Serotonin Function and Mechanism of Antidepressant Action

Serotonin Function and Mechanism of Antidepressant Action Neurotransmitters are chemicals located and released in the brain to allow an impulse from one nerve cell to pass to another nerve cell. There are approximately 50 neurotransmitters identified. There are billions of nerve cells located in the brain, which do not directly touch each other. Nerve cells communicate messages by secreting neurotransmitters. Neurotransmitters can excite or inhibit neurons (nerve cells). Some common neurotransmitters are acetylcholine, norepinephrine, dopamine, serotonin and gamma aminobutyric acid (GABA). Serotonin is a monoamine neurotransmitter. It is synthesized, from the amino acid L-tryptophan, in brain neurons and stored in vesicles. Serotonin is found in three main areas of the body: the intestinal wall; large constricted blood vessels; and the central nervous system. The most widely studied effects have been those on the central nervous system. The functions of serotonin are numerous and appear to involve control of appetite, sleep, memory and learning, temperature regulation, mood, behavior (including sexual and hallucinogenic behavior), cardiovascular function, muscle contraction, endocrine regulation, and depression. It is a well-known contributor to feelings of well-being; therefore it is also known as a happiness hormone despite not being a hormone. Serotonin is an inhibitory neurotransmitter which complements excitatory sympathetic systems like adrenaline and dopamine in the Central Nervous System. The physiological activity of serotonin starts from the brainstem in groups of brain cells called Raphe nucleus. Serotonin brain cells then spread to various regions of the central nervous system by branching out throughout the brain. History In 1935, Italian Vittorio Erspamer showed that an extract from enterochromaffin cells made intestines contract. Some believed it contained adrenaline, but two years later Erspamer was able to show that it was a previously unknown amine, which he named enteramine.[4] In 1948, Maurice M. Rapport, Arda Green, and Irvine Page of the Cleveland Clinic discovered a vasoconstrictor substance in blood serum, and since it was a serum agent affecting vascular tone, they named it serotonin. In 1952 it was shown that enteramine was the same substance as serotonin, and as the broad range of physiological roles were elucidated, the abbreviation 5HT of the proper chemical name 5-hydroxytryptamine became the preferred name in the pharmacological field. Mechanism of action The activity of serotonin arises in the brainstem from clusters of neurons known as the raphe nucleus. From the brain, serotonin neurons extend to virtually all parts of the central nervous system making the branching of the serotonin network the most expansive neurochemical system in the brain. The importance of this network becomes apparent when considering each serotonin neuron exerts an influence over as many as 500,000 target neurons. Due to the widespread distribution of serotonin in the nervous system, it is not surprising that this neurotransmitter can be linked to many types of behavior. Of the chemical neurotransmitter substances, serotonin is perhaps the most implicated in the treatment of various disorders, including anxiety, depression, obsessive-compulsive disorder, schizophrenia, stroke, obesity, pain, hypertension, vascular disorders, migraine, and nausea. A major factor in the understanding of the role of 5-HT in these disorders is the recent rapid advance made in understanding the physiological role of various serotonin receptor subtypes. There are at least four populations of receptors for serotonin: 5-HT1, 5-HT2, 5-HT3, and 5-HT4. The physiological function of each receptor subtype has not been established and is currently the subject of intensive investigation. Effects as a neurotransmitter Most neurotransmitters are released from tiny synaptic terminal buttons at the ends of nerve cells, but serotonin appears to be different. It is instead released freely from serotonergic varicosities into the general neuronal space, diffusing over a much larger area to activate the 5-HT receptors of nearby neurons. This reuptake can be disrupted by agents like MDMA, cocaine, tricyclic antidepressants (TCAs), and selective serotonin reuptake inhibitors (SSRIs). The overall action of serotonin is very complex and not entirely understood. Peripheral effects Cardiovascular action The cardiovascular effects of serotonin are complex. They are variable depending on the dose injected, experimental conditions, animal species and vascular state. Action on vessels: Serotonin induces either a vasoconstriction by 5-HT2 effect, in particular of renal vessels, or a vasodilation. Serotonin constricts veins and seems to induce venous thromboses and promotes platelet aggregating effect. It increases capillary permeability. Action on heart: Serotonin has a positive chronotropic action by 5-HT4 receptor stimulation