Strategic Issues In Training And Development Multinational Corporations Management Essay

Strategic Issues In Training And Development Multinational Corporations Management Essay Nowadays Multinational corporations are more and more widespread, but a problem that they still don t have accomplished is how to have successful employees, and most importantly how to train their employees and make them a useful and successful resource of the their enterprises. The increase of multinational corporations has led to employees sent in a foreign country to undertake international assignment more than ever before, with estimation that the use of expatriate will continue to increase in the future (Van der Bank Rothmann, 2006). Some researchers estimated that around 30% of all expatriates sent to undertake overseas assignments return home prematurely (Kim Slocum, 2008; Mendenhall, Dunbar, Oddou, 1987). And failure rates increase further when is considered also employees who return home and leave their company within one year (McGinley, 2008). One of the major causes attributed to expatriates failure is the inability of these expatriates or their spouses to adapt themselves in the host-country s new environment and different culture (Tung, 1988). Failed adjustment of expatriates leads to high amount of economic and social costs for multinationals corporations. Expatriate failure is defined as the inability of the expatriate to perform effectively the international assignment, with the consequence of being fired or recalled to home (Tung (1982), therefore it is crucial to identify the ways to reduce and eliminate such failures. Although estimations of the costs of expatriate failure tend to vary in regards to each different country and are not based on a fixed set of criteria, they certainly cannot be neglected by multinationals (Gregersen Black, 1990). This essay aims to explore the strategic issues around training and development that are faced by Multinational corporations. What is International training and development One of the most important activities of International Human Resource Management (IHRM) is International training and development and its potential benefits are highly recognized in the literature. (Dowling and Welch, 2004; Kamoche, 1996; Mendenhall et al., 1987; Tung, 1982). Kamoche (1996) says: The human resource refers to the accumulated stock of knowledge, skills and abilities that individuals possess, which the firm has built up over time into an identifiable expertise (p. 216). In the management literature, the two words International training and management development are always related to each other. Training has the aim to increase work skills and behaviour, and development has the aim to improve abilities in regards to some future position (Dowling et al., 1999, p. 155). Dowling and Welch (2004) argue that the issue for multinationals is how to retain and leverage their employees in order to have at disposal highly trained, internationally oriented human resources to support their strategic responses and concur to their key competencies. Multinationals are increasing their usage of training to improve and assist expatriates activities. The importance of training and development in MNCs Nowadays, a successful international manager has to detain a set of specific abilities in regards to the context, such as ability to handle responsibility, cultural sensitivity, ability to develop subordinates, ability to demonstrate and to exhibit (Baumgarten, 1992). These ability are considered important international skills and characteristics which can be generated with an effective international training and development program. International training is the type of training specifically set for who has been allocated an international assignment. In Multinational corporations there are mainly three different group of international trainings. They are divided in: 1. Pre-departure training for expatriates: before an expatriate s departure for the international assignment, there will be a preparatory training course, this has the scope to ensure that the expatriate has the right capacity and knowledge to accomplish his assignment in a successful way. 2. Post-arrival training for expatriates: Once the expatriate is arrived in his destination to fulfil his international assignment, he will be provided with on-site training, in order to familiarize with the new working environment. 3. Training for host country nationals (HCNs) and third-country nationals (TCNs): This training aims to help HCNs and TCNs to understand the corporate strategy and the different culture. In the international literature the group of international training that has received more attention is Pre-departure training for expatriates, as overseas failure (i.e. the return of an expatriate employee before the completion of the assigned assignment) is most of the time caused by failure to provide adequate international training for expatriates and their spouses. In order to measure the effectiveness of employees expatriation, the expatriate failure rate is a good indicator. One of the reason MNCs have to avoid expatriation failure is certainly because their cost are really high, involving direct (salary, training, travel and relocation costs) and indirect expenditure. The average direct cost per failure to the parent company goes from US$ 55.000 to US$ 80.000, depending to the assignment s destination (Mendenhall and Oddou, 1986). Whereas indirect costs can be considerable and difficult to quantify, including the damage of the relationships with host country s government, other organizations and with customers, losing market share and company s reputation, therefore also missing future business opportunities. Some research conducted among American s multinationals has revealed a high rate of expatriate failure and therefore it remain a recurring problem (Brewster, 1988). Table 1 shows this phenomenon (Shen and Edwards, 2004). The global environment is becoming more and more complex and in continuous change, for this reason it requires flexibility. Therefore organizations have to devise strategic responses with the help of suitably trained and internationally oriented employees. Researches find that there is positive correlation between the rigor of the selection and training process and its expatriate success rate (Tung, 1981). This means that if a company use a more rigorous training program then it will significantly benefit and improve the performances of the expatriate in the overseas environment, therefore decreasing the failure rate (Mendenhall et al.,1987). Cultural training aims to enables personnel to adjust themselves in the foreign culture and then work more effectively in the new environment (Earley, 1987). Table 2 shows (in descending order of importance) some reasons of expatriate failure in US and Japanese MNCs (Tung, 1982). Table 2. SOURCE: Tung, 1982. From the table it s important to note that the more important cause of expatriate failure is not expatriates absence of adequate technical skills, but the inability of expatriates and their spouse to adapt themselves in the new overseas environment and culture. The aims of international management development is to identify, promote and use international managers, and it is expected to play a central role in MNCs because it is fundamentally needed in order to develop a cross-national corporate culture and to integrate international operations. Bartlett and Ghoshal (2000), argue that multinational corporations can construct their inter-unit linkages by creating a pool of international managers from different countries. International training and development programs Pre-departure training Most of the literature is concentrated on expatriate pre-departure training programs and their scope is to provide and develop host-country s cultural awareness to expatriates. Once expatriates have been selected by the multinational for an international assignments, pre-departure training is the next indispensable step to be taken in order to ensure the successful and effective performance of expatriates assignment in the host-country (Dowling, Engler, Festing, 2008). Pre-departure training programs to be effective have to include different components: cultural awareness training, preliminary visits, language instruction and assistance with practical, day-to-day matters (Mendenhall Oddou, 1986). Cultural awareness programs Is generally known that expatriates have to feel comfortable and adapted in the host-country in order to perform effectively their task, therefore is fundamental to provide them with a well-designed cultural awareness training program. Receiving