Change Initiative

Change Initiative George Tautz Grand Canyon University Organizational Development & Change MGT 623 Dr. Kensler March 17, 2010 Change Initiative Organizational change is a necessary outcome when considering various scenarios contributing to the resulting vision. Perplexing as it may seem, change initiatives don’t always result in positive outcomes. In fact, many never succeed. As a change agent, one should always have formulated a vision of what change will â€Å"look† like for the organization. One would be hard pressed to paint a landscape without having a vision of what the landscape should resemble. Yet, resistance to change usually becomes a significant factor contributing to an initiative’s failure. It is likely an implicit expectation to prepare for the advent of resistance and it consequences. A change agent’s tool box should contain a number of strategies which will support the process of change. Defining and re-defining the end result as well as the change process itself is a useful exercise in that clarity eventually overcomes obscure, poorly orchestrated attempts at invoking change. This paper will propose a change initiative designed for LC- an organization referenced previously in part I of a continuing anthology of LC’s attempts at facing change. Resistance to change will be examined within the context of how certain attributes of any successful change process operate to support or derail attempts at managing a successful change initiative. Managing change requires a vision which supports a renewal process (Moran & Brightman, 2001). Change doesn’t (or shouldn’t) occur for the sake of change. The stress which change places upon an organization isn’t likely to justify the price in terms of its effect on the people which make up the organization. Rather, change should be gauged in terms of its resultant ability to adapt to the needs of the organization’s external and internal customers (Burke, 2002). This should serve as the premise for any organizational change initiative. It is, therefore, the basis for any vision attributable to recognizing that the needs of an organization’s constituents is not being served or met. In practice, such a realization not only forms the basis for a vision of change, but also incites and solicits aberrant behavioral reactions by employees who are responsible for its implementation. Research and anecdotal examples support the fact that an initiative’s success or failure ultimately relies upon whether or not employees get in back of an initiative or stand in its way (Scheck & Kinicki, 2000). As mentioned, employee resistance is an integral component of a scenario for failure if not managed appropriately. Rampant cynicism portends what could ultimately become an abbreviated attempt at change. Symptomatic responses to resistance include withdrawal as well as decrements in performance criteria (Weeks, Roberts, Chonko, & Jones, 2004). Resistance does not necessarily have to be exclusively negative. However, it needs to be planned for and managed upon presentation. Whatever change is envisioned for LC, there must also be a strategy for harnessing employee reactions of uncertainty and control loss. In the case of LC, the precise vision of what the final outcome of change should be must be tempered by alternative strategies necessary to address resistance. In LC’s case, the vision is to become a more responsive organization able to adapt faster to environmental changes. A change in priorities coupled with an extinction of misdirected goals and objectives will require LC to utilize the coalition of support described previously in tandem with the overall goal of reviving the organization’s viability. Trusting management is an important component to the change process. If change is not managed well, employees will inevitably mistrust management. This leads to anger as well as cognitive resistance which is questioning the very need for change in the first place. Interestingly enough, too much poor quality information results in an overall exacerbation of resistance linked symptomology (Allen, Jimmieson, Bordia, & Irmer, 2007). The perceived quality of information offered greater chances for a successful initiative. This is more or less intuitive. So then, what is the best way to provide good quality information? Fortunately for LC, the mechanism is already in place. The coalition set up for LC will serve an instrumental role in developing, analyzing, and disseminating information to the rank and file employees at LC. However, it should be pointed out that the initial selection of coalition team members may prove to be one of the most important aspects of the change initiative. Poorly selected, unqualified or otherwise circumspect individuals who â€Å"leech† their way onto a planning and implementation team such as this one, tend to force more attention onto their own needs rather than on the needs of the organization. A further refinement is in order, however. What must be understood is the observation that employees tend to react differently to quality information based on its source. The reason for this apparent discordant phenomenon has to do with employees perceiving communications emanating from senior management as one way- not two way. One way communication channels do not allow the employee to ask questions. Two way channels offer two way communication. Therefore, the most ideal make up of the coalition team should be senior management as well as supervisors. Proceeding further, it should also be understood that the overall make up of the coalition should consist of experts contributing information appropriate to their expertise. Certainly, a coalition of change agents in a hospital setting, for example, would not do well if we included the landscaping staff whose contribution would be marginal at best to a positive outcome relating to decreasing mortality rates within the institution. In conclusion, trust in management is one of the most important contributing factors when considering the likelihood of resistance to change. To enhance trust, management should form a coalition of experts as well as line supervisors for the purpose of putting forth accurate information. The strategic initiative for LC is to promote a change in how the organization conducts its business. Sweeping changes are proposed which will resonate within all areas of the organization. Immunity from inclusion is unlikely even for the most obscure, entrenched employee. Change will re-define how LC presents its service delivery model to both internal and external clients. In order to garner support for change, LC must communicate to the employees what is being done and why. The company must offer an opportunity for a two way dialogue in order to circumvent employee cynicism. There are specific well orchestrated reasons for selecting the various team members. For example, all the major operations divisions should be represented since whatever is implemented will have far reaching effects on every division of the organization. The change initiative will determine how each division is accountable to the overall mission of the organization. Developing a vision for change is an important step for the change agent to engage in. Without clarity, it is unlikely that change will occur successfully. References Allen, J. , Jimmieson, N. L. , Bordia, P. , & Irmer, B. E. (2007). Uncertainty during organizational change: Managing perceptions through communication. Journal of Change Management, 7(2), 187-210. Burke, W. (2002). Organization Change: Theory and practice. Thousand Oaks, CA: Sage. Moran, J. W. , & Brightman, B. K. (2001). Leading organizational change. Career Development International, 6(2), 111-118. Scheck, C. L. , & Kinicki, A. J. (2000). Identifying antecedents of coping with an organizational acquisition: A structural assessment. Journal of Organizational Behavior, 21, 627-648. Weeks, W. A. , Roberts, J. , Chonko, L. B. , & Jones, E. (2004). Individual readiness for change, individual fear of change, and sales manager performance: An empirical investigation. Journal of Personal Selling and Sales Management, 24, 7-17.

SWOT analysis for Nurses and Health care environments Essay

Strengths, Weaknesses, Opportunities and Threats in a health care environment. SWOT – for management, mentoring and nursing Hospital nursing swot analysisA SWOT analysis is a tool that can provide prompts to the managers, clinical leads, nurse tutors, nurse mentors and staff involved in the analysis of what is effective and less effective in clinical systems and procedures, in preparation for a plan of some form (that could be an audit (CQC), assessments, quality checks etc.). In fact a SWOT can be used for any planning or analysis activity which could impact future finance, planning and management decisions. It can enable you (the management& clinical staff) to carry out a more comprehensive analysis. Definitions of SWOT †¢Strengths – Factors that are likely to have a positive effect on (or be an enabler to) achieving the clinic’s objectives †¢Weaknesses – Factors that are likely to have a negative effect on (or be a barrier to) achieving the clinic’s objectives †¢Opportunities – External Factors that are likely to have a positive effect on achieving or exceeding the clinic’s objectives, or goals not previously considered †¢Threats – External Factors and conditions that are likely to have a negative effect on achieving the clinic’s objectives, or making the objective redundant or un-achievable. Before starting any planning or analysis process you need to have a clear and SMART goal or objective. What is it that you need to achieve or solve? Ensure that all key stakeholders (relevant to the issue being explored) buy into this objective or goal. Then undertake a PESTLE analysis (or PESTLE in Clinics), this will provide you with the external factors (OT). Use the PRIMO-F model to ensure all internal factors are considered Conducting a SWOT analysis in a clinical environment One of the most effective ways to conduct a SWOT analysis is not in isolation, but with a team effort. When the goal is shared, then a brainstorming session can be run. Ensure than when running such a session it is facilitated by a person not involved with the content – this is best with an independent person. If budgets do not allow this – then talk to another establishments head, and arrange a contra deal. Do this activity in a number of phases: 1.Share the goal 2.Data collection (no filtering or comments – record verbatim) consider all areas of PRIMO-F 3.Take a break of at least 1 hr 4.Filter, sort and analyse into the 4 areas – SWOT – be critical and SMART avoid ambiguous statements or ideas at this stage 5.Prioritise the elements Have a second session where the planning phase takes this data and puts it into a realistic plan. IMPORTANT TIP – do not hide or underestimate threats or weaknesses – if you ignore them or underplay them now they will come back to haunt you at some stage – probably when they can do most damage! The goal of any session like this is not necessarily to neutralise any weakness or threat – that is impossible – but to have it on your radar – and where possible take avoiding action. To some extent it is all about risk. What sort of tasks and issues can this be used for? At its most complex and comprehensive, it can be used for business planning, however it is also of value to solving localised issues and challenges. An Example of a nursing based SWOT We will use an example of a nurse working within a primary care clinic who want to improve the relationship with their patients. TASK 1.Define the goal and measurable outcomes – i.e. to have less than 50% of patients spending one hour waiting for treatment 2.Consider the current activities you have in place to encourage patient-partnerships within your clinic. 3.Complete a SWOT analysis, identifying your current strengths and realistically appraising your current weaknesses. This can only be done involving other nurses, doctors, support staff and patients. 4.From the current analysis identify factors which could be improved 5.Identify opportunities that could be created 6.Put a plan and set of measures in place. The clinic identified the following objective: †¢To improve parent-partnership by encouraging patients to visit the clinic and become active members of the community. †¢Outcome – to have less than 50% of patients waiting more than one hour for treatment Currently, the clinic holds an open day once each year. It uses this as a way to encourage patients to visit the clinic and engage with clinic staff. The following is the initial SWOT Analysis. Strengths †¢Highly-skilled clinical staff. †¢History of successful Open day events †¢Clinic has a strong ethos of openness, sharing and commitment to increasing patient confidence †¢Patients wanting to get involved †¢Local charities willing to participate Weaknesses †¢Nurses not available to meet patients often enough †¢Current open days events not increasing voluntary activity †¢Not enough staff time to plan more events †¢Staff not clear of their role in the patient relationship †¢Narrow focus on open events not partnership activities †¢Services too stretched for additional activity Opportunities †¢Active volunteer committee willing to plan and organise events †¢Patients active in the clinic’s Patient Participation Project can be asked for their opinions and suggestions. †¢Head Nurse is willing flex clinic times to free up clinical staff time †¢Use patients to contribute to practice delivery Threats †¢Confidentiality is at risk †¢Patient coercion to do things they do not wish to do The next step is to develop a plan with interested stakeholders SWOT Analysis templates for Nursing, clinics & health care SWOT Analysis Template/ Worksheet – use these templates to start your SWOT process SWOT Analysis on ____________________ (organisation name or product/ service/ project)Clinic/ establishment/ organisation Background/ situation ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________(usual business partners, relationships, channels to market, assumptions etc†¦) Date PESTLE completed ____________________ Date of SWOT Analysis ____________________ ____________________v INTERNAL Under each of the PRIMO-Ffactors list the relevant strengths and weaknesses.List the Opportunities and threats from your PESTLE analysis below.Then considering the combination of these factors generate some options or alternative strategies for action. Strengths (PRIMO-F) †¢People (nurses, patients, CLINICAL GOVERNANCE TEAM etc) †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢Resources †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢Innovation & Ideas †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢Marketing (communications) †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢Operations (day to day running) †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢Finance †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ Weaknesses (PRIMO-F) †¢People (nurses, patients, CLINICAL GOVERNANCE TEAM etc) †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢Resources †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢Innovation & Ideas †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢Marketing(communications) †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢Operations(day to day running) †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢Finance †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ E X T E R N A L Opportunities †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ SO Alternatives / Strategies †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ WO Alternatives / Strategies †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ Threats †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ ST Alternatives / Strategies †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ WT Alternatives / Strategies †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ †¢___________________ Try our organisational SWOT analysis tool for free NOW – Or return to our main SWOT analysis page SWOT Analysis Template / Worksheet for Nursing/ Clinical Environments 2 SWOT Analysis on ____________________ (Clinic/ establishment organisation name or product/ service/ project)Background/ situation__________________________________________________________________________________________________________________________________________________________________ __________________________________________________________________________________________ (usual operational partners, relationships, channels to market, assumptions etc†¦) Date PESTLE completed ____________________ Date of SWOT Analysis ____________________v INTERNAL Under each of the PRIMO-Ffactors list the relevant strengths and weaknesses.List the Opportunities and threats from your PESTLE analysis below.Then considering the combination of these factors generate some options or alternative strategies for action. Strengths Weaknesses E X T E R N A L Opportunities SO Alternatives / Strategies WO Alternatives / Strategies Threats ST Alternatives / Strategies WT Alternatives / Strategies Try our organisational SWOT analysis tool for free NOW – Or return to our main SWOT analysis page SWOT Analysis Template / Worksheet for Nursing/ Clinical Environments 3 SWOT analysis – Strengths, Weaknesses, Opportunities and threats Date Company/ Department name Internal Factors Our Strengths Ways to exploit Our Weaknesses Ways to reduce External factorsOur Opportunities Ways to exploit Our Threats Ways to reduce

