Bradys needs the US market not just for capital. He also needs the US pharmaceutical industry and patent protection. By having American capital, Genset can more effectively lobby the US government for the patent protection they need to make their mapped genes intellectual properties. It is also worth noting that Genset has plenty of cash reserves and is not as badly in need for capital as Bradys believes. While the US has yet to weigh in on patent protection for genes, the increased amount of commerce on the side of genomics indicates that the courts will most likely uphold the rights of companies to patent their library of genes alongside their patented processed. 7. Why is Genset going public now? Does it make sense? Genset is going public now because they need $70 million in capital to advance their research and to not fall behind other genomics companies. There are some positive points to going public now. Tapping into the US market makes sense because of the higher amount of venture capital expenditures over their native France. If Genset does not find a way to raise this capital, they will most likely fall out of competition among their direct competition. The drawbacks to going public are many. No other similar genomics business has raised $70 million in their IPO. The highest previous offering was by Human Genome Sciences, which raised $66. 7 million. However, Human Genome Sciences did not face the challenges of Genset. Most offerings lose 10% of their raised capital to offering related services. Genset could conceivably lose 20% of their offering value, as they must prepare for offerings in both France and the US. A dual offering would require accountants, lawyers, and services for two different markets in two different languages. If Genset were to achieve their desired level of $70 million, they would need to raise roughly $87. 5 million in capital, before related costs are tabulated. It makes sense that Genset go forward with an IPO at this time, although it is not without its dangers. If their IPO fails, the firm would be tainted and they would be hard pressed to raise capital elsewhere. They could instead seek more private capital, which would not preclude an IPO in the future. Even if another round of private capital falls short of the $70 million mark, they could receive bridge funds that would carry them to another round of funding through venture capital or an IPO. However, given the amount of firms entering the market, Genset could easily hurt their value by waiting. The markets could grow weary of genomics companies and fail to pony up capital to even the best companies. Genset should strike while the iron is hot, not wait until the market has cooled down. Genset must firmly trust their advantage of having the most talented French scientists in the US market. The flood of US-based genomics firm has diluted the talent pool of American scientists. Genset has a strong advantage in this respect. Coupled with their superiority in synthetic DNA and competitive edge in DNA sequencing, Genset is certain to be a much sought after stock. 8. What valuation would you put on Genset's stock? Be sure to support your valuation with specific analysis. You could try to be creative here! We estimate Genset’s stock to be priced at $10. 57 per share. We are using a beta of 1. 6 which is based on the weighted market capital of all comparable companies. The reasoning behind this is that the majority of the listed firms are in the US and hence it is difficult to find closely comparable firms. We also use the P/E based valuations since the value of the firm will also depend on how the comparable firms have performed in the market post IPO. The terminal growth rate is 5% which is reasonable since we haven’t accepted the revenue streams given to us by the firm. We have reduced them to 60% of the firm’s estimates since the numbers look highly optimistic and could be difficult to achieve given the fact that the firms' patents are registered only in Europe and could not be easily marketable in the US where most development and pharmaceutical firms are based. The revenues depend on agreements with pharmaceutical firms and if these agreements are subjective then the associated revenues will also be subjective. The core valuation itself comes from a variety of inputs that we considered. While we also did comparable company valuations, we agreed upon considering using the adjusted present values method which realizes a share price closest to that using a range of share prices obtained using the multiples method. We used a range of discount rates and P/E values associated with them, from the range of comparable firms given to us. We believe this gives us a range of valuations and taking out the High-Low values, we use the median Net Present Value of the firm and the associated stock price derived from it thus ending with a share price of $10. 