Revolutionizing Retail: Tesco and the Digital Era

by Herman Bailey | Jul 25, 2023 | Essays | 0 comments

AIMS AND OBJECTIVES (P1)

1.1 Background

In the modern world of the post-globalization era, when the competition to:

• deliver ever cheaper and better quality products and services with support from the latest technologies
• know your clients and what they want
• deliver the products and services when and where the clients need them
• communicate instantly with suppliers, stakeholders, and clients
• reach new markets and new clients on a global

is becoming tougher, it has become obvious that companies that do not incorporate digital technologies in their everyday activities will be left behind and will lose their competitive edge in a business environment in which reaching the client a nanosecond before your competitors and a mile farther than them represents the difference between being in our out of business in your specialization.
More and more tech-savvy consumers – requiring less technical assistance, less frequently (Schwalbe, 2015) – are now getting used to getting what they want the instant they want it, and patience or understanding errors is not something naturally occurring to them in their quest for what they want or need.
Therefore, companies have started implementing modern technology in their daily working operations which has led to the enhancement of the operational activities and roles.
Tesco PLC, headquartered in Hertfordshire is a multinational organization operating in the retail industry (tesco.com, 2018). Apart from the retail business, Tesco has diversified its product portfolio and has ventured into new business lines like telecom, financial services, and others. It is the ninth-largest retailer in the world.
Self-checkout points, the online catalog of products, online ordering & sales, inventory, feedback from customers, online banking – all-digital processes implemented by Tesco in the everyday running of their business arms – led to a very high degree of digitalization and use of web-based applications, many of these software solutions, associated hardware and resources being procured through cloud computing.

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1.1 Project Definition

The current project is being developed and conducted to respond to Tesco’s senior management request to assess the impact of digitalization on business activities.

1.2 Problem Statement

Following an intense process of modernization and advancement through digitalization, Tesco’s management has to learn how this transformation has impacted costs, efficiency, accuracy, customer base, customer service, profit, data protection, safety and security, talent recruitment.

Project Strategy

The project strategy is to:

• Research information available online and in written literature to identify the main elements and trends in business digitalization and the digital technologies available
• Primary and secondary research
• Research and identify Tesco’s main departments (according to the organizational chart)
• Research and identify the digital technologies implemented by Tesco so
• Design an e-survey (via SurveyMonkey cloud tool) meant to identify the exposure to and the interaction with digital technology and the effect it on business
• Survey all staff from across all departments
• Enroll Tesco’s management support to achieve the electronic completion of the survey by at least 300 staff
• Analyze and interpret the responses received electronically and compile the final report
• Present the report to Tesco’s senior management

1.4 Project Objective
To identify and assess the impact that digitalization had so far on Tesco as a business.

1.4.1 Purpose
The purpose of this study is to investigate the impact of digital technology on TESCO.
To achieve this purpose, mixed methods are to be used, including quantitative and qualitative methods. As both have advantages and disadvantages, using a combination of both methods capitalizes on the strength and reduces the weakness of every method. The approach helps the researcher to collect the information.
The qualitative research will be carried out through semi-structured face-to-face interviews with Tesco’s senior management.
The quantitative research was carried out using electronic questionnaires as the main survey tool, alongside personal interviews.

1.4.2 Objectives

• Identify the impact of cloud computing on the costs of IT and data safety (admin, IT – the departments with user input in this matter)
• Identify the impact of CCTV monitoring on safety within the premises and loss through theft (Security, Retail and Finance departments can provide the best input)
• Identify the impact of using social media (i.e. Facebook) and the retail website on the broadening of the customer base, on sales volumes, and on profits (Marketing, Sales, Admin, Finance can provide info)
• Impact of self-checkout points on customer satisfaction, operational costs, stock accuracy, and sales volumes. Are there disadvantages also? Retail, Stores – departments best places to respond
• Identify the impact of inventory software and hardware (i.e. hand-held terminals) on stock accuracy, stock movement, and sales (Retail, Stores, Admin – can provide useful input)
• Identify the impact of on-line job recruitment via Tesco’s own website (the Careers section) on recruitment costs and on the supply of the skills needed by the organization (Human Resources and Finance – most able to provide this information)

The objectives stated above are SMART:

1.5 Project assumptions
Project assumptions are as followed:

• Tesco Plc has already implemented a wide range of digital applications in the everyday run of their activities:
  • cloud computing
  • self-checkout machines
  • CCTV monitoring systems
  • software-driven stock reception, movement, and inventory
  • fidelity and saving schemes for customers (Tesco cards)
  • online buying through their website tesco.com
  • Intranet
  • etc.
• Tesco invested in digitalization in all departments and processes

PROJECT MANAGEMENT PLAN (P2)

2.1 Project Scope Statement

The scope of the present research is to reveal – through surveying Tesco’s employees from all major departments – the deep transformations happening within the organization.
This insight and knowledge will enable the management to adapt the structure of the company to the challenges and transformation brought about by digitalization, to design efficient, streamlined, cost-effective processes, and to identify the skills needed in the future to further support the process of modernization through digitalization.

