Leading & Managing People - Expatriate Essay Example for Free

Leading Managing People Expatriate Essay Multinational firms throughout the world are increasingly concerned about hiring, developing and retaining managers with international experience and global perspectives† quoted by Briscoe and Schuler in 2004. This report will be focusing on variety of issues relating to Human Resource implications which faced by the expatriate working in MNC located in Malaysia as well as Malaysian working in overseas. The extraction will be from the most recent newspaper, journal and articles relating to the following topics in human resource management. 1) Expatriate Failure and the Selection policy 2) Training and development for cross-cultural 3) Performance appraisal for expatriate The expatriation was subjugated by professionals sent by their employers to foreign subsidiaries or headquarters. 3. 0 KEY ISSUES AND ANALYSIS 3. 1 Expatriate Failure and the Selection policy Expatriate facade many new challenges both in the workplace and the community. For instance, culture shock differences in work-related norms, isolation, homesick, housing, schooling, language, customs, cost of living and coping with his/her spouse’s problems of adapting to new environment. According to Stone(2008), research indicates that a manager’s inability to adapt or their partner’s inability to adapt is the major cause of expatriate failure. Harvey(1983) cited the consequence include premature return from a foreign posting and high resignation rates, with expatriates leaving their company at about twice the rate of domestic managements. Tung (1987) expounded the three main reasons contributing to the failure of expatriates in US MNC is as follows:- * the inability of the manager’s spouse to adjust to a different physical or cultural environment; * the manager’s inability to adapt to a different physical or cultural environment; * other family-related problems. One study by International Orientation Resources, an HRM consulting firm, found that 60 percent of expatriate failures occur due to these three reasons too(Solomon,1994). Besides the above mentioned reasons, include inappropriate selection practices, inadequate preparation and training as well as the stresses associated with expatriation which identified by New Zealand research (Enderwick and Hodgson, 1993). Another critical reason is the cross-cultural communications can be a struggle for the international manager. Gestures, facial expressions, behaviour and words can have different meanings and connotations. China, Korea and Japanese have high-context cultures where considerable importance is given to non-verbal and situational cues. In contrast, Australia, Canada, the US and Britain have low-context cultures where what is said is what it meant(Stone,2008). In contrast, some Malaysians who work aboard feel that the grass is greener on the other side. In Appendix A, this article highlighted the reasons why some Malaysian prefer to remain overseas. Due to higher paid, to widen their horizons, the prestige of working in a foreign company and the quality of life is unbeatable. The expatriate is unable to adapt in the foreign environment due to lack of cultural skills. According to HRM consulting firm, this is because the expatriate selection process at many organisations is essentially flawed (Solomon, 2000). Expatriates failed because these three focal reasons which mentioned by Tung that have not been part of the selection process. The underlying message was that the family is the basic unit of expatriation, not the individual. The MNC needs to look into this matter seriously in order to reduce expatriate failure. 3. 2 Training and development for cross-cultural Many companies including MNC have been ignored on providing training for employees whether local or global organisations. MNC recruits expatriate based on technical competence and past job performance as the key selection criteria and assumed the expatriate is able to adapt in the country where he was posted. MNC should not take them for granted. They should be pre-prepared by providing orientation, training on the cultural, language and living skill in the host country. Shown in Appendix D, expatriate reports interviewed an expatriate working in Nanchang, China on how significant was the culture shock he experienced when he moved abroad? He replied that quite significant and hard to adapt to the Chinese food and people spitting on the streets. Certainly, at the initial stage every expatriate will face cultural shock difference which may lead to miscommunication, misunderstanding and misinterpretation. Then directly he will be unproductive, inefficiency and faces expatriate failure. The MNC has to recruit a new manager to replace him which will be time consuming and have to repeat the process of selection and hiring. The MNC requires the expatriate to train the local employees in the host-country by transferring his knowledge and skills to them so that they are able to be independent and step into the positions/responsibilities within the shortest possible time. The article in Appendix B highlighted Malaysia government will review the education system to produce talent needed for an advanced nation and also perks to lure home highly skilled Malaysians (brain drain) and retain global talent to develop a quality workforce. Even our government recognise the essential of education/training to develop our highly skilled employees that are not only vital to the companies but also making the nation into globally competitive and transforming it as the high-income economy for instance Singapore, HK and Shanghai. 3. Performance appraisal for expatriate Stone (2008) cited that performance appraisal is a matter of serious concern for many expatriates. This is because performance appraisal is often handled badly. Companies fail to take into account the added complexities that come with international appraisals. Key issues involving performance expectations, performance measures and who will be responsible for the conduct of the appraisals are left vague or undecided. Worse, some head office managers ignore the international appraisal and do not incorporate it into the career development process. The end result is that expatriates perceive the appraisal process as unfair and as a source of never-ending frustration. Groeschi (2003) quotes that a number of comparative international and cross-cultural management research projects have concluded that HRM is influenced by culture. He also highlighted the same HRM policy is likely to be attributed quite different meanings by different cultural groups for instance performance appraisal. An organisation’s performance appraisal systems are an important element of its control systems, which is a central component of organisation architecture (see Figure 1 as below). In many international companies, the thorny issue is how best to evaluate the performance of expatriate managers (Hill, 2009). During the appraisal evaluation for the expatriate, there are two groups who evaluate the performance of expatriate managers. They are host-nation manager and home-office managers whom are subject to bias. The host-nation managers may be biased by their own cultural frame of reference and expectations. On the other hand, home-country mangers’ appraisals may be biased by distance and by their own lack of experience working abroad. Home-office managers often not aware of what is going on in a foreign operation and they tend to rely on hard data in evaluating an expatriate’s performance, such as the productivity, revenues, profitability or market share which reflect factors outside the expatriate’s control. Due to such biases, many expatriate managers believe that headquarters management evaluates them unfairly and does not fully appreciate the value of their skills and experience. It also one of the reasons many of them believe a foreign posting does not benefit their careers (Hill, 2009). 4. 0 RECOMMENDATION 4. 1 Expatriate Failure and the Selection policy Managing a MNC provides a diversity of challenges which the crucial one will be how the parent-company will recruit potential expatriate to manage their off-shore operations affiliates/subsidiaries. Selection of the expatriate must be right at the first time although time and resources consuming in reviewing and evaluating all the potential candidates follow by filtering them. The expatriate should not be selected based on technical competence and past job performance as the key selection criteria. Expatriate failure in many cases is the result of a lack of personal adjustment rather than a lack of technical skills. Harvey (1997) cited furthermore, research shows that in many companies expatriate selection is often haphazard and irrational. Organisations need to understand that in choosing expatriates, they should take into account differences in the business, social and cultural environment in the specific country and the impact on the potential expatriate, spouse and dependants (Stone, 2008). Stone’s (1991) study found that both local managers and expatriate managers perceive the essential selection criteria as the expatriate’s ability to adapt and the adaptability of the partner and family. 4. Training and management development for cross-cultural According to Hill (2009), superior performance requires not only strategy must also be supported by the right organisation architecture. Strategy is implemented through organisation. In Figure 1, people are the linchpin of a firm’s organisation architecture. For a firm to outperform its rivals in the global marketplace, it must have the right people in the right postings. Those people must be trained appropriately so they have the skill sets required to perform their jobs effectively and so they behave in a manner that is congruent with the desired culture of the firm. The following trainings are recommended for MNCs’ expatriates:- * Cross-Culture Training prior to departure The purpose of this training allows individuals to more rapidly adjust to the new culture before departing to host-country, and therefore, to be more effective in their new roles (Black and Mendenhall, 1990). It has been widely recognised for more than 20 years that the partners and children of expatriates play an important role in contributing to the success of expatriate assignments (Fukuda and Chu, 1994; Rahim, 1983) Cultural, Language and Practical(Living Skill) trainings * These trainings are helping to control and reduce expatriate failures. There is no question that comprehensive cultural training can have many benefits for MNCs. For starters, it can help orient and develop expatriates to better communicate, understand, and work effectively with people from different cultural, religious, and ethnic backgrounds. Comprehending and valuing cultural differences can al so help expatriates in the effective management of multi-cultural teams. Understanding global markets, customers, suppliers, and competitors is another indirect benefit. Pragmatically, cultural training can have a positive impact on combating very expensive expatriate failure (Luthans, 2002). Their spouse adaption problem, it is important that the spouse and the whole family to be included in this training * Language training usually conducted in host-country’s language. When the expatriate willing to communicate in the host-country language(even not fluent), can help build rapport with local employees and improve the manager’s effectiveness. * Benefit of practical training in helping the expatriate manager and family ease themselves into daily life in the host country. The expatriate community group can be a great source of support and information sharing in helping the expatriate’s family adapt to a foreign culture. 4. 3 Performance appraisal for expatriate To overcome the expatriate’s frustration and problems, the HR manager needs to ensure that the following key issues are clarified before the expatriate begins an overseas assignment:- * What are the organisation’s performance expectations? * What criteria and standards will be used to measure performance? * Who will conduct the evaluation – a local manager, a head office manager or both? * What will be the frequency of the appraisals? What consideration will be given to local environmental influence? (for example, volatility of foreign exchange rate fluctuations, availability of skilled labour, political instability, corruption and so on) * Is the appraisal positively incorporated into the career development process? * Are head office managers cognisant of the local business environment? * Are there any cultural influences that may distort the measurement of the expatriate’s performance? In order to overcome the biases of the two groups who evaluate the expatriate managers’ performance, it is recommended to implement 360-degree feedback.

