Angels Demons Chapter 36-38

36 The Office of the Swiss Guard. Langdon stood in the doorway, surveying the collision of centuries before them. Mixed media. The room was a lushly adorned Renaissance library complete with inlaid bookshelves, oriental carpets, and colorful tapestries†¦ and yet the room bristled with high-tech gear – banks of computers, faxes, electronic maps of the Vatican complex, and televisions tuned to CNN. Men in colorful pantaloons typed feverishly on computers and listened intently in futuristic headphones. â€Å"Wait here,† the guard said. Langdon and Vittoria waited as the guard crossed the room to an exceptionally tall, wiry man in a dark blue military uniform. He was talking on a cellular phone and stood so straight he was almost bent backward. The guard said something to him, and the man shot a glance over at Langdon and Vittoria. He nodded, then turned his back on them and continued his phone call. The guard returned. â€Å"Commander Olivetti will be with you in a moment.† â€Å"Thank you.† The guard left and headed back up the stairs. Langdon studied Commander Olivetti across the room, realizing he was actually the Commander in Chief of the armed forces of an entire country. Vittoria and Langdon waited, observing the action before them. Brightly dressed guards bustled about yelling orders in Italian. â€Å"Continua cercando!† one yelled into a telephone. â€Å"Probasti il museo?† another asked. Langdon did not need fluent Italian to discern that the security center was currently in intense search mode. This was the good news. The bad news was that they obviously had not yet found the antimatter. â€Å"You okay?† Langdon asked Vittoria. She shrugged, offering a tired smile. When the commander finally clicked off his phone and approached across the room, he seemed to grow with each step. Langdon was tall himself and not accustomed to looking up at many people, but Commander Olivetti demanded it. Langdon sensed immediately that the commander was a man who had weathered tempests, his face hale and steeled. His dark hair was cropped in a military buzz cut, and his eyes burned with the kind of hardened determination only attainable through years of intense training. He moved with ramrod exactness, the earpiece hidden discreetly behind one ear making him look more like U.S. Secret Service than Swiss Guard. The commander addressed them in accented English. His voice was startlingly quiet for such a large man, barely a whisper. It bit with a tight, military efficiency. â€Å"Good afternoon,† he said. â€Å"I am Commander Olivetti – Comandante Principale of the Swiss Guard. I'm the one who called your director.† Vittoria gazed upward. â€Å"Thank you for seeing us, sir.† The commander did not respond. He motioned for them to follow and led them through the tangle of electronics to a door in the side wall of the chamber. â€Å"Enter,† he said, holding the door for them. Langdon and Vittoria walked through and found themselves in a darkened control room where a wall of video monitors was cycling lazily through a series of black-and-white images of the complex. A young guard sat watching the images intently. â€Å"Fuori,† Olivetti said. The guard packed up and left. Olivetti walked over to one of the screens and pointed to it. Then he turned toward his guests. â€Å"This image is from a remote camera hidden somewhere inside Vatican City. I'd like an explanation.† Langdon and Vittoria looked at the screen and inhaled in unison. The image was absolute. No doubt. It was CERN's antimatter canister. Inside, a shimmering droplet of metallic liquid hung ominously in the air, lit by the rhythmic blinking of the LED digital clock. Eerily, the area around the canister was almost entirely dark, as if the antimatter were in a closet or darkened room. At the top of the monitor flashed superimposed text: Live Feed – Camera #86. Vittoria looked at the time remaining on the flashing indicator on the canister. â€Å"Under six hours,† she whispered to Langdon, her face tense. Langdon checked his watch. â€Å"So we have until†¦Ã¢â‚¬  He stopped, a knot tightening in his stomach. â€Å"Midnight,† Vittoria said, with a withering look. Midnight, Langdon thought. A flair for the dramatic. Apparently whoever stole the canister last night had timed it perfectly. A stark foreboding set in as he realized he was currently sitting at ground zero. Olivetti's whisper now sounded more like a hiss. â€Å"Does this object belong to your facility?† Vittoria nodded. â€Å"Yes, sir. It was stolen from us. It contains an extremely combustible substance called antimatter.† Olivetti looked unmoved. â€Å"I am quite familiar with incendiaries, Ms. Vetra. I have not heard of antimatter.† â€Å"It's new technology. We need to locate it immediately or evacuate Vatican City.† Olivetti closed his eyes slowly and reopened them, as if refocusing on Vittoria might change what he just heard. â€Å"Evacuate? Are you aware what is going on here this evening?† â€Å"Yes, sir. And the lives of your cardinals are in danger. We have about six hours. Have you made any headway locating the canister?† Olivetti shook his head. â€Å"We haven't started looking.† Vittoria choked. â€Å"What? But we expressly heard your guards talking about searching the – â€Å" â€Å"Searching, yes,† Olivetti said, â€Å"but not for your canister. My men are looking for something else that does not concern you.† Vittoria's voice cracked. â€Å"You haven't even begun looking for this canister?† Olivetti's pupils seemed to recede into his head. He had the passionless look of an insect. â€Å"Ms. Vetra, is it? Let me explain something to you. The director of your facility refused to share any details about this object with me over the phone except to say that I needed to find it immediately. We are exceptionally busy, and I do not have the luxury of dedicating manpower to a situation until I get some facts.† â€Å"There is only one relevant fact at this moment, sir,† Vittoria said, â€Å"that being that in six hours that device is going to vaporize this entire complex.† Olivetti stood motionless. â€Å"Ms. Vetra, there is something you need to know.† His tone hinted at patronizing. â€Å"Despite the archaic appearance of Vatican City, every single entrance, both public and private, is equipped with the most advanced sensing equipment known to man. If someone tried to enter with any sort of incendiary device it would be detected instantly. We have radioactive isotope scanners, olfactory filters designed by the American DEA to detect the faintest chemical signatures of combustibles and toxins. We also use the most advanced metal detectors and X-ray scanners available.† â€Å"Very impressive,† Vittoria said, matching Olivetti's cool. â€Å"Unfortunately, antimatter is nonradioactive, its chemical signature is that of pure hydrogen, and the canister is plastic. None of those devices would have detected it.† â€Å"But the device has an energy source,† Olivetti said, motioning to the blinking LED. â€Å"Even the smallest trace of nickel-cadmium would register as – â€Å" â€Å"The batteries are also plastic.† Olivetti's patience was clearly starting to wane. â€Å"Plastic batteries?† â€Å"Polymer gel electrolyte with Teflon.† Olivetti leaned toward her, as if to accentuate his height advantage. â€Å"Signorina, the Vatican is the target of dozens of bomb threats a month. I personally train every Swiss Guard in modern explosive technology. I am well aware that there is no substance on earth powerful enough to do what you are describing unless you are talking about a nuclear warhead with a fuel core the size of a baseball.† Vittoria framed him with a fervent stare. â€Å"Nature has many mysteries yet to unveil.† Olivetti leaned closer. â€Å"Might I ask exactly who you are? What is your position at CERN?† â€Å"I am a senior member of the research staff and appointed liaison to the Vatican for this crisis.† â€Å"Excuse me for being rude, but if this is indeed a crisis, why am I dealing with you and not your director? And what disrespect do you intend by coming into Vatican City in short pants?† Langdon groaned. He couldn't believe that under the circumstances the man was being a stickler for dress code. Then again, he realized, if stone penises could induce lustful thoughts in Vatican residents, Vittoria Vetra in shorts could certainly be a threat to national security. â€Å"Commander Olivetti,† Langdon intervened, trying to diffuse what looked like a second bomb about to explode. â€Å"My name is Robert Langdon. I'm a professor of religious studies in the U.S. and unaffiliated with CERN. I have seen an antimatter demonstration and will vouch for Ms. Vetra's claim that it is exceptionally dangerous. We have reason to believe it was placed inside your complex by an antireligious cult hoping to disrupt your conclave.† Olivetti turned, peering down at Langdon. â€Å"I have a woman in shorts telling me that a droplet of liquid is going to blow up Vatican City, and I have an American professor telling me we are being targeted by some antireligious cult. What exactly is it you expect me to do?† â€Å"Find the canister,† Vittoria said. â€Å"Right away.† â€Å"Impossible. That device could be anywhere. Vatican City is enormous.† â€Å"Your cameras don't have GPS locators on them?† â€Å"They are not generally stolen. This missing camera will take days to locate.† â€Å"We don't have days,† Vittoria said adamantly. â€Å"We have six hours.† â€Å"Six hours until what, Ms. Vetra?† Olivetti's voice grew louder suddenly. He pointed to the image on the screen. â€Å"Until these numbers count down? Until Vatican City disappears? Believe me, I do not take kindly to people tampering with my security system. Nor do I like mechanical contraptions appearing mysteriously inside my walls. I am concerned. It is my job to be concerned. But what you have told me here is unacceptable.† Langdon spoke before he could stop himself. â€Å"Have you heard of the Illuminati?† The commander's icy exterior cracked. His eyes went white, like a shark about to attack. â€Å"I am warning you. I do not have time for this.† â€Å"So you have heard of the Illuminati?† Olivetti's eyes stabbed like bayonets. â€Å"I am a sworn defendant of the Catholic Church. Of course I have heard of the Illuminati. They have been dead for decades.† Langdon reached in his pocket and pulled out the fax image of Leonardo Vetra's branded body. He handed it to Olivetti. â€Å"I am an Illuminati scholar,† Langdon said as Olivetti studied the picture. â€Å"I am having a difficult time accepting that the Illuminati are still active, and yet the appearance of this brand combined with the fact that the Illuminati have a well-known covenant against Vatican City has changed my mind.† â€Å"A computer-generated hoax.† Olivetti handed the fax back to Langdon. Langdon stared, incredulous. â€Å"Hoax? Look at the symmetry! You of all people should realize the authenticity of – â€Å" â€Å"Authenticity is precisely what you lack. Perhaps Ms. Vetra has not informed you, but CERN scientists have been criticizing Vatican policies for decades. They regularly petition us for retraction of Creationist theory, formal apologies for Galileo and Copernicus, repeal of our criticism against dangerous or immoral research. What scenario seems more likely to you – that a four-hundred-year-old satanic cult has resurfaced with an advanced weapon of mass destruction, or that some prankster at CERN is trying to disrupt a sacred Vatican event with a well-executed fraud?† â€Å"That photo,† Vittoria said, her voice like boiling lava, â€Å"is of my father. Murdered. You think this is my idea of a joke?† â€Å"I don't know, Ms. Vetra. But I do know until I get some answers that make sense, there is no way I will raise any sort of alarm. Vigilance and discretion are my duty†¦ such that spiritual matters can take place here with clarity of mind. Today of all days.† Langdon said, â€Å"At least postpone the event.† â€Å"Postpone?