Validity and Reliability of the Myers Briggs Test Term Paper

Validity and Reliability of the Myers Briggs Test - Term Paper Example The history of the Myers-Briggs Type Indicator holds accountable Carl Jung and his personality theory as the primary basis and the chief influence of Katharine C. Briggs and her daughter, Isabel Briggs Myers in the development of the MBTI, a project that lasted for two decades and a half (Bayne, 1997; Morgan & Morgan, 2007; Quenk, 2009).   Jung published his book â€Å"Psychological Types† in the early 1920’s which was later on translated in English and published in America.   Briggs at that time was also developing her own theory of personality types which she later on abandoned upon discovery of Jung’s theory which resembled her ideas but had better structure and form.   It then started the long journey of Briggs and Myers that concluded with the creation of the MBTI.   Guided by Jung’s theory, their observations of individuals led them to the conclusion that â€Å"typology could provide a useful way of describing healthy personality differences and importantly, that such assessment could be put to practical use in people’s lives† (Morgan & Morgan, 2007, p. 336). Such non-judgmental and realistic underpinnings of the instrument are perhaps the reasons for its massive influence and application. It is interesting to note that none of them have studied and trained under Jungian psychoanalysis yet they accepted his ideas and studied it enthusiastically for 25 years. To begin with, both were not psychologists and do not have a strong foundation in statistics.   In the 1940’s, psychological testing was a very young field and inventory type questionnaires were not popular.   While psychology often measures characteristic, Myers and Briggs were more drawn towards preferences which identify the dominant functions of individuals.   At that time, they did not have the convenience of computers making item analysis, so they relied heavily on friends who they classified as â€Å"thinking† and â€Å"feel ing† individuals.  

Story begun Essay Example for Free

Story begun Essay He was a basic middle class male who was raised to respect women and never hit them. His name was John, an author of 2 best selling books and had started his own publishing house in short he got it all to be a best husband and father. He is my friend. His story begun when his wife wanted to have a sperm donor in order to get pregnant, even though their doctors agreed that both of them are physically fine and there’s no reason for his wife not to get pregnant and it was just 4 months since they are trying but it seems that his wife was on rush for everything. On a Saturday evening of 1994, his wife Maria slapped him so hard when disagree with her idea of having a sperm donor, he had confronted her not to do that again but instead she just verbally abused him by saying harsh things such as â€Å"Coward dog! † These things hurt him physically and emotionally. It hasn’t end there his wife’s friend left a note that his wife would just use him to have a baby and later on dumped him for divorce. Worst comes to worst when his wife was also hurt his mother physically which had resulted to a bone fracture in knees and hands. Look more:  the story of an hour literary analysis essay All of these incidents were reported to 911 but ironically who would believe in our society that a man could be called a battered husband? The police even threatened him that he will be arrested for trespassing (imagine in his own house, which he bought by his own money), if he will go back inside the house. Instead of arguing with the police and wait for the medical assistance for his mom, he just drove away and went to the nearest hospital and let the doctor examined his mother. As of today, John got his divorce and never saw his wife again, but the sad part of this is he got no justice at all. Imagine if the situation was reversed: the husband slapped his healthy wife for not having a child after 4 months of trying, shrugged off a written letter found by his wife where the husband agreed with his buddy about dumping his wife after tricking her to get pregnant, beat his wifes mother badly enough to required x-rays. Do you really believe the police and the courts would have treated that case in the same way? Nowadays we have so many crisis centers for abused and molested women and children. This centers helped them to get out and win the battle that they are facing but how about our counterparts? I mean those MEN in our communities, especially my friend, yes they can be also victims of violence, and they also need the same kind of attention and protection. Our society and government should take these laws in general and not by gender as what was John had experienced, people should not be biased about this matter just because the victim is a man.

Implementation At Indo Rama Synthetics Information Technology Essay

Implementation At Indo Rama Synthetics Information Technology Essay Before the year 2000, at INDO RAMA SYNTHETICS LTD., individual department worked independently to achieve its predefined corporate objectives. Every department used different tools and software. For example, the production department used MIMS software, accounts department used FoxPro and KICKS for its functionalities, while marketing department used tools which were not robust enough to support overall marketing functions. Lots of paper work in Human resource management was mind boggling and time consuming. This lacked inter-departmental coordination and hampered information sharing. For example, a department found it difficult to know about the stock kept by another department even in times of urgency due to lack of information. Inventory management always plays an important role in manufacturing industry, Indo Rama wanted to handle it more effectively. All these were the matters of concern for a company aspiring to be the best in its business globally. There was a need of cross-fu nctional and business process integration. So that company could react to changes in the market and economy in the most effective way. To overcome such problems, Indo Rama decided to go for Enterprise Resource Planning (ERP). The company decided to implement ERP from SAP (System Application Product). Indo Rama has been on SAP ERP platform since 2000, one of the earlier companies in India to migrate to the SAP platform. Also, recognizing core competence principles, the company outsourced its IT functions to ACCENTURE TECHNOLOGIES LTD., a global outsourcing firm, in July 2001. Accenture provides IT infrastructure management for all company locations, all legacy systems and ERP. All locations are connected on Wide Area Network (WAN) to the central server located at Butibori, Nagpur. INDO RAMA SYNTHETICS LTD. has implemented four major modules in SAP ERP: Sales Distribution (SD) Finance Costing (FICO) Material Management (MM) Plant Maintenance (PM) All major sites have been fire-walled; all locations have anti-spam and anti-virus software installed. The ERP and the internet have clearly defined password, tables of authorities and levels of access. Indo Rama Synthetics has also launched an intranet facility, Antarnaad, where internal policies, notices and other relevant organizational information are stored. Other application software that are in operation at Indo Rama include the Leave Management System, EMIS (where management reports for various levels are generated) and an auction site for vendor management. For its communications backbone, Indo Rama uses a Virtual Private Network (VPN), through which all locations are linked. The company has adopted Outlook Express for mail communications with a Linux-based back-end. During 2007-08, the IT team at Indo Rama undertook several projects. The key ones are detailed below. IRSL IRPL merger project Indo Rama Synthetics Ltd. has merged Indo Rama Petrochemicals Ltd into itself. The necessary changes needed to integrate the two entities in the ERP platform have been completed. Data Center The company built a new state of the art data centre at Butibori, Nagpur. All servers, the WAN and other network equipment are housed in this data center. The data center has been protected against unauthorized access and potential mishaps. Biometric security systems ensure that only authorized person can enter and access the data servers. Sophisticated systems have been installed for fire detection and suppression, water leakage, rodent damage and variations in ambient temperature and environment. Data backup of the SAP system is taken on tapes attached to SAP servers. One copy of the tapes is stored in a fireproof safe at data center and another at a location away from the factory. Every month, a set of tapes are also sent to the New Delhi office for safe storage. Packing System The legacy packing and recording system, which records the carton / box information and prints the labels, was on a FoxBASE database management system. This application has been converted onto an Oracle platform with enhanced features and functionality. Attendance Tracking System An attendance tracking system is installed at each department, which read the finger print responses of the employees every time they enter or leave the premises. It reduces the paper work and man power required to track the attendance. Significance of the study A Study was carried out keeping the functional working of IT department in view and its integration with other departments. Working and spending time with major departments helped us in drafting this report in the context of over all company objectives and strategies