THE USE AND ABUSE OF HISTORIC PRECEDENT Research Paper

THE USE AND ABUSE OF HISTORIC PRECEDENT - Research Paper Example Some of the stylistic architectural designs applied mostly in Los Angeles include but not limited to the Ancient Egypt and Japanese architecture. These styles were rampant in the olden days but as time went by, different architectures resolved into reinterpreting them into the modern ways of constructing buildings. This paper will seek to explore how stylistic period in architectural history namely Ancient Egypt and Japanese architecture has been reinterpreted in the buildings found in contemporary Los Angeles. In presenting the reinterpretation, MarYella Hotel, Roman Gardens, Church of Christ Scientist and The Getty Center buildings will be used as as a clear illustration of transformation to modern buildings in Los Angeles. The history of the period and structure of Ancient Egypt The Ancient Egypt was an architectural style used by architects to design buildings, which came to be very influential sites during and after civilization. Studies show that the Ancient Egypt style of cons truction started and ended in the years between 3050 BC and 900 BC (Nicholson and Ian 45). During this time, architects managed to develop a large and vast array of monuments that ended up being very great, famous, and influential to an extent that the following generations carried the knowledge with them. This style of architecture had a number of characteristics among those who involved themselves with it. First, the architects used two predominant materials during the construction of almost every building, which were stone and sun-baked mud bricks respectively (Roseman 51). Prospects have come to put across that, architects applied the Ancient Egypt construction style mainly because there was advent scarcity of wood. During and after the so-called Old Kingdom, architects had an obligation to reserve stone for building temples and tombs whereas use bricks in building fortresses, royal palaces, and walls of towns as well as temple precincts. In some instances, ancient Egyptians pre ferred using the Ancient Egypt style of constructions in erecting buildings due to the presence of hot and dry climate that preserved brick structures for a long time. Thus, one could point out that some of the reasons why the Egyptians resolved to build buildings using bricks, which was a major component of construction materials during the Ancient Egypt, include the prevailing climatic conditions. This is clearly illustrated in MarYella Hotel Architecture. Additionally, Roseman argues that the Ancient Egypt stylistic method of construction served as a way of aligning events astronomically (58). For example, the ancient architects who applied this style in building temples ended up recording certain events such as the equinoxes and solstices, which later provided people with the measurement and time when such an event took place. To some extent, this style had some religious significance, which appears to have been presided over by the Pharaoh himself with reference to ceremonials that signified their opening. The Japanese architecture The Japanese architecture is indeed very complex and according to architectural analysts, it had many characteristics. Traditionally, the Japanese architectural style of construction was typified by structures made of wood, slightly elevated off the ground, and thatched with roofs or tiles. Further, Roseman evidences that structures made using the

Critical Analysis of Locke's Representative Realism and Berkeley's Essay

Critical Analysis of Locke's Representative Realism and Berkeley's Subjective Idealism - Essay Example However, some phenomena are best represented using the theory of realism, while other phenomena are best represented by idealism. An example of which is when attempting to understand the basis of phenomena that are usually labeled as miracles, magic, spontaneous healing, or shamanism. The best theory to adopt in this case is that of idealism. So in practice, a thinker will determine what phenomena are most essential to him, and then support the theory that he deems best to interpret them. In Berkeley’s point of view, all thoughts, passions and ideas exist within the mind, while anything that is outside of the mind is unintelligible. His claims is such that it is impossible for us to ever come to know what is outside the mind, and so, we cannot even think about it. This claim would then entail that anything that is outside of mind has no meaning for us. If something is outside of the mind, it means that we are incapable of receiving any sensory input and any sensations from it. This entails that we are incapale of even perceiving it because we cannot detect it in any way. Sensations are meaningless except to the mind that receives them. All the ideas that we have of objects are derived from sensation and so are set within mind. Objects necessitates a mind to perceive them. It is impossible for us to imagine any sensible thing or object distinct from the sensation or perception of it. While imagination, on the otherhand, is based on what we have already seen. In this view, even mythical ideas such as centaurs, which we have never seen but can imagine, are made up of a collage of other ideas that we are capable of perceiving. The sensations of objects are indivisible from the ideas of them. Berkeley further insists that even though objects exist, they are not made up of an independent medium called matter. The existence of these objects is dependent only on their being perceived by an observer. A mind connects only to other minds while ideas can only relate other ideas. However, if Berkeley is right, if an object did exist that was not related to mind, which means that it would have to be an unthinking thing, then how could it form a mental image in us? If an object is not related to the mind, then it cannot affect our mind in much the same that for an object to affect our mind, it must be a mental product first. In opposition to Berkeley's views, â€Å"Representative realism† is Locke’s view that we experience objects indirectly through â€Å"representations† wherein the mind represents the world, but does not duplicate it. Primary qualities are measurable using numbers such as those of sizes and weight. Relativism is the view that no one can have perfectly objective knowledge. â€Å"Objective† in this context is defined as being â€Å"the same for everyone.† Secondary qualities, on the otherhand, results from the interaction of sense data with our sense organs, meaning they are â€Å"subjectiveâ⠂¬ . They correspond to nothing about the world as it is, but only about the world as it seems to each of us individually and privately. Locke claims that all knowledge comes from the senses and because each individual has a unique set of sense experiences, no two people will have exactly the same sense experiences. If knowledge comes only from the senses, no two people will have the same knowledge, and as long as people ground their beliefs in their sense data, nobody’

A case study on suffering with depression

A case study on suffering with depression Depression is a whole body illness, meaning it affects your body, mood and thoughts. It can be a very serious illness which affects the way you eat and sleep, the way you feel about yourself and the way you think about things. It is more than just a passing mood, and is very different from the usual feelings of sadness and feeling fed up. The feelings of depression usually last more than a few days; they can last for months or even years. If left untreated, these feelings can interfere with the daily life of the individual and can also have an effect on the people around them. Depression can affect anyone at any age, including children, although it is more likely to occur if there has been a family history of depression. Health professionals use different terms to describe depression, these are: depression, depressive illness and clinical depression (NHS, 2009). It is commonly thought that depression is not a real illness. It is seen more like a weakness or a failure in an individual however, just because it is not visible does not mean it is not real. Types of depression There many different forms of depression, these can range from mild depression through to severe depression and individuals who suffer with severe depression may also show psychotic symptoms. Major depression, probably the most common form of depression, is manifested by a combination of symptoms that interfere with the individuals ability to eat, sleep, work and study. Usually the individual will lose interest in once pleasurable activities and also has a feeling of hopelessness. Some individuals only have a single depressive episode, while others have recurring episodes. (Psychology Information Online, 2009) Dysthymia is a mild, chronic state of depression and the symptoms are similar to major depression, but less severe. A person may suffer from dysthymia depression for years before being diagnosed, thus they would still continue with everyday life and may not even realise that they are suffering with depression, they could just have a feeling that something is not quite right. (Psychology Information Online, 2009) Atypical depression is different to major depression in the way that an individual will feel better temporarily when a positive life event occurs, whereas an individual suffering from major depression will nearly always feel low. This type of depression can last for a couple of months or can be with an individual for their entire life. (Depression About.com, 2009) Bipolar disorder, or manic depressive disorder, is an emotional disorder in which an individual alternates between states of deep depression and extreme elation. (Bipolar About.com, 2009) It is characterised by sudden changes in mood, thoughts and behaviour and there is a high suicide rate seen in individuals who suffer from manic depression. The two extremes of depression are where the individual feels very low and mania where the individual feels very high. (NHS, 2009) Postpartum depression affects woman, almost always, immediately after childbirth. It is thought that postpartum depression is triggered by the hormonal changes that follow childbirth. Some woman have severe and long lasting symptoms that require treatment, others can generally beat the baby blues with good self-care and support from friends and family. (Depression About.com, 2009) There are other less serious forms of depression for example, premenstrual dysphoric disorder (PDD) and seasonal affective disorder (SAD). Symptoms There are many different symptoms of depression and these symptoms can include physical, psychological and social symptoms. These symptoms can vary from one individual to another and also depend on the severity of the depression. Depression causes changes in thinking, feeling, behaviour and physical well-being, for example it can cause the individual to