Jetblue Airways SWOT and Financial Analysis

Jetblue Airways SWOT and Financial Analysis Executive summary In this report, the financial position of JetBlue Airways Corporation, a low-fare, low-cost passenger Airline Company serving the US market, is studied in order to provide recommendations to the company with regards to its investments plans. By the year 2003, the company is intending to support its growth through the acquisition of several new aircraft over the coming 13 years. The company will thus need a high capital expenditure to support those acquisitions, as well as several related investments. For the purpose of this study, a SWOT analysis of JetBlue as by its position in June 2003 is performed. A background research is conducted in order to assess how other airline companies are financing their aircraft acquisitions and other investments, and in a broader aspect, study the specificities of their financial structures. The different financing alternatives available to the company are presented and studied in relation to the financial position of the company. A non-financial analysis of the debt and equity options is conducted, in order to assess the relevance of each of those options with regards to all areas of the business other than finance. The outcomes of those analyses are combined and a recommendation is issued to the Chief Financial Officer of JetBlue: It is recommended that the company issues common stock in order to finance the needed investments in the second half of 2003. In a longer-term perspective, it is recommended to the company to use leases and secured debt for the upcoming aircraft acquisitions when favorable terms are available to the company, and to finance the remaining parts of the investments through cash generated from operations and through issuance of new equity, in order to compensate for the increasing financial and operational risks of the company. Problem Definition JetBlue Airways Corporation is a low-fare, low-cost passenger airline company serving the US market. The company completed an IPO in April 2002, around two years after it was founded. JetBlue has had a successful business model and strong financial results during that period, and performed well in comparison to other airline companies in the US during the period between 2000 and 2003. The company, as by July 2003, is seeing several opportunities to grow by adding new markets and new flights to existing destinations. To accomplish this growth, the company is seeking to purchase 65 new Airbus A320, with an option to buy additional 50 ones, and also committed to purchase 100 Embraer E190 aircraft, with the option to purchase 100 additional ones. The company needs thus to think about a way to finance those acquisitions, as well as other needed investments such as spare parts, new engines, additional hangars and a flight training center. John Owen, the Chief Financial Officer of JetBlue, is in charge of finding the best financing scheme for the company. The problem facing John Owen is twofold: First, he needs to finance the acquisitions planned for the second half of 2003. Indeed, for the period from July 1 to December 31, 2003, the company has committed to purchase 8 Airbus A320 aircraft, for a total amount of $305 million to be paid in 2003 (Exhibit 8). The company is generating cash from its operating activities that amounted to $129,725 thousand for the first half of 2003, and already generated $238,989 thousand from financing activities (Exhibit 6). This will cover for part of this capital expenditure estimated at $570 million for 2003 (Exhibit 9). So John Owen needs to finance the remaining part of this capital expenditure. Second, John Owen needs to think about a long-term financing strategy. Indeed, JetBlue is committed to the purchase of 207 additional aircraft for a total amount of $6.86 billion over 8 years. Owen has to think about the best capital structure for the company and thus the best financing strategy for JetBlues investments, including the aircraft acquisitions and the related investments. SWOT Analysis Strengths The first strength of JetBlue is its founding teams background. Indeed, the company was founded by a veteran in the low-fare airline industry, backed by a group of private equity firms. The management of the company has also the expertise of leading a publicly held company, following the IPO in 2002. The company has a successful business model and exhibits strong financial results, as well as strong revenue growth despite the downturn in the industry following the terrorist attacks of September 11, 2001. Thus, JetBlue is a perceived as a solid and growing company by the investors. The low operation costs of JetBlue are one of the most important strengths of the company. The company is utilizing aircraft efficiently generating more revenue per plane. The company is also operating one type of aircraft, the Airbus A320, thus lowering maintenance and training costs and spare parts needs. The workforce of JetBlue is non-unionized and does not benefit from strict work regulations. The distribution costs of JetBlue are also low. Indeed, the company does not provide any paper tickets. The company operates only new airplanes, thus minimizing maintenance costs and offering a good â€Å"flying experience† to its customers. The company also benefits from its reliable on-time performance, comfortable airplanes, and friendly flying personnel to attract and secure its customer base. The company serves densely populated cities in underserved airports, with high fares. This strategy helps the company capture market share in these segments. The company is financing its existing aircraft through secured debt and operating leases, on favorable terms. Those financing possibilities are still available for the company for additional aircraft purchase. Weaknesses A considerable weakness of JetBlue is its small size. The company is operating 42 aircraft, for 73 flights per day and annual revenues of $635 million. The company can probably not rely on its personnel loyalty, due to the non-advantageous working conditions and regulation. The company is operating only one type of airplane, the Airbus A320. This represents a weakness for the company as well. Indeed, the planes have the same age and might all suffer at the same time from an eventual recurrent technical problem on this type of aircraft, which should be catastrophic for the company. JetBlue does not have a line of credit, or short-term borrowing facility. Therefore, the company depends on its operating cash flow to finance its short-term and working capital obligations. The balance sheet of the company also needs to be strengthened. JetBlue also faces one of the airlines principal risks which is the rising fuel price. The company is spending a considerable amount of money in hedging for fuel prices volatility. In addition, as the company is relatively consuming low volumes of fuel, it can suffer from significantly higher prices in case of fuel shortage. JetBlue is a levered company. With a short-term debt of $26,580 thousand and a long-term debt of $731,740 thousand as by June 2003, and equity of $480,594 thousand, the companys leverage ratio is 157.8%, whereas the industry average is around 129.46% (Infinancials). Opportunities Internal The purchase of the new 100-seat Embraer E190 aircraft would allow JetBlue to enter smaller markets while maintaining low operating costs, and increase flight frequency on existing routes. The private placement of convertible debt proposed by JetBlues investment bankers would provide sufficient capital at relatively low interest rates. JetBlue is a fast growing company, and should thus bear having less debt. The company has thus the opportunity to raise additional equity. External The low fares offered by JetBlue would allow it to attract new passengers who might otherwise not fly. The mid-sized market that JetBlue intends to enter will represent a new opportunity for growth to the company. By expanding its activities, the company will purchase larger volumes of jet fuel and would thus have more leverage in procuring fuel than today. The company will thus suffer relatively less from fuel shortages. Threats Internal The company is intending to grow and become an airline company â€Å"like the others†. JetBlue might thus lose its advantages from being low-cost, small and highly profitable. The company is clearly departing from its strategy, which has been the source of its strengths up to 2003. JetBlue plans to purchase a new type of aircraft, the Embraer E190. This is again a departure from the companys initial strategy which is to operate only one type of aircraft. JetBlue might thus incur higher maintenance and training costs, higher spare parts and engines costs, and some negative impact on the maintenance scheduling. JetBlue plans to increase its aircraft fleet from 45 to 252. In addition, the company plans to invest in other domains such as spare parts, new engines, additional hangars and a flight training center. This represents a very big investment and thus a consequent threat for the company. Such an investment will let the company more exposed to financial distress and raises the question of the management ability to cope with such a rapid expansion. The company board members are very concerned about dilution. There is a threat that they will not support John Owen, the