that necessitate a holistic approach cutting across various functional areas Marketing, Human Resource, Operations, Finance and Business environment. By implementing SAP ERP modules, manufacturing companies can attain Cross-Functional and Business Process integration required for information and data sharing across the organization. These functionalities save resource, cost and valuable time enabling the company to react fast enough to changes in market, competition and economy. Introduction Company Profile The journey of Indo Rama group began with the establishment of Ashok Textiles Limited, Nepal in year 1969. Indo Rama Synthetics ( I ) Ltd. as a cherished dream of Mr. O. P. Lohia (Chief Managing Director, IRSL) came into inception at Pithampura, Indore in year 1989. Indo Rama group have its subsidiaries in Indonesia, Srilanka, Malaysia, Nepal and India. ISO9001, 9002 certified Indo Rama, is among the leading producers of polyester with its products namely Poly Staple Fiber, Partially Oriented Yarn, Draw Textured Yarn, Fully Drawn Yarn and Polyester Chips are exported to Germany, Portugal, Greece, Turkey and Italy. Company believes in product technological advancements and is under technical collaboration with USA based DuPont and Japan based Toyobo. It uses most sophisticated machines from a German manufacturer Barmag and USA based Chemetex Intl. Indo Rama is highly committed to environmental regulations and best practices. Its priorities include minimizing waste, recycling, reusing effluents, controlling emissions, and plantation. The company invests significantly to reduce workplace accidents and ensure safety. Housing colonies, schools and health centers are built by the company as a part of corporate social responsibility. Objectives of the study To understand IT infrastructure management and study SAP ERP modules Material Management, Sales and Distribution, Order Processing, Financial Management, Plant Maintenance at Indo Rama Synthetics Ltd. Study shall help Indo Rama by providing the preliminary work, steps and evaluation required to go ahead in integrating the existing and proposed initiatives, through IT infrastructure management and SAP ERP modules. Study shall help in understanding the importance of Cross-Functional and Business Process integration by adopting IT tools and functionalities, so that manufacturing companies can react fast enough to changes in the market and economy. Brief description of the concepts ERP: An overview In the manufacturing industry, MRP (Material Requirement Planning) became the fundamental concept of production management and control in the mid 1970s. At this stage BOM (Bill of Materials), which is purchase order management that utilizes parts list management and parts development, was in the mainstream. And this concept (MRP) unfolded from order inventory management of materials to plant and personnel planning and distribution planning, which in turn became MRP-II (Manufacturing Resource Planning). This incorporated production management, financial accounting, human resource management, sales and distribution management functions and management accounting functions. It came to globally cover all areas of enterprise mainstay business and eventually came to be called ERP. Enterprise Resource Planning covers the techniques and concept employed for the integrated management of business as a whole, from the viewpoint of the effective use of management resources, to improve the efficiency of an enterprise. ERP packages are integrated software packages that support sales management, production management, accounting and financial affairs. ERP System Manufacturing Inventory Management Sales and Distribution Finance Human Resource Logistics Management Operations Quality Management ERP Implementation: Its relevance The basic idea of ERP is to assimilate companys data at some central location or repository where it can be checked, matched, and shared across the organization. This data is then used for resource planning within the organization in conjunction with the decision systems. Here, INDO RAMA SYNTHETICS aimed at eliminating wasteful duplication of data with the help of ERP. There are various techniques to improve production and efficiency across an organization such as Lean Manufacturing, Six Sigma Quality, Employee Involvement, Factory Automation, etc. These are excellent tools with enormous capabilities to support the business. But one can not achieve the full potential of business with these tools and technique unless they are backed by proper IT strategy, which helps in effective forecasting, planning, and scheduling process. ERP implementation is derived from factors such as the cost benefit analysis, decision making through pros and cons, defining performance goals, data integrity issues and solutions, defining operational environment and software selection. Business planning, strategy development Budgeting and forecasting Production plan and programme Material requirement Work load calculation and resource planning Monitoring operations and overall execution Performance measurement, learning and feedback Figure 1: ERP-related process in manufacturing industries. Mapping IT strategic initiative to ERP A few essential steps should be taken while deploying ERP in business process: Visualization: Visualization of need for ERP and impact on production and organization. Strategy formulation: Formulation of a strategy for ERP implementation and the need for the organization to respond to the changes. Planning of resources: Planning the resources and the overall business. Structuring and prioritization: The structuring of the organization and objectives along with prioritization of business initiatives needs to be outlined in detail before embarking on ERP. Transition: The organization ought to be readied for its transition to ERP paradigm. Deployment: Deployment of the system and new technologies. It also includes deployment of new tools. A proper ERP system selection and implementation helps the management to a large extent. There are various phases in the lifecycle of ERP; the major parts of which are planning, implementation and operation phases. IT enables communication between various parts of ERP and establishes an integrated ERP system. Understand the product requirement Solution planning Design phase SLA presentation and acceptance Implementation, testing Delivery Operation Plan Implement Operate Figure 2: ERP project life cycle implementation Supply Chain Management Supply chain management (SCM) refers to the coordination of activities involved in making and moving a product. SCM encompasses planning and management of all the activities involved in sourcing, procurement, conversion, and logistics management. Importantly, it also includes coordination and collaboration with the extended organizations and channel partners, who can be suppliers, intermediaries, third party service providers, and customers. SCM integrates and act as a balancing agent between supply and demand within and across companies. SCM brings value to business in terms of innovation, service, cost, and quality. Innovation: It brings value on table through unique technology or new conceptual products. Innovation gives an organization a competitive edge over other competitors. SCM helps in this process by allowing/producing optimal volume (raw material or products) and also by increasing efficiency, thereby ultimately reducing the time to market. Cost: An efficient operation with better resource management reduces the overall cost. Service: Better service can always attract customers. It is definitely a competitive advantage and SCM fundamentally contributes to it by its very nature. Quality: The quality strategy dictates production of the best-in-the-class products. SCM can also contribute to it through quality control and excellence in production. SCM, ERP and IT Infrastructure are inter-related. ERP begins with the Material Requirement Planning as depicted in following figure. Using intranets and extranets, all members of the supply chain can instantly communicate with each other, using up-to-date information to adjust purchasing, logistics, manufacturing, packaging, and schedules. A standard set of tools that are used by companies all over the world to coordinate global supply chains that include participants from many countries. Following figure explains intranet and extranet for SCM. Figure 3: Intranets and Extranets for Supply Chain Management Intranets integrate information from isolated business processes within the firm to help manage its internal supply chain. Access to these private intranets can also be extended to authorized suppliers, distributors, logistics services, and, sometimes, to retail customers to improve coordination of external supply chain processes. Inventory and Purchasing Management system MRP (Material Requirement Planning) ERP (Enterprise Resource Planning) ERP and SCM within the organization ERP and SCM across organizations Figure 4: Evolution of ERP and SCM The ERP functions from the perspective of supply chain optimization are shown in following flowchart. Overall process optimization Expense optimization Revenue and Profit optimization Logistics optimization Knowledge optimization Figure 5: ERP optimization at various stages of supply chain The business value of supply chain management systems includes: Streamlined supply chain and accurate information. Reduced supply chain costs. Increased sales through accurate product availability. IT plays a very important role in developing various functionalities and building an integrated system. Following