lose interest in activities that they previously enjoyed. The physical symptoms can include: slowed speech and movement; a change in weight and appetite; constipation; lack of energy; changes to the menstrual cycle and disturbed sleeping patterns. (NHS, 2009) The psychological symptoms of depression can include: a feeling of hopelessness and helplessness; a low self esteem; tearfulness; feelings of guilt; feeling irritable and intolerant of others; lack of motivation; lack of enjoyment; feeling anxious or worried; reduced sexual drive; suicidal thoughts or thoughts of harming others. (NHS, 2009) The social symptoms can include: a reduced interest in hobbies; difficulties in home and family life; fewer social activities; and isolation. (NHS, 2009) Diagnosis Depression is a very common condition and can affect anyone of any age, including children. When an individual is suspected of suffering from depression, they should immediately seek advice from their GP. Depression cannot be diagnosed by a blood test or any kind of physical investigation: it is diagnosed by the presence of characteristic symptoms. The characteristic symptoms are listed in a publication called the DSM-IV. The GP will make the initial diagnosis and if the individual is showing some or all of these characteristics, the GP will usually provide treatment or will refer the individual to another suitable professional. PROFILE OF INDIVIDUAL, FAMILY AND SOCIAL NETWORKS Marys father was an alcoholic who was verbally and physically abusive, he suffered from the Casanova complex and therefore had 23 children with nine different women, and was married five times. When Mary was born her father was not married to her mother, but was still married to another woman. Marys parents eventually married but got divorced when Mary was six and because of this divorce, Marys mother became a divorcee with illegitimate children. Subsequently Marys mother became an outcast in the small town they lived in, so she moved Mary and her siblings to London. Due to all the strains and stresses of her life, Marys mother became very angry and became extremely violent towards her children (DLCentre, 2008). Mary was the oldest child in her extremely dysfunctional family and when she was just 17 she moved out, taking her brothers and sisters with her, and subsequently took on a more parental role and became their main source of support (DLCentre, 2008). Mary feared being abandoned, therefore suffered anxiety in marriage and family commitments, this could possibly have been due to her parents divorce and from not receiving any positive reinforcement. Mary eventually married a dentist who had promised to stay with her forever and she devoted herself to her family and two daughters. She did not make friends easily and therefore had very few close personal friends, but she had one close friend with whom she confided everything to except anything about her past. Mary suffered with suicidal feelings, resentment towards her mother, anger and frustration with her oldest daughter and poor communication with her husband (DLCentre, 2008). These are all common effects of a person who suffered from a dysfunctional family as a child. Conflict, misbehaviour and abuse are common occurrences within a dysfunctional family. Dysfunctional families are mainly caused by adults who are affected by alcoholism, substance abuse, or any other addictions, untreated mental illnesses or personality disorders, or possibly even as a result of the parents acting out on their own dysfunctional family experiences and copying their parents. Many children from dysfunctional families are often unaware of their situation and believe that what they experience on a day to day basis in completely normal. Children from dysfunctional families often take on different roles, which include: the good child; problem child; caretaker; lost child; mascot and mastermind (Wikipedia, 2009). Mary became aware that something was not right in her family life, which was evidenced by her moving out and taking on the role of the good child by moving her siblings in with her, and thus becoming their main source of support. Other effects children suffer by living in a dysfunctional family include: moderate to severe mental health issues; distrust of others; paranoia; difficulty forming healthy relationships with others; feeling angry, anxious, depressed unlovable and having mixed feelings of love-hate towards certain family members (Wikipedia, 2009). Looking at her symptoms, Mary suffers from these effects and is therefore a victim of a dysfunctional family. The abuse Mary suffered from both her parents could have led Mary to her depression. OUTLINE THE ONSET AND PROGRESSION OF THE CONDITION Prior to seeing her GP, Marys condition was so severe that she had no interest in anything. Her physical symptoms included low energy, shaking and trembling, heart palpitations, menstrual problems, poor sleep patterns and constipation. At the onset of therapy, Mary started to show suicidal feelings, resentment towards her mother, anger and frustration towards her daughter and poor communication with her husband (DLCentre, 2008). From these symptoms, it could be concluded that Mary is suffering from major depressive disorder (Psychnet-UK, 2009). There are many factors that have possibly led Mary to her depression. Her father was verbally and physically abusive and her mother became violent and angry towards Mary and her siblings. Mary had a strong fear of being abandoned and this could possibly have been due to her parents divorce and from not receiving any positive reinforcement. Major depression is the most common and most severe form of depression. It is manifested by a combination of symptoms that interfere with the individuals ability to eat, sleep, work and study. Usually the individual will lose interest in once pleasurable activities and also has a feeling of hopelessness (Psychnet-UK, 2009). Major depression can be triggered from a single traumatic event in an individuals life, or may develop slowly as a consequence of numerous personal disappointments and life problems. Some people appear to develop the symptoms of a major depression without any obvious life crisis causing it. Some individuals only have a single depressive episode, while others have recurring episodes. (Psychology Information Online, 2009) It could also be caused by an inherited gene passed onto children from their parents (Psychnet-UK, 2009). SOCIALISATION AND ROLE THEORY Counselling or therapy is where the patient would involve in a discussion with a therapist to uncover unconscious conflicts and abnormalities. This method allows the individual to discover what is causing the abnormal behaviour and to help the individual to think about their problems in order to find new ways of dealing with them. The patient is then able to consciously deal with the issues and resolve them, enabling them to be able to handle current life situations better too. (Psychology Information Online, 2009) In order to be able to do this a good rapport needs to be built. The therapist can offer a safe relationship for building trust and help Mary to re-establish a certain sense of security. Communication skills are paramount in building a trusting relationship with the therapist and when Mary feels safe and secure with the relationship she has with the therapist then the wider network of family can be brought in. The aim is to try and build a social network of support and to engage more fully with life, within the family and independently. Friends and family are an important part of building a trusting relationship. HOW COULD MARY BE TREATED? In order to make an initial diagnosis, the GP will first need to know the individuals background and family history, mainly to see if there is a history of depression within the family. If there is, then depression is more likely to occur however, it is also possible for individuals with no family history to develop depression. A cognitive approach could be taken and this deals with the way a person thinks. It involves talking with a therapist in order to discover the beliefs and expectations that cause their unhappiness. This form of treatment involves cognitive reconstructing, which is where the patients are encouraged and taught to replace negative thoughts with rational, positive ones giving them a more adaptive thinking pattern. It involves the individual keeping a diary of their thoughts and feelings, this information would then be passed on to the therapist who would analyse it and find out how the thoughts could be turned around. The therapist will do this by setting the patient reasonable goals so that they can introduce realistic and rational beliefs into their thought pattern (Psychology Information Online, 2009). Therefore it can be concluded that the change in Marys personality is due to the way she sees the situation. Mary has been more susceptible to depression because of her past experience s of violence, negative reinforcement and her feelings of abandonment. Aaron Beck (1985, cited in Gross, 2005) stated that psychological problems can be overcome if the misconceptions are corrected using introspection, insight, reality testing and learning. Drug therapy is the use of tranquillisers, antidepressants and other drugs. They help lessen the symptoms, but are not a successful treatment for everyone. This form of therapy would not be beneficial to Mary on its own, mainly because it hasnt been successful before, but could prove to be most beneficial when combined with cognitive therapy (Psychology Information Online, 2009). Electro-convulsive therapy is where a high current is passed through the patients brain for 0.5 seconds whilst the patient is under anaesthetics and this procedure induces a convulsion that lasts for about one minute. This therapy is used mainly to treat severe depression and is a short term treatment which lasts for up to one year. ECT offers fast relief and can cause memory loss (Cardwell, Flanagan, 2003). Mary may benefit from this treatment as a quick relief to her symptoms, as this may stop the feelings of being suicidal, however this treatment may not help with the resentment towards her mother, anger and frustration towards her daughter and poor communication with her husband. The psychoanalytical theory is the classical model. Freud (1915) noted that depression is precipitated. It aims to analyse the persons feelings of loss and abandonment through the loss free association. The belief supported by this model is that psychological problems arise from the personality (psyche) rather than from physical causes (Cardwell Flanagan, 2003). This theory aims to analyse the persons feelings of loss and abandonment by talking about their past. This treatment method involves having the individual going back to an earlier age, which in Marys case would probably be her childhood in order to explore her feelings about the divorce and the violence. The therapist will