Strategic management of small firms Research Proposal

Strategic management of small firms - Research Proposal Example Such firms include entrepreneurial ventures and also business trading entities. The paper is an exploratory study and draws upon existing literature and case studies of small firms to develop the proposed model. Future research scope and applicability has also been discussed. Small firms have been long neglected over the strategic management roles and issues. The problems of identification of factors that influence small firms’ strategic decisions have been restricted to leadership roles and planning techniques. The paper is aimed at resolving this very issue by identification of a framework for strategic management within small firms. Small scale industries have been the key to economic development for most of the countries during their development stage. Studies prove that they contribute towards a major portion of a country’s GDP and growth. This has also led to a huge rise in research in the economic activity of small scale enterprises. However, most research in the field did not prove to be quite resourceful, primarily, owing to the failure of identification of problems associated with the study of small scale companies. The main objective of this paper is to evaluate and develop a framework of strategic management within small enterprises by evaluation of strategies adopted by small companies. The research shall also seek answers to the source of competitive advantage of small enterprises that emerge as successful businesses and thereby analyse the strategic management factors that influence success in small firms. The research rationale in the context of this study is whether there exists any significant difference between the strategic management employed within small firms and that within large firms. If this holds true then, the research seeks to explore the factors that are responsible for strategic management within small firms. The research

Strategic Audit - Lowe's Companies, Inc Term Paper

Strategic Audit - Lowe's Companies, Inc - Term Paper Example i. Customers are increasingly looking at â€Å"Smart Technology†, such as one-touch programming for spas and baths; heated, self-cleaning and self-closing toilets; washers and dryers with humidity sensors and steam cycles, which provides an opportunity for Lowe’s to sell product upgrades. ii. China is providing a potential market, as that country has new laws that ease restrictions on buying homes. Moreover, homes in China do not come equipped with basics, such as flooring, fixtures and appliances, so the Chinese people must purchase these items when they buy a new home, which provides avenue for Lowe’s if they decide to expand into that market. a. Rivalry high – Lowe’s continues to be a distant second to Home Depot in terms of overall revenue. Price competition is keen, and rivals continue to offer new services and new products to attract customers. b. Potential entry of new competitors is low to moderate – There is limited customer loyalty, capital requirements to enter the industry are high, industry growth rates have been slow because of the recession. c. Competitive pressures from substitute products is moderate-high – substitutes would include stores that are outside of the home improvement industry, such as Wal-Mart and Costco; brand-name stores, such as Maytag Appliances and Sherwin-Williams paint; and trained professionals, such as plumbers and electricians. i. Pros – since small, locally-owned businesses are the main threat to Lowe’s, by partnering with these businesses and providing products and services, they get a piece of that pie as well. Small businesses probably need the cash infusion, so everybody wins. ii. Cons – Increased R&D costs are risky, as there is no telling how the green market will be in the future. It might be a fad, or might be long-lasting. Also, the costs for these items will probably increase with

Benefits and Drawbacks of Divesting Fossil Fuel Company

Benefits and Drawbacks of Divesting Fossil Fuel Company The environmental issues is the main trend that is concerned by most of the organization worldwide. Those concerns spread through the activist group and are affecting financial sector as well. By pressurizing universities endowment fund to divest the fossil fuel companies, the activists urge for the funds to invest responsibly by moving their money out of the non-environmental friendly companies. They aim to indirectly create the new market norms and change the way people perceive those companies which will stigmatized them if they do not adapt to the more innovative and more sustainable ways of doing business. However, the fiduciary duty of the financial professionals is a big issue to be discussed if the fund manager will consider divesting fossil fuel companies on whether there is a conflict on investing responsibly and maximizing profit or not. By the definition of the fiduciary duty, Boatright (2008) explained that A fiduciary duty may be defined as the duty of a person in a position of trust to act solely in the interest of the beneficiary, without gaining any material benefit except with the knowledge and consent of this person. We may need to