and could take part in the genesis of certain rhythm disorders. It has a positive inotropic effect. Action on blood pressure: It is complex, according to experimental conditions, serotonin gives either hypotension, or hypertension, or no modification. Action on smooth muscles Serotonin induces contractions of intestine, bronchi and uterus. Digestive effects: Serotonin increases intestinal motility, probably by stimulation of 5-HT4 and 5-HT3 receptors: in human beings, injected by intravenous route, it increases duodenum and small intestine motility. This effect explains diarrhea observed in patients with carcinoid syndrome. Bronchial effects: Serotonin has a bronchoconstrictive action and a serotonin aerosol induces dyspnea (difficult or labored respiration). Uterus effect: Serotonin induces contractions of the uterus. Other actions Researchers have also found evidence that serotonin may play a role in regulating milk production in the breast, and that a defect within the serotonin network may be one underlying cause of SIDS (sudden infant death syndrome). Central effects Serotonin is involved in the regulation of sleep, mood (antidepressant action), temperature, appetite (appetite suppressant effect). Overstimulation of 5-HT2 receptors could induce productive and negative symptoms of psychotic disorders. LSD or lysergide, agonist of 5-HT2 receptors and also of D1 and D2 dopaminergic receptors, has hallucinogenic properties. Serotonin, thanks to its various types of presynaptic and postsynaptic receptors, modulates the activity of other transmitters. It plays a determining part in adaptation. Effects of Excess or Low Serotonin Serotonin is involved in allergic and inflammatory symptoms and in certain diseases: Carcinoid syndrome: The carcinoid syndrome is caused by metastatic tumors of enterochromaffin cells of the digestive tract which secrete various compounds, in particular a great quantity of serotonin. It is characterized by diarrhea, flushes (accesses of cutaneous vasodilation followed by a vasoconstriction), dyspnea and sometimes a damage to cardiac valves. The biological diagnosis of these tumors is based on the increase in serotonin concentration in blood and on the excretion of abnormal amounts of 5-hydroxy-indolacetic acid, 5-HIAA, in urines. Migraine: Migraine is a disease characterized by repeated accesses of headache in which vasomotor phenomena and serotonin play a determining part. In the first prodromic phase, there is a vasoconstriction, and in the second painful phase, a vasodilation. This vasodilation is reduced by vasoconstrictive drugs. Myocardial ischemia: Serotonin released from platelets seems to worsen the myocardial ischemia by vasoconstriction. Hallucinations occur due to increased levels of Serotonin. Generalized anxiety disorder People with generalized anxiety disorder (GAD) experience excessive worry that causes problems at work and in the maintenance of daily responsibilities. Evidence suggests that GAD involves several neurotransmitter systems in the brain, including norepinephrine and serotonin. Deficiencies or excessive intake of certain dietary minerals and vitamins can disrupt the level of serotonin, causing disruptions in the production or reuptake processes surrounding serotonin. Several drugs that affect the serotonin system Several classes of drugs target the 5-HT system, including some antidepressants, antipsychotics, anxiolytics, antiemetics, and antimigraine drugs, as well as the psychedelic drugs and empathogens. When Serotonin is low, certain problems with concentration and attention can be experienced. People become scatterbrained and poorly organized. It takes longer to do things because of poor planning. When Serotonin is moderately low, the following symptoms and behaviours have been observed: Chronic fatigue. Despite sleeping extra hours and naps, fatigue remains. There is a sense of being worn out Sleep disturbance. Appetite disturbance is present, usually in two types. There is a loss of appetite and subsequent weight loss or a craving for sweets and carbohydrates when the brain is trying to make more Serotonin. Total loss of sexual interest is present. In fact, there is loss of interest in everything, including those activities and interests that have been enjoyed in the past. Social withdrawal is common not answering the phone, rarely leaving the house/apartment, stop calling friends and family, and withdrawal from social events. Emotional sadness and frequent crying spells are common. Self-esteem and self-confidence are low. Body sensations, due to Serotonins role as a body regulator, include hot flushes and temperature changes, headaches, and stomach distress. Clinical Depression This is perhaps the most common mental health problem encountered in practice. One in four adults will experience clinical depression within their lifetime. Serotonin acts as an important feel-good neurotransmitter, sending signals that an individual is relaxed and happy. In the absence of serotonin, patients