then go on to help Mary to look at and re-evaluate the situations and to reconsider her past losses so as to gain a new perspective on them. Interpersonal Therapy (IPT) focuses on relationships with other people (Cardwell Flanagan, 2003). As Mary has had issues with her family in the past and is currently having problems with her family IPT would be an incredible advantage to Mary. All of these therapies would be good treatment for Mary, as they explore all of the areas of her life and will help her to deal with and come to terms with her past. If she is able to do this, she may be able to move on and may also be able to stop her children from experiencing the same things she experienced during her life and may even be able to prevent her children from suffering with depression. THE EFFECTIVENESS OF INTERVENTIONS Depression can be treated in many different ways which include drug therapy, electro-convulsive therapy, psychosurgery and cognitive therapy. Drug therapy is the use of tranquillisers, antidepressants and other drugs. Tranquillisers are used to alleviate anxiety, or in stronger doses they can be used to treat psychotic disorders and antidepressants are used to treat depressive disorders. Drugs help lessen the symptoms and are not a successful treatment for everyone. Drug therapy can be a quick solution and can therefore prove to be economical however, there is a chance of addiction, allergic reaction or intolerance and side effects may be worse than the original symptoms. Alternative therapies are available for example, St Johns Wort, which is a herbal treatment and is effective in treating mild depression but it comes with its own disadvantages. It can cause serious problems if the individual is already taking medications such as anticonvulsants and anticoagulants, and can also reduce the effect of oral contraceptives. Electro-convulsive therapy is where a high current is passed through the patients brain for 0.5 seconds whilst the patient is under anaesthetics and this procedure induces a convulsion that lasts for about one minute. This therapy is used mainly to treat severe depression and is a short term treatment which lasts for up to one year. ECT offers faster relief than drugs which is important in suicidal patients and was a popular treatment prior to drug therapies, although drugs are safer. Treatment of ECT can cause memory loss, however ECT may work where other methods fail. (Cardwell, Flanagan, 2003 pp. 222-223) Psychosurgery is the most extreme form of therapy and is used as a last resort. It involves removing the section of dysfunctional brain tissue and the procedure is not reversible. It is believed that by removing the dysfunctional brain tissue the symptoms and problems will disappear and will not reoccur. The effects of psychosurgery are not consistent and there is also the ethical issue of informed consent. It is not a quick fix and therapists need effective training before performing the treatment. (Cardwell, Flanagan, 2003 pp. 222-223) Another type of treatment is cognitive therapy. It is derived from various sources including behaviour therapy and psychoanalysis, which define and operationalise cognition in different ways. It involves talking with a therapist in order to discover the beliefs and expectations that cause their unhappiness. The patients are encouraged and taught to replace negative thoughts with rational, positive ones giving them a more adaptive thinking pattern. The therapist will set the patient reasonable goals so that they can introduce realistic and rational beliefs into their though pattern. This form of therapy is a popular choice but it may be lengthy and costly. A combination of two treatments usually works better than just one treatment for example, combining drugs and cognitive therapy (Psychology Information Online, 2009). However, each therapy is different and so is each individual person and what works for one individual may not work for others, so it is difficult to make comparisons between different therapies. When the symptoms are extremely severe the individual may either admit themself or be admitted into hospital for a short time. This short time away helps the individual to get away from the daily stresses that have caused the depression. Some treatments are only available in a hospital setting for example, ECT (Cardwell, Flanagan, 2003). LIKELY PROGNOSIS FOR THE FUTURE An individual is likely to suffer from depression if there is a family history of it. A full recovery is possible with treatment but there is also a risk it could return for example, it could be triggered by a traumatic event in the future. If Mary is responding well to treatment she could resolve her differences with her family and will possibly start to see that her life is not worthless. Her physical state of health will drastically improve and the suicidal thoughts she has been feeling will begin to disappear. SUMMARY Depression is real and is a common condition which affects an individual in the way they feel, act and behave. There are symptoms for depression and different types of medications or therapies that can be used to treat the individual. Depression can take many forms from mild through to severe and not all sufferers present the same symptoms. It can be genetic and can also be triggered by certain traumatic life events. Each treatment is different and so is each individual, thus it is impossible to compare and recommend a specific model of therapy. The best way to treat depression is possibly to combine two different therapies. Mary has suffered many problems in her life, from violence and abuse to abandonment. A combination of the medical and cognitive therapies would help Mary. The generalisations about depression could include that one treatment/therapy would suit everyone, but that is not necessarily the case as each person has different problems. Not all models of care will work on everyone and some people may recover quicker than others. It is not possible to generalise depression as it is by far a more complex illness than people are aware of. BIBLIOGRAPHY About.com Bipolar Disorder (2009) Bipolar Disorder Manic Depressive Illness From Diagnosis to Medications [online] Available from: http://bipolar.about.com/ [Accessed 22 December 2009] About.com Depression (2009) About Depression Information and support for depression [online]. Available from: http://depression.about.com/ [Accessed 22 December 2009] Cardwell, M. Flanagan, C., (2003) Psychology A2: the complete companion. UK: Nelson Thornes Ltd Eysenck, M., (2001) Psychology for A2 level. UK: Psychology Press Ltd Gross, R., (2005) Psychology The Science of Mind and Behaviour. 5th ed. London: Hodder Education. NHS Choices (2009) Depression [online]. Available from: http://www.nhs.uk/Conditions/depression/Pages/Introduction.aspx [Accessed 22 December 2009] NHS Choices (2009) Understanding Depression [online]. Available from: http://www.nhs.uk/Pathways/depression/Pages/Landing.aspx?WT.srch=1 [Accessed 22 December 2009] Psychology Information Online (2009) Depression Information and Treatment [online]. Available from: http://www.psychologyinfo.com/depression/ [Accessed 22 December 2009] Psychnet-UK (2009) Major depressive Episode [online]. Available from: http://www.psychnet-uk.com/dsm_iv/major_depression.htm [Accessed 22 December 2009]

Children Affected By Divorce Essay -- essays research papers

CHILDREN AFFECTED BY DIVORCE & PROTECTING THEIR BEST INTERESTS On the 11th of June, 1996, the Family Law Reform Act 1995 came into effect amending certain sections of the Family Law Act 1975, in particular, those relating to the care of children involved in divorce situations. The object of these amendments, according to the new act, was to ensure two things. Firstly, â€Å"that the children may receive adequate and proper parenting to help them achieve their full potential,† and secondly, â€Å"to ensure that parents fulfil their duties, and meet their responsibilities, concerning the care, welfare and development of their children.† These recent amendments are clearly a positive step forward for family law because the law has recognised that the child is the only important factor in a divorce and that it is crucial that the rights of the child are protected. To fairly evaluate the effectiveness of these recent amendments in protecting the interests of the child, the social implications of the act, the principles taken into accoun t when deciding a case, the impact on stakeholders, and criticisms of the act must all be taken into consideration. In order to ensure that the child’s rights are protected, the courts aim is to ensure that parental responsibility survives any changes in the nature of the child’s parent’s relationship. Parental responsibility relates to â€Å"all the duties, powers, responsibilities and authority which, by law, parents have in relation to children.† When deciding a case involving a child in the event of a separation between the child’s parents, the child’s best interests are now the court’s paramount consideration. The concepts access, custody, and guardianship have been replaced in the amendments by contact, residence, and joint parental responsibility. Between 1987 and 1997, the annual number of divorces rose from 39,700 to 51,300. As a result of this increase, one fifth of all Australian children aged one to seventeen now live in single parent households. Of these children living with only one natural parent, 88% live with their mothers with the remaining 12% living with their fathers. This ratio of which parents children resided with remained constant between 1987 and 1997, indicating that the trend of the courts to favour mothers over fathers has continued despite the changes to the act. With the number of divorces consistently risin... ... the number of cases which can be funded has dropped from 6,000 last year to 4,000 this year. It now seems very unlikely that steps will actually be taken to remedy this problem by either of the suggested solutions due to the lack of funding and the budget cuts will most likely result in a worsening of the situation. Overall, it is difficult to judge the effectiveness of the amendments to the Family Law Act 1975 because it is impossible to measure how well a child’s best interests have been served. However, if the Family Court of Australia has adequately implemented the changes then one would expect that the amendments have been effective in improving the system of determining what is in the child’s best interests. Therefore the court’s final ruling with regards to the contact, residence, and maintenance of the child will be the option which is best for the child. In conclusion, when all of the factors have been taken into consideration, it appears that the recent amendments will result in a step forward for the way in which the rights of children are protected by the court’s decisions. Whether or not the courts will make use of this improved system, however, is another question.