figure highlights IT components in ERP, IT infrastructure and resources in SCM. The SCM planning is the input for ERP. Operating system Data warehouse Retail Link Data, account, analysis Forecast Inventory plan ERP SCM Manufacturing planning Feedback S E R V E R S Intelligent Systems Internet Figure 6: ERP, IT Infrastructure and resources in SCM Customer Relationship Management Customers can be seen as an enterprises most valuable asset, and customer relationship management enable large firms like Indo Rama Synthetics to understand and work with their customers. CRM can also be called a business strategy to select and manage the most valuable customer relationships. It supports effective marketing, sales and service processes. CRM is the process that manages the interaction between company and its customers. With the advent of sophisticated relation databases and data-mining techniques, CRM has enabled Indo Rama to specifically target customers to determine what products, services and values they want. CRM necessitates the alignment of initiatives such as e-business, sales force effectiveness, customer service, customer relationship planning, enterprise resource planning, and supply chain management with customer-accepted value propositions. But to enable CRM to meet the business objectives, it should be backed by IT strategies. The most telling benefit of IT-powered CRM is Return on Investment (ROI). The ROI from CRM typically comes in two forms. The first is cost reductions from increasing the efficiency. For example, when customer data helps an inside sales team maintain productivity levels with fewer resources, cost reductions do result. When the sales agents in the field spend less time manually entering data into slow legacy systems, companies do save time and money. CRM systems capture and integrate customer data from all over the organization, consolidating the data, analyzing the data, and then distributing the results to various systems and customer touch points across the enterprise. A touch point (also known as a contact point) is a method of interaction with the customer, such as telephone, e-mail, customer service desk, conventional mail, Web site, or retail store. CRM systems provide a single enterprise view of the customer and provide customers with a single view of the company regardless of the touch point the customer uses. Figure 7: Customer Relationship Management CRM systems examine customers from a multifaceted perspective. These systems use a set of integrated applications to address all aspects of the customer relationship, including customer service, sales, and marketing. Good CRM systems provide data and analytical tools for determining the financial lifetime value of a customer and customer loyalty and for identifying profitable customers and their needs. Commercial customer relationship management (CRM) software packages range from niche tools that perform limited functions, such as personalizing Web sites for specific customers, to large-scale enterprise applications. The more comprehensive CRM packages contain modules for: Partner relationship management (PRM): PRM software uses many of the same data, tools, and systems as customer relationship management to enhance collaboration between a company and its selling partners. It provides a company and its selling partners with the ability to trade information and distribute leads and data about customers, integrating lead generation, pricing, promotions, order configurations and availability. Employee relationship management (ERM). ERM software deals with employee issues that are closely related to CRM, such as setting objectives, employee performance management, performance-based compensation, and employee training. CRM typically provide software or tools for: Sales force automation (SFA): SFA modules help sales staff increase their productivity by focusing sales efforts on the most profitable customers. They provide sales prospect and contact information, product information, product configuration capabilities, and sales quote generation capabilities. Customer service: Customer service modules provide information and tools to make call centers, help desks, and customer support staff more efficient. They have capabilities for assigning and managing customer service requests and may include Web-based self-service capabilities. Marketing: Marketing modules support direct-marketing campaigns with capabilities for capturing prospect and customer data, qualifying leads, and scheduling and tracking campaign mailings. They include tools for analyzing marketing and customer data-identifying profitable and unprofitable customers, designing products and services to satisfy specific customer needs and interests, and identifying opportunities for cross-selling, up-selling, and bundling. Cross-selling is the marketing of complementary products to customers. Up-selling is the marketing of higher-value products or services to new or existing customers. Bundling is cross-selling in which a combination of products is sold as a bundle at a price lower than the total cost of the individual products. Figure 8: How CRM supports Marketing Customer relationship management software provides a single point for users to manage and evaluate marketing campaigns across multiple channels, including e-mail, direct mail, telephone, the Web, and wireless messages. The major CRM products support business processes in sales, service, and marketing, integrating customer information from many different sources. Following figure includes supports for both the operational and analytical aspects of CRM. Figure 9: CRM Capabilities CRM software can also be used to increase customer loyalty through customer service by identifying valued customers and providing them with special services or offers. Following process map shows how a best practice for promoting customer loyalty through customer service would be modeled by customer relationship management. The CRM software helps firms identify high-value customers for preferential treatment. Figure 10: Customer Loyalty Management process map Thus, the business value of CRM systems which benefits companies includes: Increased customer satisfaction Reduced direct-marketing costs More effective marketing Lower costs for customer acquisition and retention Increased sales revenues through identifying profitable customers Reduced churn rate: The churn rate measures the number of customers who stop using or purchasing products or services from a company and is an important indicator of the growth or decline of a firms customer base. Order Processing As soon as the clerk enters the order into the system, system checks the inventory records and finds out whether the items are available or not. If the item are available, procedures are triggered automatically that will inform the people in the sales and distribution department and the finance department. The information will contain the details of the items to be shipped, the most economic route to the customer and so on. Also, the system will trigger procedures in the financial module so that the invoices are sent to the customer. The information is transferred Electronic Data Transfer (EDT) and the payments are received electronically through Electronic Funds Transfer (EFT). If the items are not available, then the production-planning module makes a production schedule, which is made available to the production, materials management and plant maintenance modules so that everybody is prepared to start production as per the production schedule. The material requirement planning is done and any item that is not in stock is ordered. If the supplier is connected to the company, the ordering and the associated processes happen electronically. The plant maintenance gets the list of machines required and ensures that all of them are available. Thus, the production of the item goes on without any hitches. An order entered into the ERP system by the order entry clerk triggers a whole lot of procedures and automatically performs a host of functions. All these processes take only a few minutes to complete. ERP in Order Processing After the order is received, within a very short period of time the goods are on their way to the customer. If the goods are not readily available, the customer is informed about it and is given the delivery schedule. Other than the order entry clerk and the people in the distribution, production and maintenance departments, all the other tasks are done by the system and that too automatically. In a non-ERP environment, these tasks could take days or even weeks to complete. Since the ERP system stores all the data in a central database and since the database is updated by all the modules on a real-time basis, the information available in the database is up-to-the minute. This integration of the different business functions and the automation of the business processes and the availability of information is what make the ERP systems capable of producing dramatic improvements in productivity and profitability. Following flowchart explains the order process: In stock? Finished Goods Inventory No Order Production Planning Material Management Production Plant Maintenance Sales Distribution Finance Invoice/Bill Yes Figure 11: Order Processing in an ERP System Finance and Costing The financial application components of the ERP solutions work hand-in-hand to improve the bottom line and the financial goals of organizations. Financial functionalities are integrated across all business areas and all geographic areas. This integration includes all other modules, from material