Describe at least two ways you could take advantage of people’s use of the availability heuristic to boost sales

Describe at least two ways you could take advantage of people’s use of the availability heuristic to boost sales.


The Final Essay Examination will cover the material we have studied in Modules 5 – 8. You will need to choose four of the six essay questions to answer. Each question requires a three to five paragraph (250 – 500 word) response, using the correct vocabulary related to the topic. Your answers need to be supported with  appropriate sources such as peer-reviewed (professional) journal articles. Do NOT use wikipedia or other encyclopedias, dictionaries or online sources such as Be sure to us APA style citations to show where sources were used in your response. For sources other than the textbook, please list them as references at the end in APA format. For maximum points, make sure your work is written using your own words.

For your final exam submission, please respond to four of the following questions:

  1. You are the commissioner of a state lottery system that sponsors daily and weekly drawings. Lottery tickets have not been selling well over the past few months. Describe at least two ways you could take advantage of people’s use of the availability heuristic to boost sales. Explain why you would judge your tactics to be fair or unfair to your customers.
  2. Imagine you have a friend who just last month adopted a set of siblings, a thirteen-month-old and a four-year-old, from an orphanage in a developing country. The orphanage was not a stimulating environment and the four-year-old can only speak a few words in her native language. The thirteen-month-olddoes not seem to speak words in either her native language or in English. Both children appear physically healthy and have started to adjust quite well, emotionally, but your friend is concerned about their language development. Discuss whether their language development is typical of children their age and theextent to which each child can be expected to learn English fairlywell in the next couple of years.
  3. Latisha’s history teacher asked her why so many German people complied with Hitler’s orders to systematically slaughter millions of innocent Jews and others. Latisha suggested that the atrocities were committed because the Germans had become unusually cruel, sadistic people with abnormal twisted personalities. Use your knowledge of the fundamental attribution error to highlight the weaknesses of Latisha’s reasoning and then propose an alternative explanation.
  4. Abraham Maslow suggested that “a person who is lacking food, love, and self-esteem would most likely hunger for food more strongly than anything else.” Conversely, the novelist Dostoyevski wrote, “without a firm idea of himself and the purpose of his life, man cannot live even if surrounded with bread.” What evidence from the field of psychology might support each statement.
  5. Andy, a high school sophomore, lacks self-discipline, fails to plan ahead, and is excessively anxious. He is quickly frustrated by challenging tasks and frequently becomes overly critical of others. Use the psychoanalytic, humanistic, and social-cognitive perspectives to give three contrasting explanations of Andy’s behavior.
  6. Geraldo, a second-year college student, is so fearful of medical procedures that he has avoided routine dental checkups for over three years. He has recently decided to seek help in overcoming his fear. Compare and contrast (what are the similarities and differences) the methods that would be used by (a) a behavior therapist and (b) a psychoanalytic therapist.

Describe at least two ways you could take advantage of people’s use of the availability heuristic to boost sales

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Describe at least 3 policies ANY organization should use to ensure data in the cloud remains private and secure.

The Pentagon (or U.S. Federal Government) recently awarded a colossal cloud computing
contract that might eventually be worth up to $9 billion dollars to 4 companies: Microsoft,
Google, Oracle, and Amazon. The Joint Warfighting Cloud Capability, as it is called, is planned
to be used across all branches of service, for all levels of classified information, and all security
domains. This contract was awarded after a similar contract was awarded to Microsoft, but was
cancelled due to allegations of presidential meddling in the award process. The political issues
have nothing to do with our analyses, so steer clear of those. The new contract was awarded in
Dec 2022.
Now, here we are less than 3 months later… The U.S. Special Operations Command
(USSOCOM) recently leaked 3 TBs of sensitive internal emails via a misconfigured Microsoft
Azure cloud server. The misconfiguration allowed anyone to access this extensive trove of
emails with no uesr ID or password required. Not a hack – since no malicious actor was involved,
but a very unfortunate configuration error. In military parlance, it was a “friendly fire” attack.
Given that these types of issues occur far too frequently in both the government and corporate
• Describe at least 3 policies ANY organization should use to ensure data in the cloud remains private and secure.
• Explain the purpose of each policy you describe.
• Support your arguments with at least 3 external sources total with at least 1
external source for every policy recommendation you make.
• Please describe each policy recommendation in a separate paragraph with a
minimum of 75 words (225 words total)
• Finally do you believe we should be using/storing data with national security
implications in the cloud?
o No external references required for this part, but explain your logic
o A couple of sentences is sufficient
• Provide a bibliography as well
Technical Requirements:

  • Your post must include 3 paragraphs (75 words minimum per policy) and be at least 225 words
    in total length
  • External references are required – a minimum of 3, but be sure to cite all references you use

Read the Case Study information and Watch the 2 videos below. As you watch the videos,
consider the cost of smart city technologies for residents vs. the benefits gained. How long is the
time period extimated to receive a positive Return on Investment (if ever)? Are the benefits
directly attributable to the citizens who foot the bill or are the benifits at a more macro level such
as a state, country, or the world? Using what you’ve learned, do the following:
A. Craft and support an argument either for or against community (a city) investments in
smart city technologies.
B. Additionally, identify the most useful smart technology from a citizen’s perspective
(from the case study only) and explain why it provides the best benefit to the taxpayer.
C. Identify the most useful smart technology from a government perspective (from the case
study only) and explain whether it provides any direct benefit to the taxpayer. Does the city
government’s interest justify expending funds on this technology considering the benefit to the
Be sure to fully support your positions (in both parts A, B, & C) with at least 3 external sources
(total) – these sources can be used to support any of your three arguments, but the textbook is not
considered an external source.
Videos: to an external site.
A “smart city” is a city where the day-to-day processes and the infrastructure of the city are able
to provide real-time data to the city and its citizens, allowing them to better allocate resources
and plan for the future.
Smart cities can be identified using six dimensions: a smart economy, smart mobility, a smart
environment, smart people, smart living, and smart governance. Cities are “smart” when
investments in social capital and infrastructure coupled with wise management of natural
resources fuel sustainable economic development and a high quality of life.
Smart cities focus on Information and Communication Technologies (ICTs). Wireless sensor
networks are one type of ICT. The goal of wireless sensor networks is to create a distributed
network of sensors which measure a host of parameters that allow city management to run their
city more efficiently. Ideally, ICTs will help increase local prosperity and competitiveness.
For example, citizens of smart cities can monitor pollution concentration on their specific street,
and trash cans can send signals when they are close to full. Vehicle traffic and street light usage
can be monitored to optimize city lights dynamically.
In smart cities, people have the tools to quickly and easily get the data they need to make smarter
choices about their energy consumption. All the data in the world is useless without information
systems than effectively communicate that data to users. Using IBM technologies, Dubuque was
able to determine how much water was saved by decreased consumption and leak detection, as
well as precise information about how much electricity individual appliances are consuming.
Users don’t see the back end infrastructure underlying these ICT technologies, which are
increasingly depending on the cloud. Using the cloud has made these technologies integrated
and, more importantly, cheap enough for cities like Dubuque to use to their fullest extent. They
also don’t see the sheer amount of data that they are generating, because IBM’s systems distill
that data into smaller chunks of relevant information that allows Dubuque’s citizens to live
In Portland, IBM created a model that allows city leaders to simulate the impacts of changes to
various utilities. They collected ten years of data and built a model that supports the development
of new metrics and identifies drivers of change for the city’s strategic plan. Using this data,
Portland city officials hope to achieve a 40 percent reduction in carbon emissions by 2030 and an
80 percent reduction by 2050.

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Clay and Wood Use in Creating Objects

Clay and Wood Use in Creating Objects

Wood and clay can create an object higher than their inherent worth. Wood has traditionally been used in various places worldwide to create valuable economically and socially objects. Arts and crafts work of the mid-nineteenth and twentieth centuries mainly involved use of wood, and wooden goods had a high economic value. During the same period, specific proportions of clay, when mixed with water, would yield flexible substances.

Sculptures, objects, and architectural components of wood have historical had significant monetary and cultural value across the globe. Wooden sculptures have, for centuries, been held with significant and economic value during the Romanseque and Gothic periods in northern Europe (Fortuna 14). Varities of woods such as limewood were favored since they allowed sculptors to carve intricate details of the sculpture. Some of the wood varieties are treated with very high value since they are rare, or they hold some qualities that make them unique in creation of sculptures and other valuable items. For instance, Mahogany was discovered as a valuable wood by the European explorers as they toured Carribean Islands, Central America, and South America during the 17th Century (Fortuna 14). The Mahogany wood was discovered to be valuable in creating beautiful furniture due to its beauty and strength. Furniture that was made of mahogany was a symbol of high class social status and wealth (Fortuna 14). It was also possible to the polychrome the wooden objects to enhance the quality and features of the sculpture.

Clay has also been used in a wide range of ways to create objects with significant cultural and economic value. Clay has been used in different historical eras to create cooking ports with different colors, textures, and densities. Clay is flexible and can be manipulated to create a wide range of containers for storing, transporting, cooking and serving wide range goods (Rice 17). Potters wheels were used during different eras in Mesopotamia, Egypt, and Southeast Asia to add esthetic appeal to objects made from clay such as uniform shapes, sizes, and decoration.

Wood and clay have historically been used to create a wide range of products such as sculptors and furniture that have significant economic and cultural value to the users. The products that are made of wood clay have not only preserved the culture but enhanced the economic status of different communities across the globe.

Work Cited

Fortuna, Jennifer. “The Art and Process of Wood Carving as a Meaningful Occupation.” The Open Journal of Occupational Therapy 7.2 (2019): 14.

Rice, Prudence M. “On the origins of pottery.” Journal of Archaeological Method and Theory 6.1 (1999): 1-54.

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The Use Of Spirituality In Nursing Practice

My task is only to give a positive opinion of these 2 discussions from my classmates. In total, I need 2 replies ( each of 200 words ) The 2 discussions are these: 

Discussion # 1 : 

 Spirituality is a major tenet in holistic nursing care and studies have shown that it is important for healthcare professionals to understand as well as assess some of the patients’ spiritual needs. One of the tools that can be used in evaluating spirituality in nursing is the Faith, Importance, Community, and Action (FICA) tool (Büssing, 2021). This tool is based on four domains that is the faith or the belief that a person has, the importance of the belief on the life of the individual and the subsequent influence of the belief on the decision made by the individual, the spiritual community of the individual, and the interventions to address the spirituality. This means that the tool can be used in identifying the spiritual needs of the patients and in the process address them.

The second tool that can be used is the HOPE Spiritual Assessment Tool. The tool is important to nurses in that it helps them understand how a patient derives hope and gets support when they are sick (Büssing, 2021). In addition, the nurse is able to understand the spiritual practices that are important to the patient in order for them to facilitate them. In addition, the tool also helps in understanding the role of spirituality in the decision-making processes of the patient. The third tool that can be used is Spiritual Needs Assessment for Patients (SNAP). This tool is beneficial in the identification of the spiritual needs of the patients and in helping the providers to come up with a framework that addresses the needs of the patient (Siler, Borneman, & Ferrell, 2019). This tool is based on answering questions related to the source of support that the patient gets, the beliefs of the patient, and the spiritual practices that are in line with the patient’s spirituality. These tools are ideal because they assist in the identification of the patients’ spiritual needs based on their beliefs and the impact that the needs have on the healthcare decisions made by the patients.

This discussion is important in helping me achieve the student learning outcomes. The first learning outcome is the ability to critique the nursing conceptual models and the impact that they have in nursing practice. For instance, the discussion helps in studying holistic care in nursing and its impact on nursing research and practice. This means that the theory is instrumental in examining the influence that nursing models have on research and in practice.


Büssing, A. (2021). The spiritual needs questionnaire in research and clinical application: A summary of findings. Journal of Religion and Health60(5), 3732-3748.

Siler, S., Borneman, T., & Ferrell, B. (2019). Pain and suffering. Seminars in Oncology Nursing35(3), 310-314.

Discussion # 2 :

 The integration of spirituality into nursing practice has a long history and is not a recent development. Spirituality is an important aspect of holistic nursing care and has been increasingly recognized as such in recent years. It is defined as the individual’s search for meaning and purpose in life, and includes personal beliefs, values, and experiences that give their lives significance. In nursing practice, spirituality is used to help patients cope with illness, stress, and other life challenges (Rachel et al., 2019). The integration of spirituality into nursing practice has a long history and is not a recent development. In fact, spirituality has been recognized as an important aspect of holistic patient care for centuries.

     Nurses have always recognized the importance of spiritual care in their practice, as spirituality can play a crucial role in the healing process of patients. Nurses have historically incorporated spiritual practices, such as prayer and meditation, into their care plans for patients and have recognized the role that a patient’s spiritual beliefs can play in their overall health and well-being. To effectively assess and address spirituality in nursing care, various tools have been developed and utilized. According to Reinert & Koenig (2018), some of these include:

     Spiritual Assessment Tools

     These are questionnaires or interviews designed to elicit information about a patient’s spiritual beliefs, practices, and needs. Examples include the FICA (Faith, Importance, Community, and Address) Spiritual History Tool, the Spiritual Needs Assessment Tool, and the HOPE (Holistic, Open, Personal, Experiential) Spiritual Assessment.

     Spirituality in Patient-Centered Care (SPIRIT) Model

     SPIRIT Model is a holistic approach to spiritual care that recognizes the importance of spirituality in health and healing. It includes six dimensions: meaning and purpose, connectedness, forgiveness, hope, comfort, and peace.

     The Chaplaincy Assessment Tool

     The Chaplaincy Assessment Tool assesses a patient’s spiritual needs and provides a structure for chaplain intervention in the hospital setting.

     The Sacred Space Assessment

     The Sacred Space Assessment tool evaluates a patient’s spiritual environment and helps to identify ways to enhance the spiritual atmosphere of the hospital.

     The Spiritual Well-being Scale

     The Spiritual Well-being Scale is a self-administered questionnaire that assesses an individual’s sense of spiritual well-being and satisfaction with life.

     These tools are significant and helps to evaluate a patient’s spirituality and guide healthcare providers in addressing their spiritual needs. It is important to recognize that spirituality is a personal and unique aspect of each individual, and therefore, assessment and care should be tailored to meet the specific needs of each patient. Incorporating spirituality into nursing practice can have a positive impact on patient outcomes, promoting healing and promoting overall well-being.


Reinert, K. G., & Koenig, H. G. (2018). Re‐examining definitions of spirituality in nursing research. Journal of advanced nursing, 69(12), 2622-2634.

Rachel, H., Chiara, C., Robert, K., & Francesco, S. (2019). Spiritual care in nursing: an overview of the measures used to assess spiritual care provision and related factors amongst nurses. Acta Bio Medica: Atenei Parmensis, 90(Suppl 4), 44.

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The following research paper is an in-depth examination of marijuana as a drug and its use in the United States.


The following research paper is an in-depth examination of marijuana as a drug and its use in the United States. To sustain the relevance of the information, the research points out the main points and uses statistics from reliable sources. The research will focus on primary sections that include the negative and positive effects marijuana has on individuals. Moreover, the research will discuss the symptoms associated with the withdrawal from the use of marijuana, for example, loss of memory. Addiction is also discussed in the research and the probable means of treating it. It is also clear that marijuana abuse has adverse effects on the brain and it is discussed by capturing the chemical aspect of the harmful process. Finally, the research paper has personal contributions that can be applied in dealing with marijuana abuse. These methods include the use of professionals to prescribe the drug in the states that have legalized its consumption. This avoids cases of addiction and helps curb the adverse effects caused by marijuana.

The following research paper is an in-depth examination of marijuana as a drug and its use in the United States.


Marijuana is currently the most consumed illicit drug in the United States, with users ranging from the age of 12 years. The prevalence of the drug in the United States can be blamed on different reasons that continuously make it accessible to its users. Peer pressure is one of the reasons behind the drug’s prevalence among teenagers. Taking the drug is portrayed as an acceptable and prestigious gesture among peers. As such, many teenagers end up consuming it because they want to relate to what their peers are doing. Statistical studies present marijuana as the most abused illicit drug in the United States with 11.5% of all the citizens in the country abusing it. Since 2002, the drug’s abuse rate has been escalating annually, and the trend has been consistent (Budney, Roffman, Stephens & Walker, 2007). The statistics also reveal that the spread of marijuana abuse is highly occurring in high schools and colleges. Clearly, the schools stand out as the most probable places that the abuse of marijuana prevails because of the gullibility of the students. They are young and curious to try out different substances, including marijuana.

Once people begin abusing marijuana, there are high probabilities that their bodies become addicted to the substance. The chemicals contained in marijuana spread from the lungs to the bloodstream. Sequentially, the chemicals pass through the bloodstreams to the brain where they alter the functionality of the cells. This is why people get used to the drug to the extent of addiction because the chemicals alter the brain’s functionality. An addict is bound to experience severe symptoms, which include a craving for the drug upon withdrawal from the substance. It is also common for a marijuana addict to experience uncontrollable mood swings that affect their thinking and can end up acting in abnormal ways (National Institute on Drug Abuse, 2011). Sleep disruption is also an effect that addicts face upon withdrawing from marijuana. Loss of memory is also an effect commonly experienced by marijuana abusers, and this is attributed to the damaged brain cells upon supplying it with harmful chemicals (Onaivi, 2002).  

Several effects of the abuse of marijuana have been witnessed among the addicts, which is one of the reasons it is viewed as an illegal substance. Addiction is one of the leading effects of abusing marijuana, where the users find it difficult to stop using the drug. Loss of control of someone’s action is a probable effect seen among marijuana abusers. Once a person abuses the substance, they are most likely to consume it in large quantities. In turn, their thinking capacity is impaired and can act uncontrollably. Hangovers are common among marijuana users with many experiencing lazy moments and migraines once the substance subsidizes from the body (Onaivi, 2002). Marijuana abusers are at times associated with immoral acts such as stealing and violence because of the impairment subjected to the brain.