Using Celebrities in an Ad Campaign Is a Poor Way to Stimulate Brand Appeal

Using celebrities in an ad campaign is a poor way to stimulate brand appeal Using celebrities as brand ambassadors has become very popular and is one of the more common communication strategies employed by companies today in order to market their products. Marketers pay millions of dollars to celebrities in the hope that their star magic would make the product more appealing and successful. But all celebrities glitter is not gold. There are many reasons as to why using celebrities in an ad campaign can turn into an ugly affair, sometimes enhancing attitude change towards the product altogether. In this report, I will list the disadvantages of using celebrities in ads and the reasons behind why they are a poor way to stimulate brand appeal. 1) Price It is very expensive for companies to hire a celebrity as its brand ambassador. It is important for companies to note that when they do decide to take the brand ambassador route, they should be willing to shell out millions of dollars, and sometimes even lose it. Nike signed Tiger Woods on a 5 year $ 125 million contract, Reebok signed Venus Williams for $40 million and more recently, Pepsi teamed up with Shaquille O'Neal for a reported $25 million. For big companies such as Nike, Reebok and Pepsi, the financial implications of the deals involved would probably not affect them as much as smaller ones. With this in mind, it is also important to note that consumers today are becoming more advertising savvy. They read about the multi-million dollar deals as well. This leads to more consumers asking, â€Å"Are we buying the product, or the celebrity? † 2) ‘Vampire Effect’ A common marketing term, this refers to the point where the celebrity in question overshadows the brand itself. Marketers face this problem when they pick an extremely popular star, and the audience’s attention is drawn to the celebrity rather than the product. A very popular example of this scenario occurred when Cable Association used Dawn French. They soon had to abort their entire campaign when she got in the way of effect communication. 3) Credibility & Inconsistency One of the main reasons as to why using celebrities in an ad campaign is poor for brand appeal occurs when the personal credibility of the celebrity involved drops. This has occurred several times over the past couple of years. When Kate Moss, a well known model, was pictured snorting cocaine, three of her sponsors immediately pulled out. After all, imagine how a mother who has lost her daughter to drugs would relate to the brand. Another example was when Kobe Bryant, a leading basketball star, was accused of rape in 2003. His celebrity brand partners, Nutella and McDonald's, chose not to renew contracts with Bryant, even though he was subsequently acquitted of all charges. Many companies also resort to sports starts when choosing a celebrity. While the personal credibility of the sportsman remains intact, his performances in the arena may sometimes suffer lapses. A famous example of this occurred when Sachin Tendulkar, one of the best cricketers in the world, went through a prolonged lean patch. This lead to Pepsi dropping him as its celebrity face and they instead opted for a younger generation of cricketers instead. The credibility of the celebrity involved is vital because when the company decides to use one, they are not only buying a channel via which they intend to sell their product, but also an image. 4) Multi-Brand Endorsement At the end of the day, when a celebrity decides to endorse a product, it does not guarantee that they are actually using the product itself. More likely than not, they are endorsing the product purely for the monetary benefits, and this might sometimes lead to complications, especially when one celebrity appears in many ads in a short span of time. Take for example, MRF (tyre company), one of the early sponsors of Sachin Tendulkar. With its logo embezzled on his bat, the partnership between celebrity and brand was strong. Consumers could relate to the star, and in turn, the product. Today, however, Tendulkar endorses a mirage of products, and the novelty of the original partnership has died down significantly. Consumes are often left disillusioned and are sometimes forced to ask the question, â€Å"If the endorser can’t stick to one product, why should I? † . Celebrity overexposure can often undermine the authenticity of the message. Another form of multi-brand endorsement might occur when the celebrity endorses one brand but is publically seen using a competitor’s. For example, when Britney Spears was pictured drinking Coca-Cola (pictured left), while employed as the face of Pepsi. Or when David Beckham shaved his head soon after becoming the face of Brylcreem. Consumers notice this and often realize that celebrities need not have any relation to the product itself, and hence the entire essence of using celebrities in ads is questioned. 5) Marketing Mismatch When celebrities are used in ad campaigns, they display a certain special persona for the audience. The entire point is that they are able to influence the thought process of the consumer and create a positive perception of the brand. An approving nod from a famous actor or sportsman can directly lead to a 1000 more sales. With this in mind, it is paramount that companies use celebrities who they know can relate to and sell their product. Take a bad example, pictured right, of Ronaldhino (football legend), selling Konica Minolta printers. Not only did the picture lead to consumers questioning the connection between celebrity and brand, but also put the brand in bad light. In conclusion, while the use of celebrities can sometimes prove beneficial, especially to the profitability of a relatively unknown product, there are several points that need to be taken into consideration. Marketers, especially in today’s cluttered media environment, resort to celebrities if they lack an original idea, or want to take the ‘easy way out’. Consumers too are becoming aware of this and are starting to notice the fact that celebrities need not necessarily support their brands. Furthermore, celebrity endorsements cannot change the entire thinking process of the consumers, and as such, does not justify the high cost involved either. References Pictures: 1) http://hollywoodsnark. com/wp-content/uploads/2007/03/pepsi_girl_britney_spears_drinking_coke_2. jpg 2) http://rawstylus. wordpress. om/2008/02/12/596/ Text: 1) http://www. hollywoodreporter. com/hr/search/article_display. jsp? vnu_content_id=2030984 – Article on ‘Celebrity Branding- Making the brand’ 2) http://www. rediff. com/money/2003/dec/05guest. htm Article on ‘Is celebrity advertising effective’. 3) http://en. wikipedia. org/wiki/Celebrity_branding 4) http://www. b randrepublic. com/Industry/Entertainment/News/235197/When-celebrity-brand-partners-go-bad/ Article on – ‘When celebrity brand partners go bad’ lifestyle. in. msn. com/fashion/article. aspx? cp-documentid=1671484 ‘Celebrity endorsements enhances brand appeal’

An Investigation Into the Factors Influencing the Implementation

Chapter One Introduction 1. Introduction This chapter will cover the background of the research problem, purpose of study, hypotheses, importance of the study, and the scope of the study. The chapter introduces the major concepts of the study of strategic alliances and agent banking models. 1. 1. Background 1. 1. 1 Strategic Management Process Although most can agree that a firm’s ability to survive and prosper depends on choosing and implementing a good strategy, there is less agreement about what constitutes a good strategy (Barney, 2008).However, there seems to be an agreement as to what a strategy really means: a firm’s theory about how to gain competitive advantage. The strategic management process is a sequential set of analyses and choices that can increase the likelihood that a firm will choose a strategy that generates competitive advantage (Hesterly, 2008). The first step is mission (long term purpose) definition, followed by setting of objectives, that is, sp ecific measurable targets that a firm uses to evaluate the extent to which it is realizing its mission.The next phase are the internal and external analyses, where a critical evaluation of the strengths, weaknesses, opportunities and threats is done in regard to both the internal and external environments. Once a firm establishes a sound balance between internal capabilities and weaknesses with external opportunities and threats, the management is in an informed position to select strategies that presents the best way possible to achieve the firm’s objectives. Barney (2008) categorizes strategy choices into business level strategies and corporate level strategies.Business-level strategies are actions a firm takes to gain competitive advantage in a single market and includes cost leadership, differentiation and focus. Corporate level strategies are actions a firm takes to gain competitive advantage in multiple markets and includes vertical integration strategies, strategic all iances, mergers and acquisitions. This study draws its subject on strategic alliances as a corporate-level strategy a firm may choose to achieve its broad objectives. 1. 1. 