A Microeconomic Analysis Of British Petroleum Economics Essay

A Microeconomic Analysis Of British Petroleum Economics Essay BPs (British Petroleum) origins can be traced back to 1901 when William Know tried to explore oil in Persia. The first commercial oil discovery was made in the Middle East by BP in 1908. In 1935, the company prospered and was renamed the Anglo- Iranian Oil Company. The war effort resulted in the British government becoming a shareholder of the company (until 1987). In 1950, Anglo-Iranian expanded into petrochemicals. The Iranian nationalization of the oil industry and subsequent diplomatic solution involving Britain, the US, and Iran led to the emergence of a new consortium involving Anglo-Iranian Oil called The British Petroleum Company (founded in 1954). 1.2 Company Overview BP is one of the largest vertically integrated oil and gas companies in the world. The companys operations primarily include the exploration and production of gas and crude oil, as well as the marketing and trading of natural gas, power, and natural gas liquids. BP is headquartered in London, the UK and employs about 92,000 people. 1.3 Why choosing BP for the essay The company recorded revenues of $361,143 million during the financial year ended December 2008 (FY2008), an increase of 27% over the financial year ended December 2007 (FY2007). The operating profit of the company was $36,347 million during FY2008, an increase of 9.2% over FY2007. The net profit was $21,157 million in FY2008, an increase of 1.5% over FY2007. 1.4 Business Description BP is one of the worlds largest oil and gas companies. It has presence in more than 100 countries across six continents. The company operates through two reportable business segments: exploration and production; and refining and marketing. The company also operates through a third business segment, other businesses and corporate. Upstream activities involve oil and natural gas exploration and field development and production. The midstream operations involve the ownership and management of crude oil and natural gas pipelines, processing and export terminals, and LNG processing facilities and transportation. For the FY2008, BPs worldwide network consisted of some 22,600 locations branded BP, Amoco, ARCO, and Aral. BPs retail network in the US for the FY2008 comprised approximately 11,700 sites, of which approximately 9,200 were owned by jobbers (who purchase their products directly from the refining companies and either sell them to retailers or directly to the end users) and 900 operated under a franchise agreement. At the end of FY2008, BPs European retail network consisted of approximately 8,600 sites and had approximately 2,300 sites in the rest of world. Other businesses and corporate segment of the company comprises treasury (which includes interest income on the companys cash and cash equivalents) the companys aluminum asset, the alternative energy business, and shipping and corporate activities worldwide. 1.5 What we will discuss Not a clue yet. 2. ANALYSIS 2.1 Microeconomic analysis 2.1.1 Consumer demand, price elasticity and BP revenues for FY 2008 We will take one example here to analyse the law of demand and how it applies to BP. For this specific example we will use petrol as product. In general, the law of demand states that the quantity demanded of a good falls when the price of the good rises (assuming other things equal). To represent this change, the demand curve is used. It is a graph that represents the relationship between the price of a product (petrol in this case) and the quantity demanded. demand.JPG Figure The Demand Curve (image taken from www.freeworldacademy.com) As you can see in figure1, when the price increased from P1 to P2 the quantity demanded dropped from Q1 to Q2. Changes in the demand curve can be caused by many factors such as the consumer income, the price of substitutes and others. There are 2 categories of goods though. The ones that the demand doesnt change a lot when price is changed and those that even a small price change will result in a huge change in the demand. This is called the elasticity of demand. The price elasticity of demand for petrol is inelastic (price elasticity inelastic.JPG Figure Inelastic demand You can see here that an increase in price (p1 to p2) leads to a decrease in quantity (q1 to q2) that is proportionately smaller. This results in an increase of the total revenue of the company. Lets see how BP performed. revenue.JPG Figure BP revenue in 2008 (BP annual review) BP recorded revenues of $ 361.143 million in the year 2008 compared to $ 284.365 million in 2007. This large revenue increase is partially due to the very high oil price. Peter Sutherland (BP chairman) said in his speech in February 2009: There are few precedents in history for such a rapid and dramatic change in the business environment. In the space of a few months we went from a record oil price of more than $140 per barrel, and BP reporting two consecutive quarters of record profits for the group. This profitability in 2008, in theory can be based to the price effect which states that after a price increase, product (petrol) sells at a higher price, which tends to higher revenue. The sales effect doesnt apply here because we are talking about inelastic demand. 