Included Scope

The included scopes of the project are:

• Secure £3,925 – the cost of the project, as presented in section 2.4.4Cost, to be able to conduct the research and finalize the project with a written report. The amount above will cover £3,510 – the cost of labor during the project, as well as consumables, services, and transport costs – an additional £415
• Primary and secondary research to identify Tesco’s organizational structure and digital technologies implemented so far
• Reference information available online and on specialist magazines regarding digital technologies available for businesses in the retail sector
• The project requires the use of a computer on which to build the electronic survey form (using Survey Monkey – the free cloud software available online)
• A printer is required to be able to print off hard copies of the final report and any other documentation required during the completion of the project
• A mobile phone will also be used for the necessary communication with Tesco management

2.3 Excluded Scope

The excluded scope of the research includes:

• Customers’ feedback about the impact the digitalization had on them and their interaction with Tesco as a business
• Information regarding the impact of digitalization on rival companies
• Research and recommendations on new, emerging digital solutions
  1. Performance, cost, and timescales

2.4.1 Performance
The elements of performance measured along the project’s timeline are:

• Design a can survey using the SurveyMonkey application
• Send the e-survey out via email to all staff members (with support from the It department and the company’s management)
• Receive back at least 300 completed surveys in total, ideally from each department.
• Analyze, interpret and summarise the results
• Write and present the final report

To monitor the evolution of the project and its milestones (measurable achievements) and to keep it within the delivery deadline I will maintain an Activities Logbook.

2.4.2 Timescale
The project is scheduled to be finalized then 3 months from the date the contract for the research has been signed.

2.4.3 Time management
A project schedule (Gantt chart) will be designed, to include:
– all the activities and actions necessary for the project
– the sequence and the timing of how these activities and actions will be completed depending on their inter-dependence (data input/output) with the other activities
Daily monitoring of the Gantt chart must ensure that the project is on course to be finished by the expected deadline.

2.4.4 Cost
The total cost of the survey is £3,925, with the breakdown of the elements of costs presented in the tables below:

2.5 Deliverables

The deliverable of this project are:

• The identification of digital technologies implemented so far in Tesco’s departments and processes
• The identification of Tesco’s organizational structure (main departments)
• Designing the e-survey form via the SurveyMonkey (free) cloud-based software
• Emailing the survey to all Tesco’s employees
• Receiving back a minimum of 300 responses, which should include all departments
• Creating the final report for Tesco’s management regarding the impact of digital technology and how it transformed the business and the challenges brought by this transformation that the company may need to address in future

2.6 Success Criteria

• Completing each phase of the project according to the project’s schedule (Gantt chart)
• Complete the project within the budget calculated and allocated
• Complete the project within three months from the date the research contract was signed by both parties (Tesco and myself – the researcher)
• Design a questionnaire able to inter-connect departments, roles, interaction (communication), digital technologies in use, and their impact on processes
• Collect the complete responses to the e-survey from at least 300 staff from all major departments and all types of responsibilities
• Maintain a logbook to ensure an audit trail of the progression of the project and to produce observations and conclusions valuable in the run of other projects in future
• Ensure the confidentiality of the respondents to the e-survey by creating the final report in a manner that will make it impossible to link responses to functions or individuals

2.7 Quality Management

2.7.1 Quality Planning
The main purpose of section 2. PROJECT MANAGEMENT PLAN (P1) of the project is to ensure that through detailed planning of activities, the definition of measurable deliveries, and timescales the project fulfills the client’s requirements.
2.7.2 Quality Assurance
The clear definition of the deliverables of the project, the detailed planning of the activities, and the project schedule will ensure that the final report is delivered on time and contains the information the customer commissioned the researcher to obtain.
2.7.3 Quality Control
During the execution of the project the deliverables and the delivery times, as well as the quality of the information produced at each step of the project will be compared against the measurable elements of the project – as defined at the beginning – and against the timescales agreed in the Gantt chart.
The Project Logbook will include the actions and the results completed and achieved, to capture the flow of the project, as well as ensuring the traceability of/responsibility for everything done so far.

2.8 Risk and Resources

The project management team related to this research needs to be aware of all the possible risks and threats in the case of implementing and developing the use of digital technology. There can be several risks and threats that can be aroused at the time of doing the research. As the communication system and primary research of the project are based on the internet so there may be a minor change to get some wrong information about the research that is based on the impact of digital technology in Tesco Plc. The possible risks and threats for this research can be described as follows:

• Wrong information from the internet about Tesco Plc.’s internal factors related to the usage of digital technology
• Security-related risks at the vendor
• Regulation and legislation related risks
• Location-related risks
• Financial risks

2.9 Risk assessment Plan

• Expired risks

2. 10 Implementation Plan

To make the implementation planning for the research based on the impact of digital technology on Tesco Plc, several steps are required to be implemented properly. Some several activities and factors are related to this project. A work-breakdown structure is required along with a Gantt Chart to make all the employees understand the requirements of this project. The work-breakdown structure along with the Gantt Chart can be described as follows:

Work breakdown structure including a timeline

Table 3: Action plan and work break down the structure

(Source: Created by Author)
Gantt chart (Schedule chart)

2.5 Communication Plan

A proper communication system can be considered as the primary source to achieve information in any work. In the case of this project, the researcher needs to make proper planning in a communication system that there will be no interruption at any point in time. It is a crucial responsibility of the researcher to make proper communication with the employees of the organization, stakeholders of this research, and many others. The stakeholders need to be informed about the progress of this project as well. The research needs to provide proper training and knowledge to the subordinates of this project how can they help the researcher to collect the required data and information about the impact of the digital technology of Tesco Plc. The training procedure should be well organized so that the subordinates can understand the digital technologies and their application. In this way, they can do their best to gather all the necessary information from the employees and the managers of Tesco Plc. On the other hand, a properly planned project needs to have a good strategy and the following guidelines along with options are provided to provide the necessary support to the researcher to generate the communication planning:

P4. Qualitative and Quantitative research methods theory

The present project involves a methodology section as it helps in guiding the process of gathering and collecting information. The researcher chose the positivism philosophy as it helps in analyzing the real facts, data and information gathered from the market. Taking a cue from the philosophy chosen, the researcher has opted for the deductive approach as it allows analysis of the existing theories, models, and journals and their findings to deduce information. Moreover, the explanatory purpose of research has been chosen as it helps in determining the link between the research parameters by establishing a direct cause and effect relationship.
As per the choices of the methods above, the primary research methodology has been adopted. The primary research methodology involves gathering data directly from the primary sources by the researcher himself. This method involves two techniques – qualitative and quantitative. The qualitative technique is used to gather information by conducting interviews and discussions. On the other hand, the quantitative technique involves gathering information from surveys and focus groups and deals with numerical and statistical data.
For this research, both quantitative and qualitative techniques of research have been used. About the quantitative technique, the researcher has interviewed 50 employees from the administrative department of Tesco and a questionnaire containing four questions were circulated among them. The survey responses have been presented in terms of numerical data and statistical figures. On the other hand, about the qualitative technique of data collection, the researcher has interviewed three managersof the organization who have been interviewed by asking everyone two questions each.
To determine a proper outcome and present it in form of a formal report to the senior management, sampling techniques have also been used. The probability technique of sampling has been used for the quantitative data and the non-probability technique has been used for the qualitative data.
While executing the various stages of the project, the researcher has adhered to all the ethical considerations. The survey was kept unanimous and the employees were not forced to share their personal and professionals credentials and details. Similarly, the responses were not revealed in the open and the confidential data shared by the managers was protected as per the provisions of the Data Protection Act.

Part 3 (P5, P6, P7)

Performance Review

Analysis
To conduct the research both probability and non-probability techniques have been used. In addition to this, 50 employees have been selected for the quantitative data collection and the qualitative question; three managers of Tesco have been selected.
Quantitative analysis
1. What is your age?

Figure 4: Age of respondents

Findings and analysis: From the above data, it can be stated that the among 50 respondents, nine respondent belongs to the age group of 22 years to 25 years, 11 belongs to the age group of 26 to 29 years. In addition to this, 12 respondents belong to the age group of 29 to 32 years and the rest of the respondents are 32 years and above.
Stating the information gathered in terms of percentage – 18% employees fall under the age category of 22-25; 22% in 26-29; 245 in 29-32 and lastly, 36% in the age category of 33 and above. As per the data gathered, it can be analyzed that Tesco has managed to attract young talent in their company.
2. Please specify your gender.

Figures 5: Gender of respondents

Findings and analysis: From the above data, it can be stated that among 50 respondents, 32 respondents are male whereas the rest of the respondents are female. From the data gathered above, it can be seen that 64% of the employees are male and 36% are female. Hence, the company employees people of both genders however, the majority of it is the male population.
3. How far do you agree that Digital Technology has helped in providing better customer services?

Figure 6: Benefits of Digital Technology in customer services

Findings and analysis: From the above analysis among the 50 participants, 40% of them believe that digital technology will help the organization to be more efficient and effective for its production and consumer services. On the other hand, 14% of the participants believe that the use of digital technology hurts the working environment of Tesco Plc. As all the managers and employees will be dependent on modern technology, their self-working efficiency will also be reduced. 4% of the participants remain neutral as they still do not know about the application and usage of digital technology in the working environment. Moreover, 12% of the participants do not agree with the usage of digital technology as their concept about digital technology is not clear properly.
As per the data presentation, it can be stated that the employees of the organization include a mix-up reaction about the use of this specific technology. On the contrary, some employees are unable to identify the difference between the pre and post usage of digital technology. However, the researcher needs to make the participants properly understand all the positive and negative impacts of the usage of digital technology through this research.

4. What kind of digital technologies Tesco is using?
Figure 7: Different digital technologies used by Tesco Plc.
Finding and Analysis: From the above analysis, it can be described that among 50 participants of the research survey, 50% of them believe that Tesco Plc. is using CCTV as digital technology and 30% of them believe that Tesco is using a self-checkout system. On the other hand, 12% and 8% of the total participants believe that Tesco is using the sales-website and Presentation website as digital technology. However, in reality as a renowned organization Tesco Plc. is using all the above-mentioned technology but the analysis depicts that the people still do not know all about the use and details of digital technology.
However, the main responsibility of the researcher is to find out the main reason for the issues that the researcher will face during the research. To overcome the problems, the researcher needs to be more efficient and effective in his operations and provide the essential details to Tesco Plc. about the impact of digital technology in its working environment. . From the above data analysis, it can be identified that digital technology includes several problems which are described before, and it can be recommended that Tesco Plc. needs to hire more professionals along with providing proper training to its employees about the usage of digital technologies such as CCTV, self-checkout, sales websites, and many others. It can also be recommended from the above discussion of the managers that some of the challenges about digital technology can be overcome very easily by providing proper instructions and guidelines to the employees of the organization.

5. What are the challenges that can be faced while using digital technology?

Figure 8: Challenges faced by using digital technology

Findings and analysis: From the above chart it can be described that among the 50 participants, 14 of them believe that digital technology has a proper impact on the working environment of Tesco Plc. Moreover, 12 of them believe that the challenges, which the researcher will face during this project, are including a security issue. When the research will move forward to the digital technology, that will be entirely dependent on the service provider, as they are required to maintain the equipment of the digital technology such as CCTV, self-checkout, sales websites, and many others. In the time of using digital technologies, the researcher and the organization need to provide a proper guideline about the application of this and they need to verify the SaaS provider to mitigate the problems of security such as hacking, data manipulation, and others. The organization needs to make sure that the procedure of the project research is following the terms and conditions of the project or not.
In the case of the above chart, it can be stated that among the participants 28% of them believe that there will be a performance problem that can be faced by the researcher while making the research on the impact of digital technology of Tesco Plc. 24% of them think that the issue will be related to the security purpose as well as 16% of the believes that there will be a shortage of necessary resources for conducting the research. 32% of the participants think that governance and control need to be related to this research. However, the main responsibility of the researcher is to find out the main reason for the issues that the researcher will face during the research. To overcome the problems, the researcher needs to be more efficient and effective in his operations and provide the essential details to Tesco Plc. about the impact of digital technology in its working environment.

