Analysis of Mittal’s Acquisition of Arcelor

Analysis of Mittal’s Acquisition of Arcelor 1.0 Executive Summary This examination of the merger of Arcelor and Mittal in the steel industry will examine the success and or shortcomings of this major deal that has created an industry leader that is considerably larger that its nearest competitor. In examination the merger, this study looks at the steel industry from the perspectives of historical underpinnings and ramifications, pricing, laws, monopolies, emerging markets, mature markets, new areas for exploration, as well as the resulting post merger effects of this union. To achieve the foregoing, this study has organised the foregoing into a comprehensive literature review that will delve into the indicated areas, following this with a findings and analysis section to equate the preceding. The organisational method has been selected to inform as well as guide one through the industry and the merger process to result in a clear understanding of the important and salient points that impacted the merger process, and its resultant effects on the industry. The conclusion brings forth the summary of all of the sections that preceded it to equate the results and potential areas for additional study owing to the newness of this union. The bold move by Mittal in acquiring a company if its same size and then moving forward as a unified new entity marks a new period in the steel industry worthy of examination as an history making event. 2.0 Introduction The purpose of this investigation is to delve into an understanding of the steel industry as the means to reach a determination as to the potential benefits and ramifications of the ArcelorMittal merger that is just about a year old. As such there is little in the way of case studies, and or historical data to equate the effect of the merger, this examination shall utilise historical as well as current information to understand the steel sector and thus draw deductions on the effectiveness of the merger in terms of competition, the industry and economic ramifications. The research question thus stems from the examination of the Mittal Steel and Arcelor merger, and how it developed, along with the advantages as well as disadvantages of the process in terms of the two companies. The Research Objective is to determine if the merger made ArcelorMittal a market leader in a highly competitive market, and the manner via which this was accomplished as well as if the foregoing brought about new opportunities, and or projects in terms of real ones, and or potentials for the future. The research hypothesis represents equating the impact of the Arcelor Mittal merger in terms of the industry dynamics in pricing, market positioning, competitive advantages, or other areas as uncovered by research to prove or disprove the basis for the merger as a sound proposition in the face of the preceding. To achieve the foregoing, this study shall look at the steel industry objectively through extensive research into its importance with regard to economics, trade, pricing within the industry, applicable laws, monopolies, the importance of emerging markets that might have weighed on the decision to seek a merger, the importance and or considerations of mature markets, and new locations of exploration and or supply. The approach to equating the foregoing was to conduct and extensive review of literature on the aforementioned points to provide a comprehensive view of the steel industry, where is has been, presently is, and is going. The preceding will provide a reference point to try to determine what the executives of Mittal saw in reaching the decision to attempt the Arcelor acquisition. That insight, their decision process to seek the acquisition of Arcelor, was based upon the company’s intimate knowledge and understanding of the steel sector, and a plan to capitalise on those developments based upon the projected future occurrences in the market. Donaldson and Lorsch (1983, p. 112) tell us that in strategic decision making executives must consider that: â€Å"Under certain circumstances, the firms real economic and financial constraints perpetuate stability in the financial goals system that is central to corporate strategy. The first such circumstance occurs when the composition and objectives of managements three primary constituencies remain constant over time. If the existing financial goals system truly represents a balanced response to each constituencys minimum acceptable requirements for continued participation in the enterprise, then external pressure for change is not likely to develop in the absence of some fundamental change in the constituencies themselves.† The decision to seek an acquisition as a means to growth represents a process that a company decided upon long before taking such an action. Wall and Wall (2000, p. 39) observe that â€Å"Companies that are using acquisitions as a strategic lever are rarely making only a single deal; acquisitions are ongoing and often overlapping, with several happening at once and more to come†. Mueller (2000, p. 57) states that most acquired companies were and are usually healthy strong firms in their own right that add some underlying competitive advantage in the face of market realities. He goes on to add that the rationales can be economies of scale, to obtain a more dominant market position, to gain access to markets, to stave off competition, to limit merger options of rival firms as well as a strategy for growth. Mueller (2003, p. 82) adds: â€Å"A company faced with a slow-growing or declining market has two choices for avoiding stagnation and decline: it can expand its share of this market, or diversify into new ones. Growth can be sustained indefinitely only through diversification. Thus, we expect the maturing company to resort to internal diversification by developing new products and/or external diversification through mergers. Even in a steady-state world, a company must (continually) diversify to sustain a growth rate above that of its company’s market.