Statistics show that marijuana addicts that seek medical help to quit the drug must have been using it daily. Others have tried to quit, but without any success because the pressure is too much or the environment lacks the proper support for them to stop abusing the drug. Checking into a rehabilitation center is a common treatment that marijuana addicts seek to help them overcome the addiction. At the centers, the addicts are subjected to behavioral therapies and medications aimed at reducing craving for the drug. Contingency management and family-based treatments are also solutions that marijuana addicts are subjected to with an aim of dealing with their addictions for the drug.

Currently, some of the states in the United States have legalized the consumption of marijuana because it has some beneficial aspects that medical professionals have discovered. It is a common drug used among cancerous patients undergoing chemotherapy. The chemotherapy process is intense, and the patients smoke marijuana to calm their nerves after exposure to radiation. Marijuana has also been discovered to relieve muscle pain, which is helpful to various ill people. For example, people suffering from multiple sclerosis can take marijuana to relieve their pain. However, it is a requirement that the patient consumes marijuana meticulously to avoid negative effects such as addiction.

Marijuana is composed of chemicals readily absorbed into the bloodstream upon consumption. Some of the components channeled to the brain induce negative effects to its cells. Delta-9-tetrahydrocannabinol, abbreviated as THC, is a chemical contained in marijuana and highly affects the drug consumer negatively. Once it gets into the brain cells, the chemical creates a euphoric sensation that is transmitted all over the body. The THC also inhibits the brain from forming memories because it affects hippocampus. Upon the release of the THC into the brain cell, the chemical disrupts the function of the cannabinoid receptors. Consequently, the addict’s continuous supply of the THC to the brain cells disrupts the formation of memories (Earleywine, 2002). The addict ends up with blurry images and inconclusive memories about recent activities, especially those moments that unfolded while consuming the drugs.

Marijuana’s prevalence in the United States can be curtailed if the government takes stringent measures to stop its supply. The government is strict about the abuse of marijuana, and for the states that have legalized it, the law is clear that the use has to be monitored by a physician. Indeed, marijuana has advantages that relate to health and has no harm if consumed according to the doctor’s prescription. On the contrary, some people abuse marijuana for entertainment despite the harmful effects of exposure to their brains.


Budney, J. A., Roffman, R., Stephens, S. R., & Walker, D. (2007). Marijuana dependence and its treatment. Addict Science Clinic Practice, 4(1), 4-16.

Earleywine, M. (2002). Understanding marijuana: A new look at the scientific evidence. New York, NY: Oxford University Press.

National Institute on Drug Abuse, (2011). Marijuana. Retrieved on 18 March 2014 from

Onaivi, E. S. (2002). The biology of marijuana: From gene to behavior. New York, NY: Taylor & F

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The Expansion Of Toyota Into Chinese Market Through The Use Of Its Management Model

The Expansion Of Toyota Into Chinese Market Through The Use Of Its Management Model

1.0 Abstract

The modern day business markets exhibit extreme volatilities that make it difficult for their managements to rely on conventional wisdoms and past experiences when trying to effect best management strategies (Uva 2006, p.1).The selection of best management models has called for the top management to carry out intensive research in their organizations to determine their unique needs and challenges. As the effects of modern day globalization continue to pose considerable challenges to the existing management patterns, current managers have been called upon to ‘upgrade’ their skills to cope with the ever changing and demanding business situations.

Though there have been a number of challenges for modern day businesses to overcome, it should be noted that the selection of proper management models to address these challenges has business practically implemented across various business organizations.

This study aims to demonstrate how selection of the best management models can lead to accumulation of a number of benefits for business enterprises. The study selects the expansion of Toyota into the expansive Chinese market through the use of its widely acknowledged management model.

There were various reasons cited for the choice of the model in this market. Some of the key reasons cited in defence of the selection of the model included the need to embrace hybrid technology to answer to the needs of the shifting auto-market towards more fuel-efficient car models. Other reasons cited for the use of the models included the need to reduce on the production costs as well as the need to overcome the stiff competition as posed by Toyota’s rivals amongst them General Motors, Kia Motors, Honda Motors and Ford Motors. 

A variety of challenges stood in waiting for Toyota, having made a late entry into this lucrative but challenging auto-market. Key amongst them were the increasing energy costs that led to the increased costs of production, the few number of skilled manpower that made it difficult to implement the ‘complex’ processes of the model, the very demanding Chinese auto-consumers and the less capital availed to implement the expansion programme.

Towards its end, this study advises on the importance of addressing both the needs of the particular institutions and its business partners when choosing or customizing a particular management model.

2.0 Acknowledgement

This dissertation could not have been successfully completed without the help and guidance of the following groups of individuals who extended lots of valuable assistance in the various stages of the project.

First on the cue, my gratitude goes to the management at Teesside Business School for having introduced this research project amongst its courses. This research has helped me to put my research skills into practice. Also, in availing the course outline in the Project Handbook distributed to each of us, the management ensured that all the course students were fully guided and inspired in overcoming all the obstacles they encountered during the completion of this research project. For this, I also salute them.

In addition, I would like to thank my project supervisor, for having accorded me the necessary support during the preparing and presentation of this research project. His unwavering and moral support was the key to the successful completion of the project.

Many thanks to the 10 primary source respondents in China, who took their time to answer the various questions mailed to them. For showing this gesture, I salute them all.

To my course mates, I say thank you for having given me the needed encouragement. As we “depart” from the institution, I pray that God will open opportunities for us to meet and share our inspirational ideas in future.

To my family and close relatives, I say thank for having provided me with the necessary financial assistance to complete the project. Without your assistance, it would have been impossible to carry out the phone conversations and print the completed versions of this project.

Lastly, for the omnipresent God, I say thanks for having answered all my prayers and having passed on the strength to me to complete this project. For this, thank you Dear Lord. Amen.

Table of Contents

1.0 Abstract_ 2

2.0 Acknowledgement_ 3

3.0 Background_ 5

3.1 Current business environment 5

3.2 Need/Justification for doing the project 6

4.0 Introduction_ 6

5.0 Aim_ 8

6.0 Objectives_ 8

7.0 Literature Review_ 9

7.1 Definitions of management models 10

7.2 Need for management models in business institutions 11

7.3 Management models and their application_ 11

7.4 Management models at successful institutions: Case study of Toyota management model 12

7.5 Components of the Toyota management models 13

7.5.1 The marketing system_ 13

7.5.2 Product development system_ 14

7.5.3 The design management system_ 14

7.5.4 Standardized work sequences 14

7.5.5 Just-In-Time Systems 14

7.5.6 Addressing “customer” needs 14

8.0 Toyotas expansion into Chinese market 16

9.0 Other factors which facilitated Toyota’s entry into Chinese market 17

9.1 The 4P Model 17

Diagram 2 showing the 4P model 18

10.0 Comparison of Toyota and other rivals 18

10.1 Honda Motors 18

10.2 Kia and Hyundai Motors 20

10.3 General Motors (GM) Ltd_ 20

10.4 Ford Motors 22

11.0 Research Strategy_ 22

11.1 The study population_ 23

11.2 Sampling Technique 24

11.2.1 Random Sampling Technique 24

11.3 Main source of Research Data 24

11.3.1 Secondary source 24

11.4 Methods and techniques of Data Collection_ 27

11.4.1 Questionnaires 27

11.4.2 Follow-up phone interviews 29

12.0 Findings_ 30

13.0 Presentation and Interpretation_ 31

14.0 Conclusions_ 35

15.0 Recommendations_ 35

16.0 References_ 38

17.0 Appendices_ 41

Appendix A: Project Report Certification (Sample) 41

Appendix B: Research Ethics Form (Sample) 43

Appendix C. The Chevy Volt electric vehicle, one of Toyota hybrid cars of 21st-century. 45

Appendix D. Sample Research Questionnaire 46



3.0 Background 

3.1 Current business environment       

Today’s business environment has been greatly affected by the increased effects of globalization. These increased effects of globalization have forced international businesses to undergo processes of rapid transforms (Thurman 1993, p.39). For instance, during the period 1970-1990, the total items produced as well as the flow of finance around the globe rapidly increased from 12% to a high of 27% for the produce and 3 trillion to 50 trillion for the financial flows. The increased business transformations have left businesses trying to overcome the many internal and external challenges. Some of these challenges have been fundamental; thus calling for rapid and/or reactive adjustments to be effected by managements of affected businesses. This is in order for them to maintain a competitive status.

 Ideally, even though today’s firms can be said to possess large physical assets and routinely undertake huge investments in fixed plants, research and development, market development, and so forth, the overall success factor seems to boil down to how capable the people in the organization are-in terms of such aspects as spotting business opportunities and mobilizing their own business research initiatives to go after these opportunities (Amdam 1996, p.246). Competent “brain driven” staffs are therefore vital in running modern day industries.

3.2 Need/Justification for doing the project

It is for the above reasons that Teesside university school of business has identified and incorporated a Business Research and Project Module under its key courses to enable its students to sharpen their research skills as well as acquire the relevant knowledge spurring the growth and development of modern day competitive industries. In this module, students are required to demonstrate their unique business research capabilities by demonstrating their abilities to identify and investigate topical management or business issues or problem. The students go ahead to analyse and evaluate relevant information, drawing supportive conclusions and making recommendations for effecting changes.

4.0 Introduction

In a spontaneous attempt to address the recent negative effects of globalization, especially the challenge of increased stiff competition, managers of multinational companies have identified and implemented the use of a growing number of management models (Jonker & Eskildsen 2009, p.2). These models have provided a “stable” theoretical framework that can be used to observe, create and assess a real life organizational ‘situation ‘in order to make desired (future) improvements (Jonker & Eskildsen 2009, p.3).Management models shape the way managers think, manage and run their organizations (Rapid Business Improvement 2007). According to Smith and others (2010), management models combine three elements necessary to develop and systematize a management approach within and outside the company (p.11). These elements include a definition of performance; a set of management objectives; and organizational devices, processes and skills (Smith et al. 2010, p.112).

In assessing the assessing the practical application of management models across various multinational corporations, this business dissertation narrows down to the use of the management model by the world’s undisputed leading auto manufacturer, Toyota, to its new Chinese market.  Toyota’s expansion into the world’s populous and lucrative market of China in 2002 was marked by the use of its Japanese management model that demonstrated how companies (in this case Toyota) can create extraordinary value by fostering long-term, partnerial relationships with their suppliers (Hohn 2009, p.14). In using its management model to expand into China, Toyota’s management recognized that more opportunities existed for cost reduction during product planning than in actual development production and development (Shim et al. 2009, p. 379). In doing this, the company was target costing to facilitate its ability to compete in the competitive Chinese market.

The major component of the Toyota model has been the Toyota Production System (TPS), which, according to Fortune magazine, mainly derived its success from ‘highly experienced managers working unselfishly with a motivated, well trained workforce (Heller & de Bono 2005). The TPS emphasized that production of Toyota models was to solely depend on the preferences of customers and not necessarily machines. In addition to the TPS, other components of the Toyota management model include: The Just in Time (JIT) logistics system and the supplier partnering process (Russo & Zhao 2010).

In selecting to analyze the management model at Toyota, the researcher was motivated by the success-story of the Japanese company that started its business as a little known car manufacturer with a production capacity of only 10,000 vehicles per year in the 1950’s but rose impressively within a half a century to become the undisputed world leading auto manufacturer as of 2006 with an estimated worldwide market share of 15% and sales of 10 million vehicles a year (Paul 2011, p.546). In analyzing this model, the researcher will pay attention to factors facilitating the company’s increasing auto-market share for instance, the reduced costs of ownership for Toyota products.


5.0 Aim

            The research study aims to demonstrate why selecting and implementing best and unique business models can go a great way in ensuring the success of any business enterprise in the current competitive global markets.

6.0 Objectives

The following were the objectives of this project:

  • To clearly define what management models are.
  • To explore into the need for management models across business institutions
  • To select the Toyota management model and study some of its unique features.
  • To highlight more additional factors which have facilitated the growth of Toyota into a world auto-leader?
  • To study how Toyota expanded into the competitive Chinese market using this management model.
  • To recall some of impacts that the Toyota model has contributed to the company, especially in terms of revenue and sales
  • To list as well as analyse some of the challenges that the management has encountered in its efforts to successfully implement the model.
  • To inquire and list some of the benefits that the consumers of Toyota models have derived from the models created using the company’s management model.
  • To provide a comparison of Toyota Motor Corporation and its closest competitors, some of whom include Ford Motors, Kia Motors, Honda Motors and General Motors Corporation. 

        7.0 Literature Review

The following literature review has been done based on the objectives stated above. This literature aims to identify, evaluate and synthesize the established bodies of finalized and recorded works of scholars, researchers and practitioners in this area. In line with the aim and stated objectives above, the following bodies or themes will form the topics of literature review for this dissertation:

7.1 Definitions of management models

Management models, by their definition, are, “a broad range of informal and formal models that are used by organizations to represent various (functional, social, and emotional) aspects of a business, such as operational processes, organizational structures, and financial forecasts (Jonker & Eskildsen 2009, p.3). From another perspective, management models can be looked at as, “referring to formalized and systematic representations of a set of practices (Smith et al. 2010, p. 111).

In summing up the works of 9 scholars, Wimmer (2004), gave a comprehensive definition of business management models as, a description of the following components each of which should be determined contingently considering technological, institutional changes, competitive and macro-economic environments (p.31). Wimmer’s components included the: value model which involved realization of product, information and service qualities; customer model which targeted groups of customers in their various segmentations; activity model which involved strategically positioning the initiated business activities on the industry market and the financial model which specifies the monetary and time costs associated with initiating and sustaining the business. In other words, the financial model estimates the revenues and profits associated with implementing the specific management model in the specific business institution.

On his part, Birkinshaw (2010) gave his formal definition of a management model as “the choices made by the executives of a firm regarding how they define objectives, motivate effort, coordinate activities, and allocate resources”.  From Birkinshaws definition, the following 2 important features can be derived;

  • Management models are mainly concerned with making right choices
  • Management disciplines consist of 4 specific dimensions; defining objectives, motivating effort or the people, coordinating activities and making right decisions.


7.2 Need for management models in business institutions

The need for management models keep on varying from one business institution to the other. According to Jonker and Eskildsen (2009), the need for management models has arose from the fact that many business institutions have currently come to struggle with the question of successfully designing and organizing their new-and often difficult to grasp-dynamic business demands (p.2). The two scholars go ahead to stress that the present day competitive market, and the rapidly increasing societal demands have become imminent and as such called for the need of management models to assist in innovation, renovation and re-invigoration.

Tellingly, management models are needed to help business organizations to realize outcomes such as, products, services, profits and ideologies while taking into account the well being of institutional staffs, customers and the surrounding community members (de Bono & Heller 2004). In addition, Jackson and Mathis (2007) that the most common reasons behind the adoption of management models is to address poor team work and enhance employee leadership, communication and team building amongst others (p. 312).

7.3 Management models and their application

Management models have not been miracle cures in the sense that any institutions that applied them were guaranteed success. Jonker and Eskildsen (2009) noted in their studies that the application of management models was hard work that called for dedication, persistency and courage prerequisites (p.7). The reason why the two scholars arrived at the above was based on the fact that the application of management models brought about other unforeseen consequences for the organization. In this sense, they were not physical in nature (Hohn 2009). Management models do not give complete descriptions of organizations and their contexts but provide condensed versions of reality- that facilitate the management of complexities in organizations (The Boston Consulting Group 2007).

7.4 Management models at successful institutions: Case study of Toyota management model

According to the studies conducted by Hohn (2009), the best-practice models for supply chain management from a performance point of view still remained those based on the Japanese “keiretsu” relations, of which the Toyota management model formed part of (p.14). The “keiretsu” relationships emphasized on negotiations with simple build-to-print component suppliers thus lessening on the anticipated risks (Hohn 2009, p.14).

Hutt and Speh (2009), in highlighting some of the essential requirements of managers using the management model, went on to note that Toyota: 

  • Imposed stringent selection criteria that ensured that every supplier met the model’s requirements in terms of cost, technology and quality (Hutt & Speh 2009, p.19). The Boston Consulting Group (2007) emphasized on this requirement when they stated that Toyota carefully monitored its supplier network and demanded that each senior executive at supplier organization was to be responsible for all performance and quality issues.
  • Retained critical new product development (NPD) and design knowledge in its in-house operations; (Hutt & Speh 2009, p.19) and
  • Took the responsibility of helping its suppliers to develop on their business capabilities. For instance, by regularly performing semi- annual consulting services and quality audits to enhance suppliers’ capabilities. According to the Boston Consulting Group (2007), the company performed quality audits after a period of 6 months across all the suppliers.

Tellingly, the Boston Consulting Group (2007) went on to list the following as some of the additional key tools employed by Toyota in its management model:

  • The company employed proprietary processes to facilitate rapid resolution for the identified quality issues. This prevented the problems from recurring.
  • The company employed a robust network of sharing knowledge. This ensured that suppliers shared that best practices thus enhancing their capabilities. 

7.5 Components of the Toyota management models

The Toyota management model is made up of the key strategy, namely, The Toyota Production System (TPS), also referred to as the Lean manufacturing system. Drawing from Goldsmith (2011) research, The TPS boasts of more than 50 years of experience-leading to its successful adoption and implementation across many business organizations. It has also acted as a basis upon which modern-day management theories have been formulated from.

Hino (2006) identified the following series of functions as the key components of Toyotas Production System:

7.5.1 The marketing system

This consisted of the following related policies; marketing theory and product research & and production engineering research, and comprehensive product planning (Hino 2006, p.174).

7.5.2 Product development system

This was made up of the Shusa or the Chief Engineer system. Under the chief engineer, the following sub systems exist: design and development, individual product planning, production engineering, purchasing, fabrication and sales (Hino 2006, p.174).

7.5.3 The design management system

The design management system incorporates the following aspects: standardization, product diversification or parts minimization, project management, product information management and design reviews (p.174).

From the Kiano’s (1997) keynote address at Kentucky University, the following were identified as the key components that sum up Toyotas TPS; 

7.5.4 Standardized work sequences

These comprised of the repeatable process steps and machine processes or rational methods, work flow or logical directions and reasonable lengths of time and endurance between processes (Kiano 1997, p.4).

