Oil and Gas Sector Qatar

The Impact of the Oil and Gas Sector on the Qatar Economy

Oil and Gas Sector Qatar

Qatar has become a dominant player on a global front, and its economy continues to grow at an alarmingly fast rate; it has seen a large influx of expatriates to the country because of the attractive remuneration packages on offer and the tax free environment that is available to the labor market. In addition the acceleration of growth seen in the Qatari economy is not solely due to the attractive remuneration and tax environment, but a number of other factors exist, such as the presence of large organizations, flexible trade policies, government supported initiatives and influences as well as cross border collaboration with other nations and companies that has intensified the growth of Qatar’s economy.

The production, distribution and sale of oil and gas are one of the fundamental factors that have seen Qatar and its economy develop from a frontier market status to an emerging market status. Petroleum is the cornerstone of Qatar’s economy and accounts for more than 70% of total government revenue. Paramount to this is the volume of gas which places Qatar as the third largest provider of Gas in the world today, and the richest Muslim country globally.

It is commonly becoming a place to build and implement businesses and successful partnerships and furthermore, the wealth Qatar has is in abundance which has enabled the economy of Qatar to flourish under the stewardship and vision of the Qatar emir and its government. Its economic freedom in the 2012 index was rated at 71.3 which places Qatar at 25 in terms of the freest economy of the world, and this shows the strides made by the country as a whole, however this can largely be attributed to the wealth generated from oil and gas productions, which is the largest contributor to the Qatari economy.

While Qatar has made significant progress in laying the institutional groundwork for sustained and diversified economic growth, the volatility of commodity prices, particularly during recent economic woes seen across the world which continues to undermine macroeconomic stability. Restrictions on foreign investment still exist and considerable state involvement in the economy is serious drags on generating more vibrant economic drive.

Justification of the Study

There is a lot of literature on the impacts of oil and gas on the economy of Qatar. However, most of this literature has not taken an all-round examination of the role and impact of oil and gas on the economy of Qatar. An examination of this literature shows a high inclination to the attractive economic effects of oil and gas revenue but they have paid little attention to the negative impacts of over reliance on oil and gas and its role in the current economic climate in the country.

These literature have also paid minimal attention to other factors that have contributed to the economy and the impact of globalisation. Because of this, they have been less reliable on making policy recommendations on economic diversification as a way of responding to volatility of oil prices and the global shift towards green energy supply in order to ensure a continuously high economic growth. The country also has to begin setting up economic projects that will sustain its economy, especially after the exhaustion of its oil and gas reserves. This literature gap provides the rationale for this research. Although it pays a special attention to the oil and gas industry, this research makes a whole round examination of the Qatar economy and out of this, it will make an evaluation of the role of oil and gas companies in improving the economy of Qatar.

Objectives and Nature of the Study

This study will critically evaluate and assess the role and impact of the oil and gas industries within Qatar on its economy. In doing so, the study will focus on current economic climate and analyse the key factors which contribute to the economic growth which has been evident over the last several years. The study will make a strategic evaluation of the Qatari economy examining the benefits and drawbacks of reliance upon oil and gas companies and more importantly looking at the influence of globalization on Qatar’s economy.

Main Aim

To assess the impact of oil and gas sector on the Qatari economy

Literature Review

This section of the paper contains brief summaries of the existing literature surrounding the role and impact of the oil and gas industries within Qatar on its economy and other factors that have facilitated or contributed to this the economic growth of the country.

Economic Landscape of Qatar

Qatar has flourished under the strong stewardship of the Al -Thani family and the support of the government has enabled Qatar to build and strengthen the economy of Qatar. During the recent financial crisis where many countries and governments struggled to maintain control and control spiraling debt Qatar seemed protected from such adversity, and in 2011 Qatar had the highest growth rate. Qatar’s economic policy has been focused on developing its vast oil and natural gas reserves with considerable success. The economy has seen unprecedented growth but this has largely been due to the focus and revenue generated from the oil and gas sector Qatar.

Globalization in Qatar

Globalization has encouraged and seen flexible trade among nations and also allowed emerging economies such as Qatar to prosper as it has enabled various distribution channels to be accessed. Without sufficient access to global channels or investment from foreign investors, the economy of Qatar would remain stagnant with low growth rate and a sufficiently weak economy. According to Mankiw et al (2011), international trade allows economies to achieve economies of scale, build strong relationships and more importantly, develop trade policies and practices which assist the economy.

Qatar, having reduced restrictions to some degree with respect to the investment of foreign investors, has increased its position as a leading oil and gas provider. More importantly, it has allowed Qatar to develop other aspects of its infrastructure away from the production and distribution of oil and gas. Globalization in Qatar can also be seen through the expatriate workforce, who account for almost 75% of the Qatari population, and the skills and knowledge of these individuals has allowed Qatar and its economy to benefit from sharing of best practices and gained knowledge.

Oil and Gas Companies

As mentioned in earlier parts of this chapter, the oil and gas industry in Qatar is by far the largest contributor of revenue, with almost 70% generated through this industry. The money is reinvested within the Qatari economy, with a number of objectives the government has set such as development of the infrastructure in Qatar and the knowledge base. Money is also reinvested to develop and improve other business sectors particularly the reinsurance and asset management sectors. As discussed oil and gas is a large contributor of revenue and is one of the key drivers for the Qatari economy, (Miller et al, 2011) however the volatility of oil prices, and the global focus of shifting towards more greener energy supply is likely to impact the economical standing and strength of Qatar.

Impact of Oil and Gas Industry on Qatari Economy

The exploitation of oil and gas fields in Qatar begun in 1940 and since then, the oil and gas industry has had a huge impact on the economy of Qatar. Generally, the oil and gas industry has led to the attainment of a stable economic prosperity in the country. First, it has removed Qatar out of the ranks of the poorest countries in the world. Before this, it was a poor pearl fishing nation. In relation to this, the industry has also helped to speed the economic development in the country and in 2010, Qatar was experiencing the highest growth rate in the world. This economic boost has mainly been experienced since the dramatic increase in oil and gas revenues in 1973 and the completion of first phase of the North Field gas development. This phase alone cost $1.5-billion.

This positive and accelerated economic growth in Qatar has been recorded even in the times of global financial crisis. During such times, the country experiences a rebounding of its economy due to the increased oil prices as opposed to non-oil producing countries that have to spend extra money to avail oil and gas for driving their economies. The oil and gas industry can therefore be said to provide a shield on the Qatar economy against the effects of global financial crisis. It is undeniable that the oil and gas industry is the backbone of Qatar’s economic development. This industry accounts for over 50% of the country’s GDP, about 85% of export earnings, and 70% total government revenues (Miller et al 2011).

The oil and gas industry has provided Qatar with one of the leading per capita incomes globally. Currently, Qatar has the second largest per-capita income in the world. The per capita income for 2009 was $80,000. This rose to $90,000 in 2010 and to $102,700 in 2011. The GDP for these years were $131.2 billion, $153 billion and $181.7 billion in for years 2009, 2010 and 2011 respectively. Their GDP growth rates were 12%, 16.6% and 18.7 % respectively (CIA world fact book   2012).

The oil and gas industry has also helped to reduce the unemployment rates in Qatar and currently, Qatar is one of the countries with the low unemployment rates. Unemployment rates in 2009 stood at 0.5% and remained constant through 2010. However, this figure dropped to 0.4% in 2011. Inflation rates in Qatar have been reduced mainly because of the increased government revenues from the oil and gas industry and in 2011, this figure was 2.8%. this has led to a decrease in the number of people living below poverty line. The Industries Qatar (IQ) is the second largest producer of chemicals in Middle East. The largest is Saudi Arabia’s Basic Industries Organisations.

The huge revenues from the oil and gas industry have provided sufficient capital for the establishment of heavy industrial projects in Qatar. These include refinery, fertilizer plant for ammonia and urea, petrochemical plant and a steel plant. These projects are based in Umm Said and they benefit directly from gas fuel extracted in the country. The development of industries has provided a means of diversifying the economy. Revenues from oil and gas have been critical in enhancing the development of other economic sectors like tourism, transport, education among others. Through these revenues, the government of Qatar has been able to boost its educational sector and this has reduced the reliance on foreign expatriates who are expensive to maintain.

oil and gas sector Qatar
oil and gas sector Qatar

Overall, the improved government and household income has led to a significant increase in the number of Qataris who attain higher education and those that are foreign-educated. These individuals have occupied the key positions that used to be occupied by the highly paid expatriates. This has had a positive impact in reducing national expenditure. Because of the stable income from oil and gas export, there have been sufficient funds for facilitating the growth of the tourism industry through the funding of the various activities and plans of the Qatar Tourism and Exhibitions Authority (QTEA). This has led to an increase in the number of tourists received in the country and thus revenue from tourism.

The government has also been able to expand the New Doha international airport and this is important in increasing the country’s economic growth by accommodating a larger number of passengers, especially tourists, as well as some economic commodities. Still on transport, revenues from oil and gas have helped to improve regional connectivity between Qatar and, Bahrain and Saudi Arabia through the multibillion-dollar Qatar Bahrain Causeway and the Doha Expressway. This has resulted to increased regional trade between Qatar and these countries. Others include extensive bus and rail transport that are important for facilitating a smooth running of the various economic activities like transport of human resources, raw materials or finished products to the target markets or export points.

Key Factors Driving Economies

An economy comprises of the economic systems of an area; its land resources, capital, manufacturing, production, trade, distribution, consumption patterns and labor. A country’s economy results from the activities and mechanisms that result from its technological know-how, demographic factors, geography, utilization of natural resources and history (Stretton 1999). These factors contribute to the environment, content and principles upon which the given economy operates. A market based economy may be looked at as a limited social network where exchange of goods and services takes place based on the demands and supply between the economic agents i.e. a medium of exchange where credit and debit values are accepted in a given network.  Labor and capital are the only free economic systems that can move free in search of higher profits, interests, dividends, interests, benefits and compensations. Land resource is fixed.

For an economy to be sustainable, the key drivers of its growth include, per-capita income, opens to trade, channelization of investment and deregulation (Stretton 1999). Per capita income or income per person refers to the measure of a population’s resources within a given nation or country in comparison to other nations. It involves taking the sources of income such as gross national income and then dividing it by the total population. Commonly, an international currency is used for calculation of GDP which produces accurate statistics for comparison. It’s not aimed at determining wealth or resource distribution of a nation but a measurement of success (Stretton 1999). Per capita income does not result to monetary income because income over time needs to account for change in prices. Another weakness is that there can be discrepancies on international comparisons caused by differences in living standards between nations that are not reflected on exchange rates.

Demographics refers to information that shows he populations composition on a given area. This information comprises of age, gender, income, race, population growth and migration patterns. These factors determine the price of commodities, demand and supply phases. Changes in demographics can have significant impact on the market trends of a nation. Investors need to analyze the demand and supply effects. Changes in interest rates can influence a person’s ability of purchasing an item since, if the interest rates fall, the mortgages of buying a house for example decreases and increases the demand for the house. When the interest rates rise, the mortgage increases, lowering the demand for the house.