† Olivetti's jaw dropped. â€Å"Such arrogance! A conclave is not some American baseball game you call on account of rain. This is a sacred event with a strict code and process. Never mind that one billion Catholics in the world are waiting for a leader. Never mind that the world media is outside. The protocols for this event are holy – not subject to modification. Since 1179, conclaves have survived earthquakes, famines, and even the plague. Believe me, it is not about to be canceled on account of a murdered scientist and a droplet of God knows what.† â€Å"Take me to the person in charge,† Vittoria demanded. Olivetti glared. â€Å"You've got him.† â€Å"No,† she said. â€Å"Someone in the clergy.† The veins on Olivetti's brow began to show. â€Å"The clergy has gone. With the exception of the Swiss Guard, the only ones present in Vatican City at this time are the College of Cardinals. And they are inside the Sistine Chapel.† â€Å"How about the chamberlain?† Langdon stated flatly. â€Å"Who?† â€Å"The late Pope's chamberlain.† Langdon repeated the word self-assuredly, praying his memory served him. He recalled reading once about the curious arrangement of Vatican authority following the death of a Pope. If Langdon was correct, during the interim between Popes, complete autonomous power shifted temporarily to the late Pope's personal assistant – his chamberlain – a secretarial underling who oversaw conclave until the cardinals chose the new Holy Father. â€Å"I believe the chamberlain is the man in charge at the moment.† â€Å"Il camerlegno?† Olivetti scowled. â€Å"The camerlegno is only a priest here. He is not even canonized. He is the late Pope's hand servant.† â€Å"But he is here. And you answer to him.† Olivetti crossed his arms. â€Å"Mr. Langdon, it is true that Vatican rule dictates the camerlegno assume chief executive office during conclave, but it is only because his lack of eligibility for the papacy ensures an unbiased election. It is as if your president died, and one of his aides temporarily sat in the oval office. The camerlegno is young, and his understanding of security, or anything else for that matter, is extremely limited. For all intents and purposes, I am in charge here.† â€Å"Take us to him,† Vittoria said. â€Å"Impossible. Conclave begins in forty minutes. The camerlegno is in the Office of the Pope preparing. I have no intention of disturbing him with matters of security.† Vittoria opened her mouth to respond but was interrupted by a knocking at the door. Olivetti opened it. A guard in full regalia stood outside, pointing to his watch. â€Å"ee l'ora, comandante.† Olivetti checked his own watch and nodded. He turned back to Langdon and Vittoria like a judge pondering their fate. â€Å"Follow me.† He led them out of the monitoring room across the security center to a small clear cubicle against the rear wall. â€Å"My office.† Olivetti ushered them inside. The room was unspecial – a cluttered desk, file cabinets, folding chairs, a water cooler. â€Å"I will be back in ten minutes. I suggest you use the time to decide how you would like to proceed.† Vittoria wheeled. â€Å"You can't just leave! That canister is – â€Å" â€Å"I do not have time for this,† Olivetti seethed. â€Å"Perhaps I should detain you until after the conclave when I do have time.† â€Å"Signore,† the guard urged, pointing to his watch again. â€Å"Spazzare di capella.† Olivetti nodded and started to leave. â€Å"Spazzare di capella?† Vittoria demanded. â€Å"You're leaving to sweep the chapel?† Olivetti turned, his eyes boring through her. â€Å"We sweep for electronic bugs, Miss Vetra – a matter of discretion.† He motioned to her legs. â€Å"Not something I would expect you to understand.† With that he slammed the door, rattling the heavy glass. In one fluid motion he produced a key, inserted it, and twisted. A heavy deadbolt slid into place. â€Å"Idita!† Vittoria yelled. â€Å"You can't keep us in here!† Through the glass, Langdon could see Olivetti say something to the guard. The sentinel nodded. As Olivetti strode out of the room, the guard spun and faced them on the other side of the glass, arms crossed, a large sidearm visible on his hip. Perfect, Langdon thought. Just bloody perfect. 37 Vittoria glared at the Swiss Guard standing outside Olivetti's locked door. The sentinel glared back, his colorful costume belying his decidedly ominous air. â€Å"Che fiasco,† Vittoria thought. Held hostage by an armed man in pajamas. Langdon had fallen silent, and Vittoria hoped he was using that Harvard brain of his to think them out of this. She sensed, however, from the look on his face, that he was more in shock than in thought. She regretted getting him so involved. Vittoria's first instinct was to pull out her cell phone and call Kohler, but she knew it was foolish. First, the guard would probably walk in and take her phone. Second, if Kohler's episode ran its usual course, he was probably still incapacitated. Not that it mattered†¦ Olivetti seemed unlikely to take anybody's word on anything at the moment. Remember! she told herself. Remember the solution to this test! Remembrance was a Buddhist philosopher's trick. Rather than asking her mind to search for a solution to a potentially impossible challenge, Vittoria asked her mind simply to remember it. The presupposition that one once knew the answer created the mindset that the answer must exist†¦ thus eliminating the crippling conception of hopelessness. Vittoria often used the process to solve scientific quandaries†¦ those that most people thought had no solution. At the moment, however, her remembrance trick was drawing a major blank. So she measured her options†¦ her needs. She needed to warn someone. Someone at the Vatican needed to take her seriously. But who? The camerlegno? How? She was in a glass box with one exit. Tools, she told herself. There are always tools. Reevaluate your environment. Instinctively she lowered her shoulders, relaxed her eyes, and took three deep breaths into her lungs. She sensed her heart rate slow and her muscles soften. The chaotic panic in her mind dissolved. Okay, she thought, let your mind be free. What makes this situation positive? What are my assets? The analytical mind of Vittoria Vetra, once calmed, was a powerful force. Within seconds she realized their incarceration was actually their key to escape. â€Å"I'm making a phone call,† she said suddenly. Langdon looked up. â€Å"I was about to suggest you call Kohler, but – â€Å" â€Å"Not Kohler. Someone else.† â€Å"Who?† â€Å"The camerlegno.† Langdon looked totally lost. â€Å"You're calling the chamberlain? How?† â€Å"Olivetti said the camerlegno was in the Pope's office.† â€Å"Okay. You know the Pope's private number?† â€Å"No. But I'm not calling on my phone.† She nodded to a high-tech phone system on Olivetti's desk. It was riddled with speed dial buttons. â€Å"The head of security must have a direct line to the Pope's office.† â€Å"He also has a weight lifter with a gun planted six feet away.† â€Å"And we're locked in.† â€Å"I was actually aware of that.† â€Å"I mean the guard is locked out. This is Olivetti's private office. I doubt anyone else has a key.† Langdon looked out at the guard. â€Å"This is pretty thin glass, and that's a pretty big gun.† â€Å"What's he going to do, shoot me for using the phone?† â€Å"Who the hell knows! This is a pretty strange place, and the way things are going – â€Å" â€Å"Either that,† Vittoria said, â€Å"or we can spend the next five hours and forty-eight minutes in Vatican Prison. At least we'll have a front-row seat when the antimatter goes off.† Langdon paled. â€Å"But the guard will get Olivetti the second you pick up that phone. Besides, there are twenty buttons on there. And I don't see any identification. You going to try them all and hope to get lucky?† â€Å"Nope,† she said, striding to the phone. â€Å"Just one.† Vittoria picked up the phone and pressed the top button. â€Å"Number one. I bet you one of those Illuminati U.S. dollars you have in your pocket that this is the Pope's office. What else would take primary importance for a Swiss Guard commander?† Langdon did not have time to respond. The guard outside the door started rapping on the glass with the butt of his gun. He motioned for her to set down the phone. Vittoria winked at him. The guard seemed to inflate with rage. Langdon moved away from the door and turned back to Vittoria. â€Å"You damn well better be right, 'cause this guy does not look amused!† â€Å"Damn!† she said, listening to the receiver. â€Å"A recording.† â€Å"Recording?† Langdon demanded. â€Å"The Pope has an answering machine?† â€Å"It wasn't the Pope's office,† Vittoria said, hanging up. â€Å"It was the damn weekly menu for the Vatican commissary.† Langdon offered a weak smile to the guard outside who was now glaring angrily though the glass while he hailed Olivetti on his walkie-talkie. 38 The Vatican switchboard is located in the Ufficio di Communicazione behind the Vatican post office. It is a relatively small room containing an eight-line Corelco 141 switchboard. The office handles over 2,000 calls a day, most routed automatically to the recording information system. Tonight, the sole communications operator on duty sat quietly sipping a cup of caffeinated tea. He felt proud to be one of only a handful of employees still allowed inside Vatican City tonight. Of course the honor was tainted somewhat by the presence of the Swiss Guards hovering outside his door. An escort to the bathroom, the operator thought. Ah, the indignities we endure in the name of Holy Conclave. Fortunately, the calls this evening had been light. Or maybe it was not so fortunate, he thought. World interest in Vatican events seemed to have dwindled in the last few years. The number of press calls had thinned, and even the crazies weren't calling as often. The press office had hoped tonight's event would have more of a festive buzz about it. Sadly, though, despite St. Peter's Square being filled with press trucks, the vans looked to be mostly standard Italian and Euro press. Only a handful of global cover-all networks were there†¦ no doubt having sent their giornalisti secundari. The operator gripped his mug and wondered how long tonight would last. Midnight or so, he guessed. Nowadays, most insiders already knew who was favored to become Pope well before conclave convened, so the process was more of a three – or four-hour ritual than an actual election. Of course, last-minute dissension in the ranks could prolong the ceremony through dawn†¦ or beyond. The conclave of 1831 had lasted fifty-four days. Not tonight, he told himself; rumor was this conclave would be a â€Å"smoke-watch.† The operator's thoughts evaporated with the buzz of an inside line on his switchboard. He looked at the blinking red light and scratched his head. That's odd, he thought. The zero-line. Who on the inside would be calling operator information tonight? Who is even inside? â€Å"Citta del Vaticano, prego?† he said, picking up the phone. The voice on the line spoke in rapid Italian. The operator vaguely recognized the accent as that common to Swiss Guards – fluent Italian tainted by the Franco-Swiss influence. This caller, however, was most definitely not Swiss Guard. On hearing the woman's voice, the operator stood suddenly, almost spilling his tea. He shot a look back down at the line. He had not been mistaken. An internal extension. The call was from the inside. There must be some mistake! he thought. A woman inside Vatican City? Tonight? The woman was speaking fast and furiously. The operator had spent enough years on the phones to know when he was dealing with a pazzo. This woman did not sound crazy. She was urgent but rational. Calm and efficient. He listened to her request, bewildered. â€Å"Il camerlegno?† the operator said, still trying to figure out where the hell the call was coming from. â€Å"I cannot possibly connect†¦ yes, I am aware he is in the Pope's office but†¦ who are you again?†¦ and you want to warn him of†¦Ã¢â‚¬  He listened, more and more unnerved. Everyone is in danger? How? And where are you calling from? â€Å"Perhaps I should contact the Swiss†¦Ã¢â‚¬  The operator stopped short. â€Å"You say you're where? Where?† He listened in shock, then made a decision. â€Å"Hold, please,† he said, putting the woman on hold before she could respond. Then he called Commander Olivetti's direct line. There is no way that woman is really – The line picked up instantly. â€Å"Per l'amore di Dio!† a familiar woman's voice shouted at him. â€Å"Place the damn call!† The door of the Swiss Guards' security center hissed open. The guards parted as Commander Olivetti entered the room like a rocket. Turning the corner to his office, Olivetti confirmed what his guard on the walkie-talkie had just told him; Vittoria Vetra was standing at his desk talking on the commander's private telephone. Che coglioni che ha questa! he thought. The balls on this one! Livid, he strode to the door and rammed the key into the lock. He pulled open the door and demanded, â€Å"What are you doing?† Vittoria ignored him. â€Å"Yes,† she was saying into the phone. â€Å"And I must warn – â€Å" Olivetti ripped the receiver from her hand, and raised it to his ear. â€Å"Who the hell is this?† For the tiniest of an instant, Olivetti's inelastic posture slumped. â€Å"Yes, camerlegno†¦Ã¢â‚¬  he said. â€Å"Correct, signore†¦ but questions of security demand†¦ of course not†¦ I am holding her here for†¦ certainly, but†¦Ã¢â‚¬  He listened. â€Å"Yes, sir,† he said finally. â€Å"I will bring them up immediately.†