7.5.5 Just-In-Time Systems

These ensured flexibility while avoiding inconsistencies across production systems. These systems are based on little or no inventory, supplying the production process with the right part, at the right time, and in the right amount, and first-in-first out flow (Kiano 1997, p.5).

7.5.6 Addressing “customer” needs

This principle emphasized on improving customer relations by encouraging your workforce to practice one-by-one confirmation, listening to your workforce, trusting your workforce and supporting your people (Kiano 1997, p.7).

The Toyota Motor Corporation (2011) emphasized that the TPS was established based on two concepts: the first called “Jidoka” meant “automation with the human touch”. This meant that when a problem was identified in the production system, the affected product stopped immediately to prevent the production of more defective products. The second concept, “Just-In-Time,” meant that each process produced what was only needed by the adjacent successive process. This ensured a continuous flow.

Conclusively, from the above themes, the components of a TPS can be summarised as shown in the below diagram. 


Diagram 1 depicting the various components of the TPS (Source: Toyota Motor Corporation, 2011)


8.0 Toyotas expansion into Chinese market

Before its entry into China, the Chinese auto market was an already competitive market that was dominated by the well established automakers of Kia Motors, General Motors, Honda Motors, Ford Motors, and Isuzu amongst others. At the time of Toyota’s entry in 2002, the Chinese auto industry market was growing at a high of 1 million vehicles a year (Asia News 2005). The market other than being expansive contained customers who had specific demands on the models of vehicles that they wanted.

Chen and Yao (2006) noted that as the world’s second largest automaker at that time, Toyota made a relatively late entry into the Chinese market when it formed a principal alliance with the FAW Group in 2002 (p. 206).The two authors went ahead to aver that though the company had already achieved popular name recognition through its previous automobile exports to the Chinese market, its entry made it to become a follower rather than a leader in China by its virtue of its conservative organizational and corporate structure that majorly emphasized on the use of its management model (p.206). The adoption of the efficient TPS in Toyota’s entry into China was highlighted as a major factor that facilitated the passing of General Motors by Toyota as the largest automobile company in the world during the second quarter of 2007 in terms of sales (Toyota Motors Corporation 2011).

Though many scholars overlook some of the major challenges that Toyota encountered at the time of its entry into the competitive Chinese market, The Asian News (2005) brings to our attention that the company went through a bumpy road in China during its first 7months of entry into this market. For instance, sales of the Vios, one of its top three models in the mainland, had tumbled more than 30%, making it to lag behind the rival models of Honda Motors, Kia Motors and General Motors (Asia News 2005). Though the Japanese automaker was paying the price for its late entry into this populous Chinese market, The Toyota Motor Corporation (2011) noted that the company strategically positioned itself by using the TPS model to attain sales target of 1 million cars in the Chinese market by the year 2010; a target which it surpassed when it recorded a sales output of 1.3 million cars. The Asian News (2011) concluded that the company’s success in the Chinese market was achieved after the company fought its additional challenge: the political risks that were caused by anti-Japanese feelings in China.

9.0 Other factors which facilitated Toyota’s entry into Chinese market

Other than the components stated above in the TPS, the following philosophies, which also constitute part of TPS, facilitated the successful expansion of Toyota into the Chinese market;

9.1 The 4P Model

The 4p model has the following components:

9.1.1 Philosophy

Philosophy requires that all Toyota’s inventions and principles of operation are initiated with the aim of achieving long term success.

9.1.2 Process

The process stipulates that the use of right processes during the production of Toyota models will guarantee right results.

9.1.3 People and their partners

This virtue emphasizes on Toyota adding value to its organization by developing their human resource manpower.

9.1.4 Problem solving

By believing in problem solving, Toyota continuously solves its root problems. This drives the company ahead.















Diagram 2 showing the 4P model

10.0 Comparison of Toyota and other rivals

10.1 Honda Motors

Honda Motors had successfully fought to redeem its earlier perceived “bad” image of being a dominant Japanese motorcycles producer to become a renowned world wider auto producer. According to Chinese association of Automobile Manufacturers (2009), Honda’s first fully-fledged entry in Chinese auto market had come as early as 1982 when the company began to locally produce motorcycles through a technical operation agreement. From there, the company tremendously expanded its auto operations by using marketing strategies that were tailored towards local demands. As of 2005, the company’s had successfully established its presence on the Chinese auto market through two of its core brands, The Accord and the CRV. As such, the company formed a major rival to Toyota’s late into the Chinese market.

Established: January 1982
Capital Investment of: US$100 million 
Capitalization Ratio of:100% Honda Motor Co., Ltd.
Representative: Mr. Atsuyoshi Hyogo, President 
Employment aasociates: Approximately 150 associates 
Where Located: Beijing (Headquarters), plus Shanghai, 
Guangzhou (branch offices)
Business Areas: China’s Regional Headquarters
Investment activities espescially for Honda-related businesses around  China
Importing and selling of Acura auto brands as well as its service parts 

Table 1 showing an overview of Honda’s Chinese investment


10.2 Kia and Hyundai Motors

According to the Kia Homepage (2000), Kia Motors and Hyundai Motors partnership with Jiangsu Yueda Group, a Chinese local partner, to establish a production plant with an annual capacity of 300,000 vehicles marked the successful entry of the Korean auto makers into the Chinese market. The parties in the partnership agreed to adhere to the government regulations especially on the domestically produced vehicle ratio. As such, the parties experienced favorable auto sales growth to present thus posing a stiff challenge to Toyota Motors Corporation.

10.3 General Motors (GM) Ltd

Though GM had experienced reduction in sales as a result of its insistence in producing the highly fuel consuming sports utility vehicles (SUV’s), the USA based automaker continued to sell more cars in the foreign markets, especially China, than its domestic American market (Kelly 2010). For instance, the company made history sales of 1.21 million auto units in the months spanning January 2010 to June 2010 (Kelly 2010).

Though GM had a head start in the Chinese market, Toyota has done its best globally to overtake it as the world’s number 1 automaker and seller.

Below is a comparison of the 5 key categories upon which the two auto giants have been regularly compared. 


Table 2 showing the 5 key categories (Source: Greimel, 2008)
1. Domestic domineeranceToyota
2. Expansion overseasGM
3. TechnologyToyota
4. PartnershipsToyota
5. Corporate cultureToyota











Chart 1 depicting sales battle between GM and Toyota in the last 12 years (Source LS2). 


10.4 Ford Motors

China’s rough terrain plus its growing number of rich citizens have facilitated increased purchasing of Ford vehicles for instance, the Ford Escape. The Ford Escape was well suited to China’s demography in addition to being fuel-efficient. As such, Ford has been able to pose relatively stiff competition on the Chinese market. Also, Ford’s widely praised trend of producing unique car designs that specifically answer to the needs of the “heavily” demanding Chinese auto market have been its key to its success. A comparison of Ford Motors and Toyota would present the following statistics in the Chinese market.

On the production systems, Ford’s system was specifically designed to create huge quantities of vehicles but of few models. On the other hand, Toyota’s production system produced less quantities but of very many models. As such, Toyota had a difficulty in meeting the specific market demands. 

In terms of cash and established market, Ford boasted of a $5 billion at its disposal for Chinese operations. It also had a relatively large market. On the hand, Toyota did not possess the vast resources to match the many economies of scales and the many volumes of inventories at Ford’s disposal.

11.0 Research Strategy

In analyzing how enterprise management models have been successfully implemented across various business settings, the researcher selected to study the successful implementation of the Toyota management model which was used by the company to expand into the populous Chinese market.

In analyzing this model, the researcher chose Toyota’s Beijing offices as the investigative location upon which the company’s top managers and engineers of the TPS formed the core team of respondents who were mailed the questionnaires. Being a survey kind of study, the researcher combined both the conclusive and descriptive research approaches to carry out the study. The conclusive descriptive approach was preferred for this kind of study since it was well suited in answering the core questions of what, who, when, how and where as deduced from the aim and objectives of this study (Housden 2008, p.62). 

                11.1 The study population

The researcher chose a study population of 500 respondents. This study group was constituted by 5 senior managers at the company’s production in Beijing, 45 supervisors and 450 Chinese consumers for Toyota products.

The 5 senior managers were summed up by the company’s CEO, one marketing manager, one human resource manager, one production manager and the chief systems engineer. The researcher selected the 45 supervisors as a measure adhering to the objectivity principles. This is because based on the fact that they were always 100% present at the production sites, they we better placed to provide answers related to the use of the TPS system to enhance production of hybrid models in the Chinese market. The Chinese Toyota products’ consumers in Beijing were incorporated in the study population to help the researcher determine the level of satisfaction derived from using products created based on the TPS model.

11.2 Sampling Technique

11.2.1 Random Sampling Technique

The random sampling technique was used to select a relatively small number of respondents from the study population of 500. The researcher decided to take 20% of the study population as the sample population for study. As such, this meant that out of the 5 senior managers in the study population only 1 (Chief Systems Engineer) made it to the sample.  In addition, out of the 45 supervisors, only 9 made it to the sample. Furthermore, only 90 Chinese consumers of Toyota products out of the 450 made it into the sample. Therefore in total, the researcher had a study sample of 100 respondents. The small number achieved by the sample was so because, the project period being 2 months, it would have been impossible for the researcher to find enough time to travel and carry out the project by involving a large sample. In addition, the researcher, being a mere student at Teesside University, would not have sufficiently accumulated enough financial resources to successfully carry out the project. The chosen sampling technique gave each user an equal chance of being interviewed thus ensuring that objective findings were acquired in this investigative study (StatPac 2011).

11.3 Main source of Research Data

11.3.1 Secondary source

Other than the 10 primary sources highlighted above, the researcher based his findings from the many sources of secondary data that were availed at his disposal. The internet acted as the link between the researcher and the many relevant secondary sources of data availed to the researcher. Advantages of the secondary sources

The researcher in adopting to use the secondary data, he intended to substantially reduce on the high costs he would have incurred were he to major in the use of primary sources to collect data. Housden (2008) emphasized on this advantage when he stressed that secondary data could be gathered quickly and inexpensively. Also, in using this type of data, the researcher intended to exactly narrow down on the specific elements that were vital in answering his identified problem (how companies successively implement business enterprise models). This was possible through formulating questions to be used in the various search engines. In addition, the researcher intended to minimize on the little time that was allocated for him to complete the whole project. As such, he carried out the projects from the comforts of the school cybercafé and on the laptop from his room.

The researcher did not have to worry about informed consents or restrictions arising from human subjects. Finally, the researcher deemed it right to adopt the use of secondary data to avoid tempering with the quality of his research as a result of using primary data which may have been unrepresentative. 

The researcher successfully defined his study sample, clearly defined his study problem and was able to generate various hypotheses from the many topics of secondary sources of data availed at his disposal. As FAO Corporate Document Repository (2011) noted, “the assembly and analysis of secondary data almost invariably improves the researcher’s understanding of the marketing problem, the various lines of inquiry that could or should be followed and alternative courses of action which might be pursued. Setbacks from the use of secondary sources

Whilst the researcher is able to achieve considerable benefits through the use of this source, the following shortcomings were acknowledged as having been derived from the use of the sources.

The researcher encountered a lot of difficulties when searching for information from the internet. For instance, through performing a search on “management models” the following related searches were displayed for him to choose from: strategic management models, human resource management models, risk management models, change management models, cash management models, knowledge management models and project management models amongst others. The many hits as displayed above presented a challenge to the researcher when redefining boundaries.

The researcher was not able to measure or estimate any inaccuracies that may have been involved during the compilation of the many secondary sources of data he consulted. As such, he may have consulted some sources whose levels of accuracy may have been low. 

The authors of some secondary sources may have biased when presenting their pessimistic or optimistic views on the topics at hand. As such, the researcher of this project found it difficult to arrive at a middle ground when consulting such sources.

Some data sources though containing appeasing pieces of literature, appeared outdated in terms of dates of publication. For example, Honda’s entry into China market was documented by some articles as early as 1982. With the ever changing technology that has led to the increased researches, the researcher found it unsuitable to incorporate ideas from such literatures.

11.4 Methods and techniques of Data Collection

11.4.1 Questionnaires

The researcher compiled relevant questions on the topic of study having thoroughly reviewed the existing secondary sources on it. The questions on the questionnaires were carefully structured to reflect the aim and objectives of this study. Based on these objectives, the structured questionnaires addressed themes related to management models, Chinese auto market, Toyota Motor Corporation, the TPS model and challenges affecting Toyota amongst others. In order to generate large amounts of data, the researcher majored in the construction of open ended questionnaires. For instance, in order to receive as many benefits from the users of Toyota vehicles, the researcher required the respondents to list some of the benefits they derived from using Toyota cars.

Having been mailed a list complete with respondents email addresses of the staff Toyota China offices, the researcher randomly selected the 100 sample respondents to answer the compiled questions. He then wrote an introductory letter to request the identified staff to assist in responding to his research questions. The staffs, having responded in the affirmative, were emailed the scanned questions. They were then required to fill by typing in them.

The researcher also requested to be provided with a list, full of addresses, of prominent sellers and customers of the vehicles, from which he randomly sampled the population to respond to the questions. He also, wrote them an introductory letter and requested the identified customers to respond to the research questions. Having responded in the affirmative, the researcher mailed them the questions. Advantages

The researcher received a lot of information from the use of open ended questionnaires. As such, he had to review them at his pace and arrive at necessary conclusions from them.

The researcher was able to gather the responses in a standardized way. In doing so, he was able to improve on the level of objectivity for this project.

Having carefully formulated the questionnaires, the researcher did not have to travel and pose the questions. Instead, he mailed the compiled list of questionnaires to the relevant respondents. As such, he was able to reduce on his time and travel expenses. Also, the researcher was able to completely do away with printing expenses since the questionnaires were mailed as soft copies and mailed back after being filled in soft copies. Shortcomings

Since the researcher did not travel to administer the questionnaires, it was impossible to explain any “unclear” areas or areas misinterpreted by clients. As such, some questions were irrelevantly answered. For instance, when requested to fill their professions, some consumers typed “teach” instead of “teaching”.

The use of open ended questionnaires availed large volumes of raw data from the respondents. The researcher, being alone, found it difficult to process the large of volumes of data.

Some respondents did not successfully respond to all questions. Some questions were left unattended to. The causes of the “gaps” were not immediately traced by the researcher.

Some respondents could only provide one word when responding to a question that required them to provide an explanation or a comment. For instance, when requested to comment on the unique benefits that were possessed by Toyota cars, some respondents just typed “comfort”. This made it hard for the researcher to deduce the exact interpretation of such answers. However, the respondent was to discover later on that some respondents were discontented and suspicious on the mission of the research.

11.4.2 Follow-up phone interviews

In order to seek clarifications on responses that appeared ambiguous, the researcher decided to make follow-up calls. Advantages

The researcher was able to address the challenge of desirability bias that would have occurred were he to make a personal visit to interview the respondents. As Mitchell and Jolley (2009) emphasized, interviews contacted through phone prevented the interviewer from biasing respondents’ responses via subtle visual clues such as frowns, smiles and eye contact (p.268).

The telephone interview enabled the researcher to narrow down on selected samples easily. This would not have been possible with any other survey method (Mitchell & Jolly 2009, p.269).

In addition to the two advantages above, the telephone interviewing proved more convenient, cheaper and consumed less time since it was only used to address sections where clarifications were needed. Limitations

It was not possible to reach certain respondents. As such, the responded had no alternative but to deduce his meaning.

The researcher was limited to asking simple and short questions to save on his limited airtime value.

12.0 Findings

The following were the findings from the questionnaires posted to the Toyota’s top management, the supervisory team and the company’s consumers. Findings from secondary sources have also been incorporated.

When analyzing the questionnaires and the secondary literature for some of the reasons why Toyota decided to implement its management model, the following findings clearly emerged.

  • Toyota wanted to improve on the quality of its models.
  • The company wanted to hold its engineers and top heads accountable for their actions.
  • The company wanted to minimize some of the high costs that were involved in the production of its cars.
  • The company wanted to maintain focus and regularly advance its research and development centres.
  • The management wanted to give direction, measure effectives of its processes and take corrective measures where necessary.
  • The company wanted to provide its top engineers a real tool to be used when coaching or implementing the successive processes.
  • The company wanted to establish a tool that was effective for both its projects and ‘non project’ changes.
  • The company wanted to fight the stiff competition as posed by its competitors.

On researching some of the unique features the Toyota management model contained, the following were listed.

  • The Toyota Production system
  • The Just-In-Time System
  • Jidoka
  • ‘The Toyota Way’
  • The 4Ps

On some of the challenges associated with successfully implementing the model, the following were listed.

  • Increasing costs of raw materials
  • Few expatriate engineers
  • Component breakdown
  • The ever changing consumer demands

On some of the impacts the model has had to the company since its roll-out in China, the following were revealed:

  • The company had rapidly increased its market share.
  • The company’s returns had thrice improved since 2002.
  • The company had been able to develop many hybrid car models.
  • On some of the benefits that the consumers of the Toyota models had derived from the use of cars created using its management model, the following were categorically revealed.
  • Toyota’s car users were able to able to save on their fuel expenditures.
  • Toyota’s users were able to automatically monitor the movement of their vehicles.
  • The users were also able to protect their lives in case occurrence of accidents.

13.0 Presentation and Interpretation

Table3 showing the total number of respondents to various reasons for adopting the use of the management model at Toyota


Reason(s)No. Of respondendents
Improve quality10
Fight competition8
Minimize costs6
Measure effectiveness7
Creation of project tool3


The following chart 2 depicts the above reasons and the corresponding respondents who stated the various reasons.


From the data presented above, it clearly emerged that the main reason why Toyota adopted the use of the management model in its China operations was to improve on the quality of its cars. All the ten primary source respondents listed the reason in the questionnaires. The improvement of quality may have been the primary reason for implementing since as Toyota Motors Corporation (2011) averred, the rising energy prices had rapidly increased the prices of fuel thus creating a shift in demand. The demand for cars shifted from the luxurious high consuming cars to more fuel efficient cars. This was emphasized when the company’s President, Akio Toyoda stated that, “environmentally friendly cars and emerging markets were to be its two pillars of growth globally as from the year 2000 (A1SaudiArabia 2011).