Investment channelization affects the economy in that, if people have invested in buildings, there is sensitivity to economic activities due to the type of lease structure inherent in the business (Stretton 1999). Structures are bound to be demolished any time especially if they are located on public land. On the same note, buildings located on non-strategic business ventures are likely to yield less profits in terms of rent compared to those that are strategically located. People should be advised to invest on appreciating resources such as land as opposed to depreciating resources.

Employment is another key economic determining factor. Employed persons contribute to the economy through tax payment (Stretton 1999). Employment also improves the living standards of people in a given population. Openness to trade is determined by factors such as communication patterns between nations, political stability and history of a nation in terms of trading patterns. Communication strengthens business relations between nations. Political stability ensures freedom of movement and security in conducting trade activities.

The Key Factors Driving the Qatari Economy

EconomyWatch (2010) reports that Qatar is one of the fastest growing economies across the globe and has surpassed countries like Turkmenistan and Singapore according to 2010 economic survey 2010. The survey revealed that by 2010, Qatar’s real domestic product (GDP) growth rate stood at 19.4 percent. Its economic growth has been consistent since 2008 in which it I ranked among the top three world’s fastest growing economies. In fact, economists believe foresee the growth to continue by double-digits in the coming years. The growth is attributed to by many factors among them being producer of oil and natural gasses.

EconomyWatch (2010) argues that the growth in Qatar’s economy has mainly been spurred by the fact that it has abundant oil and natural gas. For instance, it is estimated that natural gas and oil industries contributes 50 percent of the gross domestic product, with 85% of the export earnings and the other 70% being revenue. 2010 statistics show that 76.98 billion cubic meters of natural gas was produced in Qatar which accounts for an average of 1.213 million barrels of oil production daily. Qatar also ranks among the world’s top exporters of oil. This has helped in increasing economic growth based on the fact that there is high demand for oil and constant increase in prices globally.

The other factor that has spurred economic growth in Qatar is the country’s economic diversification efforts (Oxford Business Group 2009 p.42). EconomyWatch (2010) argues that since the economic down turn experienced in Qatar in 1980s and 90s, the government has ensured that the country reduces over-reliance on natural gas and oil for economic growth ensuring that it expands the country’s service sectors such as tourism and finance industries. For instance, Qatar’s financial centre built in 2005 is a state-of-the art business and financial centre that serves major multi-national companies and international financial service organizations. This has contributed a lot to Qatar’s economic growth. With regard to tourism sectors, the country has good infrastructural facilities, ranging from good roads, hotels, and natural sceneries developed to attract tourism has contributes largely to its economic growth. The fact that it has good infrastructural facilities is what led to its successful bid to host 2022 world cup. This has also increased its global profile thus increasing tourist’s influx (Oxford Business Group 2009 p.42-88).

Qatar’s industry sectors are also another factor that has contributed considerably to its economic growth. Apart from gas and oil industries, Qatar also has other industries such as steel, fertilizer and petrochemical industries. The government in partnership with private sectors has maintained a positive growth in all this industries. For instance, Industries Qatar (IQ) ranks second largest chemical producer in the Middle East just behind Basic industry organizations in Saudi Arabia. EconomyWatch 2010 survey reports that Qatar ranked among the world’s fastest growing in terms of industries in 2010, rising by 27.1% in from the preceding year. The trend has continued to grow. Thus it is one of the major factors that contribute a lot to the economic growth in Qatar.

The growth in Qatar’s economy is also attributed to the fact that the country has invested a lot in foreign countries (Oxford Business Group 2009 p.42-88. The money recouped back from such investments is used in the development of the country’s economic stimulus such as education sectors, health and other social facilities. The country also trade a lot with other countries like Japan. This has spurred a lot its economic growth. For instance, EconomyWatch (2010) Japan was the largest export partner of Qatar which accounted for 34.68 percent of all exports from Qatar. This was followed by South Korea, Singapore and India.

The other factor considered to contribute to the growth is the modest population in Qatar. The modest population has ensured that there is no strain in economic resources of the country. This is therefore a factor that has spurred its growth in GDP per capita.

Benefits and Drawbacks on Placing Reliance on Oil and Gas Revenues

Oil and gas are the main sources of revenue to the citizens. National wealth and revenues are mainly derived from oil and gas. As a major contributor to the national economy, oil and gas le ads to growth, development and good governance.  However, oil and gas have brought several challenges to the national government. These challenges do not only include the problems of management of oil and gas resources and the taxation issues. The challenges also include the government’s ability to control resources, governance and accountability in the usage and distribution of the national revenues to all members of the country (Cordesan, 1997).

Another major challenge of relying on oil and gas is the ability to manage the environment.  Unchecked oil and gas exploration and production leads to environmental de gradation. Crucial habitats for both plants and animals can be affected while producing oil. In addition, harmful gas emissions to the environment have led to global warming thus le adding to climate change. Current efforts have been channeled toward the production of energy through renewable sources of energy. Over reliability on gas and oil also reduces the chance of the coming generation in using the resource. With the increasing demand on oil and gas and the mass production, the coming generations  are likely not to benefit from oil and gas  in the coming few years. Investing in the renewable sources of energy is the best alternative to the usage of fossil fuels.  Placing reliance on oil has also led to the decreased food production. Large tracts of land have been used in the exploration and production of oil and gas (Amuzegar, 2001).

Over-reliance in oil revenues leads to increased economic tax reliability. Other contributors to the economic sector have witnesses a decrease in the amount of taxes they can contribute to the national economy. The agricultural sector has not been such effective in contributing to the national economy. However, reliance on oil and gas revenues has led to faster economic growth in Qatar (Cordesan, 1997).

Due to the increasing rate of petroleum rents. The government has been able to decrease the amount of taxes levied on its citizens. Reduced levels of taxes ensure that the citizens enjoy larger part of their income without being highly taxed by the government. However, corruption among government officials has led to the loss of huge amount of national resources. Corruption ensures that citizens do not en joy the potential benefits of the revenues generated from oil (Amuzegar, 2001).

On the contrary, reliance on oil and gas may pose challenges to the government especially when the oil and gas are not in large amounts. Fossil fuels sources can be depleted due to its constant usage and over reliability. The government therefore needs to invest t in other contributors to the economy such as industries. This will ensure that oil and gas shortage commonly witnessed or the eminent depletion of sources lead to a crisis.  Further, there has been lack of public accountability and the rampant corruption cases. This has led to fierce competition in the elective posts with competitors using violent means to deter their opponents from taking office. Politicians have continued to use state resources and facilities; there has also been the increased violation of human rights and harassments (Cordesan, 1997).

Trade barriers and the Impact on the Economy – oil and gas sector Qatar

Internally, Qatar maintains a number of trade barriers, which directly affect foreign investors willing to invest in the country. These barriers are mainly in form of import restrictions. First, the country is extra keen on the import of politically or religiously sensitive items and the Government of Qatar (GOQ) is expected to ban the import of such products.  Just before the 1995 closure of the Arab Boycott of Israel Office which was located in Doha, the government of Qatar unilaterally deleted some giant foreign firms from the blacklist. This included some US corporations. Qatar has lifted the tertiary and secondary aspects of the boycott and the as a result, the Israeli Trade Representation Office was set up in Doha. However, in a brief statement, the government of Qatar announced that this office was officially closed. This was just before the opening of the Organization of Islamic Conference in November, 2000.

Qatar does not have import quotas. However, a number of non-tariff barriers which discourage investment and trade arise occasionally. For example, Qatar maintained a banned the importation of beef from the US from 2005 until mid-2008. International trade in Qatar is also restricted by cultural barriers. For example, the imports of pork products is totally prohibited in Qatar because of cultural reasons. The country is s strong Islamic state and the consumption of pork is totally prohibited by their religious values (Arnous 2011).

International Trade Within Qatar

Imports over the one past decade, Qatar has depended more on imports. These imports range from basic food commodities to consumer goods. Specific import goods include machinery, chemicals, and transport equipment. The Imports of goods is mainly dominated by Organization for Economic Development and Cooperation (OECD) members namely US, UK, Japan, Italy, and Germany. Others include South Korea, Saudi Arabia, France, People’s Republic of China, and the United Arab Emirates. In 2010, the total import value for Qatar was $25.33 billion (CIA World Fact Book). Although Japan overtook the UK as Qatar’s chief machinery supplier, imports from the UK still account for an important percentage of Qatar’s imports. Overall, European Union (EU) is Qatar’s leading import trade partner. The value of Qatar imports doubled since 1990 as a result of improved purchasing power resulting from increased oil and gas sales and this peaked in 1999. Since the early 1990s, the capital gas and oil purchases have accounted for approximately 40% of the total import spending in Qatar (CIA World Fact Book). Unlike the export value, Qatar’s import value is consistent or predicable due to the large difference between its import and export values. Any one time, the country has sufficient money to fund its import trade. Oil and gas has therefore played an important role in maintaining a good import trade in Qatar.

The main export product in Qatar is crude oil. However, its dominance has begun declining over the recent years as a result of the increase in the export of Liquefied natural gas (LNGs). Crude oil accounts for about 56% of Qatar’s total exports and this reliance on crude oil has resulted to inconsistency in Qatar’s export bill (Miller, Agnes, & McBrewster 2010). This value has always fluctuated, to the positive and negative, as dictated by the global oil prices. Evidently, Qatar’s export revenues begun to surge beginning from 1999. in 1998 for example, export revenues were US$4.36 billion but this increased to US$6 billion in 1999 (CIA World Fact Book). Beginning this time, Japan has been the largest export partner, of Qatar. In 1998, exports to Japan alone accounted 58.1% of Qatar’s total export bill. 2010 estimates still places Japan as Qatar’s leading export partner and its trade value accounted for 30.3% of Qatar’s exports. Other important export partners for Qatar include South Korea (13.1%), India (8%), Singapore (7.7%), UK (4.2). Thailand and the US import from Qatar but on minimal levels compared to other export trade partners. Apart from exporting oil and LNG, Qatar also exports petroleum products, steel and fertilizers. In 2010, Qatar’s total export value was $104.3 billion (CIA World Fact Book).  The substantial revenues from oil and gas have allowed Qatar to maintain a significant trade surplus. This has been efficient in shielding the country from trade imbalances.

Research Methodology

Research Approach

Saunders et al. (2007) classify research approach into two main categories; deductive or inductive approaches. This research will use both approaches, as this study will analyse existing study and theories in relation to the subject. The study will rely on secondary data with sources including books, journals, government records, newspapers and reputable websites.  Primary data will also be relied on with questionnaires being issued directly to respondents. Structured interviews will also be conducted with the aim of establishing certain facts in relation to the subject from an authority’s point of view.