2 Strategic AlliancesA strategic alliance exists whenever two or more independent organizations cooperate in the development, manufacture, or sale of products or services. These alliances can be groped into three broad categories: nonequity alliances, equity alliances, and joint ventures (Barney, 2008). In a nonequity alliance, the cooperative relations are managed through the use of various contracts: licensing agreements, supply agreements, and distribution agreements. For instance, in the banking industry, agent banking falls under distribution agreements since agents are contracted by banks to offer banking services on behalf of the banks (C.G. A. P, 2009). 1. 1. 3 Agent Banking In a growing number of countries, banks and other commercial financial service providers are finding new ways to make money and deli ver financial services to unbanked people (Lyman, 2009). Rather than using bank branches and their own field officers, they offer banking and payment services through third parties. For poor people, â€Å"branchless banking† through retail agents may be far more convenient and efficient than going to a bank branch (C. G. A. P, 2009).For many poor customers, it will be the first time they have access to any formal financial services—and formal services are usually significantly safer and cheaper than informal alternatives. Two models of branchless banking through retail agents are emerging: one led by banks, the other by non-bank commercial actors (Lyman, 2009). Both use information and communication technologies, such as cell phones, debit and prepaid cards, and card readers to transmit transaction details from the retail agent or customer to the bank (C. G. A. P, 2009).Branchless banking through retail agents appeals to policymakers and regulators because it has the p otential to extend financial services to unbanked and marginalized communities. But it also challenges them to ask: What are the risks of these new approaches, and are they different from those of conventional branch-based banking? How should banks respond to these risks, so as to permit branchless banking with retail agents to operate safely and expand access to finance (C. G. A. P, 2009). Agency banking can be understood by examining the experience of five ioneering countries— Brazil, India, South Africa, the Philippines, and Kenya—where agent-assisted branchless banking that targets poor customers is already a reality (Kumar, 2009). Some models of branchless banking—for example, Internet banking and automatic teller machines (ATMs)—can be seen as modest extensions of conventional branch-based banking. Other models offer a distinct alternative to conventional branch-based banking in that customers conduct financial transactions at a whole range of retai l agents instead of at bank branches or through bank employees (Staschen, 2009).Agent-assisted branchless banking is relatively new. Among the countries studied, the phenomenon ranges in age from only a few months (in the case of Kenya), to a few years (in the case of Brazil and some services in India). Outside of Brazil and the Philippines, branchless banking through retail agents reaches relatively few customers with a limited range of financial services (C. G. A. P, 2009). As compared with conventional branch-based banking, both models of agent-assisted branchless banking touch on issues that lie at the heart of traditional bank regulation and supervision.One set of issues, common to both models, arises from the outsourcing of substantially all direct customer contact to a potentially infinite array of different types of retail agents (Lyman, 2009). According to F. S. D/Kenya, key issues to be considered are: authorization of agent network managers, establishment of a register of agents, review of agent licensing requirements, competition & agent exclusivity, and need for consumer protection arrangements covering agents.Coupled with the risks associated with new operational platforms, these issues are likely to be of major concern to commercial banks and may indeed hamper the implementation of agent banking. 1. 2 Problem Statement In the year 2009, C. B. K became one of the founding members of the Alliance for Financial Inclusion (A. F. I) in September 2009. Through A. F. I, C. B. K conducted a study tour of Brazil and Colombia to gain an understanding of Agent Banking. This model introduced through the Finance Act, 2009 entail the use of third parties by banks to extend their outreach cost effectively.The National Financial Access Survey released in 2009 indicates that 32% of Kenya’s bankable population remains totally excluded from any form of financial services. The Central Bank has therefore continued to promote policy solutions geared towards en hancing financial inclusion, with the introduction of agent banking being one of the initiatives. In a growing number of countries, banks are finding new ways of delivering financial services to unbanked people. The introduction of agent banking is intended to enable institutions to provide banking services in a more cost effective way which is equally cheaper to the customers (C.G. A. P, 2009). It is further intended to enhance financial access especially for those people who are currently unbanked, while giving banks an opportunity to increase their market shares (F. S. D/Kenya, 2009). Despite the strong presence of retail outlets showing interest to work with banks as agents, the adoption of this model is rather slow. Since the coming into operations of the Guidelines on Agent Banking, only six banks have applied to the C. B. K for Agent Network approval (C. B. K, 2010).Of these, only two applications had been granted approval by end of September 2010, while the other four were s till in the early stages of review. As at 30th September 2010, CBK had approved 5,892 agents of which 4,392 of these agents are telecom related with 1,500 comprising other types of enterprises. In addition, 66% of the approved agents are in the rural areas while the rest are in urban areas. (C. B. K, 2010). This study therefore seeks to find out the factors influencing the implementation of agent-banking by commercial banks in Kenya. 1. 3 PurposeThis study aims at discovering the factors behind the sluggish pace of agent banking implementation in Kenya, with emphasis on the position taken by commercial banks in Kenya towards agent-assisted banking models. The results of the study will include comprehensive recommendations to both commercial banks and the industry regulator on possible strategies of making agent banking, as an alternative service delivery channel, a success in bringing financial services closer to the poor and currently unbanked population. 1. 4 Objectives of the stu dy 1. 4. 1 General objectiveThe general objective of the study is to determine factors influencing the implementation of agent banking in the Kenyan Financial Services Sector. 1. 4. 2 Specific objectives The study aims to achieve the following specific objectives; i. To determine how consumer protection influences the implementation of agent banking by commercial banks in Kenya ii. To determine how laws and regulations influences the implementation of agent banking by commercial banks in Kenya iii. To determine how risk appetite affects the implementation of agent banking by commercial banks in Kenya iv.To find out the effect of overall business strategy on the implementation of agent banking by commercial banks in Kenya. 1. 5 Hypotheses Table 1. 1 Hypotheses sets |Set |H0 |HA | |1 |Consumer protection requirements influence the |Consumer protection requirements have no influence on the | | |implementation of agent banking by commercial banks in |implementation of agent banking by c ommercial banks in | | |Kenya. Kenya. | |2 |Unfavorable legal and regulatory guidelines on agent |Legal and regulatory guidelines on agent networks have no | | |networks affect the implementation of agent banking by |effect on the implementation of agent banking by commercial | | |commercial banks in Kenya. |banks in Kenya. | |3 |Low risk appetite influences the operationalization of |Low risk appetite has no effect on the operationalization of| | |agent banking by commercial banks in Kenya. |agent banking by commercial banks in Kenya. |4 |Lack of an elaborate business strategy on agent banking|Business strategies have no effect on the adoption of agent | | |affects the adoption of agent banking models among |banking models among commercial banks in Kenya | | |commercial banks in Kenya | | 1. 6 Scope The study will cover duly registered commercial banks in Kenya, with information being gathered preferably from the headquarters of the institutions.Respondents will be individuals hold ing managerial position related to retail banking, channels management, risk management and marketing or strategy functions. All aspects of service delivery by third party agents will form the main subject of the study. 1. 7 Significance of the study 1. 7. 1 To regulatory authorities The study will be of major use to the CBK, Central government and other oversight bodies as it will give insights on the unique attributes of the Kenyan banking sector and identification of potential problem areas in the quest of increasing financial inclusion through alternative channels.This will go along pay in guiding policy decisions that can be exploited to make banking services conveniently available all segments of the population. 1. 7. 