management to human resources to logistics. Because the ERP system automatically links related areas, it eliminates the need to repeat procedures. Data is entered only once. Within the ERP system, all areas work in concert, creating a new level of efficiency in handling financial data. The financial modules of most ERP systems provide financial functionalities and analysis support to thousands of business in many countries across the globe. These ERP systems include not only financial application components, but also Human Resources, Logistics, Business Workflow and links to the internet. Financial modules of most ERP systems will have the following subsystems: Financial Accounting: General ledger, Accounts Receivable/Payable, Special Ledgers, Fixed Asset Accounting, Legal Consolidation. Investment Management: Investment Planning/ Budgeting/ Controlling, Depreciation Forecast/ Simulation/ Calculation. Controlling: Overhead Cost Controlling, Activity-Based Costing, Product Cost Accounting, Profitability Analysis. Treasury: Cash Management, Market Risk Management, Funds Management. Enterprise Controlling: Executive Information System, Business Planning and Budgeting, Profit Center Accounting. Purchasing (Quantity, Value) Sales (Order, Bill) Vendor (Payable) Customer (Receivable) Fixed Assets Employees (Salary, Wages) GENERAL LEDGER Figure 12: General Ledger in ERP Financial Module. Material Management The Material Management module of ERP optimizes all purchasing processes with workflow-driven processing functions, enables automated supplier evaluation, lowers procurement and warehousing costs with accurate inventory and warehouse management and integrates invoice verification. The main modules of Material Management module are: Pre-purchasing Activities: This system supports the complete cycle of bid invitation, award of contract and acceptance of services. The pre-purchasing activities include maintaining a service master database, in which the descriptions of all services that are to be procured can be stored. Requirement Calculation Requisition for Quotations Quotation Evaluation Vendor Selection Vendor Ratings Contracts Figure 13: The Pre-purchasing activities module Purchasing: Purchasing system performs tasks like procurement of materials and services, determination of possible sources of supply for a requirement identified by materials planning and control system or arising directly within a user department, monitoring of deliveries and payments to vendors and so on. Vendor Evaluation: Vendor evaluation component has been completely integrated into the Material Management module. Information such as delivery dates, prices and quantities can be taken from purchase orders. Vendor evaluation also uses data from Quality Management, such as the results of incoming inspections or quality audits. It also access basic data in Material Management, such as goods receipt data from Inventory Management. The Vendor Evaluation system supports the optimization of the procurement processes in the case of both materials and services. It provides accurate information on prices, terms of payment and delivery. By evaluating vendors, company can improve competitiveness. Inventory Management: Inventory Management system allows company to manage its stocks on a quantity and value basis, plan enter and check any goods movements and carry out physical stocks reflect all transactions resulting in a change in stock and thus, in updated inventory levels. The user can easily obtain an overview of the current stocks of any given material. For each material, not only are the stocks in warehouse shown, but also the stocks ordered but not yet delivered, reserved for production or for a customer, and the stocks in quality inspection can be monitored. The stocks are managed not only on a quantity basis but also by value ­Ã‚ ­Ã‚ ­Ã‚ ­-a prerequisite for cost accounting. With every goods movement, the following values are updated: Stock value for inventory management Account assignment for cost accounting Invoice Verification and Material Inspection: The invoice verification component provides the link between Material Management module and the Financial Accounting, controlling and Asset Accounting components. Invoice verification in Materials Management serves the following purposes: It completes the materials procurement process-which starts with the purchase requisition, continues with the purchasing and goods receipt and ends with the invoice receipt. It allows invoices that do not originate in materials procurement (for example, services, expenses, course costs, etc) to be processed. It allows credit memos to be processed, either as invoice cancellations or discounts. Sales and Distribution A Sales and Distribution module will contain the following subsystems: Master Data Management: Every company will have products, customers, and will require raw materials and will have suppliers. The task of the Master Data management module is to keep information about all these entities, so that these can be made available to the decision-makers and also for the automatic generation of reports, contracts, invoices and so on. Order Management: This module includes Sales Order Management and Purchase Order Management and supports the entire sales and purchase processes. Warehouse Management: Components of a good Warehouse Management application include following: Inventory Planning: It comprises all planned inventory movements, which enable the accurate forecasting of trends and the consequent adjustment of reordering points, safety stock, lead-times for orders and service levels. Inventory planning also allows the commitment of inventory to a specific customer order-so that customer receives the right order in the right quantity at the right time. Inventory Handling: Allows for monitoring of all warehouse order scenarios such as receipt, issue and transfer of inventory. To ensure fast communication with suppliers and customers, advanced shipping notifications can be received or sent by means of Electronic Data Interchange (EDI),

slavery and the plantation Essays -- Slavery Essays

slavery and the plantation During the era of slavery in the United States, not all blacks were slaves. There were a many number of free blacks, consisting of those had been freed or those in fact that were never slave. Nor did all slave work on plantations. There were nearly five hundred thousand that worked in the cities as domestic, skilled artisans and factory hands (Green, 13). But they were exceptions to the general rule. Most blacks in America were slaves on plantation-sized units in the seven states of the South. And with the invent of the cotton gin by Eli Whitney, more slaves were needed to work the ever-growing cotton game (Frazier, 14). The size of the plantations varied with the wealth of the planters. There were small farmers with two or three slaves, planters with ten to thirty slaves and big planters who owned a thousand or more slaves. Scholars generally agree that slaves received better treatment on the small farms and plantation that did not employ overseers or general managers. Almost half of the slaves, however, live, worked and died on plantations where the owners assigned much of their authority to overseers. The plantation was a combination factory, village and police precinct. The most obvious characteristic was the totalitarian regime placed on the slave. One example of this was a communal nursery, which prepared slave children for slavery and made it possible for their mothers to work in the fields. The woman who cared for black children was commonly designated "aunty" to distinguish her from the "mammy", the nurse of white children. Sometimes one women cared for both white and black children. Boys and girls wandered in around in a state of near-nudity until they reached the age of work. On some plantations they were issued tow-linen shirts, on others they wore guano bags with holes punched in them for the head and arms. Children were never issued shoes until they were sent to the fields, usually at the age of six or seven. Young workers were broken in as water boys or in the the "trash gang." At the age of ten or twelve, children were given a regular field routine. A former slave recalls, "Children had to go to the fiel' at six on out place. Maybe they don't do nothin' but pick up stones or tote water, but thy got to get used to bein' there." (Johnson, 40-45) Cooking on the plantation was a collect... ... with children would be less likely to attempt escape. The marriage ceremony was instructed by the wisest and most respected slave on the plantation, and included the ritual of jumping the broomstick. Males and females were expected to remain faithful after the marriage. The marriages lasted a long time, some thirty years or more. The life on the plantation was the only life known to a slave. Few slaves ever had the opportunity to leave the plantation so it was the only world they knew. One can think of a plantation as an isolated island, with occasional contact from the outside world. It was only through making contact with the outside world that slaves became aware that they too deserved freedom and gained the knowledge to obtain it. BIBLIOGRAPHY E.Franklin Frazier. Black Bourgeoisie. New York 1957 Berkin, Miller, Cherny, and Gormly. Making America: A History of the United States. Boston 1995. Douglass, Frederick. The Life and Times of Frederick Douglass. Hartford 1881. Johnson, Charles S. Shadow of the Plantation. Chicago 1941. Olmsted, Frederick Law. The Cotton Kingdom. New York 1948. Green, Bernard V. Bondage of a People. Miami 1991.