reinterpret its definition in accordance to the ongoing situation in order to see if we can add the environmental and sustainable elements to this duty without compromising the sole existing definition of the fiduciary duty itself. I have done research on the topics about this, and here are the advantages, disadvantages, and some discussion on the fiduciary duty on divesting from fossil fuel firms. Divesting from fossil fuel companies is likely to yield three main advantages. Firstly, it may encourage the change toward more innovative and sustainable form of fuel. There was a proverb stated that The stone age did not end when we ran out of stones this is to say that when we discover a better form of fossil fuel substitution, it will be no longer the main form of fuel for our world. For example, the development of alternative energy source. By divesting from those companies, we can stimulate them to intensify their research and development in order to move on to more sustainable fuel. After their successful adaptation, those stocks may become attractive for investing responsibly again and we may reinvest in their stocks. Secondly, according to Smith Schools Stranded Assets (2013), we can indirectly influence the market by changing their norms, which is the last stage the activists hope to archive, affecting their ability to finance themselves in both debt and equity. By doing this, all fossil fuel company in the sector will be affected by the wave created by norm changing. This will result in the same way as the first advantage, but on a lot bigger scale, because the market itself is the main force that can directly affect the stock price. Thirdly, the research by Hoepner and Schopohl (2016) shows that there are no difference in terms of risk and return between the portfolio that excluding some sectors of stocks and the traditional portfolio that does not has any constrains. However, the exclusion portfolio in this research only excludes the securities after they are accused of violating the code of ethics. This findings is a very solid reason for divesting fossil fuel companies, as many people believe that these firms can generate higher return for their portfolio. By getting indifferent return, people will be motivated to seek for abnormal return opportunities by moving their money to more innovative firms with higher growth potential. These advantages can benefit the university and the students by signaling to the whole nation that our university would like to take the leading role in tackling with global warming and other environmental issues. This can also potentially use for a marketing purpose of the university, as it may ranked the university up for being seriously concerned about environment and may attract more scholars and academics in this particular area to joining the university. The university may also benefit from the new investment perspective of its endowment fund, as it can gives higher profit if invest properly. This will enhance the ability to fund any new project which will definitely benefit both university and students, the university can provide better facility for learning and the students will be get a more competitive edge from learning in such environment. There are also three disadvantages for divesting from fossil fuel companies. Firstly, the universitys endowment fund cannot heavily affect the shares price of those firms due to the low proportion of the funds holding in this sector. The Stranded Assets by Smith School (2013) shows that the average university endowment fund in the USA hold the fossil fuel companies stocks for about 2% of their fund, and about 4% in the UKs. This proportion cannot significantly affect the stock price even though the funds liquidate all of their portion. Moreover, there may be some players that are willing to immediately buy these stocks after the fund sold their shares, as the price will be attractive for that period of time. Therefore, the university cannot hope to directly impact the market trend solely on this activity. Secondly, such activity may incur additional transaction cost generated by this activity to the fund itself, which may decrease its profit for some period, especially for the University of Reading, which 12.7% of the endowment fund is invested in fossil fuel related companies. If the trustee of the fund could not find any attractive investment opportunity, this movement will do more harm than good, at least in short term, to the fund and the university. Thirdly, to see the significant effect of this divestment, we will have to be patience. The impact on the sector would not be observable within one or two years, the university is likely to suffer from the divestment, again if the fund managers could not find attractive investment alternatives. Moreover, there are no distinct lists of the targeted company that is not environmental responsible to divest, which means that this will increase the marginal cost for the fund to do the research on those fossil fuel companies to divest. I also believe that divestment is not a solution for climate change, as stated in the article Why Fossil Fuel Divestment is a Misguiding Tactic by The Guardian (2015) as this is can be only served as a mean for