Data Collection

In relation to the study, a sample of 20 respondents will be used for the study. A random sample will be drawn from a population of nationals living in the capital city of Qatar. The sample will be drawn randomly at different parts of the city as they go about their businesses. Two respondents will be draw from 10 of the main and busiest streets of the city, one from each end of the street.  The 10th person to pass by the researcher’s standing or sitting position moving toward the other end of the street will be taken as a sample.

Questionnaires will be constructed using pre-defined statements where the respondents will be asked to respond based on their level of agreement with the statement. The questionnaire will be based on the Likert style questionnaire. Specifically, a five-point Likert scale will be used to indicate the degree to which an individual respondent agrees or disagrees with statements. These will range from “strongly disagree’ at one end and at the extreme end, “strongly agree”.

Each participant will be required to complete the questionnaire presented in two languages: Arabic and English. This will help to reduce the effects of language variations and thus increase the reliability of the results. In addition interviews will also be used as an additional method of gathering data. With respect to supporting this study, the people selected for the interviews will be carefully chosen and will be selected based on their position and knowledge of the area of study. For this study, two interviewees will be considered. One interviewee will be a government official working in a ministry or department directly concerned with the harvesting and processing of oil and gas. The second interviewee will be a top official in a privately owned organization that deals with oil and gas. These personalities are chosen owing to the presumed rich knowledge of the gas and oil sector and its impact on the economy.

Data Analysis

Once the data has been collected, it will be coded on SPSS software for analysis. In order to analyze the findings and results of the study, cross tabulation and descriptive statistics will be used to determine the absence or presence, and degree of association of a relationship between any combination/pair of variables that have been selected for analysis. This method will also allow an examination of the frequencies of responses or observations that fall into specific categories. A correlation coefficient will be calculated for the purpose of expressing the relationship that exists between any two variables.

Ethical Considerations

The research does not deal with a subject that is personal and so it is unlikely to attract serious ethical issues. All the same, the research will take into consideration a number of ethical issues in its procedures. Among them is the protection of the private and statutory rights of the participants and the community being surveyed. One of the things that will be done in line with this is obtaining informed consent from the participants to avoid undue intrusion. No personal data of the respondents will be collected, and minors will not be engaged in the survey.

The research questions will be framed in a way that they will help to maintain public confidence in the entire research process. Qatar is a society that highly regards its cultural values such as human relations. Because of this, the participants, especially female participants, will be approached in a more sensitive manner to avoid suspicion, misunderstanding, or undue concerns. Any conflicting interest will also be identified and taken note of.

References

Amuzegar, J (2001) Managing the Oil Wealth: Opec’s Windfalls and pitfalls, New York, I.B Tauris.

CIA world fact book (2010) Qatar Economy 2012

Cordesan, A. (1997) Bahrain, Oman, Qatar, and the UAE: Challenges of security. New York Westview press

Crystal, J. 1995. Oil and politics in the gulf: the merchants of Kuwait and Qatar, (1st Ed), Cambridge University Press. Cambridge.

Economist Intelligence Unit (2006) Qatar. Country Report, June 2006. Economist Intelligence Unit, London, UK.

EconomyWatch (2010) Qatar Economy

Government of Qatar, Planning Council (2006) Qatar 2025 Vision, Qatar, Government of Qatar

Mankiw, G. & Taylor, P. (2011) Economics, (2nd Ed), Nelson Education.

Miller, P., Agnes. F. & McBrewster, J (2010) Qatar: History of Qatar, Politics of Qatar, Municipalities of Qatar, Economy of Qatar, Geography of Qatar, (1st Ed), Alphascript Publishing.

Oxford Business Group (2009) The Report: Qatar 2009, Oxford, Oxford University Press.

Qatar Knowledge Economy Project (2007) Qatar Knowledge Economy Project

Saunders, M., Lewis, P and Thornhill, A. (2007) Research Methods for Business Students, (4th Ed). Prentice Hall, London.

Stretton H. (1999) Economics: A New Introduction, Pluto Press.

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Market Analysis Nike

Market Analysis Nike

Nike Inc. is a globally leading organisation involve in the development, design and global marketing and selling of apparel, athletic footwear, equipment and accessories. Nike is one of the largest sellers of athletic apparel and footwear worldwide with more than 200 subsidiaries all around the world. Nike is famous for its cutting edge technology.

Nike was founded in year 1964 by Phil Knight and Bill Bowerman as an importer and distributor of Japanese shoes and was named as Blue Ribbon Sports. It officially became Nike, Inc. in 1971. The company is one of the largest manufacturers of sports equipment and suppliers of apparel and athletic shoes.

PESTEL Analysis

Political

The company has favourable relationship with other countries and has its subsidiaries in around 200 countries. Every country has its own laws and regulations and therefore the company faces the risk of different tarrifs and non-tarrifs, regulations and laws in diverse countries. The adverse trade protection by Nike in global businesses affects its services and selling.

Economic

The economic downturn worldwide that reduces consumers’ confidence to spend money and hence affects the consumer purchases. Moreover, being a global brand the companies dealing in diverse countries create diversity in currency and exchanges which is sometimes unprofitable for Nike. Nike can take advantage to outsource the low cost manufactures as it does not have its own manufacturing unit and it globally outsource the manufacturing services from where it get from cheaper rates.

Socio-cultural factors

Nowadays, consumers are becoming more brand conscious and the buying habits of youth have changed a lot within two years. Moreover, the market share of female customers is increasing and Nike does not concentrate on them. Furthermore, there is diversity in the living habit of every individual. Therefore, all such things create issue for the company.

On the other hand, Nike get benefits because people are becoming more of brand conscious.

Technological factors

Nike is considered as a technologically innovative company that manufacture technically superior quality products. But the company is required to follow the concept if lean manufacturing and to use the up to date technology.

Environmental factors

 The company needs to follow certain policies regarding the safety of environment and every country has its own policy. The environmental sustainability is important issue and is relevant for the companies. Reduction in the consumption of energy comes under the corporate social responsibility. Nike has introduced the “green” products.

Legal factors

The legal factors that affect the working of the company are the variation in laws and regulations in diverse countries. Like the law related to the company’s social responsibility.

Unique Value Proposition

The company has unique value proposition on the design, durability and quality of its products. Nike’s primary strategy that is the reason for its unique value proposition is its innovativeness.  A value proposition is something a company provide its target customers that help in giving them a better result of choosing the company. Nike Inc. practice the form follows value. For creating such value it uses the following resources –

  • Design or R&D for new products;
  • Marketing of the new products that means to drive and create demand for it; and
  • Distribution of the new products that means to make sure they reach fast to the end user.

Nike has been among the greatest value creators because of its organisational form that entail concentration of people, processes and resources. Generally, the company has achieved maximum profitable growth giving higher level of productivity and low cost of production and it’s positive and flexible responses to the changing taste of customers.

Market Analysis Nike
Market Analysis Nike

Nike’s Global Strategy

The primary strategy of Nike is to build its presence in almost every major world posting event like Olympics, World cups, skating, etc.

Nike’s global marketing strategy includes 4 P’s of marketing – Product, Promotion, Price, and Place. The company has almost every range of products that include sports apparel, footwear, equipments and accessories. In starting, Nike was only targeting consumers related to sports but later they realized to expand and started emphasizing on casuals as well in countries like India where people wear sport shoes as casuals.

Nike uses Value based pricing and Price Leadership strategy. Value based pricing strategy is the one in which company decides the price of the product on the basis of value placed by the consumers. Nike has spent so much to maintain its brand value and this is the reason people customers like to buy Nike’s products for its symbol and are willing to pay even higher amount for the same.

The company also uses psychological pricing strategy where people think .99 is cheaper than .00. Nike also uses Higher Pricing strategy in which people feel that they are purchasing products of higher quality and higher prestige.

Global Sourcing

The company has relocated the manufacturing of its clothing and footwear in around 40 countries and employ around 8, 00, 000 people to do so. Nike manages a global virtual company from its headquarter through the combination of R&D functions and low cost of production.

Brand Portfolio

The company has followed the strategy to extend its brand and product line form only sports footwear to sports apparel, equipments and accessories. For that it has owned some affiliated businesses that include – Converse, Inc., Cole Haan, Nike Golf, LLC, Umbro, Ltd. These businesses play an essential role in the growth of the company.

Nike’s focus on long term financial objectives

The long term financial strategy of Nike include the following:

  • High single-digit revenue growth (average annual rate)
  • Mid-teens Earnings Per Share growth (average annual rate)
  • 25 % Return on Invested Capital
  • Increasing dividends within a target calendar year payout range of 25-35% of trailing four quarter earnings per share

Porter’s Five Forces

Barriers to Entry – Low

The barriers of entering to the industry of athletic footwear are very low. Though the companies have a great potential to enter into the industry because of the high level of competitiveness into the industry but the huge companies like Nike and Adidas maintain their competitive advantage and control their costs in such a way that it is really difficult for the new entrants to compete with them. Moreover, the company has a strong brand power that helps it in competing with the new entrants and to beat them. So, the entry of new entrants is quite low.

Bargaining Power of buyers – High

The number of buyers is quite high in comparison to the number of companies present in the market. Therefore, the companies are required to manufacture differentiated products and make use of most innovative strategies to market and sell their products in the market. Because of such reasons it is necessary for Nike to attract and retain the consumers and it is also necessary for the company to build strong brand. The strong brand value of Nike provides its customers loyalty and trust. The brand image is also necessary because most of the buyers are cost sensitive. This shows that the bargaining power of buyers is quite high.

Bargaining power of Suppliers – Low

The material that is primarily required for the industry entail cotton, rubber, and leather and there are so many suppliers of these materials in the market and therefore, the bargaining power of suppliers is very low or does not exist. The companies need to depend on a single supplier for these materials and they can switch over to the substitutes and this is the primary reason that suppliers have less bargaining power.

Threat of substitutes – Low

When we talk about fashion items than so many substitutes are there but for professional athlete no substitute for shoes is present. An athlete does not have any substitute to switch and therefore the threat of substitute is low.

Rivalry among existing competitors – High

The company has strong competition with companies like Adidas, Puma, and Reebok. The rivals are extremely fierce and the company is considered hyper competitive. Therefore, there is a requirement of differentiated strategy that Nike is following. Still the rivalry among existing competitors is quite high.

SWOT Analysis

Strength

Nike is a highly competitive company that sponsor top athletes and gain valuable coverage.

The company has a strong brand image. Nike is a global brand and is considered as number one brand in sports items.

Nike is a very lean organization with no factories. It does not tie up cash in manufacturing workers. Rather it focuses on innovative products through its strong R&D. Nike start production of products when it is required and that too at lowest possible cost. Therefore, if the prices of product increases and the company is able to produce it at low prices in some other area then it move its production or manufacturing to that part.

Weaknesses

The first and foremost weakness of the company is that it is highly dependent on footwear market and does not have diversified range of sports products that erodes market shares of the company.