† Wall and Wall (20000, p. 39) add â€Å"†¦he most successful acquirers have developed a clear, logical, and replicable approach that they use to manage the entire process from initiation of the deal to the ongoing and longer-term development of the new organization post integration†. There is an integration process that accompanies every merger, where the rationales for preceding are thus put to the realities of the finalised merger process. This is where the decision to merge answers the questions, and or solves the issues that brought about the process in the first place. This study shall seek to equate the foregoing in the case of ArcelorMittal. 3.0 Literature Review This review of literature shall examine what has been written about the topical areas that are covered herein to gain a picture of the overall steel industry, the merger of ArcelorMittal, and the market factors inherent in the sector. The preceding shall seek to uncover the questions as posed the research objectives and find the answers to the research hypothesis 3.1 The Steel Industry Steel is the material that is the economic backbone of global economies, representing the prime material in building, infrastructure projects, refineries, vehicles, industrial as well as consumer goods. The recent emergence of new global players that have significantly increased their production and export capacities and thus has harkened a change in the international structuring of the industry whereby consolidation has become a critical component in competitiveness (D’Costa, 1999, pp. 11-12). China’s application and accession to the World Trade Organization has had major implications in terms of the global market as a result of the country’s modernisation programmes, cheap labour supply and interest in becoming a significant part of global production and export (ChinaDaily.com, 2007). The foregoing only adds to the rounds of consolidation in an industry where economies of scale in terms of raw materials as well as production are key foundational factors in a hi ghly competitive sector (Mangum et al, 1996, pp. 2-6). The above factors are important background aspects in the context of this study in that it is providing insight as to the status of the market. The aforementioned consolidation has been basically built upon the rounds of joint ventures that the industry seriously embarked upon during the mid 1980s in response to the need to tap emerging markets as well as areas of exploration for raw materials (Mangum et al, 1996, pp. 11-14). Steel, along with oil and uranium and a few other raw materials, represent concerted efforts and concerns by national governments and their important industry producers to ensure domestic strength in these sectors is maintained, owing to their importance in their economies (Visclosky, 1999). Restructuring within the steel industry is described by D’Costa (1999, p. 11) as â€Å"†¦an organizing concept to analyze capitalist development in general and reorganization of industrial capacity in particular†. He adds that (D’Costa, 1999, p. 11-12): â€Å"Restructuring also refers to the various ways by which a national industry adjusts to the capitalist imperatives of competition, profitability, market control, and national development (D’Costa 1989). More specifically, restructuring is viewed as a complex process by which the steel industry is evolving as a result of technological developments, corporate strategy, and government policies. With innovations and the diffusion of technology at the core of capitalist industrialization, restructuring of the steel industry globally can be conceptualised in terms of different national technological trajectories. By juxtaposing the factors that lead innovating countries like the US to fall behind technologically with the mechanisms by which late industrializing countries acquire technologies we can establish the uneven diffusion of technology and the process of restructuring.† The preceding represents an important understanding in this examination, as the traditional powers in the steel sector have been either challenged and or replaced by other companies / countries in the global sphere. Anwar (2006) presents an important summary overview of the steel industry that includes some of the foregoing factors, as well as providing additional insight areas: The increasing ramifications of industry volatility has been and is related to the levels of consolidation, the cyclical nature of the industry, along with the emergence of China as an important and critical player in the market. The importance of tapping into emerging growth markets has helped to fuel industry consolidation. China’s emergence as a consuming nation as well as producer  ¡, and its huge international market has caused a shifting in the strategic focus of the industry, and thus its companies. The heightened competition and cost variables of the industry help to explain the increased rounds of consolidation that in the interests