increasing peoples awareness about the issue and it can be considered only a symbolic act while the real threats to the climate such as deforestation, short-lived greenhouse gas, halocarbon are still exist. These disadvantages will affect the university in terms of the opportunity cost, which comes in the form of less financial supports, as the fund may not yield as what it used to provide. This may result in lower scholarship for students and lower capacity to fund the researches. I also believe that by divesting its holding in fossil fuel companies, the university also give up its right as the owner of the companies which means that the university cannot influence the companies to move into a more sustainable way that may eventually increase the benefits to the shareholders. For the issues about the fiduciary duty of the trustee, as I stated before, the trustee should aim to provide their beneficiary with highest benefit. Therefore, it should hope to maximize the profit of this endowment fund. I completely agree with Drew Fausts Fossil Fuel Divestment Statement to the members of the Harvard Community (2013) on the topic that the universitys endowment fund has a single purpose, to support the academic mission, and it should not be used for any other purposes. To put the fund in any political position is to put the university in a risky position, as the money in the fund are from philanthropists with different view in politics. However, they share the same perspective in funding academic advancement, taking side in this political activity may result in fund withdrawal from the disagreed benefactors. I insist that fossil fuel divestment will breach the fiduciary duty of the endowment funds trustee, the fund must remain politically neutral to secure the risk position of the university and to serve the funds only single purpose. If the fund is going to divest, it should be a strategic adjustment of the portfolio in order to maximizing profit for the university, not for expressing the view on the particular topic in the society. On the other hand, I agree with the activists view about thinking long-term, not through the channel of divesting. Divestment is, in my opinion, meaningless as we still use the fossil fuel in our everyday life, such as our car petrol, our electricity which is produced by fossil fuel or even our home heating system powered by gas. We can act with long-term attitude by implementing a more productive ways such as influencing the current fossil fuel firms as a shareholder to move them to the good direction, fueling the breakthrough research about alternative energy and fuel, funding for innovative architecture and engineering. All of these ways can be originated from a good academic institution, their research, and proper funding is crucial for the growth of the academics. Hence, the trustee should put their best effort in the fund to keep advancing the academic goals. The campaigns should not about the fossil fuel alone, it should aim to tackle all of the problem stated above to be trul y archive the solution to the environmental problems. I believe the conflict in fiduciary duty can be solved by the fund manager try to take part in the fossil fuel company that the fund invested in through voting rights and keep monitor their use of fund through the companys report. The endowment fund should also keep looking for the new investment strategy which involve alternative energies and other responsible firm in a case that those companies could give higher yield than the current fossil fuel firm, then that would create a win-win situation for the fund, the university, and the students. The other good way is forming the new committee to keep reviewing if the fund invest sustainably and responsible, This committee may consist of students from the university and specialized fund manager. This method is already implemented by some leading American university such as Harvard. Finally, I recommend the University of Readings endowment fund not to divest for the stated reasons. I would suggest the fund to keep monitor the company, keep being aware of the situation in the market and use the recommendations stated above. While the environment issues are the important concerns for everyone, one should not focus only on the companies, but should focus also the people. People are the one responsible for the climate change and should be educated about the problem properly, in order to change their mind set to make it become more responsible for their selfish actions that caused climate change. I insist that the interest of the beneficiary is still remains an undisputed duty of the trustee and the fund managers must put their full effort to see it happen. References   Ã‚   Andreas G. F. Hoepner, L. S. (2016). On the Price of Morals in Markets: An Empirical Study of the Swedish AP-funds and the Norwegian Government Pension Fund. http://ssrn.com/abstract=2828040. Atif Ansar, B. C. (2013). Stranded assets. Oxford: Smith School of Enterprise and the Environment, University of Oxford. Faust, D. (2013, October 3). Fossil Fuel Divestment Statement. Retrieved from Harvard University: http://www.harvard.edu/president/news/2013/fossil-fuel-divestment-statement Hulme, M. (2015, April 17). Why fossil fuel divestment is a misguided tactic. Retrieved from The Guardian: www.theguardian.com/environment/2015/apr/17/why-fossil-fuel-divestment-is-a-misguided-tactic

