Category: Dissertation Help

Dissertation Help

Psychological Testing Research Paper

Measurement is a very critical aspect of any psychology topic or basically, in all psychology sub- areas. Every psychologist is usually concerned with measuring the children`s intelligence, creativity and also in measuring their moral development. The psychological tests are used to help the clients learn what careers are best for them. This is based on the interests and the abilities of the clients. Similarly, in this course, description of how learning occurred and how learning can be facilitated in the near future. Therefore, psychological testing is the use of psychological tests, which are ideally designed to be an objective and the standardized measure of a sample of behavior (Garber and Simon, 2017).

Psychological assessment is the main process of testing that makes use of a combination of techniques to help realize some given hypothesis about a person and their behavior, personality, and capabilities. From the description of psychological assessment, it has been defined as an act of performing a psychological battery on an individual. It is also the process of psychological testing (Garber and Simon, 2017). This research paper will, therefore, address different types of psychological tests, various theories in psychological tests and also a variety of standardized tests of intelligence, personality, achievement, interest, neuropsychology and several other areas of psychological testing as described in the Course description.

Psychological Testing Principles

Emphasizes the principles by which psychological tests are conducted is quite important. There are several contradictions when it comes to the use of psychological tests. Psychological tests should be well examined to ensure that, there is valid, appropriate and also the fair use of psychological tests.

There are key concepts that are discussed in this research paper and these include studying the importance of psychological testing (Garber and Simon, 2017). Psychological testing allows researchers and psychologists to make concrete decisions about people, early school placement, military job selections and also in other fields like college entry behavior. Secondly, based on our course teachings, psychological testing allows us to vividly describe and also understand an individual`s real behavior (Garber and Simon, 2017). Below are several other additional reasons for carrying out psychological testing/ assessment;

-It is a measure of a person`s personal attributes- Psychological testing helps the learner to understand an individual`s behavior. Understanding a person`s behavior is quite important since it helps researchers and learners realize/ judge a person based on his/ her way of behaving.

Psychological Testing
Psychological Testing

It is a way of measuring performance- Individual performance is quite important. People would often need to be assessed how they have performed within a specified period of time. Therefore, in this case, psychological testing would help us realize a persons performance in his or her field of specialty. This is one of the key reasons why psychological testing was devised and should be embraced.

  • Saves time. It is a time-saving means of evaluating an individual`s performance in a certain field.
  • It is, of course, the most economical means of achieving a person`s performance.
  • Similarly, the process of psychological testing is basically scientific. Therefore, testing is expected to have the best results in any experiment.

There are basic psychological testing terms that have been explored in this course. As part of the course objectives, it is important to define, describe and also identify these basic testing terms (Garber and Simon, 2017). Such terms include theory, assessment, attitude, personality, measurement, validity, reliability, operational definitions, statistics, average, central tendency, correlation, bias, battery, criterion, decile, standardization, derived score, Level of significance, sample, prediction, randomness, measurement scale, stratification, norms, distracters and factor.

As part of this research paper, definitions of some of these terminologies will be analyzed. For instance; -Theory- theory refers to an idea that is used to account for or even justify a psychological situation.

  • Sample- it refers to a set of collected data that is used for psychological testing and analysis.
  • Measurement scale- it is the basis that is basically used for the psychological tests.

This research paper also addresses uses and various varieties of the personality tests. The main aim of this is to determine which tool is the best for predicting and also measuring the behavior of an individual/ a person (Rappaport et al, 2017). Establishing the validity of the personality tests is again quite important in psychology. Personality tests are an example of psychological tests that have been handled in this course. It is usually used to measure and also evaluate the behavior of a person in school and several other social places. This test basically identifies differences in personality between persons who are being subjected to the similar test.

Personal tests are basically the best psychological tests to use according to a number of psychological researchers. Again in this research paper, the question, “which is a better tool to predict the behavior of an individual, is it the personality test or the projective test?” This is one research problems that have been identified in the course. The research problem can, therefore, be reviewed (Garfinkle and Richardson, 2018). This can be reviewed in terms of whether the personality tests, observation and also the inventories are more reliable and also predictive in determining the behavior of a person.

The hypothesis for this research paper is based on using personality inventories and the projective tests and determining which is better in assessing of a person`s behavior. Using research design and the descriptive correlational methodology is the best approach for the researcher. Descriptive psychological tests are therefore tools that are used to measure and predict the behavior of humanity (Garfinkle and Richardson, 2018). However, both personality tests and the projective tests are used to assess the personalities of individuals in different environments, for instance, school and community. Psychological tests can be applied in various instances. For example, organizations worldwide are busy striving to be successful in the best ways possible.

Aptitude testing is another form of testing that has been described in the course. It is the second widely used form of psychological test after the personality test. It can interchangeably be used with the term ability. The concept of ability in the aptitude test can be described as a general character of an individual that can ideally facilitate the learning of the various skills.

From aptitude definition, it is then easier to state that, psychological tests are basically standardized measures of a small sample of an individual`s behavior (Garfinkle and Richardson, 2018). For instance, a chemist can infer the characteristics of a large compound by only testing a few cubic centimeters of a liquid. Similarly, quality engineers only test a small sample of the finished products and not all of them. The same concept is applied by psychologists in coping with test results. They only base their work on a small sample to come up with results for a larger population.

In aptitude testing, there is a need to establish the difference between aptitudes and the abilities. Ability tests are basically given with an option of giving a dire prediction about a person`s future success in his or field of work, mostly occupational activity or even group of activities. However, it’s possible to use the term aptitude in place of the term, ability (Garfinkle and Richardson, 2018). There are several ways of describing aptitude tests. These include being described in the mode in which they are being presented and also be grouped based on their content.

