Running head Audit Exercise Paper One1Audit One2Audit exe.docx

Running head: Audit Exercise Paper One 1
Audit One 2
Audit exercise 1
Introduction
Technology has been noted as a pillar in any business
organization. Essentially technology plays a crucial role in
enhancing business operations and the creation of business
opportunities in the market. Technology impact can be termed
as multidimensional and causes a cascading impact within
organizations (BurgeSmani and Wheelwright, 30). To
demonstrate the role of technology, an example can be depicted
from three major organizations in the market that have
experienced the full emancipation of technology (Nokia, Apple
and Microsoft). However, the scope of this paper is limited to
the study of General Electric which is an organization construed
to serve and render services to citizens in the society. GE is
regarded as one of the most successful companies in the 21st
century, this paper analyses the MTI of GE and evaluates its
sustainability in relation to technology and innovation
(Amernic, Craig and Tourish, 32).
GE MTI Capabilities and strategies
GE’s Organization structure and Business Portfolio
GE has undertaken tremendous steps to agglomerate
technology into its performance. Under Welch’s watch the
company managed to ensure budget allocation done with
superior operating systems that enabled error detection. The
operating systems in return brought about efficiency and
reliability in the organizations functionalities. The operating
system enabled management undertake previously had tasks and
ensure the company remained on operation for a very long time
while maintaining its profit margins (BurgeSmani and
Wheelwright, 41). A central part of GE was establishment of a
program that enabled nurturing of talents among the employees;

this was mainly done via delegation of duties and the
deployment of incentives. Management propounded on a
motivation scheme that was able to permeate deep ranks among
the middle level managers who utilized the opportunity to
reward superior performances with recognition of talents and
generous bonuses (Henderson and Evans, 40).
Value addition and increment of company core
competencies are among other areas that management
technology and innovation played and continues to play a key
role. Technology has been utilized by management to open up
the market by enhancing service delivery. For instance, the
company recently launched a program that would offer
customers service within a 24 hour period without necessarily
any human intervention (Henderson and Evans, 101). This
innovation stands out as one of the best trademarks the company
has achieved for the past one century. Under the leadership of
Welch, he deployed the use of Six Sigma, this is a
demonstration that Welch clearly comprehends the significance
of value addition for the customers and the organization’s
strategic planning. The role of technology cannot be forfeited
when it comes to improvement of service and product
development in the organization (Followill et al., 33)
There are five key growth initiatives embraced by GE’s
management owing to the leadership of Jeff, this are: - customer
focus, growth, globalization, service and technical leadership,
these key aspects are well demonstrated under the
organizational structure and business processes (Followill et al.,
91). The five key initiatives cannot grow without proper
utilization of technology, for example for globalization to be
achieved GE must embrace the use of the Internet. The Internet
portrays a platform whereby management can reach a wide
spectrum of stakeholders across diverse geographical locations
at trimmed down costs. A major step towards enhancing growth
and development of the company has been the launch of
Ecomagination initiative which is precisely a medium through
which an organization responds to the growing need and

demand for cleaner and more efficient technologies and energy
across the industry with an inclusion of health, aviation and rail
industries (Lundvall and Borr'as, 12).
GE’s sustainability and stakeholder responsibility
GE six-part growth process
GE’s growth process transcends across a wide spectrum
with an intention of taking all its aspects into consideration. As
depicted in the diagram above the company aims at growing in
all its spheres, this in return is focused on encouraging long
term growth in the company. Customers encompass a very
critical position of the company, without customers GE will not
be in operation. Hence, it’s of essence for the company to
illuminate its endeavors in ensuring customer satisfaction. GE
achieves customer satisfaction through value addition process
and proper service delivery mechanism. Value addition is best
achieved by ensuring high quality of products offered to the
customers. High quality products ensure that customers come
back for more of the same products and derive high utility from
such products. Proper service delivery stems around the
customer service organs of the company. Customers must be
treated as Kings and Queens at all times, any complaints
conveyed to management ought to be addressed at the shortest
time possible. This means that management must derive a
framework that is geared towards specifically addressing
customer related issues (Lundvall and Borr'as, 23).
Employees mark another key component in the company
stakeholders. GE takes a keen approach in ensuring that its
employees get the best working environment in the market. As
much as the company’s top management fluctuates constantly,
the company has managed to draft a permanent procedure of
managing its workforce. GE ensures that all its employees are
fully aware of the policies and regulations of the organization,
by doing so management is able to reduce any conflicts that
may arise in the process. Over the years management has taken
an initiative of ensuring a program that nurtures employee