In taking 100 percent to represent the most or the main unique feature of the model and 0 to represent the least, the following depicts the rating of the several unique features identified.

Table4  showing the %-age rating of the several unique features

Unique feature%-age rate
Toyota Way’60


Pie chart 1 showing the %-age rating of Toyota management model features.



From the pie-chart, it was clear that the TPS formed the major unique component of the company’s management model, followed by the Just-In-Time, Jidoka, Toyota Way and the 4P model. This was so because the TPS was the interactive physical system that was created by Toyota to represent its theoretical management model. This system provided the sole unique feature from which other the other listed features were able to provide support services to it.

Taking 10 to represent the most recurring challenge and 0 to represent none, the following table depicts the scores of the various identified challenges.

Increasing costs10
Few Expatriates3
Component breakdown6
Ever-changing consumer demands8


Line graph1 showing the scores of various challenges as displayed above


From the chart above, the increasing cost of production were highlighted as the most prevalent challenge facing the successful implementation of the model. The increasing costs of production may have been caused by the rising energy prices since as Uva (2006) noted when assessing the impacts of the rising energy prices, the rapidly rising energy prices had forced many companies to adopt or to consider adopting one or more energy saving techniques such as, updating the heating or cooling systems for better efficiency, conserving electricity and improving management amongst others (p.1).

14.0 Conclusions

From the analysis done above, it was clear that a number of factors may have facilitated the adoption of the Toyota management model. Though a considerable number of factors were cited as having been behind the leading auto-giant’s adoption and implementation of  its management model, the key factor that emerged from the rest was the rising production cost that caused shifts in auto markets from the highly consuming car models to less and efficient consuming models. The increasing fuel costs were thus behind the adoption of manufacturing hybrid car models by Toyota that went a great lenghth to answering the consumers changed demands.

The Toyota Production System constituted the key component of Toyota’s management system. This key component was supported with other minor features for instance, the Just-In-Time system, the 4P model and the principles contained in “the Toyota way”. 

15.0 Recommendations

From the study conducted above, it clearly emerges that each business is unique when rated in terms of the production challenges it faces. The many differences across businesses are not specifically facilitated by the businesses’ end products but rather by the uniqueness that exist. The following are some of myriad factors upon which these uniqueness may be determined: 

  • varying equipments,
  • layout constraints,
  • buy decisions versus make decisions and;
  • union requirements.

The above factors should be carefully reviewed by any top management when choosing their management models since the selection of ‘right’ management models form the key to the success of any business change process. Choosing of right models can outline the differences between transitions that are easy and smooth and those that cause great deals of strife or conflicts within the specific business enterprises. In general, it is recommended that before selecting the type of management model for any organization, managements should consider the needs of their particular businesses and their other networked suppliers.     This will ensure that the selected model addresses the needs of these two key groups. Managements are also advised that the right management models are those which can allow for customization to cater for the ever changing needs, just as the Toyota management model which was able to allow for customization to address the changing needs of its consumers.

Managements at various business units are also informed that though the use of the various conservation energy strategies have been cited as some of best practices when considering better management, most of the technologies involved always call for huge sums of additional capital both for setting up and upgrading the particular technologies. For instance, the implementation of the Toyota Production System cost the company a set up budget of $ 150million for its set up alone.





















16.0 References

A1SaudiArabia 2011, Toyota shifts focus to emerging green markets, viewed 10 April, 2011, <>.

Amdam, RP 1996, Management education and competitiveness: Europe, Japan and the United States, Routledge, London.
Jonker, I & Eskildsen, J 2009, Management models for the future, Springer, Heidelberg.

Asia News 2005, China: Hard for Toyota to break into the Chinese market, viewed 9 April, 2011, <>.

Birkinshaw, J 2010, Reinventing management: Smarter choices for getting work done, John Wiley and Sons, UK.

Boston Consulting Group 2007, Innovation 2007: A BCG senior management survey, Boston, viewed 8 April 2011, <>.

Chen, J & Yao, S 2006, Globalization, competition and growth in China, Routledge, NY.

Chinese association of Automobile Manufacturers 2009, Honda business in China, viewed 9 April, 2011, <>.

FAO Corporate Document Repository 2011, Marketing research and information systems: Chapter 2: Secondary sources of information, Agriculture and Consumer protection, viewed 9 April, 2011, <>.

Goldsmith, O 2011, Functioning of a Toyota production system, Ezine Articles, viewed 8 April, 2011.

Greimel, H 2008, GM vs. Toyota: Who will rule the next century? Automotive News, viewed 9 April, 2011, <>.

Heller, R & de Bono, E 2005, Thinking managers: Japanese management: Business strategy lessons for the West, viewed 7 April, 2011, <>.

Hino, S 2006, Inside the mind of Toyota: management principles for enduring growth, Productivity Press, New York.

Hohn, M I 2009, Relational supply contracts: Optimal concessions in return policies for continuous quality improvements, Springer, Heilderberg.

Housden, M 2008, CIM coursebook marketing information and research,
Butterworth-Heinemann, Oxford.

Hutt, MD & Speh, TW 2009, Business marketing management: B2B, 10 ed., Cengage Learning, USA.

Jackson, JH & Mathis, RL 2007, Human resource management, Cengage Learning, USA.

Kelly, KC 2010, GM sells more cars in China than in USA, Huliq, viewed 9 April, 2011, <>.

Kia Motors Homepage 2000, Hyundai/Kia Motors to advance into Chinese mainland, Kia, viewed 9 April 2011, <>.

Kitano, M 1997, Toyota Production System, University of Kentucky, Kentucky.

Mitchell, M & Jolley, JM 2009, Research design explained, Cengage Learning, USA.

Paul, J 2011, International business PHI learning Pvt. Ltd, New Delhi.

Rapid Business Improvement 2007, Management models, leadership models, coaching models and business models, London, viewed 7 April 2011, <>.

Russo, B & Zhao, J 2010, How the Toyota way went astray, Global Auto Sources, viewed 8 April 2011, <>.

Shim, JK, Siegel, JG & Dauber, N 2008, Corporate controller’s handbook of financial management 2008-2009, CCH, London.

Smith, NC, Bhattacharya, CB & Vogel D 2010, Global Challenges in responsible business,
Cambridge University Press, Cambridge.

StatPac Inc 2011, Survey sampling methods, viewed 31 March 2011, <>

Thurman, JE 1993, On business and work, International Labour Organization, Geneva.

Toyota Motor Corporation 2011, Toyota Production System, viewed 8 April 2011, <>.

Uva, W 2006, Pricing your products to survive rising energy costs, Cornell University, New York.

Wimmer, MA 2004, Knowledge management in electronic government: 5th IFIP International Working Conference, KMGov 2004, Krems, Austria, May 17-19, 2004 : proceedings,Springer, Heidelberg.



















17.0 Appendices

Appendix A: Project Report Certification (Sample)











  1. I confirm that the work in this Project Report is original and has been carried out by me as part of my programme of study.


  1. I confirm that all secondary material has been properly acknowledged by me and referenced in this work.











Appendix B: Research Ethics Form (Sample)



Please return form with 

Section A completed to:

The Secretary, 

Research Ethics Committee

School of

Section A:   To be completed by the appropriate Project Supervisor or Director of Studies.



Project Title:



Name of Project Supervisor/Director of Studies:


Names of Researcher(s)/Students working on this project:


Please tick type of Researcher:                                                                                                                                                                       
 Taught Postgraduate PG Research Student Staff – higher degree Staff – other research Final Year Under-grad.  Student 

Expected duration of project from:                                                       to:


Aim of Project:





Methods/Procedures (please specify)





Ethical Consideration      The following points have been assessed:

1.  The merit and feasibility of the proposal

2.  Possible discomfort, distress or inconvenience to participants and/or Researchers

3.  Procedures for respecting confidentiality and operating with data protection legislation.

  1. 4.  The implications of monetary or other inducements to University of Teesside, its staff, student or researchers, to participants or anyone else involved. 
  2. 5.   Potential conflicts of interest arising between the researcher’s employment and the research project or other collaborative research.
  3. 6.  All safety risks have been assessed in accordance with the University’s Risk Assessment Procedure and measures taken where appropriate to make them as low as reasonably practicable.
  4. 7    If the research involves human subjects, the following points have also been assessed:

Procedures for:

  1. providing explanation to participants including the preparation of an appropriate information sheet
  2. obtaining informed consent from participants or where necessary from their parents or guardians, including the preparation of a written consent form
  3. 8.  If the work may involve participants from vulnerable groups, the nature of recruitment and participation of these people.
  1. I have read the University’s guidelines on ethics related to research, and to the best of my knowledge and ability confirm that the ethical considerations overleaf have been assessed. I am aware of and understand University procedures on Research Ethics and Health & Safety.  I understand that the ethical propriety of this project may be monitored by the School’s Research Ethics Sub-Committee. 
  2. (Please complete the following as appropriate)    Please Tick
  1.  I have appropriate experience of the general research area.
  • I confirm that I have Research Ethics Training required by my School.
  • I confirm that as Supervisor that I will monitor progress of the project.
  • I confirm that the project complies with the Code of Practice of the following Professional Body:


  • I recommend that the project should proceed without submission to a Research Ethics Committee


Signature of Staff Researcher:    ________________________________________


Date: _________

Signature of Project Supervisor/Director of Studies: _______________________Date: _________       


                   To be completed by Chair of School Research Ethics Committee


As Chair of the Research Ethics Committee of the School responsible for the project, I have read the University’s Guidelines on Ethics Related to Research, and confirm that:

  • The Researcher/Supervisor has received, or has been exempted from University Research Ethics Training, and
  • Appropriate procedures exist for monitoring the progress of the project.


I now authorise the project as recommended above.

Signature of Chair of School Research Ethics Committee::                          __________________________________


Date: _________

As Chair of the Research Ethics Committee of the School responsible for the project I recommend that the project should be referred to the School Research Ethics Committee for approval and a Request for Ethical Approval Form must be completed.

Signature of the Chair of School Research Ethics Committee: 




Date: _________

The Chair of the School Research Ethics Committee must send a copy of an APPROVED Research Ethics Release Form to the Principal Researcher/Supervisor/Director of Studies as appropriate and to: The Secretary, University Research Ethics Committee, Research & Development Office, University of Teesside.  The original of the form should be kept in the School.  A Copy of a REFERRED Research Ethics Release form must be returned to the Staff Researcher or Principal Supervisor/Director of Studies concerned for further action.



Appendix D. Sample Research Questionnaire




Toyota’s Expansion into the Chinese auto-market by use of its management model


Instruction(s): Study the following questions and provide your own responses (Any stated or listed points should be numbered e.g. 1.).

  1. State some of the reasons that led to the adoption and implementation of the Toyota management model when it expanded into the expansive Chinese auto-market.










  1. What are the challenges that the Toyota management faced when implementing the management model in the Chinese market.










  1. What were some of the impacts that were derived by Toyota in the use of the management model in its Chinese market?










  1. Using 5 to represent the most successful results and  1 to represent least successful results, rate (by ticking in the relevant corresponding box) the performance of the Toyota management model in the Chinese market. (to be answered by the Toyota staff only).











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The impact of banning of tobacco use in the US

The impact of banning of tobacco use in the US


The United States government has contemplated the banning of tobacco and its products from within its jurisdiction. The chief reason for the banning is that tobacco and its products negatively affect the population. It is quite clear that smoking harms the smokers, partial smokers and non-smokers. A high percentage o the youth in America use tobacco and are affected just like the old generation. Remedial steps have been taken to reduce the effects of smoking. Smoking zones have for example, been specially reserved in hotels and streets and other public places but these do not solve the problem. It should be noted that banning tobacco will have negative consequences such as denying tobacco farmers their livelihood. 

This essay highlights both the positive and negative effects of banning tobacco and gives suggestions and recommendations on how to deal with the problem of using tobacco and its products. 


The impact of banning of tobacco use in the US


            According to research by various analysts, the abolition of cigarette smoking in public is one of the best undertakings by the US Government. This trend is noted to have begun when smoking zones were set aside for cigarette smokers. This increased demarcation of smoking zones marked the onset of conflict for tobacco manufacturers, control officers and the US Government. This led to an ultimate ban on the use of tobacco. 

             Notable attempts that led to the ban include attempts to secure smoking zones in airplanes, buses and in almost all areas in the surroundings. Later on, restaurants were seen to follow suit, and then buses took the initiative to set aside seats for smokers. All these measures were meant to ensure that non smokers’ health was in no way jeopardized by the few who attempted to smoke in almost everywhere they walked or worked in. In as much the message sent was not to force the smokers to abstain from excessive, the witty smokers in a way grasped the early message being sent by the US government by the horns. 

            Though at that time, there was no proven data that non smokers are greatly affected by the smoke, it is evident that smoking had to be stopped and done immediately. This take was based on the virtue that smoking was a horrifying irritant. Second hand smoking was even reported to be much worse than the first hand one (Pentz, Sussman and Newman 2007).

            In the latter years, the government was able to conduct research on the effects of smoke on health of individuals. Among the health risks noted by Health protection agencies included cancer, asthma among other vital hazards. Centers for Disease Control and Prevention (2009) research, notes that as scientific research went on, the number of areas limited to smoking kept escalating. At this time, even stadiums, schools, conference centers and work places were made compulsory to have smoking zones. According to a journal on public health, Forster, Murray, Wolfson, Blaine, Wagenaar, and Hennrikus (2008), state categorically that, smoking has created enormous problems to outdoor settings from the litter increase on the environment. This was constantly reported by the city council workers, as well as the smoke from the cigarettes which affected children and also was a bad example to them from the picture of adults smoking everywhere.

            This essay will endeavor to critically look at the impacts of banning of tobacco use in the US both on a positive and negative point of view. 



Negative implications

            One of the major impacts of tobacco banning in the US is the degradement of the economy of tobacco producers especially rural economies. According to Pentz, Sussman and Newman (2007), restrictions on production of tobacco and the sale of tobacco associated products has had a massive impact on the economies of those local producing economies. Tobacco farmers have continually grumbled on the loss they have incurred ever since the ban took place. Those that follow suit are the producers, distributors of products of tobacco.  For a long time these farmers have been on the look out for alternative means of survival to no avail. With the experience they have had for a long time on production of tobacco, having bought production equipment and some even constructed factories, they seem not to fit in other sectors of the economy while others are completely negative on the thought of starting from scratch. 

            To have a clear picture of this fact, studies have indicated that over 50 million Americans smoke (Pederson, Wanklin, Bull and Ashley 2007). This ban has gone to an extent of endangering the future of the politics of the party that contributed to the banning of cigarette smoking. Lobby groups on tobacco extraction and processing are very vocal and radical in the US. These companies painfully accepted dropping of tobacco related advertisements as for a long time, this business has been the source of livelihood for many individuals.

            The debate on tobacco use and the economy of US will continually be discussed as a negative impact on the move by the government to ban tobacco. 

            Issues on social justice have also been put across as a negative impact of the ban on tobacco use in the US. Majority of the US citizens- around a fifth of the citizens- have for a long time considered smoking as a recreational activity. According to recent research by Komro, Perry, Murray, Veblen-Mortenson, Williams and Anstine (2006), majority of the low income earners in the US spend majority of their time in parks relieving their supposedly stressful conditions by smoking. Analysts argue that banning of smoking to these individuals is a breach of just and fair means of livelihood by a group of people in the society. Refusal to recreation is considered a potential predicament to evenhandedness in the society. As a result of the same various law suits have been filed to protect this minority few in the society. 

            On a more depressing view, the levels of smoking have gone high in US though the government has continually undertaken endless initiatives to put an end to excessive and unnecessary smoking by its citizens. Though the citizens are much aware of the fatal impacts of smoking especially health risks, they are still smoking tobacco despite the continuous campaigns made against the same.  The government has also responded to this menace by increasing the taxation rates of tobacco related products, creation of higher budgetary allocations on mass education on the cons of tobacco use, creation of termination services among others. Bull, Pederson and Ashley (2004) vehemently utter that this move by government has not produced any good fruits but has acted as a source of new ideas for the upcoming business proprietors of tobacco. 

            Black markets have been created as a result of this move by the government. Crime rates have also escalated thanks to the ban by the government as many unemployed people rely on tobacco for their livelihood. Sale of unlicensed cigarettes is going on in the US behind the backs of the law keepers. This brings us to the argument that banning the tobacco use in the US has instead of protecting the vulnerable children and non smokers, created more health related problems than before. 

            On another point of view, Bull, Pederson and Ashley (2004) have brought about arguments on the validity of the mass awareness on the effects of tobacco and its contribution to the decline in smoking prevalence. They continue to argue that only a few positive feedbacks have been documented on the contribution of public awareness to a decrease in the consumption of tobacco. This move by the government has undoubtedly increased in one way or another, health risks of smoking. Comprehensive studies are yet to be undertaken on this issue and whether changes in outlooks in relation to tobacco smoking can cause a deviation in smoking conducts. The anti-tobacco measures are still not yet understandable and their validity towards inhibiting tobacco use in the US. 

            Anti-tobacco strategies have for a long time impacted negatively on the citizens of US. Harsh resistance and antipathy has been evidenced in the outskirts of US. Many adolescents claim that their freedom has been curtailed and will stop at nothing to gain a piece of the ‘forbidden fruit’. Individual freedom, they say, is a right that needs to be enjoyed by all existing human beings. According to these youths, the government has shifted all its energies towards ensuring that these young adults do not exercise their rightful authority to freedom. 

            The main question is whether this ban creates a restraining impact on the adolescents or stirs up feelings of experimentation in them. Just like the saying goes, forbidden fruit is the sweetest; many youths have resulted into experimenting why many heated debates have been held on tobacco.  Just like Bull, Pederson and Ashley (2004) bring to light; these adolescents will be inclined to react to the reactance hypothesis that states that a behavior that is outlawed tends to attract a huge percentage of cohorts. In response the ban of the tobacco use in the US has result into more of campaign for instead of against. 