Conclusion

Psychological testing and assessment are conducted for a number of reasons. For instance;

  • Detection of specific behavior- psychological tests are basically used to determine the abilities of a person.
  • Individual differences- Psychological tests are again used to determine the individual differences. This ideally shows the difference in a person`s ability. The person`s performance is also determined through psychological testing (Rappaport et al, 2017).
  • To diagnose by the psychological test- These tests are also used in clinical psychology. This can be used to diagnose mental disorders among individuals.
  • Legal classification- Psychological tests basically help researchers to identify people into different categories. These categories can be normal and abnormal, criminal and innocent, intellectual and mentally disabled and lastly, the able and the disabled.
  • Promoting Self -understanding- this is another function that psychological testing does. It, therefore, provides standardized knowledge about the person`s behavior, aptitudes and also capabilities.
  • Program evaluation- Psychological testing can be used for such measures as program evaluation (Kaplan and Saccuzzo, 2017).
  • Scientific research- psychological researchers use psychological testing for the purpose of research. It, therefore, provides knowledge about the person`s mental level (Chukhraiev, 2017).
  • Military selection- Psychological testing is used during military selection.

References

Chukhraiev, N., Zukow, W., Chukhraieva, E., & Unichenko, A. (2017). Integrative approach to reduction of excess weight. Journal of Physical Education and Sport, 17(2), 563.

Garber, B. D., & Simon, R. A. (2017). Individual Adult Psychometric Testing and Child Custody Evaluations: If the Shoe Doesn’t Fit, Don’t Wear It. J. Am. Acad. Matrimonial Law., 30, 325.

Garfinkle, M. S., & Richardson, S. L. (2018). Psychological Testing for Psychoanalysis. Psychoanalytic Trends in Theory and Practice: The Second Century of the Talking Cure, 269.

Kaplan, R. M., & Saccuzzo, D. P. (2017). Psychological testing: Principles, applications, and issues. Nelson Education.

Rappaport, S. R., Gould, J., & Dale, M. D. (2017). Psychological Testing Can Be of Significant Value in Child Custody Evaluations: Don’t Buy the Anti-Testing, Anti-Individual, Pro-Family Systems Woozle. J. Am. Acad. Matrimonial Law., 30, 405.

Other Relevant Blog Posts

Psychology Dissertations

Cognitive Psychology Research Project

Cultural Factors Psychology


Did you find any useful knowledge relating to psychological testing in this post? What are the key facts that grabbed your attention? Let us know in the comments. Thank you.

Approaches for Research Dissertations

Qualitative or Quantitative?

Approaches for all research, whether qualitative or quantitative, requires interpretation and contextualization by the researcher. Narrative statements or a series of figures will not give the answer to the research question or statement (hypothesis) by themselves.

Therefore it is important to choose a research approach (or approaches) that will give the correct ‘type’ of data to answer your research question.

A number of approaches are available when gathering data, but these don’t have to be used in isolation. For instance a focus group can elicit viewpoints which may need exploring further will a larger research cohort using a closed question survey. For this reason, it is important to plan your approach thoroughly before you start, to ensure your research question can be answered and to let your respondees know what is expected of them.

Don’t forget that whichever research method is chosen, it needs to have a robust ethics form that has been approved before contacting participants and starting to gather data.

Approaches that can be used:

Focus groups

This is where a group of people discuss a particular problem, facilitated by the researcher. The group interaction and the sharing of ideas not only means that rich and meaningful data can be pulled out from the focus group but also during the course of the focus groups, ideas can be co-constructed between participants which can be used to further the depth of research.

Structured interviews

When using structured interviews, the questions are written beforehand and are strictly adhered to regardless of the answer.

Semi-structured interviews

Whilst pre written questions are also used in semi structured interviews, this approach allows for the researcher to spontaneously build on answers given, allowing the base question to be answered but also elaborating on any areas which may impact on the research answer.

Survey

Surveys are an excellent way to reach a large number of people. This approach works if there is a clear idea of the questions that will elicit research to support the hypothesis. A mix of qualitative (open text fields) or quantitative (set questions and answers) can be used.

Case study

This approach is valuable when more in depth research is required and allows the researcher to investigate the issues in the place or time that they occur. The researcher will observe the participant and often will have follow up meetings to clarify or build on the information gained.

Narrative enquiry

This method works on the ideology that it is less important what is said, then how it is said. The story a participant will tell may not be entirely factual but it will be their perception of what happened which gives greater in sight. This approach is linked to discourse analysis methodology.

Appreciative enquiry (AI)

AI shifts the traditional focus of looking for the negative impacts of an issue and instead approaches the issue from a positive perspective.

Ethnographic

Ethnographical methodology requires the researcher to embed themselves in the participatory groups own setting, for a sustained time in order to observe, talk and learn from participants.

There are a number of branches from the ethnographic methodology:

Auto ethnographic

More than just an autobiographical account, an auto-ethnographic researcher should reflect on events and use these to uncover meanings and feelings that a purely narrative account may miss.

Visual ethnographic

Using video, photos and artefacts as the main source of research data rather than supplementing it.

Netography

Researchers using this methodology are involved and participants or ‘lurkers’ in virtual groups and communities. Ethical issues need to be carefully considered with this approach.

Soft Systems Methodology (SSM)

Instead of studying isolated issues, SSM is a holistic way of looking at and solving problems. These are often presented in mind map formats, making this a good research methodology for visual learners.

Questions to ask before choosing a research approach:

  1. Will we learn more about this topic using quantitative or qualitative approaches?
  2. Which approach will produce more useful knowledge?
  3. Which will do more good?

References

Taken from:  Cousin. Glynis, (2009) Researching Learning in Higher Education. Routledge. UK.

Research Approaches Dissertations
Research Approaches Dissertations

Relevant Blog Posts

Research Methods

Perfect Research

Dissertation Help

If you enjoyed reading this post on approaches for research dissertations, I would be very grateful if you could help spread this knowledge by emailing this post to a friend, or sharing it on Twitter or Facebook. Thank you.