brave new world Essay -- essays research papers

Imagine living in a world without mothers and fathers, a place full of faceless human clones. This is the society portrayed in Aldous Huxley's 1932 novel entitled Brave New World. Huxley describes a futuristic society that has an alarming effect of dehumanization. This occurs through the absence of spirituality and family, the obsession with physical pleasure, and the misuse of technology. In this world, each person is raised in a test tube rather than a mother's womb, and the government controls every stage of their development, from embryo to maturity. Each new human is placed into a certain class, such as Alpha, Beta, and so on. The embryos are manipulated chemically to stimulate or to retard their physical and mental growth. By repeating phrases over and over while the children sleep, the government can condition each person to accept his role in the world around him and to behave in what the government deems to be a "safe" manner. This creates a society full of human clones, completely devoid of personality. Every person is conditioned to love three things: Henry Ford, their idol; soma, a wonder drug; and sex. In Huxley's book, he portrays several unique characters who struggle with the society. Bernard Marx is a deformed upper class Alpha who constantly struggles with his own shortcomings. A young woman named Lenina Crowne becomes romantically involved with Bernard, and they both travel to a Savage Reservation, one of the last places on earth where people are allowed to live without the modern amenities such as soma, birth control, and helicopters. Bernard and Lenina meet a young boy and his mother Linda, originally from the civilized world. Linda had become pregnant many years ago, which was an illegal and incredibly disgraceful offense, became lost on a trip to the Reservation, and had to remain there. Both savages are brought back to the New World, and the young boy named John, known as the Savage, becomes quite a celebrity. But the differences between the two worlds tear at the young man's soul as his values and morals clash with those of the new society. Following the death of his mo ther, he eventually isolates himself from everyone. Sight seekers still pester him in his hideout and drive him to commit suicide in the end. One of the things that makes the society in Brave New World so different from ours is the lack of spirituali... ...pare time. Since "everybody belongs to everyone else," commitment is a non-issue. The novel deals also with the effects of advances in science and technology on human society. Technology is a crucial requirement in order for the society of Brave New World to form. One might consider whether Huxley argues that science and technology are inherently evil. In fact, he does not. The World Controller states that science is dangerous to the society, since it can destroy stability (231). Since Huxley portrays that society negatively, science and technology are therefore put in a positive light. However, Huxley gives examples of how the problems raised by new technology can be solved poorly. When mass production becomes simple, the Brave New World society allows production to increase and requires that consumption increase, a solution that seems flawed by current American standards. Huxley provides a strong warning against the misuse of science. Through factories that produce children, drugs that evoke pleasure, and conditioning that replaces families, technology becomes a dehumanizing force. --------------------------------------------------------------------------------

Global Media and Cultural Homogenisation Essay

In the 21st century, economic globalization has finally become an irresistible reality. Information, technology, goods, people, especially monetary capital are frequently exchanging worldwide unprecedentedly. The development and expansion of markets have effectively broken through the national, ethnic, cultural customs and ideological boundaries (Fairweather & Rogerson 2003). From multinationals, satellite TV, Internet to McDonald’s, Mercedes-Benz cars, cartoons, various cultures are now crossing huge distance and national borders, more densely implanted in different countries, and finally resulting in the phenomenon of cultural homogenisation. This essay is going to discuss whether globalisation implies cultural homogenisation, which will mainly focus on the role that global media has played in causing this phenomenon. To better understanding whether globalisation could lead to cultural homogenisation, this essay is about to define globalisation first. More specifically, globalisation is a terminology in economics, and scholars have three main kinds of explanation for globalisation: the first is that globalisation is Westernisation or Americanisation (Appadurai 2001), the second is that globalisation is the worldwide optimising allocation of economic and technical resources (McChesney 2001); and the third is that globalisation is to solve global problems such as environmental