this kind of training expatriates will understand and appreciate host-country s different culture and can behave accordingly or develop appropriate coping patterns. Without any understanding of host-country s different culture, expatriates are likely to feel disoriented and face difficult behavioural problems during their time abroad. Therefore, cultural awareness training is considered the most common and important part of pre-departure training. Cultural awareness training programs is formed by different components which may vary according to country of destination, duration of the assignment, purpose of the expatriation, and the provider of such programs (Dowling, Engler, Festing, 2008). Preliminary visits One methods for orientating the expatriates is to send them in the host-country for a short trip. If the trip overseas is well planned can provide a useful preview to expatriates and their spouse about the international assignment s destination, and allow them to assess their suitability for the new environment. This kind of trip is needed also to introduce expatriates to the new business context in the host-country and provide them with more information before their departure. Preliminary visit to the host-country can assist in the initial adjustment process when used as part of a pre-departure training program (Dowling, Engler, Festing, 2008). Even if the useful adoption of preliminary visits is well known, some European multinationals do not provide it. The 1997 European study reported what one firm admitted: We do not provide pre-assignments visits where conditions are so poor that nobody would want to go. Language training Language training is an important component of a pre-departure training program. However its importance is always put after that of cultural awareness training. It is generally worldwide accepted that English is the common language of the business world. The ORC Worldwide 2002 survey discovered that the adoption of language training for expatriates and their spouse, as part of the pre-departure training program is increased. In fact, results say that 59% of the sample firms provided language training before the departure of expatriates, and 74% provided language training once expatriates arrived on the assignment s destination. The ability to speak the foreign country s language is essential to perform better and improve negotiating ability, indeed Tung (1997) discovered from a survey of 400 expatriates that language competence is a critical part of the assignment s performance. Language skills is not important only for task performance but also for cultural adjustment. One reason for multinational not providing language training may be the difficulty and long time required to learn even a base level of a foreign language. A solution to this problem for multinationals is to hire a large language competent staff from which they can choose the potential expatriates to send abroad, but multinationals have also to keep an up-to-date information on all employees, and make frequent tests to verify if those language skills have been maintained (Marschan, Welch, 1997). Practical assistance Providing practical assistance is another component of a pre-departure training program. Practical assistance aims to help expatriates and their family to adapt themselves to the new foreign environment. Many multinationals are paying specialized assistants in order to help expatriates and their family, providing practical assistance in finding a suitable accommodation or school for their children. Trainees: Who should be trained? The support of the expatriate s family is of critical importance for any international assignment to be successfully completed. From this point of view, is clear that multinationals have to train all family members of the expatriate in order to receive a high and effective performance of the assignment. According to a survey conducted by Organizational Resource Counselors (ORC), 47% of multinationals offer training program to the entire family of the expatriate, 33% offer to their employee and spouse, and 20% offer training only to the expatriate employee. Different researchers have analysed this phenomenon and argue that the most important and common reasons for which expatriate cannot perform effectively their international assignment is the inability of their spouses to settle well and live in the host culture (Black, Gregersen, Mendenhall, 1992; Adler, 1997; Kohls, 1994). While expatriate are sustained by the workplace with familiar routines and job tasks, the situation of his or her family members is quite different. The spouse is left alone and have to face difficult challenges in a new international environment such as how to deal with relocation logistics, to establish the household, to settle the children at school, to negotiate with the local services, and to become part of a social network. Obviously the level of difficulty depends on spouses level of confidence and skills. According to findings of a research made by Bennett Associates and Price Waterhouse, most of the times all expatriates are married and the accompanying spouse is female, and they have to face the dual-career dilemma situation at the time of the international relocation. When the accompanying partner is in front of this situation, she or he may feel ambivalent about the move and worried about how to find employment once arrived abroad. So all training programs should take in consideration these issues and help the spouse in order to have a positive growth and development during the time abroad. Therefore is very important that the spouse feel that he or she is also an active part in the international assignment (Lublin, 1999). Training programs should also include young family members, supporting them to adapt in the new environment. All these programs should be tailored according to different needs of children, and they are particularly useful in case of strong difference between childrens culture and host-country ones. In most major business centers there are international schools that help expatriate community, trying to facilitate their transition from their own country s environment to the new foreign country s environment. In other cases, when is not possible to find this kind of international schools, children have to put more efforts in facing new education system, social norms, and the challenges posed by a new language. Some recent research studies and innovative multinational companies practices suggest that there are three main emerging topic that managers working in multinational corporations have to be aware: 1) In-Country, Real-Time Training; 2) Global Mindset Training; and 3) CD-ROM/Internet-Based Training. In-Country, Real-Time Training The majority of multinational corporations think that pre-departure cross-cultural training alone can already give expatriate the necessary skills and knowledge to perform well in the overseas environment. But researchers in this area have analyzed the expatriation process from different perspectives and discovered that multinationals thinking is erroneous, and argued that is important to continue the cross-cultural training program in the early stages of the international assignment (Gudykunst, Guzley, Hammer, 1996; Mendenhall, 1999). Living in a totally new environment facing different culture is a complex task and pre-departure training can provide expatriate with skills and knowledge only to survive, not to excel and overcome problematic situations where expatriates don t know what they should do, because pre-departure training methods cannot cover all the specific cross-cultural situations that expatriates encounter during the international assignment. Therefore once arrived in the foreign country is important to provide expatriates with further education and training in order to make them able to process accurately the new environment around them and to undertake wise moves. In-country training suits these specific needs. How to deliver In-Country Training In-country training can be delivered from: traditional or real-time training. The traditional training is the kind of training that brings all expatriates together, forming a group, when they are in-country, and provides them with in-depth skills and knowledge of the complexities and difficulties they have to face in the host culture, which are not covered in the pre-departure training program. In-country training and pre-departure training in its traditional format are different only for the location where the training is held and the depth of the content. One negative aspect of the traditional format is that all expatriates receive the same content.