Philosopher essay

The United States' form of democracy was not assembled all by one man over night. The idea of self government is an idea not widely thought about in a world who ere a king ruled. Classical Republican Philosophers and Natural Rights Philosophers influx encoded many important documents that have controlled our country such as the Declaration n of the Rights of Man and of the Citizen, a document of the French revolution and history of huh man rights, and the Declaration of Independence.The Declaration of the Rights of Man and of the Citizen was giggly highly influenced by Thomas Jefferson because Jefferson was working with General Lafayette and Lafayette admired Jefferson. The very first article of this Declare Zion, â€Å"Men are born free and remain free and equal in rights† shows that everyone is equal. All of the rights show barely any restriction to people and express how every individual is Nat aurally equal. The Declaration of Independence was written by Thomas Jefferson. Jefferson carefully organized the Declaration to control the country, while showing a distinct Seen SE of freedom toward the individual.Thomas Jefferson used the unalienable rights, â€Å"Life, Lib retry, and a pursuit of Happiness† to express the type of life a United States citizen should have. Thomas Jefferson used these three rights from John Locke except Locke used property instead of a pursuit of happiness. By â€Å"property' Locke meant more than belongings, he ref erred to one's well being as a whole as well. Using these three rights, American people can d iced when the government has been too damaging and can change it (if need be). The D acceleration states reasons â€Å"We have warned them from time to time†¦

Chewing and Sound Localization Research Paper Example | Topics and Well Written Essays - 1750 words

Chewing and Sound Localization - Research Paper Example Sound localization is the ability of a listener to identify the source or origin of a sound, in this paper we focus on the factors affecting sound localization, this study is performed to establishing whether chewing has an effect on sound localization. Chewing leads to head movements that may affect sound localization, according to previous studies undertaken head movements affect sound localization. This paper analysis response from ten participants whose sound localization errors were recorded while and while not chewing, data collected helped test the hypothesis whether chewing affected localization. The following is an analysis of research undertaken by scholars in the past and the results of the study. Many studies have been undertaken in the past regarding sound localization, however majority of this studies have been undertaken with immobilized heads and very few have been undertaken while respondents were chewing. A study by Wallach (1939) showed that head movements affected sound localization, in his study participants were allowed to rotate their head, tip their head and even pivoting. Results show that head movements affected sound localization by participants. However it was also evident that the sound moved with the head. Mangles and Runge (1967) sound localization study results showed that Monaural is as good as binaural when movements were allowed, participants were a... Hypothesis and prediction The hypothesis that was tested is whether chewing have any effect on ability to detect the direction of sound, the null hypothesis is that chewing has no effect on sound localization and the alternative hypothesis is that chewing increased the mean error score for localization. We test this hypothesis by performing a T test that will compare the two means from the two tests, we expect that we will reject the null hypothesis that the two means are equal and accept the alternative hypothesis that states that the two means are not equal. Null hypothesis: a = b where a is the mean error score for localization for test one and two are equal and alternative hypothesis a b or a Methods: In order to test our hypothesis a sample of ten individuals was randomly selected. The sample was further subdivided into two groups which included those would first chew and data collected and then data recorded with the absence of chewing. For the other group data was to be collected without chewing and then data would be collected while chewing. The experiment was carried out using MAT LB computer software, participants sat in front of a computer and given headphones, they were then asked to locate the source of sound 180 degrees in front. The condition was that the participants would chew and then stop chewing and then they were allowed five minutes where they would continue with the second condition which is no chewing and then chew. For each of these two conditions

Age Discrimination in the Society Term Paper Example | Topics and Well Written Essays - 1000 words

Age Discrimination in the Society - Term Paper Example When employment becomes scarce and population continues to increase, there is a tendency to change job qualifications from skill-focused to the overall qualities of the prospective employee. This includes the age, when it is not really necessary for the job description. The law protects the employment of the citizens aged 40 and above, and is not applicable for any "reasonable factor other than age" (U.S. Equal Employment Opportunity Commission, n.d.). The law against age discrimination provides an equal employment opportunity for all Americans and helps them reach their full potential as employees with regard to their qualifications. Age discrimination hurts not only the people directly affected by it, but also in the overall effect of morality and the country’s economic thrusts. Age Discrimination and the Society Joyce Kalivas-Griffin, 57, and an experienced school teacher, believes that she failed to get a job she applied for because of her age (Linn, 2010). While she cries for age discrimination, Joyce's situation is not a solitary case in the world of employment. The Equal Employment Opportunity Commission reports that there is a "33 percent increase in the number of age discrimination complaints filed during the past two fiscal years combined" (Linn, 2010). The impact of age discrimination does not only magnify the unequal treatment of aged employees despite their contribution and experience, but also reflects the superficial perspective of employers when it comes to choosing the right candidate for a job position. The law states, however, that the employer has the right to advertise age requirement only if it is necessary for the job. ... For instance, a man in his mid-50 was laid off because of his age. He is the breadwinner of his family and the sole provider for his children concerning education, food and shelter. His wife, on the other hand, is a plain housewife. His loss of employment has an immediate effect to him and to his family in a sense that the source of income is completely gone. Consider the effect it would bring to this 50-year old man. For so long, his family has been relying on him when it comes to everyday sustenance, and when unemployment comes as a shock, it would be harder for him to recover both financially and emotionally. The feeling of worthlessness enslaves the discriminated man and consequently affects his health due to stress. The money saved within the duration of employment reserved for his retirement years would be spent. The worst thing is, the savings may not be enough to compensate and would force him to resort to debts. According to McDowell (n.d.), the struggle of the victims of ag e discrimination may range from economic difficulties to psychological problems. Denial is a common form of self-preservation in this kind of case. When discriminated because of age, old people tend to do everything just to look younger and prove that they are still capable of doing the task as efficiently as the younger ones. They also resort to self-pity, detrimental to their overall psychological health. Butler (1975) said that victims of age discrimination wished â€Å"they were dead† at a certain point in their senior lives. Personal effects of age discrimination affect the person in all aspects of his life. What is unseen, however, is the impact it can bring to the nation’s economy as a whole. Personal debt is one of the economic constraints of employment discrimination, but

The Effect of Play on Early Literacy Essay Example | Topics and Well Written Essays - 1750 words

The Effect of Play on Early Literacy - Essay Example Research on the relationship between play and literacy emerged as early as 1974, and increased with new insights into the foundations of literacy in the preschool years. Thesis Statement: The purpose of this paper is to investigate the effect of play in preschool children on early literacy. Further, the theoretical framework provided by Vygotsky and Piaget, and the importance of symbolic play, free play and guided play reinforced by reading from resources rich in vocabulary will be examined. Theoretical Framework for the Play-Literacy Relationship The classic theories of developmental psychologists Piaget and Vygotsky provide strong theoretical frameworks for examining the relationship between play and literacy in early childhood. Piaget’s perspective emphasizes on the value of repeated social pretend play for the acquisition of broad cognitive skills such as symbolic representations and the initiation of literacy skills such as print awareness. Pellegrini and Van Ryzin (2007) state that this approach is based on interactions between individuals and the objects in the physical environment; and has led to the establishment of literacy-enriched play centers as an interventional strategy. Vygotsian theory is based on the role of adults and peers in the acquisition of social literacy practices through play activities. This theory argues that children form literacy concepts and skills through everyday experiences with others including pretend play and bedtime storybook reading. Thus, the young child’s acquisition of literacy is a social, constructive process that begins from early childhood. These classic theories identify behavioral categories apparently shared by play and literacy, including â€Å"pretend transformations, narrative thinking, meta-play talk, and social interaction† (Christie & Roskos, 2009, p.1). On the other hand, they do not explain the dynamics between play and literacy, or the means by which play activity impacts the develo pment of literacy. Learning Through Engagement in Play Activities From birth, children love to learn through play and exploration, which form their primary teachers. In early childhood, mental and physical actions support each other, and learning is a process which engages both the mind and body. It is essential for children to experience life kinesthetically, thereby learning through experiences that utilize all the senses (Dickinson & Tabors, 2001). According to Leong, Bodrova, Hensen & Henninger (1999), play promotes four major skills that are vital for the development of literacy. They include increased ability to learn deliberately with enhancement in cognitive skills, development of symbolic representation, improved oral language, and the introduction of content related literacy skills for play to prepare the way. A valuable aspect of early literacy development is pretend play, which provides extensive opportunities to develop language skills. The amount of time spent by child ren in pretend play corresponds to their performance on language and literacy assessments. Their conversations in the preschool classroom are based on several skills using oral language and print; and the development of these skills is evident by the end of kindergarten (Dickinson & Tabors, 2001). It is clear that play has a great potential for practicing and experimenting