Standardization versus Adaptation International Marketing

Standardization versus Adaptation Debate in International Marketing

In the international business market field, standardization versus adaptation debate is not new, where thus far researchers have not agreed on which strategy is effective to be adopted in international market. Taking a business into international market and successfully selling its products and services can attract a range of challenges. For many years, many multinational corporations make costly mistakes when trying to sell to the global consumers or audience. Such mistakes are mainly described by a lack of awareness of the role and contributions of adaptation and standardization in international markets. This paper seeks to analyse the issues of adaptation (customization) and standardization (global strategy) within international marketing strategies and proposes specific approaches that can help companies compete efficiently and effectively within these global setting.

Available Evidence

Since the start of the 1980s, globalization issue has developed significantly and critical to modern businesses. Globalization has helped in reducing the differences between countries. Both international of businesses and an increasing level of globalization have had a significant impact on how businesses plan and view their global marketing strategy (Wang & Yang, 2011). As a result, various research studies have been done on whether companies need to standardize or adapt certain behaviours in international market. As these multinational businesses start to market their products and services in foreign markets, one important strategic decision is whether to change the marketing strategies and mix to match the unique aspects of each local market or whether to adopt a standardized marketing mix (people, promotion, place, price, product, process management, and physical evidence) and a single marketing strategy in all international markets (Vrontis & Thrassou, 2007)

One consideration shows that markets are becoming more integrated, increasingly more global and similar and consider that the main element to business survival is its capability to standardize. In contrast, the other consideration identifies the challenges in adopting a standardized strategy, and thus, supports market adaptation or customization. Nevertheless, evidence proposes that following adaptation or standardization strategies depends on the positioning and dimensions present in respective international market.

Standardization versus Adaptation

Based on some studies, followers of standardization consider that there is an integration of cultures with the same customer demand and environmental demands across the world. They also state that trade barriers are being reduced and advancements in technology, where multinational companies reveal global integration in their strategies. Under standardization, providing a single strategy for the international market, along with standardizing the marketing mix components, can enable constancy with customers and also reduce costs. Brei, et al (2011) state that businesses managed effectively have shifted away from customizing their products to serving internationally standardized items that are low priced, reliable, functional, and advanced. Brei, et al (2011) further state that businesses can attain long-term success through focusing on what customers need instead of being afraid of the particulars of what customers think they might need.

In contrast, followers of international adaptation strategy focus on the significance of customization. The key base of the adaptation strategy is that when a business enters an international market, it needs to reflect on all environmental aspects, constraints, and factors, such as societies, cultures, different laws, taste, education, occupations, race, climate, and language (Akgün, et al., 2014). Nonetheless, studies have reported significant source of constraints that may be challenging to measure, for example, customs, manners, attitudes, values, religion, aesthetics, education, and cultural variations originated in history, along with variations in legal systems, economics, wants, and needs. Vrontis and Thrassou (2007) stated that multinational corporations need to realize how they should alter their whole marketing strategy and include how they order, distribute, and sell to match the new international or local market demands. It is also very vital to adjust the marketing strategy and mix to fit local preferences and tastes, customer non-equivalent requirements, and special market needs.

Advantages and Disadvantages of Standardization

Global uniformity and standardization have various benefits. First, customers can anticipate similar quality level of any particular brand in all outlets across the globe. Moreover, Hise and Choi (2013) posit that standardization facilitates positive consumer perceptions towards certain product. If companies that have a strong reputation and brand identity decide to follow the standardized approach, they will certainly gain success. In a global setting, positive word-of-mouth can imply an improvement in sales. Another benefit embraces cost reduction that provides the economies of scale (Hise & Choi, 2013). Selling huge amounts of non-adapted, same product and purchasing certain constituents in bulk may help in reducing the cost-per-unit.

Other benefits linked to economies of scale consist of reduced investment costs, marketing operational costs, and enhanced research and development. Additionally, standardization is a rational strategy in an era in which trade barriers are diminishing. Adopting a standardized approach assists multinational businesses to direct their emphasis on a uniformed marketing mix particularly concentrating on one single product or service, enabling adequate space for quality improvement. By focusing on one single uniformed product, employees will be trained to improve the product quality, which enables manufacturers to make equipment and technological investment that can protect the quality of the standardized product being served.

Nevertheless, standardization poses a range of shortcomings. Aforementioned, different international markets mean different consumer’s preferences. As a result, selling or offering one unified item poses lack of uniqueness. This enables competition to acquire bigger market share through adjusting their products to fit the need of a certain segment or market. Given that different markets have varied tastes and needs, by adopting the standardized strategy, businesses can become more at risk. One company example is Walmart’s failure when it entered international markets (Kim, 2008). Walmart encountered various challenges when it entered foreign markets such as Japan, South Korea, Brazil, and Germany as it realized that its recipe for success in the US (a huge set of merchandise, inventory control, and low prices) did not actually activate the same level of success in foreign markets with shoppers with varied habits and own discount chains. The key problem for the retail giant was that the company tried to inflict its values globally. Particularly, Walmart’s incident is Germany, where the company lost large sum of dollar as of 1998, has become an example or reference point for how not to expand internationally.