talents, it is generally a program that ensures that the
organization remains at the front in terms of innovation and
technological development geared towards sustainability
(Lampel and Shamsie, 67).
GE has an obligation to take care of the environment and
the general society. The company can achieve this task by
following a number of approaches. One of the most basic
roadmap is the acceptance and linkage to the government
policies and procedures, this involves payment of taxes,
acquiring of licenses and ensuring remuneration according to
the set policies by the government. The second approach that
GE adopts in ensuring its corporate social responsibility is
giving back to the society. GE gives back to the society by
organizing charities and taking care of the needy in the society
(Henderson and Evans, 76). Also the company organizes
campaigns against illegal drugs and against diseases like
HIV/AIDS, Ebola, Malaria and Polio, through this forum the
company is able to take care of its stakeholders hence ensure its
sustainability.
Conclusion
Technology has always been and will remain to be a major tool
in operations in the market. The 21st century has experienced a
number of innovations and inventions which have either led to
growth of companies or decline. Companies which acknowledge
the role of technology tend to remain installed in the market as
compared to those companies that will flutter technology.
General Electric took a bold approach to amalgamate
technology in its production techniques.
Works cited
Amernic, Joel, Russell Craig, and Dennis Tourish. 'The
Transformational Leader As Pedagogue,
Physician, Architect, Commander, And Saint: Five Root
Metaphors In Jack Welch's Letters To Stockholders Of General
Electric'. Human Relations 60.12 (2007): 1839--1872. Print.

BurgeSmani, Robert A, and Steven C Wheelwright. 'Strategic
Management of Technology And
Innovation'. READING 1.1 (2004): n. pag. Print.
Followill, David S et al. 'Neutron Source Strength
Measurements For Varian, Siemens, Elekta,
And General Electric Linear Accelerators'. Journal of applied
clinical medical physics 4.3 (2003): 189--194. Print.
Henderson, Kim M, and James R Evans. 'Successful
Implementation Of Six Sigma:
Benchmarking General Electric Company'. Benchmarking: An
International Journal 7.4 (2000): 260--282. Print.
Lampel, Joseph, and Jamal Shamsie. 'Probing The Unobtrusive
Link: Dominant Logic And The
Design Of Joint Ventures At General Electric'. Strategic
Management Journal 21.5 (2000): 593--602. Print.
Lundvall, Bengt-Ake, and Susana Borr'as. 'Science,
Technology And Innovation Policy'. The
Oxford handbook of innovation (2005): 599--631. Print.
Audit exercise 2
Innovation is the best competitive tool in the market; innovation
is an aspect that can place an organization in the best position
in the market. Thus, innovation can be described as a process of
coming up with a completely new approach in solving the
obvious problems. Some of the most innovative companies in
the market in the 21st century include Apple, Microsoft and
Google. Just like other companies in the market that delve to
penetrate and stay in the market, General Electric is founded on
the precept of innovative strategies. It is this framework that
ensures that the company stays in the market for a long time
(Burch). GE management techniques encompass a long detailed
evaluation process on the basis of performance on a curve.
According to William J. Conaty the senior vice president for
corporate human resource, each passing year the company
establishes a long list of individuals who are required to fill a
long form laying out their specific contributions while at the

same time listing their strengths and weaknesses (Howells).
GE has established a checklist that it ought to follow in order to
achieve its innovations in the market. Some of the most crucial
considerations the company has deciphered include demand for
the product, speed of adoption, success of innovation,
competitive response, competitive advantage, standards set, cost
implications, availability of resources, level of novelty,
developmental stages, areas that may be affected and other
opportunities that may accrue from an innovation strategy.
However to ensure a coherent adoption of the key
considerations management has to postulate a few questions.
Some of the questions that may be asked in accordance with the
depicted checklist include is the demand going up or down?
What is the likely speed of adoption? Are there factors that may
block the success of innovation? Is the strategy going to draw
competition? What is the competitive advantage of having a
new strategy? Do the organizational standards allow a new
approach? What is the cost implication of the whole process?
Do we have enough resources for a new approach? What is the
level of novelty captured by the new innovation strategy? Is the
new approach deemed to open opportunities of growing into a
harmful infection? All these questions are meant to critically
review management’s position towards a new innovation
strategy.
Cost is a huge impediment in technological innovation among
many companies. Many organizations incur huge costs in trying
to introduce new products and new services. The problem
becomes even bigger if the new products and services are not
adequately accepted as anticipated by the customers in the
market. GE has found itself in such position on few occasions
dragging back its innovative strategy (Xu and Ke).
Infrastructural cost itself becomes a constant headache to
management who has to contend with their budgetary
allocations at the expense of innovations. According to a study
conducted by the daily monitor, it was established that
approximately 30% of investors and companies in the market,