Managing Day Care Essay Example | Topics and Well Written Essays - 1500 words

Managing Day Care - Essay Example The recommended ratio in most countries is that one adult should be able to care for one child who is an infant as well as up to the age of one year. One adult should take care of five children that range around five years old at one specific time. For the children that are between the ages of 6-9 years, eight of them can be under one care taker at a specific time while those ranging from 10-12 years should not exceed ten under the care of one person at a specific time. It may however be challenging to meet this threshold as the number of personnel may fall short as compared to a large number of kids. (Farrell, 2001: pg 21) 2. Recruitment and Retention: A strategy should be developed to respond to all the issues that involve recruitment and retention of the people that take care of the children in day care. Such kind of strategy should be able to lay the basic foundation that would enable the child care to be in the hands of dedicate and highly qualified personnel that has the best i nterest of the children at heart. The recruitment programs should be able to bring out good qualities of the workforce that has the ability to provide continued support for the children under their care. The recruitment programs should also have the ability to facilitate retention of the up to date work force in their good numbers that is stable and dedicated to meeting the actual needs of the children under their care. The objectives that should be in the forefront for the stakeholders that recruit those who care for these children is that their strategy should be able to implement, after developing the actual strategy to be able to encourage many people who are willing but have a heavy heart to be able to come forward and take day care jobs as well as to implement the strategy to retain the good sense of personnel and workforce that have had all along and who proved their worth. (Fanning, 1991: pg 45) 3. Working with men in childcare: The issue about recruitment of men has been ho tly debated for ages but then again men should have the chance to work as caretakers. This will enable the children grow up with no form of jobs stereotypes and they would be encouraged to embrace gender balance as compared to instances where only women could do this work. Although the percentages of men who are offering themselves for the job are still few, it isn’t as low as it used to be. The men should also undergo same levels of training so as to be able to come up for the job. There should also be public education on giving the male caretaker a chance to do their job without discrimination. (Lindon, 1998: pg 22) 4. The Importance of Policies: After choosing to be an official that works under child care programs, there are certain difficult decisions that we have to make. The decisions involve how to associate with the kinds of policies that are designed to bring sanity to the work of child care centers or programs. For example when there are operating hours that are ser iously set by the managers or the parents, then there are factors that have to be considered such

Management Essay Example | Topics and Well Written Essays - 250 words - 24

Management - Essay Example ayo Clinic’s organizational culture and health care value chain are strengths that can be considered as long-term competitive advantages because they are rare, hard to imitate for competitors, and can be sustained. Its organizational culture is rare because of its strategic human resource management hiring and development policies and practices that ensure that the organization hires the right people who fit the values and strategic directions of the company (Niesen). Furthermore, Mayo Clinic has a well-coordinated, science-and-technology-centered, patient-oriented, user-relevant health care value chain that it has refined for more than 100 years that cannot be easily imitated by competitors. In addition, Mayo Clinic has a positioning strategy that merges cost and differentiation leadership. It is focused on reducing costs, but it also differentiates itself by being quality leader through research and development. Moreover, the basic meaning of the article is that it shows how difficult it is to become the best in a health care industry where costs are increasingly going up, but Mayo Clinic is succeeding because it has long-term competitive advantages, due to its dedicated, competent employees who have made a system that is not only cost-efficient, but also quality-centered. Mayo Clinic asserts that its success is a product of its systems and human resources. This is how its R&D works: â€Å"Our basic science and physician researchers are completely integrated into the Clinic and they work very closely with the physicians to understand the key questions that are out there, so that their work has real meaning† (Niesen). Its research is based on actual clinical problems. Moreover, Mayo Clinic underlines the value of its human resources to its success. For example, to drive efficiency, it hires and maintains competent engineers to focus on it: One of our secrets is weve had a very strong tradition of engineering at Mayo Clinic. We have 100s of engineers

Entrepreneurship and starting a small Business Term Paper

Entrepreneurship and starting a small Business - Term Paper Example Finally, conclusions with key findings and appropriate recommendations have been made. Starting one’s own business is an exciting, promising and high-risk proposition that usually stems from one single idea or a need. Study related to this process, usually referred to as entrepreneurship, has emerged as one of the most important outcomes of globalization. While significant part of a nation’s economic growth is through small business entrepreneurs, failure of this section of businessmen cannot be ruled out. In the current study, focus will be on efforts to identify various factors responsible for the success of small businesses and the challenges they face. An attempt will be made to list the core elements of successful entrepreneurship based on literature study and analysis before concluding with key findings. In his magazine article, Todorvic (2004) expresses that origins of entrepreneurship can be traced to early last century and is yet under lot of debate concerning its definition or actual meaning. He asserts that entrepreneurship is such a vast multidimensional and dynamic aspect of conducting business in the globalized world that it has been given multiple definitions from varied perspectives. Quoting various definitions from different people, Todorvic (2004) mentions that entrepreneurship, for instance, is concerned with starting one’s own business; entrepreneurship is the process by which new products, services or outcomes are created by people that can be recognized with certain specific characteristics. Specific characteristics have been associated with entrepreneurship, such as innovation, focus, discipline, passion, self-confidence, positive attitude, and persistence (Nieuwenhuizen & Machado, 2004). Koester (2010) asserts that an innovative opportunist is the one that m akes use of an opportunity in the marketplace and converts this into a promising business. Moreover, Koester (2010) also mentions that good interpersonal

Roe v. Wade was incorrect legally and constitutionally (Catholic) Term Paper

Roe v. Wade was incorrect legally and constitutionally (Catholic) - Term Paper Example Wade’s constitutionality with reference to the written constitution. There is so much false information regarding the Supreme Court’s decision on this case. To say that the decision of the Supreme Court was legally and constitutionally correct means that the decision should base on principles enshrined in the constitution of the United States, on precedents in constitutional law and on rights, which the constitution purposely created to secure and protect. Abortion has been generally a debated issue for many years. Abortion gets opposition especially by the church and activists’ arguing that abortion is murder, and therefore, women should not have the right to an abortion. On this case, the Supreme Court gave Roe the right to an abortion saying that it was her constitutional right not to bear the child of a rapist. The court emphasized that they were not deciding when human life starts. They ruled that an unborn child is not a human being within the meaning of the Fourteenth Amendment and therefore, not entitled to have rights to life, liberty, and property. The court effectively argued that unborn children are not living human beings and therefore, they are not entitled to the Fourteenth amendment rights1. Historical evidence of abortion does not support a woman’s right to an abortion. Early feminists opposed abortion, as the medical procedure was not safe for women, endangering their health and life. By 1965, all the fifty states had banned abortion, with some exceptions, which were different depending on the state: to save the life of the mother, in cases of rape or incest, or if the unborn child was deformed. These words gave women the right to an abortion. Groups such as the National Abortion Rights League struggled to liberalize anti-abortion laws. The history of abortion is much familiar to the Roe v. Wade case as it made most existing state abortion laws unconstitutional. The Court did not interpret in

Essay on Typical Cell Example | Topics and Well Written Essays - 1250 words

On Typical Cell - Essay Example Additionally, each cell keeps its own instructions that enable it to carry out these tasks. The debate over typical cell has been present for several decades. Microbiology scientists in different factions have defined the basic cells with its components, while others argue that the definition of a typical cell is not definite. This paper discusses the basic structure and functioning of the cell to understand whether there is anything like a typical cell. The cell is the fundamental building block for all living organisms. Living cells are divided into two main categories: prokaryotes and eukaryotes. Scientists believe that life on earth began some 4 billion years ago. Prokaryotic cells were the first cells to evolve in the world. These organisms did not have a nuclear membrane, the membrane surrounding the nucleus of a cell. Bacteria cells are an example of prokaryotic organisms. However, the recent discovery of archaea (a second prokaryotic) proves that there was a third life of cel lular domain (Panno, 2005:41). Prokaryotes are single cell organisms that do not differentiate or develop to form multi-cellular organisms. Although some bacteria reside as masses of cells or grow in filaments, each single cell is similar to the other and has the capacity to exist independently. The reason behind the existence of the cells is the probability of not separating after cell division, or maybe they remained in a common slime or sheath (Cooper and Hausman, 2009:246). Despite their close arrangement to each other, they do not communicate or interact for continuity. Prokaryotes differ from eukaryotes based on nuclear structure and organization. Prokaryotes have the capability to inhabit everywhere on the planet, including our body surface. Prokaryotes lack the nuclear membrane. They also have no intracellular structure and organelles characteristic of eukaryotes. The functions of the organelles like mitochondria, Golgi apparatus, and chloroplasts are delegated to the prokar yotic plasma membrane. A prokaryote has three main architectural regions: a cytoplasmic part that has the ribosome and cell genomes (deoxyribonucleic acid DNA), a cell envelope that has a plasma membrane, a cell wall, and a capsule, and appendages refered to as pili and flagella (Panno, 2005:67). On the other hand, eukaryotes have a more defined nuclear structure. Examples of eukaryotes include animals, plants, and unicellular organisms. Eukaryotes are approximately ten times larger than prokaryotes, and having up to 1000 times much volume. The major difference between the two is that eukaryotes have compartments within the membrane where particular metabolisms occur (Cooper and Hausman, 2009:290). A significant difference is the nucleus, which is a compartment delineated by the nuclear membrane. The nucleus houses the DNA of the eukaryotic cell, thus the name of the eukaryotes (true nucleus). The eukaryotes also have organelles, special small structures that perform specific functi ons within a cell. Eukaryotic cells have dozens of different types of these organelles. Eukaryotes were a major development on the life of living things as well as a key evolution concept. Eukaryotes use the same metabolic processes and genetic codes like prokaryotes, but their advanced organizational complexity allows development of multi-cellular organism (Cooper and Hausm

Nock’s Ideas on Education Essay Example for Free

Nock’s Ideas on Education Essay Education refers to a slow and gradual process of gaining and acquiring knowledge. Training is an organized and planned process of imparting practical and hands on skills (www. osh. gov). Training is what Nock would rather wish people undergo rather than the rigorous process of learning abstracts. Nock’s view on education though largely generalized is the basic and sad truth. We should strive to train our children towards specific topics and fields instead of continually pumping them with more and more abstracts. Whereas education imparts one with theoretical knowledge regarding certain concepts and phenomena, training focuses at the application of that knowledge to practically control that phenomenon. A locomotive engineering student gains knowledge on the mechanical components and rationale behind vehicles but a mechanic practically applies this knowledge to perfect the mechanical rationale and yet he may be of modest education. It is agreeable that education takes much of an individual time and narrows his/her thinking directing it to one channel. This is at the expense of exposing one-self to diversified interests and aspects that would be beneficial to ones life. A nuclear scientist might learn so much about nuclear science and lack understanding of how to manage his financial resources. Education for sure leads to very frustrated minds, although not all. It promises sometimes what cannot be delivered leaving one consumed by an unquenchable thirst and passion for things that life cannot offer. Although this is what leads to innovations and inventions, it leaves in its wake very frustrated people. However I find Nock’s generalizations and insinuations regarding the social life unacceptable. Being educated does not simply mean that one does not associate with people. Although one may not necessarily hang out with his/her childhood playmates, they still maintain close associations with those that they enjoy the same interests with. However, I find Nock’s view regarding education and training to be real and we should heed the advice and seek to train more than we educate.