            These young adults already hold the notion that smoking is pleasurable, exhilarating and rebellious. Most of them have been reported to indulge into smoking to quench their thirst of knowing why too much campaign is being done on the same. Bit by bit in the name of trial, has led to high numbers of addiction cases to smoking, making the ban on tobacco use more of problem creating rather than solving based on the virtue that prohibited behaviors are the most striking and pleasurable. 

            On an additional distressing note, adolescents have resulted into massive peer pressure campaigns for the continued use of tobacco. This has an exceptionally vast relationship with the above point of forbidden fruit being the sweetest. The anti-smoking policies have been perceived negatively by adolescents whose opinions have for a long time been regarded as irrelevant but seem to claim a high percentage of youths into indulging into smoking.  Research by Pentz, Sussman and Newman (2007) has proven that anti-tobacco strategies are simply passive to the youths.  Peer influence has instead taken toll of these youths who need to shift their attention towards building the nation but are simply not and do not even seem to be on the right track by any chance! The government of the US needs to restructure its policies especially on the marketing of the same so that the youth may have a positive attitude towards the intention of the government towards their well being. 

            It is important that the government notes that the youth are the major beneficiaries of these policies. If implementation of the same has to take place, the government must put in place measures that may sound appealing to the youth and not suspicious that may lead to more experimentation of the forbidden. They may undertake initiatives of appealing to the youth to obey the policies put in place and that peer pressure is the main ingredient towards failure of any individual’s dreams and aspirations. The government should also instill confidence in the youths that reports on the infringement of the policies will be highly appreciated and rewarded. 

            Ultimately, the smoking levels in young adults are set to tremendously decrease.  The government may also undertake introduction of advocacy measures that encourage enforcement of the policies put in place. This may take the form of reporting any issues in relation to tobacco use to the government, assisting the government trace the illicit vendors of harmful tobacco products to minors, conductive massive campaigns on the benefits of abstinence from smoking, being role models to the smokers among others. 

            This ban on tobacco use has led to varying viewpoints among the youth. Those that have managed to stick to their non abstinence opinion have been reported to make angry accusations on the government on its being extremely repressive and majority vowed to fight back at the government in quest to fighting for their curtailed freedom (Flynn, Goldstein, Solomon, Bauman, Gottlieb, Cohen, Munger and Dana 2008).




Positive implications

            On a brighter note, the impact of banning of tobacco use in the US has resulted into lower smoking rates among adolescents. This is according to a recent study by Collins, Sussman, Rauch, Dent, Johnson, Hansen, and Flay (2008) in their journal of Applied Social Psychology, Studies on a sample of Minnesota youths were conducted to establish the effect of anti tobacco strategies and their relationship on smoking rates. From the research, the community was enthusiastic that the youth must take collective responsibility to try by all means to limit the admittance of the youth to tobacco. Factual results are documented as a 7% decrease in smoking per week and 8% per month. From the youth -19-23 years of age- these campaigns have had a positive impact in attempt to decrease the prevalence of tobacco use by the youth. 

            Other studies have also shown that students in various campuses of the US have recorded a reduction in the use of tobacco related products thanks to massive anti tobacco campaigns that hit the television screens every other time of the day throughout the year. In some high schools in California, Chaloupka, and Wechsler (2007), put into check four mechanisms that relate to tobacco smoking. These conditions include embargo of smoking on the neighborhood of the school, focus on education for the evils of tobacco inhale and stress on cessation programs. The resultant rates of smoking after the campaigns   were seen to have a positive impact on the smoking rates, which were reported to greatly reduce. 

            The ban on tobacco use in the US has had a positive influence on safeguarding of adolescent safety. Restrictions on sale of cigarettes to minors have made it a total nightmare for these individual to access cigarettes. This relates to a decrease in the risks they are predisposed to as a result of supposed inhale of tobacco substances. Constant inhibition to these young adults creates an adjustment to non smoking behavior that is obviously exemplary for their health. These adolescents are also face with the fear that if they smoke in public, someone is always on the look out for their misconducts. According to Chaloupka, and Wechsler (2007), if these anti-tobacco strategies are implemented, marketing of cigarettes will completely be forbidden for sale to the young adults under the age of 18. Lower consumption levels of these products have in turn been recorded among the young adults, who have, with time, adjusted to their new way of life, tobacco free.    

            On another lighter note, the ban on tobacco use in the US has created an aura of peace and comfort to its citizens. The streets, parks, buses, restaurants which were previously plagued by smoke are now safe places to be in even with the young children. Interviews conducted after this ban on tobacco use portrays a feeling of relief especially to the city dwellers who for a long time had to deal with fear of succumbing to cancer or even asthma as a result of being continuous passive smokers. 

            Optimistic youths have been seen in the streets advocating for anti-tobacco promotion measures. Some have been seen with petitions that required many signatures for confirmation. Other youths in the society were made to understand the benefits of a tobacco free state and many were convinced to sign these petitions. Additionally, some youths were seen to be very committed towards attending conferences, seminars and workshops that preached against the user of tobacco especially among the young people. Some youths were also positive towards assisting the government towards search on illegal merchants of tobacco to the underage in the society. 

            The police have also witnessed that the youth have improved on their intake of tobacco thanks to the ban on its use (Department of Health and Human Services 2009). From the seminars, many youths have had the privilege of getting a clear picture from elder members of the society on the adverse effects of smoking. As a result, many of them have fret on the use of tobacco for fear of not only being dependent to it but also succumbing to awful illnesses like lung or even throat cancers.


            The topical ban on the US use of tobacco has stirred up mixed reactions among citizens in many states of the country. Just like discussed above this move has had both negative and positive implications on the citizens as well as the country. Though the positions that take the negative implications may seem tom out weigh the positive ones, any citizen of good will automatically agree that this ban is the best the idea the government has undertaken in a very long period of time. 

            Exposure to tobacco smoke has been reduced on a very high rate which is a long term solution to cancers that might have found an appropriate breeding ground. Anti-tobacco strategies have been taken up by the government which has incorporated many youth in quest to abolish the continued use of tobacco by minors. 

            The essay has also shed light on the ban of smoking in designated areas like educational institutions, hotels, conference halls that host so many people. This has been put in place to reduce the number of passive smokers in the environment who according to a comprehensive study by Marcus, Emont, Giovino, Pierce, Waller and Davis (2004) tend to be more vulnerable to smoke related infections unlike the real smokers who seemingly have adopted immune mechanisms to curb their illnesses. 

            Though attempts to keep the flag flying on the ban of tobacco among the youth by the US government is still wanting, plans are underway to ensure that current and upcoming smokers have the correct information regarding their health and ways of stopping the use of tobacco. 

Some of these measures include making it extremely difficult for cigarette smokers to access the daily ‘bread’ by working in conjunction with the youths to ensure that the police are aware of the hideouts of the illegal merchants of the drug. 

            To wrap up the whole deal, it would be healthier to recognize the endless efforts by the US government to initiate advocacy programs that have led to the youth being in a position to know all the dangers that pertain to excessive tobacco use. These programs also enable the youth think of new ideas that will propel the motion of effective ban forward. Thanks to this, many youths have been seen to change their minds on the continued use of tobacco as helpful to taking part in signing of petitions that advocate for complete ban of tobacco use in the US. 





















Bull, S. B., Pederson, L. and Ashley, M. J. (2004).Restrictions on smoking: growth in population support between 1983 and 1991 in Ontario. Canada. Journal of Public Health Policy, 15, 310–328.

Centers for Disease Control and Prevention (2009). Attitudes toward smoking policies in eight states: United States, 2009. Morbidity and Mortality Weekly Report, 43, 786–788.


Chaloupka, F. J. and Wechsler, H. (2007). Price, tobacco control policies and smoking among young adults. Journal of Health Economics, 16, 359–373.


Collins, L. M., Sussman, S., Rauch, J. M., Dent, C. W., Johnson, C. A., Hansen, W. B. and Flay, B. R. (2008). Psychosocial predictors of young adolescent cigarette smoking: a sixteen-month, three-wave longitudinal study. Journal of Applied Social Psychology, 17, 554–573. 

Department of Health and Human Services (2009). Regulations Restricting the sale and distribution of cigarettes and smokeless tobacco to protect children and adolescents; final rule. Federal Register, 61, 44395–44445.


Flynn, B. S., Goldstein, A. O., Solomon, L. J., Bauman, K. E., Gottlieb, N. H., Cohen, J. E., Munger, M. C. and Dana, G. S. (2008). Predictors of state legislators’ intentions to vote for cigarette tax increases. Preventive Medicine, 27, 157–165.


Forster, J. L., Murray, D. M., Wolfson, M., Blaine, T. M., Wagenaar, A. C. and Hennrikus, D. J. (2008). The effects of community policies to reduce youth access to tobacco. American Journal of Public Health, 88, 1193–1198.


Komro, K. A., Perry, C. L., Murray, D. M., Veblen-Mortenson, S., Williams, C. L. and Anstine, P. S. (2006). Peer-planned social activities for preventing alcohol use among young adolescents. Journal of School Health, 66, 328–334.


Marcus, S. E., Emont, S. L., Corcoran, R. D., Giovino, G. A., Pierce, J. P., Waller, M. N. and Davis, R. M. (2004). Public attitudes about cigarette smoking: results from the 1990 Smoking Activity Volunteer Executed Survey. Public Health Reports, 109, 125–134.


Pederson, L. L., Wanklin, J. M., Bull, S. B. and Ashley, M. J. (2007). A conceptual framework for the roles of legislation and education in reducing exposure to environmental tobacco smoke. American Journal of Health Promotion, 6, 105–111.


Pentz, M. A., Sussman, S. and Newman, T. (2007). The conflict between least harm and no-use tobacco policy for youth: ethical and policy implications. Addiction, 92, 1165–1173.

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A better measurement model for post adoption user perception of mobile banking services with a keen interest in the key driving factors for mobile banking services adoption and continued use

A better measurement model for post adoption user perception of mobile banking services with a keen interest in the key driving factors for mobile banking services adoption and continued use



With liberalization and internalization in the financial market and progress in information technology, banks and other service industry players face dual competitive pressures to provide service quality and administrative efficiency. Mobile Commerce is gaining increasing acceptance amongst various sections of the society as a service channel of choice. Mobile Banking, the offering of bank-related financial services via mobile devices, builds a cornerstone of Mobile Commerce. Kenya has in the recent years witnessed tremendous growth in the use of mobile money transfer services. This growth can be partly traced back to technological and demographical developments that have been influencing important aspects of the socio-cultural behavior in today’s world. The need/wish for mobility seems to be the driving force behind Mobile Commerce in general. However, taking it that these recent developments are fueled by technology alone might misleadingly suggest that the adoption of mobile banking is largely based on technological criteria. This study therefore seeks to establish a better measurement model for post adoption user perception of mobile banking services with a keen interest in the key driving factors for mobile banking services adoption and continued use. The study will make use of a descriptive research design where a sample of m-banking services users and potential users will be used as the population for the study. The study will be carried out in two geographical locations; Nairobi and Busia representing urban and rural population respectively. 
















1.0         INTRODUCTION.. 5

1.1         Background of the Problem.. 5

1.2         Statement of the Problem.. 9

1.3         General Objective. 10

1.4         Specific Objectives. 10

1.5         Importance of the study. 11

1.5.1       To Businesses, Investors and Individuals. 11

1.5.2       To the Banks. 11

1.6         Scope of the study. 12

1.7         Definition of Terms. 12

1.8         Chapter summary. 13


2.0         LITERATURE REVIEW… 14

2.1         Introduction. 14

2.2         Mobile Banking Awareness. 14

2.2.1       Employment of Mobile Technologies in the Banking Sector 14 Mobile Accounting. 15 Mobile Brokerage. 16 Mobile financial information. 16

2.2.2       Mobile banking Business models. 18 Bank-focused Model 18 Bank-led model 18 Non-Bank-led model 19

2.2.3       Mobile Banking Regulations. 20

2.2.4       Effect of awareness on Mobile banking usage. 22

2.3         Perceived Security of mobile banking Services. 22

2.3.1       General Security features of mobile banking products. 22

Figure 2.1 GSM components. 23

2.3.2       General Security Concern in GSM.. 23

2.3.3       The risk barrier to m-banking usage in Kenya. 23

2.4         Perceived Usefulness of M-banking products. 24

2.4.1       Match between offerings and need. 27

2.4.2       Pricing vis-à-vis alternate channels. 27

2.4.3       Reliability with respect to informal channels. 28

2.5         Ease of use. 28

2.5.1       Technology Discomfort 30

2.5.2       Self-efficacy. 30

2.5.3       Ease-of-use as a barrier to M-Banking usage. 31

2.6         Chapter Summary. 31


3.0 Research methodology. 32

3.1 Introduction. 32

3.2 Research Design. 32

3.3 Population and Sampling Design. 33

3.3.1 Population. 33

3.3.2 Sampling Design. 33 Sampling Frame. 34 Sampling Technique. 34 Sample Size. 35

3.4 Data Collection Methods. 35

3.5 Research Procedures. 36

3.6 Data Analysis Methods. 36

3.7 Chapter Summary. 37



Appendix 1: COVER LETTER. 44

Appendix 2: QUESTIONNAIRE. 45

Appendix 3: RESEARCH BUDGET. 51

Appendix 4: WORK PLAN.. 51

















ATM:              Automated Teller Machines

CBK:               Central Bank of Kenya

Et al:                (et alia): and others

FIs:                  Financial Institutions

G.o.K:             Government of Kenya

ICT:                 Information Communication and Technology

Ksh:                 Kenyan Shilling

PC:                  Perceived cost

PEOU:             Perceived Ease of Use

PR:                   Perceived risk

PU:                  Perceived usefulness

RAs:                Research Assistants

SE:                  Self efficacy

SMS:               Short message service             

SPSS:              Statistical Package for Social Scientists

TAM:              Technology Acceptance Model
















  2. Background of the Problem

While mobile services and mobile service consumption have lately become a hot topic among information systems and marketing scholars, service providers are putting great efforts to take advantage of the business opportunities offered by wireless technology. This may be due to the fact that value-adding mobile services are becoming increasingly important in gaining a competitive edge in the marketplace (Wang, Guriting, Ndubisi, 2006). 


In the financial services sector mobile banking represents an additional service for certain occasions adding the element of true mobility to Internet banking used over fixed networks. Some bank customers, for example, find mobile banking valuable when being out of home on a country cottage, on the road or in case of acute need for money transfer (Laukkanen and Lauronen, 2005). Indeed, while Internet banking services provide economic benefits for the banks, mobile services serve rather as a way to offer customers value added (Laukkanen et al., 2005). In Finland, already two thirds of the population pays their bills primarily over the Internet (Federation of Finnish Financial Services, 2007) but the adoption rates of mobile phones for banking are in their infancy. 


Kenya’s financial system is among the largest and more developed in Sub-Saharan Africa, with a fairly large banking sector. The sector is a cutthroat business arena, with over 44 players including multinationals all scrambling for a slice of the pie. According to World Bank estimates, the banking sector accounts for up to about 40% of the country’s GDP.  Notable however is the fact that much of the Kenyan banking sector’s activity is concentrated among the richest 20% of the population (World Bank, 2008).


According to Financial Sector Deepening Kenya (2008), the most recent data available indicates that only 19% of adult Kenyans reported having access to a formal, regulated financial institution while over a third (38%) indicated no access to even the most rudimentary form of informal financial service. This leaves more than 80% outside the bracket of the reach of mainstream banking. The population is massively under-banked, largely because more than half of the people in Kenya live in rural areas where banking services are non existent and their earnings are paltry. 


Recent indication of growth in incomes and rapid urbanization in Kenya however is already pushing up demand for banking services. Financial services growth, which was muted in the recent past, is clearly poised for a take-off in Kenya, on the back of a strengthening economy, advent of technology and systematic reforms of the sector.


An appropriate banking environment is considered a key pillar as well as an enabler of economic growth (Koivu, 2002). Initially, banks in Kenya responded to the growing demand for banking services by opening up new bank branches at the grass roots closer to their potential customers. However, with the continuously emerging wave of information driven economy, the banking industry in Kenya has inevitably found itself unable to resist technological indulgence in order to meet customer needs. Koivu asserts that the need for convenient ways of accessing financial resources beyond the conventional norms has seen the recurrent expansion and modernization of banking patterns. Given the huge demand for finance oriented services, even institutions beside the historical banks such as the mobile phone service providers have joined the fray in an attempt to grab a piece of the perceived cake of opportunity within the banking industry.


The challenging business process in the financial services pressurized banks to introduce alternate delivery channel to attract customers and improve customers’ perception. Electronic Banking or simply e-banking due to its flexibility and perceived convenience has increasingly become the distribution channel of choice for most retail banks. E-banking is an umbrella term for the process by which a customer may perform banking transactions electronically without visiting a brick-and-mortar institution (FinCen, 2000). E-banking encompasses the use banking services delivery channels such as ATMs, telephone, use of plastic money, mobile phone banking and electronic funds transfers.


According to the GSM Association and Ovum, over the last few years, the mobile and wireless market has been one of the fastest growing markets in the world with over 2.4 billion cell phone users and it is still growing at a rapid pace. In Kenya, there are more than 20 million mobile phone users slightly over half the population of the country (KNBS, 2009). 


The unprecedented uptake of mobile phones in Kenya and rapid absorption of mobile-based banking services is of vital significance. This trend of continued reliance on mobile devices to execute monetary transactions is steadily gaining momentum. Mobile Banking or simply M-banking is one of the newest approaches to the provision of financial services through ICT, made possible by the widespread adoption of mobile phones even in low income regions of Kenya. 


Mobile banking takes several dimensions of execution all representing a new distribution channel that allows financial institutions and other commercial actors to offer financial services outside traditional bank premises. M-banking services in Kenya started with the creation of mobile phone sms services by banks. These services included Top-up of mobile phone air time, Minimum/Maximum Threshold Balance Notification, Bills payment, Overdraft notification, Fraud alerts and notification, Daily transaction limit notification, Monthly transaction limit notification, Daily balance notification, Account debit notification, Account withdraw, Transaction status updates for non real time transactions, Loan process status updates, Loan transaction summary, Monthly interest summary etc. These facilities were aimed at enabling customers’ access information relating to their accounts. 