CFO, if he recommends to raise new equity capital. With the rapid expansion of the company, the jet fuel expenses, as well as the cost of their hedging will grow rapidly. The company will be more exposed to both the fuel price volatility and the growing cost of hedging it. As the company will get bigger, with higher manpower, those might want to be unionized. External The fuel price is also an external factor due to its non-predictable volatility. JetBlue plans to be the launch customer for the new Embraer E190 aircraft. Although this allowed probably the company to have a price discount, it is also a threat. JetBlue might be exposed to technical and/or non-technical problems that have been not detected by the manufacturer or other users of the jet. The reason for the company to go public was to wean off its dependence on the venture capital and private equity industries. Issuing private debt securities represent a threat for JetBlue as this might lock back the company to such private investors. In addition, those investors and the private investors in general might not be interested by the eventual convertible debenture issued by the company. JetBlue is a small client of Morgan Stanley, the investment bank in charge of proposing financing alternatives for the company. Morgan Stanley might thus charge heavily JetBlue, and/or try to bias the companys choice for its benefit. The competition from other low-cost and regular airline companies which might try to counter JetBlues expansion. The revenues of the company and its growth aspirations are subject to the economic conditions. An economic downturn or additional terrorist attacks might impact negatively JetBlues ability to finance its debt obligations. The company will also have to secure additional airport gates which will represent a threat for the company in case it cannot negotiate advantageous conditions as with underserved airports. The alternatives In order to finance the acquisitions planned for the remaining part of 2003, JetBlue received two financial propositions from the investment banks. The first alternative is to issue additional 2.6 million shares at an estimated $42.50 per share. JetBlue will thus be able to raise up to $110.5 million. The fees and commissions of the bank for this proposal amount to $3,591,250 which represents a cost of 3.25%. The second proposal from the investment banks is to issue $150 million in a private placement of convertible debentures. The debentures will be a 30-year convertible debt with a coupon rate of 3.5%. In addition, the debt will be convertible into shares of JetBlue at $63.75 per share, which represents a conversion rate of 15.6863 shares per $1,000 principal amount of notes. The notes will be unsecured obligations and will rank equal in right of payment with all other unsecured debt. Currently, all of JetBlues debt is secured. The bank will not charge any additional fees for this alternative. JetBlue can consider some other alternatives as well. Indeed, the company can issue some preferred stock. This stock might be considered as equity in accounting, to strengthen the balance sheet of the company, but will at the same time accommodate the board members concern about dilution. This preferred stock option might however fail to attract investors. Another alternative might be the issuance of simple corporate bonds. The coupon rate for those will however be higher than the 3.5% of the convertible bonds. This option will thus cost more for JetBlue than convertible bonds, especially before the companys shares price eventually exceeds $63.75. Issuing public corporate bonds will have higher cost for the company as well. Indeed, those need to be ranked by some ranking agencies and will have higher coupon rates (Exhibit 12). Two other alternatives exist for JetBlue, for the aircraft acquisitions financing: The operating lease and the secured debt (each acquisition debt is secured by the acquired aircraft). Those two options are available for JetBlue at advantageous conditions. Thus, the alternatives that will be retained for the remaining of the analysis are the operating lease and secured debt for the aircraft acquisitions, and the equity issuance and the convertible private bonds for the acquisitions and the other investments. Background Research Some background research has been performed in order to assess how other airline companies are financing their aircraft acquisitions and other investments, and in a broader aspect, study the specificities of their financial structures. This study included some regular as well as low-cost airline companies. British airway, for example, is financing its aircraft acquisitions through debt, all of which being asset related. The group is principally using finance leases and hire purchases contracts to acquire aircraft (British Airways Annual Report 2010, p.104). Delta Airlines, on its side, is using pass-through certificates to finance aircraft (Delta Airlines Annual Report 2010, p.34). In addition, the company has $5.2 billion of loans secured by 287 aircraft (Delta Airlines Annual Report 2010, p.72). United Continental Holdings has a high amount of obligations, including debt, aircraft leases and financings (United Continental Holdings Annual Report 2010, p.53). A substantial portion of the companys assets, principally aircraft, are pledged under various loans and other obligations. The company also uses secured notes, equipment notes, pass-through certificates and multiple financings secured by certain aircraft spare parts, aircraft and spare engines (United Continental Holdings Annual Report 2010, p.55). United Continental Holdings also raises cash from issuance of common stock (United Continental Holdings Annual Report 2010, p.56). The low-cost airline companies seem to be, on their side, more conservative. Indeed, EasyJet is adopting a conservative capital structure policy, including a liquidity target of  £4 million cash per aircraft, and a 50% limit on net gearing (EasyJet Annual Report 2010, p.9). All of the companys debt is asset related (EasyJet Annual Report 2010, p.85). The company holds 62 aircraft under operating leases and 8 aircraft under finance leases, out of 196 total aircraft, principally Airbus (EasyJet Annual Report 2010, p.87). RyanAir, another low-cost airline company, has a fleet of 232 Boing 737-800s. The company makes its firm-order purchases through a combination of bank loans, operating and finance leases and cash flow generated from the companys operations (RyanAir Annual Report 2010, p.42). Both RyanAir and EasyJet exhibit a capital structure that relies less on debt than the regular companies counterparts, as illustrated by the following table: It is important to mention that some small airline companies choose to issue bonds for their investments as well. SpiceJet, an Indian airline company operating to Mumbai, Bangalore, Ahmedabad, Pune, Goa and Delhi issued in 2005 foreign currency convertible bonds worth $90 million to fund aircraft acquisitions (IndiaAviation, 2005). All in all, airline companies are using both debt and equity (together with other financing means, including cash flows generated from operations) to raise money. In its ‘Airlines return to capital markets article, David Knibb (2009) summarizes the ways several companies found financings: Lufthansa, Air-France KLM, British Airways, Air Canada, Australias Virgin Blue, Avianca and Indian carrier Kingfisher all issued bonds during 2009. AMR used private lenders to borrow money. Some other companies, smaller, chose to issue shares: SAS, Virgin Blue, AirAsia, Kingfisher, and Icelandair. From this study, it appears that the majority of airline companies are financing their aircraft acquisitions, apart from using cash flow generated by operations, through debt, either leases or secured debt. Other investment needs are financed either through debt or equity, depending on the companies. However, a common trend to low-cost companies seems to be their conservative financial structures, in comparison to bigger, regular airline companies. Financial Analysis of the Alternatives As per June 2003, JetBlue Corporation has a short-term debt of $26,580 thousand, a long-term debt of $731,740 thousand and equity of total $480,594 thousand (Exhibit 5a). In order to compute an average interest rate for the company, data from 2002 are used: The interest expenses for this year equaled $10,370 thousand (exhibit 4), for a total long-term debt of $690,252 thousand (Exhibit 5a), thus an interest rate of 1,5%. The tax expenses as per June 2003 are of $40,188 thousand for a total earnings before tax of $95,503 thousand (exhibit 4), thus a corporate tax rate of 0.42. From exhibit 1, the JetBlues equity beta during the period from April 2002 to June 2003 is 0.69. As per the data from Exhibit 5a for June 2003, the financial structure of the company was as follows: From the Hamadas formula, we can compute the unlevered beta of JetBlue as follows: Beta(u)=Beta(l)/[1+(1-T)*(Wd/We)] With Beta(l)=0.69, T=0.42, Wd=61.21 and We=38.79 Thus Beta(u)=0.36 In addition, from exhibit 12, the Treasury bill interest rate as of June 30, 2003 is 1.09%, this will be used as the risk-free rate of return. Assuming a market rate of return 9 points higher than the risk-free return, we can use the WACC spreadsheet in order to estimate the financial structure of JetBlue that minimizes the