The Holocaust and Aushwitz :: European Europe History

The Holocaust and Aushwitz INTRODUCTION The Holocaust is the most horrifying crime against humanity of all times. "Hitler, in an attempt to establish the pure Aryan race, decided that all mentally ill, gypsies, non supporters of Nazism, and Jews were to be eliminated from the German population.He proceeded to reach his goal in a systematic scheme." One of his main methods of "doing away" with these "undesirable" was through the use of concentration camps. "In January 1941, in a meeting with his top officials the 'final solution' was decided". Jews were to be eliminated from the population. Auschwitz was the concentration camp that carried out Hitler's "final solution" in greater numbers than any other. In this paper I will discuss concentration camps with a detailed description of the most well-known one, Auschwitz. CONCENTRATION CAMPS The first concentration camps were set up in 1933. In the early days of Hitler, concentration camps were places that held people in protective custody. Victims for protective custody included those who were both physically and mentally ill, gypsies, homosexuals, Jehovah Witnesses, Jews and anyone against the Nazi regime. "Gypsies were classified as people with atleast two gypsy great grandparents." By the end of 1933 there were atleast fifty concentration camps throughout occupied Europe. "At first, the camps were controlled by the Gestapo (police), but by 1934 the S.S. (Hitler's personal security force) were ordered, by Hitler, to control the camps." Camps were set up for different purposes. Some for forced labor, others for medical experiments and, later on, for death/ extermination. Transition camps were set up as holding places for death camps. "Henrick Himmler, chief of the German police, the Gestapo, thought that the camps would provide an economic base for the soldiers." This did not happen. The work force was poorly organized and working conditions were inhumane. Therefore, productivity was minimal. Camps were set up along railroad lines, so that the prisoners would be conveniently close to their destination. As they were being transported, the soldiers kept telling the Jews to have hope. When the camps were finally opened, most of the families who were shipped out together ended up being separated. Often, the transports were a sampling of what went on in the camps, cruelty by the officers, near starvation of those being transported, fetid and unsanitary conditions on the trains. "On the trains, Jews were starved of food and water for days.

Indirect vs. Direct Presentation Essay

â€Å"The Destructors,† by Graham Greene, both indirect and direct presentation is implemented to provide a multidimensional portrayal of the characters in the story. This device is effective because each type of presentation provides the reader with a different perspective into each character. The author presents the characters directly by telling the reader details about the characters and presents the characters indirectly by showing the reader. Direct presentation allows for more of a complete understanding of the characters while indirect presentation forces the reader to make inferences based on dialogue and occurrences throughout the story. Direct presentation is effective especially in the beginning of a short story because the reader gets a primary and absolute insight into each character’s emotions, which will in turn allow them to interpret actions and developments later on in the story. Mike’s young age, and childish naà ¯vetà © is immediately exposed when Greene directly presents him as â€Å"nine [and] surprised by everything† (111). Mike’s character is clearly defined with little left for the reader to interpret. The author can best express his purpose through this type of presentation. Greene uses direct presentation when he introduces major members of the gang such as Blackie, Trevor, and Mike. Greene reveals Blackie’s acceptance of his class standing as he describes Blackie’s reservations with Trevor’s plan. â€Å"He was just, he had no jealousy, he was anxious to retain T. in the gang if he could. It was the word ‘beautiful’ that worried him – that belonged to a class world that you could still see parodied at the Wormsley Common Empire by a man wearing a top hat and a monocle, with a haw-haw accent† (114). In this instance, direct presentation is quite effective because Greene reveals that Blackie is not a resentful character; this is a truth that would be very difficult for a reader to infer. Old Misery is also presented directly. Greene provides direct insight into Old Misery as he describes his background early in the story. â€Å"Old Misery-whose real name was Thomas-had once been a builder and decorator. He lived alone in the crippled house, doing for himself† (112). This saves the  author from having to digress from the plot in order to indirectly characterize Old Misery, which would in essence detract from the true purpose of the story. Indirect presentation is used throughout the story to reveal subtleties and more importantly, to accentuate the story’s many paradoxes. Greene’s usage of indirect presentation in exposing these truths adds to the profundity of the story. Greene cleverly shows Blackie’s insecurity when Blackie attempts to avoid Trevor’s plan of destroying Old Misery’s house as he feebly states, â€Å"there wouldn’t be time, I’ve seen housebreakers at work. None of us know how† (115). When Trevor taunts him and his leadership position seems compromised Blackie â€Å"uneasily [says], it’s proposed that tomorrow and Monday we destroy Old Misery’s house† (115). Greene uses the word â€Å"uneasily† to indirectly present Blackie’s insecurity and to distinguish him from his malevolent foil, Trevor. Blackie’s foil, Trevor, also known by the gang as â€Å"T.,† is a very bitter character. Greene uses direct presentation to illustrate the many paradoxes surrounding him. T.’s attitude towards Old Misery is quite paradoxical. On the one hand, he sets about destroying his house, treating him disrespectfully, and regarding him with suspicion. At the same time, however, T. expresses that he does not hate Old Misery when he says, â€Å"of course I don’t hate him. There’d be no fun if I hated him† (118). Although his destructive behavior is not personal, the consequences are tremendous for Old Misery, but T. is unable to consider such consequences. Another instance of indirect presentation is when T. takes Mr. Thomas’s seventy one-pound notes, but not for personal gain. Instead, he and Blackie take each pound note and â€Å"[light] the top corner, so that the flame burn[s] slowly towards their fingers† (118). Essentially, T. takes items that are inherently valuable, but he has no interest in making use of that value. T.’s attitude toward Old Misery’s house is paradoxical as well. T. said, â€Å"It’s a beautiful house,† as he â€Å"still [watched] the ground meeting no one’s eyes† (114). Green shows T.’s distaste for wealth and for the upper class  when he notes T’s lack of eye contact with the gang. He knows the house is beautiful, but his feelings about beauty, especially as they relate to social classes makes it easy for him to destroy it anyway. The Wormsley Common Gang is presented indirectly as a whole. Greene presents the gang indirectly rather than directly for the sole reason that the gang often thinks as a whole but is ultimately made up of many different members. This is shown when Mr. Thomas attempts to reach out to the boys and give them chocolates. Many members chime in their opinions on Mr. Thomas’ motives however, Blackie, their leader at the time, picks the reasoning that most suits him. â€Å"We’ll show him we don’t take bribes† (113). â€Å"They sacrificed the whole morning to the game of bouncing that only Mike was young enough to enjoy† (113). Even though none of the gang enjoyed the activity except for Mike they participated anyways. This instance indirectly reveals the insecurity of each individual gang member. Though the gang stands by the decision, none of its members even get enjoyment out of it. The gang’s judgmental tendencies and fickly characteristics are shown through the power struggle for leadership between Blackie and T. â€Å"For the first time since T. had strolled into the carpark on the first day of the holidays his position was in dancer. It only need a single use of his real name and the gang would be at his heels† (114). The fact that Trevor feels the need to go by T. when he is with the gang reveals his own insecurity as well as the judgmental qualities of the gang. Just a few days prior Blackie had been the leader of the gang however now they â€Å"[paid] no more attention to him than to a stranger† (115). â€Å"Blackie was dimly aware of the fickleness of favor† (115). Especially in short stories, presentation is essential. Greene does an excellent job as he masterfully uses both direct and indirect presentation to convey his message in â€Å"The Destructors.† He immediately develops the main characters through direct presentation. This way, the readers have a predisposition about each character therefore making the eventual character shift more dramatic. He uses indirect presentation to describe the gang and to reveal the subtleties and paradoxes within the story. â€Å"The Destructors†Ã‚  is an effective literary work because of its multidimensional qualities enabled by Green’s brilliant control of presentation. Work Cited: â€Å"The Destructors† by Graham Greene