Subsequent innovations have seen the mobile banking phenomena continue to grow steadily in Kenya. M-PESA, a mobile money transfer service for instance is one such land mark innovation. M-PESA was first piloted in 2005 where the service was used to disburse loans from a Faulu Kenya to its clients and then to collect repayments via designated Safaricom airtime agents. The commercial version of M-PESA was launched in early 2007 and its success paved the way for numerous mobile banking schemes. Today, different institutions and business are offering m-banking services in Kenya. Some are offered entirely by banks, others entirely by telecommunications providers, and still others involve a partnership between a bank and a telecommunications provider. Regulatory factors play a strong role in determining which services can be delivered via which institutional arrangements (Mortimer-Schutts, 2007).


The mobile banking services are available to mobile phone users of the three main mobile service providers namely Safaricom, Zain and Econet wireless. Safaricom’s service is branded “Mpesa”, Zains service goes by the “Zap” brand name whereas Econet’s services is called U-Cash. The other mobile service provider Telkom wireless/Orange is also expected to roll out its mobile banking service in the course of time. Partnership between Banks and these telecommunication firms to develop mobile applications is in top gear. Products such as M-Kesho of Equity bank’s, Family Bank’s Pesa Pap, and Standard Chartered Bank’s mBanking are just but a few m-banking applications arising out of these partnerships.


While mobile banking applications are rapidly gaining popularity within the banking sector in Kenya, there is not enough evidence of its acceptance amongst consumers. Robinson (2000) reported that half of the people that have tried e- banking services would not become active users. Another author claims that e-banking is not living up to the hype (Weeldreyer 2002). According to Njenga (2009), the effects of usage associated with mobile phone banking in Kenya are yet to be consolidated or quantified in a well-documented fashion.


Lee and Lin (2005) highlighted the need for further research to measure the influence of e-service on customer-perceived service quality and satisfaction (Ibrahim et al, 2006). The perception is formed as a result of interpreting the customer’s experience with the services. (Hiltunen et al., 2002) notes that there is a growing interest in understanding the users’ experience since it has been observed to be a larger concept than user satisfaction. This study seeks to ascertain the users’ perception of M-banking in Kenya by considering four factors; perceived usefulness, perceived ease of use, consumer awareness about m-banking and perceived risks associated with mobile banking. The study aims at examining the impact of these four factors in the move to embrace m-banking in Kenya.


  1. Statement of the Problem


The pervasiveness of the mobile phone in developing countries has recently instigated the development of applications, which are designed to enhance customer service. One of the most recent is m-banking—a platform for the delivery of financial services via the mobile phone. The main concern within the m-banking literature however is related to its adoption. Many studies pose the question of whether or not these applications have the potential to be appropriated by a large segment of the population. Mols et al., (1999) stated that the diffusion of any form of e-banking is more determined by customer acceptance than by seller offerings. According to Bauer et al (2005), Customer satisfaction and customer retention are increasingly developing into key success factors in e-banking. Any form of e-banking requires perhaps the most consumer involvement, as it requires the consumer to maintain and regularly interact with additional technology. Consumers who use e-banking use it on an ongoing basis and need to acquire a certain comfort level with the technology to keep using it (Servon and Kaestner, 2008) hence the need for regular feedback about their experiences.


Research on consumer attitude and adoption of e-banking showed that there are several factors predetermining the consumer’s attitude towards e-banking such as person’s demography, perceived risk, ease of use of the service and ones behavior towards technology. It has also been found that consumer’s attitudes toward e-banking are influenced by the prior experience of computer and new technology (Laforet and Li, 2005. 


Though customer acceptance is a key driver determining the rate of change in the financial sector, empirical studies on what may be hindering total embrace of e-banking by customers have been few (Sathye, 1999). To date, there is very little empirical work examining the customer experience and adoption of m-banking applications in Kenya and discussing the numerous barriers to this process. This survey therefore seeks to bridge that gap by establishing what the users’ perception of the mobile banking products is and what are the main driving factors towards/against the use of the mobile banking products in Kenya. Besides, this study is founded on the knowledge that assessing user experience is an essential part of any new technology product and services particularly in a highly risky and competitive industry such as banking. 


  1. General Objective


The general objective of this study is to determine customers’ perception of the various mobile-banking services in Kenya. 


  1. Specific Objectives


  1. To assess the customers’ level of awareness and their knowledge about m-banking services.
  2. To establish the customer’s perceived ease of use of the m-banking services.
  3. To establish customers perceived usefulness of the mobile banking services/products in Kenya.
  4. To determine customer say regarding the risk associated with use the m-banking services.





  1. Importance of the study


  1. To Businesses, Investors and Individuals


The survey will also provide a platform through which users and non-users of mobile banking services will voice their concerns and complements. So far, there are no clear channels through which consumers of potential consumers of m-banking services can voice their concerns and therefore this study will present them with that much needed platform.


  1. To the Banks


This research may help banks to better strategize and better see the future opportunities relating to m-banking. The findings of this study will help decision makers in the banking sector to identify gaps between their expectations of the mobile banking services and the actual customers’ experience. This will go a long way in assisting banks understand better their customer needs and in designing other mobile products and services hence offering better services to their customer, an important ingredient of strategic advantage. 

1.5.3 To the Government

Through the Central Bank of Kenya, the Government could greatly benefit from this study. The findings and recommendations could help the Government to better tap and fully explore the opportunities of the mobile Banking models and assist in establishing any missing regulatory needs necessary for the smooth running of these services.

1.5.4 To Academicians and Researchers

For this group, the outcome of this research will inspire further research in the area. It can constitute a starting point of reference and a source for secondary data for further scrutiny in the area. More importantly, the study will at least fill a knowledge gap in that the findings and conclusions will identify some important factors that would affect the adoption of mobile banking in Kenya. As for students of finance and banking and Marketing, this study will be of great help as it will assist them to clearly understand the concept of mobile banking and its applicability. 

  1. Scope of the study


The key intention of this study is to evaluate those factors that determine the perception of retail banking customers towards mobile-banking products in Kenya. The study will focus on the m-banking customers around Nairobi area and the survey will be conducted between the month of June 2011 and July 2011.


  1. Definition of Terms


  7. E-Banking -The process by which a customer may perform banking transactions electronically without visiting a brick-and-mortar institution (FinCen, 2000)


  1. M-Banking -The use of a mobile phone or another mobile device to undertake financial transactions linked to a client’s account (Anderson, 2009)


  1. Mpesa –  Mobile money transfer service provided by the leading mobile phone service provider Safaricom (Indrani M. et al, (2009).     


  1. Mkesho– Equity banks’ m-banking product that link customer account Mpesa service. (Indrani M. et al, (2009)


  1. Customers– Consumers and potential consumers of Mobile Banking products




  1. Chapter summary


This study seeks to offer an insight into the customer experience with the mobile banking services in Kenya that has not previously been investigated. It focuses on customers’ perception of the various mobile-banking services in relation to usefulness, ease of use, risks and customer awareness of m-banking. The study recognizes the prior research efforts to establish the status of mobile banking usage in Kenya but builds on these findings by seeking the customers’ feedback on the usage of the services. A survey based on the objectives of the study will be conducted between the month of February 2011 and March 2011 in Nairobi.


The subsequent chapter reviews the existing literature on the concept of mobile banking and consumer adoption of m-banking products and Chapter three is a narrative of the research methodology.





















  2. Introduction


This chapter presents a review of the literature related to the purpose of the study; “Towards Mobile Banking in Kenya- a customer perspective”. The chapter is organized according to the four specific objectives developed in the previous chapter which include assessing customers’ level of awareness and knowledge about m-banking services and establishing customers’ perceived usefulness and ease of use of the m-banking services/products in Kenya. Finally, chapter discusses customers view regarding the risk associated with use the m-banking services. At the end of the chapter, a chapter summary is provided to give an overview of the related literature review and a description of what the next chapter will cover.


  1. Mobile Banking Awareness 


  1. Employment of Mobile Technologies in the Banking Sector


According to Tiwari, Buse and Herstatt (2006), a cornerstone of Mobile Commerce is built on Mobile Banking which is the provision of bank-related financial services via mobile devices. It comprises of services in the field of accounting, brokerage and financial information. He further notes that Mobile Banking is increasingly being employed by many banks around the world to generate additional revenues, reduce costs or to increase customer satisfaction, often with greater success.


Unlike in the past, when banks offering mobile services suffered a severe setback due to lack of customer interest and unripe technologies, the time seems to be now ripe for (re-)launching mobile services(Tiwari R., et al 2006). Mobile Banking is usually defined as carrying out banking business with the help of mobile devices such as mobile phones or PDAs. The offered services may include transaction facilities as well as other related services that cater primarily to informational needs revolving around financial activities.


  1. Mobile Accounting


Mobile Accounting is sometimes characterized as transaction-based banking services that revolve around a bank account and are availed using mobile devices (Georgi and Pinkl 2005). Not all Mobile Accounting services are however necessarily transaction-based. A more precise definition of Mobile Accounting would therefore characterize it as “availment of account-specific banking services of non-informational nature (Tiwari et al). Mobile Accounting services may be divided in two categories to differentiate between services that are essential to operate an account and services that are essential to administer an account.


Table 2.1: Services in Mobile Accounting

Mobile Accounting
Account Operation Account Administration
Money remittances & transfers Access administration
Standing orders for bill paymentsChanging operative accounts
Money transfer to sub-accountsBlocking lost cards
Subscribing insurance policiesCheque book requests

Source: Tiwari R.,et al (2006)


  1. Mobile Brokerage


Brokerage, in the context of banking- and financial services, refers to intermediary services related to the bourse, e.g. selling and purchasing of stocks. Mobile Brokerage can be thus defined as transaction based mobile financial services of non-informational nature that revolve around a securities account (Georgi and Pinkl, 2005). Mobile Brokerage, too, may be divided in two categories to differentiate between services that are essential to operate a securities account and services that are essential to administer that account. (Georgi and Pinkl, 2005).



Table 2.2: Services in Mobile Brokerage

Mobile Brokerage
Account OperationAccount Administration
Selling & purchasing financial instruments (e.g. securities)Access administration
Order book administration

Source: Tiwari et al (2006)


  1. Mobile financial information


Mobile Financial Information refers to non-transaction based banking- and financial services of informational nature (Tiwari, R. and S. Buse). Mobile Financial Information services include subsets from both banking and financial services and are meant to provide the customer with anytime, anywhere access to information (Georgi, F. and J.Pinkl 2005). The information may either concern the bank and securities accounts of the customer or it may be regarding market developments with relevance for that individual customer. 


According to Georgi and Pinkl (2005), this information may be customized on the basis of preferences given by the customer and sent with a frequency decided by him. The information should be provided, ideally, on both, pull and push basis. Information services are an integral part of Mobile Accounting and Mobile Brokerage but they may also be offered as a stand-alone, independent module, i.e. Mobile Financial Information can be offered without offering Mobile Accounting or Mobile brokerage but vice versa is not feasible.


Table 2.3: Services in Mobile Financial Information

Mobile Financial Information
Account InformationMarket Information
Balance inquiries / Latest transactionsForeign exchange rates
Statement requestsMarket and bank-specific interest rates
Threshold alertsCommodity prices
Returned cheques / cheque statusStock market quotes and reports
Credit card informationProduct information & offers
Branches and ATM locations
Helpline and emergency contact
Information on the completion status

Source: Tiwari et al. (2006)


  1. Mobile banking Business models


A wide spectrum of Mobile/branchless banking models is evolving. However, no matter what business model, if mobile banking is being used to attract low-income populations in often rural locations, the business model will depend on banking agents, i.e. retail or postal outlets that process financial transactions on behalf telecoms or banks (Wambari, 2009). The banking agent is an important part of the mobile banking business model since customer care, service quality, and cash management will depend on them. Many telecoms will work through their local airtime resellers. In Colombia, Brazil, Peru, and other markets however, the use of pharmacies, bakeries, etc as agents is common. These models differ primarily on the question that who will establish the relationship (account opening, deposit taking, lending etc.) to the end customer, the Bank or the Non-Bank/Telecommunication Company (Telco). Another difference lies in the nature of agency agreement between bank and the Non-Bank (Infogile, 2007). Models of branchless banking can be classified into three broad categories; Bank Focused, Bank-Led and Nonbank-Led. 


  1. Bank-focused Model


The bank-focused model emerges when a traditional bank uses non-traditional low-cost delivery channels to provide banking services to its existing customers (Infogile, 2007).  In this model the technological/physical infrastructure of a mobile operator / retailer is used to provide some basic banking services like balance enquiry, A/c to A/c fund transfer, payments for goods / services at merchant outlets using bank account (through ATM/ Debit card / Phone SMS ). Most of these services are already being provided by banks and are covered under existing regulations. So this model poses little specific regulatory issues (Infogile, 2007).

  1. Bank-led model


According to Ratha., Sanket and Vijayalakshmi, (2009), The bank-led model offers a distinct alternative to conventional branch-based banking in that customer conducts financial transactions at a whole range of retail agents (or through mobile phone) instead of at bank branches or through bank employees. This model promises the potential to substantially increase the financial services outreach by using a different delivery channel (retailers/ mobile phones), a different trade partner (Telco / chain store) having experience and target market distinct from traditional banks, and may be significantly cheaper than the bank-based alternatives. 


The bank-led model may be implemented by either using correspondent arrangements or by creating a partnership between Bank and Telco/non-bank (Infogile, 2007). In this model customer account relationship rests with the bank. This model is, therefore, prone to agent-related risks. These agent-related risks can however be mitigated by making banks fully liable for actions of their agents and by giving regulators power to review agents’ record of bank-related transactions


  1. Non-Bank-led model


In this model, customers do not deal with a bank, nor do they maintain a bank account. Instead, customers deal with a Non-Bank firm—either a mobile network operator or prepaid card issuer—and retail agents serve as the point of customer contact (Infogile, 2007). Here, the bank does not come into the picture (except possibly as a safe-keeper of surplus funds) and the non-bank (e.g. Telco) performs all the functions.


Customers exchange their cash for e-money stored in a virtual e-money account on the non-bank’s server, which is not linked to a bank account in the individual’s name. 

This model is riskier as the regulatory environment in which these non-banks operate in Kenya does not give adequate importance to issues related to customer identification, which may lead to significant risks. Further the non-banks are not much regulated in areas of transparent documentation and record keeping which is a prerequisite for a safe financial system.

  1. Mobile Banking Regulations Existing Regulatory Framework for Financial Sector in Kenya


Understanding the legal framework governing the mobile banking activities in Kenya require a deep look at the development of M-pesa, a pioneer mobile banking service in Kenya. Prior to the launch of M-PESA services in Kenya, Safaricom sought authorization from the Central Bank of Kenya (CBK) to undertake the money transfer service. In evaluating the proposal, the CBK considered the request on the basis of safety, reliability and efficiency of the service (Sirken, 2009). Two CBK departments had been involved in this effort. The Financial Institutions Supervision Department (FISD) is responsible for the prudential regulation of banks and deposit-taking MFIs. Its primary concern regarding M-PESA was whether the operator (Safaricom) is stretching or even breaking the rules for the business of banking. 


By contrast, the National Payment System (NPS) Division of the Banking (which focuses on the integrity, effectiveness, efficiency, and security of the payment system) viewed M-PESA as a payment service provider. The NPSD were more willing than the FISD to permit experimentation with the non bank based model of m-banking (CGAP, 2007). Interestingly, in Kenya telecommunications regulations require that a mobile network operator offer only the telecommunication services listed in its license and m-banking falls under the definition of telecommunication service in the law. Hence, Safaricom stand was therefore that service should be listed in the license agreement. However, the primary regulator with respect to a mobile network operator’s m-banking activities will be the banking regulator. (CGAP, 2007)


Precautionary measures were however put in place to ensure that the services did not infringe upon the banking services regulatory framework as provided for under section 2(1) of the Banking Act. Specifically, the proceeds from issuing e-money are held by M-PESA Trust Company Limited in trust for the clients in a pooled account with the Commercial Bank of Africa. Any interest earned on this pooled account cannot benefit Safaricom (without triggering the definition of “banking business”); use of interest proceeds is currently under consideration. Customer claims against M-PESA Trust Company arising from negligence or intentional wrongdoing by the trust company or by Safaricom shall be covered by Safaricom. In addition, caps on the maximum account balance (about US$ 750) and maximum transaction size (about US$ 530) provides CBK with additional comfort because they limit the risks of money laundering and the amount any individual customer could lose in case of insolvency. (CGAP, 2007) 


Table 2.4 Legal and regulatory mobile banking related issues in Kenya

Legal /regulatory issuesNon-bank based
KYCAccount opening (both on site and remotely) while maintaining adequate “know your customer” (KYC) standards. Domestic and international transfers of funds are not subject to specific KYC rules.

Maximum limit of


KES 50,000 per M-PESA account per day and a transaction limit of KES 35,000 per day in order to mitigate against settlement risk
AML/CFTAML bill 2007
E-money issuanceKenya has no laws, regulations or policies dealing directly with e-money
Payment systemThere is no law in Kenya expressly governing the payment system.

Source:  Ratha. Et al. (2009)





  1. Effect of awareness on Mobile banking usage


For the adoption of e-banking in general, it is necessary that banks make their customers aware of the availability of such a service and explain how it adds value relative to other ways of conducting banking services (Sathye, 1999). In their study Kuisma et al. (2007) found that some Internet banking non-users suffered from a lack of information and felt that they had not received enough information or help from the bank concerning Internet banking services resulting uncertainty toward the service. 


Jayawardhena and Foley (2000) noted that the information about the services provided should be detailed enough and easily available on the web pages. Indeed, in order to enable customers to perform transactions individually it has been found to be important that the information is available before but also during the usage of the service (Filotto et al., 1997). 