Qualitative analysis

FOR ALL 3 objectives
Q1. How has Digital technology helped Tesco plc?
Manager 1: As per Manager 1, the usage of digital technology helped the organization greatly. Digital technology helps an organization be more efficient and effective in its production rate and customer services. Moreover, with the help of digital technology the organization may include a proper management system that will be capable of controlling the productivity and operations of the company. For example, by using CCTV, the management can monitor all the activities and operations happening within the organization.
Manager 2: According to Manager 2, digital technology will help the researcher and organization develop its business operations. For example, by using the presentation website the authority of the organization can communicate with their employees and can provide the necessary guidelines to make a project more efficient. In the case of researching this project, the usage of digital technology can also be very effective as the researcher can communicate with his subordinates to know the progress report and can provide them some necessary information as well.
Manager 3: In the case of Manager 3, he stated that digital technology could help Tesco Plc. for its business purpose. For example, through an online website, the organization can able to get the consumer’s feedback much faster and can develop their products as per the feedback and the requirements of the customer.

Q2. Did you face any problems and challenges in using digital technology?

Manager 1: In the context of Manager 1, the main issue of digital technology is maintenance. For example, if the main control of the organization like CCTV surveillance room is totally dependent on digital technology then there may be several problems arise. Such as: if the server of the control room fails for a certain time then it will be impossible to monitor the organizational activities at that time which can lead the organization towards some serious troubles.
Manager 2: As per Manager 2, the main issues will be security-related. For example, in the time using digital technology like online websites to provide essential documents and guidelines to the subordinates or an important client, there will be a massive chance that the website can be hacked by other rival organizations or any other person who can manipulate the information.
Manager 3: In case of the Manager 3, the issue of using digital technology is very minor such as in the time using self-checkout, if the checking system gets fail then there will be a chance for the employees to bunk the office. They can come to the office lately as well as can get out without notifying the seniors.

Recommendations:

The researcher can offer better service to the readers with the help of this research based on the impact of digital technology in Tesco Plc. Therefore, the researcher needs to gather more data and accurate information to satisfy the requirements of the readers, as well as the researcher, needs to provide some recommendations related to the topic that everyone can understand about the application and details of the digital technology. From the above data analysis, it can be identified that digital technology includes several problems which are described before, and it can be recommended that Tesco Plc. needs to hire more professionals along with providing proper training to its employees about the usage of digital technologies such as CCTV, self-checkout, sales websites, and many others. It can also be recommended from the above discussion of the managers that some of the challenges about digital technology can be overcome very easily by providing proper instructions and guidelines to the employees of the organization. From the above discussion, it can also be identified that about the online website there is a chance of hacking the essential information of the company so the organization needs to hire some experienced IT professionals to prevent hacking.

It can also be recommended based on the discussion that the organization needs to take care of all the essential and important documents properly and the authorities need to check all the digital systems properly that there is any chance of the system to get failure in the working time or not. If there is a chance then they need to take another step to overcome the problem. For example, if the self-checking system gets failure then the organization can arrange a team immediately to monitor the attendance of the employees manually by using pen and paper. The process will be time-consuming but for a certain time, it will help the organization to be independent of digital technology. It can be stated at last that the application of digital technology is very good but to be over-dependent on this is not necessary for a renowned organization like Tesco Plc.

Reflection

Reference list

Schwalbe, K., 2015. Information technology project management. Cengage Learning
Walker, A., 2015. Project management in construction. John Wiley & Sons.
Tesco.com (2018). Tesco – Online Groceries, Homeware, Electricals & Clothing. [online] Tesco.com.

Appendix1

Quantitative analysis
1. What is your age?

2. Please specify your gender.

3. How far do you agree that digital technology has helped in providing better customer services?

4. What kind of digital technologies Tesco is using?

5. What are the challenges that can be faced while using digital technology?

Appendix 2

Herman Bailey

With a student-centered approach, I create engaging and informative blog posts that tackle relevant topics for students. My content aims to equip students with the knowledge and tools they need to succeed academically and beyond.

Advancements in Phase Change Materials for Efficient Energy Storage

by Herman Bailey | Jul 25, 2023 | Essays | 0 comments

Abstract

The paper on the use of Phase change materials in building construction has been a recent development and a keen interest of the researchers have been demonstrated in this regards. Furthermore, there is ongoing research regarding the various applications of PCM. It may be stated in this context that this research project focuses on the types of PCMs used in the building construction industry. In addition to that, this paper provides a significant insight into the methods or techniques employed for integrating or mixing thee PCM with the concrete or other building material. Moreover, the advantages and the limitations of using PCM as a significant building construction material have been evaluated through this paper. Additionally, Arizona Public Service or APS in the Solar Testing and Research (STAR) center or APS STAR center is taken into consideration for their role in conducting relevant, consequential and noteworthy research on the applications of PCM. Furthermore, the applicability of PCM as an alternative to solar power has been considered through the research conducted by the organisation.

The survey and interviews conducted for performing the quantitative and qualitative analysis of the data, illustrates the knowledge of the researchers and junior research fellows at APS STAR center with regards to the particular subject of discussion. It may be mentioned in this context that the thermal storage capacity of PCMs are exploited through this research and the research at the aforementioned organisation. The methodology chosen for the purpose of execution of this research project has been identified to have a positivism philosophy, and a deductive approach for carrying out these research studies.