feel sad and unwell and may even experience fear, anxiety and physical discomfort. serotonin acts as an important feel-good neurotransmitter, sending signals that an individual is relaxed and happy. In the absence of serotonin, patients feel sad and unwell and may even experience fear, anxiety and physical discomfort. Treatment for depression, as might be expected, involves increasing levels of Serotonin in the brain. Since the mid-eighties, medications have been available that attempt to specifically target and increase Serotonin. Known as Selective Serotonin Reuptake Inhibitors (SSRIs), these medications such as Prozac, Zoloft, and Paxil are felt to work by making more Serotonin available in the brain. Like all neurotransmitters, we can have too much Serotonin. Obsessive-Compulsive Disorder The American Academy of Family Physicians explains that one of the disorders categorized as a serotonin deficiency-related illness is obsessive-compulsive disorder. In this psychiatric condition, patients feel obsessed with certain issues, like cleanliness or order, and are therefore compelled to engage in what they perceive as related behaviors, including rigorous and repetitive cleaning or hand washing. Researchers have determined that low levels of serotonin in the brain are responsible for many cases of obsessive-compulsive disorder, and physicians prescribe pharmaceuticals that help increase brain levels of serotonin. These drugs help reduce or relieve symptoms entirely, allowing individuals with obsessive-compulsive disorder to live normal lives. Serotonin Syndrome While elevated levels of Serotonin produce a sense of well-being, bliss, and oneness with the universe too much Serotonin can produce a life-threatening condition known as Serotonin Syndrome (SS).Likely to occur by accident by combining two Serotonin-increasing medications or substances. These are some of its symptoms: Cognitive mental confusion, hypomania, agitation, headache, coma Autonomic shivering, sweating, fever, hypertension, tachycardia, nausea, diarrhea Somatic myoclonus/clonus (muscle twitching), hyperreflexia, tremor Emergency medical treatment is required, utilizing medications that neutralize or block the action of Serotonin as the treatment for Serotonin Syndrome (SS). Discontinuation syndrome Antidepressants such as SSRIs have some dependence producing effects, most notably a withdrawal syndrome. Their dependence producing properties (depending on the antidepressant) may not be as significant as other psychotropic drugs such as benzodiazepines, however, withdrawal symptoms nonetheless may be quite severe and even debilitating. SSRIs have little abuse potential, but discontinuation can produce disturbing withdrawal symptoms that may not be able to be distinguished from a reoccurrence of the original illness: Sexual side effects Cardiac side effects Suicide risk Post SSRI sexual dysfunction Aggression Permanent nuerophysiological changes Persistent pulmonary hypertension Bleeding tendencies Applications of Serotonin SSRIs Selective serotonin reuptake inhibitors (SSRIs) are commonly used as first-line therapy to treat mood disorders due to their demonstrated efficacy, safety, and tolerability profiles. SSRIs may play an intricate role in treating hormone-mediated disorders that disturb the quality of life for women. Selected uses of SSRIs, specifically in the treatment of hot flashes, premenstrual dysphoric disorder, and postpartum depression, are explored in this article. Data from several studies support the use of SSRIs in these conditions, and therefore, these agents have the potential to significantly improve mood, cognitive function, physical symptoms, and social functioning in patients with these disorders. In addition, SSRIs may prove to be viable alternatives to current therapies that may be contraindicated, poorly tolerated, or lack efficacy in patients with these disorders. Post Traumatic Stress Syndrome PTSD is an anxiety disorder affecting individuals who have been exposed to a disastrous event, which may have threatened their lives or included witnessing tragic harm being afflicted. This disorder is most often related to individuals who have experienced combat. Patients are treated with an SSRI-Selective Serotonin Receptacle Inhibitors that have a calming effect on the body. The result for the patient is a calming effect on the body and reduction in the feeling of anxiety and aggression. Fibromyalagia Fibromyalgia is a disorder characterized by widespread pain of the muscles and tendons accompanied by varied tender points all over the body and general fatigue. Fibromyalgia affects more women than men and occurs in 2 percent of the population in the United States. As serotonin is a pain-fighting hormone, it is frequently used to treat fibromyalgia. Many medical professionals agree fibromyalgia is caused by low levels of serotonin. Besides taking supplements, serotonin can be taken from natural sources of tryptophan. Tryptophan is an amino acid that aids in