57 and a NPV of $44. 796mn. We believe this is fair onservative valuation and reflective of the risk as well as the potential associated with the firm. This reflects a good middle ground for the investors to get in on a company with great potential as well as for the firm to capitalize on its unique position in the biomedical space. Adjusted Present Value Approach Inputs Tax Rate Unlevered Cost of Capital Cost of Debt Growth Rate (Product Sales – 2001 – 2003) Terminal Growth rate Other Income/Loss Depriciation (Straight Line) CAPEX (every year) All Value in Thousands 40% Asset Beta (comps) Risk Free Rate Market Risk Premium Terminal growth rate 1. 7 6. 05 7. 09 13. 62% 16. 2% 15. 00% 5. 00% 0 20% 3% $10,000. 0 DEBT 20,000 Adjusted Present Value (APV) (A) NPV of Unlevered Investment Date Revenues Expense Other Income/Loss Depreciation and Amortization EBIT EBIT(1-T) Add: Depreciation Gross Cash Flow Less: Capex Less: Change in WC Free Cash Flow Terminal Value PV Factor PV of Future Cash Flows (at time 0) NPV of Unlevered Investment (B) PV of Interest Tax Shields Date Debt (D) Interest Expense Tax Shield Terminal Value of Tax Shield PV Factor PV of Tax Shields (at time 0) NPV of Tax shield Infinite Horizon 1996 1 $12,700. $23,300. 0 $0. 0 $15,662. 6 $26,262. 6 $15,757. 6 $15,662. 6 $95. 0 $20,000. 0 $0. 0 $20,095. 0 1997 2 $21,300. 0 $26,800. 0 $0. 0 $17,662. 6 $23,162. 6 $13,897. 6 $17,662. 6 $ 3,765. 0 $10,000. 0 $0. 0 $6,235. 0 1998 3 $44,600. 0 $31,500. 0 $0. 0 $19,662. 6 $6,562. 6 $3,937. 6 $19,662. 6 $15,725. 0 $10,000. 0 $0. 0 $5,725. 0 1999 4 $68,600. 0 $36,700. 0 $0. 0 $21,662. 6 $10,237. 4 $6,142. 4 $21,662. 6 $27,805. 0 $10,000. 0 $0. 0 $17,805. 0 2000 5 $129,200. 0 $46,500. 0 $0. 0 $10,000. 0 $72,700. 0 $43,620. 0 $10,000. 0 $53,620. 0 $10,000. 0 $0. 0 $43,620. 0 2001 2002 2003 6 $148,580. $53,475. 0 $0. 0 $12,000. 0 $83,105. 0 $49,863. 0 $12,000. 0 $61,863. 0 $10,000. 0 $0. 0 $51,863. 0 7 $170,867. 0 $61,496. 3 $0. 0 $10,000. 0 $99,370. 8 $59,622. 5 $10,000. 0 $69,622. 5 $10,000. 0 $0. 0 $59,622. 5 8 $196,497. 1 $70,720. 7 $0. 0 $10,000. 0 $115,776. 4 $69,465. 8 $10,000. 0 $79,465. 8 $10,000. 0 $0. 0 $69,465. 8 $673,852. 8 0. 3601 $267,668. 6 $71,549. 8 0. 8801 $17,686. 4 $331,280. 9 0. 7747 $4,829. 9 0. 6818 $3,903. 3 0. 6001 $10,684. 5 0. 5282 $23,038. 3 0. 4649 $24,108. 7 0. 4091 $24,393. 8 1 $12,163. 2 $1,965. 0 $786. 0 2 $33,437. 2 $5,401. 9 $2,160. 7 3 $4 2,913. $6,932. 8 $2,773. 1 4 $41,347. 9 $6,679. 9 $2,671. 9 5 $27,550. 7 $4,450. 9 $1,780. 4 6 $20,000. 0 $3,231. 1 $1,292. 4 7 $20,000. 0 $3,231. 1 $1,292. 4 8 $20,000. 0 $3,231. 1 $1,292. 4 $8,000. 0 0. 860916465 0. 74117716 0. 63809162 0. 54934358 0. 47293893 0. 407160916 0. 350531536 $676. 68 $1,601. 50 $1,769. 49 $1,467. 82 $842. 00 $526. 22 $453. 04 0. 301778371 $2,804. 25 $10,141. 00 NPV of Project $341,421. 92 total debt market cap genome therapeutics 1. 4 131. 4 human genome sciences 6 697. 4 incyte pharmaceuticals 0. 1 244. 8 millenium pharmaceuticals. 2 7 myriad genetics 0. 307 sequana therapeutics 4. 1 189. 9 cash 0. 01065449 0. 008603384 0. 000408497 0. 002931596 0. 021590311 9 107. 5 41 17. 8 72. 5 41. 3 EV (calc) 123. 8 595. 9 203. 9 -10. 6 235. 4 152. 7 revenue 11. 2 9. 6 11. 1 22. 9 3. 6 12. 4 revenue multiple (calc) EBITDA 11. 05357143 0. 6 62. 07291667 -31. 1 18. 36936937 -10. 1 -0. 462882096 65. 38888889 -5. 2 12. 31451613 -6. 1 28. 12273006 0. 053571 -3. 23958 - 0. 90991 0 -1. 44444 -0. 49194 EBITDA multiple (calc) 206. 3333333 -19. 1607717 -20. 18811881 -45. 26923077 -25. 03278689 19. 33648503 MEAN MEDIAN HIGH LOW 28. 12 15. 34 65. 39 -0. 46 19. 4 -20. 19 206. 33 -45. 27 Base Case Total Revenue Total Expense Depreciation Taxable Income Taxes After Tax Depreciation Capital Expenditures FCF Terminal Value FCF Post Terminal Value PV – 1996 5. 84 2173. 6575 0. 6771654 1996 12700 23300 15662. 6 -26262. 6 0 -26262. 6 15662. 6 20000 -30600 -30600 $313,353. 57 1997 21300 26800 17662. 6 -23162. 6 0 -23162. 6 17662. 6 10000 -15500 -15500 1998 44600 31500 19662. 6 -6562. 6 0 -6562. 6 1999 68600 36700 21662. 6 10237. 4 3378. 342 6859. 058 2000 129200 46500 10000 72700 23991 48709 0. 