pollution, population explosion, drugs proliferation and transnational crimes, etc. (Mehlika 2013). In this essay, the meaning of globalisation is referred to the second explanation. When it comes to the effects of globalisation, it could be seen in various aspects, and living space of people has been associated with the world as a whole. For instance, London’s stock market or the European Football League is not a regional event, shockwave of these events quickly spread to every corner of the globe (Mehlika 2013). â€Å"Global village† is a more realistic word to describe the current world (Appadurai 2001). No matter international relations, political interests, social wealth distribution, cultural homogenisation or everyday life, globalisation has shown their significant role in those fields, and has contributed to profound consequences. Cultural homogenisation, which could be expressed as one of the significant impacts  of cultural globalization, that is local unique cultures all over the local culture will tend to become a single global culture, contributing to different lifestyles, values and beliefs of differing ethnics and communities are becoming increasingly similar (Mihailidis & Moeller 2010,). According to the view of Marxist (Mehlika 2013), the economic base determines the superstructure; economic and cultural globalization inextricably has linked and influenced each other. With the impact of the trend of globalisation, previously diversified culture has been influenced by the stronger culture and fashionable trend which are normally propagated by global commercial media system (McChesney 2001). In addition, McChesney (2001) holds the view that economic and cultural globalization arguably would be impossible without a global commercial media system to promote global markets and to encourage consumer values. Therefore, this essay believe that global media has played a crucial role in the development of globalisation and cultural homogenisation, and the following part of this article will mainly focus on the how global media has impacts on cultural homogenisation. At present, when reading newspapers or magazines, or turning on the TV, a confusing phenomenon could be the hom ogenisation of media culture, and sometimes similar entertaining programs could be seen in dozens of TV channels. Homogenization of media culture is very fast, often like a plague epidemic (Jan 2009). For example, a popular talent show called American Idol in the U.S. had a new name in China called Chinese Idol, which completely copied the main contents of American Idol. In addition, the successfulness of open copy experience has immediately provoked a chain reaction, almost all the local TV stations are following this trend, for a time, from national TV station (CCTV) to the local ones, and more than ten similar talent shows hurriedly came out. Another example is the Quiz Millionaire, this TV show has numerous versions in China, such as Happy Dictionary, Lucky 52, and so on. And there are various other TV programs in China are just Chinese version of famous TV programs around the world. In terms of the homogenisation of media culture, what most people may consider first is to criticize the lack of creativity of TV people or media workers. However, to explore further, more problems will involve in this problem. That is the globalisation of commercial media will unavoidably lead to the homogenisation of different cultures (McChesney 2001). A problem that may  be ignored is the convergent environment of media. More specifically, people tend to accept the fact of the homogenization of economic life; however, it is difficult to accept the homogenization of culture. The majority people still hold the view that different cultures should own their unique national, ethnic, and local characteristics (Fairweather, & Rogerson 2003). In other words, individuals could drive multinational or foreign designed automobiles, wear foreign produced perfume, but should remain vigilant when enjoy foreign films and television programs or other cultural products (Dumas, et al. 2010). However, little do these people know that the production mode of the media culture determines the globalisation of it, especially since the mid-twentieth century , new media and new media culture comes along with it, are emerging and developing in the international environment with relatively frequent exchanges (Appadurai 2000). That is to say, what we call the media culture of today is not entirely follow the traditional method that brought to the global market after its completion in certain developed countries, but gradually generated in the broader context of international exchanges which are contributed by the modern commercial media system (McChesney 2001). Taking the Hollywood films as an example, it is totally different form what it was half a century ago. Today’s Hollywood has a broader global context; its creators and performers are white, black or yellow from Europe, Asia or Oceania and other regions around the world. Additionally, technical means or electronic producing technologies of Hollywood films are also the most advanced, regardless of the technology are coming from the United States or from other countries. Another example