the bodys production of serotonin and is found in soy, turkey, chicken, halibut, beans and cheddar cheese. General Stress Serotonins mood regulating neurotransmitters help alleviate stress in sufferers. People suffering from chronic stress benefit from supplementing their regular diet with serotonin, or tryptophan to increase its production. In some cases, using lavender can induce feelings of calm and happiness. Known as a feel good hormone, serotonin is actually lowered by high levels of stress and therefore must be added back. Ways to increase serotonin levels: Eat healthy Free Range Turkey Tryptophan is an essential amino acid that is present, in different amounts, in all protein foods. This amino acid is the building block for the neurotransmitter serotonin. Flaxseed/ Flaxseed oil As well as being great for fat loss, flaxseeds are great foods that raise serotonin levels because they contain both tryptophan and high levels of omega 3 fatty acids. 60 percent of the brain is made of structural fats, and omega 3 fatty acids make up a large proportion of brain nerve cells. Wild Fish and Sea food = Fatty fish like wild salmon, sardines and herring are rich in oils containing the essential fats EPA and DHA. Both of these long chain fats have been shown in trials both to smooth the mood swings of bipolar disorder and to ease regular depression. Whey protein = Whey protein has gained a greater and greater reputation as a super-food over recent years. Whey has been shown to regulate appetite, improve insulin sensitivity and blood sugar levels, bolster the immune system and has been shown to be the ideal protein source to use around workout time. Bananas High quality Eggs Sour Cherries Free Range Beef Dark Chocolate Cocoa is well known to increase serotonin levels in the brain the trick is not to eat so much that you crash a few hours later. Similarly most chocolate is clearly high in sugar and will spike blood sugar levels causing serotonin levels to plummet when your blood sugar crashes.

I Know Why the Caged Bird Sings by Maya Angelou Essay

In her anthology Written by Herself, Jill Ker Conway discuses a central theme in black women’s autobiography that is fully shown in I Know Why the Caged Bird Sings (1970) by Maya Angelou: â€Å"Because, from girlhood, these women faced the dual injustices of racial hostility and male exploitation, their life histories are told with no hint of romantic conventions. They describe, instead, a quest for physical and psychological survival† (3). Angelou’s illustration of her childhood and adolescence shows her frequent conflicts with racism, sexism, and injustice at the same time that the Maya describes her personal qualities, events, and the people that helped her to survive the destructive effects of her environment and served as positive role models for her. Despite the constant oppression she faced as a girl growing up lacking financial or other means of subsistence in the racially segregated town of Stamps, Arkansas, Angelou gives emphasis to the role models of her family members who sustained and raised her. These people contributed to Angelou’s development into a brave, independent young black woman. A Song of Transcendence: Maya Angelou Maya Angelou’s I Know Why the Caged Bird Sings was published at the end of the civil rights movement of the 1960s, and it carries with itself the bitter and hard-won fruit of this historical period. Angelou knows the cruel realities of life in the raciest Deep South in the mid-twentieth century. As the critic Roger Rosenblatt (1974) has stated, â€Å"No black American author has ever felt the need to invent a nightmare to make [her] point† (174). As Maya Angelou describes her childhood: â€Å"High spots in Stamps were usually negative: droughts, floods, lynchings and deaths† (Conway 45). Touched by the harsh effects of these negative forces, Maya Angelou goes through her life with sense of self-importance and self-respect. She moves forward toward a goal of freedom with a sense of self-knowledge, an understanding of the political realities of black life in the racist South, and a realization of the responsibility that such an understanding involves. Significant Others Maya describes several Black women nurturing a young Black girl in a racist and sexist society. These Black women characters serve as positive role models for Maya. This autobiography illustrates how Black women love themselves and each other in spite of living in a world that does not love or respect them. Angelou’s work describes a positive character of Black women who support each other and still remain individuals, free to choose their own paths to self-sufficiency. Angelou writes: â€Å"if growing up is painful for the Southern black girl, being aware of her displacement is the rust on the razor that threatens the throat. It is an unnecessary insult† (4). Her autobiography illustrates the painful double strikes of becoming Black and female adult. As a young girl, Maya Angelou has a strong desire to be white, to