experience a lag due to the huge costs associated to innovation.
The huge cost is construed to the skills level needed and the
infrastructure in the market. For instance, if GE wanted to come
up with an employee authentication system, the company will
need to recruit the necessary personnel to develop the software,
secondly the company will need to purchase the matching
hardware to install the program; adding up the resulting costs, it
will depict that they are quite high and may be an impediment
to such an innovation (Koskela and Vrijhoef).
GE has faced a couple of legal restrictions when coming up with
new developments in the market. Some of the restrictions are
impounded by the local authorities while others are cemented by
the workers movement. Both of these agencies point out effects
of infringement of privacy and the security of the employees
and the customers in the market (Koskela and Vrijhoef). Legal
restrictions amount to a significant portion of the overall factors
of impediments in innovation strategies in the company. The
law itself keeps transitioning, for instance in the year 2002, the
EU passed a resolution to protect the internet users from
manipulation from organizations that had access to their data
and how such organizations could use the data. However, in
2012 the same law was revisited in allowing the users to have
control of their data. It is such transitions that organizations
like GE have to deal with to achieve innovation strategies
(Hua).
GE management can employ the above checklist in a number of
ways; some of the degrees of application that can be adopted by
GE management include continuously assessing a new
innovation on the basis of the checklist. This will go a long way
in ensuring that management stays in control at all times
(Fraser). By constantly reviewing a new innovation against the
checklist management will not only remain in position to
determine the requirements of a new innovation rather they will
also determine the compatibility of a new innovation to the
organization and the general market. The second approach is
methodically following the checklist in the absorption of new

technologies in the market. Other than in house development,
the company can also employ the checklist in purchasing new
innovations in the market. Additionally the company can ask for
third party vendors to specifically customize products to fit the
company’s demands more specifically. It is under this position
that the checklist plays a significant role in the organization
(Burch)
An innovation strategy engulfs a number of steps and
procedures before maturation to achieve an end result. GE can
follow either of the following approaches in solving its
problems in system development: 1) self-developed
development methodology, 2) adapted or modified development
methodology, 3) use of no development methodology at all. The
two key approaches that GE has to consider in its innovation
strategy include the hard approach which concentrates on the
procedures and technology to solve a given problem and the soft
approach which agglomerates the concentration and focus on
political, cultural and human aspects of the problem domain to
help specify the problem (Xu and Ke). The checklist can
perfectly fit this spectrum, at each stage the organization is able
to clarify whether a few requirements or conditions were met at
each stage, this will go a long way in solving mistakes that
would accrue in the long run. One of the results of efforts to
apply a scientific methodology to solve problems is the staged
framework for the control of system development that divides
the process into a number of manageable stages each defined in
terms of the activities or responsibilities and the outputs or the
milestones to be achieved. This means that GE has to follow a
particular process in ensuring the success of a particular
innovation strategy within its frameworks (Koskela and
Vrijhoef).
The success of a given innovation strategy requires a
consideration of a number of factors; GE has to put into place a
mechanism that weighs the options for a given innovation. The
following factors are of crucial significance if they are taken
into perspective by management: cost, usability, reliability,

efficiency, effectiveness, complicity, legality and adaptability
(Castillo-Rojas et al.). A good innovation is that which ensures
that it is achieved at the minimal cost possible, that which can
be used effectively for the purpose it was developed to attain,
that which is not complicated to the end users and that which
lies between the legal foundations established by the
government and other law enforcers. These factors are of
uttermost importance to be considered by GE’s management
(Koskela and Vrijhoef).
Finally GE lies in a good position to push further its innovative
strategy; a number of factors lay in favor of the company and
effectively utilized could lead to success to the company. The
company enjoys a long stay in the market which means it
comprehends the market pretty well as compared to new
entrants. Additionally it enjoys economies of scale which is a
huge advantage to the company to spearhead its innovative
strategy. Another positive value that stands in favor of the
company is its huge capital base owing to its customer base,
thus GE stands in a good position to position its innovative
strategy in the market (McCartney).
Works cited
Burch, Giles St John. 'The Creativeschizotype”: Help Or
Hindrance To Team-Level Innovation'.
The University of Auckland Business Review 8.1 (2006): 43--
50. Print.
Castillo-Rojas, Sandra M et al. 'Is Implementing Multiple
Management System Standards A
Hindrance To Innovation?'. Total Quality Management &
Business Excellence 23.9-10 (2012): 1075--1088. Print.
Fraser, Barry J. 'Curriculum Evaluation--Help Or Hindrance To
Teaching And Innovation?.'.
Australian Science Teachers Journal 21.2 (1975): 45--51. Print.
Howells, John. 'Patents And Downstream Innovation
Suppression--Facts Or Fiction?-A Critique

Of The Use Of Historical Sources In Support Of The Thesis
That Broad Patent Scope Enables The Suppression Or Hindrance
Of Downstream Useful-Technology Development'. Centre for
Organizational Renewal and Evolution, Working Paper-2008--
01 [online]. Available at< http://www. pucsp.
br/icim/ingles/downloads/pdf_proceedings_2008/11.
pdf>[Accessed September 2012] (2008): n. pag. Print.
Hua, ZHANG. 'The Hindrance To The Innovation Of Family—
—Enterprises System In China
With A Case Study Of Lanzhou Huanghe Co. Group'. Journal of
Beijing Institute of Technology (Social Sciences Edition) 3
(2001): 003. Print.
Koskela, Lauri, and Ruben Vrijhoef. 'Is The Current Theory Of
Construction A Hindrance To
Innovation?'. Building Research & Information 29.3 (2001):
197--207. Print.
Koskela, Lauri, and Ruben Vrijhoef. 'Is The Current Theory Of
Construction A Hindrance To
Innovation?'. Building Research & Information 29.3 (2001):
197--207. Print.
Koskela, LJ, and Ruben Vrijhoef. 'The Prevalent Theory Of
Construction Is A Hindrance For
Innovation'. (2000): n. pag. Print.
McCartney, Kevin. 'National Quality Assurance Guidelines For
Architectural Education-Help Or
Hindrance In Curriculum Development And Innovation'. (2013):
n. pag. Print.
Xu, Yang, and Zhang Ke. 'The Hindrance And Policies In
Enterprise Using Disruptive
Technology Innovation'. Economy and Management 6 (2010):
019. Print.
Audit exercise 3
Introduction
General Electric has undertaken numerous channels attached to
its development strategies. These management approaches are
construed to ensure that GE emerges as one of the best firms in