Another disadvantage is that it relies mainly on economies of scale. In nature, companies that are global often engage in manufacturing in various countries. This may also pose a great problem because some countries adopt trade barriers such as the EU and the US (Dimitrova & Rosenbloom, 2010). For such a case, adaptation is predetermined. However, even though the standardization strategy is more used, its adoption is not absolute. Standardization approach raises the performance of a firm. Nevertheless, this is only true for businesses where competition occurs in a global range, such as perfumes, luxury goods, fashion, electronics, consumer durables, among others. In such cases, similar product may be sold across all markets. In contrast, there are other sectors where this same action does not apply and thus, this needs to be considered.

standardization versus adaptation of international advertising strategies
standardization versus adaptation of international advertising strategies

Moreover, consumer non-durables, such as food products, are highly responsive to variations in national habits and tastes, making the companies to consider some adjustments to fit different markets. For instance, Unilever realized a greater opportunity among Indian low-income consumers who intended to purchase personal care products and high-end detergents, but might not afford them. To respond to this, Unilever produced a low-cost packaging product and various other alternatives that enabled it to provide radically cheaper alternatives. According to Theodosiou and Leonidou (2003), such a flexibility not only increase a new market for the business, but enabled also it to produce brand loyalty that customers benefit from it when their income increased and might afford higher-end products from similar manufacturer.

There are some questions which most businesses in the international market expansion need to answer: what products do we aim to standardize? And do we standardize distribution channels, pricing, marketing communications, product support and customer service? The answer to such questions need to either all adapted or all standardized.

Advantages and Disadvantages of Adaptation

Customization is also commonly considered an adaptation. Moreover, product adaptation is more applicable in the case in which: (1) there is an intense competition, compelling differentiation of products; (2) there is a considerable variations in consumer wants and needs; and (3) to meet essential host country requirements, including legal, technical, and packaging issues. These are also essential reasons for product adaptation and modification; literacy, customer lifestyle, and consumer’s income level.

The key arguments towards implementing adaptation approach is that it entails the individual approach as it enables the company to be aware of the preferences, wants, and needs of each market or consumer. Followers of adaptation strategy credibly support the idea that there is a considerable variation in consumer’s lifestyle, political system, regulations and rules, economic condition, culture, and consumer belief and values across the globe. Such elements need to be reflected on for the success of the company (Hussain & Khan, 2013). The application of adaptation marketing strategy supports the companies to gain an increased competitive advantage. In addition, the ultimate aim of a business needs not to be the cost reduction using standardization, but the actual long-term corporate profitability through improved sales attributable to the enhanced use of the differing consumer needs globally.

Poturak & Duman( 2014) assert that the followers of standardization does not possess the conventional knowledge of contemporary marketing. Irrespective of various arguments of improved consumer homogeneity, various studies have reported that consumers are becoming progressively more complex or diverse and do not essentially intend to substitute quality over price. Moreover, product modification or adaptation approach will results in a boost in sales volume of the company in international market; by highly meeting the wants and needs of the consumers, but reflecting on the competing companies; and by also retention of the current customers through frequently updating the product.

There are also certain drawbacks of product adaptation or modification of different marketing strategy, including duplication of the practices across the company and additional cost needed for the promotional practices. In this strategy, the company will need extra resources for research and development. The increased costs are attributable to defender fights and developments, which are also more risky. Moreover, companies may lack knowledge and experience regarding the technical elements of the different products and understanding on how to market a product (Hossain & Yazdanifard, 2015). This strategy also promotes decentralization of management.

Most Appropriate Strategy

These two strategies emerge to be coherent, logical, and rational, outlining the benefits that a company intending to expand internationally can acquire through implementing either strategy. When an international company puts forth all its efforts of the extreme side of either strategy, it normally becomes incoherent and unfeasible. The point is that marketing for international companies is not based on either of the two opposite strategies, since both strategies are probably to coexist, even in similar multinational company, brand, and product line (Rocha & Silva, 2011).

Vrontis and Thrassou (2007) stated that standardizing some components of the marketing mix, while adapting other components to differing market conditions is required. Adaptation and standardization should not be considered an ‘all or nothing’ proposal; rather it should be considered a matter of degree. For instance, diversity across various countries and markets does not enable whole standardization. Nevertheless, Schilke, et al. (2009) opines that higher cost associated to adaptation can limit the application of adaptation strategy. Wei and Yazdanifard (2014) focus on three factors to analyse adaptation and standardization practices: transferability of competitive advantage; homogeneity of various consumers’ reponse towards the marketing mix; and similarities in the level of economic freedom.

Schilke, et al. (2009) point out that even in markets or countries with the same cultures, such as across the EU, there are variations in customer wants and needs. In addition, they state that standardization will be effective when the customer response homogeneity and the level of sameness in economic freedom are higher, with easily transferable competitive advantages. Components of both strategies need to be integrated so that it can enable international companies to achieve desirable success. Acquiring the benefits of both strategies needs various firms to not only standardize different components of marketing strategies and marketing mix, but to implement also adaptation when needed with the aim of meeting the evident market needs (Batraga & Pūķe, 2015).

McDonald’s Case Study

An example of a major corporation that has been able to demonstrate the benefits of both adaptation and standardization strategy is McDonald’s. With around 35,000 restaurants in around 120 countries globally, McDonald’s competently manages its franchise system, providing an outstandingly reliable branding and customer experience, while also enabling for locally appropriate service and menu differentiations in segments or markets globally. Moreover, all advertisements are provided in twelve different languages, characterizing the tailored products organized to each region or market (Vignali, 2001). McDonald’s launched the McArabia (a flatbread sandwich product) in 2003, to its outlets in the Middle East. In addition, in India, it launched the McVeggie, while introducing EBI-Fillet-O shrimp in Japanese markets.

The company also selects convenient locations for its franchises, which include local neighbourhoods, airports, and malls. Such marketing strategies have proven to be efficient, showed by the company’s 8% increase in profit margins within the last five years. Nonetheless, McDonald’s has placed various efforts to improve them using the latest marketing practices in regards to the 7Ps. The company has started to modernize its eateries, shifting from a plastic-appearance to a more wood and brick design with the aim of sustaining a modern image (Yeu, et al., 2012). McDonald’s has also chosen to “re-image” its business operations in their advertisements through integrating a hip-hop theme with young generation icons such as Lee Hom and Justin Timberlake in China as a way of attracting young people. Moreover, this company has started to serve healthier foods (e.g. oatmeal), provided consumers are highly health conscious.