Antony and Cleopatra’s relationship Essay

Examine the Strengths and Weaknesses of Antony and Cleopatra’s relationship and the significance love has on important events in the play. Antony and Cleopatra’s strengths in love fluctuate tremendously. Their behaviours toward each other create a chain reaction in the formation of events within the play. It is for these reasons, which determine the direction of the narrative. Antony behaviour is demonstrative of extreme strengths in his love toward Cleopatra, as he is prepared to neglect all his duties in Rome to stay in Egypt with her. His duties in Rome are very important to stabilise the triumvirate however, he still finds love more important. We see this when a messenger comes to call Antony back to Rome, his reply is: â€Å"Let Rome in Tiber melt, and the wide arch / of the ranged empire fall! Here is my space†(I. 1. 33)1 This shows his devotion to their love and shows the audience he has a sense of loves value. Antony uses hyperbole in his reply as he suggests that the river that flows through Rome will disappear or crumble and the bridge will collapse, before he will return, ‘wide arch’ also accentuates the strength of the bridge, this may show that Rome’s might is so strong it does not need Antony. This use of language emphasizes how unlikely it is that Antony will leave Cleopatra. It shows he is prepared to see Rome, in a sense, be demolished and he will still not care for his duties. We see here that Antony believes love to be a much nobler calling, than his obligations in Rome. While the lovers are in a love-debate we see that it is Cleopatra who is setting the rate of knots by her sarcasm and taunts when she says: â€Å"you must not stay here longer. Your dismission/ Is come from Caesar. Therefore hear it, Antony. â€Å"(I. 1. 26/7)2 leads Antony to neglect his life in Rome to prove his affection for her. It is obvious to us, as it was to Cleopatra and Antony, if he went back to Rome he would be proving her words right therefore had no choice but to stay with her, if he wanted to prove his love. We know that Cleopatra wants nothing of the sort for Antony to leave but the more she presses upon Antony, the less he feels the need to full fill his duties in Rome. Cleopatra used reverse psychology to keep a grip on their love. Antony also expresses his great love for Cleopatra through his speech â€Å"such a mutual pair / And such a twain can do’t, in which I bind, / On pain of punishment, the world to weet / We stand up peerless. â€Å"(I. 1. 37/40) Antony is expressing all that matters is the two of them, in-love, that the moral judgement of other people does not matter and they have the whole world in their hands, therefore Rome considered a loss. Cleopatra too shows tremendous strengths in love as she shows true signs of missing Antony while he is away. â€Å"O happy horse, to bear the weight of Antony! â€Å"(I. 5. 21)4 from this Cleopatra is showing the magnitude and importance of Antony’s splendour. Cleopatra describes here that the horse should be flattered to be supporting such a wonderful man, although this is slightly humorous, as the horse would not feel any honour, we still sense the extreme fidelity Cleopatra has toward Antony. means nothing in comparison to them. We can see here how important Cleopatra is to him and just how much he is willing to give up for her. However it is not only that he is giving up his life for her but that he really truly believes she is more important, therefore the phrase ‘giving up’ does not mean anything to him as he believes Rome is not important enough to be Cleopatra’s behaviour is effusive by showing how much she misses him as she talks about him constantly. â€Å"Where think’st thou he is now? Stands he, or sits he? / or does he walk? â€Å"(I. 5. 19/20)5 We see here Cleopatra is continuously thinking of Antony. We imagine her to be entranced by her love for him, as she is asking questions when she does not require an answer. This gives us the image of her staring into amidst, thinking of all the different things Antony is doing. By going through his different positions ‘stands’ or ‘sits’ or ‘walks’ we see she is thinking about him in great detail and longs for him to be with her. All of this love and devotion led to Lepidus and Caesar resenting the time the once noble Antony spent in Egypt, and despised his neglect of duty. Antony’s alliance with the two leaders had been weakened due to love. When faced with opposition from Caesar, Cleopatra’s enticing behaviour comes into play again. And we see Antony’s blindness play himself into a destroying event. Once the suggestion comes about that they will fight Antony at sea, Antony’s reason for doing so is â€Å"For that he dares us to’t. â€Å"(III. 7. 29)6 This lacks a great deal of strategy and shows his childlike features to stand strong against a dare. As we hear from Enobarbus: â€Å"you therein throw away / The absolute soldiership you have by land,†(III. 7. 41/2)7 from this Enobarbus is suggesting Antony has greater chance winning battle on land, as there is where his skills lye. It therefore seems completely illogical to fight by sea. The reader believes this because we know that Enobarbus is not fooled by love, therefore we have more reason to trust his judgement. This shows how Shakespeare uses love to move the readers trust to different characters. This raises the suspicion that perhaps Antony is showing off, as such, to Cleopatra. He may not want to back down to a dare from fear of losing bravery. Again love influences Antony’s decisions, carrying him into jeopardy. We could accept Antony showing off to Cleopatra however it seems strange that Cleopatra supports Antony fighting at sea: â€Å"By sea; what else? â€Å"(III. 7. 28)8 Cleopatra is testing Antony on his love for her yet again. Cleopatra knows it is best for Antony to fight on land but is determined to make him do what she wants and not the wisest thing. Cleopatra is toying with Antony as she did in the first scene. She is enjoying her power over Antony and increasing her ego tremendously. Ultimately Antony is saying he would die for her. Antony refers to Cleopatra at the end of this deciding scene as a: â€Å"Thetis! â€Å"(III. 7. 60)9, this is a goddess of the sea. We see here that Antony has full faith and trust in Cleopatra and her ships. Up until act III scene 10 Cleopatra is seen as a very strong and brave character. The reader is aware she is slightly conniving and manipulative however this adds to her charm of character. When Enobarbus says: â€Å"With all their sixty, fly and turn the rudder. â€Å"(III. 10. 3/4)10 Our opinion of Cleopatra drops a enormously. We know it was her influence which put Antony in battle at sea. Cleopatra knew this too, so the least she could have done was see him through it. Her cowardice creates great anger toward her, not only from Antony and the soldiers but from the reader, again Shakespeare is giving a personal interaction by building our secret desire for Cleopatra to highs and then dropping her grandeur with no warning. Scarus shows the most realistic and unpretentious view of the situation by suggesting: â€Å"we have kissed away / Kingdoms†(III. 10. 7/8)11 the use of metaphor here creates humorous imagery. Love lead to the reprehensible loss of the empire. Just as Antony kisses Cleopatra, he kissed away his victory. It gives enigmas to the reader as the battle was evenly balanced or could be argued in Antony’s favour and yet Cleopatra fled for no evident reason. This completely defies the laws of love and shows Cleopatra as a paradox in contrast to Act I scene 5. Her actions were not at all those of loyalty and devotion like Antony’s in Act I scene1and it shows the complete imbalance of love. The audience now dislike Cleopatra and see her as an iniquity in ‘Antony and Cleopatra’. Also this scene confronts the title ‘Antony and Cleopatra’ as this scene is Antony on his own without Cleopatra by his side. Again we see love from Antony toward Cleopatra. Although it was foolish that he was ‘Leaving the fight in height’ ‘and ‘flies after her'(III. 10. 20)12 we still se he’s ultimate devotion to Cleopatra. ‘height’ shows how the battle was at important levels, where either side could win, it seems apparent that the battle was not lost due to, the strength of the enemy, the weakness of Antony’s army neither bad luck but simply the ‘very ignorance'(III. 10. 7) of Antony and Cleopatra. Cleopatra’s actions were like ‘a cow in june stung by a gadfly'(III. 10. 14)14 as the speed of her turn and flight was dreadfully hasty. Antony sacrificed everything for love, his honour, power and the support of his men. Although this angered Antony the queen won him over with her inveigling skills. The third time Antony went to battle at sea, Cleopatra fled yet again. Bibliography Primary Text – Shakespeare William, Antony and Cleopatra, Emrys Jones (ed. ), London, 1977 1 William Shakespeare, Antony and Cleopatra, Emrys Jones (ed. ), London, 1977, page 60.