be a member of what she considers as the more favored and lucky race. The girl dreams to wake up out of her â€Å"ugly black dream† and instead become a white girl with beautiful long blond hair and blue eyes (2). She is aware, even as a little girl, that her â€Å"nappy black hair† and dark skin are not valued highly. The girl begins her difficult life with the painful feeling of not being â€Å"good enough,† since Maya could not find girls who were black in any literature or movies. From the age of three Maya Angelou is raised and nurtured by her devoutly religious grandmother that is severely correct in attention to rules and morality. The girl calls her grandmother â€Å"Momma. † Although Maya realizes that she is often perplexed by her grandmother’s manners, she definitely loves and respects her. This substitute mother-daughter relationship provides some state of being secure for the young Maya. Some feminist literature emphasizes the meaning of the mother-daughter relationship for young women’s psychological development (Iglesias and Cormier 259). Maya gives prominence to the important role of her grandmother (and later, her mother). Angelou’s account strategy bears witness to the strong impact these relationships had on her life, and in the end on her literary work. Maya Angelou places emphasis on the role of the black woman that has played in shaping her unique individual characteristics and destiny. Nancy Chodorow (1978) asserts that â€Å"because of their mothering by women, girls come to experience themselves as less separate than boys, as having more permeable ego boundaries. Girls come to define themselves more in relation to others† (93). In A Poetics of Women’s Autobiography, Sidonie Smith analyzes different theories of women’s autobiography and discusses among them â€Å"theories that distinguish women’s autobiographies by the way in which women seem to unfold their story through their relationship to a significant ‘other’† (18). Maya Angelou feels the pain of racism as she observes her dearly loved paternal grandmother endure embarrassment when white girls call her â€Å"Annie† instead of addressing her with respect as â€Å"Mrs. Henderson. † Being a teenager, Maya has a similar situation when she is â€Å"called out of her name† by a white female employer who calls her â€Å"Mary† (108). Momma Henderson’s painful experiences have prepared Maya Angelou for her own encounters with racist American society. The refusal of a white dentist, to whom Momma Henderson has provided loan, is another instance of the humiliation these two generations of Black women confront together. The dentist replied that he would â€Å"rather stick [his] hand in a dog’s mouth than in a nigger’s,† granddaughter and grandmother have to travel twenty-five miles to find the nearest Black dentist (189). The echo of Jim Crow, even so many years after slavery, places Black women at the very low position in a white patriarchal system. And yet despite the painful experience and examples of racism, Angelou’s autobiography is a story of victory and a praising of the strength and power of Black women. Maya portrays Momma Henderson as a strong, made by oneself, economically independent woman who has gained knowledge how operate and accomplish the goals in a world that believes women should be timid and dependent. Despite behavior conflicts with those who try to humiliate her, Momma Henderson is always the winner of any conflict because she never surrenders and retains her self-respect—and she teaches Maya Angelou to do the same. Vivian Baxter, Maya’s mother, is a woman of great ingenuity and has personal qualities like her own mother. She enjoys life, despite life’s troubles. From her mother, Maya learns the happiness of being a woman, delighting in the womanlike, and being proud of her Black female body. Mrs. Flowers, the â€Å"aristocrat† of Stamps, Arkansas, also encourages Maya to be â€Å"proud to be a Negro† (95). She helps Maya regain her self-confidence after the rape; she gives her lessons about the importance and beauty of language; she introduces to her great writers; and she gives her â€Å"lessons in living† so that Maya would learn to listen â€Å"carefully to what country people called mother wit †¦ couched in the collective wisdom of generations† (100). All of these black women teach Maya to love and respect herself, and to remember the generations of Black women who have come before her and helped pave a road of self-sufficiency in a strict world. Conclusion Maya Angelou played particular attention to the themes of motherhood within her autobiography. Angelou wrote a story in which both blackness and womanhood could be celebrated. What makes the work particularly powerful is her description of the vulnerable sexual positions in which black girls and women are placed. Readers see how Angelou presents black women among her family and friends and the significant role they play in providing the girl with security and love. Angelou describes black women as wise or trusted advisers