Conclusion on Standardization versus Adaptation

The regular topic in international marketing is whether multinational firms need to plan for adapted or standardized marketing strategy is immensely debated in scholarly setting and is a major issue to all multinational firms and marketing individuals. Followers of standardized strategy state that the international market has become homogenized and thus, these firms can market their commodities similarly across the globe. Using similar approaches will lead to higher margins and reduced costs. On the contrast, followers of the adaptation strategy focus on the evident differences between the markets of various countries and markets, particularly those for consumer goods, and favour adopting global differentiated marketing initiatives

This paper listed some advantages and disadvantages of every strategy, suggesting that the solution to an effective market strategy lies between these two extreme strategies. Firms can promote a strong international marketing strategy with the relevant structure, attitude, and operating behaviours that attain an effective and efficient balance between standardization versus adaptation approaches. Companies intending to expand internationally need not to treat the world as one singular market. Rather, they should initiate market research and establish their customers, and their wants and needs.

References

Akgün, A. E., Keskin, H., & Ayar, H. 2014. Standardization versus Adaptation of International Marketing Mix Activities: A Case Study. Procedia – Social and Behavioral Sciences, 150(15), pp.609–618.

Batraga, A., & Pūķe, I. 2015. Integrating Standardization versus Adaptation in International Marketing Strategies: Companies in Latvia. Proceedings of the 2015 International Conference, pp.27-36.

Brei, V., D’Avila, L., Camargo, L., & Engels, J. 2011. The Influence of Adaptation and Standardization of the Marketing Mix on Performance: a Meta-Analysis. BAR, Curitiba, 8(3), pp.266-287.

Dimitrova, B., & Rosenbloom, B. 2010. Standardization Versus Adaptation in Global Markets: Is Channel Strategy Different? Journal of Marketing Channels, 17(2), pp. 157-176.

Hise, R., & Choi, Y.-T. 2013. Are US companies employing standardization versus adaptation strategies in their international markets? Journal of International Business and Cultural Studies, 1-29.

Hossain, A., & Yazdanifard, R. 2015. Which One of Standardization or Customization Works the Best When It Comes to Online Marketing? American Journal of Industrial and Business Management, 5, pp.45-52.

Hussain, A., & Khan, S. 2013. International Marketing Strategy: Standardization versus Adaptation. Management and Administrative Sciences Review, 2(4), pp.353-359.

Kim, R. 2008. Wal-Mart Korea: Challenges of Entering a Foreign Market. Journal of Asia-Pacific Business, 9(4), pp.344-357.

Poturak, M., & Duman, T. 2014. The Role of Marketing Standardization versus Adaptation Strategies on Managers’ Satisfaction with Export Performance: Proposal of a Conceptual Framework. European Journal of Economic Studies, 10(4), pp. 252-262.

Rocha, T. V., & Silva, S. C. 2011. The Standardization versus Adaptation Dilemma: The Case of an American Company in Brazil. Internext – Revista Eletrônica de Negócios Internacionais da ESPM, 6(1), pp.63-83.

Schilke, O., Reimann, M., & Thomas, J. 2009. When Does International Marketing Standardization Matter to Firm Performance? Journal of International Marketing, 17(4), pp. 24–46.

Theodosiou, M., & Leonidou, L. 2003. Standardization versus adaptation of international marketing strategy: an integrative assessment of the empirical research. International Business Review, 12, pp.141–171.

Vignali, C. 2001. McDonald’s: “think global, act local” – the marketing mix. British Food Journal, 103(2), pp.97 -111.

Vrontis, D., & Thrassou, A. 2007. Adaptation versus standardization in international marketing – the country-of-origin effect. Innovative Marketing, 2(3), pp.7-20.

Wang, X., & Yang, Z. 2011. Standardization or Adaptation in International Advertising Strategies: The Roles of Brand Personality and Country-Of-Origin Image. Asian Journal of Business Research, 1(2), pp.25-36.

Wei, S., & Yazdanifard, R. 2014. Comparison on the Impact of Standardization and Adaptation on International Marketing. Journal of Research in Marketing, 3(1), pp. 250-259.

Yeu, C., Leong, K., & Tong, L. 2012. A Comparative Study on International Marketing Mix in China and India: The Case of McDonald’s. Procedia – Social and Behavioral Sciences, 65, pp.1054–1059.

Other Relevant Blog Posts

Marketing Dissertation Topics

Example Marketing Dissertations

Brand Management Reputation Marketing

Did you find any useful knowledge relating to the impact of standardization and adaptation on International Marketing in this post? What are the key facts that grabbed your attention? Let us know in the comments. Thank you.

Currency Crisis Cause and Resolution

Currency Crisis

Currency crises are rapid and unpredictable decline in the value of the currency of a nation. The crises are often more severe if the country involved uses a fixed exchange rate than if the country has a flexible exchange rate since the monetary authority will be forced to abandon the fixed rate. Currency crises usually increase by selling pressure of a currency and can only be remedied through devaluation or establishing a new exchange rate at a sufficiently depreciated level. Several countries have experienced currency crises which are caused by different factors. One of the most severe currency crisis occurred in Mexico between 1994 and 1995. The crises led to huge massive economic crises that forced the Mexican government to seek assistance from the United States and the International Monetary Fund (IMF) (Carbaugh, 2016). The essay herein will, therefore, examine the sources of currency crises in Mexico and the specific resolution and also including some other countries that have experienced currency crisis such as Russia and Turkey.