596237 0. 30626 depreciation capex Depreciation 1992 1991 0. 19413 0. 016384 0. 017899 0. 107211 0. 053256 0. 080234 includes patent purchase+investing activities 1 2 3 4 5 6 20 32 19. 2 11. 52 11. 52 5. 76 19662. 6 21662. 6 10000 10000 3100 18521. 658 10000 10000 4 8709 593323. 1 3100 18521. 658 642032. 1 51144. 45 Conservative 1996 Total Revenue Total Expense Depreciation Taxable Income Taxes After Tax Depreciation Capital Expenditures FCF Terminal Value FCF Post Terminal Value (B) PV of Interest Tax Shields Date Debt (D) Interest Expense Tax Shield NPV of Tax Shields FCF including tax shield Total Net income NPV of Plan $44,796. 5 7620 23300 15662. 6 -31342. 6 0 -31342. 6 15662. 6 20000 -35680 -35680 1997 12780 26800 17662. 6 -31682. 6 0 -31682. 6 17662. 6 10000 -24020 -24020 1998 26760 31500 19662. 6 -24402. 6 0 -24402. 6 19662. 6 10000 -14740 -14740 1999 41160 36700 21662. 6 -17202. 6 0 -17202. 6 21662. 6 10000 -5540 2000 77520 46500 10000 21020 6936. 6 14083. 4 depreciation capex Depreciation 1992 1991 0. 019413 0. 016384 0. 017899 0. 107211 0. 053256 0. 080234 includes patent purchase+investing activities 1 2 3 4 5 6 20 32 19. 2 11. 52 11. 52 5. 76 10000 10000 14083. 171549. 5 -5540 185632. 9 14787. 57 1 $12,163. 2 $1,970. 4 $788. 2 $10, 143. 89 ($34,892) 2 3 $33,437. 2 $42,913. 2 $5,416. 8 $6,951. 9 $2,166. 7 $2,780. 8 4 5 $41,347. 9 $27,550. 7 $6,698. 4 $4,463. 2 $2,679. 3 $9,785. 3 20000 $3,240. 0 $1,296. 0 $8,000. 000 $16,084 ($21,853) ($11,959) ($2,861) $23,869 PV – 1996 Shares Outstanding Share Price $34,652. 16 4,574 $7. 58 Present Value $28,139. 37 $118,630. 13 $7,862. 21 $68,507. 03 Rate 0. 2 0. 2 0. 3 0. 3 PE 11 25 11 25 Share Price $6. 15 $25. 94 high $1. 72 low $14. 98 10. 57 median

Cultural Analysis of Brazil Essay

A key to manage effectively across national and cultural boundaries, which is critical to the success (Browaeys and Price, 2011), lies in the understanding the different means of in various cultures (Trompenaars, 1993). Hence, basic cultural analysis should be conducted to better plan the new manufacturing business unit in Brazil where there are many differences from the Swedish culture. The famous analytic models from Hofstede (1980) and Trompenaars (1993) are applied to identify the key distinct dimensions of the two national cultures in terms of their management implications. Cultural Analysis The most influential factors chosen from Hofstede’s model are PD and UA, with the largest gap in scores and significant differences from table 1. Table 1 Different Scores of Brazil and Sweden in the national cultural dimensions Power DistanceUncertainty AvoidanceIndividualismMasculinity Brazil69763849 Sweden3129715 Source: Hofstede (1980, p315) Firstly, PD refers to the interpersonal power or influence between the powerful member of an organization and the least powerful one (Browaeys and Price, 2011). It, however, reflects the human inequality with a range of aspects, including rewards, wealth, prestige and privileges, etc., in the hierarchies of the organization. Normally, a higher high PD value implies the requirements of a centralised and direct decision-making process rather than plural participations of members in different levels (Velo, 2012). Brazil is, as many as around one time larger in land size and populations of Sweden (Findthedata, 2012), which contribute to the centralisation trends of organisations. Meanwhile, the large PD of Brazil means inequalities of power and wealth are however likely tolerated (Stephen, 2006) since the resources are concentrated. For instance, Azevedo (2009) concluded that most companies from Sà £o Paulo Stock Exchange has strong power concentration characteristics in terms of fact t hat most controlling shareholders or their relatives hold or chaired CEO positions. However, Brazil also suffers from, in return,  burdensome bureaucracy and deep social imbalances (James, 2011). Reversely, Sweden companies are more democracy, less hierarchical and even, for employee able to make comment to their managers (Porter, 2006). Secondly, the UA represents the degree to which a culture prefers risky, flexible and new situations over conversational, rigid and regular status (Browaeys and Price, 2011). UA, as Hofstede (1980) noted, indeed suggests, uncertainty about the future and cope with it through technology, law and religion. Commonly, a high UA scores means the national residents are unlike to do risky things and try to avoid changes (Velo, 2012), which directs