Review of Continental Airlines organizational structure Essay

1.Does the organizational design of this corporation help or hinder it in achieving its organizational goals? Continental Airlines utilizes a divisional structure relative to the management of its various entities. This structural design is due to the complex nature of the aviation industry as well as the autonomy required in operating a twenty-four hour a day, seven day per week worldwide business. In my opinion, the structural design of this organization with the exception of Continental Express and Continental Micronesia can really not be structured in any other way, and therefore should be considered helpful. The airline business is an incredibly tough business as it is. The costs of operations in relation to profit per passenger mile are very low. This airline and its management team have emerged from bankruptcy and now fly the newest fleet of aircraft in the sky today. Chairman and CEO Gordon Bethune with his years of experience in the aviation industry have afforded the opportunity for Continental to receive more awards for customer satisfaction than any other airline. Obviously, this is a far cry from the pre-bankruptcy days of this airline which now proudly stands as an industry leader. (No, I do not work, nor have I ever worked in the airline industry). The organizational structures leadership includes various notables that have grown up within the industry filling various leadership positions for other airlines. It seems as though Mr. Bethune has installed an incredibly capable team to steer this company into the future. I carved out Continental Express and Micronesia since they are basically licensed businesses that fly under the Continental flag. Their existence within the Continental family does provide routes to smaller and far-eastern destinations but are independently managed and therefore not considered (by me) as anything more than a profit center on the organizational chart. 2.If you were to change this organization, what issues would you need to consider and why? What would be the advantages and disadvantages of organizational change? If I had the ability and experience to effect change for this organization, the first issue I would consider would be consolidation of the airlines in  general. I address this issue because I do not necessarily feel that consolidation is all that it’s cracked up to be. Bigger airlines mean bigger bureaucracy and smaller profit potential. Both of these translate to decreased customer satisfaction as well as the potential for employee dissatisfaction. Mr. Bethune prides himself in being â€Å"one of the people†, he is often seen walking in the terminal, shaking hands and recognizing employees for doing an outstanding job. As a rated company pilot, he is also seen on the flight deck of the occasional 757 or 777. It is hard to imagine how the current structure could be improved beyond what it already is. He is leading by example as a leader should. Should airline consolidation continue, the main advantage would be for the traveling public. The customer could potentially book a trip around the world simply by calling the Continental reservation line. Until that customer shows up for the trip to commence, he may not even realize that he’s not even on a Continental flight. That’s the beauty of â€Å"being big†. The trip might be made up of legs flown by Northwest connecting to Varig connecting to Delta connecting to Qantas, etc. This â€Å"seamless† travel experience for the customer should be considered as an upside to consolidation. The main disadvantage might possibly be that the customer has no idea who to call when things go wrong. He might be stranded in a foreign land after his connection with China Airlines cancelled and he’s not sure of whom to contact to get back on track. The second issue I might consider would be mandatory retirement of pilots once they reach their sixtieth birthday. Organizationally, this federally mandated policy weakens the organization. My best and most experienced pilots are being forced out of my company. If this policy is unchangeable, I must find a way to keep this incredible resource happy and employed in some form or fashion that augments my existing infrastructure. This disadvantage to my organization structure is a hurdle that is out of my control but directly affects the bottom line relative to people and organizational power. Reference: www.continental.com/company/investor.governance.asp

A CASE STUDY †STRATEGY AT H&R BLOCK, INC. Essay

A Case Study Running head: A CASE STUDY – STRATEGY AT H&R BLOCK, INC. A Case Study – Strategy at H&R Block, Inc. Capella University OM 8012 Strategy Dr. Perry Hahn Dec 21, 2005 Abstract This paper will include an analysis of the company from the four strategy perspectives provided in the project deliverable which are: Strategy as rational thought – strategic planning and decision-making, Strategy as revolution – what is referred to as disruptive innovation, Strategy as resource allocation and accumulation in the firm, and finally Strategy as technology leadership viewed as a unique competitive advantage. This paper provides information about H&R Block in the areas identified in the project deliverables. Background information regarding the company is provided, along with the mission, vision, and an overview of management and the current structure. The strategy of the company as defined by the CEO, current management statements in the annual report and investor meetings and conferences is explained. An analysis of this strategy is then presented focusing on core strategic concepts such as five forces model and value chain analyses. This paper then provides a competitive analysis from both an external and internal perspective. External factors affecting this organization that are included involve an industry overview in each of the areas in which the company operates; tax preparation, mortgage services, financial services, business services, and software. In addition, foreign markets are explored for possible opportunities. Internal factors include a SWOT analysis as well as identifying the current business ethics and social responsibility paradigms exhibited by current management. Diversification strategies employed are identified as well as the current state of shareholder value. A final strategy analysis is provided with an overview of results and how the strategic plans of Block have been implemented and to what degree. Finally, future plans are explained and the information in this paper is summarized and final comments are added. H&R Block is a dynamic company with a history of providing excellent tax preparation services to over 16 million clients a year. Can this company branch out successfully into these other complimentary areas of mortgage, financial services, business services, and software and ensure they no longer depend upon one product but instead truly do become what they envision; To help our clients achieve their financial objectives by serving as their tax and financial partner. A Case Study – Strategy at H&R Block, Inc. Introduction Company Background H&R Block opened in Kansas City, MO in 1955 specializing exclusively in income tax preparation. Because the IRS no longer offered free tax preparation starting in 1956, H&R Block was able to capitalize on this enormous new market, by offering this service in the right place at the right time. H&R Block holds the largest market share in the tax preparation business and filed 14.3 million or 15.3% of all tax returns with the IRS in 2003 (HRB, 2003). H&R Block’s fiscal year ends on April 30th. Much of Block’s revenue is highly seasonal with over 50% of its annual revenue from the period of February – April, known as the tax season. H&R Block operates out of 9,301 tax offices and 98 Financial Centers in the United States, as well as 1,334 tax offices in Canada, Australia, and the United Kingdom and has a presence in all 50 states. Many of these offices are seasonally open only from January through April, although some offices remain open year round and phone representatives are available year round. Block views its business in five segments consisting of United States Operations, International Tax Opera tions, Mortgage operations, Investment Services and Business Services. Before H & R Block was born Henry Bloch opened up a bookkeeping business called United Business Company and later his brother Richard joined him. They did bookkeeping for several companies and they had an office of 12 employees, they even did income taxes for some of their clients. Eventually, they were becoming overloaded. So, one day they decided that they weren’t going to do income taxes anymore, but one of their clients, which was an advertiser for the Kansas City newspaper suggested that they  should try to make a business out of doing income taxes. So, their client persuaded them to run an ad twice and the IRS had just stopped doing free income tax returns. So, one day their office was full of people who needed to get their taxes done. On January 25, 1955 Henry and Richard Bloch replaced their original firm with a new firm, H & R Block because they wanted a company that strictly specialized in prep aring income tax returns. The company went public on February 13, 1962, with a $300,000 offering, 75,000 shares at $4 per share. H& R Block became listed on the New Stock Exchange in 1969. Today H&R Block Inc. is a diversified company with subsidiaries that deliver tax services and financial advice, investment and mortgage products and services, and business accounting and consulting services. The world’s largest tax preparation company, H&R Block in fiscal year 2002 served nearly 21 million clients in approximately 10,400 retail offices worldwide and with award-winning TaxCut ® software and online services. Investment services and securities products are offered through H&R Block Financial Advisors Inc., member NYSE, SIPC. H&R Block Mortgage Corp. offers retail mortgage products. Option One Mortgage Corp offers wholesale mortgage products and a range of mortgage services. RSM McGladrey Inc. serves mid-sized businesses with accounting, tax and consulting services. Mission To help our clients achieve their financial objectives by serving as their tax and financial partner. (HRB, 2000). Vision H&R Block seeks to be the world’s leading provider of financial services through tax and accounting-based advisory relationships. (HRB, 2000). Management Mark A. Ernst, 46, is chairman of the board, president and chief executive officer of H&R Block, Inc. He was appointed chief executive officer in January 2001, and elected chairman of the board in September 2002 (HRB 2002). Ernst joined H&R Block in 1998 and was first elected to the board of directors in 1999 when he was appointed president. Since joining the company, Ernst has been responsible for developing and implementing a long-term strategy for the company that strengthens the H&R  Block brand and builds on the company’s