2 To commercial Banks The study is important to Commercial bank managers since it will help them appreciate the magnitude of potential loss of business opportunities to their competitors due to lack of flexible strategic planning. The report will also produce val uable industry data that can be used by commercial banks to develop comprehensive business strategies on agent banking as key potential problem areas in the banking model will be identified and quantified. . 7. 3 To academicians and researchers The study will be a source of reference material for future researchers on related topics; it will also help other academicians who undertake the same topic in their studies. The study will highlight important relationships that require further research; this may be in the areas of relationships between firm’s performance and delivery channels’ dynamics. 1. 8 Limitations of the study This study will be confined to the headquarters of 12 Commercial Banks in Kenya.The responses given might be inadequate to make generalizations for the whole banking sector. This problem will however be averted by stratifying the population into three categories based on asset book size and market reach, and in line with the classification provided by the industry regulator, followed by random sampling. This will ensure that the sample will indeed be a true representative of the population. 1. 9 Assumptions The study assumes that consumer protection requirements, low risk appetite, cumbersome regulations and restrictive business strategies have a negative influence on the adoption of agent banking models in Kenya.The study further assumes that middle and top level bank managers in the areas of retail banking, marketing, strategy and risk management are conversant with the subject of service delivery through third party agents. 1. 10 Definitions Strategy- a firm’s theory about how to gain competitive advantage Strategic management process – sequential set of analyses and choices that can increase the likelihood that a firm will choose a strategy that generates competitive advantage Strategic alliances – arrangements where two or more independent organizations cooperate in the development, manufacture, or sa le of products or servicesAgent banking – a banking model where commercial banks offer their core services through third party intermediaries Consumer protection – set of guidelines a firm/industry employs to cover its customers from any form of exploitation due to their vulnerable position in a business transaction Risk appetite – the amount of loss a firm is ready to absorb due to risk events Risk – uncertainty in the occurrence of loss or gain Reputation risk – risk of loss resulting from compromised external opinion towards a firm Operational risk – risk of loss resulting from inadequate or failed internal processes, people and systems, or from external eventsLiquidity risk – risk that an imbalance between cash inflows and outflows will result in insufficient cash reserves to meet all demands of the depositors. Chapter Two Literature Review 2. 0 Introduction This chapter presents the literature review and theories, and conceptual framework adopted in the study of strategic alliances and more specifically, the evolution of agent banking. In addition, an empirical work has been reviewed with the final presentation of conceptual and operational frameworks of the study. 2. 1 Theoretical Literature ReviewThe sections analyses current theories related to strategic management process, strategic choice, strategic alliance threats and opportunities, and their relevance in the agent banking models. Research gaps and theoretical weaknesses have also been identified. 2. 1. 1 Strategic Management Process Although most can agree that a firm’s ability to survive and prosper depends on choosing and implementing a good strategy, there is less agreement about what constitutes a good strategy (Barney, 2008). However, there seems to be an agreement as to what a strategy really means: a firm’s theory about how to gain competitive advantage.The strategic management process is a sequential set of analyses and choices that can increase the likelihood that a firm will choose a strategy that generates competitive advantage (Hesterly, 2008). The first step is mission (long term purpose) definition, followed by setting of objectives, that is, specific measurable targets that a firm uses to evaluate the extent to which it is realizing its mission. The next phase are the internal and external analyses, where a critical evaluation of the strengths, weaknesses, opportunities and threats is done in regard to both the internal and external environments.Once a firm establishes a sound balance between internal capabilities and weaknesses with external opportunities and threats, the management is in an informed position to select strategies that presents the best way possible to achieve the firm’s objectives. Barney (2008) categorizes strategy choices into business level strategies and corporate level strategies. Business-level strategies are actions a firm takes to gain competitive advantage in a sin gle market and includes cost leadership, differentiation and focus.Corporate level strategies are actions a firm takes to gain competitive advantage in multiple markets and includes vertical integration strategies, strategic alliances, mergers and acquisitions. This study draws its subject on strategic alliances as a corporate-level strategy a firm may choose to achieve its broad objectives. One major weakness of this framework is that it presents strategic management in a form of series while in real sense, management decisions are made within a network of closely interwoven and interrelated activities. For instance, S. W. O.T analysis is done at every stage in the strategic management process 2. 1. 2 Strategic Alliances A strategic alliance exists whenever two or more independent organizations cooperate in the development, manufacture, or sale of products or services. These alliances can be groped into three broad categories: nonequity alliances, equity alliances, and joint ventur es (Barney, 2008). In a nonequity alliance, cooperating firms agree to work together to develop, manufacture, or sell products or services, but they do not take equity positions in each other or form an independent organizational unit to manage their cooperative efforts.Rather, these cooperative relations are managed through the use of various contracts: licensing agreements, supply agreements, and distribution agreements. For instance, in the banking industry, agent banking falls under distribution agreements as agents are contracted by banks to offer banking services on behalf of the banks (C. G. A. P, 2008). The classification according to Barney (2008) is in agreement with that given by Day (1990) and gives a clear distinction between strategic alliances and mergers and acquisitions.However, other writers have questioned this classification as merger could be indeed be a form of strategic alliances involving capital. 2. 1. 3 Strategic Alliance Opportunities Strategic alliances c reate value by exploiting opportunities and neutralizing threats facing a firm. Opportunities associated with strategic alliances fall into three large categories. First, these alliances can be used to improve performance of a firm’s current operations. Second, alliances can be used to create a competitive environment favorable to superior firm performance.Finally, they can be used to facilitate a firm’s entry into or exit from new markets or industries (Hesterly, 2008). Indeed, the major reason why most firms cooperate is to increase efficiencies and open more avenues of improving firms’ performance. However, Hesterly (2008) has not clearly whether opportunities of strategic alliances attract firms or it is the business needs that compel firms to initiate alliances in the market. 2. 1. 4 Strategic Alliance Threats Just as there are incentives to cooperate in strategic alliances, there are also incentives to cheat on these cooperative agreements.Indeed, research shows that as many as one-third of all strategic alliances do not meet the expectations of at least one alliance partner (Barney, 2008). In the case of distributor agreements (nonequity alliance), the producers often evaluate the threats of the alliance using a framework of risk. The risk based approach has particularly been adopted in the financial services contracting in countries like Brazil and Mexico. (C. G. A. P, 2006) Hesterly (2008) has highlighted four issues of concern to forming strategic alliances: consumer protection, legal / regulatory implications, competitive networks, Reputational and operational risks.In addition, an organization needs to have an overall business strategy that is open to strategic linkages with other entities. Lyman (2009) has brought these threats into perspective while studying the branchless banking model in Brazil, Kenya and the Philippines. 2. 1. 4. 1 Consumer Protection And Resolution Of Grievances According to Lyman (2009), any of the foreg oing categories of risk triggers consumer protection concerns if the resulting loss falls on customers. Use of retail agents may also increase the risk that customers will be unable to understand their rights and press claims when aggrieved.Customers are protected against fraud by laws and regulations in the countries studied. But it is not always clear to customers how they will be protected against fraud when they use retail agents to conduct financial transactions. 2. 1. 4. 