Mexico Currency Crisis (1994-1995)

Before the 1994 Mexico currency crises, the central bank of Mexico maintained the value of peso within a depreciated band of four percent every year against the U.S. dollar. In 1994, the Central bank decided to issue debt that is linked to the US dollar as a way to reduce interest rates on debts. The debts kept rising until it exceeded the central bank’s falling foreign exchange reserves which led to the currency crises. Despite the government responding by devaluing the currency by 15 percent, the crises continued until 1995. The continued selling pressure on the currency forced the monetary authorities to withdraw support in foreign exchange markets as foreign reserves of the Bank of Mexico fell. Although the severity of the Mexican currency crisis in 1994 was unprecedented, Mexico’s history on exchange rate policy has been characterized by the duration of both fixed exchange rate and flexible exchange rates (Ötker et al., 1995). The devaluation registered by Mexico is the largest depreciation of the currency of a country within one year.

When the currency crises occurred, there was little information about the possibility of its occurrence. The crises were somehow similar to the debt crisis that occurred between 1982 and 1983. Several assessments have been conducted to establish the main cause of the situation, and most of them reveal that it was contributed by the exchange rate policy of Mexican monetary authorities. The other cause identified through the assessment is the excessive use of short maturity tesobonos for deficit financing. Tesobonos is a peso-dominated bond which is issued by the government of Mexico and the coupons associated with it are indexed to the United States dollar. The Mexican government issued the tesobonos as a way to convince the international investors to buy Mexican debt that is exempted from risks associated with currency exchange. The investors are therefore immune to the effects of changes in the dollar value of the peso between the period of purchase and redemption. The risk associated with the change of currency is therefore carried by the Mexican government and not the investors. For instance, if the value of peso depreciated during the period of purchase and redemption, the Mexican government and the taxpayers would be liable for the losses.

According to the international economic statistics that were available before the crises, the Mexican government had the chance to evade the crises if the monetary authorities had information about the actual state of Mexican reserves. At the beginning of 1994, the Mexican reserves were at around $25 billion, but towards the ends of the year, the reserves had reduced to about $5 billion (Tavlas, 1997). The existing reserves were insufficient to meet the existing financial obligations. Furthermore, a default was considered to be a perilous move for the stability of the international financial markets. The deficit, therefore, led to the currency crisis. The International Monetary Fund (IMF) failed to provide the Mexican authorities with information about the decline in the reserves. Following the crisis, the IMF has resolved to closely monitor the financial reserves of developing countries to avert the occurrence of a currency crisis. The IMF has also resorted to providing early warning indicators to avoid the occurrence of a currency crisis in any nation.

Currency Crisis
Currency Crisis

Mexico has a great deal of the forms of direct capital investment in 1994, but it was not sufficient. The government was receiving massive amounts of money through stock-brokers who were motivated by the quick returns which were about 20 percent annually. The investment bankers and the stock-brokers were ready to exit Mexico as soon as the crisis begun thereby increasing the magnitude of economic damage. The troubles of Mexico extended from insufficient reserves, inability to service the debts, and incapability to generate profits on the equity capital. The crises also contributed to other social and political problems such as the Chiaspas rebellion at the beginning of 1994 (Tavlas, 1997). The political issues made the foreign investors take their money out of Mexico thereby broadening the implications of the crisis. The implications of the crises forced the Mexican government to seek assistance from the International Monetary Fund and the United States government.

According to Gil-Diaz (1998), the currency crisis in Mexico was contributed by the execution of the privation of the public enterprises and the deregulation of the Mexican banking sector. He concluded that the confiscation of the banking sector followed by subsequent privatization in 1991-1992 is the cause of the currency crisis. The Mexican monetary authorities made the deregulation of the banking sector without due consideration about the implications that it would have on the federal reserves. The decision later resulted in an increase in unpaid debts to the banks. The currency was then triggered by the Mexican government in 1994 because of the economic decisions. The crisis was determined by the fragility of the banking system and not the macroeconomic factors as indicators by other researchers. Three years before the crisis, the Mexican peso was overvalued which also resulted in economic pressure. The monetary policy that was passed by the Mexican authorities was inappropriate because the Federal Reserve was raising the interest rate while the Bank of Mexico maintained the existing rates. It, therefore, made the investors leave increasing pressure on the reserves.

The Mexican currency crisis had a regional effect through a contagion in various markets such as Brazil, Argentina, Asia, and Thailand; the effect was referred to as the “Tequila effect.” The crisis affected both the stock market and the foreign exchange market. Only the countries that had high economic fundamentals were exempted from the effects of the crisis. The Mexican government responded to the adverse situation by requesting for loans from different countries and international bodies among them being the United States, the International Monetary Fund, and the Bank for International Settlements. In the end, Mexican government managed to secure a loan totaling to $50billion that was used to meet the financial obligations. However, the move by the government to ask for loans received criticism from some of the European authorities that considered the move to be a moral hazard.

The Mexican government continued to resolve the crisis by implementing a severe adjustment program. Some of the strategies in the program included reducing the public spending, increasing the value added tax from 10 percent to 15 percent, and raising the prices of all the public goods and services. The program worsened the situation in Mexico as the Gross Domestic Product dropped by 6.5 percent and inflation increased by 50 percent. Furthermore, the banking system collapsed thereby forcing the government to use public funds in the rescue. The government also changed the exchange rate from fixed to flexible. Later, a law was passed that would only allow the government budget to be approved if the deficit is zero to prevent further lending. The initiative had positive implications in the GDP because of the increased exports of products to the United States. Through the Banking Fund for the Protection of Savings, the government was able to bail out the banking system that had collapsed.  Years later, the government decided to sell the Mexican banks to the international financial groups. Presently, there is only one Mexican bank as foreign investors own the rest.

One of the international institutions that played a role in rescuing Mexico was the International Monetary Fund. The IMF is responsible for providing loans to nations that are in financial deficit. The loans are usually issued following an agreement between the nation and IMF. The IMF responded to the crisis by providing a loan to the Mexican government through the U.S Treasury as a way to protect the foreign banks and other existing financial institutions. The various government also played a vital role in rescuing the currency crisis among them being the United States and Canada. The U.S. has had a long outstanding relationship with Mexico, and it is also the largest trading partner. Although the Federal Service Bank contributed to the crisis by increasing the interest rate, the United States assisted the Mexican government with loans to end the crisis. On the other hand, Canadian government through the North American Framework Agreement (NAFA) contributed funds beyond what had been collected at the time of occurrence of the crisis.