WACC of the company: Appendix 1. It turns out that the company has an optimal financial structure, minimizing its weighted average cost of capital, following those estimated figures. Any of the two options, either the convertible debt or the equity, will probably pull the financial structure from its current optimal position. For the first alternative, the convertible debenture, the coupon rate of this bond is 3.5%, for a total amount of $150,000 thousand. The weighted average cost of debt for JetBlue, if they issue such bonds, will be: [(3.5%*150,000)+(1.5%*731,740)]/(150,000+731,740), thus 1.84%. The financial structure of JetBlue will be as follows: Using the WACC spreadsheet, we can see the companys financial position with regards to the optimal financial structure of JetBlue following the new cost of debt: Appendix2. If JetBlue chooses the debt option, the financial structure of the company will no more be the one offering the minimal WACC. The same analysis can be done for the second alternative. Following the shares issuance, the financial structure of JetBlue will be as follows: Using the WACC spreadsheet, we can see the companys financial position with regards to the optimal financial structure of JetBlue following the raise in equity: Appendix3. From this analysis, it can be noted that JetBlue will still have a financial position that minimizes the companys weighted average cost of capital, thus maximizing the overall value of the companys stock. It can be concluded, from a financial point of view, that the best alternative for the investments planned for 2003 is the equity issuance. Non-Financial Analysis JetBlues passenger revenues knew a steady growth from 2000 ($101,665 thousand) to 2002 ($615,171 thousand). The revenues are forecasted to continue to grow up to a level of $1,796.9 million in 2005 (Exhibit 9). This revenue stability and expected high growth provide a strong confidence to JetBlue in its ability to meet its financial obligations, thus having the opportunity to issue either debt or equity. The companys assets amount to $1,565,322 thousand as per June 2003. Those assets are principally composed by operating property and equipment, which are pledged under the operating leases and secured debt of the company. If JetBlue chooses to finance its future aircraft acquisitions by debt, the acquired aircraft can be used to secure the corresponding debt. JetBlue, as any airline company, incurs very high fixed costs due to its high value operating property and equipment. The company has thus a very high operating leverage and is greatly exposed to the risk of cash flow projections errors in case it does not meet the projected revenues figures. Any variation in the estimated revenues, might lead the company to a position where it could not meet its financial obligations related to debt. From this point of view, JetBlue needs to secure its cash flows. As stated earlier, the company revenues knew a high growth for the precedent years and are expected to continue growing steadily. This high level of growth allows the company to rely on equity. JetBlue is a profitable company, in comparison to peers, as stated in the following graph: JetBlue exhibits good levels of gross margin and operating margin. Furthermore, the companys return on sales, return on assets and return on equity are higher than industry averages and the company can be said to be quite profitable in comparison to company peers. This offers some flexibility to the company to rely on debt. JetBlue has a high level of tax rate (0.42), this allows the company to have an even lower cost of debt and offers the company the advantage of being able to rely more on debt in order to minimize its weighted average cost of capital. All of the companys debt is secured. In addition, the company does not have any line of credit, or short-term borrowing facility. The company does therefore not have any control restrictions or obligations towards its creditors. The shareholders of the company are on their side very concerned about any dilution. This fear of losing the control of the company limits the possibility of the CFO to issue new equity. The founding and managerial team of JetBlue is issued from the airline industry. They are used to manage a highly leveraged and public company. They should thus have a positive attitude towards high levels of debt. They should be able to deal with the opposite aspect (issuing more equity) as well. JetBlue does not need any rating agency for the issuance of the bonds, as those are private. The alternative of issuing public bonds has been eliminated as this one will incur higher costs for the company. The lenders of the company seem on their side to have a positive attitude towards the company, which should be able to issue additional secured debt for its aircraft acquisitions with advantageous conditions. The company has been performing well in the recent years. However, many major US air carriers struggled between 2000 and 2003, and some of them filed for bankruptcy protection. The market is impacted by a general economic slowdown caused partly by the terrorist attacks of September 11, 2001. The market is also subject to big variations depending on several unpredictable factors, like political stability, weather conditions, natural disasters, terrorist attacks etc. All of this calls for some financial conservatism for the airline industry. The internal stability of JetBlue will probably continue to hold, unless the company faces some financial distress, or if the shareholders are no more supporting the management team. From a short-term point of view, John Owen might lose the shareholders support if he goes for equity issuance. From a mid to long-term point of view, he might as well negatively impact the internal stability of the company if he is not conservative enough to avoid any financial distress situation. The debt offering will afford JetBlue less financial flexibility, especially due to the jet fuel prices. If fuel prices rise, this will incur less operating income and thus some difficulties to the company to meet its additional debt service payments. Owen has also to review his hedging strategy of the fuel prices volatility: If the company chooses to hedge more of its fuel consumption, it will incur much higher hedging costs. If on the contrary the company chooses to reduce hedging costs, it will be more exposed to financial distress when the prices increase. Conclusion: The best solution JetBlues market capitalization can be estimated at around $3.12 billion (74,423,693 * $41.98) as per June 30, 2003. The company is intending to grow heavily in the following years, and has plans to acquire 207 new aircraft for a total $6.86 billion up to 2011,

The Impractical Philosophies of Self-reliance and Civil Disobedience Es

The Impractical Philosophies of Self-reliance and Civil Disobedience The philosophies of Henry David Thoreau and Ralph Waldo Emerson would work well in a society comprised only of highly intellectual, healthy individuals who were willing put forth the effort needed to thoroughly examine themselves and formulate their own opinions about every issue pertaining to them. Emerson said that all members of society should think for themselves and formulate their own opinions rather than conforming to a popular belief. Thoreau said that the best government was no government, and that people should always do what was just. A society that functioned under the ideals of Emerson and Thoreau would have no problems. No money would be needed, because all members of society would do what was right and help each other out. A farmer would give away his grain and in return would receive everything he needed from other members of society. No crimes would be committed because people would think through what they were about to do and realize that a better option existed. Re alistically, such a society is not possible because humans constantly make mistakes, and since these ideals rest on the notion that all members of society will adhere to them, the philosophies are not practical. Because humans could never fully adhere to them, the philosophies of Emerson and Thoreau will never be adopted in society. The philosophy of Thoreau hinges on the acceptance and truth of the philosophy of Emerson, and the philosophy of Emerson is ruined if the philosophy of Thoreau cannot be followed. Emerson preached that all men should trust their own hearts, and that what they thought was good and true. "To believe your own thought, to believe that ... ...s as the checks and balances for human neglect. People have two distinct natural tendencies. At heart, they tend to be good, but in action they tend to be bad. People know the difference between right and wrong, but usually do not act on this knowledge. They tend to act too quickly, to give in to their desire for more money and more power, thinking that these will bring them happiness. People usually fail to understand that true happiness lies in doing the right thing. Self-reliance and civil disobedience go hand in hand. If all people are self-reliant, then they can function with no government at all. But if one man is not self-reliant and acts against his good nature, government is needed and thus self-reliance cannot fully function. In a perfect society, these ideals would work wonders. In flawed society they will accomplish nothing.