2.1.2 Oil Market Structure (supply curve, market equilibrium, total surplus) Its difficult and most times inaccurate to try and analyse the supply curve for inelastic products. A supply curve illustrates firms willingness to supply at particular prices. But in the oil industry there are exogenous factors that affect the prices. When a factor changes we say we have shifts in supply. That can be anything, for example a change in the number of firm selling petrol, a change in the price of a factor input (oil exploration expenses) or a change in technology. In our case, the supply is not affected by customers willingness to buy. Someone will buy petrol at any price in order to cover their needs (e.g drive to work). But in theory, the more quantity requested, the higher the price set by the firm. In the case which the price has reached the level where quantity supplied equals quantity demanded, we use the term equilibrium. On a graph, it is the price at which the supply and demand curves intersect. The total surplus refers to the total net gain to consumers and pr oducers from trading in the market. IT is the sum of the producer and consumer surplus. But in practice the things are a little bit different. There is always need for more petrol (or oil products generally). This means that BP and other firms can produce as much petrol as they want. The boundaries here are if the petroleum firms can produce more petrol. Its clear that the firm that can sell more barrels of oil, they will generate more revenue and gain more market share. BPs performance in the last 10 years has been exceptional well. They improve and increase the production every single year and thats due to increased refining availability. In the next page (figure4) you can see some of the performance factors. performance.JPG Figure BPs performance (picture taken from BPs annual report 2008) As you can see in the photo, the production was high but a bit lower that the year 2006. This is due to the unstable economy and prices in the last 2 years. BP still managed to increase their profits by improving their processes. The highlights of the year are: replacement cost profit of $ 25.594 million (up 39%), capital expenditure and acquisitions of $ 30.700 million and share price increase. The complete table with data will be attached in the appendix. 2.1.3 Government legislation (competition policy and carbon trading) The competition policies are different from country to country. We will talk about the policies in England as the BP is a british firm. In the UK there is the role of Director of fair trading and their job is to supervise the behaviour of companies. If they think that a firm is doing something is not supposed to do then they can refer those firms to the Competition Commission for investigation. The maximum market share that a company can hold is less than 25% of the total market. If it exceeds this limit the Director of fair trading can refer the company to the Competition Commission. Also, firms are not allowed to collude because this way they restrict the competition by setting prices. Also, because many companies operate in Europe or worldwide, there are other organisations that keep an eye on firms strategy. In the oil industry the top 3 competitors are : Exxon Mobil, Royal Dutch Shell and BP. BP is the second largest refining and fuel retailing firm in the UK and third in the world. In their effort to become the largest petroleum and offer high variety of products, BP merged or acquired other firms over the past few years. The companys key products and services now include the following: Aromatics and acetyls, petrochemical products, oil and gas exploration and production, lubricants downstream derivative products, aluminum coil and other. To produce their products, firms utilise big amounts of energy. This energy usually comes from burning fossil fuels. For example, oil and coal are used to generate electricity. By burning these fuels, greenhouse gas is emitted in the atmosphere. Carbon dioxide is a pollutant and the European governments have set rules to try to reduce the emissions. The reason the firms dont care much about pollution is because they maximise profit by reducing their costs. Nowadays though, they have to pay big amounts of money depending how much they pollute the environment (surplus permits). BP is helping to meet the worlds growing demand for sustainable and affordable energy, building alternative energy businesses with the potential to grow and compete far into the future. gas.JPG It is also impressive how much money BP invests in alternative energy, $ 1.4 billion just in 1 year. The total cost they are willing to invest is $ 8 billion. Alternative sources of energy BP is experimenting with are: Wind (432MW), Solar(162MW) and Biofuels. Moreover, they are running a project called CCS that stands for Carbon Capture and Storage. What CCS does is capturing the CO2 emitted during the burning and processing of fossil fuel. Then, it is transported and stored in deep geological formations such as gas or oil fields. CCS technology is supported by the government and the target is a worldwide implementation that will help reduce the problem of global warning. 2.2 Macroeconomic Analysis 2.2.1 2.2.2 3. CONCLUSION Based on your analysis, state your recommendations describing the possible strategies that the firm can consider.