of cost efficiencies utilises more supply chaining to set up production facilities in important developing countries, as well as close to natural steel resources. The consolidation as well as fragmentation of the global steel industry is amply illustrated in the following Chart: Chart 1 – Global Steel Industry (Anwar, 2006) The cyclical nature of the industry is caused by price significant drops due to the selling of steel at bargain prices as companies keep their production facilities running when industry sectors in certain countries are working off their own inventories (Matthews, 2007). It may sound illogical, but it is actually more cost effective to keep plants running as opposed to temporarily shutting them down and restarting again, even at the cost of dramatic price drops that occur in the process (Matthews, 2007). Consolidation has enabled important companies in the market to fend off competitors in their areas, and leverage their positions (Matthews, 2007). The rapid growth of China’s internal market, as well as upgrading of its steel production capabilities has significantly added to global tonnage output (Anwar, 2006). The heavy rounds of consolidation is in keeping with the regionalization of the international market as The North American Free Trade Agreement, that entails the United States, Canada and Mexico, competes with the European Union’s 25 countries, Mercosur that includes Brazil, Paraguay, Uruguay, and Argentina, and of course China, whose domestic market and size provides a market that is larger than almost all of these combined (UC Atlas, 2006). The significance of the foregoing is that these trade blocs represent associations that have been formed by the attending governments to aid in the management as well as trade promotion activities for their regions, and countries within these blocs (UC Atlas, 2006). The foregoing dynamics of globalisation thus helps to explain the consolidation that has been and is taking place in the industry. Figure 1 – Regional Trade Blocs / European Union (Europa, 2008) Figure 2 – Regional Trade Blocs / NAFTA (UC Atlas, 2006) Figure 3 – Regional Trade Blocs / MERCOSUR (UC Atlas, 2006) 3.2 ArcelorMittal In 2006 Arcelor one of the world’s biggest steel producers as represented by turnover and output, was acquired by Mittal for $31.9 billion USD in a deal that ended over five months of a hard fought takeover battle (White, 2006). Born out of a prior merger of Spain’s Aceralia, France’s Usinor, and Arbed of Luxembourg in 2002 (Reed, 2006), the acquisition by Mittal of Arcelor that was formed out of the preceding triumvirate is a further example of industry consolidation. The company, that consisted of in excess of 94,000 people in excess of 60 countries, was a major company in supplying the automotive, metal processing, construction, household appliance as well as general industry segments (wcbstv, 2006). Mittal Steel, which is based in Rotterdam, was the world’s largest steep producer in terms of volume prior to the merger, and still retains that title post merger, is a family controlled company by Chief Executive Officer Lakeshmi Mittal (ArcelorMittal, 2008a). The resulting company after the merger, ArcelorMittal, represents a concern that has â€Å"†¦ 310,000 employees in more than 60 countries† (ArcelorMittal, 2008b). The new company become the overall global leader in the automotive sector, construction industry, household appliance as well as packaging industries, along with becoming the leader player in technology as well as volume of steel produced (ArcelorMittal, 2008b). In terms of size, the new union creates a company that dwarfs the competition: Table 1 Largest Steel Companies (editgrid.com, 2007) Metal Bulletin’s top steelmakers of 2006 Millions of Tonnes Company Country 2006 2005 1Mittal Steel1 Netherlands 63.66 49.89 2Arcelor Luxembourg 54.32 46.65 3Nippon Steel Japan 33.7 32.91 4JFE Steel Japan 32.02 29.57 5Posco South Korea 31.2 31.42 6Shanghai BaosteelChina 22.53 22.73 7US Steel USA 21.25 19.26 8Nucor USA 20.31 18.45 9Tangshan China 19.06 16.08 10Corus UK 18.3 18.18 11Riva Italy 18.19 17.53 12Severstal Russia 17.6 15.16 13ThyssenKrupp Germany 16.8 16.55 14Evraz Russia 16.1 13.85 15Gerdau Group Brazil 15.57 13.7 16Anshan China 15 11.9 17Jiangsu ShagangChina 14.63 12.02 18Wuhan China 13.76 13.05 19Sumitomo Metal IndJapan 13.58 13.48 20Sail India 13.5 12.22 21Techint Argentina 12.83 11.42 22China Steel Corp Taiwan 12.48 11.65 23Magnitogorsk Russia 12.45 11.38 24Jinan China 11.24 10.43 25Maanshan China 10.91 9.65 26Laiwu China 10.79 10.34 27Shougang China 10.55 10.44 28Hunan Valin GroupChina 9.91 8.45 29Imidro Iran 9.79 9.41 30Ind Union/DonbassUkraine 9.52 8.55 The preceding Table has been utilised here to indicate that out of the top 30 steel companies globally, nine are located in China, with one in India and just three others coming from the European Union. The highlighted companies in colour have relevance in other sections of this study. The importance of the merger, as brought forth by the preceding discussion of the significance of regional trade blocs and national interests, is illustrated by the fact that at the time, then French President Jacques Chirac endorsed the union after the merger talks eased from being unfriendly to friendly in the face of certain guarantees concerning jobs as well as research operations (Noon, 2006). The new company represents 10% of the global market in steel and becomes a highly significant company for the European Union in the face of competition from and in China, as well as India, providing it with the resources and economies of scale to wrest deals from its rivals. 