Nike does not have its own retailers and retail is the most sensitive sector. This is decreasing the prices of Nike’s products because retailers try to emphasize on Nike for low prices.

Opportunities

Nike considers it as a sports brand and not meant for fashion purpose. But development of the company’s product can offer it many opportunities because consumers do not buy its products for the purpose of sports.

Nike has a very strong image and high income group like to purchase its product for the sake of prestige and therefore Nike has opportunity to make development in the existing products like sports wears as well as to enter into the new market like that of  jewellery and sunglasses.

Nike should focus more on global expansion because even some emerging markets like China have a richer consumer to spend lavishly on sports products.

Threats

The costs and profit margins of the company are unstable over long run because of the company’s exposure to international trade. This is a global issue that Nike being a multinational brand is facing and because of which the company may be manufacturing and selling products in loss.

There is no sustainable competitive advantage in the industry because the market for the sports apparel and shoes is highly competitive and competitors in any way want to take away Nike’s market shares.

The retail sector as we discussed above is highly competitive and people really want to go for a best deal. Therefore, consumers make comparison between prices before purchasing a product and this is another threat for Nike.

Recommendation

Nike should concentrate on the impacts of its global expansion on its brand integrity and loyalty of the customers. Moreover, the company should push itself in digital sports. The company should also concentrate on the Women Athletics. Nike has a very strong image and therefore it can also concentrate on fashion products with the sports products. Nike should also concentrate on application of lean in manufacturing its products.

Being a global brand the company is required to deal with consumers in diverse locations and countries and therefore Nike needs to monitor the movement of foreign exchange. For that it is necessary for the company to engage itself in substantial forward hedging of the currency that provides it with the moderate shift in the value of currency and save Nike from loss incurred because of dealing in diverse currencies.

References

Katz, D., 2004. NIKE Kingdom. Triumphpublish Co., Ltd.

I hope you liked this post written on the market analysis of Nike. What other marketing strategies do you think will help Nike maintain its position as the number one sports clothing manufacturer in the world? Let us know in the comments.

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Managing Team Performance

Managing Team Performance

Explain organisational policies, procedures, values and expectations to team members

Before your team can begin to work, they have to know what the internal structure of their company is. The most effective teams are built on a strong foundation of knowledge comprised of the following elements:

Organisational Policies – No matter what organisation you work for, there will be behind-the-scenes policies in place to make sure that the company runs smoothly and that the actions of the company are both legally compliant and representative of the company’s attitude.  These policies may include things such as:

  • Hiring policies
  • Policies regarding accessibility for persons with disabilities
  • Policies regarding ecological impact reduction
  • Confidentiality policies
  • Community outreach and impact policies
  • Quality and service policies

By learning and teaching your company’s organisational policies, you can learn exactly what makes your company tick, and will be able to explain to your team what the rules are, and why you are directing them to make certain choices. Make sure these policies are available to all team members who may want to read them, and that you are available to answer any questions that they might have relating to managing team performance.

Procedures – No matter who you are, it is important that you follow your company’s procedures, and that you teach your team-mates and co-workers to do the same. Not only have these procedures been designed and refined to make the job work safely and effectively, they have also been crafted with the input of legal consultants, human resources advisors, and other people in different fields to ensure that everything works smoothly for all parties involved. When the opportunity to discuss specific procedures arises, make sure to supplement your explanation with information about why the procedures are set up the way they are.

Values – When working with a team, conveying to them your personal values, as well as the values of the company overall, is vital to keeping everyone on track towards the goal, and to encouraging a personal connection to the work. A clear system of values will include core concepts, such as:

  • Leadership
  • Diversity
  • Integrity
  • Humility
  • Simplicity
  • Success

Posting your list of values somewhere visible, or including these concepts in your daily talks, can ensure that everyone is focusing on what is really important in their work.

Expectations – A clear set of expectations is the most basic piece of structure that you can provide for members of your team. Knowing exactly what you are asking of them means that they can sort out their priorities and do their best work without being confused or feeling lost. Furthermore, opening the line of communication regarding projects and expectations can make team-members feel more comfortable initiating conversations about goals, techniques, and other details.

Communicate work objectives, priorities and plans in line with operational requirements

Once you have set down the most basic foundation of your team, you need to convey to them what actually needs to get done, and how important each task is. The easiest way to do this is to follow this structure:

  • Clarify the overarching goals of your company as it relates to this project. If your company is striving to increase its reach, emphasize how your team can affect this outcome.
  • Lay out your individual objectives as a team, clearly defining the steps that you will be taking together to achieve the goal. Let your team know which objectives are of the highest priority, and if there are stretch goals or incentives. Encourage them to meet the most important goals, and then go above and beyond.
  • Share your plan to reach your goals, and discuss the procedural requirements that will be involved in the process. Make sure your team knows how to go about the tasks you are asking of them, and why you are asking them to do things in a certain way.
  • If possible, invite discussion from your team. Do they have any ideas on how to best accomplish a certain task? Does anyone have a unique passion or skill-set that could be used to achieve a goal? Your team is composed of unique individuals, and acknowledging their personal strengths can help enhance work ethic and effectiveness.

Setting out a clear plan of action, as well as clarifying the goals of your team, is the best way to start out a strong when beginning a new project. Confidence comes from knowing what is coming next, and the team that knows what they have to do is much more likely to exceed expectations.

Explain the benefits of encouraging suggestions for improvements to work practices

Because your team members are working directly on projects, they may come up with clever improvements for work practices that could enhance the working experience for your team, and possibly for your company. Encouraging suggestions from your team means that you are actively working towards a better situation for your co-workers and team members, and employees will take more pride in their work if they know that they have a chance to make a real difference in the company.

Provide practical support to team members facing difficulties

If one or more of your team members is not meeting expectations, or needs to improve a certain aspect of their performance, it is important to let them know about these issues as soon as possible, and to share with them practical advice and support for improving.

Not all workers come by every task naturally, and some people need a little more coaching than others to achieve their potential. Once these workers overcome their issues, they often make the best team workers and future leaders, as they are experienced with overcoming the difficulties that lead to success, and they will remember their own errors and be able to help others with similar situations in the future.

Managing Team Performance
Managing Team Performance

Explain the use of leadership techniques in different circumstances

Not every circumstance calls for the same leadership techniques, and not every technique may work for you. Here are some examples of different techniques, and when they are most effective:

  • Democratic Leadership – In situations where you need your team to feel enthusiastic and connected to the project, asking questions such as, “What do you think?” and, “What are your ideas?” is a great way to lead the team by serving as the proctor for discussion. This fosters creativity and increases the flow of ideas, and will increase the likelihood of developing a new technique or approach to a situation.
  • Coaching Leadership – If your team members are new, or if they are learning a new skill, you may need to step in as the leader who can show them how things are done, and make suggestions as to how to improve. Providing positive feedback and constructive criticism may be time consuming, but it can also help to strengthen the team and show that you are involved.
  • Caring Leadership – Building a team and fostering the relationships among your team members is an important part of being a leader. If you have the time and the flexibility, being a leader who is involved and considerate can be a great way to build the team and create strong, lasting connections.
  • Pace-Setting Leadership – If the pressure is mounting, a great way to get the team moving is to take charge and set the pace. This leadership style involves stepping in front of the team and working at the task, saying, “Watch me and do what I do,” which is a great way to motivate team members, if you don’t have other commitments that would keep you from doing the work at the best of your abilities.
  • Authoritative Leadership – Taking authority without being demanding is important if you have other projects that you need to work on, but still want your team to follow your directions implicitly. Projecting an air of confidence when asking your team to trust you is vital to your success, and remember that this style of leadership will not work if you do not already have your team’s respect.
  • Commanding Leadership – For emergency situations or rush projects, you may have to bluntly tell your team what to do and expect them to meet your expectations. This technique will not be taken well by your team if it seems unnecessary, but if time is tight and tension is high, your team will appreciate clear and concise direction.

Knowing when and how to mix and match these techniques can be the difference between an unpleasant working relationship and a leader that makes a real difference for the team, so consider your approach carefully, and be sure to gauge the responses that you receive from your co-workers.

Give recognition for achievements, in line with organisation policies

Positive reinforcement is a psychological tool that has been used for over a century to encourage good behaviors through rewards and positive attention. As long as you are not infringing on your company’s policies, rewarding your workers for a going above and beyond is the best way to keep them working hard, and to encourage other workers to step up their game.

Explain different ways of motivating people to achieve business performance targets

Motivating your team to reach their business goals can be difficult. While some of your employees may self-motivate, you may need to use other methods to get your entire team working at their best. Techniques to motivate your employees include:

  • Perks and Rewards – Some people will be best motivated by rewards like bonus pay or extra time off, while others will be more enthusiastic about things like tickets to sports games or being taken out to lunch.
  • Public Recognition – For others, being promoted or publicly congratulated in front of their group can be a great motivation. This also serves to encourage other team members to perform better so that they, too, can receive recognition.
  • Increased Responsibility – Even if you don’t promote a team member for doing a good job, you can give them different or increased responsibilities that they might enjoy, and that will make them feel more ownership towards their work.
  • Consistent Feedback – Feedback as simple and heartfelt as a “well done” can really mean a lot to an employee, especially if they feel as though they work hard but may not be being appreciated. This kind of positive motivation is free and easy to give, and should be used liberally.
  • Personal Analysis – If your team member really seems to be struggling to get motivated, having a private and personal conversation with them can do wonders to help them sort out their goals. No matter how much an employee might say that they want to succeed at work, if their perceived cost is less than their perceived benefit, they will always struggle to focus. Figure out how to convince them that the results will be worth the effort, and they will be much more likely to work effectively.

If you’re not sure what will motivate a member of your team, there’s nothing wrong with asking him or her specifically. Each person has their own specific needs and desires, and figuring out the way each member of your team works is vital to being a good leader.

Managing Team Performance

Allocating responsibilities making best use of the expertise within the team

Your team is composed of unique workers, which means that you have access to an arsenal of different talents. Learning what these talents are and putting them to the best use can make all the difference when it comes to reaching your business goals, so you should look for employees who demonstrate:

  • Good Interpersonal Skills – If you have a team member that is good with other people, make sure to put these skills to use. Let them out in the field, have them communicate with clients, and let them represent the group in meetings, if needed.
  • Creative or Critical Thinking – If you have workers who are better at problem solving and innovation, make sure that they are allowed to exercise these skills as much as possible. Putting all of the brain power that you have available to work solving problems and developing new ideas is important, and your team will be more successful as a result.
  • Detail-Oriented Nature – Workers who have a good grasp on details are just as important as the rest of their co-workers. Use these workers to filter the ideas and products developed by the team and make sure that no errors make it through to your customers.
  • Patience Under Pressure – For the worker who has the patience needed to repeat tedious tasks, even under the shadow of looming deadlines, the rest of the team should be infinitely grateful. This is the teammate who gets the work done, no matter how slow or arduous, and who is calm and steady enough to keep the team together in times of stress.
  • Specialized Knowledge – Some tasks require different expertise than others, so keep an eye on the skills and passions of all of your team members. It does not matter if their knowledge has been learned through the pursuit of a hobby or an advanced degree program; there is a chance that this specific information will be useful in the future, and you will want to have the most experienced team member on the task.
  • Quick Learning Abilities – In the event that no one on your team is proficient in a certain task, you should know which of your workers is versatile and quick to learn. Knowing which of your team members can be put to any task can help you to quickly adjust and compensate for unusual situations, and can make your team more adaptable and fluid.