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1.0 Introduction

1.1 Research background

Substances exhibiting thermodynamic properties as a result of the presence of high heat of fusion or latent heat are termed as Phase Change materials. The outcome of the latent heat presents the opportunity for storing and releasing large amounts of energy. The PCMs are capable of demonstrating such thermodynamic properties during the phase change, generally solid to liquid transition, resulting in the heat storage in accordance with the per unit volume of the substance. The PCMs can be classified as organic, inorganic, hygroscopic or even Solid-Solid PCMs. The implementation of the various kinds of PCMs in building construction is dependent on the advantages and the disadvantages that the materials pose in different environment conditions. The thermophysical properties of the PCMs are taken into consideration as selection criteria for the type of PCM for the materials for building construction (Qiu et al. 2017). It may be stated in this regards that the concept of implementation of PCMs for improving the insulation of building materials had been taken into account after the World War II. This research provides an insight into the classification of the PCMs based on their thermophysical properties, along with the techniques implemented for improving the insulation of building materials. In addition to that, this research investigates the various applications of PCMs, including the involvement in building construction.

1.2 Research problems

Often issues with leakage of insulation are noted due to the implementation of high temperatures. However, the encapsulation of paraffin into small spheres, and thereafter mixing with concrete, aids in the building construction purposes. The techniques used in this regard and their efficiency are studied for the purpose of this research paper. Impregnation, immersion and direct mixing are techniques which are emphasized in this paper. Furthermore, the applications of PCM are studied and an evaluation is made regarding which of the techniques may be suited for the construction industry.

1.3 Research objectives

The objectives and sub-goals of the research are detailed below:

• Discussions of the utilization of PCM in construction
• Assessing the advantages and disadvantages of PCM in construction
• Evaluating the issues that get associated with Phase Change Material

1.4 Research questions

The following questions have been formulated to detail the issue that this paper discusses in a better way:

1. How can you define and understand Phase Change Material?
2. How do you assess Phase Change Material in the manufacturing units of construction?
3. Explain the utilization of Phase Change Management and its advantages when related to the construction industries.
4. Explain the disadvantages of the application of PCM in the industry of construction (Paksoy, 2007, p. 67).
5. Identify and discuss the technologies that can be applied for the better utilization of PCM in the industry of construction.

2.0 Literature Review

2.1 Introduction

The study of phase change materials provides a concept regarding the efficiency of the materials, and it has been evident that the use of PCMs results in more energetically efficient buildings. A literature review of the PCM stated by several scholars has been discussed in this regards. The productivity and advantages offered by a variety of PCMs in the building construction industry have been illustrated in this research. In addition to that, the multiple techniques for enhanced PCM integration into building construction work have been mentioned and studied.

Phase Change Material can be described as a substance that has a heat of fusion, which is high. As it possesses this quality it can be melted or solidified at a specific temperature and then it can store as well as release huge amounts of energy. Phase Change Materials can be called as the units of latent heat storage or LHS too, as the substance while turning from solid to liquid or from liquid to solid releases or absorbs a lot of heat. The storage of latent heat can be done in a few ways and through the following changes in the phase of a material:

• Solid to liquid
• Liquid to solid
• Liquid to gas
• Solid to gas

While all these phases are present, PCM involves only the two initial phases, which are the solid to liquid and the liquid to solid phase. The phase change from liquid to gas has a higher degree of the transformation of heat than the solid to liquid or the liquid to solid transitions, the first phase change involves the utilization of high pressures or large volumes in order to store the materials in the gas phase and have been concluded as being impractical for the purpose of thermal storage. On the other hand the solid to solid phase transition is a very slow process that produces low heat. The solid to liquid transitions of PCM initially behave like the sensible heat storage or SHS where the temperature increases constantly log with the absorption of heat. However, the PCMs reach a certain temperature when they melt and then they can absorb huge amounts of heat without rising radically in the temperature. The PCMs are available at a diverse range of temperature, which starts from -5 degree C to 190 degree C. some PCMs are also available at the comfort range of the human beings, which is between 20-30 degree C and are quite effective as well because they are able to store heat 5 to 14 times more per unit volume than the conventional materials of storage like masonry, rock or water.

2.2 Classification of Phase Change Materials

The classification of PCMs can be classified as depicted in Figure 1.

Figure 1: Classification of PCM

(Source: Mishra, Shukla and Sharma, 2015)

2.2.1 Eutectics

The first category can be cites as eutectics, which are commonly called eutectic mixtures. Eutectic mixtures can be considered as PCMs, which are mixtures of two or more substances having low melting points (de Gracia and Cabeza, 2015). The characteristic feature of this mixture is that the mixture melts at the freezing point of one of the two mixtures, which is the lowest among the two. The temperature at which the mixture freezes is termed as its eutectic point. The binary systems of the eutectics have demonstrated freezing points between 16℃ and 51℃, while the melting point has been noted to be between 18℃ and 51℃ (Mishra, Shukla and Sharma, 2015). The latent heat of fusion of this range of melting and freezing points have been noted to be around 120 and 160 kJ/kg. A mixture of Lauric acid (LA) and Capric acid (CA) is often used as an efficient PCM in building construction (de Gracia and Cabeza, 2015). Figure 2 illustrates the melting points of the binary systems of each of the components of the eutectic mixture, namely, Capric acid and Lauric acid (Qiu et al. 2017).

Figure 2: Melting points of the binary systems of Capric acid and Lauric acid

(Source: Bland et al. 2017)

Using the Schroder’s equation to calculate the transition temperatures of the eutectic mixture of LA and CA have been found to be at 19.6℃. Figure 3 depicts the DSC curve of the binary systems of CA and LA. This had been derived through a DSC analysis of the eutectic mixture, when the proportion of the mixture of LA to CA was 34.88% to 65.12% (Bland et al. 2017).