could be the footboard culture, before the Western football culture was introduced to China, China does not have similar local cultural phenomenon about football. Because there is no similar local media environment of football in China, the popularity of football media culture in China is not resulting from the public choosing the Western media culture in the competition with local media culture (just like choose the team which that is liked best), but the decision has been make before individuals have the right to choose, or that the decision is made by the convergent media environment (Jan 2009). For the football culture in china, it is either existing or not existing; and once it exists, it would be derived from western culture. Here, the most difficult to imagine is the development of  China’s own local football culture. The development of culture cannot be delimited and designated by people in a relatively closed space (Bredin 2009). In other words, culture is not static, but dynamic, and acquiring development in the exchanges and communication with other cultures. Ethnic and local cultural could be regarded as closed culture in certain degree, but only with respect to the degree of globalisation and internationalisation (Bredin 2009). In fact any so-called ethnically local culture cannot grow in a completely closed environment, just like running water is never stale, any viable culture must obtain nutrients and support in the exchanges and communications with other cultures (Bredin 2009). For example, Chinese culture, which originated in the Yellow River Basin, but in the long years later, it is in contact with the south Chu culture and western culture it becomes vibrant. People may be sceptical for the single origin of Chinese culture, but they will not deny that the development and prosperity of Chinese culture is owing to the time after time collision and exchanges with other cultures. Cultural homogenisation may emerge during the exchanges and collision, which contains various types of convergence of this case (Fairweather, B & Rogerson, S 2003). For instance, some cultures could be complementing each other’s advantages. Additionally, there are weak cultures naturalised by the dominant culture, as well as the repression of strong cultural to weak culture. Besides, there are also new cultures created in the collision and interaction of differing cultures. All these situations discussed above exist in the development of today’s media culture; however, the convergence of media culture is obvious more than ever of any age. Here, admirations should be given to McLuhan’s prophecy of â€Å"earth village†, his conclusion was drawn from â€Å"media is the message†, rather than deduced from the globalisation of capital and markets (Jan 2009). Moreover, perhaps another deduction could be made that the globalisation of capital and markets are also a result caused by the modern media system in some degree. Besides, as what has been discussed above, global media will also contribute to cultural homogenisation. In fact, media culture reflect the conformity or group psychology of individu als, it could absorb essence and advantages from other cultures, and then turn into a form of global media culture. Therefore, from what has been discussed above, in order to find out whether the globalisation implies cultural homogenisation,  this essay has made the following discussions. On the one hand, the globalisation is an economic term which is promoted by global commercial media system. On the other hand, various studies has found out that it is the global media commercial media system that promoted the convergence of the media culture, and influence the national, ethnic and local culture through media values. Nowadays, individuals are deeply influenced by the wide broadcasted media systems, thus, more and more people have the tendency to pursue the latest fashionable elements, or other items to keep up with the time. Moreover, According to Appadurai (2001), the globalisation of culture is no the same as its homogenisation, however, globalisation involves the use of a variety of instruments of homogenisation. This also indicates that it is not the globalisation that completely leads to the cultural homogenisation. Cultural homogenisation is more likely to be regarded as a coexistence with the globalisation, which are caused by the increasingly homogeneous comm ercial media system. In conclusion, in order to investigate the relationship between globalisation and cultural homogenisation, and get a better understanding of both these items. This essay has defined the meaning globalisation and cultural homogenisation based on the previous studies. Moreover, this article has discussed the emergency and development of cultural homogenisation, and then finds out that the global commercial media system has played a vital role in causing this phenomenon. The following parts of the essay discussed the how the global media culture is formed and its impacts on the result of cultural homogenisation. Finally, this essay hold the view that, the fact of globalisation does not completely imply the emergency of cultural homogenisation, however, it is the increasingly homogeneous global commercial