history of service to clients. Over the past five years, he has managed the company to achieve annual results that rank H&R Block in the top 10 percent of all companies in the S&P 500 for financial performance. During his tenure H&R Block has sharpened its strategic focus on increasing the value that its tax professionals bring to their client relationships; moved forward with its mission to become its clients’ tax and financial partner; strengthened its senior management team by hiring executives with the expertise needed to offer clients a wider range of financial services; and brought more discipline to its planning processes. The company and its subsidiaries offer a full range of tax, financial and mortgage products and services, including personalized financial advice about ret irement savings, home ownership, and other opportunities to help clients to build a better financial future. (HRB 2000-2005) Structure Block’s Five Business Segments consists of tax services available to the general public in the U.S. This includes the company’s full range of software including TaxCut personal tax preparation software, online tax preparation services through HRBlock.com and tax preparation through one of the company’s tax professionals. The company generates revenue from tax services provided through company owned tax offices and royalties from franchised branches. Also in this segment are H&R Block’s tax preparation classes in which members of the public and perspective employees learn how to complete tax returns. During ‘03 254,000 students enrolled at an average price of $450 for this 80 hour class (HRB 2003). Besides traditional personal tax services, the company also offers software TaxCut ($15-$50) and an online tax preparation program ($35-$100). International tax operations offers all of the services listed above for U.S. citizens living abroad wishing to file U.S. tax returns in addition to filing foreign returns for citizens of foreign countries. Pre-tax income for this segment has increased 114% over the last four years. Investment services: This segment of H&R Block Inc. offers investment advice and related services and securities products through HRBFA (H&R Block Financial Advice) branches to the general public. A nationwide network of registered representatives makes stocks, bonds, mutual funds and similar products and available. In ‘03 Block had 1,600 financial advisors and registered associates in more than 600 offices nationwide (HRB 2003). Average trading volumes fell during fiscal year’ 03 by approximately 21%, as measured by average trades per day. This is one of Block’s  sources of non-seasonal revenue and is expected to drive revenues and overall company growth during the coming years (HRB 2003-2004 statements by management in annual reports and investor meetings). Block views its key to future success of the investment services segment as retention and recruitment of financial advisors, which Block pursued in ’03 by hiring 260 experienced advisors. This segmen t of Block’s business has experienced severely declining revenue which is suggested to have been a result of the unfavorable environment of the equity market during the recent years. However, since acquisition of this business in ‘00 Block has been able to increase clientele in this division by over 14%. H&R Block’s management lists the Investment Services business as one of their priorities for the next six years. Mortgage operations: Subsidiaries in the Mortgage Operations segment originate service and sell prime and sub-prime mortgage loans and securitize residual interests in the United States. Sub-prim mortgage originations constitute 90% of Block’s business in this segment. Through a network of more than 24,000 mortgage brokers in all 50 states this segment offers a diverse mortgage product line to clients that do not meet traditional underwriting criteria, according to Reuters. These services are available through Block’s subsidiaries in addition to HRBFA branches. Block approves about 50% of their loan applications which come from over 2,200 independent sales associates throughout the U.S. Block makes money from the gain on the sale of these loans to other lenders. Through securitization the company makes money from the interest spread between its funding costs and its cost of borrowing. During the past 2 years, the declining interest rate environment has been favorable for the company and the company has been able to achieve as high as 4.46% in net profit margin. (HRB, 2004) Business services: H&R Block’s business services segment provides accounting, tax, consulting, payroll, employee benefits to business clients and tax, estate planning, financial planning, wealth management and insurance services to individuals. These services are made available through a number of sources, the largest of which, RSM McGladrey, Inc, operates more than 100 offices in 22 states. (HRB, 2004). The addition of these business units under the parent company along with the core H&R Block Tax Services, Inc. created the operational backbone to support a fuller line of financial services. Cross selling is heavily used and customer information, with proper consents, is shared amongst the business units for marketing and contacts. Even though this strategy is well under way, and in some ways is doing well other ways not, the average person on the street does not have any idea Block does more than â€Å"taxes†. In addition, some attempts to cross sell have worked to some degree such as mortgage products but others, such as offering IRA products to tax clients, have not. H&R Block’s average client has an income around $38,000 (individual) and do not seem to be interested in savings vehicles to the degree that would be necessary to meet sales goals. Strategy Defined In an effort to become â€Å"America’s year-round tax and financial partner† Block transformed itself from a company focused exclusively on tax preparation to a company that provides comprehensive financial services. This diversification aimed to offer existing clients a wider range of products and services while compensating for sagging revenue during the off season of the tax preparation business. In researching statements  by management in annual reports, investor meeting materials, etc. the author finds the following strategic direction is desired by the company. Several years the new CEO, Mr. Ernst, at H&R Block said that the new strategy is to take the steps necessary to transition the company from â€Å"tax preparer† to â€Å"financial partner† (HRB, 2000). Ask anyone you know what does this company does and you will hear â€Å"prepare taxes† but financial partner? H&R Block, Inc. began to implement a strategy to offer clients, and potential clients, additional financial services beyond tax preparation. H&R Block acquired Olde financial (based in Detroit) and used this firm as a launch to create H&R Block Financial Advisors, Inc. In addition, Block acquired Option One mortgage (Based in Irvine, CA) and renamed the firm to H&R Block Mortgage, Inc. Block’s management feels that the tax preparation market is so unsaturated that it is foreseeable to open 50% more stores in order to provide its customers sufficient convenient locations. H&R Block studies indicate that for some of their clients, convenience of location is valued higher than brand name and that the only way to capture such fringe customers is open stores throughout market areas. These plans are currently under formulation and implementation. Although there was a 6% increase in the number of tax return offices, tax clients served declined 3% during ’03, which lead Block to file 600,000 fewer returns than in ‘02. This was offset by a jump in software sales of 600,000 for the same period. Block achieved increased profitability during the ’04 tax season as a result of higher tax preparation fees. Average tax preparation fees have increased about $10 per year over the last four years to $130.59 suggesting that demand is slightly price elastic. According  to Mr. Ernst because of this elasticity Block can continue to raise its prices to generate revenue growth. The company is competing on quality, not on cost and on ‘location’ whether it be a physical location or via online using the web. In addition, the company has announced the opening of 400-500 new offices for tax season 2005 in under served markets. With the trending to online and software, causing a decrease in office clients, this may be a mistake. One of the Organization’s Corporate Priorities is to integrate and align Tax, eSolutions, Financial Advisors and Retail Mortgage, incorporating advice as a key differentiator. In that respect, the Company’s Vision states: â€Å"To be the world’s leading provider of financial services through tax-and accounting- based advisory relationships.† It appears that the vision statement does not fully reflect the company’s long-term goals since it only mentions two specific products, -tax and accounting- under the umbrella of financial services. By stating only two products, the vision statement implied that tax and accounting are the company’s core strategic goals, with the other products revolving around them. If that were the case, then all the integration and arrangement measures through structural changes done in order to accelerate the alignment process would be much ado about nothing, that is, if the company’s true intention is what can be deduced from the Vision statement. Strategy Analyses Some of the measurements of an effective strategy as outlined by Thompson, Strickland & Gamble (2005) includes consideration of and alignment with the adopted competitive moves and business approaches, a focus on competitive advantage, resource  strengths and overall competitive capabilities. By acquiring complimentary businesses, financial services and mortgage, the company has been able to, to a certain degree, begin offering the millions of customers who come to Block for tax preparation other financial services. During the last few years mortgage has done well, tax held steady with barely an increase, and financial services has lost money. Online services and software have shown good increases in clients yet profitability is very low at this time. Consumer awareness and trust as well as infrastructure and technology needs require more work than originally realized. In addition, the internal problems of an old cash cow business unit, Tax Services, being asked to suddenly share clients with, and work with, business units with differing cultures and oper ating speeds is a much larger issue perhaps than management anticipated. The strategy of providing additional financial products to current tax customers as well as running these complimentary business units as unique operations does have a good fit, H&R Block does have competitive advantage in the service areas mentioned but more so with Tax and Mortgage than with financial services. It may be learned and the results the last few years bears this out, that the client base of Tax and Mortgage are not the most ideal financial services fit. Tax and Mortgage deal primarily with mid to low income groups and high profitability in financial services comes from the mid to high income groups. Value Chain The value chain categorizes the generic value adding activities of an organization. The â€Å"primary activities† include: inbound logistics, production, outbound logistics, sales and marketing, maintenance. The â€Å"support activities† include: administrative  infrastructure management, human resources management, R&D, and procurement. The costs and value drivers are identified for each value activity. The value chain framework quickly made its way to the forefront of management thought as a powerful analysis tool for strategic planning. Its ultimate goal is to maximize value creation while minimizing costs (Porter, 1985). The value chain maps a firm into its strategically relevant activities in order to understand the behavior of costs and the existing and potential sources of differentiation. Differentiation results from the way a firm’s product, associated services, and other activities affect its buyer’s activities. All the activities in the value chain contribute to buyer value, and the cumulative costs in the chain will determine the difference between the buyer value and producer cost. A firm gains competitive advantage by performing these strategically important activities cheaper or better than its competitors. One of the reasons the value chain framework is helpful is because it emphasizes that competitive advantage can come not just from great products or services, but from anywhere along the value chain. In strategic management it is critical to understand both the competitive advantage of an organization as well as understand the value chain. Five Forces Model The five forces model developed by Porter (1985) guides the analysis of organization’s environment and the attractiveness of the industry. The five forces include the risk of new competitors entering the industry, threat of potential substitutes, the bargaining power of buyers, the bargaining power of suppliers, and degree of rivalry between the existing competitors (Porter).  