2 Legal / Regulatory Risks Since industry regulators have had little experience with agent banking models and are still adjusting existing rules to address them (or had yet to begin this process), some level of legal and regulatory uncertainty and ambiguity for both the banks and nonbanks (and to a lesser extent also for retail agents) has remained.Once a model becomes widely used in a country, these uncertainties and ambiguities could take on a systemic dimension if, for example, several banks with significan t operations conducted through retail agents suddenly face an unfavorable interpretation that challenges their authority to transact business through retail agents or the enforceability of related legal agreements (Lyman, 2009) 2. 1. 4. 3 Operational Risk Operational risk refers to potential losses resulting from â€Å"inadequate or failed internal processes, people and systems or from external events. For banks and nonbanks that use retail agents and rely on electronic communications to settle transactions, a variety of potential operational risks arise. For example, customers or retail agents could commit fraud, or a bank’s equipment or other property could be stolen from a retail agent’s premises. Financial loss for banks or nonbanks (and also potentially for customers) can also occur from data leaks or data loss from hacker attacks, inadequate physical or electronic security, or poor backup systems (Lyman, 2009). 2. 1. 4. 4 Reputation Risk When retail agents under perform or are robbed, banks’ public image may suffer.Many operational risks mentioned (such as the loss of customer records or the leakage of confidential customer data) also can cause reputational risk, as can liquidity shortfalls in the retail agent’s cash drawer. Moreover, reputation risk can spread from one bank or nonbank to another and take on systemic dimensions (Lyman, 2009) 2. 1. 4. 5 Liquidity Risk Retail agents, especially those that are relatively small, unsophisticated, and remote, may not have enough cash to meet customers’ requests for withdrawals and may lack experience in the more complex liquidity management required for offering financial services.To manage liquidity effectively, retail agents must balance several variables, including turnover of cash, ease of access to the retail agent’s bank account, and processing time of transactions, among others (C. G. A. P, 2008). 2. 1. 4. 6 Business Strategy Although most can agree that a firm ’s ability to survive and prosper depends on choosing and implementing a good strategy, there is less agreement about what constitutes a good strategy (Barney, 2008). According to Aaker (1998), t is usually very difficult to predict how competition in an industry will evolve, and so it is rarely possible to know for sure that a firm is choosing the right strategy and this is why a firm’s strategy is almost always a theory. However, this theory sets the tone at which competition evolution is handled in the future. For a firm to make the choice of making strategic alliances, the overall business strategy must be open to the formation of strategic linkages with other entities.This fact has been acknowledged by the Central Bank of Kenya which has directed that for any commercial bank to be allowed to offer services through third party agents, it must have an elaborate business strategy on agent banking (CBK guidelines on Agent Banking, 2010). In summary, the classification of threats in agent banking models as given by Lyman (2009) appears to be widely accepted by industry players as the framework was drawn from case studies done in the banking industry in the pioneering countries.However, the framework fails to suggest possible avenues of avoiding or at least neutralizing these threats to be used as a guideline by financial institutions which are interested in agent banking models. More research is indeed required to meet this gap if agency banking is to be the new frontier of increasing financial inclusion. 2. 2 Empirical Review The concept of agent banking has only taken momentum in the twenty first century, with Brazil being a success story of branch-less banking. Other countries where the banking approach has been implemented are South Africa, India, Mexico, Kenya and the Philippines.In Kenya, the idea of agent banking evolved from the innovations of the mobile telecommunications company, Safaricom Ltd, with its innovative and transformative mon ey transfer service, ‘M-PESA’. In 2009, the Banking Act was amended to allow commercial banks use agents in their outreach to extend the formal financial services access frontier. Three organizations have been instrumental in studying agent banking models and their contribution to the universal goal of raising financial inclusion among the poor. These organizations are F. S.D/K (Financial Sector Deepening, Kenya), C. B. K (Central Bank of Kenya) and C. G. A. P (Consultative Group to Assist the Poor). In an effort to promote financial access by the majority of Kenyans, the Central Bank and the banking sector continued with initiatives to put in place a credit information sharing mechanism which would enable individuals to use their information capital as â€Å"collateral† to access bank services. Further, the amendment of the Banking Act to permit banks to use agents in their outreach would also extend the formal financial services access frontier.In 2009, banks p ursued revenue growth strategies based on their ability to acquire new customers and cross-selling more products and services to existing customers by leveraging on technology (C. B. K, 2010). In a growing number of countries, banks and other financial service providers are finding new ways to make money and deliver financial services to unbanked people (C. G. A. P, 2009). Rather than using bank branches and their own field officers, they offer banking and payment services through third parties.For many poor customers, it would be the first time they have access to any formal financial services—and formal services were usually significantly safer and cheaper than informal alternatives. Two models of branchless banking through retail agents have emerged: one led by banks, the other by non-bank commercial actors (Lyman, 2009). Both use information and communication technologies, such as cell phones, debit and prepaid cards, and card readers to transmit transaction details from the retail agent or customer to the bank (C. G. A. P, 2009).For example, customers of Caixa Economica Federal, a Brazilian state-owned bank, could open and deposit money in a current account, make person-to-person transfers, and get loans—all using simple bankcards and card readers at over 12,000 lottery outlets, supermarkets, and even butcher shops (Lyman, 2009). In Kenya Customers could use their phone to send and receive â€Å"M-PESA,† make payments to other people and shops, and store money for future use (F. S. D/K, 2010). Branchless banking through retail agents appeals to policymakers and regulators because it has the potential to extend financial services to unbanked and marginalized communities.But it also challenges them to ask: What are the risks of these new approaches, and are they different from those of conventional branch-based banking? How should banks respond to these risks (C. G. A. P, 2009) F. S. D/Kenya and C. G. A. P have done immense research and advocacy on agent banking. Agency banking can be understood by examining the experience of five pioneering countries— Brazil, India, South Africa, the Philippines, and Kenya—where agent-assisted branchless banking that targets poor customers is already a reality (Kumar, 2009).Branchless banking represents a new distribution channel that allows financial institutions and other commercial actors to offer financial services outside traditional bank premises. Lyman (2009) has outlined two models of agent banking. One model of branchless banking—for example, Internet banking and automatic teller machines (ATMs)—can be seen as modest extensions of conventional branch-based banking. Other models offer a distinct alternative to conventional branch-based banking in that customers conduct financial transactions at a whole range of retail agents instead of at bank branches or through bank employees (C. G. A.P, 2009). This concept has introduced new risks and other regulatory issues in the industry. For regulators, the task is not to try to eliminate these risks, but to balance them appropriately with the benefits of branchless banking—including expanded outreach of financial services. Of the countries so far studied, Kenya may best reflect the situation of most developing and transition countries (F. S. D Kenya, 2010). Policymakers and regulators have greeted branchless banking with a mixture of great enthusiasm for its potential to expand access and real concern about new risks for vulnerable customers and the financial system.The case for accepting bank agents in Kenya has already been accepted by policy makers and regulators in Kenya; the question is how to regulate and supervise this (FSD Kenya. 2010). In addition, it is left to the individual banks to decide whether they will use the model to meet their strategic objectives. The Central Bank of Kenya has indeed placed a requirement for an elaborate business strategy on agent banki ng before any approval is given for agent networks. Section 2. 3. 