the market in the 21st century. According to a report established
by the internal audit of GE, development is always attached to
the endeavors of management and the effort put in the
development strategies of an organization. During its General
Meetings, GE stakeholders decided that they will roll out a plan
that will ensure that the company adopts a strategy that
illuminates financial control, customer satisfaction, human
resource development and sustainability in its activities. All
these segments are very critical to the overall functioning of the
company (Chenhui, 7).
GE financial activities
Public inquiries have been a stepping stone in the economy due
to their contribution in the long run. For instance the Campbell
Committee gave a report in 1981 on the substantial deregulation
of the financial sector. This report was widely accolade by
Martin Review report in 1983 on the impacts financial
deregulation in the banking sector. This was later reviewed by
the standing committee under the precipice of Finance and
Public Administration in 1991. Almost in the same year an
industry committee looked into the financial system to depict
the availability of investment capital (Gberevbie, 11). It is after
all this that the Wallis report gave its own version of the
financial deregulation and the techniques to build on the past
success by further reforms. For instance, GE has developed a
plan that is attached to its operations and dedicated in ensuring
that the company does not engage in unnecessary activities that
cost the company money. Basically, the company employs a
computerized system that allocates money to all the departments
depending on the needs of each department (Haugh and Talwar,
45). Harmonization of funds in the company is a key step in
ensuring that no uncoordinated activities transcend in the
company. The financial controller is required to give a clear
analysis of all the financial transactions in the company.
Additionally, quarterly review of the financial transactions is
required by law as it is adopted by GE.
Customers handling by GE

Customers are always the determinants of the success of a
company in the market. A company will never thrive if it has
poor relations with its customers in the market. GE has always
been on the frontline in establishing a proper relation with its
customers. For instance, the company has rolled out an online
platform whereby customers will be required to traverse their
complaints through. Additionally customer service is
undertaken in a 24 hour program. Further the company has
adopted a framework and policies that guide customer relations,
this include timely communication and ethical behavior by the
employees. Customer handling also involves after sales services
and the latest loyalty programs. Such programs enable
customers to feel appreciated by the clients (Houkes, 23).
Human resource
Employees aid management in attaining the set objectives of the
company. Thus, the recruitment process must always be skewed
in the attainment of a workforce that is motivated and
encouraged to work hard and attain success. The right
recruitment exercise takes numerous factors into consideration
since it is a process that will impact the company positively or
negatively in the long run. Employee recruitment in many
companies has been criticized because of the inequality in the
selection process. Over time, companies have used the wrong
approach towards filling vacant positions in their departments.
As a result, it has cost them immensely since they end up hiring
the wrong workforce while closing the doors for those who
could have spearheaded company growth. However, GE has
taken an initiative of ensuring that it attains a workforce
correlated on the basis of equality, performance, level of
education and other factors that guide achievement of quality
services and products in the market (Liyanage, 10).
Sustainability
Sustainability in the market is an approach that explains on
how long a company can remain in the market maintaining or
increasing its customer base. Since its establishment GE has
maintained a good position in the market despite the collapse of

other companies that were initiated almost the same time. GE
sustainability has been established on the basis of quality and
effective products and service delivery (Parrish, 30). There are
numerous steps the company has taken to depict quality and
effective products and services in the market. Adoption of the
technology is a framework which is initiated to increase the
level of products and services in the market. According to
Apple CEO, Apple thrives on the basis of innovation; it is this
approach which has given the company an upper hand in the
market. It is on the same precept that GE thrives on, GE
endeavors to adopt the latest innovation in the market, this is
construed to enable the introduction of quality products and
services in the market (Odero, 41).
The figure below demonstrates a sustainability matrix that can
be used by GE in ensuring its stay in the market and at the same
time allowing the company to establish a development plan.
Technological plan for mergers and acquisitions
In the present business world, mergers and acquisitions have
become a common trend; the most common type which can be
seen in the market is the horizontal model whereby companies
in the same industry come together to trade. However, there are
underlined factors that have faulted the whole process making it
80% less effective in business. According to John, Michael &
Kersi, M&A can be regenerated by taking into considerations
the marketing resources which are needed by the company
(Rossi and Volpin, 45). The resources which are invested back
into the companies in a merger will easily steer the company to
a new level of performance. However, on the other hand, some
researchers like Becker, depict that mergers and acquisitions are
likely to collapse in the initial stages of their development. The
reasons portrayed by Becker include; customer loss, strong
internal fragility and other managerial shortcomings.
Competitors will find an easy spot to hit the company since
customers are uncertain about the whole process.
GE has established a technological plan that can be used in