How Do Economic Incentives Affect Social Preferences and Behavior Essay

For decades economic theories have relied heavily on the effectiveness of material incentives (Fehr & Gachter, 2001). According to the traditional exchange theory all people are exclusively motivated by their own material self-interest. It predicts that the introduction of a penalty will reduce the occurrence of the behavior that is subject to the fine. On the other hand it states that introducing a material incentive will lead to an increase of the behavior related to the bonus. Based on economic theory, incentives have become increasingly popular and are used to increase certain behaviors in various fields including environmental policy (Andersen & Sprenger, 2000; Barde & Smith, 1997; Baumol & Oates, 1988; Kahn, 1995; all cited in ThOgersen, 2003), household surveys (Singer, 2002) and education policy (Fryer, 2011). On the other side, penalties have been used to reduce free-riding (Feldman, Papadimitriou, Chuang, & Stoica, 2006), and crimes (Akerlof & Dickens, 1982). There is much evidence that supports the basic premise of economics that incentives are effective (Gibbons, 1997; Prendergast, 1999; Lazear, 2000; all cited in Benabou & Tirole, 2004). However, a large body of literature in psychology has shown that explicit incentives lead to decreased motivation and reduced performance in the long run (Deci & Ryan, 1985; as cited in Benabou & Tirole, 2004). Titmuss (1970, as cited in Benabou & Tirole, 2004) was the first who claimed that people might adopt a ‘market mentality’ when they are exposed to explicit economic incentives. He found that paying blood donors for donating blood could actually reduce supply. In the beginning there was little hard evidence that social preferences affected individual behavior, but empirical and theoretical advances over the past decades provide the basis for more support. For example, Gneezy and Rustichini (2000a) found that introducing a monetary fine for late-coming parents in day-care centers led to a significant increase in late-coming. There was no reduction in late-coming after the fine was removed. Also Fryer (2011) didn’t find evidence that providing financial incentives to teachers to increase student performance had any effect. Partly because of these findings, terms as trust, reciprocity, gift exchange and fairness have appeared in the empirical study and modeling of principal-agent relationships (Bowles & Polania-Reyes, 2012). This highlights the importance of the influence that social preferences have on incentives. Based on the contradictions mentioned above I conclude that a more thorough analysis is needed in order to understand the influence of incentives on behavior. I’ll focus on the interplay between incentives and social preferences and how this affects behavior. In this paper I will review several mechanisms that can explain how incentives can be less effective than economic theories predict and how they can even have counterproductive effects. Furthermore I will indicate the implications of the (non-)effectiveness of incentives for economic policy. Overview of past research According to the definition of Bowles and Polania-Reyes (2012), social preferences refer to â€Å"motives such as altruism, reciprocity, intrinsic pleasure in helping others, inequity aversion, ethical commitments and other motives that induce people to help others more than would an own-material-payoff maximizing individual† (p. 4). Fehr and Fischbacher (2002) have indicated the most important types of preferences that have been uncovered by the literature. I will shortly review them below. The first important type of social preference is the preference for reciprocal fairness or reciprocity. An individual is reciprocal when he responds kindly to actions that are perceived as kind, and when he responds hostile to actions that are perceived as hostile. Whether some action is perceived as hostile of kind depends on the unfairness or fairness of the intention and on the consequences that are associated with the action. A second social preference type is inequity aversion. According to Fehr and Schmidt (1999; as cited in Fehr & Fischbacher, 2002) â€Å"inequity averse persons want to achieve an equitable distribution of material resources† (p. C3). Inequity averse persons show altruistic behavior if the other persons’ payoffs are below an equitable level. However, if the other persons’ payoffs are exceeding the equitable level an inequity averse person want to decrease the other persons’ payoffs. There are a lot of similarities in the behavior of reciprocal and inequity averse individuals, since both concepts depend in some way on the perception of fairness. Pure altruism is the third type of social preference, which is very different from the former two. Altruism can be seen as an unconditional form of kindness (Fehr & Fischbacher, 2002), as an altruistic person would never take an action that decreases another person’s payoff. The problem with pure altruism is that it cannot explain conditional cooperation, that is, people want to increase their voluntary cooperation in response to cooperation of others. The last social preference type that Fehr and Fischbacher (2002) mentioned is envious or spiteful preferences. An envious or spiteful person always values the payoff of other agents negatively. Therefore the envious person is willing to decrease the other agent’s payoff even if it brings along a personal cost to himself. This happens irrespective of fair or unfair behavior of the other agent and irrespective of the pay-off distribution (Fehr & Fischbacher, 2002). However, spitefulness can’t explain why it is that the same individuals sometimes are willing to help others at a personal cost, while sometimes they harm other people. Over the past decades, many studies have confirmed that a significant fraction of individuals engage in reciprocal or altruistic behaviors (Buraschi & Cornelli, 2002; as cited in Benabou & Tirole, 2004; Fehr & Gachter, 2000). Thus, many individuals do not only care about the material resources allocated to them, but also care about material resources allocated to other relevant agents. To give an overview of the incentive effects on preferences, two distinctions are made: the nature and the causes of incentives (Bowles & Polania-Reyes, 2012). Concerning the nature of incentives, people often respond to the mere presence of incentives, rather than to their extent (Gneezy, 2003; as cited in Bowles & Polania-Reyes, 2012). However, the extent of an incentive may also play a role. Therefore the effects of incentives on social preferences can be either categorical or marginal or a combination of the two. Bowles and Polania-Reyes (2012) also make a distinction between 2 causes of incentive effects on preferences. First, incentives can affect the environment in which preferences are learned. When this happens, the preferences are referred to as endogenous preferences. Second, the extent or presence of incentives affect the behavioral salience of an individual’s social preferences. When incentives constitute different states, we refer to social preferences as state-dependent preferences. There are three mechanisms that make social preferences state-dependent. First, by implementing an incentive, the principal discloses information about his intentions, about his beliefs about the target of the incentives and about the targeted behavior. This information might affect the agent’s social preferences which in turn affect the agent’s behavior. Second, incentives provide situational cues for appropriate behavior. Finally, incentives may lead to a crowding out of intrinsic motivations. The crowding-out effect is based on the intuition that the presence of punishments or rewards spoils the reputational value of good deeds. This creates doubt within the individual about the extent to which he performed because of the incentives rather than for himself. This phenomenon is also referred to as the ‘overjustification effect’ (Lepper, Greene, & Nisbett, 1973; as cited in Benabou & Tirole, 2004). In the next part of this paper I’ll give experimental evidence for both endogenous preferences and for all 3 mechanisms that make preferences incentive-state-dependent. Furthermore, I’ll give examples of experiments where crowding in has been found and explain the underlying mechanisms. 