Raising the Dropout Age Essay -- Education, GED, high school

Children are told from a young age that it is mandatory for them to graduate from high school, but it’s not until they are on the verge of dropping out that they hear the importance for staying in school. It is also when they hear how high school students who dropouts learn the incredible price to pay in the future when they give up on an education. Thinking with a teenage state of mind and trying to take the easy way out they go straight for a GED, which is told to be an equivalent earning of a diploma. Stated in a complete listing of educational resources most teachers tend to argue that â€Å"The General Educational Development lacks the depth and breadth found in a traditional high school education† (â€Å"The Facts about Getting a GED† par.5) Initially, the program was created for World War II veterans to receive their high school education after the war and not for students who decided that they wanted to give up (â€Å"General Educational Development† par.1). This was until the year of 1959 when veterans were not the only ones getting there GED but also those adults who had yet to finished high school (par.1). In the article â€Å"Dropouts†, from Education Week, it was stated that â€Å"Overall, the dropout rate has changed among racial and ethnic groups; the minorities tend to have higher dropout rates than their white classmates†(Kaufman and Bardby par. 4). As of today the GED profile is still changing into 3.5 to 6 million young teens between the age of 16 and 17 year olds who have decided that they do not want to finish school (Haskins par.1). Due to the National Public Radio it was stated that â€Å"Many states are willing to reduce the dropout rate by rising the high school dropout age to 18† (Abramson par. 10). This law should be passed throughou... ... set the same as the mandatory age for dropping out of leaving school. This is a high risk for giving children the opportunity to leave their education to earn money which will not benefit them in the long run without a diploma. There are few that will state that the mandatory age of a high school dropout is good at sixteen. Main requirements taught in high school become unnecessary, especially lower skilled jobs so not all people who dropout will be unsuccessful. Therefore, society is creating an economic waste by providing a service that has very little benefit to the majority of people (Rodriguez par.2). The PBS, the Public Broadcasting Service, provided facts that show that not all GED recipients are less successful than high school graduates. In example, both comedians Bill Cosby and Dave Thomas both received a GED and became highly successful. (Schleicher 1).

Huckleberry Finn Book Report :: essays research papers

THE ADVENTURES OF HUCKLEBERRY FINN AUTHOR’S SKETCH Mark Twain was born Samuel Langhorne Clemens on November 30, 1835, in Florida, Missouri. When Samuel Clemens was four years old, his family moved to Hannibal, Missouri, where he spent his childhood. Clemens first approach to literature was through typesetting for a newspaper in 1851. At the time Orion, his brother, was a newspaper publisher in Hannibal. From 1857 until 1861, he served as the pilot of a riverboat on the Mississippi River. He later used this experience in creating his novels. His first writings appeared in a newspaper on February 2, 1863 under the pen name “Mark Twain.'; Clemens fell in love with Olivia Langdon and married her in 1870 after a long courtship. The Clemens’ family lived in Hartford, Connecticut from 1871 until 1891, the period of his best writing. In 1872, he published his first book, Roughing It. He published The Adventures of Tom Sawyer in 1876. The Adventures of Huckleberry Finn, considered his masterpiece of writing, was published in 1885. He received many honors and a great deal of recognition for his writings. Clemens died of Angina on April 21, 1910. MAIN CHARACTERS Huck Finn - the central character of the novel and the son of the town drunk. Jim - Miss Watson’s runaway slave whom Huck helps to gain his freedom. Pap - Huck’s father who comes back to town when he learns about the reward. Tom Sawyer – Huck’s friend who is about his same age. ELEMENTS OF PLOT (1) Setting The setting of Huckleberry Finn was in mid Eighteenth Century America. The first few chapters were set in St. Petersburg, Missouri. The town was patterned after Hannibal, Missouri, where Clemens spent his childhood. It is located on the Mississippi River about 80 miles from St. Louis, Missouri. Most of the novel’s setting is on the Mississippi River south of St. Petersburg. (2) Beginning Situation Huck Finn, a boy of about 12 years, was the son of the town drunk. Widow Douglas adopted him so that she could civilize him and raise him to be a gentleman. Huck did not like going to school, attending church or dressing up. Tom Sawyer, Ben Rogers, and Joe Harper were his friends at the local school. Huck and Tom found a treasure hidden by bank robbers and were allowed to keep six thousand dollars each, for themselves, as a reward. Huck’s father heard about his son’s treasure and returned to St.

An Valuable Experience Essay

It started off like any other morning for me when I woke up from the bed. It was totally different from others. I was very hungry and decided to have breakfast before school. When I approach the dining room, I saw my parents was sitting there and kept smiling at me. As soon as I sat down, there was a big surprise for me. â€Å"Happy Birthday, Jacky†, said my parents as they handed me a beautiful wrapped present. I was extremely curious and I opened the present hurriedly. Wow! It was an expensive cell phone, Iphone 5. I was over the moon because I had wanted the cell phone so much since it published last month. After having my light breakfast, I drove to school as usual. When I reached my classroom, my classmates shouted at me and wished me happy birthday. I was very happy as they sent their greeting to me. John, my best friend since primary school hugged me and kissed my forehead as his â€Å"present† to me. When I put down my bag, I quickly showed him my new cell phone. He was fascinated when he saw my amazing cell phone. In fact, he was in love with that cell phone and both of us love it. We investigated the functions of this new cell phone until the bell rang and soon the lessons stared. I immediately hid the cell phone because cell phone is contraband in school. After three hours, it was recess time. The first thing I would do was going to the washroom. After that, I would go to the canteen to fill up my empty stomach. After having my fabulous meal, I went back to the classroom. When I reach my seat, I realized that my cell phone was not in my pocket. My cell phone was missing! I looked up and down for my cell phone frantically but I could not find it. I started to think carefully where I had put the cell phone. I recognized that I had given it to John before going out from the classroom. Or maybe I miss it in the toilet but it is impossible. It must be John who had stolen my cell phone and I was sure for it. I darted to the canteen to look for John who was eating banana. â€Å"John, there you are! Give me back my cell phone!† I yelled at him. John did not know what had happened and shouted that he did not take my cell phone. However, I did not believe him and kept accusing him that he had stolen my cell phone. I was getting impatient and my voice was getting louder. â€Å"Hey John, I thought that we are best friend but now I know that you are just a liar, a thief! If you admire my cell phone, just tell me and I can lend it to you. You should not steal it as that is my present from my parents. You know how toilful my parents work for buying me this present? I will never trust you again! Never! † I shouted on top of my voice in front of the other students. After a couple of minutes, the bell rang again and we went back to the classroom. The whole day we did not talk to each other. I even changed my seat with the other friend. I was really upset and angry at John for being dishonest to me. After I had reached home, I took my bath. I was still thinking of my cell phone and I did not have any appetite to take my lunch. I did not know how I was going to tell my parents about the missing of the cell phone. I decided to finish my homework before my parents come back. When I opened my bag and took out my book, I was shocked. To my surprise, it was my cell phone, dropped deeply inside my bag. I knew that I had misunderstood John. I felt sorry for him and I made up my mind to apologize to him. I took up my phone and called John. â€Å"John, can we meet at Starbuck for a while? I had something important going to tell you.† John did not answered me and cut the call. I was very worried that time and I believed that John will come to meet me. Therefore, I quickly go out to the Starbuck coffee shop afterward. Thirty minutes later, I saw John walking toward me, but he did not even look at me. I knew that he was still angry with me. He took a seat next to me immediately. After we ordered our coffee, I started to begin my apologize. â€Å"John, about just now†¦ erm†¦ I am truly sorry. I did not search for my cell phone carefully and misunderstood you. I should not shout and yell at you rudely. It is my entire fault. Sorry for everything. Can you forgive me?† I said solemnly. â€Å"Jacky, of course I will forgive you, we are best friend right/. However, to express your sincere, you must pay for my ordered coffee.† Said John. We smiled at each other. After this incident, I realize that John is always my best friend. I learnt that we should trust our friends and not to misunderstood them without investigating properly. As the saying goes, â€Å"Look before you leap†.