steering forth a merger and acquisition in the market. Some of
the steps the company has taken in ensuring a successful merger
and acquisition include rolling out a computerized system of
storing data; this can be termed as a database system that will
improve analysis of data. The second approach is the use of the
internet as a main source of data for marketing and product
development. The social media plays a significant role in
ensuring the organization remains at the top position by
following customer complaints and suggestions (Sumaila et al.,
23). Additionally, technology can be used as tool to assess the
correspondence of organizations before joining forces to
establish a wider market base. Financial analysis has always
been a steering factor in the development of mergers and
acquisitions, hence coming up with a financial control program
will help steer mergers and acquisitions. It is important to note
that technology acquiring requires an assessment of cost,
reliability, efficiency, usability, obsoleteness and the relative
significance behind the technology.
Conclusion
As noted above it’s very important to carry out an analysis
before endeavoring to take an action. This is the sole reason
why market research is very important in the production of new
products and services in the market. GE has adopted this
framework for a long time and endeavors to improve it even
further to ensure the success of its activities in the market.
Clinical and executive survey gives the finer details of the
internal organization of the mergers. Sometimes the major
factor which gets disrupted is the internal organization of the
company, managers and other employees may become unwilling
to work under the stipulated conditions. Finally, it can be seen
that mergers are a common thing in the present society. The
major reason for the upcoming trend is the need for different
organization from the same industry to extend their economies
of scale; synergic need of companies (Young Sung and Choi,

12).
Works cited
Chenhui, Zhang. 'Selection of Technological Plans for
Equilibrium at Low Temperature in Low-Temperature Methanol
Wash Unit after Change of Ammonia Feedstock from Oil to
Gas'. Chemical Fertilizer Industry 3 (2009): 022. Print.
Gberevbie, Daniel Eseme. 'Impact of Human Resource
Development and Organizational Commitment on Financial
Sector Employees in Nigeria'. Annals of the Alexandru Ioan
Cuza University-Economics 59.2 (2012): 29--41. Print.
Haugh, Helen M, and Alka Talwar. 'How Do Corporations
Embed Sustainability Across The Organization?'. Academy of
Management Learning & Education 9.3 (2010): 384--396. Print.
Houkes, Wybo N. 'Rules, Plans and the Normativity of
Technological Knowledge'. Springer (2013): 35--54. Print.
Liyanage, JRK. 'Impact of Strategic Human Resource
Management Practices on Perceptions of Financial
Performances: A Study on Medium and Large Size Software
Development Firms in Sri Lanka'. (2011): n. page. Print.
Odero, Edwins. 'AN Assessment of the Impact of Human
Resource, Organizational and Institutional Development on the
Financial Performance of the Municipality Of Karibib.'. (2014):
n. page. Print.
Parrish, Bradley D. 'Sustainability-Driven Entrepreneurship:
Principles of Organization Design'. Journal of Business
Venturing 25.5 (2010): 510--523. Print.
Rossi, Stefano, and Paolo F Volpin. 'Cross-Country
Determinants of Mergers and Acquisitions'. Journal of Financial
Economics 74.2 (2004): 277--304. Print.
Young Sung, Sun, and Jin Nam Choi. 'The Effects of Human
Resource Development on Operational and Financial
Performance of Manufacturing Companies: A Large-Scale,
Longitudinal Analysis'. Institute for Research on Labor and
Employment (2011): n. page. Print.

Running head: FINANCIAL DEPRIVATION AND CRIME
1
THE CORRELATION BETWEEN FINANCIAL DEPRIVATION
AND CRIME 14
FINANCIAL DEPRIVATION AND CRIME
Individual Project 2
Ashley Williams
American Intercontinental University
Dr. Telesco
Abstract
The correlation between low income areas and crime has been
one of the most contentious subjects over the last couple of
decades. This proposal will explore the state of security in low
income areas and analyze why it supersedes that of high income

areas. It argues that the state of income in every neighborhood
should be explored with utmost seriousness as it has a likely
correlation with the rate of security in the neighborhood.
The treatise made some important contributions to the
correlation between low income areas and security. It analyzes
why high crime rates are synonymous with low income areas
compared to the high income areas. It redefines the aspect on
which some of these assertions are proved. The study also
unravels some of the critics who may have opined a different
opinion regarding the same and exemplifies some of the
assertions they evoked.
Despite the assertions by some of these researchers being true
to some extent, low income areas and neighborhoods continue to
be the breeding hub on which some of the most serious crimes
happen and this is solely blamed on the financial deprivation of
the local population. The study argues that the lack of financial
freedom may be one of the reasons that have triggered crimes
around the world. Viewing crime from this context as opposed
to the conventional norm of researching criminals can be one of
the most prudent ways of purging the high rates of crimes that
have become prevalent in the low income areas. Some possible
solutions have been cited including the liberation of some of
these populations from their financial lack and formulating
ways through which they can steer themselves towards financial
freedom.
Introduction and Variables
The proposal starts from the premise that financial freedom is
indeed one of the greatest determinants of crime in any area,
state or neighborhood. Many people view the lack of financial
freedom as the root behind the lack of basic amenities, jealousy
and immorality. These negative assumptions have greatly led
many individuals deprived of their financial freedom into
believing that crime is the only way out of their problems.
The correlation between the high rate of crimes and income
inequality is a subject that has not only baffled economists and