1. Endogenous preferences: incentives alter how new preferences are learned Preferences are endogenous if someone’s experiences lead to durable changes in motivations and eventually result in a change in behavior in certain situations (Bowles, 2008). In most cases, experiments have a few hours duration and therefore it’s unlikely to uncover the mechanisms that are involved in the process of durable change of preferences. Although it’s hard to explore the causal mechanisms at work, there exist some experiments that do show a durable learning effect (Irlenbausch & Sliwka, 2005; Falkinger, Fehr, Gachter, & Winter-Ebmer, 2000; all cited in Bowles, 2008). Gneezy and Rustichini (2000a), for example, examined if the introduction of a monetary fine for late-coming parents in day-care centers would lead to reduction of late-coming. However, the amount of late-coming parents didn’t decrease, but increased significantly. Thus incentives led to more self-interested behavior. More importantly, after the fine was removed no reduction in late-coming parents was shown, meaning that there was some durable learning effect going on. 2. State-dependent preferences: incentives provide information about the principal When an incentive is imposed on an agent, he may infer information about the principal who designed the incentive. He may, for example, infer information about the principal’s beliefs regarding the agent, and about the nature of the task that has to be done (Fehr & Rockenbach, 2003). This information can lead to a negative response to fines that are imposed by principals. Fehr and Rockenbach (2003) designed a sequentially played social dilemma experiment and examined how sanctions intended to prevent cheating affect human altruism. Participants in the role of ‘investor’ could transfer a certain amount of money to another player, the ‘trustee’. The experimenter tripled this amount. After tripling the money, the trustee was given the opportunity to back-transfer some of this money to the investor. The investor could indicate a desired level of the back-transfer before he transferred the money to the trustee. In the incentive-condition the investor even had the option to impose a fine if the trustee would send a back-transfer that was less than the desired amount. Instead of imposing a fine the investor could also choose to decline the use of the fine. The decision of imposing or declining the fine was known to the trustee. In the trust-condition the investor could not make use of incentives. Fehr and Rockenbach (2003) found that generous initial transfers by investors were reciprocated with greater back-transfers by trustees. However, the use of the fine reduced the return transfers, while renouncing the fine in the incentive-condition increased back-transfers. This means that sanctions revealing selfish or greedy intentions destroy altruistic cooperation almost completely (Fehr & Rockenbach, 2003). In another experiment by Fehr and Schmidt (2007), principals could choose between offering a bonus contract or a combination contract (which was a combination of the bonus contract with a fine) to the employee. What they found was that agents perceive that principals who are less fair are more likely to choose a combined contract and are less likely to pay the announced bonus. Furthermore the effect of effort on the bonus paid is twice as large in the pure bonus condition compared to the combined contract condition. The positive response to the principal’s renunciation of the fine option can be seen as a categorical effect. The threat of a fine led to diminishment of the trustee’s reciprocity. 3. State-dependent preferences: incentives may suggest permissible behavior The experiments that will be described here, differ from the experiments mentioned above in the way that here incentives are implemented exogenously by the experimenter. This means that incentives do not provide any information about the beliefs or intentions of other experimental subjects. In a lot of situations people look for clues of appropriate behavior. These are often provided by incentives. These framing effects have been investigated in many studies. Hoffman, McCabe, Shachat and Smith (1994; as cited in Bowles & Polania-Reyes, 2012) found that by making a game sound more competitive after relabeling it, generosity and fair-minded behavior in the participants were diminished. In some other studies (Ellingsen, Johannesson, Munkhammar, & Mollerstrom, 2008; as cited in Bowles & Polania-Reyes, 2012) the framing effect even appeared to have changed subjects’ beliefs about the actions of others. Framing effects can also be induced in other ways than simply renaming the experiment. Providing an incentive may already provide a powerful frame for the decision maker. In an experiment of Schotter, Weiss and Zapater (1996) subjects played an Ultimatum Game experiment in which player 1 is given an endowment and asked to propose a part of this endowment to player 2. Player 2 can either accept or reject this division. If he accepts, the proposed division is implemented. However, if he rejects both players receive nothing. Schotter et al (1996) found that if a market-like competition was included in the game, that is, subjects with lower earnings would be excluded from the second round in the game, player 1 proposed less generous divisions to player 2. Furthermore, lower offers were accepted by player 2. The authors interpreted these results as that implementing market-like competition â€Å"offers justifications for actions that in isolation would be unjustifiable† (p. 38). Thus, providing incentives in the form of a competition can lead to moral disengagement. The framing effects of incentives can occur in cases of government-imposed incentives as well. An example comes from an experiment from Cardenas, Stranlund and Willis (2000) where they studied the effects of external regulatory control of environmental quality. Participants were asked to choose how much time they would spend collecting firewood from a forest, while being aware that this activity has a negative effect on local water quality. Two treatments were considered to examine whether external control may crowd out group-oriented behavior. All subjects played eight initial rounds of the game without any treatment, that is, without being able to communicate with each other and without external regulation. After the initial rounds, one subset of groups played additional rounds in which they were able to communicate. The other subset of groups was confronted with a government-imposed regulation. The regulation also involved the possibility of imposing a fine to subjects that would withdraw too much of the firewood. Although standard economic theory predicted that the regulation would increase group-oriented behavior, this wasn’t the case. When subjects were able to communicate they made way more efficient decisions. However, regulatory external control caused subjects to make decisions that were closer to their self-interest. This means that the fine, although it was insufficient to enforce the social optimum, extinguished the subjects’ ethical aptitudes. 4. State-dependent preferences: incentives may compromise intrinsic motives and self-determination A third reason why social preferences may be state dependent is because providing incentives may lead to motivational crowding out. As Bowles (2008) put it: â€Å"where people derive pleasure from an action per se in the absence of other rewards, the introduction of explicit incentives may ‘overjustify’ the activity and reduce the individual’s sense of autonomy† (p. 607). According to Deci (1975; as cited in Bowles, 2008) the underlying psychological mechanism appears to be a desire for â€Å"feelings of competence and self-determination that are associated with intrinsically motivated behavior† (p. 1607). There is a large body of literature on the psychology of intrinsic motivations going back to the early work of Festinger (1957; as cited in ThOgersen, 2003) and his cognitive dissonance theory. In the past decades a lot of experiments have been done to test the crowding out of intrinsic motivation. One of these studies comes from Gneezy & Rustichini (2000b) who tested the effects of monetary incentives on student performance. 180 students were asked to answer 50 questions of an IQ test. They were all paid 60 NIS (New Israeli Shekel) for their participation in the experiment. The students were divided into 4 different groups, which were all corresponding to 4 different treatments. The students in the first treatment group were only asked to answer as many questions as possible. The students in the second group got an extra payment of 10 cents of a NIS per question that they answered correctly. Subjects in the third group were promised 1 NIS, and subjects in the fourth group 3 NIS per question that they answered correctly. The average number of questions correctly was approximately 28 in the first group and declined to 23 in the second group. Furthermore, the number increased to 34 in both the third and the fourth group. The differences in performance were significant. In a second experiment Gneezy & Rustichini (2000b) tested the effect of incentives on volunteer work performed by high school children. 