Acording to Indrani M. et al, (2009), the level of awareness about availability and features of m-banking services affects the way in which potential users adopt (or not adopt) these services. 21 out of 30 subjects in the Philippines, 11 out of 23 in South Africa and 22 out of 26 in India had never heard of m-banking channels. Among the subjects who were aware, the perception was that the service would be expensive because it involves the use of technology (Indrani M. et al, 2009).


  1.  Perceived Security of mobile banking Services


  1. General Security features of mobile banking products


Security features of mobile banking apps are based on the GSM (Global System for Mobile Communication) technology via which mobile phones communicate (Ananda F. and Kiptum J. , 2008). GSM is a cellular network which means that mobile phones connect to it by searching for cells in the immediate vicinity. 


Figure 2.1 GSM components


Source: Ananda F. and Kiptum J., (2008)

  4. General Security Concern in GSM


Despite the elaborate technological structure of the GSM network and the security measures put in place, there are various security concerns with this technology. According to Michael W. (2000), GSM networks only provide access security and do not address active attacks. He further asserts that the technology lacks user Visibility and poses a challenge in upgrading the cryptographic mechanisms. 


  1. The risk barrier to m-banking usage in Kenya


The risk barrier refers to the risks consumers encounter or perceive in innovations. Fain and Roberts (1997) point out that marketers should keep in mind that risk is rather a perception of a consumer than a characteristic of a product. Some customers, for example, are afraid that they may make mistakes when conducting their bank affairs using a mobile phone (Laukkanen and Lauronen, 2005). In mobile banking especially the data input and output mechanisms are argued to impede the banking process creating feelings of insecurity (Laukkanen and Lauronen, 2005). 


Mobile phones may also be limited in computational power, memory capacity and battery life limiting the usage of mobile services in complicated business environments (Siau and Shen, 2003). Other aspects of perceived Risk in mobile banking may further be broadly classified into Agent-Related and E-Money Risks. 


According to Siau and Shen (2003), agents Related Risks arise from substantial outsourcing of customer contact to retail agents. From a typical banking regulator’s perspective, entrusting retail customer contact to the types of retail agents used in both the bank-led and nonbank-led models would seem riskier than these same functions in the hands of bank tellers in a conventional bank branch. These retail agents may operate in hard-to reach or dangerous areas & they lack physical security systems and specially trained personnel. The lack of expert training may seem a particular problem if retail agents’ functions range beyond the cash-in/cash-out transactions of typical bank tellers to include a role in credit decisions.


E-Money Risks relates to acceptance of repayable funds from retail customers by Non-Bank entities that are not subjected to prudential regulation and supervision. Risk is that an unlicensed, unsupervised Non-Bank will collect repayable funds from the public in exchange for e-money and will either steal these funds or will use them imprudently, resulting in insolvency and the inability to honor customers’ claims. 

  1. Perceived Usefulness of M-banking products


Perceived usefulness is defined as the degree to which a person believes that using a particular technology will enhance his or her job performance. People tend to use or not to use an application to the extent they believe it will help them perform their job better – (Davis et al., 1989). Phillips and colleagues defined perceived usefulness as; the prospective adopter’s subjective probability that applying the new technology from foreign sources will be beneficial to his personal and/or the adopting company’s well-being”. (Phillips et al., 1994). Perceived usefulness explains the user’s perception to the extent that the technology will improve the user’s workplace performance (Davis et al. 1989). This means the user has a perception of how useful the technology is in performing his job tasks. This includes decreasing the time for doing the job, more efficiency and accuracy.


A significant number of studies have shown that perceived usefulness is an important antecedent of computer utilization (Davis et al., 1989; Davis et al., 1992; Igbaria & Iivari, 1995; Keil et al., 1995; Satzinger & Olfman,1995; Igbaria et al., 1996). In these studies, perceived usefulness has proven to be the stronger of the two TAM variables (perceived usefulness & perceived ease). Taylor & Todd (1995) tested a decomposed TPB model, in which they found that for business environments, perceived usefulness had a strong direct effect on an individual’s intention to utilize an IT product. The researchers provided support for Davis et al. (1989) argument that in a real work environment, behavioural intentions are based primarily on performance-related elements, rather than on the individual’s attitude towards the behaviour (Taylor & Todd, 1995a). 


Since behavioral intent depends on cognitive choice, a potential mobile banking user for instance can either respond favorably or unfavorably towards engaging in m-banking. Meaning, the “like/dislike nuance” would be based on whether the tradeoff is beneficial to the potential mobile banking user as opposed to other banking service channels. Partly, this study believes that the power to attract mobile banking user lies in the technology’s usability and usefulness. This is inline with Davis (1989) who defines the latter as perceived usefulness (PU), i.e. the belief that using the application would increase one’s performance. In this context, the performance would be centered in the benefits of obtaining banking services via mobile phone minus the trade off of a physical banking practice. 


In the past, researchers have validated the construct of PU and they were found to influence the intention of potential user of e-commerce such as internet shoppers. However, study on Internet retailing from the TAM perspective is limited; nevertheless the PU construct still garnered tremendous support from many other technological applications. For example, Horton et al. (2002) asserted the existence of a positive influence of PU on intention in Intranet media. Additionally, Agarwal and Prasad (1999); Chau and Hu (2002); Davis, et al.(1989); Hu et al. (1999); Igbaria et al. (1995); Igbaria (1993); Mathieson (1991); Mathiesonet al. (2001); Moon and Kim (2001); Ramayah et al. (2002); Venkatesh and Davis (2000)also reported that PU is Significant and positively influences the behavioral intent. Hence, it is expected that:


Empirical support for the relationship between usefulness and attitude has been provided by a number of studies (Adams, Nelson & Todd, 1992; Mathieson, 1991). Although these studies have been limited to job-related contexts where few information system alternatives are available, perceived usefulness attributes, such as convenience, intuitively apply to the competitive e- service context. This view has been supported by the marketing literature findings that convenience, saving time and money, being in control and avoiding interpersonal interaction are some of the benefits that customers seek in self-service technology (Reardon & McCorckle, 2002; Meuter, Ostrom, Roundtree & Bitner, 2000; Dabholkar, 1996; Bolton & Drew, 1991; Zeithaml, 1988). This relationship has also been recently observed in the context of e-service use (Gefen, Karahana & Straub, 2003; Chen, Gillenson & Sherrell, 2002; Bhattacherjee, 2001a; Bhattacherjee, 2001b; Karahana, Straub & Chervany, 1999; Kenney, 1999). 


Some studies found strong support for perceived usefulness during post-acceptance stages (Gefen et al., 2003; Karahana, et al., 1999) other studies offered only mild support (Bhattacherjee, 2001a; Bhattacherjee, 2001b). This paper expects a positive association between the user beliefs about the usefulness of M-banking services and their continuance intentions. Aspects of m-banking services that influence customers’ perception of the usefulness of the m-banking product include the matching between the m-banking product and the customer need, pricing and reliability of the product with respect to informal channels (Indrani M. et al., 2009)


  3. Match between offerings and need


According to Indrani M. et al, (2009) there were often issues of the mismatch between the m-banking product offer and the user need. In South Africa, for instance, According to Indrani M. et al, (2009) found out that there was no strong a need for domestic remittance, instead 5 out of 7 Wizzit users, were migrant workers from Zimbabwe, who expressed a strong need for international remittances yet  WIZZIT in South Africa was only offering domestic remittances. In Kenya, while airtime purchase was offered via M-PESA, none of our respondents, even those who actively used M-PESA for money transfers had begun buying airtime through the m-payment channel .When asked why, they said the ‘bamba’ prepaid talktime cards were so easy to get and use. For them, that was “enough” (Indrani M. et al, 2009).


  1. Pricing vis-à-vis alternate channels


The pricing of the m-banking service with respect to other formal and informal remittance channels available in a location, was a determinant of how our subjects adopted and used the m-banking service (Indrani M. et al, (2009). In Kenya, one of the reasons for some users to shift to M-PESA for remittance transfers was because it was half the price of the formal alternative, i.e. the postal money order that they were currently using. For transacting with or between the unbanked, compared to the nearest formal, secure alternatives, M-PESA was lower cost, though it remains more expensive than using informal channels like family or friends. On the other hand in the Philippines, 9 out of 30 subjects mentioned that they would prefer to use the local bus line because it costs less (Indrani M. et al, (2009). They could simply hand over cash in an envelope to the driver traveling in the direction of the recipient’s location. In the case of 7 out of the 9 subjects, this transfer had no explicit cost given that the driver was a friend or a family member of the sender or the recipient.

  2. Reliability with respect to informal channels


In their studyMobile-Banking Adoption and Usage by Low-Literate, Low-Income Users in the Developing World”, Indrani M. et al, (2009 established that subjects in South Africa and Kenya would use WIZZIT and M-PESA respectively because of the reliability these m-banking services provided compared to informal channels. 8 out of 34 subjects described sending money through friends and relatives had no explicit cost, but sometimes the money never reached the intended recipient. Instead, with m-banking, doing the transfer directly to the recipient’s phone and receiving confirmation for the same did not leave any uncertainty on whether the money had reached the intended recipient or not.


  1. Ease of use


This refers to the degree to which a person believes that using a particular technology will be free of effort. Perceived ease of- use closely parallels with the concept of complexity (Davis, 1989; Teo and Pok, 2003), defined as the degree to which an innovation is perceived as difficult to understand and use (Rogers, 2003). Users may believe that a given application is useful, but they may, at the same time, believe that the technology is too hard to use and that the performance benefits of usage are outweighed by the effort of using the application (Davis and Arbor, 1989). Phillips and his colleagues defined perceived ease of use as ‘the degree to which the prospective adopter expects the new technology adopted from a foreign company to be free of effort regarding its transfer and utilization’. (Phillips et al., 1994, p. 18,). Perceived ease of use explains the user’s perception of the amount of effort required to utilize the system or the extent to which a user believes that using a particular technology will be effortless. (Davis et al.,1989)


Similar to PU, Perceived ease of Use (PEU) plays a major role in e-commerce. Much of previous researches have established that perceived ease of use is an important factor influencing user acceptance and usage behaviour of information technologies.  According to the Ram and Sheth’s (1989) consumer resistance framework, ease of- use as barrier to adoption of technological innovation comes into operation when the innovation is not well-suited with existing workflows, practices or habits. Laukkanen et al. (2007) suggest that in the case of technology intensive services the ease of- use barrier could be connected to the usability of the service and the changes it requires from the consumers. Internet shopping for instance is surmised to have beneficial outcomes, yet the hassle of engaging in the interaction medium (i.e. website) could prove to be daunting for some consumers. In short, the PEU is associated with the “user-friendliness” of the website. If the hassle proves to outweigh the benefit of purchasing through the net, then potential Internet shoppers would prefer to purchase through conventional channels. 


One of the factors that contribute towards the unfriendliness of some websites of Internet retailers is long download times. Additionally, poorly designed forms might cause potential e-shoppers to loose focus of their carts and purchases. In other words, these barriers reduces the perception on the ease of use of Internet shopping, therein, allowing Internet user’s to develop a negative attitude. In turn, this leads to Internet shopper’s unwillingness to engage in Internet shopping. 


Similarly, this study anticipates that potential mobile banking users who find the products difficult to use are likely to shun the products.


Mobile services are getting increasingly complex and enhanced with new characteristics such as personalisation and context-awareness, new usability challenges are being raised. Indrani M. et al, (2009) notes that there is significant variation in users’ ability to conduct the m-banking transaction on their mobile phones themselves. Despite having their own M-PESA accounts, for instance, 3 of 8 M-PESA users transacted on their account only through peers or their local agents (Indrani M. et al, 2009). They did not access the application on their own device, instead handing over their money and sometimes their phone to a peer or agent, and having them perform the transaction. 


The two main factors effecting perceived ease of use in the usage of mobile banking are Technology discomfort and self efficacy.


  1. Technology Discomfort


Technology discomfort (TD) is the tendency of an individual to be uneasy, apprehensive, stressed or have anxious feelings about the use of a technological product; Is a similar construct to computer anxiety, a variable that has been found to have a negative effect on perceived ease of use (Venkatesh, 2000). The extended model proposes a similar link between technology discomfort and perceived ease of use and also a link between technology discomfort.


  1. Self-efficacy


Self- efficacy is defined as a person’s belief about their ability to organize and execute courses of action necessary to achieve a goal (Bandura A., 1977). Recent studies have provided empirical support for the relationship between self-efficacy and technology usage. Hill et al. (1987) showed that computer self-efficacy is an important determinant of an individual’s decision to use computer technology. In a different study, Compeau & Higgins (1995) found self-efficacy to play an important role in determining computer usage, both directly and through outcome expectations.

 Igbaria & Iivari (1995) found self-efficacy to have a strong direct effect on perceived ease of use. In another study, computer self-efficacy was found to have a positive effect on both perceived ease of use and perceived usefulness (Venkatesh, 2000; Wang et al., 2003). It was hypothesised that perceived self-efficacy regarding confidence in one’s ability to use Self Service Banking technologies (SSBTs) would have a positive effect on an individual’s judgment about the usability of an SSBT. 

  1. Ease-of-use as a barrier to M-Banking usage


The ease-of-use is related to the usability of the service and the changes it requires on the part of the consumers. Siau and Shen (2003) note that whilst mobile devices demonstrate a greater extent of mobility and flexibility compared to personal computers and laptops, the small screens of mobile terminals and tiny multifunction keypads are cumbersome to use further inhibiting data input and output.

 Earlier literature on mobile banking shows that smaller screens are adequate in information-based services but services requiring transactions call for bigger screen size (Laukkanen, 2007). For example, bill payment via mobile phone is perceived to be quite difficult and time-consuming by some consumers as the device enables only a limited amount of information processing and hence the whole bill is not visible on the display (Laukkanen and Lauronen, 2005). 

Moreover, in their qualitative study Laukkanen and Lauronen (2005) report that those mobile banking services that do not require PIN and TAN codes, such as request for account balance service, creates convenience, ease of use and efficiency to the service consumption.

  1. Chapter Summary


The chapter presented the literature and recent studies in the areas of Mobile Banking and user perception. Starting with a brief introduction to the chapter, this chapter explored literature on M-banking models and classification of m-banking services. The chapter then discussed the four main aspects of M-banking that affect the customer perception of M-banking products as a whole with reference to recent studies in this area. 

Having reviewed the relevant literature in the area of m-banking and customer perception, the chapter that follows will capture the research methodology and describe in details the methods and procedures that will be used to carry out this study. 


3.0 Research methodology

  1. 3.1 Introduction


This chapter outlines the method that will be used for the study and adopts the following structure: research design, population and sample, population description and data collection methods. Described also in this chapter is the research instrument used as well as the data analysis techniques.

  1. 3.2 Research Design

The research design to be used in this study is a descriptive design. The cross-sectional survey design will be used. This design entails the collection of data of more than one case and at a single point in time in order to collect a body of qualitative or quantifiable data in connection with several variables which are then examined to detect the patterns of association (Bryman 2001). According to Burns and Bush (2010), a descriptive research design is a set of methods and procedures that describe variables. 

Churchill and Brown (2007) consider a descriptive research design as typically concerned with determining the frequency with which something occurs or the relationship between variables. Descriptive study investigates these variables by answering who, what, where, when and how questions (Cooper and Schindler, 2001). Further, Cooper and Schindler (2001) consider descriptive research as versatile and popular in business research. Descriptive research is conducted to describe the features of relevant groups, such as customers, organizations, or market areas; to estimate the percentage of units in a specified population exhibiting a certain behavior; to determine the perceptions of products or services characteristics; to determine the degree to which variables are associated and to make specific predictions


The survey research design is the most appropriate for this study, as it allows for the description, interpretation, of existing relationships and comparison of variables under study. In surveys, bias is also less likely if subjects are randomly assigned to treatments, and if subjects and researchers are blind to the identity of the treatments.

  1. 3.3 Population and Sampling Design
  2. 3.3.1 Population

A population is an entire group of individuals, events, or objects having in common observable characteristic (Mugenda and Mugenda (2003). Cooper and Schindler (2008) on the other hand define a population as the total of the elements upon which inferences can be made. From a population, a sample which is usually a representative sub-set or microcosm of the population is drawn.

In this study, the population will comprise users and potential-users of the mobile banking services drawn from Nairobi, Kenya.  Generally, the respondents will be individuals who have been exposed to mobile phone usage. Thietart, et al. (2001), define a target population as one for which the study results will be generalized through statistical inference while the study population is one that is operationalized in order to have clear criteria to determine the elements included or excluded.


  1. 3.3.2 Sampling Design


Sampling involves selecting individual units to measure from a larger population. Sampling presents several benefits to the researcher. The three main advantages of sampling are that the cost is lower, data collection is faster, and since the data set is smaller it is possible to ensure homogeneity and to improve the accuracy and quality of the data. According to Adèr, Mellenbergh, & Hand (2008), researchers rarely survey the entire population for two reasons; the cost is too high, and the population is dynamic in that the individuals making up the population may change over time. 

  2. Sampling Frame

A sample frame is a list of elements from which the sample is actually drawn and is closely related to the population (Cooper and Schindler, 2008). According to   Saunders, Lewis, and Thornhill (2007), a sample frame is a complete list of all the cases in the population from which the sample is drawn. The list could of geographical areas, institutions, individuals, or other units (Churchill and Brown, 2007). 

In this study the sample frame will comprise one representative mobile money transfer product; Mpesa, and account related m-banking services offered by two major banks in Kenya (equity and Family bank). In cases of account related services, the participating banks will help identify the service consumers and potential customers whereas in the case of the money transfer service, respective dealers will help identify the users of the services. 

  1. Sampling Technique

A sample is a group from the population that will be representative of the population (Coopers and Schindler, 2008). Sampling is the technique of selecting elements from the population that will represent the population (Collins and Hussey, 2006). 

A stratified random sampling (probability sample) technique will be engaged to identify sample elements in this study. Stratified random sampling is the probability of selection in which units are randomly sampled from a population that has been divided into categories or strata (Bryman, 2008). 