Life Of A Teenager Essay

WE TEENS are something our life depends on cell phones, television and lot more. We are more bothered about our fashion and outlook. Our friends play the most important role in our life.A teenager, or teen, is a young person whose age falls within the range from thirteen  through nineteen (13–19). They are called teenagers because their age number ends in â€Å"teen†. Someone aged 18 or 19 is also considered a young adult. Timing of puberty On average, girls begin puberty at ages 10–11; boys at ages 11–12. Girls usually complete puberty by ages 15–17,[2][3][4] while boys usually complete puberty by ages 16-17. The major landmark of puberty for females is menarche, the onset of menstruation, which occurs on average between ages 12–13; for males, it is the first ejaculation, which occurs on average at age 13. In the 21st century, the average age at which children, especially girls, reach puberty is lower compared to the 19th century, when it was 15 for girls and 16 for boys.This can be due to improved nutrition resulting in rapid body growth, increased weight and fat deposition, or eating meat from animals which have been dosed up with oestrogen. â€Å"I memorize the phone numbers of friends whom my parents do not approve of so that their names don’t blink on my mobile phone.† Nothing Like a Friend >> I sometimes fight with my friends, but there’s mutual understanding that we won’t let our parents know. And, usually, we sort out the differences ourselves. >> Some of us get stuck with friends from whom we learn to smoke, drink, splurge, and other vices. For a while, I got entangled with a group of boys and became addicted to video games. >> When I want to attend a party or watch a film, I invent a story, like I am  going to study at a friend’s place. >> Last year one of my classmates was moving to another city. On his last day at school, I gave him `100 so that he could buy himself a present. It was the money my mother gave me to buy a sweater.

Blackrock Difference Essay Essay

The expectations, standards and treatment an individual receives are affected by their differences. The play ‘Blackrock’ composed by Nick Enright thoroughly explores the impact that difference of gender has on individuals and groups. The composer examines the common social ideas of gender and the differences in expectations, standards and treatment of males and females by creating a focus on the reaction by people to the rape and murder of the young girl. This is similar to the cartoon on homosexuality composed by Ficher. Ficher also examines the common social ideas differences in expectations by creating a focus on the response by people towards homosexuals being open about their sexuality in society. Both texts explore the way society views a person’s difference. The expectations, standard and treatment an individual receives are affected by their differences. The play â€Å"Blackrock† demonstrates how an individual’s gender forms the expectations others have on them. The typical expectation of girls is that they should be subservient and be used as an object. Cherie is an example of the rejection of these expectations. The behaviour Cherie portrays is different from other girls in the play as she interacts regularly with her female friends and portrays no interest in sexual behaviour. Cherie represents dignity and independence. As a result, she is exposed to isolation and abuse by others. This is demonstrated in the scene where Cherie protects Tracy’s reputation by saying to the boys â€Å"She was beautiful, you dickheads†. She is ridiculed by Scott, who in reply utilises slang in saying â€Å"Couple of lezzos are you? . The use of slang in â€Å"lezzos† reveals the aggressive response towards Cherie for protecting the reputation of the girl as well as abuse and isolation towards any person who breaks the conventional gender roles. The use of the word â€Å"lezzos† is a pejorative term used to ridicule females who have an interest in the same gender. In Cherie’s case, she is protecting a female and she is berated and ridiculed by Scott for protecting a female friend. The statement also reveals how Cherie is expected to be submissive to the boys. In Cherie’s circumstance, gender forms the expectations others have of her, and in breaching them she suffers isolation and abuse. In Enright’s â€Å"Blackrock† it is clear that an individual’s gender can form the way an individual is treated. In the play, gender connects the boys together and a mutual trust is formed. This mutual trust creates the belief that mates should protect and treat each other with respect. This however is different for the females. The boys portray a general disrespect towards the females in the play. They sexualise them and expect them to ‘give into’ there sexualisation. Once the female rejects to be submissive to their sexualisation, they are abused and isolated. This is portrayed through Scott who utilises dialogue in saying â€Å"you just pashed me off you slag†. The use of the word â€Å"slag† demonstrates the aggressive response Scott upholds towards females who refuse to be submissive. This statement also reveals the mistreatment females suffer as the word â€Å"slag† is used as an insulting term to describe females who engage in sex and in promiscuous behaviour. The males criticize the ones who reject their sexualisation as well. This is portrayed in the statement by Scott â€Å"I know enough†¦to show you a good time† . The slang in this statement suggests how forceful and berating Scott is towards females who reject to be submissive to his sexualisation. This demonstrates how despite the continuous rejection, Scott will continue to enforce his male dominance and mistreat the females. This mistreatment is continually related to gender and is evident throughout the play. Enright portrays the way difference determines how a person is treated. The cartoon composed by Ficher shows how an individual’s sexual status forms the expectations others have on them. The cartoon composed by Ficher demonstrates the difficulty faced by homosexuals who are trying to be open up about their sexuality. Society’s response to such beliefs and opinions are forceful and violent as they immediately reject and refuse to accept them. The composer utilizes symbolism to demonstrate the expectations formed by difference. The two figures on the left symbolise two major, powerful groups in society – law and religion. These figures represent society as a whole. The two figures on the right symbolise the homosexuals, the different group in society. The two powerful groups are forcefully sending the two homosexuals back to the ‘metaphorical closet’ as the closet is used as a symbol to represent a person being open up about their sexuality. The expectation’s formed by society to the homosexuals is that they should not be open about their sexuality and that they should keep their sexuality hidden from society. Fischer makes it portray the way difference decides how society forms expectations people have on them. The expectations formed on the two homosexuals are similar to the expectations formed on Cherrie in the play. The two homosexuals are expected and forced to keep quiet about their sexuality. They are also expected to be submissive to society. Similarly, Cherrie is expected and forced to be submissive to the boys. Both characters represent society’s mistreatment of people who are different. This portrays how the expectations and treatment an individual receives are affected by their differences. In â€Å"Blackrock†, the view of what is acceptable behaviour for each gender is demonstrated throughout the entire play. A double-standard is strongly reflected through the characters gender difference. In the play, allowing males to have sexual intercourse with females whenever possible is acceptable. Ricko demonstrates this at the party by utilising dialogue in saying â€Å"the mobs hot†¦go for it†. The use of dialogue reveals the peer-pressure encouragement element in the statement. The statement also reveals how they encourage each other and try to pick up different girls in different settings such as the party. This also portrays how openly sexual males are accepted and their behaviour and attitudes are encouraged. In contrast, openly sexual girls are disrespected, abused and labelled as ‘slag’ and ‘slut;.. This is portrayed by Scott, who utilises slang in saying â€Å"She’s been through Ricko already. Now its Gary. Now she’s a fucken band moll†. This reveals how girls who are openly sexual are disrespected and verbally abused. This shows Scott’s aggressive response towards females who are openly sexual. The word â€Å"moll† is an insulting term used to describe woman with openly sexual morals and is used to describe females in the play. This statement also reveals the non-acceptant views on females with openly sexual morals. These statements both portray a clear double-standard as the males in the play are allowed to be openly and freely sexual where the females are berated and abused if they are openly sexual. Enright portrays how gender difference reflects a double standard through showing what acceptable and non-acceptable behaviour for each gender is. In conclusion, expectations, standards and treatment an individual receives are affected by their differences. The play ‘Blackrock’ composed by Nick Enright explores the impact that difference of gender has on individuals and groups. Enright examines this through the common social ideas of gender and the differences in expectations, standards and treatment of males and females by creating a focus on the reaction by people to the rape and murder of the young girl. This is similar to the cartoon on homosexuality composed by Ficher. Ficher also examines the common social ideas differences in expectations by creating a focus on the response by people towards homosexuals being open about their sexuality in society. The expectations, standards and treatment an individual receives are affected by their differences.