the activities in working are supposed to be planned with less ambitious and stable employees (Hofstede, 1980). The managers are expected to be more task-oriented and involved in more details to control, if not eliminate, the uncertainty in work (Hofstede, 1980). Oppositely, Sweden companies are high possibile to have adverse attitude towards risk with different attributes in management (Porter, 2006). Predominantly Catholic population in Brazil reinforces the philosophy of the existence of an absolute ‘Truth’, that those individuals, thereby, should make efforts to lower this level of uncertainty (Vincent, 2003). Instead, in order to prevent the unexpected, the ultimate goal of this society is to control everything by means with adopted and implemented strict rules, laws, policies, and regulations (Stephen, 2006). Brazil companies are operating under a highly complex and expensive tax with a regulatory environment (James, 2011) aimed at reducing uncertainty in business circumstances. Also, Brazilian companies are showing growing interests in implementing modern enterprise risk management techniques (Ernst & Young, 2012). In comparison, the Sweden companies are welcome the relaxed atmosphere in which managers are interpersonal and strategy centred and flexible in style whereas employees are ambitious with high turnover probability (Hofstede, 1980; Porter, 2006). The most vital factor taken from Trompenaars’ framework is individualism versus collectivism, which means people in certain culture are oriented to the self or common goals and objectives (Browaeys and Price, 2011). These two elements affects the international management in negotiation, decision-making and motivation and are often related to religions (Trompenaars and Hampden-Turner, 1997). Catholics are likely to do group work while Protestants rely more on themselves. Brazil is a typical  collectivist community that places family at the center of its social system and depend heavily on relationships (Malinak 2012). Accordingly, Brazilians are of loyalty and duty to their group, especially within their extended families (James, 2011). The firms are anticipated to care employees like family member. For example, a job are considered when it includes mandatorily paid vacations, Fundo de Garantia do Tempo de Servià §o, at least one meal for employees working eight hours and the 13th salary (Novais 2012). Sweden companies are generally quite different. The common Swedish word â€Å"lagom† are used to inform the importance of one’s own performances in workplace (Porter, 2006). MOST IMPORTANT DIMENSION IN THIS CONTEXT Among all the dimensions in these two models, individualism should be the most important one that calls for intensified attention when setting up a new manufacturing business unit in Brazil. From a theoretical level, individualism is contained in both Hofstede’s and Trompenaars’ model and is suggested by some scholars (e.g., Dunnette & Hough, 1990) as the essential dimension to analyse culture. Because a large number of studies have proved the impact of individualism on the behaviour of members belong to a social group (e.g., Smith & Bond, 1999; Ashmos & McDaniel, 1996). Moreover, individualism usually has impact on some other dimensions in the models. For instance, people belong to collectivist culture and individualist culture is suitable to different motivation method (Hofstede, 1980). In this case, the most significant reason is the big gap between Sweden and Brazil in individualism. Just as mentioned above, Brazil gets 38 points while Sweden scores 71 in Hofstedeâ €™s analysis (Hofstede, 1980). In Sweden culture, individuals usually are regarded as the end achieved by the improvements of communal arrangements (Hampden-Turner & Trompenaars, 1994). On the contrary, groups are regarded as end in Brazil culture achieved by the improvements of individual abilities (Hofstede, 1980). It can be reflected by the splendent performance of group sports in Brazil such as soccer (Wikipedia, 2012). The difference in individualism would lead to various factors that require more attention in management. Organizational structure usually takes the brunt of this change. People in Brazil would prefer group work rather than individual work. The group leader or the older and powerful member of a group is expected to offer help to younger colleagues (Hofstede, 1980). It also leads  to the changes in reward system. Since people in Brazil often motivated by group interests rather than their