A starting point to analyzing the industry is to look at competitive rivalry. If entry to an industry is easy then competitive rivalry will likely to be high. If it is easy for customers to move to substitute products for example from coke to water then again rivalry will be high. Generally competitive rivalry will be high if: †¢ There is little differentiation between the products sold between customers. In this case Block has the advantage of a long solid history with the perception being that they know what they are doing and can be trusted. In addition, electronic filing is a long time product of Block that has also gained a lot of trust with customers. Of the two competitors, Jackson Hewitt and Liberty, Block is the only one with a guarantee that pays additional costs of any errors in work done. †¢ Competitors are approximately the same size of each other. The two competitors are very small compared to Block. No other tax preparation firm comes close to re aching the size and market share of Block. †¢ If the competitors all have similar strategies. They do have very similar strategies in the tax services arena; however, this will be an area to review in regards to financial services and mortgage. Suppliers are also essential for the success of an organization, however Block is a service business and suppliers are abundant for office supplies, computer equipment, etc. Block develops its own tax software. All mission critical needs are handled by Block so the threat of suppliers is almost non existent. Although, the IRS in a sense is a supplier of the electronic filing product infrastructure and does heavily influence what sort of electronic filing products are offered. Buyers or customers can exert influence and control over an industry in certain circumstances. This happens when there is little differentiation over the product and substitutes can be found easily. For many low income customers there is no loyalty and they will move to other providers if the fees are lower or they can get their refunds quicker. Regarding threat of substitutes the question is: Are there alternative products that customers can purchase over Block’s product that offer the same benefit for the same or less price? This is high in the case of H&R Block due to the availability of cheap and easy tax preparation programs, the increased use of the internet by a growing number of internet users, and technology is creating new forms of service delivery such as online services and software capabilities and price. Competitive Analysis – External Industry Analyses  Tax Preparation Industry: The IRS projected that for ‘05 they would receive 226.9 million tax  returns, a  number which  they project to  continue  growing at a  rate of 1.6% per  year until 2010  when the total number is expected to be 247.9 million. In the U.S., tax payers may file  their returns either through pipeline filing methods (sending paper forms  through the U.S.P.S.) or by e-filing (IRS 2004-2005). The IRS has strongly encouraged e-filing in recent years which is now becoming increasingly popular and consists of both TeleFiling and online filing. Online filing can be completed either through a broker or from any personal computer. The IRS projects that during ‘04, 58.9 million returns will be e-filed which would constitute 26% of all expected returns. Subsequently, the IRS projects this number to grow 8% per year until 2010 when the number of e-filers is expected to be 93.5 million, or 37.7% of the expected returns dur ing the 2010 tax season. (IRS 20042005). During recent years the IRS has promoted this method by touting higher accuracy, lower costs, less time consuming processing procedures, and refund turn around three to five weeks sooner than pipeline filing. Online filing is expected to increase by 21% from ‘03 to ‘04 and is expected to jump another 18% for the ‘05 tax season. According to HRB, the percentage of individual tax returns completed by paid preparers has risen from 48% in 1990 to 56.8% in 2002. Tax Preparation Competition The most recent U.S. economic census conducted in 1997 suggested that the tax preparation industry is very fragmented. While H&R Block holds 15.3% of this market its largest competitors, Intuit and Microsoft, hold significantly smaller portions. Although both of these companies directly compete with a portion of Block’s business, neither has the same business model or identical products. Intuit Inc. is a provider of business and financial management solutions for businesses and consumers and accounting professionals. This company not only produces products such as TurboTax and the  Quicken line of software, they also provide the general public professional tax help in person. Intuit has offices in 13 states while Block has offices in all 50 and both companies have a presence in the U.K. and Canada. Microsoft also plays a part in the tax preparation industry with Microsoft ® Excel Version 2002 Inside Out software. Growth of two fairly new competitors, Jackson Hewitt and Liberty Tax, which are using similar business model of combination of retail locations and online services. While currently these organizations are no where near the size of Block they are growing significantly each year. The availability of cheap and easy tax preparation programs is also an external factor which is driven by the customer need to conduct business when and where it is convenient for them. The increased use of the internet for tax preparation by a growing number of internet users is also an external factor. Technology is creating new forms of service delivery as mentioned previously regarding online services and software capabilities and price. In addition, the Internal Revenue Service factors as both a resource and competitor in a sense. In the chapter entitled â€Å"Conceptions of Environments† (133) Scott notes that the most common conception of environment of organizations is that of a task environment. He defines this concept as all aspects of the environment that are â€Å"potentially relevant to goal setting and goal attainment† and goes on to note that it is typically narrowed to refer to the nature and sources of inputs, competitors, and markets for output. This based on the belief that most organizations are created to achieve goals, to perform some type of work. Scott goes on later in the book and talks about managing task environments and notes (197) that there are many research resources and theories regarding the various aspects of managing the task environment, i.e., the sources of inputs, markets for outputs, competitors, and regulators. At H&R Block there is a great deal of material that could covered under this subject but one in particular stands out and that is the need at Block for the customers it serves in tax operations to continue to need that service. I am speaking of the Internal Revenue Service as both a resource and a competitor for Block. Block’s tax service is regulated in that all paid tax preparers must conform to tax professional rules and regulations that are part of the tax code and compliance enforcement in the responsibility of the IRS. So in one way, the IRS is a compliance officer to Block and Block must ensure that all tax professionals and company representatives comply with these rules at all times. They include sharing of information, application of tax law and theory, etc. In addition, the IRS has been a partner to Block and these two organizations worked together, almost a joint venture in behavior, to develop electronic filing in the late 80’s. This has been a boon to both organizations. At IRS processing centers labor needs have decreased as more filer’s use electronic filing rather than mailing in paper returns. They have experienced other benefits as well, less errors, etc. At Block this new product produced a new revenue stream that now makes up approximately 30% of revenues in the tax services business unit. Block and the IRS also work together on special projects and have a sort of standing arrangement where if the IRS wants an idea tested or hammered out they go to  Block, the largest preparer with 16 million customers. Five years ago IRS was concerned over the pending proposals for changes to the earned income credit. IRS asked Block to analyze what they might mean to lower income tax papers. With 16 million customer records that could be analyzed for impact it is much more than a random sampling. The IRS used this information to make internal recommendations to the program. In many ways, over the years Block has managed to use the IRS to actually help grow the company and the IRS has benefited from this enormously. This is true case of no organization  generates all the resources necessary for its goal attainment or survival (197). Software Comparison: TaxCut versus Turbo Tax  During ’03 48 million filers used Intuit’s Turbo  Tax while only 20 million used Block’s TaxCut.  (HRB, 2004 & Intuit, 2004). Block’s software  offerings average $10.00 less expensive for  comparable software with similar features which is  illustrated by TaxCut and Turbo Tax’s price ranges  $15.00-$50.00 and $20.00-$70.00, respectively. Both  products tout extremely user friendly features, such as  aggressive deduction finder, error double check, and  import of previous year’s repeatable information to promote continued use. Complaints regarding Turbo Tax are that the software is generally designed for one user to do one return and that it difficult to jump to one part of the return process without completing the entire procedure. Regarding TaxCut’s short comings, consumers have  suggested that it is easier to file more complicated itemized returns with Turbo Tax than TaxCut, although thi s may be outweighed by the smaller price. Both products are designed to file only the federal tax return for the fiscal year the product is purchased, and both also offer a rebate program to get the state version at no cost after rebate. Because tax legislation varies by year, a new version of either product is available each year, which sustains demand for this market. It is unclear if on of these products will clearly dominate the market in the near future because their extremely similar characteristics, pricing and availability. What is clear is that the market for ax preparation software is growing and that as long as both products remain innovative and react to consumers demands they will continue to attract new customers. Block’s brand name is one small advantage regarding TaxCut’s prospects in the future although that is only enough to pique interest in the product, while the features and ease of use will keep customers retuning year after year. Mortgage Industry The specific activity mortgage bankers engage in is the purchase, packaging, and sale of loans to third parties. This segment of Block’s business is sensitive to interest rate fluctuations. Interest rate cuts have driven mortgage rates to a 45 year record low, which, in turn spurred a sharp increase in home mortgage refinances. The industry has directly benefited from significantly higher volume of loan transactions in recent years driving a $2.5 trillion increase, in mortgages originated between ‘00 and ‘03. Because the majority of those interested in refinancing their mortgages have had sufficient opportunity to do so, business in this sector will be driven by new mortgage originations rather than additional refinances. The market for sub-prime mortgage will not slow down as much the prime market over a period of rising interest rates due to the cash-out refinance nature of the business. During ‘02 sub-prime originations constituted 8.3% of all loans and during ‘03 they constituted 8.4%. If interest rates rise in ‘05 as Greenspan has indicated then sub-prime originations should rise to their normal volume of 15% of all loans, nearly double what they are now. Over the new few years, the sub-prime industry expects growth of at least 5% a year. Regardless that low interest rates may have caused a spike of mortgage refinances in recent years, Block has experienced steadily increasing rate of mortgage originations the same time period. Although mortgage refinancing may not continue to be as considerable revenue source in the future, HRB management suggested in a Goldman Sachs conference call that non-refinance mortgage origination rates are increasing steadily  which should at least partially compensate. Financial Advice Industry H&R Block Financial Advisors (HRBFA) competes directly with a broad range of companies seeking to attract consumer financial assets, including full-service brokerage firms, discount and online brokerage firms, mutual fund companies, investment banking firms, commercial and savings banks, insurance companies and others. In ‘99, there was $6 trillion invested in mutual funds which is the largest single portion of this industry. 