Commodity Futures and Markets

Commodity Futures and Markets Chapter 1 Introduction to Commodity Market What is â€Å"Commodity†? Any product that can be used for commerce or an article of commerce which is traded on an authorized commodity exchange is known as commodity. The article should be movable of value, something which is bought or sold and which is produced or used as the subject or barter or sale. In short commodity includes all kinds of goods. Indian Forward Contracts (Regulation) Act (FCRA), 1952 defines â€Å"goods† as â€Å"every kind of movable property other than actionable claims, money and securities†. In current situation, all goods and products of agricultural (including plantation), mineral and fossil origin are allowed for commodity trading recognized under the FCRA. The national commodity exchanges, recognized by the Central Government, permits commodities which include precious (gold and silver) and non-ferrous metals, cereals and pulses, ginned and un-ginned cotton, oilseeds, oils and oilcakes, raw jute and jute goods, sugar and gur, potatoes and onions, coffee and tea, rubber and spices. Etc. What is a commodity exchange? A commodity exchange is an association or a company or any other body corporate organizing futures trading in commodities for which license has been granted by regulating authority. What is Commodity Futures? A Commodity futures is an agreement between two parties to buy or sell a specified and standardized quantity of a commodity at a certain time in future at a price agreed upon at the time of entering into the contract on the commodity futures exchange. The need for a futures market arises mainly due to the hedging function that it can perform. Commodity markets, like any other financial instrument, involve risk associated with frequent price volatility. The loss due to price volatility can be attributed to the following reasons: Consumer Preferences: In the short-term, their influence on price volatility is small since it is a slow process permitting manufacturers, dealers and wholesalers to adjust their inventory in advance. Changes in supply: They are abrupt and unpredictable bringing about wild fluctuations in prices. This can especially noticed in agricultural commodities where the weather plays a major role in affecting the fortunes of people involved in this industry. The futures market has evolved to neutralize such risks through a mechanism; namely hedging. The objectives of Commodity futures: * Hedging with the objective of transferring risk related to the possession of physical assets through any adverse moments in price. Liquidity and Price discovery to ensure base minimum volume in trading of a commodity through market information and demand supply factors that facilitates a regular and authentic price discovery mechanism. * Maintaining buffer stock and better allocation of resources as it augments reduction in inventory requirement and thus the exposure to risks related with price fluctuation declines. Resources can thus be diversified for investments. * Price stabilization along with balancing demand and supply position. Futures trading leads to predictability in assessing the domestic prices, which maintains stability, thus safeguarding against any short term adverse price movements. Liquidity in Contracts of the commodities traded also ensures in maintaining the equilibrium between demand and supply. * Flexibility, certainty and transparency in purchasing commodities facilitate bank financing. Predictability in prices of commodity would lead to stability, which in turn would eliminate the risks associated with running the business of trading commodities. This would make funding easier and less stringent for banks to commodity market players. Benefits of Commodity Futures Markets:- The primary objectives of any futures exchange are authentic price discovery and an efficient price risk management. The beneficiaries include those who trade in the commodities being offered in the exchange as well as those who have nothing to do with futures trading. It is because of price discovery and risk management through the existence of futures exchanges that a lot of businesses and services are able to function smoothly. 1. Price Discovery:-Based on inputs regarding specific market information, the demand and supply equilibrium, weather forecasts, expert views and comments, inflation rates, Government policies, market dynamics, hopes and fears, buyers and sellers conduct trading at futures exchanges. This transforms in to continuous price discovery mechanism. The execution of trade between buyers and sellers leads to assessment of fair value of a particular commodity that is immediately disseminated on the trading terminal. 2. Price Risk Management: Hedging is the most common method of price risk management. It is strategy of offering price risk that is inherent in spot market by taking an equal but opposite position in the futures market. Futures markets are used as a mode by hedgers to protect their business from adverse price change. This could dent the profitability of their business. Hedging benefits who are involved in trading of commodities like farmers, processors, merchandisers, manufacturers, exporters, importers etc. 3. Import- Export competitiveness: The exporters can hedge their price risk and improve their competitiveness by making use of futures market. A majority of traders which are involved in physical trade internationally intend to buy forwards. The purchases made from the physical market might expose them to the risk of price risk resulting to losses. The existence of futures market would allow the exporters to hedge their proposed purchase by temporarily substituting for actual purchase till the time is ripe to buy in physical market. In the absence of futures market it will be meticulous, time consuming and costly physical transactions. 4. Predictable Pricing: The demand for certain commodities is highly price elastic. The manufacturers have to ensure that the prices should be stable in order to protect their market share with the free entry of imports. Futures contracts will enable predictability in domestic prices. The manufacturers can, as a result, smooth out the influence of changes in their input prices very easily. With no futures market, the manufacturer can be caught between severe short-term price movements of oils and necessity to maintain price stability, which could only be possible through sufficient financial reserves that could otherwise be utilized for making other profitable investments. 5. Benefits for farmers/Agriculturalists: Price instability has a direct bearing on farmers in the absence of futures market. There would be no need to have large reserves to cover against unfavorable price fluctuations. This would reduce the risk premiums associated with the marketing or processing margins enabling more returns on produce. Storing more and being more active in the markets. The price information accessible to the farmers determines the extent to which traders/processors increase price to them. Since one of the objectives of futures exchange is to make available these prices as far as possible, it is very likely to benefit the farmers. Also, due to the time lag between planning and production, the market-determined price information disseminated by futures exchanges would be crucial for their production decisions. 6. Credit accessibility: The absence of proper risk management tools would attract the marketing and processing of commodities to high-risk exposure making it risky business activity to fund. Even a small movement in prices can eat up a huge proportion of capital owned by traders, at times making it virtually impossible to payback the loan. There is a high degree of reluctance among banks to fund commodity traders, especially those who do not manage price risks. If in case they do, the interest rate is likely to be high and terms and conditions very stringent. This posses a huge obstacle in the smooth functioning and competition of commodities market. Hedging, which is possible through futures markets, would cut down the discount rate in commodity lending. 7. Improved product quality: The existence of warehouses for facilitating delivery with grading facilities along with other related benefits provides a very strong reason to upgrade and enhance the quality of the commodity to grade that is acceptable by the exchange. It ensures uniform standardization of commodity trade, including the terms of quality standard: the quality certificates that are issued by the exchange-certified warehouses have the potential to become the norm for physical trade. Chapter 2 History of Evolution of commodity markets Commodities future trading was evolved from need of assured continuous supply of seasonal agricultural crops. The concept of organized trading in commodities evolved in Chicago, in 1848. But one can trace its roots in Japan. In Japan merchants used to store Rice in warehouses for future use. To raise cash warehouse holders sold receipts against the stored rice. These were known as â€Å"rice tickets†. Eventually, these rice tickets become accepted as a kind of commercial currency. Latter on rules came in to being, to standardize the trading in rice tickets. In 19th century Chicago in United States had emerged as a major commercial hub. So that wheat producers from Mid-west attracted here to sell their produce to dealers distributors. Due to lack of organized storage facilities, absence of uniform weighing grading mechanisms producers often confined to the mercy of dealers discretion. These situations lead to need of establishing a common meeting place for farmers and dealers to transact in spot grain to deliver wheat and receive cash in return. Gradually sellers buyers started making commitments to exchange the produce for cash in future and thus contract for â€Å"futures trading† evolved. Whereby the producer would agree to sell his produce to the buyer at a future delivery date at an agreed upon price. In this way producer was aware of what price he would fetch for his produce and dealer would know about his cost involved, in advance. This kind of agreement proved beneficial to both of them. As if dealer is not interested in taking delivery of the produce, he could sell his contract to someone who needs the same. Similarly producer who not intended to deliver his produce to dealer could pass on the same responsibility to someone else. The price of such contract would dependent on the price movements in the wheat market. Latter on by making some modifications these contracts transformed in to an instrument to protect involved parties against adverse factors such as unexpected price movements and unfavorable climat ic factors. This promoted traders entry in futures market, which had no intentions to buy or sell wheat but would purely speculate on price movements in market to earn profit. Trading of wheat in futures became very profitable which encouraged the entry of other commodities in futures market. This created a platform for establishment of a body to regulate and supervise these contracts. Thats why Chicago Board of Trade (CBOT) was established in 1848. In 1870 and 1880s the New York Coffee, Cotton and Produce Exchanges were born. Agricultural commodities were mostly traded but as long as there are buyers and sellers, any commodity can be traded. In 1872, a group of Manhattan dairy merchants got together to bring chaotic condition in New York market to a system in terms of storage, pricing, and transfer of agricultural products. In 1933, during the Great Depression, the Commodity Exchange, Inc. was established in New York through the merger of four small exchanges the National Metal Exchange, the Rubber Exchange of New York, the National Raw Silk Exchange, and the New York Hide Exchange. The largest commodity exchange in USA is Chicago Board of Trade, The Chicago Mercantile Exchange, the New York Mercantile Exchange, the New York Commodity Exchange and New York Coffee, sugar and cocoa Exchange. Worldwide there are major futures trading exchanges in over twenty countries including Canada, England, India, France, Singapore, Japan, Australia and New Zealand. Chapter 3 India and the commodity market History of Commodity Market in