Admission Essays Writing

Admission Essays Writing Admission Essays Writing Admission Essays Writing: The Introduction Admission essay writing is obviously included in the list of admission and exams to the MBA. Some MBA schools even require several essays, the quantity of which depends on the school. The essence of the MBA essay topics is usually the same every year. They do not usually change much: The Most Widespread Questions We offer you several of the admission essay questions. There are questions about your contribution to education and about your versatility. What reasons influenced your professional choice? Please, tell us about your plans for the professional future. Where do you want to get your MBA degree to achieve the desired objective? Tell us about your career. Why do you need the MBA degree? How will develop your career after receiving MBA degree? Tell us more about, what is your plan to do in the near future and in the future after receiving your MBA degree. How will education at MBA School contribute to the achievement of your goals? Briefly tell us about your professional achievements. Tell us details about your plans for the future and what caused you to get MBA degree at the university? What are your plans after receiving MBA degree? These are the most typical essay topics of every business school. You must clearly and precisely explain, why you need an MBA degree, and be able to prove it, writing an essay. Essay questions are usually divided into several parts. Most of them concern your past. Did you succeed in business today? Tell us, what influences your future. How will develop your career after receiving your MBA degree? What are your future plans? Admission Essay Help: Responsibility And Trust Why should you order custom essay writingat our company? We have well-organized and well-structured staff. Each employer is responsible for his own work. For example, the essay writer writes, professional editor edits, manager controls the process of performance of the custom essay order. Unlike other companies, where one person performs admission essay service, all our employees are divided into groups of specialization: economics, law, science, humanitarian, technical etc, and thus the organizational structure of the company is created. Secondly, in order to take a systemic approach to take and control essay orders a service administration was established. And thirdly, most important, is that an organized group of editors are responsible for the quality of the custom essay order. We are a reliable, experienced company! Contact us to convince of the best results and 100% guaranteed success! Read also: Much Ado About Nothing Coursework Marketing Coursework Self Critique Essay MLA Format Bibliography Critical Essay Essays on Patriotism