There are several potential benefits to stratified sampling; first, dividing the population into distinct, independent strata can enable researchers to draw inferences about specific subgroups that may be lost in a more generalized random sample; utilizing a stratified sampling method can lead to more efficient statistical estimates (provided that strata are selected based upon relevance to the criterion in question, instead of availability of the samples and finally, since each stratum is treated as an independent population, different sampling approaches can be applied to different strata, potentially enabling researchers to use the approach best suited for each identified subgroup within the population.

On receiving the sample respondents from the various sources as outlined above, the researcher will randomly select the actual respondents. The respondents will be stratified according whether they are consumers of the m-banking services or whether they are non-consumers, services consumed/likely to be consumed and then within these strata, individual elements will be randomly selected in order to ensure that each respondent has an equal chance of being chosen.

  1. Sample Size


The sample size of a statistical sample is the number of observations that constitute it. A cording to Thietart, et al (2001) a sample size is the set of elements from which data is collected. The sample size enables the researcher to have adequate time and resources in piloting and designing the means of collecting data. The sample size ensures that the information is detailed and comprehensive. 

Due to some resource constraints especially associated with time and finances, a sample size of 170 respondents will be used. The sample distribution will be as follows:


 M-Banking ServiceNo. of respondents% of the sample Size
Mkesho(Equity Bank)4018
Pesa-pap! (Family Bank)3014
SMS Banking4018


  1. 3.4 Data Collection Methods


Data will be collected using a structured questionnaire written in English and which will be developed and organized on the basis of the research’s specific objectives. The structured approach has been preferred so as to ensure uniformity is achieved in the responses. The respondents will be served the questionnaire through drop and pick methods. The method was chosen because of the limited time and financial constraints. 

  1. 3.5 Research Procedures


A pilot test on 5 percent of the sample size will be first conducted. The pilot test adhere to the fundamentals attested by Cooper and Schindler (2008), who define a pilot test as a tool that should be administered so as to detect weaknesses in the research design and the instruments. In the same optic, Kumar (2005) defines a pilot study as a study which is carried out to determine its feasibility. It is also referred to as feasibility study. A defined time period of three days will be offered for the pilot test. The questionnaire will be redesigned on the basis of the feedback that the researcher will receive. Respondents in the pilot test will be requested to highlight any ambiguous or duplicated questions, to point out if wording is clear, if all questions could be interpreted in the same way by respondents or if there is any research bias. The final version of the questionnaire (which will be part of the appendices of the project) will be administered to the respondents selected in the sample size excluding the respondents who participated earlier in the pilot test. At the end the final questionnaire will also comprise a cover letter clarifying the purpose of the research. 

The researcher will get some assistance from his undergraduate colleagues (Research Assistants) who have a business background and all between junior and senior year of study. The research assistants (RA) will first be trained on the various aspects of the research instruments. Time span to carry out the entire study will be six months. The first four months will be used to develop the proposal, the fifth month will be for data collection, and the last one will be used for data analysis, discussions, conclusions, recommendations and finalization of the entire report. 


  1. 3.6 Data Analysis Methods


The collected data will be statistically analyzed using the Microsoft Excel spread sheet program and the Statistical Program for Social Scientists (SPSS). Editing of the data will be undertaken before data analysis. Using the cited statistical tools, frequency tables, cross tabulations, percentages, variance, standard deviations, and regressions will be generated to analyze the respondents’ measure to the various aspects elaborated in the questionnaires. Tables, pie charts and bar graphs will be used to present the data to enable ease in the understand ability, analysis and interpretation of the results. 


  1. 3.7 Chapter Summary


This chapter essentially described the research methodology that will be used to carry out this study. The population is defined and the sampling technique, and sample size have been described. The chapter further discussed the method that will be used to conduct the research. Also discussed in this chapter are data collection methods and the instruments to be used. The chapter also highlighted the research procedures. The chapter concluded with the data analysis methods which the researcher will use to analyze the collected data, and make conclusive remarks on the study.

Having discussed the methodology to be used in this study, the chapter that follows will present the findings of the study. 


















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  1. Appendix 1: COVER LETTER


Friday, 7th 2011.

Dear Respondent,


In partial fulfillment of the requirement for the degree of Masters of Business Administration (MBA) at USIU, I am carrying out a research to establish the level of user satisfaction/perception of the mobile banking services in the Kenyan market. 


Sir/Madam, I would be very grateful if you kindly completed the enclosed questionnaire which will be used to collect the data relevant to the study. That would go a long way in helping me successfully conduct this study. You have been randomly selected among many to participate in this study and it is estimated that it will take less than ten (10) minutes of your time to complete the questionnaire. If you have any questions or concerns about completing the enclosed questionnaire, please do not hesitate to contact me any time through my contact provided below.


I assure you of the highest level of confidentiality in your participation in this exercise. Your views, comments and expectations will be treated with confidentiality and as such will not be used for any other purpose other than for which they were sought.

Thank you for your continued cooperation and support.

Yours Sincerely,

Mr. Onyango Polycap Okumu,


Tel : 0721827107

  1. Appendix 2: QUESTIONNAIRE


  1. Appendix 3: RESEARCH BUDGET 




Materials (Outlining & Drafting papers)

Typing and Printing

Stationary, Photocopying







Questionnaires printing/photocopying (450 copies @Ksh 20 each)


Travelling Expenses








Coding entry and analysis

Editing fee

 Printing of Final Project Drafts






Printing 5 copies(100 pages each) @ 1500 per copy

Binding @ 500 per copy












  1. Appendix 4: WORK PLAN
 ActivityTime Frame
1Development of Draft ProposalSeptember 1st , 2011Dec ember 1st, 201113 weeks
2Pilot TestingJanuary  17th, 2011January 21th, 20115 days
3Data CollectionJanuary 24th, 2011February 11th , 20113 weeks
4Data entry and editingFebruary 15th , 2011February 17th, 20113 days
4Data AnalysisFebruary 18th , 2011February 25th, 20111 weeks
5Writing of Discussions, Recommendations, and ConclusionFebruary 26th, 2011March 5th 20111 week
6Finalizing the Entire ProjectMarch 7th , 2011March 8th , 20112 day
7Binding of the ProjectMarch 9th , 2011March 9th , 20111 day



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Advantages and Disadvantages of Expanding a Business through the use of Franchisees.


A franchise can be described as a business agreement in which the franchiser (business owner) allows others (the franchisees) to own as well as operate a business on his/her concept and trade name. According to Tassiopoulos (2009), franchising is a proven business strategy developed by a franchisor that permits the franchisee to make use of its established trade names, propriety business strategy, and methods of carrying out business; in return for a recurring payment that involves a given percentage of gross profits or gross sales, along with a yearly fee.

 The concept of franchising has over the last couple of decades expanded internationally and has now become a common entry mode for numerous establishments. According to Tassiopoulos (2009), franchising comes along with advantages and disadvantages, with the underlying advantages and disadvantages being able to be presented at a domestic and international level. This particular paper therefore seeks to discuss the advantages and disadvantages of expanding a business through the use of franchisee. 

One of the biggest advantages offered as a result of expanding a business through the use of franchisees is self-funding expansion. According to Talloo (2007), a franchiser is able to expand the business rapidly without incurring much additional cost since the initial costs of creating and providing the franchise such as launch support, training, intellectual property rights, software license and site selection are normally recovered by the franchisee. Additionally, investment requirements to open each business operation, including vehicles and staff recruitment, lease, store fittings, is undertaken directly by the franchisees.

 The ongoing costs of marketing, promotional activities, sales, websites, ongoing communications, providing support and managing the franchise network are also met by an ongoing management service fee provided by the franchisee, normally as percentage of the franchisee’s turnover. The only costs met by the franchisor are that of the overheads that are not met by the franchisee’s opening franchise fee (Moschandreas, 2000).Franchising as a business expansion strategy therefore requires less capital outlay compared to other business expansion strategies. Additionally, as a result of the self-funding expansion, franchisers find it easier to open multiple units, thus, gaining the competitive advantage on any prospective competitors. The multiple developments of units increase the firm’s advantage within the marketplace.

Marks & Spencer, one of the United Kingdom’s leading retailers of home products, clothing financial services and food represents an example of internationally franchising firm. Marks & Spencer opened its first store in Greece in the year 1992, working in partnership with the Marinopoulos Group, a company having business interests ranging from pharmaceuticals and supermarkets to multimedia (Marks & Spencer Company Website,2011).Marks & Spencer has now approximately 155 stores that are managed under franchise in 28 regions, mostly in Asia, Europe, Middle and the Far East, as well as stores in Hong Kong, Ireland and a United States supermarket group, King supermarkets. This has helped them exploit the potential of the Marks & Spencer brands within their local territories (Marks & Spencer Company Website, 2011).


Another advantage offered as a result of expanding a business through the use of franchisees is in terms of risk minimization. According to Li-Tzang & Kansas State University (2007), previous research has indicated that franchise arrangements arise largely out of the need to share risks. Investing in a new a business is normally risky and most studies reveal that more than 90% of new investments fail within 3 years. Franchising substantially reduces the possibilities of business risks. 

As highlighted by Spencer (2010), a franchisor is able to plan for these business risks and is able to reduce their exposure through contractual stipulations such as performance standards, clauses that shift legal responsibilities to the franchisees, restrictions on the use of intellectual assets as well as reporting requirements. The franchiser is also able to use a contract form as well as its provisions not only to protect the brand, but also to protect his/her business against risks of conflict or failure in the relationship.

Moreover, franchising allows franchisers to maintain their control over profitable units with more predictable returns while shedding fairly risky locations with uncertain revenues. To a franchise business therefore, franchising, implies spreading business risks by increasing the number of locations through the franchisees’ (other people’s investments).This implies faster expansion of networks and a better opportunity to put focus on the changing market needs, which in turn means reduced effect from business competitors (Tassiopoulos,2009).

Tesco, a UK supermarket brand present an example of a firm that has employed franchising to help it minimize business risks. The supermarket opened 18 franchise stores outside the UK and has seen it and the franchisees share the cost of opening the stores as well as the subsequent profits (Fletcher, 2010).

A franchisor also accrues the benefit of rapid expansion and increased market strength bye using the investment money provided by the franchisees. As a business growth strategy, franchising enables an existing firm to rapidly expand in terms of the number of outlets for its products and services without investing excessive capital or practical managerial input (Tassiopoulos,2009). This means that the franchiser is able to have his business expand rapidly with minimal capital outlay as compared to the cost of opening up new branch offices. At the same time, the franchiser does not loose his/her control over the products, marketing and delivery as in the case of a licensed agreement. Franchising therefore gives the franchiser an easier opportunity to exploit various geographical areas that would not otherwise be within reach. 

An aspect of the rapid expansion of such firms as a resulting of franchising and increase its sale is that the expanded business as a whole gains market strength. The enhanced market strength often comes with advantages, including bulk buying from various suppliers of products and services. This business expansion strategy has made it possible for giant firms like MacDonald’s and Marks & Spencer to grow rapidly, while at the same time, increasing their market strength globally. For instance, McDonald’s chain of fast food restaurants has currently more than 2000 outlets globally, with only 25% being company owned. According to Moschandreas (2000), MacDonald’s reliance on widespread franchising has been a strategy that the firm has taken on after some experimentation given the fact that the proportion of the firm-owned stores increased from 9% of the total number of stores in the year 1967 to 33% in 1976. 

Expanding a business through the use of franchisees also offers operational benefit to the franchisor. Franchised firms are normally larger in terms of outlet numbers. In international operations, distance and time increases uncertainty levels due to the information gap (Whitehead, 2010). It is therefore difficult and expensive to gather as well as receive information about foreign business operations on time. In addition, cultural differences may also increase the cost of gathering information. Franchising therefore offers the franchisor with an opportunity to have a smaller central organization instead of owning locations themselves. As a result, franchisers are able to easily manage their operations even within foreign markets and with minimal investments.

Franchising also implies standardization of procedures, which reveals consistency, enhanced productivity levels in addition to better quality. As highlighted by Whitehead (2010), global franchising has proven to be a significant strategic option in the foreign expansion of UK mixed retailing businesses. It offers firms with opportunities to gain access to foreign markets within minimal investment and high returns. For Marks & Spencer, one of the United Kingdom’s leading retailers, franchising plays a pioneering role.

Another significant advantage accrued by a franchisor as a result of expanding a business through the use of franchisee is the higher return on investment. The high return on investment is normally due to the less capital employed in the business. Profits that are generated by the franchisor are normally generated on a much lower capital outlay (Tassiopoulos, 2009).

Additionally; the franchisor acquires a higher return on investment by being able to concentrate his resources in expanding his business, instead of investing on additional plants, equipment and overheads. With a franchising business arrangement, nearly all the costs are met by the franchisees. However, despite the fact that revenue collected from the franchised units is normally less than those received from the firm-owned outlets, a greater percentage of the revenue is profit (Tassiopoulos,2009). 

This business expansion strategy has made it possible for giant firms like MacDonald’s and Marks & Spencer to grow rapidly and increasing their market strength globally. As a result, they have benefited much from the higher return on investment that comes with expanding their businesses through the use of franchisees.

Expanding a business through the use of franchisees also involves a number of disadvantages. One of the most significant disadvantages that come with this business growth strategy is in terms of sales. Talloo (2007) highlights that all franchise firms are normally sales-driven at the start; as a result, this implies that one has to have a very effective franchise marketing programme with very resourceful sales people. 

Franchise sales effort can be affected by a number of variables including interest rates, the state of the national economy, competition, the willingness of banks to provide loans for the franchise, etc (Talloo, 2007).Therefore, in franchising arrangements, if a business is not growing, then it is dying. A franchiser must therefore ensure the franchise business has the franchise income fee so to enable the franchise stay in business until there is a sufficient amount of royalty income to attain the monthly break-even.

Conflicts involving the franchisee and the franchisers are almost unavoidable and forms one of the biggest disadvantages of expanding a business through franchising. However, worst still are the lawsuits that come with the conflicts. According to Talloo (2007), things are always fine with the franchisees only when they are making money, but if they are making losses, conflicts between the franchisers and franchisees always arise and if not dealt with well, it may end up in the law courts with the franchisor being indicted of everything from misrepresentation, providing inadequate training and fraud (Talloo, 2007). 

Usually if the case ends up in a law court, the franchisor will most likely lose since the legal system has a very uneven playing field for the franchiser in terms of legal proceedings. The best way to avoid such conflicts is for the franchiser to offer his/her franchisee the best support as possible and make them successful.

A significant example of a conflict involving a franchisor and franchisee occurred between Burger King, an international fast food chain and its Israel franchisee. This was due to a violation of contract dispute. The case drew out reactions from members of the Arab League and the Islamic nations who made a threat to the company for legal injunction including revocation of the firm’s business licenses within the member nation’s territories (BBC News, 1999).

Managing growth within a franchise business forms another significant negative as the problem of managing can always prove to be fatal. As highlighted by Talloo (2007), franchising as business expansion strategy is a very efficient way of rapidly expanding a business, because the strategy has very few limits that inhibit growth. However, managing growth in a franchise business is not always easy. Firstly, the franchisor has often no direct, hierarchical control over his franchisee. Moreover; the franchisee is usually an independent contractor, and not an employee. As a result, the franchisor is able to damage the overall reputation of the franchise if they do not adhere to the firm standards. 

Management within a franchise system is therefore more complex when compared to a truly uniform as well as a hierarchically managed system of a firm-owned unit. Great effort and resources are therefore needed to ensure the franchisees are successful. Burger King, an international fast food chain restaurant presents an example of a franchising firm that has suffered due to management problems that involved a lack of effective control over its franchisees. However; it was only after Pillsbury’s management hired an assertive executive from McDonald’s that the firm began to exercise effective control over its franchisees (Burger King Corporation,2011). 



From the above analysis, what is evident is that, just like any other business growth strategy; business expansion through the use of franchisee has both advantages and disadvantages. The advantages of expanding a business using this strategy include benefits in terms of self-funding expansion, risk minimization, rapid expansion and increased market strength, higher return on investment and operational benefits. On the other hand, the disadvantages of this business strategy include Conflicts between the franchisee and the franchisers and negative effects that may effect on sales. However, what is evident is that expanding a business through use of franchising has a lot of advantages, therefore forms a good strategy of expanding a business.












BBC News, 1999,”Middle East Protest Grows against Burger Giant”. 

Burger King Corporation, 2011, Company Histories & Profiles.

Fletcher, R, 2010, Tesco takes Franchise Route in Overseas Push, Retrieved on December from

Li-Tzang, J.H & Kansas State University, 2007, The Franchise Decision and Financial Performance: An Examination Of Restaurant Firms, ProQuest.

Moschandreas, M, 2000, Business Economics, Cengage Learning EMEA. 

Marks & Spencer Company Website

Talloo, 2007, Business Organization and Management, Tata McGraw-Hill Education.

Whitehead, M, 2010, International Franchising – Marks & Spencer: A Case Study, International Journal of Retail & Distribution Management, Vol. 19 Issue: 2MCB UP Ltd.

Spencer, E.C, 2010, The Regulation of Franchising in the New Global Economy, Edward Elgar Publishing.

Tassiopoulos, D, 2009, New Tourism Ventures: An Entrepreneurial and Managerial Approach, Juta and Company Ltd.


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Select a major event in Part 3 and use psychoanalytic or postcolonial theory to analyze it

Select a major event in Part 3 and use psychoanalytic or postcolonial theory to analyze it

Select a major event in Part 3 and use psychoanalytic or postcolonial theory to analyze it. Use at least one concept from the theory (in bold) in your response. Also, tie in what we know from Parts 1 and 2. For example, if you are focusing on Okonkwo’s response to the colonialists, consider what we know about him from Parts 1 and 2. Analyze specific passages (with citations) in your response.

This analysis can be used in your research paper if it fits.

Select a major event in Part 3 and use psychoanalytic or postcolonial theory to analyze it

Length: Half a page (about 125 words)

Respond in a structured, focused response. This isn’t a free write in which you jot down thoughts. Write clear, grammatical sentences in coherent paragraphs, and use an appropriate tone. Your response should show that you are familiar with the texts. Do not offer a long summary or background information unless it is related to the question.

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