India:- The history of organized commodity derivatives in India goes back to the nineteenth century when Cotton Trade Association started futures trading in 1875, about a decade after they started in Chicago. Over the time datives market developed in several commodities in India. Following Cotton, derivatives trading started in oilseed in Bombay (1900), raw jute and jute goods in Calcutta (1912), Wheat in Hapur (1913) and Bullion in Bombay (1920). However many feared that derivatives fuelled unnecessary speculation and were detrimental to the healthy functioning of the market for the underlying commodities, resulting in to banning of commodity options trading and cash settlement of commodities futures after independence in 1952. The parliament passed the Forward Contracts (Regulation) Act, 1952, which regulated contracts in Commodities all over the India. The act prohibited options trading in Goods along with cash settlement of forward trades, rendering a crushing blow to the commodity derivatives market. Under the act only those associations/exchanges, which are granted reorganization from the Government, are allowed to organize forward trading in regulated commodities. The act envisages three tire regulations: (i) Exchange which organizes forward trading in commodities can regulate trading on day-to-day basis; (ii) Forward Markets Commission provides regulatory oversight under the powers delegated to it by the central Govern ment. (iii) The Central Government- Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution- is the ultimate regulatory authority. The commodities future market remained dismantled and remained dormant for about four decades until the new millennium when the Government, in a complete change in a policy, started actively encouraging commodity market. After Liberalization and Globalization in 1990, the Government set up a committee (1993) to examine the role of futures trading. The Committee (headed by Prof. K.N. Kabra) recommended allowing futures trading in 17 commodity groups. It also recommended strengthening Forward Markets Commission, and certain amendments to Forward Contracts (Regulation) Act 1952, particularly allowing option trading in goods and registration of brokers with Forward Markets Commission. The Government accepted most of these recommendations and futures trading was permitted in all recommended commodities. It is timely decision since internationally the commodity cycle is on upswing and the next decade being touched as the decade of Commodities. Commodity exchange in India plays an important role where the prices of any commodity are not fixed, in an organized way. Earlier only the buyer of produce and its seller in the market judged upon the prices. Others never had a say. Today, commodity exchanges are purely speculative in nature. Before discovering the price, they reach to the producers, end-users, and even the retail investors, at a grassroots level. It brings a price transparency and risk management in the vital market. A big difference between a typical auction, where a single auctioneer announces the bids and the Exchange is that people are not only competing to buy but also to sell. By Exchange rules and by law, no one can bid under a higher bid, and no one can offer to sell higher than someone elses lower offer. That keeps the market as efficient as possible, and keeps the traders on their toes to make sure no one gets the purchase or sale before they do. Since 2002, the commodities future market in India has experienced an unexpected boom in terms of modern exchanges, number of commodities allowed for derivatives trading as well as the value of futures trading in commodities, which crossed $ 1 trillion mark in 2006. Since 1952 till 2002 commo dity datives market was virtually non- existent, except some negligible activities on OTC basis. In India there are 25 recognized future exchanges, of which there are three national level multi-commodity exchanges. After a gap of almost three decades, Government of India has allowed forward transactions in commodities through Online Commodity Exchanges, a modification of traditional business known as Adhat and Vayda Vyapar to facilitate better risk coverage and delivery of commodities. The three exchanges are: National Commodity Derivatives Exchange Limited (NCDEX) Mumbai, Multi Commodity Exchange of India Limited (MCX) Mumbai and National Multi-Commodity Exchange of India Limited (NMCEIL) Ahmedabad.There are other regional commodity exchanges situated in different parts of India. Legal framework for regulating commodity futures in India:- The commodity futures traded in commodity exchanges are regulated by the Government under the Forward Contracts Regulations Act, 1952 and the Rules framed there under. The regulator for the commodities trading is the Forward Markets Commission, situated at Mumbai, which comes under the Ministry of Consumer Affairs Food and Public Distribution Forward Markets Commission (FMC):- It is statutory institution set up in 1953 under Forward Contracts (Regulation) Act, 1952. Commission consists of minimum two and maximum four members appointed by Central Govt. Out of these members there is one nominated chairman. All the exchanges have been set up under overall control of Forward Market Commission (FMC) of Government of India. National Commodities Derivatives Exchange Limited (NCDEX) National Commodities Derivatives Exchange Limited (NCDEX) promoted by ICICI Bank Limited (ICICI Bank), Life Insurance Corporation of India (LIC), National Bank of Agriculture and Rural Development (NABARD) and National Stock Exchange of India Limited (NSC). Punjab National Bank (PNB), Credit Ratting Information Service of India Limited (CRISIL), Indian Farmers Fertilizer Cooperative Limited (IFFCO), Canara Bank and Goldman Sachs by subscribing to the equity shares have joined the promoters as a share holder of exchange. NCDEX is the only Commodity Exchange in the country promoted by national level institutions. NCDEX is a public limited company incorporated on 23 April 2003. NCDEX is a national level technology driven on line Commodity Exchange with an independent Board of Directors and professionals not having any vested interest in Commodity Markets. It is committed to provide a world class commodity exchange platform for market participants to trade in a wide spectrum of commodity derivatives driven by best global practices, professionalism and transparency. NCDEX is regulated by Forward Markets Commission (FMC). NCDEX is also subjected to the various laws of land like the Companies Act, Stamp Act, Contracts Act, Forward Contracts Regulation Act and various other legislations. NCDEX is located in Mumbai and offers facilities to its members in more than 550 centers through out India. NCDEX currently facilitates trading of 57 commodities. Commodities Traded at NCDEX:-  · Bullion:- Gold KG, Silver, Brent  · Minerals:- Electrolytic Copper Cathode, Aluminum Ingot, Nickel Cathode, Zinc Metal Ingot, Mild steel Ingots  · Oil and Oil seeds:- Cotton seed, Oil cake, Crude Palm Oil, Groundnut (in shell), Groundnut expeller Oil, Cotton, Mentha oil, RBD Pamolein, RM seed oil cake, Refined soya oil, Rape seeds, Mustard seeds, Caster seed, Yellow soybean, Meal  · Pulses:- Urad, Yellow peas, Chana, Tur, Masoor,  · Grain:- Wheat, Indian Pusa Basmati Rice, Indian parboiled Rice (IR- 36/IR-64), Indian raw Rice (ParmalPR-106), Barley, Yellow red maize  · Spices:- Jeera, Turmeric, Pepper  · Plantation:- Cashew, Coffee Arabica, Coffee Robusta  · Fibers and other:- Guar Gum, Guar seeds, Guar, Jute sacking bags, Indian 28 mm cotton, Indian 31mm cotton, Lemon, Grain Bold, Medium Staple, Mulberry, Green Cottons, , , Potato, Raw Jute, Mulberry raw Silk, V-797 Kapas, Sugar, Chilli LCA334  · Energy:- Crude Oil, Furnace oil, Thermal Coal, Brent Crude Oil, Natural Gas, Gasoline, Heating Oil Multi Commodity Exchange of India Limited (MCX) Multi Commodity Exchange of India Limited (MCX) is an independent and de-mutulized exchange with permanent reorganization from Government of India, having Head Quarter in Mumbai. Key share holders of MCX are Financial Technologies (India) Limited, State Bank of India, Union Bank of India, Corporation Bank of India, Bank of India and Cnnara Bank. MCX facilitates online trading, clearing and settlement operations for commodity futures market across the country. MCX started of trade in Nov 2003 and has built strategic alliance with Bombay Bullion Association, Bombay Metal Exchange, Solvent Extractors Association of India, pulses Importers Association and Shetkari Sanghatana. MCX deals wit about 100 commodities. Commodities Traded at MCX:-  · Bullion:- Gold, Silver, Silver Coins,  · Minerals:- Aluminum, Copper, Nickel, Iron/steel, Tin, Zinc, Lead  · Oil and Oil seeds:- Castor oil/castor seeds, Crude Palm oil/ RBD Pamolein, Groundnut oil, Mustard/ Rapeseed oil, Soy seeds/Soy meal/Refined Soy Oil, Coconut Oil Cake, Copra, Sunflower oil, Sunflower Oil cake, Tamarind seed oil,  · Pulses:- Chana, Masur, Tur, Urad, Yellow peas  · Grains:- Rice/ Basmati Rice, Wheat, Maize, Bajara, Barley,  · Spices:- Pepper, Red Chili, Jeera, Cardamom, Cinnamon, Clove, Ginger,  · Plantation:- Cashew Kernel, Rubber, Areca nut, Betel nuts, Coconut, Coffee,  · Fiber and others:- Kapas, Kapas Khalli, Cotton (long staple, medium staple, short staple), Cotton Cloth, Cotton Yarn, Gaur seed and Guargum, Gur and Sugar, Khandsari, Mentha Oil, Potato, Art Silk Yarn, Chara or Berseem, Raw Jute, Jute Goods, Jute Sacking,  · Petrochemicals:- High Density Polyethylene (HDPE), Polypropylene (PP), Poly Vinyl Chloride (PVC)  · Energy:- Brent Crude Oil, Crude Oil, Furnace Oil, Middle East Sour Crude Oil, Natural Gas  · Whether:- Carbon (CER), Carbon (CFI) National Multi Commodity Exchange of India Limited (NMCEIL) National Multi Commodity Exchange of India Limited (NMCEIL) is the first de-mutualised Electronic Multi Commodity Exchange in India. On 25th July 2001 it was granted approval by Government to organize trading in edible oil complex. It is being supported by Central warehousing Corporation Limited, Gujarat State Agricultural Marketing Board and Neptune Overseas Limited. It got reorganization in Oct 2002. NMCEIL Head Quarter is at Ahmedabad. Chapter 4 INTERNATIONAL COMMODITY EXCHANGES Futures trading is a result of solution to a problem related to the maintenance of a year round supply of commodities/ products that are seasonal as is the case of agricultural produce. The United States, Japan, United Kingdom, Brazil, Australia, Singapore are homes to leading commodity futures exchanges in the world. The New York Mercantile Exchange (NYMEX):- The New York Mercantile Exchange is the worlds biggest exchange for trading in physical commodity futures. It is a primary trading forum for energy products and precious metals. The exchange is in existence since last 132 years and performs trades trough two divisions, the NYMEX division, which deals in energy and platinum and the COMEX division, which trades in all the other metals. Commodities traded: Light sweet crude oil, Natural Gas, Heating Oil, Gasoline, RBOB Gasoline, Electricity Propane, Gold, Silver, Copper, Aluminum, Platinum, Palladium, etc. London Metal Exchange:- The London Metal Exchange (LME) is the worlds premier non-ferrous market, with highly liquid contracts. The exchange was formed in 1877 as a direct consequence of the industrial revolution witnessed in the 19th century. The primary focus of LME is in providing a market for participants from non-ferrous based metals related industry to safeguard against risk due to movement in base metal prices and also arrive at a price that sets the benchmark globally. The exchange trades 24 hours a day through an inter office telephone market and also through a electronic trading platform. It is famous for its open-outcry trading between ring dealing members that takes place on the market floor. Commodities traded:- Aluminum, Copper, Nickel, Lead, Tin, Zinc, Aluminum Alloy, North American Special Aluminum Alloy (NASAAC), Polypropylene, Linear Low Density Polyethylene, etc. The Chicago Board of Trade:- The first commodity exchange established in the world was the Chicago Board of Trade (CBOT) during 1848 by group of Chicago merchants who were keen to establish