3.3 Pricing In terms of pricing, the steel industry is cyclical running through periods whereby supply exceeds demand, and then when demand exceeds supply. The recent trends has seen demand exceeding supply as steel prices have been inching upward since 2003 as China’s economy has begun to heat up, along with India taking steps to increase the demand in its economy for more products and production (domain-b.com, 2004). Table 2 – World Carbon Steel Transaction Prices (Steelonthenet.com, 2008) The preceding Table shows that upward movement that has and is making a new trend for the long embattled steel sector that had gone through heavy dumping in the 1990s as markets and the global recession dried up demand. But, that scenario seemingly looks like a thing of the long gone past, with China’s appetite just getting started, and India beginning its sit at the steel table. Prices are on the way up, as production capacity has remained relatively static with 1999 levels (DiCianni, 2007): Chart 2 – Steel Production Capacity (DiCianni, 2007) The upward trending in steel prices as a result of production capacity is reflected in the following Chart: Chart 3 – Steel Price Comparisons in Key Regions (DiCianni, 2007) The foregoing rise in steel prices is reflective of increased global demands as illustrated by the following: Table 3 – Global Steel Demand (DiCianni, 2007) The prognosis for increased prices is forecast by a broad consensus of industry analysts as caused by heightened production costs, and increased consumer demand as a result of growth markets (rediff news, 2007). Spot prices for ore are a prime contributor to the foregoing as prices have been on the increase since 2003: Chart 4 – Iron Ore Spot Prices (DiCianni, 2007) The preceding trend is highly different from the one facing the steel industry during the mid and late 1990s when too much capacity was the problem and steel prices dropped (Denoel et al, 2002). 3.4 Laws The rules governing trade laws is overseen by the World Trade Organization that also oversees the varied treaties its member nations make (WTO, 2008a). The principle tactic and the one that is subject to attention in terms of laws has been anti-dumping policies utilised by Japan as well as Russia and recently China in the early 1980s and 1990s to gain a footing in supplying steel when prices were depressed as a means to enter and secure contracts (WTO, 2008b). Dumping represents the selling of steel in foreign markets below what is charged in home markets in order to secure a foothold, and or longer term supply contracts to keep factories running (Scheurman, 1986). The anti-dumping provision has long been a measure whereby countries seek to prevent lower priced steel from competing with domestic producers and thus threatening their home markets (WTO, 2008b). An example of the foregoing is provided by Jones (2004, p. 23) in his book â€Å"Who’s Afraid of the WTO?†: â€Å"When steel imports from Japan and other countries surged in the United States in the wake of the crisis, however, it became a â€Å"trade problem, † and WTO rules prohibiting unilateral trade restraints as a stabilization tool by governments shifted blame over to the system of trade rules itself.† The laws on steel stem from this foundation, contained within World Trade Organization rules, thus it represents a confusing as well as under most circumstances self-servicing provision enacted frequently by the target country. The following provide illumination on the foregoing (Tarullo, 2002): â€Å"While not specifically proscribed by international agreements, dumping has been internationally identified as deserving of condemnation if it causes injury to an industry in the importing country. (2) U.S. law, since emulated by other countries, added to the definition sales below fully allocated cost of production, even where the price charged for the merchandise was the same as that in the importing country. Anti-dumping law generally provides for imposition of an additional import duty to equalize the price of the imported goods with the normal value, as calculated from foreign sales or from the cost of production. Most economists find the entire premise of anti-dumping law misguidedat least where there is no predatory intent or effectbecause it discourages some forms of price competition in some circumstances. Certain domestic interestsparticularly those in industries with high fixed costsare equally insistent that anti-dumping laws are necessary to protect them from forei gn producers suppressing prices by flooding domestic markets. The laws and regulations enacted by countries, which can be very complex, reinforce the suspicion of liberal traders that the laws are rigid, biased implementations of a misguided premise. Not surprisingly, disputes over imposition of dumping duties have been frequent. Exporting countries have often complained that, quite apart from the principle that dumping is bad, importing countries misuse their anti-dumping laws. The first code negotiated in the GATT to supplement the rules of the original GATT agreement was one that limited the use of anti-dumping measures. (3) New, more detailed agreements to limit national anti-dumping measures were included in both the Tokyo Round and Uruguay Round of trade negotiations. Meanwhile, use of anti-dumping measures had spread from the United States, European Union, and other industrialized countries to developing countries as well. (4) Thus, while international disagreements over dumping continue to pit some industrialized countries against Japan and many developing countries, the lines are not as clearly drawn as they were twenty years ago.