Consider the responsibilities of each position within your team, and think about how each of your workers fits into those roles. Fitting people to the right roles for them will increase your team’s productivity, and it will make your team happier in the long run and improve managing team performance.

Agree SMART objectives with team members in line with business needs

By spending time and effort to develop SMART objectives and sharing them with your team, you ensure that everyone involved with the project has the knowledge and understanding needed to contribute effectively and comfortably. Specific, Measurable, Achievable, Realistic, and Time-bound goals allow the team to work toward one common goal, and give them the support they need to help your team to succeed

For more on the benefits of SMART objectives, refer to Unit 1.

Provide individuals with resources to achieve the agreed objectives

Of course, if your team does not have the resources to achieve their goals, they will be unable to do what they need to do. It is your job as a team leader to ensure that everyone has the tools, information, and support that they need to meet their goals. Communicate frequently with your team and explicitly ask them if they need anything to increase productivity or meet their goals, and you may find that there are ways to speed up the working process that you have not yet addressed.

Monitoring individuals’ progress, providing support and feedback to help them achieve their objectives

A worker cannot make positive change if he or she does not know that there is a problem in the first place. It is your responsibility to make sure that every worker is taken care of and directed towards excellence by following these steps:

  • Monitor Individual Performance – The easiest way to make sure that a worker is not having issues is to watch them work and examine their success. If a worker is having issues, you will most likely be able to see them, and that is the first step to identifying any possible problems. We will discuss techniques for monitoring performance in the next section.
  • Listen to Comments from Co-workers – If a worker is having problems cooperating with other members of their team, or if they are slacking or falling behind, other members of the team may come forward to discuss this issue with you. Because this sort of information is hard to acquire from a management standpoint, you should strengthen this line of communication or arrange for peer reviews to foster feedback from your team.
  • Provide Feedback – Once you have identified a weakness in a worker, you should discuss this issue with them privately. Make sure to have clear examples of the problems, and to avoid an accusatory tone. If a member of the team feels attacked, they are less likely to improve, and distrust may form within the group.
  • Offer Support – After discussing the issue with your team member, make sure to offer continued support to them. Simply revealing the problem to them may not be enough to make them change it. Instead, provide more feedback and assistance as needed, helping them to improve and avoid backsliding.

As the leader of the team, your workers should look up to you for advice and instruction. It is important that you provide these things and encourage them to improve.

Explain techniques to monitor individuals’ performance

There are many strategies for monitoring your team’s performance, which is an important aspect of being a team leader. You can decide how intensive you want to be when monitoring your employees, as there is a wide range of techniques, including:

  • Physical Drop-Ins – The most basic of all monitoring techniques is simply getting up and checking in on your team members. Although anyone who has bad habits may stop as soon as they realise you are approaching, this method can be used to catch a majority of workplace issues.
  • Results Monitoring – Looking at the results of your team’s work, be they sales numbers or product reviews, can be an easy way to identify problem members. Anyone whose performance seems unusually low-quality should either be monitored further or called in for a discussion.
  • Video Surveillance – In some cases, video surveillance of the working area may be necessary. Employees’ actions can be directly viewed at any moment, and even the presence of the cameras can decrease the tendency to slack on shift. This, however, may come at the price of the trust of your team.
  • Call Monitoring – Especially for phone-based sales or customer service teams, call monitoring can be an invaluable tool for change. Recorded calls can be played back for training purposes, and can be used in the case of customer complaints.
  • Computer Monitoring – Similarly to call monitoring, computer monitoring can be used to track internet correspondence for sales and customer service teams. This can also curtail the use of business computers for personal reasons, such as internet browsing and social media.

When you are developing a monitoring system, you should be careful to consider your employees’ rights, and make sure that they are aware that they may be monitored.  You should also consider the legal rulings on monitoring and privacy in your area.

Report on team performance in line with organisational requirements

You should make frequent and detailed reports to your managers or other company officials regarding the performance of your team. Not only will this allow them to evaluate you as a team leader, but it will also provide them with important documentation on your team members, which will be invaluable if one of your team members is to be promoted, or needs to be subjected to disciplinary action. Make sure to use your company or organisation’s approved channels for making these reports so that the higher-ups can deal with them in the appropriate manner.

Be able to deal with problems within a team

Assess actual and potential problems and their consequences

To make sure that your team works smoothly and cooperatively as a group, you will need to be prepared to address inter-group problems. These problems, or the potential for problems, can present in many ways, such as:

  • In-office dating
  • Racial, sexual, religious, or other discrimination
  • Incompatible personality types or beliefs
  • Uneven distribution of effort
  • Fights
  • Harassment

If any of these situations arise, you will need to address the conflict as soon as possible. For things as simple as arguments or workers who are not pulling their weight, you will most likely be able to address the issues on your own. If deeper issues such as harassment, discrimination, or inappropriate relationships arise, however, you may have to report these problems to Human Resources or higher management.

Report problems beyond the limits of your own competence and authority to the right person

In the case of an issue that you feel you cannot address, you should compile a comprehensive report and bring it to your direct manager, or whichever authority is dictated by your organisational policies. Include details from your observations, as well as any observations from other employees or customers. If you have photo, video, or audio evidence, bring this along as well.

Bringing in the proper authorities at the earliest possible stage will help you to avoid further conflict and risk of lawsuit. There are people in your organisation who are specially trained to handle situations in a professional and legally secure manner, and trusting your team into their expert hands is the best recourse in situations where the security and comfort of the group has been violated.

Take action within own limits of authority to resolve or reduce conflict

If an issue arises that you do feel comfortable handling, you should take immediate action to isolate the conflict and address the issues with the parties involved.  Separate the parties and get their individual accounts of what is going wrong, and then work with them together to find the best solution for everyone.

In some cases, one or more parties may be unwilling to change or remedy the situation. If you find that you may need to use more drastic measures than simple mediation, be careful not to exceed your authority or make any firing decisions without consulting with your manager.

Adapt practices and processes as circumstances change

As your team grows and develops, your circumstances may change. It is necessary for you to keep up with this change by adapting your practices and processes to fit with the times, and to be open to change from both within and outside of your group. If a fight breaks out between two team members, be prepared to rearrange your teams to separate the two. If an important team member leaves, be willing to change your process to account for his or her absence.

An inability to change is the most damaging factor a team can face, and as the team leader, it is your responsibility to lead the group in adapting to your situation and improving yourselves. If you can succeed in evolving your team, you will be able to succeed in business.

If you enjoyed reading this post on Managing Team Performance, 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.

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Jurisprudence Positivists

Jurisprudence Positivists

There is only one doctrine which has a unique and different association with legal positivism. The name of this doctrine is separation of law and morals and ethical values. The principal aim of jurisprudence positivists has been to establish that the essential properties of law do not include moral bearings. Positivism has a different approach as compared to classical natural law. At the same time, it is completely different from the modern approaches, which were introduced by Lon Fuller and Ronald Dworkin. Positivists strongly emphasize on removing the connection between law and morality.  H.L.A Hart is the author of ‘Positivism and the Separation of Law and Moral”. In this article, he contended that positivism is a philosophy and concept which is based on nature of law. Furthermore, he insisted that positivism does not tell how lawyers should reason, judges should decide or citizens should act. Hart defended Jeremy Bentham and John Austin who he took as his main predecessors, the insistence on the need of essential and compulsory link between law and morality. Legal positivism indeed involves nothing more than ‘the contention that there is no necessary connection between law and morality.’ Therefore, Hart settles for a single core positivist legal thought that ‘it is no sense a necessary truth that laws reproduce or satisfy certain demands of morality, though in fact they have often done so.’ Many other philosophers, encouraged by Hart, consider that concept denies the essential and needed link between law and morality. Jules Coleman does not hesitate at all in ascribing this legal positivism thesis. This is perhaps the prevailing view of legal positivists.

During the past decades, this prevailing view has come into questions. It has been regarded as one-dimensional and incorrect. It has been criticized because it conceals the real nature of law and its source of origin in social life. Others argue that it has deceptively misled and distorted law in practical sphere. John Gardner, Hart’s first positivist successor in the Oxford Chair of Jurisprudence, has asserts that the separability thesis is the propagation of a myth. He contends it to be ‘absurd and no legal philosopher of note has even endorsed it.’ Even some estimable positivists such as Joseph Raz and his followers have interrogated the significance and meaning and the credibility of the persistence on the separation of laws and moral values. Other positivists are also in doubts of such an insistence as a key component of positivist outlook.

This report will evaluate and examine the most prominent lines of argument against the traditional image of the orientation of legal positivism, and therefore aims to counter the critiques of the separability thesis. It should be noted that the concept of important association and link is open to analysis and understanding, and not all ‘important’ relations between laws and moral values are in a clash with the legal positivism; in fact, any sensible person will accept that there are countless similarities between law and morality. In determining this effectively, it is essential to discuss separation of law and morality in terms of multiplicity of thesis. The discussion will maintain that the criticisms that have marshaled on the separability thesis fail in casting doubts on its significance and sustainability. It will then be proven that the challenges that have been mounted against it are unjustifiable. Therefore this essay is divided into four parts. It will first discuss the positivist tradition and outline its criticisms. Secondly, it will assess the separability thesis, particularly on Hart’s challenges on the thesis. The third part of the essay will defend the separability thesis whereas the final part is an evaluation of the positivist’s view on the thesis.

The Positivist Tradition – Heyday of its Success

Positivists believe that an independent science of law compels that it should be defined and recognized in an ethically unbiased and impartial way. They emphasize that law is manmade, or ‘posited’, by the legislature. Positivists hold that until a duly enacted law is changed, it remains law, and shall be obeyed. Natural law thinkers however, define law on basis of morality and ethical values. They deny the compulsion and requirement to abide by the law if it is not moral by appealing to moral or religious principles.

During the late eighteen century, the main philosophers in England who thought and analyzed the legal and social problems of the society as well as became the pioneers of reforms were Bentham and Austin. They persistently insisted on the requirement to differentiate strongly and evidently on the law as it should be and denounced the ideals of natural law thinkers, asserting that the natural law theory blurred this distinction. Austin concentrated on the basic ideals and principles of morality and asserted that they were commands of God, where utility was defined as the ‘index’ and that there was the tangible conventional and established ‘positive’ morality. On basis of principles of utility, Bentham argued on this difference. Both thinkers insisted that this will assist in identifying and understanding the issues created by laws, which are morally wrong. At the same time, it would be beneficial in understanding the particular nature and quality of the legal authority.