List of Naturally Occurring Elements

List of Naturally Occurring Elements Some elements have been made by man, but do not exist naturally. Have you ever wondered how many elements are found in nature? Of the 118 elements that have been discovered, there are 90 elements that occur in nature in appreciable amounts. Depending who you ask, there are another 4 or 8 elements that occur in nature as a result of radioactive decay of heavier elements. So, the grand total of natural elements is 94 or 98. As new decay schemes are discovered, its likely the number of natural elements will grow. However, these elements will likely be present in trace amounts. There are 80 elements that have at least one stable isotope. The other 38 elements exist only as radioactive isotopes. Several of the radioisotopes instantly decay into a different element. It used to be believed that of the first 92 elements on the periodic table  (1 is hydrogen and 92 is uranium) that 90 elements occur naturally. Technetium (atomic number 43) and promethium (atomic number 61) were synthesized by man before they were identified in nature. List of the Natural Elements Assuming 98 elements can be found, however briefly, in nature, there are 10 found in extremely minute amounts:  technetium, atomic number 43; promethium, number 61; astatine, number 85; francium, number 87; neptunium, number 93; plutonium, number 94; americium, number 95; curium, number 96; berkelium, number 97; and californium, number 98. Here is an alphabetical list of the natural elements: Element Name Symbol Actinium Ac Aluminum Al Antimony Sb Argon Ar Arsenic As Astatine At Barium Ba Beryllium Be Bismuth Bi Boron B Bromine Br Cadmium Cd Calcium Ca Carbon C Cerium Ce Cesium Cs Chlorine Cl Chromium Cr Cobalt Co Copper Cu Dysprosium Dy Erbium Er Europium Eu Fluorine F Francium Fr Gadolinium Gd Gallium Ga Germanium Ge Gold Au Hafnium Hf Helium He Hydrogen H Indium In Iodine I Iridium Ir Iron Fe Krypton Kr Lanthanum La Lead Pb Lithium Li Lutetium Lu Magnesium Mg Manganese Mn Mercury Hg Molybdenum Mo Neodymium Nd Neon Ne Nickel Ni Niobium Nb Nitrogen N Osmium Os Oxygen O Palladium Pd Phosphorus P Platinum Pt Polonium Po Potassium K Promethium Pm Protactinium Pa Radium Ra Radon Rn Rhenium Re Rhodium Rh Rubidium Rb Ruthenium Ru Samarium Sm Scandium Sc Selenium Se Silicon Si Silver Ag Sodium Na Strontium Sr Sulfur S Tantalum Ta Tellurium Te Terbium Tb Thorium Th Thallium Tl Tin Sn Titanium Ti Tungsten W Uranium U Vanadium V Xenon Xe Ytterbium Yb Yttrium Y Zinc Zn Zirconium Zr The elements are detected in stars, nebulas, and supernovae from their spectra. While pretty much the same elements are found on Earth compared to the rest of the universe, the ratios of the elements and their isotopes are different.

Virtual Hard Drives (VHD) Research Paper Example | Topics and Well Written Essays - 1000 words