93% of this $6 trillion was controlled by six firms at that time. These were Vanguard (35%), Janus Capital Corp (20%), Fidelity (17%), PIMCO, Alliance, and MFS with 7% each (NYSE Market Report Searches, 2005). Clearly, Block is a small player in this enormous industry. In the secondary business units, financial services and mortgage, there are huge number of competitors currently offering services. Both businesses who core business are in these areas with high skills and those businesses that branched into these areas whether or not related to their core business. For example, retailers running credit operations. In the regulatory arena Block business units are heavily regulated. Tax Services by Internal Revenue Service and Treasury Department rules, financial services by SEC and broker regulations, and mortgage by lending laws. The most out of control areas are mortgage due to interest rate drivers and tax due to tax law changes. Foreign Markets Of the five segments at Block only one, Tax Services, actually operates in foreign markets. Mortgage, Financial Services, and Business Services operate solely in the United States. Until Recently H&R Block placed a moderate amount of emphasis on foreign markets but the particular services Block offers, and especially the non-tax segments, are not viable in most countries. As disclosed in the companies 2005 Annual Report the International Tax Operations segment has been aggregated with U.S. Tax Operations in the Tax Services segment and prior year results have been reclassified to reflect this change. In the 2005 Annual Report Block stated that international operations contributed $110.0 million, $97.6 million and $85.1 million in revenues for fiscal years 2005, 2004 and 2003, respectively, and $11.3 million, $11.1 million and $10.5 million of pretax income, respectively. This represents only 5.2% of revenue in 2005 but is up a bit from the 3.8% contribution in 2001. Australia is flat over this time period and the growth came from tax law changes in Canada. Considering the markets it makes sense that Block would not allocate a great deal of resources to foreign markets but instead operate primarily domestically. The company’s tax segment provides services to assist taxpayers with required self filings. Few countries have such systems requiring tax payers to self file. In Canada the tax reporting system is similar to the United States in that taxpayers file returns on an annual basis. This is also true in Australia. The United Kingdom is different in that few taxpayers are required to submit any filings. In the financial services area there is impact from foreign markets. The financial services industry has become considerably more concentrated as many firms have been acquired by or merged with other firms in recent years. Some of these competitors have greater financial resources than HRBFA and offer additional financial products and services. Competition from domestic and international commercial banks and larger securities firms is expected to continue to increase as a result of legislative and regulatory initiatives in the U.S. Firms in this industry are impacted by market performance, volatility, investor sentiment, margin balances, government regulation, and many other factors which cannot be controlled. Competitive Analysis – Internal SWOT Analyses A SWOT analysis is an effective method for identifying H&R Block’s strengths and weaknesses, while examining the opportunities and threats the company may face. Strengths: Personalized product and services Only brand to offer software, online and in-office solutions Dynamic marketing skills and structure Brand Client Base/Distribution Scale Very user-friendly website Low cost delivery system Low number of major (tax) competitors and no one on par with Block as far as clients served. H&R tax professionals are offered more education at most tax preparation firms over 400 hours. Weaknesses: Niche brand and market position Mass business system best serves lower income consumers Delivery system perceived to not meet many consumers’ needs Outside of tax relationships, limited or no competitive advantages in financial services/mortgage businesses Customer service in office and telephone Part time employees lack corporate citizenship Offices are leased and appear so Non-contractual service allows customers ease of switching to competitors Opportunities: Financial advisory business Tax preparation software Consumers are rapidly embracing internet availability Digital self-preparation splitting between software and online Online attracting younger, moderate income consumer (Early Adopters) Push for/advantage to E-Filing likely to drive growth for many years Financial services – long-term trend toward advice Online trading phenomenon is likely over – now just way business gets done Pricing for services evolving toward fee-based Major competitors focusing on high net worth market for growth Interest rate cycle impact on conforming loan market refinance business Financial advisory business Tax preparation software Threats: Availability of cheap and easy tax preparation programs Organizing low-end Competitors – Jackson Hewitt and Liberty Tax Banks or other financial companies could offer similar services in the future IRS could reduce complexity of forms and remove demand Technology is creating new forms of service delivery Flood of entries into financial services arena Financial services competitors building brand strength and service capabilities that drive consumer expectations Service capabilities that lead consumer expectations Mortgage industry – scale advantages dominate successful business models Business Ethics According to Thompson business ethics refers to the application of general ethical principles and standards to business behavior. They go on to say that business actions are judged by the general ethical standards of society, not by a special set of more permissive standards. Examples of ethical behaviors are honesty, integrity, keeping one’s word, respecting rights of others, and practicing the Golden Rule. H&R Block has a core set of values that the company attempts, through training and orientation, to instill in each employee. H&R Block’s values are client focused. Integrity: We are honest and ethical in everything we do, Excellence: We take pride in doing our best in everything we do. We embrace change to learn and grow, Respect: We treat each other with respect and dignity, recognizing that innovation springs from unique perspectives, and Teamwork: Everyone’s collaboration and full participation make us stronger and allow us to serve clients better (HRB web site). In my experience at Block, these values, which include being honest and ethical in all actions are adhered to by the majority of employees and leaders. Block has a culture of honesty and integrity which was fostered by Henry Block, the founder, and I would say this is a very ethical company. Social Responsibility Thompson outlines the notion of social responsibility as it applies to businesses concerns a company’s duty to operate by means that avoid harm to stakeholders and the environment and, further, to consider the overall betterment of society in its decisions and actions. At H&R Block one the products sold is known as a Rapid Refund. This is a loan against a refund. The demographics of Block clients are typically middle or lower income tax payers and many qualify for a refundable tax credit known as the Earned Income Tax Credit. This is credit given to low income tax payers and was intended to help those falling into this income range to move higher up in the income levels to assist with supporting their family. Block’s Rapid Refund product is a high cost loan and the interest rate is very high considering the length of the loan, typically a few weeks. The National Consumer Law Center is a non-profit organization specializing in consumer issues on behalf of low-income people. NCLC works with thousands of legal services, government and private attorneys, as well as community groups and organizations, who represent low-income and elderly individuals on consumer issues. According to the NCLC Refund anticipation loans (RALs) are usurious short-term loans secured by the taxpayer’s expected tax refund. Over half of RAL consumers are recipients of the Earned Income Tax Credit (EITC), despite the fact that EITC recipients only constitute 15% of all taxpayers. They also state, from valid research, that low income Taxpayers Lost over $1 Billion in Loan Charges and Fees in 2002 Their research also indicates that check cashing fees add to the cost of getting tax refunds or RALs, especially for those consumers who do not have bank accounts. While many un-banked consumer s find ways to get their checks cashed for free, commercial check cashers count on tax season to boost their revenues. One study found that 45 percent of EITC recipients planned to use a check casher to cash refund checks, further draining this program.50 Check cashers are also moving into the tax-filing and RAL market for their clientele. Since IRS rules prohibit commercial tax preparers from charging their clients to cash tax refund or RAL checks, 51 some tax preparers have formed partnerships with check cashers. H&R Block has teamed up with ACE Cash Express, one of the nation’s largest check cashing chains. This partnership has been proven very profitable for ACE, which has seen growth in its income during tax season. Part of the H&R Block/ACE partnership involves placement of self-service check cashing machines in lobbies of H&R Block tax preparers. ACE reported that 3.2% of its check cashing fees in fiscal year 2002 came from self-service machines located in ACE stores or in H&R Block offices. ACE placed 100 machines at Block locations during 2002 and has an agreement with Block to place up to 250 machines during the 2003 tax-filing season. As of the end of June, ACE had 22 machines in company-owned  locations and 150 machines available for deployment at H&R Block locations for 2003. ACE, expecting a boom ing business in cashing Block checks this year, announced cash inventory of $290 million during the 2003 tax season for 248 self-service machines placed in H&R Block offices. ACE also has a $55 million credit line from banks, for a total cash inventory of $345 million available