Although Utilitarian concentrated on separation of law and morality, it did not reject the ‘the intersection of law and morals’. Historically, the growth and expansion of the legal structure has been extremely controlled by moral and ethical values; likewise, moral principles and values have been controlled by law, so that in many ways, there is a strong relation between legal bindings and moral values. It is difficult to trace the causal link, but Bentham and Austin were definitely ready to admit its existence. Bentham and his disciples did not deny that there is a possibility that moral values can enter the legal system and may become part of it by explicit legal provisions, or that system maybe forced to make a decision on basis of morality and ethical values. Austin has discussed these ‘frequent coincidence’ in which positivism and morality are seen together and recognized the perplexity and uncertainty on the objective nature of law. He differed from Bentham in the thought. He asserted that autonomous and independent law-making authority did not have the force of law. He had recognized and identified that a law might confer a representative, who would have legislative power and may have the authority to impose restriction on its restrictions on its exercise based on moral principles. In fact, both of them asserted that if a rule defies the principles and ideals of morality, then it is not the decree or statute of the law. Similarly, if the decree was ethically required, then it was the statute of the law.

This straightforward and uncomplicated principle was found jurisprudence of England in the nineteenth century after Austin has proposed it. Lawyers were able to achieve new clarity when they understood the utilitarian concept of separation of law and morals. Sheldon Amos commented that Austin ‘have delivered the law from the dead body of morality that still clung to it’; and even Sir Henry Maine, who always critically analyzed Austin, did not cast any doubts on this part of doctrine.

A Critique of Utilitarian Theory

After the discussion of legal positivism in the section heyday of success, the theory has emerged to show support for confusing massive amount of different sins. One of it, real or alleged, is on the separation of law as it is and as it ought to be as insisted by Austin and Bentham. This insistence had concealed the fact that at some points there is an essential point of contract between the two. Besides, an examination of how the disputed meanings in law are interpreted and applied in concrete cases will revealed an important connection between law and morality. This connection emerges again if in a broader view, we consider whether a system of rules that altogether failed to satisfy a moral minimum could be a legal system.

Another major complexity was that Utilitarian had combined the persistence differentiating between law and morals through two different and popular doctrines, one doctrine concentrated on the studying the law analytically, whereas the other asserted that the law is considered to be basic and fundamental decree. These are two essential concepts from utilitarian perspective. They are nevertheless three distinctive doctrines because it is possible while endorsing the first two doctrines and think it wrong to understand law as essentially a command. It is utterly baffling that deceptiveness and falseness one showed and proved that the others were untrue and fabricated; moreover, it failed to distinguish three different and divergent doctrines existed from this perspective. Austin attempted to explain moral judgments in terms of vital utterances to reverberate his ambitious command theory; he stated that it was ‘the key to the sciences of jurisprudence of morals’. The command theory nonetheless seems quite overwhelming and remarkable because it is simple and still not sufficient even if it is an attempt to recognize and discover the essence of law as well as that of morals.

Utilitarian believed that the essence and real meaning of the legal structure and system could be conveyed if the command theory was accompanied by obedience. This would have made law a command for the uncommanded commanders of society. This account is definitely threadbare and inadequate because it does not consider the connection and link between the fundamentals of morality and law. Utilitarian scheme also does not consider the study and investigation of what it means for society and its representatives to approve such rules. Such omissions especially the collapse to contend on the essential and significant association between morals and law is open for debate.

The Continental criticisms on the command theory had always alive to the complexity of the idea of a subjective right. John W. Salmond commented that the command theory analysis bring the notion of a right to no place. Similarly, Axel Hagerstrom asserted that the notion of an individual’s right was really inexplicable if laws were merely commands; he contended that commands are something which either we obey or otherwise; they do not confer rights. In fact, rules that confer rights are not necessarily moral rules or agree with them as distinguished from command. In several spheres rights exist, which are regulated by rules. However, they do not have any relevancy to query of justice or what law should not be, nor it requires discussing that rights have to be just. rights be just. This is affirmed by what as Austin put it, ‘the existence of law is one thing; “its demerit or demerit is another”.’ Therefore, it is dependent on the distribution of rights and how they are implemented in the social sphere of life.

The separability thesis is however, not to be identified with Austin’s claim that survival and continuation of law is dependent on its sources and not on qualities or virtues. The sources thesis although inspired by Austin’s tag, it only asserts laws do not exist on basis of moral values and ethical principles. Hart nonetheless is so much interested on the relations between morality and the content, form, and functions of law; rather than between morality and law’s existence conditions. He concentrates on what is the essence of positivism, for instance, the link between law and economics. Therefore, when he says ‘no necessary connection,’ he really means it.

The Separability Thesis

Surely, by this Hart did not mean that law and morality should be kept apart and that law and morality are separated. Likewise, law should live up to ideals set by morality. Hart’s victory was perhaps in promoting ‘positivism and separation of law and morals’ to the stage that individuals, who are unaware of jurisprudence, are ware that legal positivists belong to the separability sphere.

The separability thesis is simply the contention that ‘there is no necessary connection between law and morality’. A ‘connection’ means any sort of relation to social power, social rules, and morality. The term ‘morality’ is more complex as it includes valid and positive morality. The thesis however, only applies to positive morality. It therefore rejects the ‘natural law’ perspective that morality and law should not be separate and it completely rejects the outlooks of those ‘consensus sociologists’ who believe that morality and legal system have to be incorporated together.

Leslie Green suggests that the only complicated and difficult concept is that of ‘necessary’ connection. Hart’s interpretation on ‘necessity’ is too large and liberal. He thinks that an important association is one which cannot be unsuccessful to grasp, but does not have any firmer commitment to the nature of necessity in the social studies. In particular, he does not take an initiative to contend on the issues of what is not important in terms of nature and society. Of course, the content of law is best explained with reference to moral ideas; and perhaps a legal system could not flourish unless it is just. This means that law should confront with morality and normally has moral value. By the separability thesis, all of these are counted as contingent only; neither are they impossible nor necessary. Hart thus constantly asserts that if the claim is on ‘the connection between law and morals’ intends we may accept it, but it is not a necessary connection.

The thesis is considered to be interpreted in order to bear any conditional association between law and moral values, only if which it is plausible that the association may not be workable. It is nevertheless most problematic because confusion exists on its exact meaning. In general, most legal positivists maintain that the minimum content of the separability thesis consists in the claim that determining what the law is does not necessarily, or conceptually, depend on moral or other evaluative considerations about what the law ought to be in the relevant circumstances. The main controversy is about its more extended reach. Therewith, all these confusions and uncertainties form the major part of the criticisms surrounding legal positivism.

Missed Connections

Legal positivism today is classified as ‘sloppy’, ‘confused’ and ‘misrepresented’, yet position among positivists largely differ which put it as its most vulnerable. Gardner, a staunch and perceptive defender of Joseph Raz observes that ‘legal positivists have often taken great pains to assert some of the connections between law and morality,’ and he declares that there are many other necessary connections between law and morality, namely that each of consists of valid norms.

Gardner rebukes Hart for formulating the ‘no necessary connection’ in a heavyhanded manner, Hart only ‘seemed to endorse it’ by ‘hint and emphasis.’ Gardner maintains that Hart’s ‘apparent’ endorsement must ‘be read as a bungled preliminary attempt to formulate and defend a much narrower version of legal positivism, which, like Bentham and Austin, he really did endorse.’ He argued that the lawful legality of a given standard and the formation of it as element of the law of that system are depending on its foundations, not its qualities. This thought however, does not entail that validity is morally unmeritorious. Gardner then claims Bentham and Hart had ‘regarded valid laws as necessarily endowed with some moral value just in virtue of being valid laws’.

While Gardner is correct about Bentham and Austin, he seems to be wrong about Hart. Gardner assumes that Hart rejected the separability thesis in his 1958 manifesto by claiming that ‘every law necessarily shows a redeeming moral merit, a dash of justice that comes of the mere fact that a law is a general norm that would have like case treated alike’. However, Hart was just stating the legal requirement of ‘treat like cases alike’ as one essential element of justice, he was aware that this is ‘justice in the administration of the law, not justice of the law’. Therefore, while the ‘treat like cases alike’ requirement is a necessary element of justice and that it is not sufficient; it proves that there mandatory association or link between law and morality.

Indeed in The Concept of Law, Hart highlighted the moral benefits in favouring the separability thesis, the benefits of seeing that law has no inherent or intrinsic moral value because it does not considers any moral or political issues and it completely independent from evaluations, which made on basis of politics or morality. For Hart, this is certainly an important set of reasons to adopt the positivist concept of law. Therewith, Hart concludes that one that is confronted by a morally bad law is to let individual conscience decide, unhampered by any thought that there is a necessary connection between law and morality.

It is perhaps worth noting that Hart, with Bentham’s thought that certain laws might be too evil to be obeyed, sought to enlist Bentham in exactly this version of the separability thesis. Gardner is nevertheless right that Bentham should not be so enlisted. Hart called Bentham’s ‘general recipe for life under the government of laws’ ‘to obey punctually; to censure freely’, suggest a universal responsibility to adhere to the law. Bentham certainly argued for a association between legal order and political morality, which is a completely different approach as taken by Hart. The real importance of Hart following Bentham’s ‘recipe’ is that one has a general moral obligation to obey the law even he disapproves it, he is nonetheless obliged to criticise the law freely and the institution that produce it, so that the law can be effective reformed. Bentham stressed on the general moral duty to obey the law even there is no freedom, and this duty is to become stronger in a democratic government with freedom, as he opined, obey punctually but criticize freely, it is ‘the motto of the good citizen’.

We should therefore recognize Hart’s ‘no necessary connections’ was intended in the same spirit as his repeated invocation of the phrase ‘Separation of Law and Morals’ a shorthand for an array of theses with which he denied the important and essential link between moral values and the legal bindings. Hart went beyond the affirmation of the two Utilitarian’s distinction between the laws as it is and the law is it to be and contested many supposedly necessary connections between law and morality. For example, he persistently insisted the motivations underlying officials’ compliance with rule of law requirements can credibly be prudent rather than moral. He likewise challenged Fuller’s contention that the basic formal characteristics of legal norms and legal systems constitute an inner morality of law.

Hart’s Challenges to Ineluctable Law Morality Connections

As a pioneer of legal positivist insistence on the separability thesis, Hart made apparent from the beginning that he was advancing more than a single thesis. Hart defended positivism in the beginning of his essay to which Gardner principally refers. He argued that it is time to recognize that ‘…there is a “point of intersection between law and morals,” or that what is and what ought to be are somehow indissolubly fused or inseparable, though the positivists denied it.’ He queried the meaning of these phrases or rather which of the many possible meanings that they could mean. Hart also asked ‘which of them do positivists deny and why is it ostensibly wrong to do so?’