Figure 3: DSC curve of the eutectic mixture of CA and LA

(Source: Bland et al. 2017)

2.2.2 Organic phase change materials

Organic phase change materials are known to have lower thermal conductivity. The increase in the technology of microencapsulation has enhanced the use of organic PCMs. Furthermore, the use of bio-based PCMs may serve as an alternative to the prevalent petroleum-based PCM. for instance, paraffin (C_nH_2n+2)is one of the most examples of bio-based PCMs which offer numerous advantages (Bland et al. 2017). The chemical inertia of paraffins, along with the extensive range of melting temperatures from 200℃ to 700℃ makes it a suitable PCM in building construction (Bland et al. 2017). The advantages include the ability to freeze without much undercooling, non-reactive and safe. In addition to that, the organic PCMs are chemically stable and offer a high heat of fusion. Moreover, the lipid and carbohydrate based PCMs are generally produced from renewable substances, which does not harm the environment. Additionally, it is to be noted that the compatibility of the organic PCMs with the traditional materials of construction are an interesting feature for the purpose of building construction. Regardless, there are certain disadvantages as well, such as the low thermal conductivity offered by the PCMs in their respective solid states, which may be addressed through the high heat transfer rates for the freezing cycles. Furthermore, organic PCMs are flammable in nature and have a low volumetric latent heat storage capacity (Bland et al. 2017). Examples of organic PCMs include phenol, glycerin, formic acid, methyl palmitate, and Paraffin n-Carbons.

2.2.3 Inorganic phase change materials

Inorganic PCMs are generally salt hydrates in nature with the chemical formula (M_nH₂O). As opposed to the organic PCMs, the inorganic PCMs have a high latent heat of fusion and are non-inflammable, which provides better scopes of application for the same. The other advantages offered by inorganic PCMs include low cost and abundant availability, high thermal conductivity, high rates of volumetric storage capacity of latent heat of fusion and a sharp melting point. However, there are a number of drawbacks identified with respect to inorganic PCMs, such as a high volume change, phase separation and incongruous melting on cycling, which may potentially pose a threat to the latent heat enthalpy (Fokaides, Kylili and Kalogirou, 2015). In addition to that, inorganic PCMs are noted to be corrosive to other substances such as metals, and the requirement of nucleating agents is essential as the PCMs are likely to become inactive after repeated cycles. Furthermore, the solid to liquid transition require supercooling which may become potentially problematic to the PCMs. Sodium sulfate (Na₂SO₄·10H₂O), Sodium hydroxide/ sodium carbonate NaOH / Na2CO3 (7.2%) and more can be considered common examples of inorganic PCMs. Since, inorganic PCMs are subject to undergo phase decomposition, the cross-linking enhances the stability of the compound, which may prove beneficial. For instance, HDPE or high density polyethylene is cross-linked when 98% of the heat of fusion is utilised through transition. However, the temperature range for organic PCMs is quite favourable as they offer a wide range, but the inorganic PCMs are active at a temperature range of 30℃ to 600℃ (Kalnæs and Jelle, 2015).

2.3 PCM Incorporations in Concrete

2.3.1 Impregnation

Incorporation of the PCMs into the building materials proves beneficial as it may aid in the storage of thermal energy. However, it may be mentioned in this regards that the additional of the PCMs into the building material, such as concrete allows the increment of efficiency through providing a higher thermal mass, which aids in the provision of a higher energy efficiency. The process of impregnation is one of the many techniques through which PCMs are incorporated into concrete or other building and construction materials (Fokaides, Kylili and Kalogirou, 2015). Impregnation requires three fundamental steps, namely, the evacuation of activities that result to physical healthiness. For example, proper diet, ensuring that all meals are balanced and taking a lot of water and air from the light-weight aggregates. This is performed with the help of a vacuum pump. Figure 4 illustrates a diagram depicting the process of incorporation of PCMs into concrete. The second step entails the absorption of the porous materials or aggregates into the liquid PCM. Finally, the previously soaked PCM aggregates are mixed with the concrete. The formerly soaked PCM aggregates act as a ‘carrier for the PCM’ (Fokaides, Kylili and Kalogirou, 2015). For instance, taking butyl stearate as a PCM, the aggregates expanded shale aggregate (S), normal clay aggregate (C2) and expanded clay aggregate (C1) had been used for a comparative study of porosity of the materials and as a ‘carrier for the PCM’. It was identified that the porosity of the materials had been found to be 0.081, 0.176 and 0.876 ml/g of the aggregates, S, C2 and C1 respectively. The net outcome of the experiments can be illustrated as the capability of the PCM to occupy about 75% of the porous aggregate (Kalnæs and Jelle, 2015).

Figure 4: Incorporation of PCM into concrete

(Source: Fokaides, Kylili and Kalogirou, 2015)

2.3.2 Immersions

The primary principle acting behind this technique has been identified as the capillary action. As opposed to the impregnation technique, wherein the liquid PCM is incorporated into the concrete, this technique entails the building materials such as concrete or bricks and more, to be dipped within the PCM. The liquid PCM is absorbed by the construction material through capillary action. Figure 5 illustrates the procedure of heat absorption of the PCM and the state transition.

Figure 5: PCM transition

(Source: Fokaides, Kylili and Kalogirou, 2015)

It may be mentioned in this regards that the effectiveness of this particular technique implemented is primarily dependent on the capacity of absorption of the concrete or other building materials used for the building purposes. Furthermore, it is also to be noted in this context that the incorporation or integration of the PCM into the concrete results in the negative impact on the properties of the concrete. However, this may be corrected through the selection of the appropriate and the most suitable technique of PCM integration. Investigation by scientists have demonstrated that the absorption of porous materials or PCM into concrete take a few hours in general. The investigation further highlighted that the liquid PCM required at temperature of approximately 80°C±5 in order to soak through concrete blocks (Kalnæs and Jelle, 2015). Furthermore, it was identified that autoclaved concrete blocks have increased porosity, therefore, it has resulted in an increased rate of absorption of the liquid PCM.