Legalized Marijuana and Law Enforcement Essay

Marijuana is the most common illicit drug all over the world including the United States. It is derived from the leaves, flowers, seeds and stem of cannabis sativa. THC, tetrahyrocannabinol is the main active component of marijuana. The drug can either be smoked or mixed with foods and beverages. In the streets, marijuana is commonly known as the herb, pot, ganja among other names. There are many side effects, both short term and long term effects associated with abuse of marijuana. However, marijuana has also been used medically in hospitals. Legalization of marijuana in the United States has always attracted a heated debate. It is important to note that marijuana was not discovered yesterday. For the centuries in which the herb has been used, it has been completely legal. It is estimated that marijuana has been illegal for less than one percent the period man has used it. The drug is known to have been in use as early as 7000 BC but it was made illegal in the United States in the 20th century. A: History of marijuana The history of marijuana laws in the United States is very interesting. The first law relating to marijuana or cannabis sativa to be enacted in the modern day America was in 1619 in Jamestown in Virginia. For many years, the plant had been in use for various functions such as food, incense, rope among others. It is also interesting to note that the first law related to the herb was a ‘must grow’ law that required all farmers in the colony to grow the crop. A farmer could be taken to jail or punished for failing to grow the crop due to it shortage in the region in the 18th century. The must grow laws were therefore in place for more than two centuries. The government encouraged the farmers to plant the crop due to its importance among the military requirements. However, it is important to note that although the plant was critical in the 17th and 18th century, to an extent of it being used as a legal tender, the public was not aware of its uses as a recreational drug until the early 20th century (Inciardi, 1990). In the mid 19th century, over two thousand acres of land in the United States was under cannabis sativa plantations. The herb was mainly grown for use in the textile industry. However, the situation changed in the early 20th century due to the large influx of immigrants from Central America especially Mexico. This influx was triggered by the Mexican revolution in the early 20th century. Tension was generated between the small scale farmers and the plantation owners due to the availability of cheap labor from Mexican Americans. The situation was made worse by the fast changing world in the after math of the First World War and the event of the great depression. The increased tension as well as the high number of immigrants from South and Central America made resources scarce and the quality of life in American cities deteriorated significantly. It is important to note that when the immigrants from Mexico arrived in the United States, smoking of marijuana for recreation was common in Mexico but it was unheard among the American population. Consequently, the Mexicans brought with them the herb as well as the smoking habit. These Mexican immigrants introduced smoking of marijuana in the United States which resulted into the first law prohibiting marijuana in California (Inciardi, 1990). Other than the Mexican immigrants use of marijuana prompting the first law prohibiting preparation of hemp, there were other factors that influenced the enactment of the new law. Most important was the use of the drug by Mormons who had been sent to the Central American country in the early 20th century. The Mormons came back with marijuana and they were already using it. The churches reaction to this may have had a big influence in the enactment of the first anti marijuana laws in California. Consequently, various states including Texas, Wyoming, Washington, and Oregon among other states had laws limiting the use of marijuana in the early 1920s. Most importantly, the laws were designed to specifically target the Mexican immigrants who were well known to use the drug (Inciardi, 1990). Compared to other states, the eastern states did not have a large number of Mexican immigrants but the problem of marijuana was evident in the states too. Analysts have argued that the drug was introduced by Latin Americans and African Americans jazz musicians. Marijuana is believed to have traveled across the eastern states such as Chicago, Harlem and New Orleans. Abuse of marijuana was part of the jazz music performance scenes. Racism was also an important factor in the enactment of the anti marijuana laws where the white extremists argued that the herb gave the Negroes and the Latin Americans the courage to face the whites. During the same period, there were rumors in the public that the immigrants as well as the African Americans were influencing young whites including children into taking the drug. This was the origin of the ‘assassin’ stories of professional killers under the influence of marijuana. In the 1930s, the use of marijuana in the United States was associated with violent behaviors as a result of these stories (Inciardi, 1990). As early as mid 1920s, the United States supported international conventions that regulated marijuana in the form of the Indian hemp. These conventions included the international opium convention which prohibited exports of Indian hemp to countries and states in which marijuana use was illegal. The convention also required proper documentations that approved the importation of marijuana to such countries if it was meant for medical use. However, the convention did not affect other cabanas products such as fiber which were widely produced in Europe and the United States. It was believed that the Indian hemp contained higher levels of THC compared to the European hemp which was mainly grown for use in the textile industry (Inciardi, 1990). The first anti marijuana federal law in the United States was the uniform states narcotic acts whose first draft was introduced in 1925 and the final draft was ready seven years later. This new law sought to introduce uniform anti narcotic laws throughout the United States. Following the enactment of this law, the Federal Bureau of Narcotics was created which encouraged the adopting on uniform regulations. By mid 1930s all the states had adopted some laws that regulated the production, distribution and use of cannabis products. The establishment of the Federal Bureau of Narcotics in 1930 increased the concern over the increased use of cannabis in the American population. The bureau was headed by Anslinger, one of the most celebrated anti narcotic crusaders in the American history, who argued that marijuana was responsible for the increased violent crimes in the society and irrational acts. The bureau used both the print media as well as the first developing film industry to spread propaganda against the use of cannabis (Inciardi, 1990). The Geneva trafficking convention of 1936 is also an important convention in the legal history of marijuana. Led by head of Federal Bureau of Narcotic, Anslinger, the United States government tried to influence the world society to criminalize all activities involved in the production, processing, distribution and use of cannabis and opium in the world unless it is for scientific or medical reasons. However, the proposal was rejected and only trafficking of the drug remains illegal internationally. The signatory governments were expected to establish systems within their criminal justice systems to punish individuals involved in trafficking of prohibited drugs in their countries. Due to the failed attempts by the American government to influence the international community, the officials did not sign the treaty terming it too weak to deal with the problem at hand (Inciardi, 1990). The marijuana tax acts of 1937 are considered to be the most significant law towards the legalization of marijuana in the United States. The act was penned by Anslinger and sponsored by Robert Doughton. The principle purpose of the bill was to completely destroy the production, distribution and use of cannabis products in the United States terminating it illegal drug businesses. The act also specified penalties to which individuals found in possession of the drug were to be subjected to. Those found guilty of cannabis related offences were subjected to a five years sentence or could be fined up to two thousand dollars. This was all aimed at increasing the risks involved in the illegal business. The act was however opposed by a large number of Americans including the American Medical Association who argued that the act imposed tax on medical personnel using cannabis as a prescribed drug. The act also limited and taxed the production and sale of cannabis meant for medical use. Other than the new acts being enacted, the association proposed that the Harrison Narcotics Tax Acts could have been strengthened to deal with the emerging problem of marijuana abuse (Bertram, 1996). Since then, the federal government has continuously increased its vigilance in dealing with marijuana among other drugs in the country. Marijuana in the United States is today controlled by the controlled substance act which is contained in the comprehensive drug abuse prevention and control act that was enacted in 1970 as an appeal to the marijuana tax act of 1937. However, the act does not distinguish between marijuana meant for medical use or recreation purpose and prohibits possession, production and distribution of large quantities of the drug. Consequently, the federal laws treat marijuana like any other illegal drug with no medical value. Marijuana is therefore treated in the same way as cocaine and heroine. All the controlled substances under the federal are placed in a schedule according to their properties which includes risk of abuse and potential uses in medicine. In the controlled substance act, marijuana is not considered to have any medical value and is rated as a highly addictive substance and therefore placed under schedule 1 drug. Although doctors can use the first amendment to recommend its use in treatments, under the current federal regulations, prescribing marijuana is illegal (Gray, 2001). The Drug Enforcement Administration was also established to enforce federal anti narcotic laws in the country. The DEA has over the years taken a lot of interests in the production and use of medical marijuana. Moreover, the agency has targeted specific individuals involved in illegal drugs production and distribution. This mainly includes the minority races, African Americans and Latino Americans, who have been found to fall victims of illegal drugs abuse. Consequently, the war on drugs has