Unit 245 Understand the Context of Supporting Individuals...

Unit 245 – Understand the context of supporting individuals with learning disabilities. 1.1 a) Human Rights act 1998 b) Equality act 2010 c) Disability discrimination act 1995 d) Mental Capacity act 2005 1.2 a) Improved the standards of care given to individuals with a learning disability, it gave individuals the right to life, right to privacy and the right not to be subjected to degrading or inhuman treatment. b) Protects the rights of individuals and promotes equality for all, gives the right for all people to be treated the same regardless of race, age, sex or disability. c) Made it unlawful for employers to discriminate against people based on a disability, it gave individuals a greater chance†¦show more content†¦4.1 Included and recognized as part of society as an equal. 4.2 The act of pleading or arguing in favour of something, such as a cause, idea or policy. Active support. Advocacy is the act of speaking on the behalf of or in support of another person, place, or thing. 4.3 Citizen Advocacy - A one to one partnership between two people. The Citizen Advocate is a volunteer who usually forms a long term relationship with their partner and takes a personal interest in ensuring that their partner’s interests are effectively represented. The relationship is based on trust, commitment and loyalty. There is an element of emotional support and friendship as well as a social element, which may involve introducing the partner to new experiences and/or activities. Self Advocacy - People speaking out for themselves to express their own needs and representing their own interests. Often people with some form of disability may have received some support in achieving self-advocacy – this is a model employed by People First – a group run by people with learning disabilities for people with learning disabilities. Group Advocacy - Where people come together to represent shared interests or goals and works by offering mutual support, skill development and a common call for change with the intention of developing or changing services. 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Real Options Analysis In Investments Finance Essay - Free Essay Example

Sample details Pages: 21 Words: 6186 Downloads: 2 Date added: 2017/06/26 Category Finance Essay Type Argumentative essay Did you like this example? Real options analysis is an innovative approach towards the evaluation of investment and financial decisions, investment appraisal, asset valuation and performance measurement. Furthermore Real option analysis facilitates us to incorporate our judgments on investments, operations and disinvestment. It is based on the perceptive that at least one of the value-determining variables is evolving unpredictability and following a random walk; however as that uncertainty unfolds our response would be flexible towards it. Don’t waste time! Our writers will create an original "Real Options Analysis In Investments Finance Essay" essay for you Create order Additionally Real option analysis is an improvement from the approach by which financial markets value an option on a stock or investment. It assists us in decision making regarding how much capital we should spend to achieve an economic opportunity and when we should commit ourselves to one of the accessible decisions. Nowadays Real option analysis is progressively more being used by companies to value their intangible assets. Research and Development (RD) is a recognized example of a real option, by virtue of what a company undertaking RD has the option to make a decision in regards whether developing or launching a new product, otherwise instead carrying out further RD in order to develop a conceivably secondary product. Since the main objective of my study is to focus on predictability of introducing or launching 3G technology or Universal Mobile Telecommunication System (UMTS), the literature review mainly spotlights on those models that are relevant and noteworthy to Research a nd Developments (RD). One might think that in todays time when it has already been almost a decade since the launch of 3G (UMTS) service, competitive investment real option models may be appropriate for valuation of introduction or adoption of 3G; however the choice of the model depends on the different circumstances. For instance in the case of Pakistan it is still required to consider RD model for valuation of introducing 3G, the reason being that competition among different mobile operator seems to be a secondary issue whereas the primary issue is whether mobile operators are willing to take the risk by purchasing the licence for 3G spectrum. When taking Pakistan into account 3G seems to be a risky investment because historical data shows that mobile operators could not gain enough revenues from data service (mobile internet) provided. In Pakistan most of the revenue is generated from voice calls. . Furthermore although the Pakistani government is seeking high-cash injections to deal with the countrys economic challenges, but at the same time the market is a very different proposition to India where mobile operators have currently invested multi billion dollars. The reason being that Pakistan does not seem to be a profitable mobile market at the present is due to many of the barriers to entry for 3G services (UMTS) such as lower levels of literacy, low GDP per capita, high fluctuations in currency, severe price pressure with respect to a dominant prepaid market, high taxes with regards to import of handsets and a frequently disorganized distribution network. Mobile operators in Pakistan have been arguing for a few years that Pakistan is not yet ready to make investment with respect to adoption or introduction of 3G services. Furthermore we can also refer to revenues raised from EDGE which can be thought of a downgraded version of 3G which is although slower but at the same time also up to 60% cheaper. Analysis show that investments made with respect to adop tion of EDGE was not a profitable strategy because in developing countries like Pakistan mobile internet is considered to be a luxury rather than a necessity. Therefore introducing 3G at this moment of crisis in Pakistan would be considered as a strategy of niche marketing which refers to serving to high end users. Although keeping in mind that 3G is a multibillion dollar investment, the mobile operators in Pakistan should definitely spend a few million dollars on RD to judge the profitability of the investment. Real RD options are anticipated processes in RD that assist researchers to attain flexibility in terms of timing, dedication, investment and research processes, which can be valued in terms of options. Real RD options have been practical in the field of biotechnology, energy, and the primary focus of my study telecommunication research. In the upcoming, real RD options may perhaps turn out to be incorporated with capital market prices, therefore as a result internal and e xternal market valuation using option theory will possibly turn out to be more consistent and occasionally functional in making RD capital allocation and other fundamental corporate finance decisions. Real RD options in general are opportunities that refer to attaining, developing or disposing of real assets associated to RD contained by an investment and operation cost determined in terms of present value that delivers benefits in the future. On the other hand, in contrast to financial options, real RD options are not until now frequently traded, and are often tricky to recognize, with lack of information, and thus may engage complicated valuation methods. By far, real RD option theory has been established to a broad range of elemental aspect of projects, that incorporates investment timings in monopoly and competitive environments, alternatives in RD budgets, sequential option activities, consequential investment opportunities, and flexibility in RD project development. 