2.3.3 Direct mixings

The process of encapsulation has been previously mentioned in the literature. The physically and chemically stable form of the PCM is directly added into the constituents of the building materials. The common processes identified in this regards are namely, emulsion polymerization, interfacial polymerization, spray drying and more. The use of Zeocarbon or Zeolite is implemented in this regards, in order to avoid the breakage of the capsule during the process of direct mixings. The principle behind this has been identified as the surface reinforcement in order to withstand impact or high impact (Stritih et al. 2018).

2.4 Application of PCMs

2.4.1 Building applications

The role of PCM integrated into concrete is known to have multiple applications in several components of building construction. Major components have been identified as:

• Glass windows filled with PCM: The windows in this aspect have double sheets, filled with air-filled gaps between them. Two holes at the bottom of the window are connected to PCM tank and a pump. Furthermore, the pump is connected to the tank containing the PCM in the liquid state. Temperature sensors are enabled, which enables a pre-set temperature and the pump is activated and the air-filled gaps are replaced with the PCM from the tank (Lee et al. 2015). Hence, the PCM starts freezing as a result of the low outside temperature, thereby maintaining the internal temperature.

Figure 6: PCM embedded in a wall system of a building

(Source: Derradji, Errebai and Amara, 2017)

• Under-Floor Electric Heating System: The thermal floor performance of the building may be evaluated through the implementation of PCM for undertaking the under-floor electric heating systems (Karaipekli, Sarı and Biçer, 2016). The components of the heating system include electric heater, wooden floors, air layer, polystyrene insulation, some wooden supporters and PCM.
• Roof integrated with PCM: A thermal PCM storage unit is installed in the iron roof sheets acting as a solar radiation collection in order to heat up the air. The operations may be performed depending on the requirements. For instance, the PCM is melted by pumping air into the thermal storage facility. However, in the absence of heat, an auxiliary gas heater is implemented for heating.
• PCM assisted ceilings: In this case, a ceiling-mounted fan is used for pumping the air out through the heat pipes, while the other end of the storage pipes is considered as a PCM storage module. The phase transition property of PCM is utilised in this regards, during the day, the PCM absorbs the heat, which cools the warm air generated within the room, while the shutters are opened and the fans are reversed at night, thereby facilitating the heating from the PCM when the cooler air passes over the pipes (Akeiber et al. 2016).

2.4.2 PCM enhanced concrete

Thermo-concrete, which is commonly known as PCM enhanced concrete, implements EPS or Expanded Polystyrene that is embedded in Thermo-concrete panels. This technique implements the use of thermal mass technology. PCM is mixed with the concrete is enhance its durability as well as the properties of heat retention and absorption. Furthermore, a series of experiments performed on PCM in SCC or Self Compacting Concrete have been performed taking 1%, 3% and 5% of PCM in the experiments (Kylili and Fokaides, 2016). It has been established that an increase in 1.7, 3.0 and 3.5 times in the samples, with a consistent increase in the levels of PCM. Additionally, the melting temperatures have been in the range of 23℃ to 26℃, which have been identified to play a vital role in influencing the specific heat capacity of the experimental samples (Souayfane, Fardoun and Biwole, 2016).

2.4.3 Thermal Energy Storage and Cooling Power Potential

It has been found upon conducting several experiments that upon incorporating PCM into the walls of an office space, the indoor ambient temperature had been reduced by about 7℃ in the summer, while the ambient indoor temperatures rose by 4℃ in the winter (Kenisarin and Mahkamov, 2016). Furthermore, it had been established that upon integrating PCM into the walls of the office had resulted in reduced energy consumption as well. It may be stated that it had been demonstrated through a series of experiments that the energy consumption of the office had been found to be 33 kWh without the integration of PCM, while upon integration with PCM, the energy consumption had been reduced to 18 kWh (de Gracia and Cabeza, 2015). Furthermore, as an efficient thermal storage system, PCM has a major role to play in the building construction industry. The PCM embedded in the concrete primarily absorbs the surplus heat during the day, and melts. On the contrary, it solidifies on cooler nights and the the heat absorbed is released into the environment. The principle behind the efficiency can be demonstrated in connection with the heat transfer steam/ water that take place in two phases.

2.5 Recent work in the field of PCMs

Efficient energy performance of building is becoming an increasing concern with the rise in global warming and other negative environmental effects. Recent works in this field have primarily contributed to a better understanding of the management of the energy flow within and out of the buildings. The paper by Fokaides, Kylili and Kalogirou (2015), investigates the incorporation of PCM for the transparent glazing development of a building. The paper draws inspiration from the series of experiments conducted at MIT in 1948 by Dr. Maria Telkes. The experiment at MIT focused on the construction of a house with integrated PCM facilities for heating purposes. The principle of the latent heat of fusion of the PCM was taken into account in this regards. Glauber salts were used; however, the experiment had failed after 3 years, which had given researchers an opportunity to explore the field and the applications of PCM in building construction.

It may be mentioned in this context that the paper by Mishra, Shukla and Sharma (2015), explores the possibility of implementation of PCM as a potential thermal storage in the future. It is stated in the research paper that the use of solid-liquid PCMs are predominantly used in the field of building construction. The prime reason has been identified as the higher heat of transformation required in other phase change transitions such as liquid-gaseous state transitions (Hughes and Zaki, 2016). Furthermore, high pressures and larger volume requirements for other phase transition is also a criterion,, making the overall system impractical and complex.