resulted into accusation of institutional racism and racial profiling where the anti narcotic laws were designed to target the minority races. This issue continues to attract debate in the country while the American correctional facilities and the criminal justice systems in general is overwhelmed by the large number of drug related criminal cases (Musto & Korsmeyer, 1996). Although in many cases the drug enforcement administration leave alone cases involving medical use of marijuana, the federal laws have punitive penalties against individuals found in possession of marijuana for whatever reason. The drug is considered dangerous, illegal and with no medical use. For this reason, the courts maintain that an individual cannot defend himself on the basis of medical use when convicted of marijuana related cases. However, in many cases, defense attorneys have always raised the issues during trials. Sentencing is also an important legal aspect of marijuana in the United States. An accused can either be subjected to the federal sentencing guidelines created in 1987 or the mandatory minimum sentence created in the late 1980s. In the federal sentencing guidelines, an individual accused of marijuana related crimes is sentenced based on his criminal record. Under these guidelines, not all marijuana related crimes offenders are subjected to a jail term. However, they are all eligible for imprisonment. The guidelines require that the convicted individual should serve at least 85 percent of the jail term. The length of the jail term is determined by the amount of marijuana the individual is accused of being in possession. Low level crimes can result into a sentence of between one month and one year probation even in cases where multiple convictions are reported. For example, under the guidelines possession of one kilogram of marijuana attracts an alternative sentence of 6-12 months probation while two and half kilograms and no past record attracts not less than six months imprisonment and up to two three years incase of prior record of drug crimes with no alternative sentence. Although the judges continue to be influenced by these federal guidelines in imposing sentences, they are no longer mandatory. However, they are supposed to be advisory to ensure uniformity in sentencing (Bonnie & Whitebread, 1999). Cases involving marijuana are also subject to the minimum mandatory sentencing laws. The sentences mainly target individuals accused of possession of huge amounts of drugs. For example, the minimum mandatory sentence for an individual found guilty of possessing one hundred kilograms of marijuana or cultivating one hundred plants of cannabis is five years if he has no drug related crime record and ten years if otherwise. One thousand kilograms of plants attract ten years imprisonment with no prior record, twenty years with prior record and life imprisonment in case of multiple drug offences. Therefore, drug users and traffickers always avoid possessing one hundred or more kilograms of marijuana at any time to avoid the minimum mandatory sentence of five years (Gray, 2001). Medical Effects of Marijuana The effects of marijuana on the user have attracted a lot of attention in the past few years. There are a good number of studies that are still on going on the negative as well as positive effects of marijuana use on human body. It is important to note that the use of marijuana for recreation purposes has not been widely pronounced in the past as compared to other drugs. While narcotic use dates back to over a century, the use of marijuana has not been very prevalent in the general society until the last three or so decades. Consequently, the long term effects of marijuana abuse have not been very well documented although there are substantial and reasonable hypothesis that have been proposed. It is also important to note that arguably, marijuana has been considered to be among the safest illegal drugs such as heroine and cocaine. It has also been argued to be safer than some legal drugs such as tobacco and alcohol. Moreover, it has been confirmed to have pharmacological characteristic and consequently been used as a therapeutic drug for many years. It has been used in treatment of people suffering from chronic pain, Aids, cancer and other terminal diseases. Research is also being carried out to validate the alleged applicability in treatment of mental conditions such as anxiety and post traumatic stress disorder (Gruber et al, 2003). While looking at the negative impacts of marijuana on the user, it is also important to note that when used in moderation, marijuana does not have as many harmful effects as alcohol and tobacco. The social and economic impacts on marijuana could also reduce significantly if the use of marijuana is controlled. However, this is not possible when its use is illegal. No cases of accidents on the roads have been reported as a result of influence of marijuana despite it being the most abused drug in the United States. Moreover, although the health complication associated with alcohol and tobacco has been confirmed, very few have been confirmed in relation to marijuana. Reports on harmfulness of marijuana on the user have been inconclusive and mare hypothesis some of which are contradictory. Short term effects The active component in marijuana, THC, is responsible for the short term effects of marijuana experienced by the user. The main short term effects of the drug are as a result of its effects on the central nervous system. THC is known to bind to the protein receptor nerve cells in the brain. After binding, the chemical propagate a chemical reaction in the nervous system and produces the short term effects of the drug. One of the most immediate effects of these chemical reactions is restraining the user’s memory as well as learning abilities. After using the drug, the individual feels relaxed and may be very talkative. Other pleasant effects of marijuana use include lifting the moods, feeling relaxed and a change in the state of consciousness. This is why marijuana users claim to feel more enlightened and philosophical when they are high. These short term effects on the user plateau after thirty minutes to one hour and subsidies there after. However, there are evidences of some of the effects lasting for several days or weeks (Moore, et al, 2007). Other short term effects of marijuana include increase in appetite, dryness in the mouth, impaired logical thinking and slow reaction time. Intoxication with marijuana is also associated with nausea, occasional confusion, increased anxiety and agitation, increased heartbeat, loss of memory and paranoia or hallucinations. Marijuana users have also been found to have bloodspots in their eyes, inconsistent time perception and increased inability to carry out tasks that require concentration such as operating a machine or driving. The individual may also suffer from loss of motivation and decreased cognitive abilities making it difficult to learn or acquire new information. In general, the individual’s ability to learn, remember, make informed judgments, think critically, solve problems, communicate effectively and form concepts is impaired when he is high. Studies indicate that the risk of heart attack increase by more than four fold immediately after an individual has smoked marijuana. This is because the heart rate can increase with up to a hundred percent after using the drug which can be maintained for up to three hours. The increased risk of heart attack is also as a result of the changes in the heart rhythms. This risk increases with age and vulnerability to heart diseases (Gruber et al, 2003). Long term effects While the long term effects of marijuana are under investigation and therefore not well known, there is no doubt that long term use of marijuana have detrimental effects on the user’s health as well as social life. The insufficient information on long term use of marijuana is due to the fact that the drug has not been very common to many societies in the world until recently. There is no doubt that when marijuana smokers are compared to cigarette smokers, marijuana smokers consume much less cannabis compared to the tobacco consumed by cigarette smokers. However, this does not mean that marijuana smoking has insignificant long term effects compared to cigarette smoking and therefore should not be ignored. Recent studies have found out that there are more hydrocarbons that have potential carcinogenic effects in marijuana compared to tobacco. Moreover, marijuana smokers may be more exposed to these compounds than tobacco smokers because marijuana is deeply inhaled and the smoke is held for a longer time in the lungs compared to tobacco. This exposes the delicate tissues in the lungs to more carcinogenic compounds increasing the risk of cancer (Mittleman et al, 2001). Studies have indicated that marijuana use increase the risk of cancers such a cancer of the head and neck by up to three times. It has also been confirmed to have a significant contribution in the development of cancers that have traditionally been associated with tobacco smoking. Marijuana smoke is believed to have up to three times as much tar as in tobacco smoke. Moreover, it has over twice the number of potential carcinogenic compounds when compared to tobacco smoke. Logically, this suggests that marijuana smoking has a significant increase in the risk of development of cancerous cells leading to lung cancer. However, scientific research is underway to confirm these hypotheses. Other than marijuana being a recent drug among the wider population compared to other drugs, scientific research on its long term effects has been hindered by the small sample that is available due to punitive anti marijuana laws in many parts of the world. For examples, most of marijuana perennial users are still too young to have developed cancer. However, although there is no prove, long term marijuana users need to reconsider the risks associated with the drug (Hashibe, et al, 2006). The effects of long term use of marijuana in animals’ immune systems are well known. The immune system plays a vital role in protecting the body against harmful microorganisms. Research in animals indicates that the marijuana has a significant effect on the T cells, especially in the lungs. Although this has not been confirmed in human beings, there is no doubt that it affects the user’s immune systems because the animals’ immune system is similar to that of human beings. While it is expected that marijuana smokers too have similar respiratory system problems as tobacco smokers, it has been observed that majority of these problems are more frequent among marijuana smokers. They are more frequently attacked by chest colds, coughs, production of phlegm, and obstruction of airways and higher risk of