a central market place for trade. Presently, the Chicago Board of Trade is one of the leading exchanges in the world for trading futures and options. More than 50 contracts on futures and options are being offered by CBOT currently through open outcry and/or electronically. CBOT initially dealt only in Agricultural commodities like corn, wheat, non storable agricultural commodities and non-agricultural products like gold and silver. Commodities Traded: Corn, Soybean, Oil, Soybean meal, Wheat, Oats, Ethanol, Rough Rice, Gold, Silver etc. Tokyo Commodity Exchange (TOCOM):- The Tokyo Commodity Exchange (TOCOM) is the second largest commodity futures exchange in the world. It trades in to metals and energy contracts. It has made rapid advancement in commodity trading globally since its inception 20 years back. One of the biggest reasons for that is the initiative TOCOM took towards establishing Asia as the benchmark for price discovery and risk management in commodities like the Middle East Crude Oil. TOCOMs recent tie up with the MCX to explore cooperation and business opportunities is seen as one of the steps towards providing platform for futures price discovery in Asia for Asian players in Crude Oil since the demand-supply situation in U.S. that drives NYMEX is different from demand-supply situation in Asia. In Jan 2003, in a major overhaul of its computerized trading system, TOCOM fortified its clearing system in June by being first commodity exchange in Japan to introduce an in-house clearing system. TOCOM launched options on gold futures, the firs t option contract in Japanese market, in May 2004. Commodities traded: Gasoline, Kerosene, Crude Oil, Gold, Silver, Platinum, Aluminum, Rubber, etc Chicago Mercantile Exchange:- The Chicago Mercantile Exchange (CME) is the largest futures exchange in the US and the largest futures clearing house in the world for futures and options trading. Formed in 1898 primarily to trade in Agricultural commodities, the CME introduced the worlds first financial futures more than 30 years ago. Today it trades heavily in interest rates futures, stock indices and foreign exchange futures. Its products often serves as a financial benchmark and witnesses the largest open interest in futures profile of CME consists of livestock, dairy and forest products and enables small family farms to large Agri-business to manage their price risks. Trading in CME can be done either through pit trading or electronically. Commodities Traded: Butter milk, Diammonium phosphate, Feeder cattle, frozen pork bellies, Lean Hogs, Live cattle, Non-fat Dry Milk, Urea, Urea Ammonium Nitrate, etc Chapter 5 How Commodity market works? There are two kinds of trades in commodities. The first is the spot trade, in which one pays cash and carries away the goods. The second is futures trade. The underpinning for futures is the warehouse receipt. A person deposits certain amount of say, good X in a ware house and gets a warehouse receipt. Which allows him to ask for physical delivery of the good from the warehouse. But some one trading in commodity futures need not necessarily posses such a receipt to strike a deal. A person can buy or sale a commodity future on an exchange based on his expectation of where the price will go. Futures have something called an expiry date, by when the buyer or seller either closes (square off) his account or give/take delivery of the commodity. The broker maintains an account of all dealing parties in which the daily profit or loss due to changes in the futures price is recorded. Squiring off is done by taking an opposite contract so that the net outstanding is nil. For commodity futures to work, the seller should be able to deposit the commodity at warehouse nearest to him and collect the warehouse receipt. The buyer should be able to take physical delivery at a location of his choice on presenting the warehouse receipt. But at present in India very few warehouses provide delivery for specific commodities. Following diagram gives a fair idea about working of the Commodity market. Today Commodity trading system is fully computerized. Traders need not visit a commodity market to speculate. With online commodity trading they could sit in the confines of their home or office and call the shots. The commodity trading system consists of certain prescribed steps or stages as follows: I. Trading: At this stage the following is the system implemented- Order receiving Execution Matching Reporting Surveillance Price limits Position limits II. Clearing: This stage has following system in place- Matching Registration Clearing Clearing limits Notation Margining Price limits Position limits Clearing house. III. Settlement: This stage has following system followed as follows- Marking to market Receipts and payments Reporting Delivery upon expiration or maturity. Chapter 6 Investments in Commodities How to invest in a Commodities? With whom investor can transact a business? An investor can transact a business with the approved clearing member of previously mentioned Commodity Exchanges. The investor can ask for the details from the Commodity Exchanges about the list of approved members. What is Identity Proof? When investor approaches Clearing Member, the member will ask for identity proof. For which Xerox copy of any one of the following can be given a) PAN card Number b) Driving License c) Vote ID d) Passport What statements should be given for Bank Proof? The front page of Bank Pass Book and a canceled cheque of a concerned bank. Otherwise the Bank Statement containing details can be given. What are the particulars to be given for address proof? In order to ascertain the address of investor, the clearing member will insist on Xerox copy of Ration card or the Pass Book/ Bank Statement where the address of investor is given. What are the other forms to be signed by the investor? The clearing member will ask the client to sign a) Know your client form b) Risk Discloser Document The above things are only procedure in character and the risk involved and only after understanding the business, he wants to transact business. What aspects should be conside Commodity Futures and Markets Commodity Futures and Markets Chapter 1 Introduction to Commodity Market What is â€Å"Commodity†? Any product that can be used for commerce or an article of commerce which is traded on an authorized commodity exchange is known as commodity. The article should be movable of value, something which is bought or sold and which is produced or used as the subject or barter or sale. In short commodity includes all kinds of goods. Indian Forward Contracts (Regulation) Act (FCRA), 1952 defines â€Å"goods† as â€Å"every kind of movable property other than actionable claims, money and securities†. In current situation, all goods and products of agricultural (including plantation), mineral and fossil origin are allowed for commodity trading recognized under the FCRA. The national commodity exchanges, recognized by the Central Government, permits commodities which include precious (gold and silver) and non-ferrous metals, cereals and pulses, ginned and un-ginned cotton, oilseeds, oils and oilcakes, raw jute and jute goods, sugar and gur, potatoes and onions, coffee and tea, rubber and spices. Etc. What is a commodity exchange? A commodity exchange is an association or a company or any other body corporate organizing futures trading in commodities for which license has been granted by regulating authority. What is Commodity Futures? A Commodity futures is an agreement between two parties to buy or sell a specified and standardized quantity of a commodity at a certain time in future at a price agreed upon at the time of entering into the contract on the commodity futures exchange. The need for a futures market arises mainly due to the hedging function that it can perform. Commodity markets, like any other financial instrument, involve risk associated with frequent price volatility. The loss due to price volatility can be attributed to the following reasons: Consumer Preferences: In the short-term, their influence on price volatility is small since it is a slow process permitting manufacturers, dealers and wholesalers to adjust their inventory in advance. Changes in supply: They are abrupt and unpredictable bringing about wild fluctuations in prices. This can especially noticed in agricultural commodities where the weather plays a major role in affecting the fortunes of people involved in this industry. The futures market has evolved to neutralize such risks through a mechanism; namely hedging. The objectives of Commodity futures: * Hedging with the objective of transferring risk related to the possession of physical assets through any adverse moments in price. Liquidity and Price discovery to ensure base minimum volume in trading of a commodity through market information and demand supply factors that facilitates a regular and authentic price discovery mechanism. * Maintaining buffer stock and better allocation of resources as it augments reduction in inventory requirement and thus the exposure to risks related with price fluctuation declines. Resources can thus be diversified for investments. * Price stabilization along with balancing demand and supply position. Futures trading leads to predictability in assessing the domestic prices, which maintains stability, thus safeguarding against any short term adverse price movements. Liquidity in Contracts of the commodities traded also ensures in maintaining the equilibrium between demand and supply. * Flexibility, certainty and transparency in purchasing commodities facilitate bank financing. Predictability in prices of commodity would lead to stability, which in turn would eliminate the risks associated with running the business of trading commodities. This would make funding easier and less stringent for banks to commodity market players. Benefits of Commodity Futures Markets:- The primary objectives of any futures exchange are authentic price discovery and an efficient price risk management. The beneficiaries include those who trade in the commodities being offered in the exchange as well as those who have nothing to do with futures trading. It is because of price discovery and risk management through the existence of futures exchanges that a lot of businesses and services are able to function smoothly. 1. Price Discovery:-Based on inputs regarding specific market information, the demand and supply equilibrium, weather forecasts, expert views and comments, inflation rates, Government policies, market dynamics, hopes and fears, buyers and sellers conduct trading at futures exchanges. This transforms in to continuous price discovery mechanism. The execution of trade between buyers and sellers leads to assessment of fair value of a particular commodity that is immediately disseminated on the trading terminal. 2. Price Risk Management: Hedging is the most common method of price risk management. It is strategy of offering price risk that is inherent in spot market by taking an equal but opposite position in the futures market. Futures markets are used as a mode by hedgers to protect their business from adverse price change. This could dent the profitability of their business. Hedging benefits who are involved in trading of commodities like farmers, processors, merchandisers, manufacturers, exporters, importers etc. 3. Import- Export competitiveness: The exporters can hedge their price risk and improve their competitiveness by making use of futures market. A majority of traders which are involved in physical trade internationally intend to buy forwards. The purchases made from the physical market might expose them to the risk of price risk resulting to losses. The existence of futures market would allow the exporters to hedge their proposed purchase by temporarily substituting for actual purchase till the time is ripe to buy in physical market. In the absence of futures market it will be meticulous, time consuming and costly physical transactions. 