180 children were divided into three groups. The subjects in the first group constituted the control group and they were only given a speech about the importance of volunteer work. The second group was given a speech as well, but was also promised to receive 1 per cent of the total amount of donations collected. The third group was promised 10 per cent of the amount collected. The average amount collected was highest in the first group and lowest in the second group. The average amount that was collected by the third group was higher than that of the second group but not as high of the amount that was collected in the first group. Also these results were significant. It appears to indicate that the effect of incentives can be detrimental, at least for small amounts. In another experiment, Falk and Kosfeld (2006; as cited in Bowles 2008) tested the idea that control aversion based on the self-determination motive is the reason that incentives reduce performance. They used a principal-agent game where agents could choose a level of production that was beneficial for the principal, but costly for themselves. If the agent chose to produce nothing, he would get a maximal pay-off. Before the agent’s decision the principal could decide to leave the choice f production level completely to the agent or to impose a certain lower bound on the agent’s production level. The experimenter varied the bounds across the treatments and the principal could only choose to impose it or not. Results showed that when the principal imposed the bound, the agents chose a lower production level than when the principal didn’t impose a bound. The ‘untrusting’ principals earned half of the profits of those who did trust the agents and thus didn’t impose a bound. In post-surveys, the agents indicated that imposing the lower bound was perceived as a signal of distrust. The results of this experiment suggest that the desire for self-determination and control aversion are not the only effects of imposing the bound. Imposing this minimum was informative for the agents about what the principals’ beliefs were regarding the agents: the principals who imposed the bounds had lower expectations of the agents. Thus, the results in the experiment of Falk and Kosfeld (2006; as cited in Bowles 2008) seem to be the result of both negative information about the principal (or incentive designer) as well as the result of self-determination. 5. Crowding in Although a lot of experiments show that providing incentives has a negative effect on social preferences, there is also some evidence that crowding in can occur, that is, social preferences and incentives enhance the effect on each other. This might happen when an incentive provides good news about the principal’s type or intentions, for example when he offers the agent a reward rather than a fine. It is also seen in experiments where the incentive designers are peers in a public goods game who pay to punish free riders in order to sustain cooperative behavior (Bowles & Polania-Reyes, 2012). The phenomenon of crowding in is interesting since it indicates how policies could be implemented optimally and how incentives and social preferences could become complements rather than substitutes (Bowles & Polania-Reyes, 2012). Besides that, it appears that crowding in happens often in Public Goods games and Common Pool Resources games, which display the same characteristics as public policy settings. Below I’ll give an example of an experiment in which crowding in was found. Fehr and Gachter (2000) conducted a public good experiment with and without the opportunity to punish. In the no-punishment treatment the dominant strategy is complete free-riding. In the punishment treatment free-riders could be punished by their altruistic peers, since it was costly for them to punish. Therefore, if there were only selfish individuals, as assumed in economic theory, there wouldn’t be a difference between the two treatments. However, in the no-punishment treatment the contributions of the players were substantially lower than in the punishment treatment. This suggests that powerful motives drive the punishments of free-riders. Furthermore there was evidence that the more free-riders deviated from cooperation, the more they were being punished. There are several mechanisms that can explain the effect of crowding in. In the first place when a peer imposes a fine on a free-rider, this may activate a feeling of shame. Barr (2001; as cited in Bowles & Polania-Reyes, 2012) found that just a verbal message of disapproval already can have a positive effect on the free riders’ contributions. A second mechanism that appears to be at work it that nobody wants to be the cooperator while all others are defecting. Shinada and Yamagishi (2007, as cited in Bowles & Polania-Reyes, 2012) found that students cooperated more in a public goods experiment when they were assured that defecting free-riders would be punished. They just didn’t want to be exploited by defectors. A third mechanism underlying crowding in was consistent with the findings of an experiment by Vertova and Galbiati (2010, as cited in Bowles & Polania-Reyes, 2012). They found that when a stated obligation was introduced, this produced a larger effect when it was accompanied with a small monetary incentive, rather than with a big incentive or than when no incentives were offered. The authors interpreted this phenomenon as that the salience of the stated obligation is enhanced by large explicit incentives. The latter phenomenon was also found in Ireland, where a small tax was imposed on plastic grocery bags (Rosenthal, 2008; as cited in Bowles & Polania-Reyes, 2012). After two weeks there was a 94% decline in the use of these bags. This result can be explained by the fact that the introduction of the tax was preceded by a large publicity campaign. Thus, the incentive was implemented jointly with a message of social obligation and it seems that it served as a reminder of the importance of one’s civic duty. Implications for policy Many policies are based on the self-interest hypothesis that predicts that all individuals are self-regarding. However, as we have seen social preferences play an important role as well when it comes down to behavior. This would mean that a lot of current policies are non-optimal. Therefore a big challenge is facing the mechanism designer: how to design optimal fines, taxes or subsidies when the individual’s responses depend on his preferences which in turn are determined by the incentive imposed? In most experiments the effects of incentives were studies and afterwards the mechanisms were identified that could explain the results. However, one of the problems that the designer is facing is that he must determine beforehand how incentives will affect behavior. Based on the experiments that have been done, several guidelines can be drawn. The first is that when crowding out is found, social preferences and incentives are substitutes. This means that a negative effect of incentives is less likely to be found when the social preferences are minimal. In contrast, when social preferences are prevalent among a society, it may be more convenient to reduce the use of incentives. Also, policies that are implemented in order to enhance social preferences will be more effective when incentives are little used. The second stems from Titmuss’s claim that if the crowding out effect is so strong that the incentive has an opposite effect than intended, incentives should be used less. However, in many cases the effectiveness of incentives is not reversed, but blunted and then the implications for the optimal use of incentive isn’t that obvious (Bowles & Hwang, 2008). How Bowles & Hwang (2008) state it: â€Å"the reduced effectiveness of the incentive associated with crowding out would entail a larger incentive for a planner designing a subsidy to ensure compliance with a quantitative target† (p. 4). Present evidence is insufficient in providing enough guidelines to the policy maker who wants to know ex ante what the effects are of the incentives that he considers to implement (Bowles & Polania-Reyes, 2012). What we do know is that the same incentives imposed by individuals who have no personal benefit but only want to promote pro-social behavior (as in the experiment of Fehr & Gachter, 2000) are more likely to increase contributions than when imposed by an untrusting principal (Fehr & Rockenbach, 2003). Furthermore it seems to be important to let the agent understand that the desired change in behavior would be socially beneficial rather than that the incentive is perceived as a threat to her autonomy or reflecting badly on the designer’s intentions (Bowles & Polania-Reyes, 2012). Conclusion The self-interest hypothesis assumes that individuals are only motivated by their own material self-interest. This assumption is used in the design of many policies. However, in the past decades a lot of experiments have shown that other-regarding social preferences rather than self-regarding preferences play a role in behavior. We have seen that some mechanisms can induce pro-socially oriented individuals to behave as they are selfish. On the other hand, there are also examples of experiments in which mechanisms induce self-interested individuals to behave at a more pro-social level. Thus, incentives can lead to both crowding out and crowding in phenomena. Whereas negative information about the principal and the over-justification effect may lead to crowding out of intrinsic motivation to contribute to a good, altruistic punishment by peers who do not benefit personally is more likely to increase contributions. Furthermore it seems important to make individuals aware of their civic duty, as was shown in Ireland where a small tax was imposed on plastic bags. Regarding to public policy, we have seen that small differences in institutional design can lead to many different outcomes. This imposes a big challenge on the policy designer who has to know ex ante what the effects of the incentive that he is considering to implement will be. When social preferences are not present, incentives may have a positive effect, predicted by economic theory. However, in areas where social preferences do play a role, the use of monetary incentives needs to be reconsidered.