media system that plays a more important role in both causing the globalisation and cultural homogenisation. Reference list Appadurai, A 2000, ‘Disjuncture and Difference in the Global Cultural Economy’, in Frank Lecchner and John Boli (eds), The Globalization Reader, Blackwell, Oxford, pp. 322-330. Dobewall, H & Strack, M 2011, ‘Cultural Value Differences, Value Stereotypes, and Diverging Identities in Intergroup Conflicts: The Estonian Example’, International Journal of Conflict and Violence, vol.5, no.1, pp. 212-223. Dumas, G, Madel, J, Soussignan, R, Martinerie, J & Garnero, L 2010, ‘Inter-brain synchronization during social interaction’, Plos one, vol. 5, no.8, e12166 Mihailidis, P & Moeller, S 2010, ‘New Frontiers in Global Media Education’, Communication Today, vol. 2, pp.6-13. Fairweather, B & Rogerson, S 2003,‘The problems of global cultural homogenisation in a technologically dependant world’, Journal of Information, Communication & Ethics in Society, vol. 1, no. 1, pp. 7-12, viewed 27 April 2014, < http://search.proq uest.com.ezproxy.utas.edu.au/docview/1011920977/C47C3B1C2CD642E3PQ/4?accountid=14245>. Bredin, M 2009, ‘Global Indigenous Media: Cultures, Poetics, Politics’, Canadian Journal of Communication, vol. 34, no. 4, pp. 765-767. Jan, M 2009, ‘Globalization of media: Key issues and dimensions’, European Journal of scientific research, vol. 29, no.1, pp. 66-75. McChesney, RW 2001, â⠂¬ËœGlobal Media, Neoliberalism, and Imperialism’, Monthly Review, vol. 52, no.10, pp.1-19. Mehlika, F 2013, ‘Globalization and its social-cultural-political and economic impacts’, viewed 26 April 2014, .

Contribution Of Health To Economic Growth Economics Essay

The linkage between wellness status and economic activity has been debated several times in the yesteryear, and this issue became even more of import in the last few old ages. This relationship is instead complex. It has been already recognized that increased national wealth is linked with betterment of wellness at single and social degree. Furthermore, it is clear that improved wellness status has an consequence on economic activity and extent of economic growing. Several surveies in high- , middle- , and low-income states examined this linkage. These show that a important displacement in paradigm is discernible. Harmonizing to the new paradigm wellness was non considered as a pure byproduct of economic development, but as a cardinal factor and basic status for economic growing. This manner puting in wellness became a nucleus portion in many states ‘ development schemes and policies. At European degree the purpose of a competitory and dynamic cognition based community was set, enabling sustainable economic growing, invention and a stronger social coherence. The issue of part of human capital to economic growing was the footing for several treatments and analyses. Until now instruction was considered as the chief constituent of human capital. In the context of the neo-classical theory, economic growing is dependent on the undermentioned factors: stock of capital, stock of labour and productiveness. Productivity was considered in the first clip as a factor affected by outside forces. Subsequently on this point of position changed by looking at the investing into human capital as a possible beginning for heightening productiveness and invention. A research of Becker ( 1964 ) was based on the human capital formation. Harmonizing to him an addition in human capital raises the person ‘s productiveness. It is reached through investing into instruction, developing and wellness. The function of wellness as another of import constituent of human capital next to instruction was introduced by Grossman ( 1972 ) . Grossman constructed a theoretical account where the demand for wellness was applied in human capital theory. Grossman differentiated wellness as a ingestion good and as a capital good. In the instance of the ingestion good people practically enjoy their well-being and good wellness status. When looking at wellness as a capital good it reduces the figure of yearss spent badly. This manner it enhances the figure of productive on the job yearss and yearss spent for leisure activities. In this context wellness is non merely consumed ( enjoyed by persons ) , but produced at the same clip as good. Persons can put into wellness to keep and better it over clip. The theoretical account of Grossman received critics as good, but remained a cardinal theoretical account of analyzing the demand for wellness. Figure 1: Factors act uponing wellness and results Beginning: hypertext transfer protocol: //europa.eu.int/comm/health/ph_determinants/healthdeterminants_en.htm Figure 1 represents factors finding the wellness position at single and at society degree, and different channels through which wellness contributes to economic activity. On the left side factors are presented impacting wellness of persons: genetic sciences ( inherited ) life style, instruction, wellness attention and other socioeconomic and environmental factors. Many exogenic factors impacting the wellness position can be influenced by public policies. On the right side different ways are presented through which wellness exerts a direct consequence on economic