scientists but it has also been one of the most debated subjects
in the legal and justice arena. The recent developments in these
two areas have particularly directed the notions and
assumptions behind this subject. Income inequalities have been
soaring high in the United States from the 70s with the rate of
crime decreasing slightly from the 60s.
This proposal argues that the only prudent way of solving the
exacerbating rate of crime in low income families is by ensuring
that individuals in low income areas and neighborhoods are
empowered financially through community cooperation and
microfinance institutions. In addition, it argues that that in spite
of low income areas being abuzz with a high rate of crime, some
upper income areas also experienced a similar rate of crime and
high rate crimes are not therefore entirely synonymous with low
income areas. However various researchers such as Reardon and
Bischoff (2011) still argue that a majority of the criminals who
cause havoc in these upper income earners originate from the
low income neighborhoods.
The study also argues that despite some developmental, social
and environmental factors contributing equally to the high rates
of crime as postulated by various researchers, the issue of
financial freedom remains thorny and a great contributor to
some of the crimes committed.
The purpose of the study was to examine the correlation
between financial freedom and crime and particularly regarding
why the low income neighborhoods are likely to experience a
higher rate of crime compared to the high income
neighborhoods. One of the fundamental basis on which some of
these arguments are based is got from the microeconomic theory
that asserts that people are generally driven by their wants and
needs which is usually restricted by the limited resources. When
the ability to purchase some of these resources is superseded by
the desire for the same resources, individuals are prompted to
look for the most desperate means to acquire them where some
go as far as stealing and robbing what has been acquired by
others.

Another factor that has also been mentioned as a great
contributor to the rise in the rate of crime in low income areas
is social degradation (Pitner & Brown, 2012). A close analysis
between the high income areas and the low income areas reveals
that social degradation is high in the low income areas
compared to the high income areas and this can all be traced to
the disparity in the financial freedom between the two areas.
The treatise concludes by affirming that there is indeed a
correlation between financial lack and the high rate of crime
and assertions by various researchers is sound proof to these
arguments.
Research questions:
1. What is the correlation between financial freedom and the
rate of crime?
2. Why do low income areas have a higher rate of crime
compared to the high income areas?
3. Which factors have greatly contributed to the rise in crime in
low income areas?
4. What are some of the measures that can be put in place to
reduce the exacerbating rate of crime in low income areas?
5. What are some of the other factors that can contribute to the
high rate of crime in low income areas other than financial
freedom?
6. What are some of the recommendations to these concerns?
Statement of the Purpose
This research proposal was carried out with the intended
purpose of unraveling the correlation between financial freedom
and crime. It exemplifies how the low income areas experience
a higher rate of crime compared to the high income areas and
underlines some of the factors behind this. It is an eye opener to
the economic, social and legal arena to not only view the social
aspects of a criminal but to also consider the social aspects of
the entire neighborhood of a criminal as it could unravel some
important aspects on how the financial state of the local
neighborhood could trigger the emergence of more crimes in the

area and therefore the only feasible way to bring an end to these
crimes is to economically empower the locals.
Literature Review
Low wages, lack of employment and opportunities are
some of the factors that were cited by Braithwaite (2011) as key
contributors to the high rate of crime in low income areas.
Experts such as Jackson (2011) have also revealed that in as
much as the poor are suspects of crimes they have also been key
victims of similar crimes.
Despite most quarters citing poverty as one of the leading
contributors to crime, unemployment has constantly been cited
in the research as the key factor that contributes to crime.
Foley (2011) was however quick to point out that in as much as
the high rate of crime is synonymous with the low income areas,
this does not in any way assert that criminals can only be found
among poor people. He postulated that the high income areas as
in as much risk of criminal attacks just as low income areas and
crime is therefore not entirely synonymous with low income
areas. He however agreed that the high rate of unemployment
and poverty in low income areas is a huge issue of concern and
can be a breeding root to crime.
Contrary to the opinions of many, Reardon and Bischoff (2011)
asserted that there is indeed some proof that despite the high
rate of crime in the low income areas, the residents of these
neighborhoods tend to show more care for their communities
compared to the high income area but some critics such as
Freedman (2012) have however refuted these assertions.
Annotated Bibliography
Braithwaite, J. (2011). Inequality, Crime and Public Policy.
NewYork, NY: Routledge.
In this publication, Braithwaite uses concise and user-friendly
language to capture the interest of the readers. He cites the
disparities in the purchasing power and consumer index as some
of the factors that have contributed to the high rates of crime in
the low income areas. Despite deviating slightly from the
research carried out by Foley (2011), he achieves his objective