† The fray over anti-dumping continues to dominate the steel sector, but the recent surge in demand is lessening such occurrences and companies scramble to ramp up production and meet increasing demand. This has been a significant tactic used in the market that could very well continue after the shakeout over which companies dominate in China as well as India settles in. 3.5 Monopolies Steel represents an important component in the health of national economies by virtue of the broad range of industries it supplies. Automotive, construction, appliances, equipment, industries machinery, pipes, plumbing and a host of other areas that underpin production are all industries that need steel. As such national interests step in, as indicated under regional trade blocks, whereby steel is akin to a national resource, in the securing of raw materials and finished output, thus the strengthening of company positions in the sector is a priority that regional and national governments seek and endorse, as evidenced by former French President Jacques Chirac’s positive comments on the Arcelor Mittal merger. From this stance, having too many producers, steel companies, weakens their position in the global market, and size enables them to introduce economies of scale in production and sales. Thus, monopolies simply are not a term that applies in this sector as a result of inten se global competition and national interests. In steel, bigger is better! Better for the steel company, national interests, domestic market supplies, and in terms of strength against their rivals. In the European Union, monopoly like status is not punishable as it is in the United States, as long as such does not harm the consumer or restrict competition (European Union, 2002). In the European Union a Monopoly is defined as (Europa, 2008): â€Å"Market situation with a single supplier (monopolist) who due to the absence of competition holds an extreme form of market power. It is tantamount to the existence of a dominant position. Under monopoly, output is normally lower and price higher than under competitive conditions. A monopolist may also be deemed to earn supra-normal profits (i.e. profits that exceed the normal remuneration of the capital). A similar situation on the demand side of the market, that is with a single buyer only, is called monopsony.† In other words, if the status of an extremely large company is not harming consumer markets and or increasing prices that are out of line with the normal costs of production, then, it is basically non actionable. The European Union’s actions against Microsoft were of a different nature in that Microsoft’s actions were restricting competition in the entire industry sector, and the company was convicted of unfair tactics (European Union, 2004). 3.6 Emerging Markets The merger of Arcelor and Mittal provided the new company with the size as well as clout to make a significant difference in emerging markets such as China due to its enhanced capabilities across all market and industry sectors (ArcelorMittal, 2008b). The foregoing increased size as well as capabilities also provides the new company with advantages in the high growth Indian market (ArcelorMittal, 2008b). The company announced immediately after its bid for Arcelor was accepted that the new plans call for boosting its presence in both the Chinese as well as Indian markets (EarthTimes, 2007). Lakshmi Mittal is of Indian decent, thus this new and larger company will provide him with increased presence in that market as a result of long standing contacts and the company’s enhanced capabilities (Forbes.com, 2007). As the world’s fifth richest person whose wealth is estimated as $32.0 billion that influence helps his aims in many areas (Forbes.com, 2007). Of particular interest is the discussion of the formation of a new regional trading block in Asia consisting of China, Japan, South Korea and India, a union that along with other countries would account for 20 percent of the world’s Gross Domestic Product, that would relegate the other major trading blocs and lesser players (Bergsten and Scollay (2001). The potential for such an arrangement has gained in strength since 2001, with increasing talks being held between China, South Korea and Japan (Asia Times, 2003). Increasing ties between China and India, as a result of the proposed cross border trade route would open up trading in the region and serve as the foundation for a new trading bloc (Hasan, 2006). The present trading Bloc, ASEAN, which was formed in 1967, consists of Indonesia, Malaysia, the Philippines, Singapore and Thailand, that represents a combined population of approximately 560 million (Association of Southeast Asian Nations, 2008). China, with its population of 1,321,851,888 (Rosenberg, 2007), along with India’s 1,027,015,247 people (indianchild.com, 2007), and Japan’s 127,288,419 (CIA World Factbook, 2007), would result in a combined trading bloc population of 2,476,155,554, or slightly more than one-third of the world’s total population of 6,602,224,175 (World Factbook, 2007a). That would dwar f the population counts of the European Union, 490,426,060 (World Factbook, 2007b), as well as NAFTA (446,078,489), with its U.S

Is Money a Motivator?