in her intellectual development. Repeatedly Angelou expresses gratitude for the presence of these powerful and independent women in her life and credits them for the individual she becomes. Works Cited Angelou, Maya. I Know Why the Caged Bird Sings. New York: Bantam Books, 1969. Chodorow, N. The Reproduction of Mothering: Psychoanalysis and the Sociology of Gender.Berkeley: University of California Press, 1978. Conway, Jill Ker ed. , Written by Herself: An Anthology, New York: Vintage Books, 1992. Iglesias, Elizabeth and Cormier, Sherry. â€Å"The Transformation of Girls to Women: Finding Voice and Developing Strategies for Liberation. † Journal of Multicultural Counseling and Development. Vol. : 30 (4), 2002. Rosenblatt, Roger. Black Fiction, Cambridge, MA: Harvard University Press, 1974. Smith, Sidonie. A Poetics of Women’s Autobiography. Bloomington: Indiana University Press, 1987.

Economic of Industry

Despite the different degree of competitions and the level of development in the market across the various types of industries, most firms are continuously and consistently looking for ways and opportunities to enhance their ability to grow or even to just maintain sustainability and survival in the industry. Firms carry out diversification such as developing new lines and products, joint ventures and acquiring firms in unrelated lines of business, to improve on their corporate efficiency and benefits of the shareholder. For example, if a firm’s business focuses on seasonal products such as selling heating equipment, sales will do well during the autumn and winter months. However, to ensure the firm’s survival and maintain its business during the summer, it will need to carry out diversification such as establishing new product lines (i. e. Air conditioners). Therefore, firms diversify to achieve economies of scales and scope, to economize on transaction costs, improving shareholder’s diversification by reducing risks, as well as identifying undervalued firms. This paper will look at the different advantages and drawbacks of diversification as well as their economic validity. Diversification for Economies of Scales and Scopes It has been said that when a firm is able to achieve economies of scale, the production levels becomes more efficient as the number of goods being produced increases. With the increase in production levels, firms will then able to lower their average cost per unit as the fixed cost are able to spread out over a large number of goods. For large firms, this will be a great advantage to them as it allows these firms to be able to gain access to a larger market. Furthermore with a lower average cost in production, they will be able to position their products at a more cheaply and affordable pricing in the market, giving firms a competitive advantage as well as it sits greatly for the consumer. A good example of such company would be Wal-Mart WMT. Being a dominant player in the retailing industry as well as the sheer size of the company, Wal-Mart has great efficiencies at keeping costs low as the company has tremendous bargaining power with its suppliers. This allows Wal-Mart to be able to retail their products at a heaper price as well as having inexpensive distributions. However, it has been said that diversifying for economies of scales has an adverse effect on the smaller to medium size firms as it raises cost instead. It is generally true if the concept is viewed narrowly but small firms nowadays has managed to find ways to create opportunities to achieve economies of scales such as buying services, sharing risks and scaling through tech nology. Most small firms rather engaged services from a larger company as opposed to doing the job in-house to cut cost. Therefore any organizations servicing these smaller businesses (i. e. payroll services) are view as an â€Å"economies of scale† from the perspective of the small firms. Economies of Scopes on the other hand has a similar concept as economies of scales but refers more to firms that are able to lower their average cost by developing and producing or providing two or more products in their businesses. This means that a given level of production cost of each product line by a firm is much lower as compared to the given output level of a single product each produced by a combination of separate firms. An example of a company that uses economies of scope at its advantage would be Daiso. Daiso produced and retail hundreds of products from foods to house cleaning materials which allow them to offer standardization in their product’s pricings. With higher demands and production level as well as a lower average cost achieved through economies of scales, it definitely does help for firms to diversify so as to maximise their profit margins. Economizing on transaction costs Transaction costs in economics are unavoidable by firms and are usually incurred when making economic transactions such as buying or making products. Transaction cost complicates coordination as well as