of underlining the correlation between financial freedom and
crime. This is a publication that suits any economist or scholar
and the easy to understand scripts is one reason why this book
should at the hands of every reader with a particular interest in
this subject.
Foley, F. C. (2011). Welfare Payments and Crime. Review of
Economics and Statistics 93, 97-112.
Foley in this review underline some solutions that should be
considered in order to purge the rising rate of crime in the low
income areas. Some of the solutions include an improved
apprehension system, modernization of the police force, stricter
enforcement of laws and punishments. Despite highlighting
some of these fundamental solutions, his research fails to
capture the key subject of the research by failing to elucidate
the correlation between the low income areas and a high rate of
crime. Some critics such as Freedman (2011) have also
questioned why he left some vital solutions such as the
empowerment of the locals but despite the apparent dearth in
his research, it provides some useful information on crime.
Freedman, M. (2012). Teaching new markets old tricks: The
effects of subsidized investment on low-income neighborhoods.
Journal of Public Economics 96, 1000-1014.
This journal provides some useful insight on the life of
residents in low-income neighborhoods. His research has
however dwelled more on subsidized investments rather than the
correlation between financial freedom and income and this has
led some critics such as Braithwaite (2011) to question his
research. His analysis on the subsidized investments however
provides an insight on how the lack of opportunities in low
income areas has contributed to the high levels of crime.
Economists who are the core target audience for this journal
have therefore some significant knowledge to gain on the
correlation between the inadequate opportunities in these low
income areas and the high rate of crime in such areas.
Freedman, M., & Owens, G. E. (2011). Low-income housing
development and crime. Journal of Urban Economics 70, 115-

131.
This previous treatise by Freedman extends the previous
assertions mentioned above on how the lack of opportunities has
contributed to the high rate of crime in the low income
neighborhoods. Through concise and properly crafted scripts,
Freedman captures the interest of the reader and articulates how
the deplorable state of development in the low income areas
could be a key contributor of crime. These assertions were
backed by Martinez and Martinez (2013) in their book when
they claimed that the deplorable state of social amenities could
be one of the main reasons why crime could be high in the low
income areas compared to the higher income areas.
Jackson, J. (2011). Revisiting Risk Sensitivity in the Fear of
Crime. Journal of Research in Crime and Delinquency 48, 513-
537.
In this Journal, Jackson revisits the issue of crime and cites the
high rate of poverty coupled with the lack of opportunities in
low-income areas as some of the factors that have contributed to
the high rate of delinquency in low income areas. Social and
developmental issues such as drug and substance abuse, sexual
promiscuity and criminal versatility that are synonymous with
low income areas could be some of the reasons why the low
income areas are more ‘unsafe’ compared to the higher income
areas. His failure to revisit the issue of financial freedom and
how it relates with the aforementioned issues has been
questioned but despite the slight deviation from the core
subject, it underlines some important factors that were useful to
the research.
Martinez, J. R., & Martinez, R. (2013). Latino Homicide:
Immigration, Violence, and Community. New York, NY:
Routledge.
In this publication by the Martinez’s, the lack of social
amenities is cited as one of the key factors that have contributed
to the high rate of crime in low income areas. Martinez asserts
that residents in such areas engage in crime for the sole reason
of acquiring the social amenities that lack in their

neighborhoods.
McKinnish, T., Walsh, R., & White, T. K. (2010). Who
gentrifies low-income neighborhoods? Journal of Urban
Economics67, 180-193.
McKinnish and White in their 2010 journal pose the question
that has constantly been posed by many researchers including
Reardon and Bischoff (2011) on the gentrification of low-
income neighborhoods. Citing crime as one of the inhibiting
factors behind this gentrification, these authors takes the reader
through the life of low income earners, underlining some of the
factors behind the high rate of crime in such areas. The
deplorable state of infrastructure coupled with the high rate of
unemployment and low wages are some of the factors that have
affirmed why crime is prevalent in low income areas compared
to the higher income areas. It is a good read for any scholar
with a particular interest in public economics and provides some
important factors that were essential for this research.
Pitner, O. R., & Brown, E. M. (2012). Making neighborhoods
safer: Examining predictors of residents’ concerns about
neighborhood safety. Journal of Environmental Psychology 32,
43-49.
Having worked on similar researches in the 90s, Pitner and
Brown underline some important factors on how the low income
neighborhoods can be made safer. They cite economic
empowerment of the local residents as one of the most integral
solutions to the high rate of crime in these neighborhoods.
Secondly, he proposes that local residents should also consider
joining microfinance institutions and cooperatives as some of
the most prudent ways to gain financial freedom and
consequently alleviate the rate of crime in their neighborhoods.
Reardon, S. F., & Bischoff, K. (2011). Income Inequality and
Income Segregation. American Journal of Sociology 116, 1092-
1153.
In this journal, Reardon and Biscoff echo what McKinnish and
White (2010) asserted when they cited the low wages and high
rate of unemployment as some of the factors behind the high