There are countless articles circulating today instructing managers on how to motivate their employees. Some theories state that all workers are motivated primarily by the need for money; so if you want to get the most out of your workforce, you pay them more. So, is money a motivator? Motivation is the encouragement to do something. (1) There are short term motivators and there are long term motivators. There are also different levels and sides to motivation. In this article I would like to focus on three theories in particular which discuss motivational needs for an individual and how as a manager you can address them in the work place: The first is Maslow’s need hierarchy which led to McGregor’s Theory X and Theory Y and the last theory is Herzberg’s Motivation – Hygiene Theory. Maslow’s Hierarchy of Needs consists of five levels of needs to be satisfied. This model suggests that as people satisfy needs on one level, they progress to the next level of needs as motivation for their behavior. It is only the unsatisfied needs which can influence behavior, not the satisfied needs. 1) Under Maslow’s Hierarchy money would be recognized within the safety category (or a base need for behavior). When you have money you feel secure, because you have a resource you need to survive. According to Maslow once that need is fulfilled you move to the next level for motivation. (1) In this case money itself is no longer a motivator because that need has been satisfied. As a manager, you can use this knowledge to continue to motivate your employees. If they are already satisfied with money, in that it is no longer a primary need, you should move up the pyramid. Work to build the employee’s confidence, respect them, and give the individual projects that drive him/her to satisfy the higher level needs. Douglas McGregor took the work Maslow did with the hierarchy of needs and grouped it into two theories on how people view human behavior at work and organizational life. McGregor called this Theory X and Theory Y; Theory X is focused on the â€Å"lower order† needs and Theory Y focuses on the â€Å"higher order† needs identified by Maslow. (4) McGregor suggests that management could use either theory to motivate employees but that the better results would stem from meeting the Theory Y needs. Let us take a closer look at two theories and how money fits into the picture. Theory X states that management’s role is to coerce and control employees: †¢ People have inherent dislike for work and will avoid it whenever possible. †¢ People must be controlled, directed or threatened in order to achieve. †¢ People prefer to be directed, do not want responsibility and have little ambition. †¢ People seek security above all else. (2) Theory Y states that management’s role is to develop the potential in employees and help them to release that potential towards common goals. Work is natural, like play and rest †¢ People will exercise self direction if they are committed †¢ People learn to accept and seek responsibility †¢ People have potential(2) In Maslow’s hierarchy we identified that money falls under safety, or the need for security. McGregor’s theories show security under the X Theory, that above all security is what peo ple seek. If as a manager you run your organization under Theory X, you would agree that money is a motivator for your employees. You would agree, that in order to get the most out of your workforce you should pay them more. If you manage under Theory Y, money may be a part of your business but is not what drives your employees to achieve. The last theory I would like to look at is Herzberg’s Motivation-Hygiene Theory. This theory focuses on the factors causing job satisfaction and the factors causing job dissatisfaction, and that they are different. Herzberg called the satisfiers motivators and dissatisfiers hygiene factors. Hygiene factors are in a sense maintenance factors that are necessary to avoid dissatisfaction but do not themselves provide satisfaction. 3) These factors should not be treated as opposites of each other. The opposite of satisfaction is not dissatisfaction, but rather, no satisfaction. Similarly, the opposite of dissatisfaction is no dissatisfaction. (4) Motivation factors lead to positive mental health and challenge people to grow, but at the same time do not lead to dissatisfaction. Above is a list of the top 6 motivation factors or factors leading to satisfaction in the w ork place. Look at how the possibility for advancement can challenge you to grow. Before you were a manager you had an opportunity to advance in your career, to become a manager. This information motivated you to work hard and continually grow as an employee; it brought satisfaction to your job. As a manager you want to bring these factors into your workplace in order to bring the most out of your employees. Hygiene factors can lead to job dissatisfaction. When hygiene factors are either not present or not sufficient you feel dissatisfied. (3) However, they in turn do not lead to satisfaction when they are present. For instance an employees work conditions. If you have favorable work conditions it does not motivate you to work harder, it does not bring satisfaction into your job but you are comfortable so there is no dissatisfaction with your position. Look at how money works, if you get a raise for the job you are doing it does not motivate you to work harder. At the same time if you did not get the raise you wanted or needed you become dissatisfied with your position or management. Money or an employee’s salary is a hygiene factor. It is a biological need because you need money for food, water and shelter. Money becomes a drive for all people because of this truth. It will give a short run of motivation because we need it to survive, but only the intrinsic or motivation factors can determine job satisfaction or no satisfaction. If this theory holds true as a manager you need to provide the hygiene factors to avoid employee dissatisfaction, but also must provide the intrinsic factors to the job itself in order to satisfy your employees. Overall, this theory recognizes that true motivation comes from within a person and not from external factors. The external factors will just dissatisfy and discourage your employees if they unfavorable. Is money a motivator? All three theories studied show that money is a biological need; it is something every person needs to sustain modern life. It is at the base of Maslow’s pyramid, it is in McGregor’s Theory X which focuses around Maslow’s base of the pyramid and it is a hygiene factor in Herzberg’s theory. All of these theories show that money is a short term motivator. If you do not have money, which causes you to go hungry, you will be motivated to take any job to fill that basic need. Once that need is met it no longer motivates you to grow in your career, it doesn’t drive you to go above and beyond the bar set for your current position. As a long term motivator money loses its power over time and can not be considered one. Because once the basic needs of an individual are met they move to other factors to motivate themselves: respect, relationships, advancement, satisfaction. I agree with all three of our theorists that money is a necessity and if it is not present people may become dissatisfied with their jobs, but at the same time it will not motivate the individual to take the next steps in their current career. You can not just pay them more in order to get the most out of them. You need to bring other factors to the workplace in order to motivate your employees to give you their all. About the Author: I am a under graduate from Ferris State University, with my degree in Biology Education. I am attending Elmhurst College in pursuit of my Masters in order take my education to the next level, expand my knowledge of business fundamentals, practices and innovations and to build lasting relationships with my peers and professors. I currently work for Menlo Worldwide, a Global Third Party Logistics Provider. I one day hope to be a respected leader within the organization I work for.