own, it would be better to set group goals and reward members on the basis of the group achievements. Decision making process is another significant different caused by individualism. In Sweden, people view themselves as being empowered to make the decisions needed to meet one’s own goals thus the decision making is very quickly. When it comes to group decisions, voting is a common method. However, Brazilians sometimes would give up their personal interests to collective interests thus decisions usually are not based on democratic voting (O’Keefe, 2004). Moreover, Brazil people are usually integrated into strong, cohesive groups thus they attach great importance to relationships. Businessmen should pay more attention to develop good relationships to their potential distributors and government officials. Senior manager should spend as more time as possible with chatting and making jokes. Similarly, making a call or talking to someone in person is preferred to writing e-mails. To sum up, the big gap between Sweden and Brazil in individualism demonstrates that it is the essential dimension to analyse culture as it would lead to various difference in organization structure, decision making process and the importance of relationships. Thus, from both theoretical and practical level, individualism is the most important dimension in this case. CONCLUSION In conclusion, there are several significant cultural gaps between Sweden and Brazil including power distance, individualism, uncertainty avoidance, neutral versus emotional and attitudes to the environments. Individualism comes out to be the most important dimension because of the considerable gap between the two countries in their attitudes towards collective interests and personal honour. And this difference would have a significant impact on transnational management. Thus, the management method should be sharpened in order to consider them when extending business in emerging economies of Brazil. This allows to avoid misunderstandings caused by cultural reasons and to improve the efficiency of management and communication in new manufacturing business unit. References Ashmos, D.P. & McDaniel, R.R. (1996) Understanding the Participation of Critical Task Specialists in Strategic Decision Making*. Decision Sciences. [Online] 27 (1), 103–121. Available from: doi:10.1111/j.1540-5915.1996.tb00845.x. Azevedo, S. M. G. (2009). Os papà ©is do Conselho de Administraà §Ãƒ £o em empresas listadas no Brasil. Master’s Dissertation, Faculdade de Economia, Administraà §Ãƒ £o e Contabilidade, University of Sà £o Paulo, Sà £o Paulo. Retrieved 2012-11-03, from http://www.teses.usp.br/teses/disponiveis/12/12139/tde-11092009-141955/ Browaeys, M-J and Price, R, (2011) Understanding Cross-Cultural Management (2nd Ed.), Harlow: Pearson Education Ltd. Dunnette, M. & Hough, L. (1990) Handbook of industrial and organizational psychology. 2nd edition. Palo Alto, Consulting Psychologists Press. Ernst & Young (2012). Risk-based capital and governance in Latin America: Emerging regulations (Report). London: Ernst & Young Global Limit. Findthedata (2012). [Online]. Available from: [Accessed: 01 November 2012]. Hampden-Turner, C. & Trompenaars, A. (1994) Seven cultures of capitalism†¯: value systems for creating wealth in the United States, Japan, Germany, France, Britain, Sweden, and the Netherlands. London, Piatkus. Hofstede, G.H. (1980) Cultures consequences†¯: international differences in work-related values. Beverly Hills†¯; London, Sage. James G. (2011). Business Basics in Brazil, Big opportunities, challenges go hand in hand. Journal of Accountancy [online]. Available from: [Accessed: 01 November 2012]. Malinak C. (2012). Doing Business in Brazil (report). London: Communicaid Group Ltd. Novais Andrà ©a (2012). Common Benefits in Brazil. The Brazil Business [online]. Available from: [Accessed: 01 November 2012]. O’Keefe, H. and O’Keefe, W.,M., (2004) Business behaviors in Brazil and the USA: Understanding the gaps. International Journal of Social Economics, 31(5), pp. 614-622. Porter A. (2006). ‘Taking care of business in Sweden’. Sweden.se [online]. Available from: [Accessed: 01 November 2012]. Smith, P.B. & Bond, M.H. (1999) Social psychology across cultures. 2nd ed. Boston, Mass, Allyn & Bacon. Stephen T. (2006). ‘Geert Hofstede Analysis for Brazil’. Cyborlink [online]. Available from: [Accessed: 01 November 2012]. Trompenaars F. and Hampden-Turner C. (1997). Riding the Waves of Culture: Understanding Cultural Diversity in Business (2nd ed). London: Nicholas Brealey. Velo, V. (2012). Cross-cultural management. New York, Business Expert Press. Vincent, J. S. (2003). Culture and customs of Brazil. Westport, Connecticut: Greenwood Press. 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Erin Brockovich Blog Essay