rate of unemployment in low income areas. Despite giving a
blurred analysis on the correlation between financial freedom
and crime, his study was crucial in this treatise and underlined
important aspects regarding how income inequality and
segregation contributes to crime.
Santiago, D. C., & Wadsworth, E. M., & Stump, J. (2011).
Socioeconomic status, neighborhood disadvantage, and poverty-
related stress: Prospective effects on psychological syndromes
among diverse low-income families. Journal of Economic
Psychology 32, 218-230.
Santiago, Wadsworth and Stump are some of the greatest
contributors in this subject. In this journal they outline some
important factors such as the poverty related stress and how it
may contribute to the high rate of crime in low-income
neighborhoods. His study is properly researched and captures
the interest of the reader through properly crafted and explicit
analysis and is therefore a good recommendation for any reader
with a particular interest on this subject.
Research methodology
Data Collection Methods
The study incorporated both quantitative and qualitative data
with the main quantitative techniques for the methodology that
were used including questionnaires, interviews and observation
and the incorporation of these techniques enabled me to explore
and examine the concrete data from an connoisseur perspective.
Statistical Analysis
Some of the methods that can be used to analyze the data
include structural equation modeling that measures the variables
in order to access the latent structures. One of the key
advantages of this method is that it is able to cover large
amounts of data and it is also relatively cheap to carry out. The
disadvantage however is that it consumes a lot of time. The
generalized linear method is a method that focuses primarily on
discrete dependent variables and it is advantageous in that it is
easy to carry out. The general linear model is one of the most
renowned methods of analyzing data and it assesses the impact

of several predictors on various continuous dependent variables.
It is advantageous in the fact that less time is consumed when
carrying out the analysis. Reardon and Bischoff (2011)however
cited this method as being one of the most expensive to carry
out but despite the humongous costs involved it has proved to
be the most effective and efficient methods of conducting data.
In conclusion, it is evidently clear from the research that there
is a correlation between financial deprivation and crime.
Despite low income areas having the highest rates of crime,
empowering the locals economically can go a long way in
enabling the residents in these locations to gain financial
freedom and consequently purge the high rate of crime that is
synonymous with such areas.
References
Braithwaite, J. (2011). Inequality, Crime and Public Policy.

NewYork, NY: Routledge.
Foley, F. C. (2011). Welfare Payments and Crime. Review of
Economics and Statistics 93, 97-112.
Freedman, M. (2012). Teaching new markets old tricks: The
effects of subsidized investment on low-income neighborhoods.
Journal of Public Economics 96, 1000-1014.
Freedman, M., & Owens, G. E. (2011). Low-income housing
development and crime. Journal of Urban Economics 70, 115-
131.
Jackson, J. (2011). Revisiting Risk Sensitivity in the Fear of
Crime. Journal of Research in Crime and Delinquency 48, 513-
537.
Martinez, J. R., & Martinez, R. (2013). Latino Homicide:
Immigration, Violence, and Community. New York, NY:
Routledge.
McKinnish, T., Walsh, R., & White, T. K. (2010). Who
gentrifies low-income neighborhoods? Journal of Urban
Economics67, 180-193.
Pitner, O. R., & Brown, E. M. (2012). Making neighborhoods
safer: Examining predictors of residents’ concerns about
neighborhood safety. Journal of Environmental Psychology 32,
43-49.
Reardon, S. F., & Bischoff, K. (2011). Income Inequality and
Income Segregation. American Journal of Sociology 116, 1092-
1153.
Santiago, D. C., & Wadsworth, E. M., & Stump, J. (2011).
Socioeconomic status, neighborhood disadvantage, and poverty-
related stress: Prospective effects on psychological syndromes
among diverse low-income families. Journal of Economic
Psychology 32, 218-230.
Running head: STAKEHOLDERS
STAKEHOLDERS

Unit # 4
Individual Project
Student Name
American Intercontinental University
Dr. Telesco

Abstract
(Summary of the paper. Here is where you sum up in about a
paragraph what the paper will examine. Please do not re –write
this informational sentence – it is only here to guide you).
Research Question
Restate your Research question to remind the reader of your
question and topic. Please do not re –write this informational
sentence – it is only here to guide you).
RQ: What is…………? Or……. Does………..
Variables
Restate your independent and dependent variable for your
research topic. Please do not re –write this informational
Stakeholders Involved

Consider the possible stakeholders for your research project.
Who are they? Please do not re –write this informational
Social Political or Personal Factors
What social, political, or personal factors might influence the
direction of your research? Please do not re –write this
informational sentence – it is only here to guide you).
Interest Groups
What interest groups would be involved? Please do not re –write
this informational sentence – it is only here to guide you).
Patterns Influencing the Research
What patterns might influence the direction of your research?
Please do not re –write this informational sentence – it is only
here to guide you).
Policy Implications
What are the possible policy implications of your research?
Provide some examples of policies that might result from your
research. Please do not re –write this informational sentence – it
is only here to guide you).
Conclusion

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