results. When analyzing the linkage between wellness and economic growing the feedback of income on wellness should be taken into consideration excessively. Marmot ( 2002 ) provinces there are two ways of through which income influences wellness status. On one manus higher income can hold a direct affect on stuff conditions holding a positive impact on biological endurance. On the other manus higher income positively influences societal engagement. Therefore, persons have better conditions to pull off life fortunes and heighten the feeling of security. Based on Figure 1 there are four chief channels or mechanisms where the consequence of wellness on the economic system is explained. Labor productiveness Peoples with a good wellness position can bring forth more within a defined clip interval. Higher productiveness is arising from better physical and mental wellness. Furthermore, persons with improved physical and mental position can utilize engineering more efficient and they are expected to be more flexible excessively. Labor supply The direct consequence of wellness on the labour supply is non obvious in some instances. Good wellness status reduces the figure of ill yearss spent, therefore increasing the figure of productive on the job yearss. In this sense it influences determinations on labour supply every bit good, because of its impact on rewards and expected life-time. In the instance when rewards are connected to productivity a healthier worker can bring forth more, therefore heightening rewards and this manner the labour supply. On the other manus a better wellness position enables higher lifetime net incomes increasing the hazard of earlier backdown from working. The decision can be drawn that these effects are based on single penchants. Based on this wellness can impact the economic system in a similar manner as wellness affect single penchants. Education Based on the theory of human capital more educated people can make higher criterions in footings of productiveness and net incomes. With a good wellness persons can accomplish higher educational making lending significantly to future productiveness. Capital Formation The cardinal point here is, whether the effects of wellness at the micro degree are successfully applicable at macro or state degree, in footings of GDP and growing rate. The mentioned theoretical theoretical accounts already assumed that there should be a positive relationship. Now analyzing several empirical surveies the necessary grounds can be collected to do more accurate judgement sing this relationship. In first line, historical surveies contributed significantly to the research of this issue. Robert Fogel was considered as the innovator of the historical survey attack. These surveies examined the part of wellness to economic growing over a longer clip period ( 1-2 centuries ) . Fogel ( 1994 ) found that the development in wellness and nutriment resulted a 30 % addition in income and 1.15 % per capita in the instance of the UK, within two centuries. Researchers paid less attending to the part of wellness to economic growing in the instance of high-income states. Just a few surveies were made finding the impact of wellness on growing specifically. Some of them found even a negative relation between wellness and economic betterment, but this was chiefly due to the usage of imperfect wellness indexs and the institutional policy model for these states. Despite the few negative consequences wellness still remained as a robust determiner for economic growing. The most normally used placeholders for wellness are life anticipation and grownup mortality. Knowles and Owen ( 1997 ) made a research on 22 high-income states utilizing life anticipation as a placeholder for wellness and found an undistinguished relationship between wellness and economic growing. The consequences were adjusted by Tompa ( 2002 ) , where he stated that the undistinguished result of the survey was due to limited variableness of life anticipation within the chosen sample of states. More important consequences were achieved by Beraldo et Al. ( 2005 ) . He found that investings in wellness consequence a 16-27 % addition in growing rates. The work by Suhrcke and Urban ( 2005 ) followed a somewhat different manner by utilizing other indexs. They used non-communicable diseases as a footing to analyze the impact of wellness on growing in high-income states in a better manner. More specifically, cardiovascular disease ( CVD ) was used as a placeholder for wellness. 26 high income states were taken as a sample in the clip period of 40 old ages. Consequences showed that CVD is a robust index in the instance of high-income states. A decrease of 10 % in CVD resulted an addition in the growing rate of per capita GDP by 1 per centum point. The consequences of empirical surveies show that merely appropriate factors enable the accurate scrutiny of the relationship between wellness and economic growing. The best indexs are life anticipation and mortality rate, but in add-on CVD is good every bit good, because it shows more variableness among high-income states than life anticipation does. Furthermore, mental illness and other morbidity indexs for rich states are suggested by Tompa ( 2002 ) .