to cash tax refund and refund anticipation loan checks during the 2003 taxfiling season. In addition to NCLC, several other consumer groups have charged this is a rip off and that Block is stealing some of this earned income credit from needy families and is perceived as being very unethical. Block counters that these clients in fact want this service and Block is doing nothing more than meeting the needs of its clients. This issue draws attention every year and creates quite a bit of bad press. Currently the National Consumer Law Center Consumer Federation of America is working to Ban refund  anticipation loans outright or make them subject to state usury and small loan interest rate laws. Diversification Strategies Thompson points out that diversification becomes an attractive strategy when a company runs out of profitable growth opportunities in its original business. H&R Block since it’s inception in the 1955 was focused on one area, tax preparation. In the 1980’s they did begin to think about diversification when talk began about a flat tax. They purchased a company called CompuServe based in Columbus, OH. At the time it was doing well in the new area of online subscription services. It did not, however, fit all the tests for a good acquisition for Block and the management team at corporate lost some key people at CompuServe and had no skills at all in running such a business. In essence for several years it sort of just stayed flat in growth and innovation and AOL took off and left CompuServe in the dust. CompuServe was finally sold in the mid 1990’s and the buyer stripped off the technical infrastructure for their own use. The other services were  discontinued. This was Blocks first try at diversification so it was a long while before they tried again. In the late 1990’s a new CEO was hired, who is still managing the firm through a brand and strategic shift, and he immediately laid plans to diversify but only with complimentary businesses with a good fit to the core competencies of Block. Block certainly fits with the opening remark from Thompson in this discussion. Tax is mature and has growth potential that is limited each year. Mergers and Acquisitions Thompson (2005) identifies several strategy choices in chapter 6 of Crafting and executing strategy: The quest for competitive advantage and one of those is the merger and acquisition strategy. The authors state that a â€Å"merger is a pooling of two or more companies as equals, with the newly created company often taking on a new name. An acquisition is a combination in which one company purchases and absorbs the operations of another.† According to Thompson the objective of mergers and acquisitions are to achieve one or more of the following organizational business goals; paving the way for acquiring firm to gain more market share and create a more efficient operation, expanding a firm’s geographic coverage, extending a firm’s business into new product categories or international markets, gaining quick access to new technologies, and/or to invent a new industry and lead the convergence of industries whose boundaries are blurred by changing technologies and new market opportunities. Thompson goes on to indicate that combining operations may result in some negative consequences such as resistance from rank-and-file employees, hard-to-resolve conflicts in management styles and corporate culture, and tough problems of integration. In addition, the author’s state that greater-than-anticipated difficulties may occur in; achieving expected cost-savings, sharing of expertise, and achieving enhanced competitive capabilities. Regardless of possible negative effects the merger-acquisition is a much used strategic option and is a common occurrence in business today. H&R Block does have a good example of this strategic method. In 1996 Block acquired Option One mortgage (Based in Irvine, CA) after running the business as a separate company retaining the name and structure in 2000 this firm was renamed H&R Block Mortgage, Inc. In addition, in 2000, H&R Block acquired Olde Financial, a securities firm (based in Detroit) and used this firm as a launch to create H&R Block Financial Advisors, Inc. The addition of these two business units under the parent company, along with the core H&R Block Tax Services, Inc., created the operational backbone to support a fuller line of financial services. Cross selling is heavily used and customer information, with proper consents, is shared amongst the business units for marketing and contacts. In many other ways, outlined in my final project, the company has used these acquired firms to provide the operational structure required to gain entry into new areas relatively quickly. Moving into financial services and mortgage has been a big plus for the company. Mortgage has been especially lucrative financially and while financial services are not as strong it is growing steadily as skills and talent is added. They do fit very well and there is cross marketing and up selling in and across the business units. It is taking longer to really integrate and turn these strategies into operational ways of doing business but they are achieving the plan. Shareholder Value According to Thompson there are three tests that if passed indicates the diversification move can produce added value for share holders. They also state that â€Å"managing a set of unrelated businesses is a much weaker foundation for enhancing  shareholder value than is a strategy of related diversification where corporate performance can be boosted by competitively valuable cross-business strategic fits.† The industry attractiveness test measures whether the industry chosen measures favorably in competitive conditions and a market environment that is as good as or better than the current businesses. It seems that Block meets this test with their diversification strategy. By entering into the financial services and mortgage businesses they are able to cross market and sell to, for most products, existing customers of the core business. The mortgage business has done extremely well in profitability. The cost-of-entry test measures whether the business in consideration has a cost of creating or buying that will limit profitability. In the case of Block the mortgage business has shown incredible returns on the original investment. The financial services firm purchased were slow to contribute profit but are doing so now. The better-off test measures whether, well as it says, the company is better off overall with this business. Financially if there is no increase in profits and shareholder value with the business than without it than it would not meet the test. Block is definitely better off with these businesses than without as shown in the contribution rates of the businesses to the overall corporate profit. In addition, these businesses provide value added services to the 18 million tax clients out there in the form of these added financial and mortgage services. Block, in my opinion as a former long time executive and based upon operating results, has done well in these businesses and seem to have made good choices by using a diversification strategy of related businesses that provide added value to shareholders and customers of the cash cows tax services division. Unfortunately, these units have not all achieved the profitability levels desired and financial services in particular has sustained some heavy losses during the first few years of implementing this strategic plan. Strategy Analysis Strategy – integration of services across business units.  Completing its transformation from tax provider to financial services provider, H&R Block is well aware that it is entering into some stiff competition— from brick-andmortar to click-and-mortar and strictly online ventures One of the areas that could be improved that would allow for better support of the company cross selling and servicing strategy is to create greater cross operational responsibilities for local and regional managers. This company does retain a good deal of silo mentality at this level and managers should have more cross operational responsibilities. For example, those customers using online tax preparation or purchasing TaxCut software could have included year round in person service if needed at the local physical Block office. Both managers should be viewed as responsible for this customer and compensation considering accordingly. This same scenario could work in reverse with physical offi ce customers seeking assistance via the web. Infrastructure is in place to accomplish this and only strategic planning and execution of processes changes is needed. As Thompson states â€Å"organizational capabilities emerge from a process of consciously knitting together the efforts of different work groups, departments, and external allies, not from how the boxes on the organization chart are arranged†. In the past few years technology and functional areas have been reorganized and  processes reengineered to support this type of operational shift, however, the people have  not been paid as much attention to. Currently, if a local Block manager has a client come in that had done their taxes with the software about all the help they can offer is an 800 number to call for support on the product but not with any tax issues. There is no incentive to assist this client any more than that. Customer needs and the market drivers should be primary considerations regardless of wha t branch of the company the client approaches for assistance. H&R Block already has strong brand equity as a tax preparation company, but to successfully take advantage of financial industry deregulation, the company needed to leverage the relationships with its traditional tax customers. Much of this effort falls on its tax preparers. As the first point of contact for customers, they’re charged with gauging the interest level and potential value a tax customer would receive from other financial services, including mortgage products and investment plans. Once customers express interest, the company needed an efficient way to pass information to the appropriate financial advisors and ensure every inquiry was addressed. That was the hard part, with 1,600 advisors spread across 190 financial centers nationwide. Because of changes in policies, processes, structure, and technology solutions, when a tax customer requests more information on other H&R Block services, information on that customer’s background and interest area is automati cally routed to the most qualified financial advisor for an immediate, tailored response. According to a CRM study (HRB, 2003) within the organization conducted by a software firm the company could enable its financial advisors to provide personalized sales and service, they found that H&R Block is giving its customers reason to be loyal and creating a return on relationship over the customer lifecycle. While piloting its financial service center concept, H&R Block initially used a contact management and lead distribution application, but it ultimately lacked the robustness needed. That’s when the financial services group began seeking a new sales force automation solution. Meanwhile, the company had chosen a technology solution as its scalable, web-ready CRM solution to track and route customer inquiries— whether they come in by phone, email, the web or in person—in the company’s newly consolidated customer contact center. Its individual call centers had been using disparate call center tracking software, which meant that the company wasn’t getting a single view of each of its customers—or their profitability levels. The new customer contact center serves the tech support needs of the company’s 10,000 offices as well as its client relations, financial and e-commerce groups. Future Plans Thompson has several key points regarding organizational capabilities; companies don’t implement and execute strategies; people do; all managers have strategy-executing responsibility in their areas of authority, and all employees participate in the strategy execution process; and, when strategies fail, it is