4. Predictable Pricing: The demand for certain commodities is highly price elastic. The manufacturers have to ensure that the prices should be stable in order to protect their market share with the free entry of imports. Futures contracts will enable predictability in domestic prices. The manufacturers can, as a result, smooth out the influence of changes in their input prices very easily. With no futures market, the manufacturer can be caught between severe short-term price movements of oils and necessity to maintain price stability, which could only be possible through sufficient financial reserves that could otherwise be utilized for making other profitable investments. 5. Benefits for farmers/Agriculturalists: Price instability has a direct bearing on farmers in the absence of futures market. There would be no need to have large reserves to cover against unfavorable price fluctuations. This would reduce the risk premiums associated with the marketing or processing margins enabling more returns on produce. Storing more and being more active in the markets. The price information accessible to the farmers determines the extent to which traders/processors increase price to them. Since one of the objectives of futures exchange is to make available these prices as far as possible, it is very likely to benefit the farmers. Also, due to the time lag between planning and production, the market-determined price information disseminated by futures exchanges would be crucial for their production decisions. 6. Credit accessibility: The absence of proper risk management tools would attract the marketing and processing of commodities to high-risk exposure making it risky business activity to fund. Even a small movement in prices can eat up a huge proportion of capital owned by traders, at times making it virtually impossible to payback the loan. There is a high degree of reluctance among banks to fund commodity traders, especially those who do not manage price risks. If in case they do, the interest rate is likely to be high and terms and conditions very stringent. This posses a huge obstacle in the smooth functioning and competition of commodities market. Hedging, which is possible through futures markets, would cut down the discount rate in commodity lending. 7. Improved product quality: The existence of warehouses for facilitating delivery with grading facilities along with other related benefits provides a very strong reason to upgrade and enhance the quality of the commodity to grade that is acceptable by the exchange. It ensures uniform standardization of commodity trade, including the terms of quality standard: the quality certificates that are issued by the exchange-certified warehouses have the potential to become the norm for physical trade. Chapter 2 History of Evolution of commodity markets Commodities future trading was evolved from need of assured continuous supply of seasonal agricultural crops. The concept of organized trading in commodities evolved in Chicago, in 1848. But one can trace its roots in Japan. In Japan merchants used to store Rice in warehouses for future use. To raise cash warehouse holders sold receipts against the stored rice. These were known as â€Å"rice tickets†. Eventually, these rice tickets become accepted as a kind of commercial currency. Latter on rules came in to being, to standardize the trading in rice tickets. In 19th century Chicago in United States had emerged as a major commercial hub. So that wheat producers from Mid-west attracted here to sell their produce to dealers distributors. Due to lack of organized storage facilities, absence of uniform weighing grading mechanisms producers often confined to the mercy of dealers discretion. These situations lead to need of establishing a common meeting place for farmers and dealers to transact in spot grain to deliver wheat and receive cash in return. Gradually sellers buyers started making commitments to exchange the produce for cash in future and thus contract for â€Å"futures trading† evolved. Whereby the producer would agree to sell his produce to the buyer at a future delivery date at an agreed upon price. In this way producer was aware of what price he would fetch for his produce and dealer would know about his cost involved, in advance. This kind of agreement proved beneficial to both of them. As if dealer is not interested in taking delivery of the produce, he could sell his contract to someone who needs the same. Similarly producer who not intended to deliver his produce to dealer could pass on the same responsibility to someone else. The price of such contract would dependent on the price movements in the wheat market. Latter on by making some modifications these contracts transformed in to an instrument to protect involved parties against adverse factors such as unexpected price movements and unfavorable climat ic factors. This promoted traders entry in futures market, which had no intentions to buy or sell wheat but would purely speculate on price movements in market to earn profit. Trading of wheat in futures became very profitable which encouraged the entry of other commodities in futures market. This created a platform for establishment of a body to regulate and supervise these contracts. Thats why Chicago Board of Trade (CBOT) was established in 1848. In 1870 and 1880s the New York Coffee, Cotton and Produce Exchanges were born. Agricultural commodities were mostly traded but as long as there are buyers and sellers, any commodity can be traded. In 1872, a group of Manhattan dairy merchants got together to bring chaotic condition in New York market to a system in terms of storage, pricing, and transfer of agricultural products. In 1933, during the Great Depression, the Commodity Exchange, Inc. was established in New York through the merger of four small exchanges the National Metal Exchange, the Rubber Exchange of New York, the National Raw Silk Exchange, and the New York Hide Exchange. The largest commodity exchange in USA is Chicago Board of Trade, The Chicago Mercantile Exchange, the New York Mercantile Exchange, the New York Commodity Exchange and New York Coffee, sugar and cocoa Exchange. Worldwide there are major futures trading exchanges in over twenty countries including Canada, England, India, France, Singapore, Japan, Australia and New Zealand. Chapter 3 India and the commodity market History of Commodity Market in India:- The history of organized commodity derivatives in India goes back to the nineteenth century when Cotton Trade Association started futures trading in 1875, about a decade after they started in Chicago. Over the time datives market developed in several commodities in India. Following Cotton, derivatives trading started in oilseed in Bombay (1900), raw jute and jute goods in Calcutta (1912), Wheat in Hapur (1913) and Bullion in Bombay (1920). However many feared that derivatives fuelled unnecessary speculation and were detrimental to the healthy functioning of the market for the underlying commodities, resulting in to banning of commodity options trading and cash settlement of commodities futures after independence in 1952. The parliament passed the Forward Contracts (Regulation) Act, 1952, which regulated contracts in Commodities all over the India. The act prohibited options trading in Goods along with cash settlement of forward trades, rendering a crushing blow to the commodity derivatives market. Under the act only those associations/exchanges, which are granted reorganization from the Government, are allowed to organize forward trading in regulated commodities. The act envisages three tire regulations: (i) Exchange which organizes forward trading in commodities can regulate trading on day-to-day basis; (ii) Forward Markets Commission provides regulatory oversight under the powers delegated to it by the central Govern ment. (iii) The Central Government- Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution- is the ultimate regulatory authority. The commodities future market remained dismantled and remained dormant for about four decades until the new millennium when the Government, in a complete change in a policy, started actively encouraging commodity market. After Liberalization and Globalization in 1990, the Government set up a committee (1993) to examine the role of futures trading. The Committee (headed by Prof. K.N. Kabra) recommended allowing futures trading in 17 commodity groups. It also recommended strengthening Forward Markets Commission, and certain amendments to Forward Contracts (Regulation) Act 1952, particularly allowing option trading in goods and registration of brokers with Forward Markets Commission. The Government accepted most of these recommendations and futures trading was permitted in all recommended commodities. It is timely decision since internationally the commodity cycle is on upswing and the next decade being touched as the decade of Commodities. Commodity exchange in India plays an important role where the prices of any commodity are not fixed, in an organized way. Earlier only the buyer of produce and its seller in the market judged upon the prices. Others never had a say. Today, commodity exchanges are purely speculative in nature. Before discovering the price, they reach to the producers, end-users, and even the retail investors, at a grassroots level. It brings a price transparency and risk management in the vital market. A big difference between a typical auction, where a single auctioneer announces the bids and the Exchange is that people are not only competing to buy but also to sell. By Exchange rules and by law, no one can bid under a higher bid, and no one can offer to sell higher than someone elses lower offer. That keeps the market as efficient as possible, and keeps the traders on their toes to make sure no one gets the purchase or sale before they do. Since 2002, the commodities future market in India has experienced an unexpected boom in terms of modern exchanges, number of commodities allowed for derivatives trading as well as the value of futures trading in commodities, which crossed $ 1 trillion mark in 2006. Since 1952 till 2002 commo dity datives market was virtually non- existent, except some negligible activities on OTC basis. In India there are 25 recognized future exchanges, of which there are three national level multi-commodity exchanges. After a gap of almost three decades, Government of India has allowed forward transactions in commodities through Online Commodity Exchanges, a modification of traditional business known as Adhat and Vayda Vyapar to facilitate better risk coverage and delivery of commodities. The three exchanges are: National Commodity Derivatives Exchange Limited (NCDEX) Mumbai, Multi Commodity Exchange of India Limited (MCX) Mumbai and National Multi-Commodity Exchange of India Limited (NMCEIL) Ahmedabad.There are other regional commodity exchanges situated in different parts of India. Legal framework for regulating commodity futures in India:- The commodity futures traded in commodity exchanges are regulated by the Government under the Forward Contracts Regulations Act, 1952 and the Rules framed there under. The regulator for the commodities trading is the Forward Markets Commission, situated at Mumbai, which comes under the Ministry of Consumer Affairs Food and Public Distribution Forward Markets Commission (FMC):- It is statutory institution set up in 1953 under Forward Contracts (Regulation) Act, 1952. Commission consists of minimum two and maximum four members appointed by Central Govt. Out of these members there is one nominated chairman. All the exchanges have been set up under overall control of Forward Market Commission (FMC) of Government of India. National Commodities Derivatives Exchange Limited (NCDEX) National Commodities Derivatives Exchange Limited (NCDEX) promoted by ICICI Bank Limited (ICICI Bank), Life Insurance Corporation of India (LIC), National Bank of Agriculture and Rural Development (NABARD) and National Stock Exchange of India Limited (NSC). Punjab National Bank (PNB), Credit Ratting Information Service of India Limited (CRISIL), Indian Farmers Fertilizer Cooperative Limited (IFFCO), Canara Bank and Goldman Sachs by subscribing to the equity shares have joined the promoters as a share holder of exchange. NCDEX is the only Commodity Exchange in the country promoted by national level institutions. NCDEX is a public limited company incorporated on 23 April 2003. NCDEX is a national level technology driven on line Commodity Exchange with an independent