This stage of his defense is collaborated with the approach he pursued in his discussion of law and morality in the ninth chapter of The Concept of Law, he indicated that

‘…there is some further way in which law must conform to morals… Many such assertions either fail to make clear the sense in which the connection between law and morals is alleged to be necessary; or upon examination they turn out to mean something which is both true and important, but which it is most confusing to present as a necessary connection between law and morals.’

Hart’s positivist confrontations with natural law thinking therefore were not confined to a single set of issues, but on a variety of fronts in order to expose the un-sustainability of a medley of purportedly necessary connections between law and morality. He dangled phrases such as ‘no necessary connections’ as sweeping summations of the diverse points which positivists make in reply to their opponents. Hart hardly intended those phrases to be interpreted as an outrageous rejection of the important relations between the morality and law, which are willing recognized by any jurisprudence positivists.

Jurisprudence Positivists
Jurisprudence Positivists

Alertness to the varieties of legal positivists’ replies to their enemy is then, the key to grasping the role of some of Hart’s sloganeering phrases that are harmless and doubtlessly valuable as unrefined summations of those replies. To be sure, Hart submitted that the status of moral soundness as a necessary condition for legal validity ‘may still be illuminatingly described as the issue between legal positivism and natural law, though each of these titles has come to be used for a range of different theses about law and morals.’ He further suggested that legal positivism shall be taken to mean ‘the simple connection that it is no sense a necessary truth that laws reproduce or satisfy certain demands of morality, though in fact they have often done so.’ Hart singled out this matter as the prime point of controversy, however he was merely highlighting those legal positivists and natural law thinkers had indeed traditionally crossed swords on precisely that point. Later in his works, very much of the challenges launched by Hart were chiefly in response to his critics such as Fuller, Dworkin and Finnis. He reemphasized that he as a legal positivist argued many ‘different forms of the claim that there is a connection between law and morality which are compatible with the distinction between law as it is and as it ought to be.’

Gardner chooses for a much more restrictive form of positivism, following Raz’s ideas, he articulates that in any legal system, ‘whether a given norm is legally valid, and hence whether it forms part of the law of that system, depends on its sources, not its merits.’ In Raz’s perspective, this thesis enunciated by Gardner rehearses the traditional positivist tradition between the law as it is and as it ought to be. Therefore, Gardner’s thesis is certainly a positivist principle.

Gardner however does not capture the whole of positivist message. Neither is he justified in ignoring the various respects in which a number of positivists have endeavored to rebut assertions of necessary connections between law and morals; nor should we agree with Gardner’s view that the ‘no necessary connections’ formulation is misleading with thought that it denies only one necessary link between legal and moral domain. Matthew Kramer reasons these by contending that even though Hart has gone beyond his great legal positivist predecessors in the width of their contestation of apparently unavoidable ties between law and morality, Gardner and other Raz’s disciples likewise go beyond those predecessors by supporting the Exclusivist’s variety of legal positivism in preference to Inclusivist varieties. Hart observed that his positivists’ ancestors favored the Inclusivist position before the controversies between Inclusivist and Exclusivist. Hence, like Hart, they abstained the view that it is necessarily not the case that the status of norms as legal norms ever depends on moral tests.

Hart’s expansion of the range of positivist attacks on presumably necessary connection between law and morality was because of his keen interests to the normative dimension of law, which had been largely obscured by his positivist predecessors. Hart had to engage in crucial battles that were never similarly pressing for Austin, his greatest advances over Austin was his knowledge to law’s normatively that posed new challenges for him, he defended by fending off arguments that equate law’s normatively with moral’s. Therefore, this is doubtlessly another reason to reject Gardner’s narrow understanding of conception of legal positivism; otherwise, we would render a lot of the disputes that have preoccupied legal positivists and their opponents during the past five decades as quite enigmatic. Remarkably, positivists such as Hart have taken themselves to be defending positivism against those critics by theorists such as Fuller, Dworkin, Finnis, Stephen Perry, Gerald Postema, Philip Soper, Nigel Salmond, Roger Shiner and Robert George that in varying ways casting doubts on theories of legal positivism. Noting that, most disputes have not focused on Gardner’s thesis which he regards as the solitary distinctive doctrine of positivism, thus most of the proponents and detractors of positivism in last five decades have been very confused, particularly on the specific points and general nature of debates.Although this expression is coherent, it seems a little bizarre. Therefore, it should be contended that Gardner’s conception of positivism is undeniably restrictive.

Gardner is right when he remarks that we should not always quarrel over a label. Gardner conceives that it is truth that matters in philosophical argument, not which proposition is given which name. In recent decades, some legal philosophers who are positivists by any conjecturing, including Gardner’s reckoning, sought to expose the possibility of varied links between law and morality that are often noticed as necessary. It is contended that these conjecturing are the salient features in modern jurisprudence wrangling. Thus, Hart and other legal positivists have undertaken a sophisticated insistence on the separability of law and morality regardless of the label one affixed thereto.

The separability thesis has to be construed with a bit of generosity rather than in an insensitively quibbling fashion if its purpose is to be identified. It is suggested that although the language of ‘no necessary connection’ is unacceptably rough as a means of summations to the upshot of an insistence on the separability thesis, its clarifies largely offsets its temerity. Therefore, the ‘no necessary connection’ formulation might be accepted as a slogan that provides an understandable synopsis to some major reasoning developed by legal positivists.

The Separability Thesis Defended

The separability thesis captures well Hart’s idea that ‘there is no necessary connection between law and morality.’ As Hart’s electrifying survey of various different relations between law and morality shows, the thesis applies and is intended to apply to all of them. The contradicting reactions between Gardner and Coleman were mainly due to the scope of the thesis: one takes it literally and pronounces it absurd; the other pares it down and declares it obvious.

Unlike Gardner, Coleman ascribes the legal positivism claim without any hesitations. He recognizes that such claim is in need of interpretation and in doing so; he severely limits the scope of the positivists’ insistence on the separability of law and morality. Coleman believes that the positivists’ affirmation of the separability thesis is quite naive. He contends that the ‘…thesis asserts that it is unnecessary that the legality of a standard of conduct depend on its moral value or merit.’Although the thesis is a central principle of legal positivism, Coleman opines that it is no distinctively positivist because just about every legal philosopher has endorsed it. He submits that it is not utterly accurate to characterize legal positivism by the separability thesis because once it is properly understood, neither positivists nor anyone rejects it.

       Coleman thinks that if the thesis is ‘properly understood’; it is only a claim about ‘the content of the membership criteria of law’. Coleman is of particular interest only on the thesis that bears the ‘existence conditions of the not necessarily moral criteria.’ No one however thinks that these must be moral criteria; not even John Finnis, who openly recognizes that ‘human law is artefact and artifice, and not a conclusion from moral premises.’ Thus, Coleman concludes that the hallmark of positivism is an insistence on the conventionality of law, not the insistence of the separability of law and morality.

Coleman’s position is quite similar to Gardner’s. Gardner rejects the separability thesis whereas Coleman embraces it with the interpretation that it overlaps with the one Gardner attributes to legal positivism. Both of them substantially limit the reach of its resistance to the postulation of necessary connection between law and morality and submit that the resistance is confined to legal validity. However, in fairness to Coleman, it should be remarked that he acknowledges that ‘the debates between positivists and natural law thinkers are considerably richer and more complicated than might be inferred from his discussion of the separability thesis.’ He naively adopts simple positivistic position on several points of contention, particularly in connection methodological issues.

Positivists have taken several themes on the insistence of law and morality, one of the most familiar themes is the traditional distinction between the law as it and as it ought to be. In contrary to what Coleman declares, the distinction is not wholly uncontroversial. The traditional philosophers as eminent as Dworkin, Soper and Michael Moore have pursued traditional natural law attacks in varying ways and degrees on this distinction. Thus, although the standard positivists’ defenses to such attacks have attained widespread acceptance, or at least acquiescence, such attacks have not vanished without trace from the present day jurisprudence scene.

Anti-positivists claim that law is necessary for the attainment of morally vital state of affairs and conclude that law is endowed with an intrinsic moral worth. Although positivists occasionally challenged such contention, they have sometimes accepted it; however, they rejected its conclusion. It is the best respond from positivists if they challenge the unwarranted comparison that absolutely underlines the inference about the prima facie moral obligations of law, not by denying the indispensable role. Indeed, positivists question this absolute comparison by contending that instead the appropriate baseline is other realistically attainable legal regimes, some of which may well be morally superior to the regime under consideration. Hence, if positivists can rebut the view that mandates of every legal system are possessed of such obligations as legal mandates, they are able to block any general inference of prima facie moral obligatoriness.

Another positivists’ resistance to moralized law is the self-presentation of a legal system. Soper believes that every legal system presents itself as morally legitimate with morally correct mandates. They posit a necessary connection between law and morality at the level of discourse, particularly by maintaining that officials’ legal pronouncements are inextricably bound up with moral assurances. Soper opines that those pronouncements cannot retain a minimum credibility if their assurances of moral legitimacy are wildly outlandish; he consequently contends that nothing can count as a genuine legal system unless it surpasses some modest threshold of moral acceptability. These reflections have encapsulated him to a traditional natural law position. Thus, positivists are encouraged to challenge Soper’s claim about the self-presentation of legal system.

Besides, law and morality share a similar terminological structure; key terms such as ‘right’, ‘obligation’, ‘authority’ and ‘permission’ are prominently operative. Some theorists therefore suggest that these terminological affinities are clear indication of deeper connections between the two domains. Soper advances such a view in his efforts to establish a genuine legal system that is morally legitimate with morally correct mandates. Like Raz, Soper actually takes for granted that ‘duty’ or ‘obligation’ carries the same meaning both in legal and moral contexts. Hart therefore submitted that the conceptual overlap is formal rather substantive, but not outrageously that the terminology correspondences are unaccompanied by any conceptual overlap.

Another area of debate is on the distinction between morality and factuality. Here, the principle source of disagreements between legal positivists and their foes is the issues singled out by Coleman’s separability thesis. Positivists submit that the endeavors of officials in ascertaining the existence and contents of legal norms are not necessarily guided by any moral assumptions, but concentrate strictly on observable fact. It is therefore the case that moral soundness is neither a necessary nor sufficient condition for the status of any norm as a legal norm. For Dworkin and other theorists that characterized the process of law ascertainment as unavoidable enterprise of moral deliberation, the inclusive legal positivists have held that the role of moral judgments in the process is a contingent matter determined by each legal system’s particular rule of recognition. Hence, this can include, but need not include, moral standards.