2. f CBK guidelines on agent banking approval requires the applying institution to have a delivery channel strategy and how agents fit in the strategy, feasibility study of the global view of future operations and development of the agent business for a minimum period of three years and a business strategy for agent banking (C. B. K, 2010). According to FSD-Kenya, key issues to be considered are: review of agent licensing requirements, risk management, and need for consumer protection arrangements covering agents.These issues are likely to be of major concern to commercial banks and may indeed hamper the implementation of agent banking. The threats associated with agent banking have not gone unnoticed. Indeed most commercial banks are taking a rather conservative position regarding the implementation of agent banking model. Like F. S. D/K, C. G. A. P (2009), has identified three issues that agent banking, as a strateg ic alliance orientation, poses to both the regulator and the market players: reputational and operational risks, consumer protection, regulatory framework and business strategies at the institutional level. On its part, C. B.K has alluded that any bank wishing to operate through agents must have an elaborate business strategy on agent banking before any approval is given. 2. 3. 1 Conceptual Framework [pic] Independent Variables Dependent Variable Figure 2. 1: Conceptual framework Source: (Author, 2010) 2. 3. 2. Operational Framework: [pic] Dependent variable Independent variables Parameters Figure 2. 2: Operational framework Source: (Author, 2010) Chapter Three Research Methodology 3. 0 Introduction This chapter presents the methodology that will be used to carry out this study.Research methodology is defined as an operational framework within which the facts are placed so that their meaning may be seen more clearly. The task that follows the definition of the research problem is th e preparation of the design. The methodology of this research includes the research design, population to be studied and sampling strategy, the data collection process, the instruments to be used for gathering data, and how data will be analyzed and presented. 3. 1 Research Design In this study a survey design will be used. This research problem can best be studied through the use of a survey.This method portrays an accurate profile of persons, events, or situations. Surveys allow the collection of large amount of data from a sizable population in a highly economical way. It allows one to collect quantitative data, which can be analyzed quantitatively using descriptive and/or inferential statistics. 3. 2 Population The population of study will consist of 46 commercial banks in Kenya. Target population in statistics is the specific population about which information is desired. A population is a well defined set of people, services, elements, and events, group of things or households that are being investigated.This definition ensures that population of interest is homogeneous. Population studies, also called census are more representative because everyone has equal chance to be included in the final sample that is drawn. The target population of this study will be all the 46 commercial banks in Kenya registered under the banking act. The study will focus on the headquarters of the banks, especially risk, marketing, strategy and retail divisions since they are the most conversant with the strategic directions of the banks in regard to the subject of the study. Table 3. 1 Target Population Class |Net Assets |Population |Percentage % | | |(‘000,000’ KES) |(Frequency) | | |Large Banks |> 15,000 |19 |42 | |Medium Banks |5,000 – 14,999 |14 |32 | |Small Banks |< 5,000 |12 |26 | |Total | |45 |100 | Source: (C. B. K, 2010) 3. 3 Sample size The sample size in this study will consist of 12 commercial banks in Kenya. The researcher will involve the mar keting managers, retail banking managers, and risk/compliance managers (preferably two managers from each of the mentioned functional areas) from each bank.This means that the total respondents in this study will be 72 in number. 3. 4 Sampling technique The researcher will use stratified random sampling to select 12 commercial banks out of 46 banks. The researcher will in this case consider all the commercial banks and choose 12 of them in a manner that will make the sample a true representative of the population. The population will be stratified into three categories according to the market shares and in line with the CBK classification of financial institutions. In each class, the researcher will select a random sample so that each item in the population has the same probability of being selected as part of the sample as any other item. Table 3. 2: Sample size Classes |Respondents |Target Population (2/Bank)|Sample size (2 |percentage | | | | |respondents * 4 | | | | | |banks per class) | | |Large |Marketing/strategy Managers |38 |8 |21% | | |Retail-Banking Managers |38 |8 |21% | | |Risk/Compliance managers |38 |8 |21% | |Medium |Marketing/strategy Managers |28 |8 |28% | | |Retail-Banking Managers |28 |8 |28% | | |Risk/Compliance managers |28 |8 |28% | |Small |Marketing/strategy Managers |24 |8 |33% | | |Retail-Banking Managers |24 |8 |33% | | |Risk/Compliance managers |24 |8 |33% | Source:(Author, 2010. ) 3. 5Instruments. The researcher will use primary data (questionnaires) to carry out the study. The questionnaires will include structured (close-ended) and unstructured (open-ended) questions. The structured questions will be used in an effort to conserve time and money as well as to facilitate in easier analysis as they are in immediate usable form; while the unstructured questions will be used so as to encourage the respondent to give an in-depth and felt response without feeling held back in revealing any information.With unstructured questions, a resp ondent’s response may give an insight to his feelings, background, hidden motivation, interests and decisions and give as much information as possible without holding back. 3. 6 Validity and Reliability The questionnaires to be used are estimated to be reliable as sets of questions measuring a single concept have been groped together, resulting in a high degree of internal consistency. In addition, the instruments will be subjected to a test-retest procedure before being distributed to the main respondents. The variables have been operationalized into parameters that represent issues which are handled on a day to day basis under normal business activities in the industry being studied.Besides, the selected respondents have been drawn from personalities with knowledge, experience and influence on matters forming the subject. This will ensure that the instrument actually measures the true situation, opinions and predictions on agent banking in Kenya. A survey designed will be u sed in this study because of its strength associated with collecting data in a real life situation. In addition, the sampling technique (random stratified) and the proposition of drawing respondents from relevant divisions in the head offices of commercial banks will increase the external validity as the results could be generalized to the entire banking sector in Kenya. 3. Data Collection Data will be collected using the drop and pick method. The method is deemed appropriate as all respondents are expected to be found within a small geographical area, that is, the city of Nairobi. This is coupled by the possibility of face to face interaction with the respondents which is likely to increase the response rate. 3. 8 Data Processing and Analysis Once the completed questionnaires have been received, the raw data will be edited to ensure accuracy, completeness and consistency as well as identifying cases where a respondent may give more than one response in a question that would otherwi se generate a single answer.A codebook of questionnaire items will then be developed and used to enter responses into a computer spreadsheet which would then be imported by S. P. S. S. Data will be analyzed using a multiple regression model. This will enable the researcher to make possible predictions about the study. A multivariate regression model will be applied to determine the relative importance of each of the three variables with respect to the implementation of agent banking by commercial banks in Kenya. The regression model will be as follows: y = ? 0+ ? 1X1 + ? 2X2 + ? 3X3 + ? 4X4 + ? Where: Y = Implementation of agent banking ?0 = Constant Term ?1, ? 2, ? 3, ? 4 = Regression coefficients associated with consumer protection, risk appetite, laws & regulations and restrictive business strategy respectivelyX1= consumer protection X2= risk appetite X3= laws and regulations X4= Restrictive Business strategy. 3. 9 Presentation of Findings The findings will be presented using tab les and charts. Tables will be used to summarize responses for further analysis and facilitate comparison. This will generate quantitative reports through tabulations, percentages, and measures of central tendency. 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Vol. 59, July, pp. 63-74 ———————– Consumer protection Regulatory issues Risk appetite Business strategy Agent Banking Implementation Grievance Handling Information Confidentiality Fraud & employee theft Reputational risk Operational risk Liquidity Risk Agent Registration Agent control & monitoring Conflict resolution Channel strategy Feasibility studies Technical Expertise Consumer Protection Risk Appetite Laws & Regulations Restrictive &'e†#(2CUVCO > business strategy Agent Banking Implementation (Number of banks)