Board of Directors and professionals not having any vested interest in Commodity Markets. It is committed to provide a world class commodity exchange platform for market participants to trade in a wide spectrum of commodity derivatives driven by best global practices, professionalism and transparency. NCDEX is regulated by Forward Markets Commission (FMC). NCDEX is also subjected to the various laws of land like the Companies Act, Stamp Act, Contracts Act, Forward Contracts Regulation Act and various other legislations. NCDEX is located in Mumbai and offers facilities to its members in more than 550 centers through out India. NCDEX currently facilitates trading of 57 commodities. Commodities Traded at NCDEX:-  · Bullion:- Gold KG, Silver, Brent  · Minerals:- Electrolytic Copper Cathode, Aluminum Ingot, Nickel Cathode, Zinc Metal Ingot, Mild steel Ingots  · Oil and Oil seeds:- Cotton seed, Oil cake, Crude Palm Oil, Groundnut (in shell), Groundnut expeller Oil, Cotton, Mentha oil, RBD Pamolein, RM seed oil cake, Refined soya oil, Rape seeds, Mustard seeds, Caster seed, Yellow soybean, Meal  · Pulses:- Urad, Yellow peas, Chana, Tur, Masoor,  · Grain:- Wheat, Indian Pusa Basmati Rice, Indian parboiled Rice (IR- 36/IR-64), Indian raw Rice (ParmalPR-106), Barley, Yellow red maize  · Spices:- Jeera, Turmeric, Pepper  · Plantation:- Cashew, Coffee Arabica, Coffee Robusta  · Fibers and other:- Guar Gum, Guar seeds, Guar, Jute sacking bags, Indian 28 mm cotton, Indian 31mm cotton, Lemon, Grain Bold, Medium Staple, Mulberry, Green Cottons, , , Potato, Raw Jute, Mulberry raw Silk, V-797 Kapas, Sugar, Chilli LCA334  · Energy:- Crude Oil, Furnace oil, Thermal Coal, Brent Crude Oil, Natural Gas, Gasoline, Heating Oil Multi Commodity Exchange of India Limited (MCX) Multi Commodity Exchange of India Limited (MCX) is an independent and de-mutulized exchange with permanent reorganization from Government of India, having Head Quarter in Mumbai. Key share holders of MCX are Financial Technologies (India) Limited, State Bank of India, Union Bank of India, Corporation Bank of India, Bank of India and Cnnara Bank. MCX facilitates online trading, clearing and settlement operations for commodity futures market across the country. MCX started of trade in Nov 2003 and has built strategic alliance with Bombay Bullion Association, Bombay Metal Exchange, Solvent Extractors Association of India, pulses Importers Association and Shetkari Sanghatana. MCX deals wit about 100 commodities. Commodities Traded at MCX:-  · Bullion:- Gold, Silver, Silver Coins,  · Minerals:- Aluminum, Copper, Nickel, Iron/steel, Tin, Zinc, Lead  · Oil and Oil seeds:- Castor oil/castor seeds, Crude Palm oil/ RBD Pamolein, Groundnut oil, Mustard/ Rapeseed oil, Soy seeds/Soy meal/Refined Soy Oil, Coconut Oil Cake, Copra, Sunflower oil, Sunflower Oil cake, Tamarind seed oil,  · Pulses:- Chana, Masur, Tur, Urad, Yellow peas  · Grains:- Rice/ Basmati Rice, Wheat, Maize, Bajara, Barley,  · Spices:- Pepper, Red Chili, Jeera, Cardamom, Cinnamon, Clove, Ginger,  · Plantation:- Cashew Kernel, Rubber, Areca nut, Betel nuts, Coconut, Coffee,  · Fiber and others:- Kapas, Kapas Khalli, Cotton (long staple, medium staple, short staple), Cotton Cloth, Cotton Yarn, Gaur seed and Guargum, Gur and Sugar, Khandsari, Mentha Oil, Potato, Art Silk Yarn, Chara or Berseem, Raw Jute, Jute Goods, Jute Sacking,  · Petrochemicals:- High Density Polyethylene (HDPE), Polypropylene (PP), Poly Vinyl Chloride (PVC)  · Energy:- Brent Crude Oil, Crude Oil, Furnace Oil, Middle East Sour Crude Oil, Natural Gas  · Whether:- Carbon (CER), Carbon (CFI) National Multi Commodity Exchange of India Limited (NMCEIL) National Multi Commodity Exchange of India Limited (NMCEIL) is the first de-mutualised Electronic Multi Commodity Exchange in India. On 25th July 2001 it was granted approval by Government to organize trading in edible oil complex. It is being supported by Central warehousing Corporation Limited, Gujarat State Agricultural Marketing Board and Neptune Overseas Limited. It got reorganization in Oct 2002. NMCEIL Head Quarter is at Ahmedabad. Chapter 4 INTERNATIONAL COMMODITY EXCHANGES Futures trading is a result of solution to a problem related to the maintenance of a year round supply of commodities/ products that are seasonal as is the case of agricultural produce. The United States, Japan, United Kingdom, Brazil, Australia, Singapore are homes to leading commodity futures exchanges in the world. The New York Mercantile Exchange (NYMEX):- The New York Mercantile Exchange is the worlds biggest exchange for trading in physical commodity futures. It is a primary trading forum for energy products and precious metals. The exchange is in existence since last 132 years and performs trades trough two divisions, the NYMEX division, which deals in energy and platinum and the COMEX division, which trades in all the other metals. Commodities traded: Light sweet crude oil, Natural Gas, Heating Oil, Gasoline, RBOB Gasoline, Electricity Propane, Gold, Silver, Copper, Aluminum, Platinum, Palladium, etc. London Metal Exchange:- The London Metal Exchange (LME) is the worlds premier non-ferrous market, with highly liquid contracts. The exchange was formed in 1877 as a direct consequence of the industrial revolution witnessed in the 19th century. The primary focus of LME is in providing a market for participants from non-ferrous based metals related industry to safeguard against risk due to movement in base metal prices and also arrive at a price that sets the benchmark globally. The exchange trades 24 hours a day through an inter office telephone market and also through a electronic trading platform. It is famous for its open-outcry trading between ring dealing members that takes place on the market floor. Commodities traded:- Aluminum, Copper, Nickel, Lead, Tin, Zinc, Aluminum Alloy, North American Special Aluminum Alloy (NASAAC), Polypropylene, Linear Low Density Polyethylene, etc. The Chicago Board of Trade:- The first commodity exchange established in the world was the Chicago Board of Trade (CBOT) during 1848 by group of Chicago merchants who were keen to establish a central market place for trade. Presently, the Chicago Board of Trade is one of the leading exchanges in the world for trading futures and options. More than 50 contracts on futures and options are being offered by CBOT currently through open outcry and/or electronically. CBOT initially dealt only in Agricultural commodities like corn, wheat, non storable agricultural commodities and non-agricultural products like gold and silver. Commodities Traded: Corn, Soybean, Oil, Soybean meal, Wheat, Oats, Ethanol, Rough Rice, Gold, Silver etc. Tokyo Commodity Exchange (TOCOM):- The Tokyo Commodity Exchange (TOCOM) is the second largest commodity futures exchange in the world. It trades in to metals and energy contracts. It has made rapid advancement in commodity trading globally since its inception 20 years back. One of the biggest reasons for that is the initiative TOCOM took towards establishing Asia as the benchmark for price discovery and risk management in commodities like the Middle East Crude Oil. TOCOMs recent tie up with the MCX to explore cooperation and business opportunities is seen as one of the steps towards providing platform for futures price discovery in Asia for Asian players in Crude Oil since the demand-supply situation in U.S. that drives NYMEX is different from demand-supply situation in Asia. In Jan 2003, in a major overhaul of its computerized trading system, TOCOM fortified its clearing system in June by being first commodity exchange in Japan to introduce an in-house clearing system. TOCOM launched options on gold futures, the firs t option contract in Japanese market, in May 2004. Commodities traded: Gasoline, Kerosene, Crude Oil, Gold, Silver, Platinum, Aluminum, Rubber, etc Chicago Mercantile Exchange:- The Chicago Mercantile Exchange (CME) is the largest futures exchange in the US and the largest futures clearing house in the world for futures and options trading. Formed in 1898 primarily to trade in Agricultural commodities, the CME introduced the worlds first financial futures more than 30 years ago. Today it trades heavily in interest rates futures, stock indices and foreign exchange futures. Its products often serves as a financial benchmark and witnesses the largest open interest in futures profile of CME consists of livestock, dairy and forest products and enables small family farms to large Agri-business to manage their price risks. Trading in CME can be done either through pit trading or electronically. Commodities Traded: Butter milk, Diammonium phosphate, Feeder cattle, frozen pork bellies, Lean Hogs, Live cattle, Non-fat Dry Milk, Urea, Urea Ammonium Nitrate, etc Chapter 5 How Commodity market works? There are two kinds of trades in commodities. The first is the spot trade, in which one pays cash and carries away the goods. The second is futures trade. The underpinning for futures is the warehouse receipt. A person deposits certain amount of say, good X in a ware house and gets a warehouse receipt. Which allows him to ask for physical delivery of the good from the warehouse. But some one trading in commodity futures need not necessarily posses such a receipt to strike a deal. A person can buy or sale a commodity future on an exchange based on his expectation of where the price will go. Futures have something called an expiry date, by when the buyer or seller either closes (square off) his account or give/take delivery of the commodity. The broker maintains an account of all dealing parties in which the daily profit or loss due to changes in the futures price is recorded. Squiring off is done by taking an opposite contract so that the net outstanding is nil. For commodity futures to work, the seller should be able to deposit the commodity at warehouse nearest to him and collect the warehouse receipt. The buyer should be able to take physical delivery at a location of his choice on presenting the warehouse receipt. But at present in India very few warehouses provide delivery for specific commodities. Following diagram gives a fair idea about working of the Commodity market. Today Commodity trading system is fully computerized. Traders need not visit a commodity market to speculate. With online commodity trading they could sit in the confines of their home or office and call the shots. The commodity trading system consists of certain prescribed steps or stages as follows: I. Trading: At this stage the following is the system implemented- Order receiving Execution Matching Reporting Surveillance Price limits Position limits II. Clearing: This stage has following system in place- Matching Registration Clearing Clearing limits Notation Margining Price limits Position limits Clearing house. III. Settlement: This stage has following system followed as follows- Marking to market Receipts and payments Reporting Delivery upon expiration or maturity. Chapter 6 Investments in Commodities How to invest in a Commodities? With whom investor can transact a business? An investor can transact a business with the approved clearing member of previously mentioned Commodity Exchanges. The investor can ask for the details from the Commodity Exchanges about the list of approved members. What is Identity Proof? When investor approaches Clearing Member, the member will ask for identity proof. For which Xerox copy of any one of the following can be given a) PAN card Number b) Driving License c) Vote ID d) Passport What statements should be given for Bank Proof? The front page of Bank Pass Book and a canceled cheque of a concerned bank. Otherwise the Bank Statement containing details can be given. What are the particulars to be given for address proof? In order to ascertain the address of investor, the clearing member will insist on Xerox copy of Ration card or the Pass Book/ Bank Statement where the address of investor is given. What are the other forms to be signed by the investor? The clearing member will ask the client to sign a) Know your client form b) Risk Discloser Document The above things are only procedure in character and the risk involved and only after understanding the business, he wants to transact business. What aspects should be conside