Introduction to heritage tourism

In Northern Ireland heritage tourism attractions can be classified in many different ways. These include manmade but not built to attract tourists attractions, manmade and purpose built to attract tourists attractions, natural attractions and can also be applied to special events. It is hoped that this seminar will help people to gain a wider understanding and appreciation of heritage tourism and the efforts of the bodies who do so much excellent work in order to protect and preserve Northern Ireland's rich heritage attractions. Manmade but not built to attract tourist heritage attractions include the Walls of Derry which were built in 1613 to protect the inhabitants from hostile enemies. They fulfilled their purpose during the siege by the Jacobites and defended the city for more than a hundred days until the siege ended. Another example of a heritage attraction is St Columb's Cathedral, built in 1633 and was the first cathedral in the British Isles to be built after the Reformation. Today, like the Walls, they are the city's most popular tourist attraction and receive hundreds of tourists a year .However the Cathedral is still used to worship in. The Walls are owned by the Honourable The Irish Society but are looked after by the Environment and Heritage Service. Manmade and purpose built to attract tourist attractions include the Tower Museum, which was built in 1992, which has displays on the early history of Derry, the Siege and the role it played during World War Two. Another example of this is the Ulster American Folk Park in Tyrone which was primarily built as an educational facility. It was built in the late 1970's to celebrate the United States' bicentenary in 1976. It is owned by MAGNI (National Museums and Galleries of Northern Ireland) which looks after all the museums and parks in its care. Natural attractions include the Giant's Causeway in County Antrim which was formed sixty five million years ago by the cooling of magma into its unique hexagonal shapes. It is perhaps the legend of Finn MacCool forming the Causeway that is perhaps more interesting than the actual formation. It is also the only World Heritage Site in Ireland having been made so in 1986. Special heritage attractions include the Halloween festival and the Maiden City Festival in Derry. The Maiden City festival was first held in 1997 and has had an extremely successful run each subsequent year. It embraces both sides of the community and has helped both sides to gain a better understanding of the others culture. The Banks of the Foyle Halloween Carnival has had perhaps an even more successful run. It won the Northern Ireland Tourist Board's â€Å"Event of the Year† Award in 2002. To tie in with the festivities are ghost tours around the city and story telling in the Tower Museum. 0950- The National Trust The National Trust was established in 1895 by Robert Hunter, Octavia Hill and Hardwicke Rawnsley to â€Å"guard† the threatened coastlines, countryside and historic buildings of the United Kingdom. They had been concerned with the unrestrained development and industrialisation of the Victorian Era. Since 1884 Hunter had been calling for the establishment of an organization to â€Å"administer its property with a view to the protection of the public interests in open spaces.† In over a hundred years it has become the largest independent conservation body in the world and now owns more than two hundred historic buildings , more than six hundred thousand acres of countryside and more than five hundred miles of coastline. Its main aim is, and always has been, to â€Å"maintain and care for the coast, countryside and historic buildings on behalf of the nation†. In Northern Ireland the Trust owns almost fifty different properties spread around the country .These include Mount Stewart in County Down which is one of the Trust's more popular properties in Northern Ireland. The property not only includes some of the most magnificent gardens in Northern Ireland but also objects of historical significance. The dining room features the actual chairs that were used by the delegates in the Congress of Vienna in 1815. The house also contains priceless paintings which were collected by members of the family over several centuries. The Dining Room Mount Stewart Another popular property is Florencecourt in County Fermanagh. It was previously the home of the Enniskillen family and was given to the National Trust by the fifth Earl of Enniskillen in 1953. It is also of natural importance as on its grounds is the first Yew Tree was planted here in 1767. The land around the house is owned by the Forest Service which purchased the land from the sixth Earl of Enniskillen in 1975. Florence Court, County Fermanagh In County Antrim the Trust owns the Carrick-a-Rede Rope Bridge. It was primarily used as a way for fishermen to Carrick-a-Rede Island. Over one hundred thousand tourists visit the bridge every year. It is also an excellent place to view porpoises, dolphins and basking sharks. Carrick- a-Rede Rope Bridge The Giant's Causeway is the most popular heritage attraction in Northern Ireland and is the only UNESCO World Heritage Site in Ireland. More than five hundred thousand tourists a year visit the area from around the world. Over sixty million years old it was formed by lava flowing into the sea and gradually cooling and hardening. In 2002 the Giant's