affecting the firms’ profit and loss. It reduces profit margin and a high transaction cost over time may result in firms having to face huge losses. For example, for a firm to produce a product it will need to carry out R&D and obtain information from different kind of sources which cost money. Therefore to reduce or economize the transaction costs, firms diversify by carrying out merger and acquisition. For example, in order to expand its revenue stream, Dell Inc, an American multinational computer technology corporation has decided to extend its target market to the gaming industry by creating a new line of product of gaming PCs. However, it requires Dell to carry out R&D to obtain and search for relevant information on the product and the target market and all this accumulates as transaction costs. Therefore to avoid incurring high transaction cost, Dell Inc. ad decided to acquire Alienware, a manufacturer of high-end gaming PCs in 2006. In conclusion, firm diversifying to economize transaction cost is viable and valid in the economic market as it helps to reduce cost thus improving the profit margin for the firms. Internal Capital Markets Internal Capital Markets of diversified firms allows firms to properly allocate its resources according to how its best use. It creat es efficiencies and increases firm’s control of funds which allows easier monitoring and lowers the monitoring costs as well as reducing chances of fraud. In addition, internal capital market allows firm to have informational advantage to make the necessary changes and allocation to its resources when it is being used improperly. For example; if the cost of issuing shares at a bargain price to the old shareholders outweigh project’s net profit value, the firm may decide to forgo NPV project which in return result in an underinvestment problem. However through internal capital market, diversified firms are able to allocate resources more efficiently and diminish the underinvestment problems. Internal capital market however may cause firms more harm than good. As established by Stulz (1990), diversification may engender influence costs and result in cross-subsidisation where some diversified firms tend to underinvest in high-performing projects and overinvest in the lower ones. This may have adverse impact on firm’s return and profitability as a firm allocating too many resources on a segment that relatively had less investment opportunities is unconditionally leaving some of the better projects in other segments underinvested which may bring in more profits to the firm. Shareholder’s diversification Diversifying helps to reduce firm’s risk and smooth out its earnings stream. However, most shareholders do not benefit from this as they are able to diversify their portfolio at near zero cost through investing in many different options. However, there is a fraction of shareholders whom are unable to carry out diversification on their own. They are usually the owners of firms whom investments are largely based on their own business and are the leasing shareholder of the firm. Due to this, the shareholders are unable to carry out proper portfolio diversification and therefore rely and benefit greatly from the risk reductions carried out by firms. For example, a firm developing new lines of businesses internally reduce its risk of failing as it streams of revenue are being segregated and relied on different channels. If one was to fail, there will be other means of business for the firm to recoup its losses and streaming in revenue. With this, the firm shareholders’ risks are being indirectly reduced as well. Identifying undervalued Firm Undervalued firm’s assets and potential earning power are usually inadequately reflected in its stock price. This means these firms are actually worth more than what is being expected of them in the market. Therefore, other firms whom are able to recognize this mispricing diversify and acquire these undervalued firms and benefits from the acquisition by gaining the differences between the value and purchased price as surplus. For example, General Electronics has over the years been carrying out acquisition and diversifies its business which allows stability in its earnings. However, identifying undervalued firm is not easy and some firm acquisition can bring more harm the benefits to a company. Furthermore, public firms traded in reasonably efficient markets may have their valuation surplus quickly eliminated by the premiums paid on market prices. Therefore, it is more viable in the economics to carry out acquisitions in less efficient markets or acquire private businesses. Conclusion In conclusion, though diversification come with a cost for firms and may be difficult to be carried out in some cases, I do believe that it is valid in economics as it greatly benefit firms in reducing risk and widen its revenue stream which in returns increases profit margins. Therefore, firms should see diversification as a viable option in expanding its business.