3.1 TYPES OF REAL RD OPTIONS: First of all, Margrabe exchange option is an example of simple real option that assumes that all new investments regarding product development are at the date when the option expires, that is assumed to be product launch date. Furthermore there are a number of alternative models for compound type real options; where initially there is RD expenditure, followed by new product development expenditure. Lint and Pennings (2001) explained that RD expenditure is analogous to a premium that is paid for a forward start option with timing determined by new product development management along with deterministic investment costs and future cash flows that are eventually uncertain, continuing in perpetuity. Additionally a compound options model has been offered by telecommunication practitioners, where there is a three stage life cycle, comprising of research, development and deployment. Moreover the compound option formula has been modified by Jensen and Warren (2001) by making use of bivaria te normal distribution. Apart from that, Martzoukas (2002) has illustrated that real option models should acknowledge the fact that management can and will add value through endogenous actions, which bear a resemblance to jump processes with upward although stochastic values. As well Bellah (2002) presented a model for explicit information cost of an RD project and on options relative to it since it was not understandable, if there was comprehensive information on cost of biotechnology RD. Finally Quigg (1993) provided an application or a real option model to assess and value speculative developments, in the circumstance where both investment cost and consequent product value are stochastic. 3.2 SIMPLE EXCHANGE OPTION (MARGRABE): It is extensively acknowledged that the traditional Net Present Value (NPV) method is inadequate to value real investment opportunities in an uncertain environment. Despite the fact that the exercise price is fixed and known in advance at the instant the option is purchased in a typical (vanilla) call option, such case is exceptional in a real options situation. As a consequence of following, the real option to invest in the future corresponds to an exchange option and not to a typical call option, due to its uncertain exercise price. An American exchange option gives its owner the right to exchange one asset for another at any time till the expiration/maturity of the option. Margrabe (1978) values a European exchange option which provides its owner with such an exchange right only at expiration/maturity of the option. Margrabe (1978) was the first who initially extended the standard Black and Scholes (1973) formula in order to value European options in scenarios where stock pri ce and exercise price are stochastic and follows a log-normal diffusion process (GBM). The Margrabe (exchange) Real Option formula makes the same assumptions as American perpetual options for European calls, which are listed below. First of all it assumes that an asset price follows Geometric Brownian Motion (GBM) with constant ÃÆ'Ã… ½Ãƒâ€šÃ‚ ´ and ÃÆ' Ãƒâ€ Ã¢â‚¬â„¢. Furthermore it assumes that short selling is allowed with full use of the proceeds. Likewise there are no transaction costs or taxes. Apart from that, all assets are perfectly divisible. Moreover there are no riskless arbitrage opportunities. Additionally asset trading is continuous and finally the risk free rate of interest and expected volatility are constant. However unlike assumptions made by American perpetual options for European calls, The Margrabe (exchange) Real Option assumes that there is an instantaneous constant correlation between the two stochastic processes. Furthermore this formula is independen t of the risk-free rate, in a risk neutral world, and the exchange volatility is the volatility of the spread. Margrabe developed an exchange option pricing model which is predominantly functional in pricing options for which exercise price is uncertain. Therefore this model is practical for those financial assets that allow the exchange of two assets (option to switch) where prices are stochastic at one pre-specified point in time. Margrabes model regarding the Exchange Options is not completely adequate because its European exchange option can only be exercised at maturity/Expiration. This characteristic of Margrabes European Exchange Option is impractical because a company that owns an option to invest can principally exercise that option at any time until maturity. In other words, the investment opportunities are generally American options. Additionally the Margrabe model can value American options only in the specific situation where the underlying asset does not offer divid ends. Due to this facts and limitations of Margrabe exchange model, it is restrictedly used to price real RD options in E-commerce and in pharmaceutical industry for those RD processes where the product launch is restricted to one point in time. However with reference to the main objective of my study that is to focus on predictability of introducing or launching 3G technology or Universal Mobile Telecommunication System (UMTS), where the product information can occur at any time rather than one pre-specified point in time, in such scenario the application of Margrabe exchange option seems to be less appropriate. 3.3 SEQUENTIAL DEVELOPMENT AND SEQUENTIAL INVESTMENT MODELS: Black and Scholes (1973) and Merton (1973) should be mentioned as originator of real option theory due to the fact that not all of their imaginary applications were with regards to traded assets. Brennan and Schwartz (1985) and McDonald and Siegel (1986) were the early developers of the theory that is consequently applied to RD along with exploration and development regarding natural resources. The model of sequential development stages makes the assumption that RD is single-sided, where RD is a requirement in advance before completion of the project. In addition, it also assumes that the project volatility is a deterministic function of RD expenditure that is reduced by the amount spent. The opportunity to make investments in stages or phases is a general attribute with respect to the numerous categories of investments. A few conventional examples of such investments refers to the launch of new products, RD in the field of pharmaceuticals, exploitation of natural resources for instance petroleum, and finally the enlargement of an industrial plant and real estate developments. The significant attribute of the sequential investment refers to the possibility of suspending or aborting the investment in the circumstance where the expected value of the complete project diminishes or otherwise if the cost to complete the investment amplifies. Additionally these investments take place in a continuing way in a timely manner only if the development of the product and market tests comes out to be favourable. Childs and Triantis (1999) observed RD investment decisions and project values, where two investments can be developed in a sequence. They build up closed-form solutions with the objective of valuating the investment program and they analyzed the optimal decision and features that tend to influence the alternative between a few sequential and parallel investments. Carr (1988) identifies a sequential or a compound option as an option where the asset received i s considered to be an another option where in contrast to a simple option the holder of the option obtains cash flows or shares from an investment project upon the exercise of the option. Conversely, Geske (1979) has a different opinion on the definition of sequential options. He stipulates that a compound option exists on every occasion when the subsequently opportunities are available only in the circumstance where the previously opportunities are undertaken. Many researches emphasize that the real world investments are time and again sequential in nature which refers to the fact that investments take place in phases and that firms management has the opportunity to react to changing state of affairs and the arrival of latest information. Furthermore Lint and Pennings (2001) lay emphasis on the fact that sequential investment is not at all standardised and as a result there is not one single model capable of fitting all kinds of staged investment opportunities. Although the standar d assumption of sequential investment model is that volatilities tend to be constant throughout entire investment stages. However in contrast a bigger strand of models make assumption that the uncertainty bounded within the investment opportunities is diminished with the frame of time which is motivated by the development of those models that takes into account different volatilities for several phase of investment. Geske (1979) was the first to suggest the valuation a compound option where the call option on a stock was valued in a similar way as call option on