Russia Currency Crisis (1998)

Russia was severely hit by a currency crisis in 1998 that left both the economic and financial system in crisis. According to Gerry & Li (2002), the financial crisis begun in August 1997 when the Russian government defaulted on its domestic financial and economic systems. The duration was characterized by an increase in inflation, high levels of unemployment, and shanking of the economy. Although the crisis lasted for a short period, Russian who was living in the urban areas were severely hit. Globalization and uncontrolled speculation in the financial markets is one of the leading contributors to a currency crisis in the developing countries. The rise in the amount of capital that is flowing in the international financial systems as a result of globalization has had negative impacts on the economies of different countries. The crisis is caused by failures of certain sectors of the economy in the countries involved which later spreads to other countries through contagion and spill-over effects. For instance, the Asian currency crisis spread through contagion and spillovers to other countries such as Thailand in 1997 and later to Russia in 1998. Therefore, Asia is one of the causes of the Russian crisis although research shows that there is a little linkage between the crises that hit the two countries.

The Russian crisis can also be attributed to both political and economic factors. The Russian government triggered the crisis by selling the GKOs and OFZs which denominated debt instruments and coupon bonds after the fall of USSR. The Russian government then started experiencing problems that had negative implications on both the financial and the economic systems. The Russian government responded by converting the Ruble dominated instruments into US dollar-dominated Eurobonds to alleviate the risks involved. The Russian government continued borrowing from external sources that later raised concerns of its default exposure as foreign investors decided to cut their connection with the Russian debt, equity, and commodity market because of lack of confidence. The withdrawal of investors from Russia economy reduced the government capability to finance the debts thereby causing a currency crisis. According to the reports provided by the Economic Intelligence Unit (1998) in 1998, 30 percent of the Russian expenditure was used to service the short-term debts that the government had secured from other governments and international institutions. Therefore, high levels of debts are one of the causes of a currency crisis in Russia.

Russian Currency crisis was also caused nu the fall in the value of the Rule, weak banking system, and the reduction in the level of the foreign reserves. The Russian government tried to remedy the situation through the Central Bank by pegging the Russian Ruble to the US dollar with a narrow band. Several other studies have been conducted to establish the causes of the Russian financial crisis which had serious consequences to the economic and financial systems of other countries such as Turkey, Ukraine, and Moldova. The devaluation of the Russian Ruble also had negative implications on the Russia banks regarding assets and liabilities. There was also a reduction in the foreign exchange contracts because of the increase in the value of liabilities. Furthermore, the Russian government debts such as bonds and treasury bills that were used assets were reduced to worthless assets because of the defaults. As a result, most banks were closed which made a majority of the Russians to lose their savings. Lastly, the crisis caused political fallouts and frequent demonstrations of workers who were demanding a pay rise (Margolin, 2000).

The Russian currency crisis was resolved after intervention by the International Monetary Fund (IMF) which has the mandate of monitoring the economic and development policies enacted by various nations. The other responsibilities of the international body are to lend money to countries that are experiencing financial challenges and provision of technical assistance regarding research and training to countries that are in need. The IMF intervened in the Russian crisis by lending money that would help the government to escape the financial collapse. Despite the IMF lending money to the Russian government, the situation was already out of control since the money could only be used to take care of the short-term debts but not offer a permanent solution to the difficult situation.

For a country to survive a financial crisis, it requires a plan for the aid to be used in a manner that will help escape the situation. It is an excellent idea for the international body to issue financial aid, but the Russian government was not prepared to use the funds to evade the crisis. The government had lost control of the situation, and therefore it required more than financial aid to help the situations. The Russian government responded by coming up with a plan that would ensure the crisis does not happen again. The funds issued by the IMF were used in rescuing the banking system which plays a vital role in maintaining economic growth in a nation.

Conclusion

A currency crisis is one of the challenges that has been experienced by several countries especially the developing countries. Among the countries that have been affected by currency crisis include Mexico between 1994 and 1995, Russia in 1998, and Thailand in 1997. The crisis has severe implications on the economic and financial systems of an economy. The causes of the crisis vary from one nation to another, for instance, the crisis in Mexico was caused by reducing the level of Federal Reserve while excessive borrowing caused the Russian crisis. Once the countries are caught in such difficult situations, it the responsibility of the international bodies and other government to assist in escaping the situation. International Monetary Fund played a vital role in helping the above-discussed countries escape the harsh implication of currency crisis. The United States and Canada through the North American Framework Agreement (NAFA) assisted Mexico financial aid in helping rescue the situation.

References

Carbaugh, R. (2016). International Economics. Boston, MA: Cengage Learning.

Economist Intelligence Unit (1998). Russia: Country Report. London. pp. 42.

Gery, C. J. & Li, C. A. 2002. Vulnerability to welfare change during economic shocks: evidence from the 1998 Russian Crisis. Working Paper. University of Essex, Department of Economics, Discussion Papers.

Gil-Díaz, F. (1998). The Origin of Mexico’s 1994 Financial Crisis. Cato Journal, 17 (3), pp. 303-313.

Margolin, R. (2000). The Russian Financial Crisis: from craze to crash. The Stern Journal, New York University.

Ötker, I., Pazarbaşioğlu, C., International Monetary Fund, & International Monetary Fund. (1995). Speculative attacks and currency crisis: The Mexican experience. Washington, D.C.: International Monetary Fund, Treasurer’s Dept. and Monetary and Exchange Affairs Dept.

Tavlas, G. S. (1997). The Collapse of Exchange Rate Regimes: Causes, Consequences and Policy Responses. Boston, MA: Springer US.