lungs infections. This is possible due to the effect of the drug on the T cells and thus immune systems in the lungs (Tashkin, 2005). The long term effects of marijuana on the users reproductive system is not in doubt. This is more serious considering the fact that marijuana is one of the most abused drugs among young people in the United States. The active compound in marijuana has been known to have adverse effects on various parts of the central nervous system including areas that are responsible for controlling sexual hormones and growth. Consequently, long term use of marijuana has been found to reduce the level of testosterone and other sex hormones in male. In some cases, it has been associated with increased femininity due to distortion of the hormone system. It can also lead to infertility, reduced sperm count and increased abnormality in sperm cells. Significant cases of infertility in males has for this reason been linked to long term use of marijuana. The drug has been seen to have similar effects in females by altering the hormonal systems leading to irregular menstrual cycles. However, the alteration can be reversed but it may take time. It has also been found to negatively affect unborn babies who are born with an impaired nervous system. This results into children with poor learning abilities, hormonal irregularities, lack of attention and abnormal reactions to different stimulus such as sound and light (Moore, et al, 2007). Long term use of marijuana is also associated with mental disorders. One of the greatest negative effects of marijuana use in an individual is its addictive effects. The ability of the drug user to develop dependency on the drug has always been the main argument used to support prohibition of marijuana use. However, other mental disorders have been associated with long term use of marijuana. They include toxic psychosis which may reach acute levels, panic attacks, increased aggressiveness which the user is unable to control, flashbacks and delusions, paranoia and hallucinations as well as some cases of acute depression. Marijuana has also been suggested to trigger other serious mental conditions such as schizophrenia. These effects of the drug on the mental health of an individual have been the point of contention between pros and cons of therapeutic use of marijuana in terminally ill patients (Moore, et al, 2007). What are the legal guidelines and state statutes of some of the states that have legalized marijuana? The federal and states’ laws in the United States varies in relation to medical marijuana. According to the controlled substance act, the federal systems do not recognize the medical properties of marijuana. However, prosecuting patients or medical practitioner for using marijuana for therapeutic procedures is not a priority in the federal legal systems. The federal legal systems recognizes the fact that caregivers may be compelled to use medical marijuana in certain medical cases which is allowed in some states. Fourteen states have so far legalized medical marijuana use within their jurisdiction while others gives police or judge discretion to allow significant reduction in the punishment given to marijuana users for medical reasons. One of the most published states in relation to medical marijuana is California where the drug is distributed through dispensaries. It is estimated that medical marijuana industry in California was worth two billion dollars in 2008 which attracted over one hundred million dollars in tax (DPA, 2010). Despite majority of Americans and civil society organizations in America supporting legislation of medical marijuana, the federal government has always rejected the proposals. In 2005, the Supreme Court made a ruling confirming that a patient can be prosecuted in the federal court for using marijuana and medical reasons cannot be used as a defense. This law applies even in states that have legalized medical marijuana. Consequently, on several occasions, dispensaries distributing medical marijuana such as in California have been raided by federal officials from the Drug Enforcement Administration. The ruling by the Supreme Court provided an excellent opportunity for the amendment of the law to protect patients and medical marijuana legislatures in different states but the bill was once more rejected by congress (DPA, 2010). . Despite the congress rejecting the proposal to amend the law and legalize medical marijuana, the high court ruling had insignificant effects on the states’ medical marijuana laws. The court did not have the power to overturn or exercise authority over the states legislations. It is important to note that about 99 percent of marijuana related arrests are done at the states level which makes it possible for legislation in the states to protect patients and caregivers. The state laws can afford to effectively remove all penalties against individuals accused of growing, processing, distributing or possessing marijuana for medical reasons. Other states have not legalized medical marijuana but have symbolic legislatures that legally protect the patient in the state legal systems (DPA, 2010). From a wide range of contentious issues relating to drug policies in the United States, medical marijuana has received the greatest public support. The American population is skewed towards legalization of medical marijuana despite the federal government rejecting such proposals. Scientific studies have confirmed the medical value of marijuana in patients with serious terminal diseases such as cancer, Aids, epilepsy and chronic pain among others. There is also documented evidence of marijuana use in treating variety of illnesses in the ancient world. The most comprehensive study relating to medical marijuana was carried out in 1999 by the institute of medicine which concluded that marijuana has potent in the management of conditions such as loss of appetite, anxiety and chronic pain. Various professional bodies and organizations such as the American Public Health Association, the Aids Action Council and the National Association of Attorney Generals have deliberated on legal access to medical marijuana for patients with certain medical conditions. The American population has favored the abolishment of laws prohibiting production, distribution and use of medical marijuana at the state and federal level. Voters from various states have over the years passed ballot initiatives to push for legalization of medical marijuana. Over seventy percent of voters throughout the United States support the proposal to have legal marijuana available to medical practitioners for prescriptions (Cassidy, 2002). The point of contention on the legality of medical marijuana has been whether the benefit accrued is less than the risk involved. There have been many arguments on possible shortcoming upon legislation of medical marijuana. For example, questions have been raised on whether patients under marijuana prescription would be allowed to drive while under the influence of the drug, how to control the quantity the patient uses, the issue of addiction and medical marijuana getting into the wrong hands. However, it seems that this is not the main concern of the federal government. The main reason why the federal government has been opposed to legalization of marijuana for any reason is based on the Drug Enforcement Administration description of marijuana. DEA maintains that marijuana has no medical value and is a highly addictive substance with adverse effects on the body such as compromising the immune systems and triggering the development of cancer. The government has ignored some research that has confirmed the medical benefits on marijuana (Cassidy, 2002). Consequences on Law Enforcement What difficulties would Law Enforcement Officers encounter if marijuana was legalized? Legalization of marijuana is likely to bring about many challenges to the law enforcement structures. This is due to the interdependence of illegal drug markets where almost all narcotics go hand in hand. Although some people have argued that marijuana is safer compared to other illegal as well as some legal drugs, its legalization will in no doubt be a stepping stone drug. It will open up production, distribution and use of other harder drugs which will be problematic to law enforcement. Research indicates that progressive use of marijuana eventually leads the user to harder drugs. Because marijuana is considered a harmless drug, it is used for experimentation by potential hard drugs abusers. After a while, the user turns to other drugs. This will be worse if marijuana is made legal. More people will be introduced to it because of its legality and in the long run, the law enforcement will have a difficulty in dealing with a much bigger problem of harder drugs (Husak & Marneffe, 2005). The law enforcement agencies in the United States have enough drug related problems to deal with. The system ought to have learnt a good lesson from the legality of drugs such as alcohol. Road carnage as a result of driving under influence of alcohol is among the top killers in the United States. The law enforcement has always had a problem dealing with underage drinking and aggressive behaviors associated with alcoholism. Legalizing another drug means added problems. The dangers associated with stone driving will increase significantly. It is therefore wrong to legalize marijuana because it amounts to a victimless crime. There are many crimes that are associated with marijuana use such as violence and aggressiveness. Punitive penalties to deter irresponsible drinking have proved unworkable which suggests that it will be difficult to control marijuana use if legalized. A device can be used to detect drivers under the influence of alcohol, but this may not be possible when the driver is driving high. There is no doubt that legislation of marijuana will increase crime and burden in law enforcement (Husak & Marneffe, 2005). Arresting individuals found in possession of marijuana and other drugs reduces the likelihood of such individuals committing crimes. Drug addicts have been associated with minor and serious crimes such as shoplifting, theft and other property crimes to pay for their habits. Legalization of marijuana means that there will be more of these drug users in the streets and neighborhoods. These individuals are more likely to commit more serious crimes since the law enforcers are not obliged to get them out of the streets. Moreover, majority of murderers, rapists and robbers have been found to be drug addicts. By incarcerating these individuals for possession of drugs, they are incapacitated from committing such serious crimes. Common sense dictates prevention is better than dealing with the resultant problem. If there is reason to incarcerate potential murderers,