firms asset. As for real options, the sequential option bear a resemblance to a variation of compound option known as instalment option where the price of option is paid sequentially over time in instalments. Furthermore, on one hand where the Geske (1979) model requires the total discounted present value of future cash flow to be stochastic, on the contrary Bar-Ilan and Strange (1998) takes a somewhat different approach as their model is expressed in terms of annual project revenues or in terms of output prices net of variable cost which are assumed to follow a GBM. However the main limitation of the model is that it only allows for two phases of sequential investment. Majd and Pindyck (1987) tend to overcome this limitation in their model. Their analysis is concerned with a contingent plan for making irreversible and sequential expenditures therefore the management can decide upon the completion of each stage whether or not to incur cost for the subsequent stage or whether deferral is optimal in the present. According to their model, the firm makes investment continuously until the completion of the project. Also their analysis can be extended by taking into account the information cost that would be incurred regarding the study of decision whether suspending or starting the investment in the above models. Roberts and Weitzman (1981) emphasizes the role of gathering information in sequential inves tment. They were traditionally the first to develop a model in which uncertainty decreases with investment expenditures. In this kind of investments, early phases propose information about net payoff and costs to be incurred in later stages. Summing up, although the dynamic sequential investment models are on average based on more practical hypothesis, it is frequently complicated in practice to predict how precisely uncertainty decreases with expenditure all the way through different phases of investment. On the contrary, static sequential investment models are characteristically more appropriate in consideration to dynamic models. 3.4 SEQUENTIAL EXCHANGE OPTION MODEL: The sequential exchange option model is a more practical classification of RD options in comparison to standard American or European exchange option model in the circumstance where RD projects take the form of phases of research or sequential investment opportunities. Roberts and Weitzman (1981) represented the benefits of terminal RD being a geometric Brownian motion process where the primary concern was an optimal stopping limitation. Furthermore Weitzman et al. (1981) also made same assumptions except for the fact that costs were assumed to be stochastic along with reducing process volatility over time. Carr (1988) model integrates and build up collectively on the essentials of both Geske (1979) compound option and the Margrabe exchange option for the purpose of valuation of European sequential exchange options. As a result the model obtained is a combination of an exchange option that refers to operating option and a time-to-build option that corresponds to growth option. Ad ditionally Carr (1988) also illustrates estimation for an American sequential exchange option. The valuation of sequential exchange option provided by Carr (1988) has been indirectly applied in Childs et al. (1998), Taudes (1997) and by Bar-Ilan and strange (1998) towards the formulation of real RD options. Moreover Lee and Paxon (2000b) based their foundation on the model which was proposed by Carr (1988) in order to present another model for the valuation of a sequential pseudo-American exchange option and are also able to demonstrate that their analytic approximation generates more precise results than Carr (1988). The analytic approximation proposed by Lee and Paxon (2000b) takes into consideration a two-phased investment process. Despite the fact that the initial expenditure only takes place after a specified span of time, the firm can consequently take decision regarding the product launch and pay the cost of implementation at any point in time until the expiration of excha nge option. As a consequence, Lee and Paxon (2000b) tends to present a more practical structure for several investment related opportunities in comparison to Carr (1998) method for the valuation of European sequential exchange option. Lee and Paxson (2000b) method seems to be more suitable and well-organized as compared to Carr (1998) due to the fact that it can be learned from the past that almost all the mobile operators have initially postponed their first announcement regarding the launch of UMTS and in such a scenario Lee and Paxson (2000b) approach plays an important role by providing flexibility to the firm with regards to launch of the project within a certain period of time. There are a number of ordinary solutions for American sequential exchange options where the underlying asset refers to perpetuity, which can observed in Dixit and Pindyck (1994), furthermore in replacement investments in Mauer and Ott (1995), and finally when concerning sequential investments in Chil ds, Ott, and Triantis (1998). Additionally by means of related assumptions, Bar-Ilan and Strange (1998) demonstrated closed-form solutions in order to attain optimal sequential investments in both the circumstances referring to, with and without suspension of operations and investments, and additionally with regards to costly suspension. Despite the fact that there are no closed-form solutions for those American exchange options when dividends are taken into account, however several substitute analytic approximations have been anticipated. By utilizing the two-point Richardson extrapolation, Carr (1988) proposed an analytic approximation for an American exchange option, which is imitated by a portfolio consisting of two European Margrabe exchange options along with one European compound exchange option. Moreover Bjerksund and Stensland (1993) suggested a closed-form solution for an American exchange option through transformation of their vanilla American call option approximation . Finally, Lee and Paxson (2001, 2003) estimated American option models that are extended in context to a sequential exchange, given for exercise of option at optimal times after the completion of required interim expenditure. Schwartz and Moon (2000a) proposed a numerical solution for multiple sequential exchange options that refers to exchange model which comprises of more than two stages. In the same way to Majd and Pindyck (1987) they allowed for highest rate of expenditure along with the authority to take decision after completion of each phase whether it would be optimal to incur subsequent phases expenditure or otherwise it would be better to wait. However in contrast to Majd and Pindyck (1987), the model proposed by Schwartz and Moon (2000a) not only provide for stochastic present values for projects future cash flows but also for stochastic total investment cost. 3.5 PREEMPTION MODELS: Most of the earlier Real option models give an idea about the importance of deferring sunk cost expenditures which considers the fact that what is gained by waiting to invest. On the contrary, Kulatilaka and Perotti (1992, 1998) consider the fact that what is lost by waiting to invest. When taking a competitive market into account, early investments may give benefit of a greater market share which refers to pre-emption along with incentives of early cash flows. Dixit and Pindyck (1994) suggest a pre-emption model that lays its foundation on the model that developed earlier on by Fudenberg and Tirole (1985) and Smets (1993) which takes into account an oligopolistic industry. Furthermore Williams (1995) explains several characteristics of real options which differentiate them from financial options and some of these properties are also incorporated by pre-emption models. The first property of real options in contrast to financial options is concerned with downward sloping demand c urve which refers to the fact when real options are exercised, they tend to increase the aggregate supply of developed assets and in this manner the equilibrium price of each unit of output is reduced. The second property is concerned with the aggregate constraint in term of rate of exercise which refers to the fact that when the developers deal with either increasing costs or limited capacity, the development costs ultimately depends on the demand for development. Furthermore the third property relates to limited supply