In the film, we see that Pacific Gas and Electric (PG&E) had known for several years about the water contamination problems that existed near their plants in California. PG&E is trying quietly to buy land that was contaminated by hexavalent chromium, a deadly toxic waste that the company is improperly and illegally dumping and, in turn, poisoning the residents in the area. This fact becomes apparent when a newly hired file clerk, Erin Brockovich, runs across some files on a pro bono case involving medical records in real-estate files and PG&E offering to acquire the home of Hinkley, California, resident Donna Jensen. It can be seen here that PG&E engaged in a crime. This white collar deviance involved the type called physical harm and moral harm. Erin Brockovich: Oh see, now that pisses me off. First of all, since the demur we have more than 400 plaintiffs and†¦ let’s be honest, we all know there are more out there. They may not be the most sophisticated people but they do know how to divide and $20 million isn’t *shit* when you split it between them. Second of all, these people don’t dream about being rich. They dream about being able to watch their kids swim in a pool without worrying that they’ll have to have a hysterectomy at the age of *twenty*. Like Rosa Diaz, a client of ours. Or have their spine deteriorate, like Stan Blume, *another* client of ours. So before you come back here with another lame ass offer, I want you to think real hard about what your spine is worth, Mr. Walker. Or what you might expect someone to pay you for your uterus, Ms. Sanchez. Then you take out your calculator and you multiply that number by a hundred. Anything less than that is a waste of our time. In this scene PG&E attorneys are trying to settle the lawsuit with a mediocre offer that Erin finds unacceptable. The case had changed to a binding arbitration. Therefore no jury would be present and a judge would make the final decision. This type of litigation was classified as a tort case.

Asian-Americans and College Admissions

Higher education in the United States is still the main purpose of society. It will be the most important way of social mobility and economic independence and will reward people of all backgrounds and races. However, American universities have undergone intense changes emphasizing the advantages of providing higher education for certain privileged races, limiting the quotas of other Asian Americans. As predecessors of the 1920s denied the existence of Jewish quota, senior officials at Harvard University, Yale University, Princeton University, and other Ivy League schools today declared the existence of Asian Quotas I strongly deny it. (Unz) However, statistical evidence suggests other As an Asian American activist I am skeptical of Harvard's lawsuit against unequal treatment of Asian Americans at university entrance. This case was proposed by advocacy groups for students' fair enrollment and was meant to represent my interests, which was a serious mistake. During the first year at Ya le University I learned the activities that the first year students stood together and the counselor set the goal to read cards that would not have me. If the prompt matches your background, the student goes ahead. Some tips are easy; Others ask for serious life experiences like discrimination, hunger or violence This is not the first time that the Harvard incident was accused of discriminating against students in Asia. In the 1980s, student activists pointed out that despite the rapid increase in the number of Asian Americans during college years, the admission rate of Asian American universities is still sluggish. They believe that this stagnation is mainly due to prejudice of entrance practices. This is relatively beneficial for Caucasian applicants, with relatively few Asian American enrollment. Due to these complaints, an internal survey on entrance exercises at Stanford University, Harvard University, Princeton University, and University of California, Berkeley was held. Sever al schools like Berkeley believe that they are doing nothing bad and that Asian American students are over-represented in their common population in the United States.