Other Relevant Blog Posts

Currency Risk Dissertation

Circular Flow Model Economics Report

Economics Dissertation Titles

Did you find any useful knowledge relating to currency crises in this post? What are the key facts that grabbed your attention? Let us know in the comments. Thank you.

Brand Management Reputation Marketing

Reputation and Brand Management

Title: Reputation and Brand Management. In the recent years, some companies have been paying little attention to managing their reputations. Although the image of some companies is at risk, they do not see the risk posed by the loss of reputation (Issacharoff & Rave 2013). The BP oil spill accident was one of the largest environmental crises to happen in the recent times because it affected both the marine life and the human sector (Issacharoff & Rave 2013). Although this accident may not have affected the company directly in terms of financial performance, it lost part of its reputation. The company spent a lot of money on restoring the undermined image, although its efforts were not largely successful. The reputation of BP was made even worse by the responses given by the CEO Tony Hayward (Economist, 2018). In particular, the CEO tried to shift blame to other parties without taking full responsibility and making the necessary efforts to curb the situation.

Despite some of the bad remarks made by Hayward, when the accident happened, the company tried as much possible to curb the situation. Even James Ross, the Chairman of BP in the U.S., decided to go to the scene and estimate the level of the accident in order to see how the damage can be minimized. In just two hours after the accident had occurred, BP opted to send skimming team to the accident scene (Du, 2012). In addition, after 24 hours, BP had had already sent about 36 specialists to the site, which was a crucial step due to the fact that it reduced damage which has been caused to the company’s reputation. The measures taken succeeded in one way or the other. The company should have focused further on how to deal with the situation instead of spending a lot of money on PR exercise.

Volkswagen Company in 2015 was involved in emission scandal, whereby EPA issued a statement stating the company had greatly violated the Air Act (Ewing, 2015). According to the report released by EPA, it is clear that their TDI engines emitted a few poisonous gases after conducting a laboratory test, whereby in the real sense it was not the case because these engines emitted about 40 times more poisonous gases (Benjamin, 2018). The scandal affected the reputation of the company because the diesel emissions from the engines made by Volkswagen are not currently considered suitable due to not being environmentally friendly.

In order to solve the problem, Volkswagen came up with ways of reducing the diesel emissions. First of all, the company acknowledged the fact that they were involved in manipulating the tests conducted to investigate the vehicle emissions. The CEO himself apologized to the customers by admitting that the scandal had completely damaged the public trust and customers as a whole (Zhang et al., 2016). In addition, the company decided to pay the fine as result of damage caused by the diesel emissions, although it was costly to the whole organization. The effort made by the company to compensate for the damage caused by the pollution proved to be important because after some time, Volkswagen started to regain its lost customers sales, brand management and Reputation.

Brand Management Reputation Marketing

Also, Wells Fargo scandal was one of the biggest financial crimes committed ever, whereby the bank intentionally created more than 2 million fake accounts (Corkery, 2013). According to the report conducted in 2016, it was clear that this scandal inflicted a lot of damage to the Company because its reputation was largely damaged. For example, negative perception towards the bank increased from 15% to 52% after the criminal activity was revealed, which means that the bank had to witness decreased loyalty and the number of customers as result of the scandal (Corkery, 2013). Most of the customers started leaving the bank because it had already lost its reputation.

Brand Management Dissertation
Brand Management Dissertation

Further, the management of the bank tried as much as possible to restore its image at all cost. For example, after the occurrence of the scandal, it decided to pay compensations to some victims. The bank wasted significant costs on settling the damage done to its reputation by the scandal. For example, it had to pay $ 185 million in order to settle the charges resulting from the manipulation (Mims, 2017). In addition, the bank paid 570,000 customers, whom the company claimed to have taken car loans without their permission (Mims, 2017). After making efforts to compensate the affected customers, the bank’s activity started to alleviate the situation. For example, it managed to win back the faith of some of the loyal customers. In addition, the reputation of the company started to improve to some extent because it made efforts to rectify the fault.

References

Corkery, M. Wells Fargo Struggling in the aftermath of Fraud Scandal. The New York Times, 2013.

Du, S., & Vieira, E. T. Striving for Legitimacy through Corporate Social Responsibility and Brand Management: Insights From Oil Companies. Journal of Business Ethics, 110 (4), 2012: 413-427.

Economist. “A year on, Wells Fargo cannot shake off its mis-selling scandal”, 2018.

Ewing, J. Volkswagen says 11 Million Cars Worldwide are Affected in Diesel Deception. The New York Times, 2015.

Issacharoff, S., & Rave, D. T. The BP Oil Spill Settlement and the Paradox of Public Litigation. Louisiana Law Review 74(2) 2013: 397.

Kervyn, N., Chan, E., Malone, C., Korpusik, A., & Ybarra, O. Not All Disasters are Equal in the Public’s Eye: The Negativity Effect on Warmth in Brand Management Perception. Social Cognition 32(3) 2014: 256-275.

Mims, J. H. The Wells Fargo Scandal and Efforts to Reform Incentive-Based Compensation in Financial Institutions. NC Banking Institute 2(1) 2017: 429.

Preston, Benjamin. “Volkswagen Scandal Tarnishes Hard-Won US Reputation as Green Company.” The Guardian, 2018.

Zhang, B., Veijalainen, J., & Kotkov, D. (2016). Volkswagen Emission Crisis: Managing Stakeholder Relations on the Web. In Webist 2016: Proceedings of the 12th International conference on web information systems and technologies. Volume 1. Scitepress, 2016

Other Relevant Blog Posts

Branding Dissertation Burberry

Brand Equity Marketing

Branding Dissertation Titles

Did you find any useful knowledge relating to brand management and marketing reputation in this post? What are the key facts that grabbed your attention? Let us know in the comments. Thank you.