of real options which according to which the supply of underdeveloped assets can be possibly constrained with the supply of developed assets which seems to essential specifically when taking real options into account. Additionally the fourth property relates to monopolistic or oligopolistic exercise according to which investments made by competitors tend to decrease the value of companys own investment opportunities. Finally we consider the property of real options regarding portfolio effects where with respect to monopolistic or oligopolistic situations, the exercise of individual real option is able to have pessimistic influence on the value of other options enclosed in companys portfolio. As already mentioned above the previous models with proprietary assumptions that were taken into account were not well suited to incorporate the following properties of real options, however the pre-emption models incorporate at least a few of these characteristics. Apart from that the study aims to focus on the impact of competitive behaviour with respect to value of an investment opportunity. The primary initiative is that once a competitor has already entered the market, the option to enter the market becomes less valuable for other competitors. The following piece of evidence makes pre-emption which refers to prior entrance into market compare to other competitors, more attractive. According to Paxson (2003), although entering first in the market ha s several incentives but at the same time a competitor can also play an opposite strategy by waiting and learning from leaders mistakes before entering the market. Lambrecht and Perraudin (1997) further extended the standard models that incorporate irreversible investment by means of including strategic entry by competing firms. Additionally Lambrecht (2000) also modelled competitive RD phases, where in the first phase there is a trade-off between the cost of being pre-empted and the value that arise as a consequence of waiting to invest. In the second phase sleeping patents inventions are taken into consideration which may not be instantaneously put into use. 3.5.1 FIRST MOVER ADVANTAGES: In this section the main focus of the study is to spotlight the significance of strategic consideration. The particular focus is on the advantage of being first to enter the market prior to other competitors along with quantifying the outcome of such an advantage on valuation of investment and exercise policies. I will specifically refer to the model that has been explained in Paxson and Pinto (2003) in relation to magnitude of first movers advantages or the degree of pre-emption to completely parameterized, which enables to measure their effects on decision to enter along with game equilibria. Paxson and Pinto (2003) takes into account two competing firms in the scenario of uncertain profitability which have option to enter the market where the option to enter the market is a kind of American call option that incorporates an exercise price equivalent to the investment cost along with underlying security that is considered as the net profitability formulated from operating in the m arket. Conversely, exercising the option by one firm in order to enter the market has consequences on the option value of both the competing firms. Under the scenario of this model, leader who is supposed to be the first to enter the market has to sink the investment cost earlier but at the same time leader also has an incentive by means of securing a greater market share in comparison to the competitor. An attractive element of this models framework is that it acknowledges the opportunity that the first-mover advantages can either be temporary or permanent. Furthermore according to Paxson and Pinto (2003) model, the other competitor (follower) can take the decision when it would be optimal to sink the investment cost in order to claim lower market share than that of the leader. When the follower makes the decision to enter the market the underlying game comes to an end which results in a duopoly market structure where sharing the market by leader and follower seems to be a preci se function of the magnitude of pre-emption factor. After the value functions and market share of leader and follower are determined then the consequence of the magnitude of first-movers advantage can be assessed. The most important implication is that first movers advantage guarantees a higher market share for the leader along with optimal rival entry according to which leader has the incentive of monopoly in the market till the entrance of follower. The model illustrated by Paxson and Pinto (2003) is based on the work provided by Smets (1993) in relation to foreign direct investment and the following implementation of Smets (1993) model by Grenadier (1996) in the context of real estate market. Paxson and Pinto (2003) model acknowledges the likelihood of both simultaneous and sequential exercise equilibria likewise Smets (1993) and Grenadier (1996) depending on preliminary circumstances and degree of first movers advantages. Additionally Paxson and Pinto (2003) model is enhanced an d can acknowledge their consequence on value function much better in comparison to other two models discussed above. Above all unlike Smets (1993) and Grenadier (1996) the model ensures that first movers advantage is permanent as leader will retain a higher proportion of market share ever after the entry of follower. As discusses above Grenadier (1996) formulates a pre-emption duopoly model which is based on work of Smets (1993). Nonetheless his model assumes that firms are already competing in an existing market where the new investment opportunity boosts the profitability of the firm. However according to this model the first movers advantage is temporary since both the firms will equally share the market after the follower has entered and completed its investment. Followed by Grenadier (1996), Pawlina and Kort (2002) demonstrated a similar model making the assumption that two firms already competing in an existing market where the new investment opportunity boosts the profitab ility of the firm, while diminishing the profitability of competitor. In contrast to previous model, this model does not assume that two firms are identical by providing one of the firms an incentive in terms of lower investment cost. However also according to this model the first movers advantage remains temporary. Similarly dixit and Pindyck (1994) illustrated a simplified duopoly model by implementing Smets (1991) approach. Also according to this model the first movers advantage remains temporary as the leader only receives the full market revenues until the entrance of follower. Furthermore Boyer and Clamens (2001) explain a duopoly model of pre-emption by means of multiple investments along with Bertrand competition. Mason and Weeds (2000) demonstrated the implementation of technology when there is first movers advantage of being the first adopter. Other academic literature with reference to pre-emption model and first movers advantage includes Williams (1993), Leahy (1993) and Fries et al. (1997) which take into account real investment decisions in perfectly competitive industry equilibrium. Apart from that Tsekrekos (2003) derived model based on Smets (1991) and Grenadier (1996) which has similar views to that of Paxson and Pinto (2003) according to which the first movers advantage is permanent as leader will retain a higher proportion of market share ever after the entry of follower. Additionally with respect to possible equilibria it is revealed that both simultaneous and sequential equilibria can result. Finally in their article THIRD GENERATION MOBILE GAMES- An application of real competition games, Paxson and Pinto (2004) formulated analytical solutions with respect to the leader and follower options to invest in the market along with quantitative explanation for the optimal investment timing of the leader. The main objective of demonstrating the model was to determine the optimal timing for a mobile company to make investment with respect to a major technological change such as 3G. The reason why this real option model is appropriate for analyzing telecommunication mobile market is because first of all it is a competitive sector which implies that there is a natural application for game theory models and moreover it a considered to be a license race market. The models which has been demonstrated by Paxson