What Are You Going to Do After You Graduate

No matter where you go to school, what youre majoring in, where you live, or what kind of college experience youve had, youre likely to face an all-too-common question as Graduation Day approaches: So, what are you going to do after you graduate? While this question is often coming from a well-intentioned person, being asked multiple times can become a bit disheartening—especially if your post-graduation plans arent solidified. So what can you say that offers a polite response without divulging too much about your personal life? Im Still Deciding This answer lets folks know that youre actively engaged in a decision-making process. You might have a variety of options on the table or are choosing between two different directions—like graduate school or work, for example. Additionally, it lets folks know that you are exploring the choices available to you instead of just passively waiting to see whats going to happen. Im Giving Myself Until (Upcoming Date) to Decide This can be a great deflector of peoples nosiness because it lets folks know that youre currently in the process of deciding, you have a date in mind, and you dont necessarily need advice until that point in time. Im Talking to the Career Counselors at School About My Options Lots of people like to give advice to current or recent college graduates, which can be great. However, not all of the advice you receive can be helpful or constructive. Letting people know that youre talking with administrators who are professionally trained to offer career advice can be a gentle way to let them know that youre already receiving advice from others -- and, consequently, dont necessarily need any more at this moment. Im Focusing on Making the Most of My College Experience Right Now Remember, its perfectly okay not to know what youre going to do after college. That decision can, in fact, wait until you really do graduate. College is a stressful, intense journey, and letting people know that youre focusing on being successful in that process before turning to the next phase in your life is perfectly acceptable. Im Talking With a Few People About Some Opportunities You dont have to be specific, and you dont have to name names. But letting someone know that you already have some conversations going on with other people can gently deflect a series of questioning you might not feel like answering. Im Giving Myself Some Time to Think About It Spending some time genuinely thinking about and strategically planning for your post-college plans isnt lazy; its important. And some people might want to give themselves some time to focus on such an important decision while not also trying to juggle college classes and other obligations. If you have the luxury of being able to take some time to be mindful about where you want your post-college life to go, dont be shy about admitting that. I Want to Go to Graduate School This lets people know that you have plans for graduate school and are actively working to figure out how to make those plans a reality. Additionally, it lets people know that you are already in the process of working out the details, which may mean full-time work, an internship, or time off studying for an entrance exam. Regardless of the specifics, this answer lets folks know that you already have plans in motion. Im Looking for a Job as a (Potential Career Choice) Using the What are you doing after graduation? question as a networking opportunity isnt cheating—its smart. If you want to go into a certain field or work for a certain company, get the word out. Dont be shy about telling people what youre looking for and what youre interested in. Doing so is an important form of networking, and you never know who might be able to help you get your foot in the door somewhere. Im Going to Help My Family Out for a While This can mean youre working for your familys business or that youre going home to help care for a sick family member. And while you dont need to share the details if you dont want to, mentioning that youll be supporting your family in one form or another lets people know that you already have plans in the works. Im Not Sure and Im Open to Suggestions People who ask about your post-graduation plans are likely experiencing several things: They genuinely care about you and want to know what youll be doing after college. They want to give you advice. They think they can help you in some way. Or theyre just nosy and want to know what the skinny is. No matter the details, it never hurts to hear what someone else has to say. You never know who might provide a gem of insight that sparks a personal epiphany for you or that provides a connection you werent expecting. No matter what your plans are, after all, theres no reason to shy away from an opportunity to make things more solid and secure.