In summary, these laconic arguments have outlined some of the chief points that suffice to illustrate their rich multifariousness. Notably, the restrictiveness of Coleman’s comments on the separability thesis is not match by any similar cramping of his methodological and substantive analysis. Although Coleman stands on positivist in every one of the controversies, he does adopt such a position in quite a few of them. Coleman’s disdainful remarks about the separability thesis are damaging to legal positivism by obscuring some of the best positivist insights. Most of the recent conflicts between positivists and their adversaries are blurred by those remarks. Therefore, when the positivists’ affirmation of the separability of law and morality is understand in its expansive variegatedness rather than only in its most pallid formulation, its centrality and profundity become clear. To slight that affirmation is to darken counsel.

Joseph Raz & the Separability Thesis

As an estimable positivist, Raz’s attitude on the insistence of separability of law and morality has always been uncertain, sometimes been downright hostile. He has expressed skepticism in much of his works about the separability of law and morality. Raz suggests that the multifaceted positivists’ insistence can reduced to a single thesis, similar to Coleman. In contrary to Coleman, Raz singles out a different and more capacious principle as the separability thesis and rejects that principle as unsustainable.

Coleman construes the thesis as a claim that the criteria for legal validity in any particular legal system need not include moral tests. He suggests that to assert the contingency of the role of moral tests as criteria for legal validity is to affirm the separability of law and morality. Raz however, submits that Coleman is wrong, he further opines, ‘a necessary connection between law and morality does not require that truth as a moral principle is a condition of legal validity. All it requires is that the social features which identify something as a legal system entail that it possess moral value.’ He maintains that the truth of Coleman’s principle is insufficient for the truth of separability thesis because Coleman construed the thesis over narrowly. Raz therefore opted for a broader specification of the thesis that the thesis will be false if any of law’s defining features entail its possession of some degree of moral worthiness.

Raz then proceeds that ‘the separability thesis is… implausible… there is some necessary connection between law and morality, every legal system in force has some moral merit or does some moral good even if it is also the cause of a great deal of moral evil.’ Furthermore, he reminds that ‘all major traditions in Western political thought, including Aristotle and Hobbes traditions, believed in such connection.’ Hence, Raz is on solid ground in censuring Coleman for conceiving of the separability thesis too restrictively. Raz however enlarges the scope of separability thesis far too modestly. The main problem lies in the notion that legal positivism’s insistence on the separability of law and morality can aptly be recounted as a single thesis. Raz consequently obscure the fact that many of the liveliest debates over the separability of law and morality have in recent decades been primarily on the morality dichotomy. Although he wisely moves beyond the confines imposed by Coleman, he still conveys the false impression that the matter of separability is reducible to a very small set of issues that can be captured in a univocal thesis.

While renouncing ‘the facts which determine the existence and content of law do not guarantee any moral value,’ Raz contends it is true that the necessary connection between law and morality which is likely to be established by his arguments is weak. Moreover, he submits that it is sufficient to establish prima facie obligation to obey the law. For one thing, Raz does not do justice to the comparative character of any genuine moral assessment. Neither of his remarks suitably takes account of the fact that some morally good results can of moral value; nor adequately acknowledge that the role of law as a necessary condition for certain moral desiderate is insufficient to vest la with any inherent moral worth.

Raz’s passing reference to the Aristotle and Hobbes traditions in Western political thought is unquestionably correct in declaring that past and present political thinkers have believe that law as such does inherently partake of some degree of moral worthiness. In most if not all cases, however, they have believed as much because they have further believed that the rule of law is necessary for the realization of extremely important moral desiderate such as the preservation of public order and the coordination of social life and the promotion of individual freedom. The latter belief is entirely accurate. It does not support the thesis that law partakes of some inherent moral worthiness.

The rule of law is indispensable for the continuation of wickedly exploitative and repressive governmental institutions on a large scale over a long period. Therefore, if we were to ascribe inherent moral worthiness to law because of its status as a necessary condition for the attainment of key moral desiderata, we should likewise ascribe inherent moral iniquity to law because of its status as a necessary condition for the successful long term pursuit of heinous purposes by evil regimes that rule over sizable societies. We should not engage in either of those inconsistent ascription. We should conclude that the moral bearings of law are not inherent but are determined by its contingent substance and by the uses to which it is put in various settings.

Remarkably, we reaffirm legal positivism’s insistence on the separability of law and morality. On some occasions those theorists have suggested that certain important strands of the positivist insistence on the separability of law and morality are in fact outside the scope of jurisprudence positivism, and on other occasions they have squarely impugned certain elements of that insistence. Whatever may be their reasons for discounting central tenets of legal positivism that have been elaborated in tussles with natural law theorists of sundry stripes, they have indeed de-emphasized or abjured a number of those tenets.

To reassure, an unswerving allegiance to those tenets is not a necessary condition for the applicability of the ‘positivist’ label. Raz is surely a legal positivist even though he has eschewed any such allegiance. Nevertheless, the vibrant heart of legal positivism at least during the past five decades is a far-reaching insistence on the separability of law and morality, from which these positivists have distanced themselves.

Conclusion

In conclusion, any sensible person should accept that there are countless similarities between law and morality. The vast majority of those similarities are utterly trivial, but a small proportion of them such as the normative legal propositions and moral propositions are significant. When we distinguish among morally contrasted with immorality and morality contrasted with prudence and morality contrasted with factuality, we can discern that nearly all of the important and ostensibly necessary connections between law and morality – in any of the three specified sense of ‘morality’ – are contingent at most.

During the past five decades, natural law theorists of differing persuasions have proclaimed quite a few of those contingent connections to be ineluctable bonds. Legal positivists have developed fruitfully in response to those proclamations, as its proponents have endeavored to expose the un-tenability of the natural law arguments. Their endeavors have doubtless expanded the ambit of legal positivism beyond its historical contours, but the expansion has improved to the great benefit positivism by underscoring the soundness and versatility of its general insights.

Legal positivists’ altercations with natural law thinkers can shed light on the battles that take place among positivists themselves.

Bibliography

Books

H.L.A Hart, ‘Positivism and the Separation of Law and Morals’ in H.L.A Hart, Essays in Jurisprudence and Philosophy (OUP, Oxford 1983)

H.L.A Hart, The Concept of Law (2nd edn Clarendon Press, Oxford 1994)

Jules Coleman, The Practice of Principle (OUP, Oxford 2001)

Joseph Raz, ‘Practical Reason and Norms’ (Princeton University Press, Princeton 1990)

Joseph Raz, ‘Ethics in the Public Domain (OUP, Oxford 1994)

Matthew H. Kramer, Where Law and Morality Meet (OUP, Oxford 2008)

Articles

Andrei Marmor, ‘Legal Positivism: Still Descriptive and Morally Neutral’ (2006) 24(4) O.J.L.S 686.

Deryck Beyleveld and Roger Brownsword, ‘The Practical Difference between Natural Law Theory and Legal Positivism’ (1985) 5(1) O.J.L.S 3.

David Dyzenhaus, ‘The Genealogy of Legal Positivism’ (2004) 24(1) O.J.L.S. 39

H.L.A Hart, ‘Positivism and the Separation of Law and Morals’ (1958) 71 Harv. L. Rev. 593.

John Gardner, ‘Legal Positivism 5 ½ Myths’ (2001) 46 Am.J.Juris. 199, 233.

Leslie Green, ‘Positivism and the Inseparability of Law and Morals’ (2008) 83 N.Y.U.L.Rev. 1035.

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Knowledge Management UK Construction

Knowledge Management UK Construction

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One of the main challenges facing the construction industry is to continually find new ways of delivering construction projects effectively. Reports such as the Egan and Latham Report, Rethinking Construction in the UK etc., are all written as guidelines to help construction organizations and project teams focus more on the client and carry-out projects in line or parallel to the client’s business strategy to ultimately improve their services and project delivery. This continuous search for improvement and changes to facilitate bench-marking against best practices has called for more effective and dynamic approaches to the way things are done in the construction industry. These approaches include developing alternative procurement routes to ultimately improve communications between participants in the construction process and the adoption of an extensive variety of concepts, tools and techniques to develop collaboration and to enhance efficiency and quality. Other approaches include using IT (Information Technology) solutions to integrate the construction process with technology by electronic sharing of data and information in the design phase and the improvement of better components, materials and construction methods, including standardization and pre-assembly.

Knowledge Management UK Construction
Knowledge Management UK Construction

However, new markets demand a change in the way organisations operate and demand new concepts, tools and technology to improve the efficiency and quality of processes and products of construction firms, and researchers and practitioners in the KM field believe and continuously underline that KM is one of the concepts needed to meet these demands. They argue that it has become apparent that organisations need to manage their knowledge assets effectively and to continuously identify where knowledge resides in their organization, so that they can then organize it for employee use in their work processes. The aim of the dissertation is to explore, investigate and analyse whether the knowledge management (KM) concept enables construction organisations to deliver more efficient services and products, improved performance and enables them achieve their organisational objectives.

Dissertation Objectives

  • To appraise the academic and practice rudiments of knowledge management
  • To outline the implications of the KM concept on people, processes and products in construction organisations
  • To identify the main benefits of knowledge management, and assess whether the current perception and practice of KM in construction organisations allow them to have full access to these benefits and subsequent organisational benefits
  • To analyse through data collection in sample construction companies, the influence of KM in construction organisations and investigate its impact in delivering more efficient services and products, continuous improvements in processes and in gaining organisational benefits
  • To evaluate whether KM adds value to the construction industry as a whole

Dissertation Structure

The dissertation is divided in seven parts which are follows:

Chapter 1: Introduction to the research work describing the background of the study, its aims and objectives, and the scope of the study.

Chapter 2: Literature review appraising the academics and practice rudiments of knowledge management. It essentially reviews the general meaning, history, aims, objectives and benefits, and the implementation of KM in organisations.

Chapter 3: Literature review discussing the introduction and benefits of KM in construction industry. It essentially reviews academic discussions on the introduction, relevance and the current practice of KM in construction industry alongside the current tools and techniques used.

Chapter 4: Research methodology discussing the technique for executing the research work. It essentially discusses the method of research chosen, selection of samples and the justification for conducting the research work using that distinctive method.

Chapter 5: Data analysis discussing the research carried out within the sample organisations. It essentially describes KM practices in each particular sample organisation, its awareness, objectives, benefits, barriers and its general impact so far in each organisation. An analysis of each sample organisations is also carried out in this chapter.

Chapter 6: Cross-data analysis tries to explore parallel and unparalleled factors (similarities, common issues and differences) which help to identify the impact of KM in different organizations or firms in the construction industry. These organisations are analysed and compared under these topics: KM awareness and motivation; KM strategy and implementation and KM impact.

Chapter 7: Discussions, conclusions and recommendations drawn from the research findings, interviews, data collection and data analysis. The limitations of the study are also discussed in this chapter.

For more tips on how to write your own construction management dissertation check out our Construction Management Dissertation Topics today. It contains many dissertation topics and dissertation titles, it will also show you what is needed to write your own project. I would be very grateful if you can share this post on Twitter or Facebook. Thank you.