Virtual Hard Drives (VHD) - Research Paper Example Yet another type is the differencing one, which can be attached to any of the two other types, for increasing the performance of the system. The fixed sized disks do not have to specify for the minimum space required on the computer file system of the host, as it can automatically acquire the required space. On the other hand, dynamically expanding VHDs will take up the required space, according to their need. (Rouse) Virtual Hard Disk drives are the best alternative, when conducting cost-effective operations on computer systems. Using VHD, diverse operating systems can be loaded on the same PC, which allows the host to run different software programs on the same computer, while allowing the software developers to test their programs in a cost-effective manner. During February, 2013 Microsoft purchased the Virtual Hard Disk software from Connectix Virtual PC Software, which was originally responsible for creation of this software. Thereafter, Microsoft renamed this product as Microso ft Virtual PC. (VHD) Virtual Hard disk Formats Apart from the fixed and dynamic formats, as mentioned above, there is another format of VHD called ‘Differencing’ type. Each format can perform different tasks, as they vary in performance. Fixed size VHD The space required by this type of VHD is allocated on the physical Hard disk storage, while creating the VHD. While the fixed size can be increased, in an offline operation, the software does not support reducing the size. The fixed size characteristic of this type ensures optimum efficiency in operation of the system. However, due to the commitment of space allocated, it cannot be used by the physical drive, incase the VHD does not utilize any portion of the given space. Dynamically expanding VHD This file format counters the disadvantage of the fixed type VHD, as the space utilized by dynamically expanding VHD will depend on the actual requirement for the data size that is being written to it. However, ‘on-disk m eta-data’ size will add to this requirement. The file size can vary from as small as 43 KB in a VHD of this type to 20GB. The choices of optimization of performance are available with this type of VHD. However, the performance can be slower, for read or write functions, than the fixed size type VHDs. Differencing VHD This type of VHD can be associated with either of the above two types. While they can implement many additional features to their parent VHD, they also are responsible for prevention of any changes to the parent hard drive. The advantage of using this type is that space taken from physical hard drive can be reclaimed by compacting a differencing VHD.(Ranjana1) Native VHD boot Native boot VHD configuration is available in Windows 7 and Windows server 2008 R2. This allows the user to use the VHD as the computer running operating system without requirement of any parent system or hypervisor. In addition, Native boot provides full access to all the files in the PC sy stem, as the virtual volumes are visible, after the VHD portions are automatically attached to the system. Native VHD boot supports all the tree types of VHDs. However, the system will fail in case the expanding VHD requires more than the space available with the physical host drive. Only BIOS-based and UEFI-based firmware supports Native VHD boot. (Frequently Asked Questions) VHD vs. VHDX Windows Server 2012 has made available another VHD format, called VHDX. It has many advantages. The main

Business in Focus & Research Skills Essay Example | Topics and Well Written Essays - 3000 words

Business in Focus & Research Skills - Essay Example Globalisation of businesses on the one hand, and the extensive spread of the Internet on the other, facilitated the phenomenon of global manpower outsourcing. The growth of usage of computers in all walks of life created enormous demand for English speaking and trained manpower for working as programmers. The economic rationale for using foreign nationals in low-end application programmes was the significantly lower wage costs and sheer manpower resource availability. This trend has rapidly spread to many other areas such as call centre operations, legal, accounting and auditing, engineering, manufacturing processes etc. generally termed as business process outsourcing (BPO), and gave rise to two types of employment of foreign nationals - onshore or off-shore services and in each case there have been corresponding loss of job opportunities for locals. In the onshore format, the foreign national is In the US, which is the major promoter of outsourcing as a model for competitive global business operations, there is a growing public resentment on the jobs lost to foreign nationals. The volume of jobs lost can be gauged by the fact that in each of the cities like New Delhi, Mumbai, Hyderabad and Bangalore in India, there are hundreds of companies employing thousands of men and women, providing back office services on 24x7 basis, to the US and European companies (BPO India, 2009). In the past most of these jobs in areas such as customer services, credit card operations, medical transcription, data entry, telemarketing etc. were being performed locally in the US itself by US nationals. The high hourly wage costs and the opening up of the world markets for services led to the outsourcing trends. In addition, the major Indian IT firms place thousands of their employees at the clients' premises for operations such as programming, installation, maintenance and training. Further, major US firms like Microsoft, IBM, Dell, Accenture, and Deloitte have established subsidiary companies in India i.e., they have effectively shipped jobs abroad. While economising on manpower costs is one reason for outsourcing, avoiding payment of taxes in the US is another aspect. Some business houses establish overseas operations in tax haven countries because the corporate income tax in the US is relatively higher, thus encouraging firms to establish operations abroad where either there is no tax or the tax rates are much lesser. Under the double taxation agreements, which the US has with a host of countries, if US firms pay taxes abroad on the income generated fromBusiness in focus 3 their foreign operations, then there is no need to pay taxes again on such income in the US, meaning consolidation of global income for tax purposes is not required. There is a growing criticism of such tax breaks for firms, which ship jobs abroad. The current economic down turn has only accentuated the demands for discouraging firms from outsourcing. During the 2004 presidential elections, Mr. John Kerry