IS PROPAGADA A TECHNIQUE OR A PHENOMENON Essay Example | Topics and Well Written Essays - 1000 words

IS PROPAGADA A TECHNIQUE OR A PHENOMENON - Essay Example on, the analysis will seek to determine whether or not the presence of propaganda throughout the modern world is merely something that exists naturally or whether or not it is an purposeful and authored process. Firstly, it should be understood that the nature and definition of propaganda itself lends the reader to assume that the process of information distribution and purposeful deception is not something that merely â€Å"happens†. 1 Of course there are many instances throughout the world in which incomplete information is transmitted to the media participant; however, these inadvertent instances do not accurately define the conventional definition of â€Å"propaganda†. Ultimately, the use of propaganda, by its very definition and nature, is to deceive or mislead the media participant to understand the world or a particular situation within a given construct or manner. As such, it is painfully obvious that the majority of propaganda that exists is most certainly a technique by which entities, individuals, or governments attempt sway the opinions of societal stakeholders. Therefore, the reader can adequately assume that the types of â€Å"propaganda† under discussion is more likely than not an authored process that is intended to be misleading, untrue, or inaccurate.2 As with a legal discussion of motive, the question that has thus far been represented ultimately reduces to the intention of the way the information is represented. In the event that a particular entity, government, or individual represents information in a willfully deceitful manner as a means of swaying individual opinions, then it is clear and apparent that the process is a technique which is engaged as a means of effecting a particular goal.3 Yet, in the event that incomplete, untrue, or inaccurate information is represented to a group or an audience with no intention to deceive or mislead, then it cannot be said that such a process is propaganda; rather, it is an inadvertent process that

Categories of Computer Crime Essay Example | Topics and Well Written Essays - 500 words

Categories of Computer Crime - Essay Example codes; the creation of false bank accounts; theft of personal information and misuse of the stolen information; the virus infection created on computers that can hamper the proper software operations and damage records. Today, the biggest crime created through computer use is the electronic financial account transfer (Computer-Based Crime, 2011). To date, identity theft has the fastest growing crime rate in America. Identity theft is the pilfering and illegal use of private information from an unsuspecting individual to access personal financial accounts. The targeted personal data include a victim’s address, birth date, telephone number, social security number (SSN), bank account number, credit card number, or other valuable identification records to be used for the thief’s economic gain. Criminals use this information in opening new credit and depository accounts, applying for home or car loans, leasing homes, apartments or vehicles (Brody, Mulig & Kimball, 2007) applying for benefits, or filing fake tax returns (Palmer, 2006). In worst cases, perpetrators use the obtained private information to take over the victim’s identity, create enormous debts, or use in a criminal activity under the victim’s name (Brody, Mulig & Kimball, 2007). Phishing is a scam that uses volumes of electronic mail messages to attract innocent victims into disclosing private information. A phishing email illustrating a believable problem lures the victim to a fake link that is a replication of the victim’s bank web address; the victim then fixes the imaginary concern and verifies account information and divulges personal identification. Subsequently, the phisher uses the pilfered PIN number, secret code, and identity to drain the victim’s bank account (Brody, Mulig & Kimball, 2007). Pharming is a technically higher form of phishing wherein a virus is unknowingly downloaded on the victim’s computer. The prey keys in a genuine web address but is instead redirected to a

The Role of IS Users in IS Development Essay Example | Topics and Well Written Essays - 2250 words

The Role of IS Users in IS Development - Essay Example Today almost everyone old enough owns a cellular phone. This social revolution is mostly brought about by the changes in technological evolution. For many generations, the pace of technological growth was steady. Although after the breakthroughs of the 17th and 18th century, man has achieved more than it had ever done in its entire history. The pace during these two centuries was consistent and steady. The real revolution didn’t come until the mid nineteenth century. This was the first time that man had tried to use artificial computing technology to find solutions to its various problems. The possibilities to this revolution were limitless. Many different breakthroughs were made using this technology. The most amazing breakthrough was none other than the man’s quest of space. Using the mathematical abilities of computers, human beings were able to conquer space for the first time. This would not have been possible without the usage of computers. These computers were ma ny millions times slower than the processing power controlled by modern day super computers. In fact the simplest of desktop computer being used today by a seven year old, has more processing power than the computer used by NASA to send man on the moon. Nevertheless, the whole mission would not have been possible without the use of computers. The journey from computer usage by NASA to modern day smart phone is spanned over only a few decades. In this era the advancements in chip technology, both for storage and processing have given computer technology a whole new meaning. The computer was always used mostly as a giant calculator. Thus it was mostly utilized to process calculations which would otherwise be difficult for human beings to carry out themselves.