often because of poor execution— things that were supposed to get done slip through the cracks. A talented management team is essential talent implies that an appropriate mix of skills and experiences exists within the team. Intellectual capital is more important to strategy execution than other investments. Also decentralizing decision making which takes full advantage of the talent is important to good strategy execution. H&R Block has been reorganizing and changing the management team over the last five years. As they have added businesses through acquisition and development of  new products (online and software, for example) they have added key management per sonnel in those areas with backgrounds and skills in the appropriate fields. While this company does not attract â€Å"stars† it has a very capable management team and the only criticism is that unfortunately many of those newly added have left after two or so years. A great deal of turnover has occurred in seeking just the right individuals. In some cases, they were not working out and in others they sought greener pastures. The management ranks in the middle levels of the company are, however, stable and exhibits a great deal of talent within their respective operational group. This company does retain a good deal of silo mentality at this level and managers should have more cross operational responsibilities. For example, those customers using online tax preparation or purchasing TaxCut software could have included year round in person service if needed at the local physical Block office. Both managers should be viewed as responsible for this customer and compensation cons idering accordingly. This same scenario could work in reverse with physical office customers seeking assistance via the web. Infrastructure is in place to accomplish this and only strategic planning and execution of processes changes is needed. As Thompson states â€Å"organizational capabilities emerge from a process of consciously knitting together the efforts of different work groups, departments, and external allies, not from how the boxes on the organization chart are arranged†. Thompson also states that â€Å"the ultimate goal of decentralized decision making is not to push decisions down to lower levels but to put decision-making authority in the hands of those persons or teams closest to and most knowledgeable about the situation†. Block is a leader in this area. Local and regional managers are responsible for most  decision making regarding hiring, schedule of activities (training, tax  schools, etc.), location selection, local marketing, bookkeeping, public relations, etc. When I was a district manager the total experience was of running my own business with the absence of financial liability. There are, however, policies and procedures for many areas that must be adhered to in all locations but deviations are allowed with proper approvals and usually this is just one level up rather going to the CEO. Another area is evaluation of strategy implementation. For several years the company has been designing and setting up processes to support a balanced scorecard method. (Kaplan, 1996). The balanced scorecard is a management system (not only a measurement system) that enables organizations to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise. Kaplan and Norton describe the innovation of the balanced scorecard as follows: â€Å"The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation.† The balanced scorecard suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives: 1) The Learning and Growth Perspective, 2) The Business Process Perspective, 3) The Customer Perspective, and 4) The Financial Perspective. At H&R Block key performance indicators have been identified and databases put into place to provide executives with data at all levels of the company in the four performance dimensions measured by the scorecard. Executives indicate in personal conversations with the author that the initiative is going well and the tool is providing much needed information to assist with decision making and measurement of results. Summary and closing In a Forbes article printed in early 2004 author Emily Lambert stated â€Å"April 15, looms, but H & R Block Chief Executive Mark A. Ernst has more than taxes on his mind. He’s eager to find out how many of this season’s customers can gradually be convinced to buy H & R Block’s newer offerings, including home mortgages, business consulting and brokerage services. Last fiscal year the company’s non-tax businesses accounted for half of its $3.8 billion in revenue, most of that from its mortgage lending, which it started offering in 1997. Its financial services business hemorrhaged $128 million (pretax) last year, and the business services arm is also lagging. The loans, which can carry interest rates of 129%, appeal to cash-strapped low-income customers. Some customers may be wary, too. The company is under fire for its â€Å"refund anticipation loans.† The loans, which can carry interest rates of 129%, appeal to cash-strapped low-income customers. T he fees accounted for $109 million in revenue last year. H&R Block has settled a number of loan-related laws.† This is a powerful representation of the state of company as of that time which is result of close inspection during a time of transition. What she does not mention is how this compares to the first couple of years of the strategy implementation of broadening services. As of today, the picture is brighter and the company, while still a long way from being there, is closer to achieving some of the goals. This paper outlined the company, the strategy employed, the rationale for various components of the strategy, and how these areas fit within the strategic models studied in this course. One area that the author feels may be needed that is not current present in any of them.

Business process management Essay Example | Topics and Well Written Essays - 250 words - 1

Business process management - Essay Example Mature organizations on the other hand, produce quality products or services effectively and there is no variation in efficiency and quality. 2b Describe a capability maturity model with which you are familiar. The model can be described in two ways . Mature organizations use objective and statistical basis of judging product quality and analysing problems with the product and process.Managers supervise process by monitoring the quality of the software products and the processes that produce them . Schedules and budgets s are forecasted making use of previous process data available. These forecasts produce realistic estimates of costs, schedules, functionality, product quality. There is not much variation in forecast and actual figures obtained. In general ,the mature organization follows well planned process because all employees understand the importance of quality and hence coordinate well. The second way is used to explain immature organisations.In immature organisation the produ ction process lacks coordination. Some employees produce high quality results and some do not which results in unsatisfactory results. On the other hand a mature is well coordinated and organised. Every employ puts is his best and produces high quality results.

Unemployment within the Labour Market is Primarily Voluntary Essay

Unemployment within the Labour Market is Primarily Voluntary - Essay Example Unemployment within the labour market is primarily voluntary But this hope was to prove a mirage as the trend reversed in subsequent months. Though the UK took a little while to catch up with the crisis in the United States, at the beginning of the second quarter of 2008, the region’s economy was in acute recession. It has been close to four years since the onset of recession and subsequent economic slowdown in the UK and the prospects for a turnaround in the region remains distant. The question of unemployment in the labour market, and whether or not it is ‘voluntary’ needs to be studied under these prevailing economic conditions. Also, a historical view of the role and operation of labour markets will lend clarity to the topic in question. This essay endeavours to do the same by way of analysing and synthesizing related scholarly resources on this subject. A look at the current unemployment problems in the UK reveals how acute a social, political and economic problem it has now become. For example, â€Å"Concerns have be en raised for a "lost generation" in the North East after the region was highlighted as a blackspot for youth unemployment. New research reveals that almost a third of people claiming unemployment benefit in the region are aged between 18 and 24, making the North East the worst region for youth joblessness in England. The figures released by the GMB union, showed there were 18,765 claimants within the age bracket in the North East last month, 30.9% of the total. That figure rose to 35% in County Durham, the fifth worst local authority area in the UK for young claimants.† (Lawson, 2011, p.6)... ng claimants.† (Lawson, 2011, p.6) Many politicians and social activists believe that increasing unemployment will lead to a ‘lost generation’ of such young people. This situation could lead to social fissures, with attendant increase in crime. Already, statistics from the North East is troubling: â€Å"six out of the nine areas in the region had more than the national average for young claimants. County Durham, Sunderland, Northumberland, Hartlepool, South Tyneside and Darlington were all above the national average of 28%† (Lawson, 2011, p.6) Further, for many youth in the region, there are no clearly defined career paths ahead. Such was not the case during the 1960’s and 1970s. Whether or not this unemployment situation is voluntarily sought or involuntarily imposed can be learnt from several surveys undertaken recently. What these surveys clearly indicate is the definite sense of ‘fear’ in the hearts and minds of the unemployed. To the extent that fear is seldom a voluntarily embraced choice, unemployment in present day Britain is imposed on eligible and willing workers. Participants of the survey were asked what they think will be the prospects for employment over the next year: â€Å"The balance between positive and negative answers has averaged 25 since its inception in 1982-the higher the number, the more people expect unemployment to rise. The findings shows, fear of unemployment rose very strongly in mid-2008, just as the unemployment rate started to rise, but then fell back through early 2010 to a low of 30 in February. The balance was 35 in May, 40 in June and 54 in July. The last increase of 14 points is the second-largest in the series ever, behind an increase of 15 in January 1991, when unemployment was also 7.8 per cent and rising.†

Bus 234 San Asign3 Essay Example | Topics and Well Written Essays - 250 words

Bus 234 San Asign3 - Essay Example A concept map is a type of graphical organizer that gives the scholars the knowledge to organize and present their subject of study. It helps in brainstorming and generation of new ideas among the students. Students are also in a position to integrate new ideas with old ideas by use of the concept map. It also assists in communication of information through ideas. Concept maps also help students gain knowledge of any topic and evaluate the new information. According to Hudgins (78), instructional design is a systematic approach that is used to develop education systems and training programs in a more effective and reliable manner. Instructional designs are categorized in to three:- Organizational - these involve minor and major levels (macro and micro) that enhance subsequent arrangement of the lessons. Delivery strategies are more concerned with the decisions that may impact on the process of information transmission. The third strategy is referred to as management, which involves the decisions that help the student’s inn their interaction with learning activities in order to gain knowledge and skills. The third phase – management, is more important, since it give a chance for the learners to gain new skills and