Causeway and Bushmills Railway opened more than fifty years after its predecessor the Giants Causeway, Portrush and Bush Valley Tramway closed. The line runs from the Giant's Causeway to Bushmills. The Causeway is also an important area for wildlife including peregrine falcons and a rare species of bird known as chough. The Causeway is the last known area in Northern Ireland for these birds to inhabit. The Giant's Causeway The Trust also owns and manages the Mourne Mountains specifically Slieve Donard and Slieve Commedagh. Slieve Donard is Northern Ireland's highest mountain standing at a majestic 850 metres. The Trust has only owned these two mountains since 1991 and, since it is a charity, it had to use its own money to buy them. It managed to raise enough money through a fundraising campaign and bought over a thousand acres. The Mournes have an abundance of wildlife including ravens, hares and rare dragonflies. Slieve Donard and Slieve Commedagh The Trust also owns and cares for sites that belong to Northern Ireland's industrial heritage such as Patterson's Spade Mill in County Antrim. It operated from 1919 to 1990 and was purchased by the Trust in 1992. It is the last working water-powered spade mill in the British Isles. The spades are still available for purchase at around twenty pounds. 1010- The Environment and Heritage Service The Environment and Heritage Service is the largest department in the Department of the Environment with more than five hundred personnel. It advises and implements the Government's policy on the environment in Northern Ireland. Their main aim is â€Å"to protect and conserve the natural and built environment and to promote it's appreciation for the benefit of present and future generations.† One of the areas the EHS cares for includes Scrabo Tower and Country Park in County Down. It was built in 1857 in memory of the 3rd Marquis of Londonderry (who also owned Mount Stewart) and can be seen for miles around. There is also a disused mine where the famous Scrabo Rock was extracted and exported to other areas of the United Kingdom. The EHS also cares for Roe Valley Country Park in County Antrim. It is home to a wide variety of wildlife including foxes, badgers and otters. The park is also a popular place for recreation including salmon and trout fishing, canoeing rock climbing, orienteering and riverside and woodland walks. They also look after Dunluce Castle in County Antrim which was built in the late 16th century. The incident in 1639 in which the kitchen fell into the sea is what the Castle is most renowned for. Carrickfergus Castle, Bellaghy Bawn, Ballycopeland Windmill, Dundrum Castle, Inch abbey, Grey Abbey and Hillsborough Courthouse. Other country parks and countryside centres the EHS cares for include Portrush, Countryside Centre, Castle Archdale County Park, Ervey Wood and Ness Wood. Scrabo Tower and Country Park Dunluce Castle Greenpeace Greenpeace had it's beginnings in 1971 when several people protested at the USA detonating underground nuclear bombs in a area used by rare otters near Alaska. It has grown in the last thirty years and has over 2.8 million supporters around the world. It operates in more than forty countries and has its headquarters in Amsterdam. Greenpeace's latest triumph has been in putting pressure on the World Heritage Committee to add Lake Baikal (the largest fresh water lake in the world) and the Volcanoes of Kamchatka in Russia to the list of World Heritage sites. More than twelve million hectares will now be preserved. Greenpeace also successfully put pressure on the WHC to declare the Komi Virgin Forests in the Urals a World Heritage Site. 1100-The Wildlife Trust It is the United Kingdom's largest conservation charity devoted to wildlife. No member of the trust is paid as all of its members volunteer to help the Trust. The Trust cares for more than two thousand nature reserves. There were four hundred thousand voluntary members of the Trust in 2002 and the member is still growing. Membership costs à ¯Ã‚ ¿Ã‚ ½24 a year for one person and à ¯Ã‚ ¿Ã‚ ½36 per annum for a family membership. They have 47 local trusts and a trust for children known as the Wildlife Watch who work together to protect wildlife in different areas from cities to the countryside especially in national and country parks. The local trust in Northern Ireland is the Ulster Wildlife Trust and was founded in 1978. In Northern Ireland there are more than 2000 members of the Trust. Their main aim is to â€Å"help people recognise that a healthy environment, rich in wildlife and managed on sustainable principles, is essential for continued human existence.† WWF The World Wide Fund for Nature's main aims are to protect and conserve endangered species and to address global threats to wildlife. However it only works to protect animals in the wild and has â€Å"no experience or expertise to deal with issues relating to animals in captivity. Whereas the larger organisation works on international issues relating to animals the UK organisation work to look after the countries wild animals. It can be involved in many matters affecting wildlife such as challenging the government on the destruction of the countryside. It also puts forward the effects of tourism in wildlife. Unlike other heritage organisations it owns no property and therefore has more money to spend.

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