and Pinto (2004) were actually developed in Paxson and Pinto (2003-a) where two firms are bearing in mind the option in order to enter a new market. The firm that would be the first to enter the market would be defined as the leader from now onwards and will get hold of a first mover advantages in terms of a higher share of the market as compare to a follower that would be second firm or in other words the competitor to enter the market. The roles of the leader and the follower are characterized endogenously in the opinion obtained from Fudenberg and Tirole (1985) where the two firms are supposed to be symmetric al ex- ante however they tend to be asymmetrical ex-post. Above all the leader will always be having a competitive advantage over the follower in terms of first mover advantages, therefore with respect to the upshot each of the firm will want to acquire the position of the leader, which generates a pre-emption effect. These models formulated by Paxson and Pinto (2004) best suits the circumstance of a duopoly environment where the first firm to enter the market is considered as a leader and the second firm or the competitor is considered to be a follower and therefore are most suitable for the purpose of my research which refers to introduction of 3G (UMTS) technology in Pakistans mobile telecommunication market. 3.7 GENERAL OPINIONS ON REAL RD OPTION MODELS: Traditionally capital investment appraisal technique such as Net Present Value (NPV) and Discounted Cash Flow (DCF) approach were used to evaluate investment opportunities however they were imprecise since it is not straightforward to estimate the risk adjusted discount rates appropriate for cash flows when they arise from expansion, abandonment, deferral and other options. Therefore the real option analysis is a better approach as it is able to account for the controllability of cash flows through the management of firms. Although the Black-Scholes model is widely accepted for the valuation of stock options, its applicability to RD projects is questionable. Ross (1991) recommended using the Black-Scholes formula in order to analyse RD projects, however this method created some problems. For instance, Newton and Pearson (1994) explained the complications with evaluating the volatility of an RD investment project and in addition Trigeoris (1993) discussed the inconvenience of real o ption valuation using a risk-free rate of return. Margrabe developed an exchange option pricing model which is predominantly functional in pricing options for which exercise price is uncertain. Therefore this model is practical for those financial assets that allow the exchange of two assets (option to switch) where prices are stochastic at one pre-specified point in time. However with reference to the main objective of my study that is to focus on predictability of introducing or commercializing 3G technology or Universal Mobile Telecommunication System (UMTS), where the product information can occur at any time rather than one pre-specified point in time, in such scenario the application of Margrabe exchange option seems to be less appropriate. Carr (1988) identifies a sequential or a compound option as an option where the asset received is considered to be an another option where in contrast to a simple option the holder of the option obtains cash flows or shares from an in vestment project upon the exercise of the option. The significant attribute of the sequential investment refers to the possibility of suspending or aborting the investment in the circumstance where the expected value of the complete project diminishes or otherwise if the cost to complete the investment amplifies. Summing up, although the dynamic sequential investment models are on average based on more practical hypothesis, it is frequently complicated in practice to predict how precisely uncertainty decreases with expenditure all the way through different phases of investment. On the contrary, static sequential investment models are characteristically more appropriate in consideration to dynamic models. The sequential exchange option model is a more practical classification of RD options in comparison to standard American or European exchange option model in the circumstance where RD projects take the form of phases of research or sequential investment opportunities. Therefore, Lee and Paxson (2000b) model which is a classification of sequential exchange model seems to be more suitable and well-organized with respect to my study where the main objective of the study is to focus on ROV for introducing or adopting 3G technology or Universal Mobile Telecommunication System (UMTS). The primary reason being that it can be learned from the past that almost all the mobile operators have initially postponed their first announcement regarding the launch of UMTS and in such a scenario Lee and Paxson (2000b) approach plays an important role by providing flexibility to the firm with regards to launch of the project within a certain period of time. In addition, when taking a developing country like Pakistan into account then a sequential option seems to be appropriate because mobile operators over there will prefer to make a tremendous multibillion dollar investments in phases that is involved in adoption of 3G services since it is a risky investment and keeping the de mographics in mind, it is obvious that currently in Pakistan 3G gives a view of luxury rather than a necessity. When taking a competitive market into account, early investments may give benefit of a greater market share which refers to pre-emption along with incentives of early cash flows. In pre-emption models the particular focus is on the advantage of being first to enter the market prior to other competitors along with quantifying the outcome of such an advantage on valuation of investment and exercise policies. Particularly Paxson and Pinto (2003) model which is among the classification of pre-emption models takes into account two competing firms in the scenario of uncertain profitability which have option to enter the market where the option to enter the market is a kind of American call option that incorporates an exercise price equivalent to the investment cost along with underlying security that is considered as the net profitability formulated from operating in the mark et. When relating to the main objective of the study which focuses on ROV for introducing or adopting 3G technology or Universal Mobile Telecommunication System (UMTS), Paxson and Pinto (2003) seems to be a precise and suitable model for determining the optimal timing for entering the market of both the leader and the follower. Furthermore Paxson and Pinto (2004) formulated analytical solutions with respect to the leader and follower options to invest in the market along with quantitative explanation for the optimal investment timing of the leader. These models formulated by Paxson and Pinto (2004) best suits the circumstance of a duopoly environment where the first firm to enter the market is considered as a leader and the second firm or the competitor is considered to be a follower and therefore are most suitable for the purpose of my research which refers to commercialization of 3G (UMTS) technology in Pakistans mobile telecommunication market. This model proposed by Paxson an d Pinto (2004) belongs to the class of pre-emption models. However, like sequential models they take the strategic consequences on the worth of an investment opportunity into consideration that tends to result from the competitors behaviour. Summing up Paxson (2002a) emphasizes that there is no single best model which can completely capture all the requirements due to the fact that each investment decision is subject to different assumptions and constraint. However, different models have a mixture of advantages and limitations over other models and deciding which model would be optimal to use depends on Parameters embedded in the model along with the state of affairs and the circumstances to be captured by the model. Keeping in mind that different models can fit certain investment situations better or worse, in my opinion the two models illustrated by Paxson and Pinto (2004) seems to be most appropriate than the models demonstrated by other authors with respect to my study on com mercialization of 3g technology and are perhaps more realistic than other models in relation to the proposition of permanent first mover advantages.