2.7 Assessment of PCM

The use of the phase Change Materials in the areas of construction and development have been initiated in order to improve the performance of energy and to bring thermal comfort as well. The construction industry is expanding rapidly with the increase in population and that is resulting in the increase of the consumption of energy on a regular basis (da and Eames, 2016). The consumption increase is due to the increased demand for the heating of space or the cooling of areas so that the human beings can enjoy thermal comfort. The Phase Change Materials are utilized largely because they can produce energy in huge amounts by solidifying or by melting at a specific temperature. They play a significant role as the device of storage of thermal energy by utilizing the storage density that is high and the latent heat capacity as well.

2.8 Advantages and Disadvantages of PCM

The following are the advantages and the disadvantages that can be evaluated from the application of PCM in the construction industries.

2.8.1 Advantages of PCM

The application of Phase Change Materials in the industry of construction is farfetched. It adheres to a lot of sections of the industry and provides a lot of help to the people working in the industry as well. It makes work easier and swifter (da and Eames, 2016). It helps to bring down the total cost of the budget as well as it has different units through which it can be utilized. It has organic utilization inorganic uses as well as eutectic variations. They separately look after different issues and solve various problems of the construction industry. They provide the following advantages:

Organic

These are Paraffin (C_nH_2n+2), bio-based or Phase Change Materials that are lipid or carbohydrate derived.

• It has a high latent heat quantity.
• These are materials that are non-corrosive.
• The Phase Change Materials that are organic are thermally as well as chemically stable.
• They need little amount of sub-cooling.
• They materials that are organic are both recyclable as well as organic.
• They provide thermal comfort and are efficient that way (da and Eames, 2016).
• The heat of fusion of these materials is high.
• The vapour pressure used is low.
• It has the ability to melt consistently.
• These are non-reactive materials that are safe.
• The PCMs that are lipid based or have carbohydrate can be produced easily from sources that are renewable.
• The conventional materials of construction are compatible with it (Sharma et al. 2015).

Inorganic

These are the salt hydrates (M_nH₂O)

• These have high latent heat as well.
• The melting enthalpy of these materials is high.
• The Phase Change Materials that are inorganic have high latency and density as well.
• The thermal conductivity of these materials is high.
• The heat of fusion is high.
• The materials are sensible heat storage units or SHS.
• These are non-flammable too.
• The materials have low change of volume (Sharma et al. 2015).
• The PCMs that are inorganic are affordable.

Eutectic

These are inorganic-inorganic or c-inorganic compounds.

These materials have melting temperature which is sharp.

The volumetric thermal storage density of these materials is high as well.

2.8.2 Disadvantages of PCM

The section above have already mentioned what are the advantages of the PCMs that can be used in the industries of construction for better results and financial reduction as well (Sharma et al. 2015). These materials however, have certain disadvantages too when they are put to practical use. These are discussed in the section below.

Organic

• The main issue or problem with the organic Phase Change Materials is that they are not really affordable as they are made with much care and through a complicated process.
• The enthalpy of melting for these materials is relatively low.
• The density of these items is low as well.
• The thermal conductivity of the organic PCMs is equally low.
• The availability of the organic PCMs is rare. They are not very affordable as they are rarely available in the market (Silva et al. 2015).
• The organic materials are quite flammable depending on the type of container they are placed in.
• They go through a change in volume.

Inorganic

• The materials have super cooling issues.
• The materials of the containers of the inorganic PCMs are corrosive.
• The materials go through a separation in phase.
• They go through segregation in phase as well.
• The materials lack thermal stability in them.
• When the materials go through repeated cycles of change the volume of the Phase Change Materials become unstable (Silva et al. 2015).
• The phase of melting as well as separation goes through a loss of latent heat enthalpy and is not consistent.

Eutectic

• The thermal performance of these materials gets reduced after repeated cycling just like the inorganic Phase Change Materials.
• Volume change is high as well.
• These are highly corrosive substances.
• Thesuper cooling level is high too.
• There is the formation of sharp crystals when the PCM of salt hydrates starts to solidify (Silva et al. 2015). These sharp objects can cause leaks of the macro-encapsulation and is highly possible to happen.
• The data on the thermo-physical characteristics of these materials are limited.
• There is a lack of practical test of these materials too.

2.9 Technologies applied in PCM

The technologies that are used for the application of PCM in the industries of construction are of different types. These technologies are initiated in the structure of the building or in the water usage systems as well. The technologies are of various kinds and are detailed below:

• Wallboard provides a suitable area for the application of the Phase Change Materials. They have the ability to enable cooling that is off-peak and solar heating that is passive(Silva et al. 2015). These walls where the PCM have been added save almost 5-12% on the cost of heating. The performance after application is measured by the temperature of melting, the effectiveness of the method of incorporation, conditions of climate, solar gains that are direct, and many more of the PCMs.
• Concrete used in PCMs help to save the cost and loses the storage capacity of heat that is high. The concrete usage in PCM has been enhanced in order to increase stability, avoid chances of leakage and improve the thermal performance.
• Ceilings and floors fabrication have been done using the solar heating that is passive and it has been coupled with the PCM night cooling (Kensby et al. 2015). The solar heating that is passive when connected stores the heat until it is required and does not depend on the external solar heating.
• Insulation is a concept on which there has been investigation. It was found that the cellulose that is incorporated in PCM and the insulators of PU-foam reduced the peak-load generated from the walls to about 40%. The insulators can be fitted to the attic insulation and when the summer temperature is at its peak, it can bring down the temperature from 43 degree C to 32 degree C (Su et al. 2015).
• Shutters or window blinds that have PCM incorporated into them reduced almost 10 K in the blind temperature and cause a delay of 3 hours as well. The application of this PCM technology in the building provides a thermal inertia or resistance, which is high and increases the effectiveness of the modules of standard buildings.
• Cooled ceilings are part of the dynamic building application of PCM and the technology of cooled ceilings was able to identify the incorporation of the MPCM slurries and the fluid of heat transfer (Su et al. 2015). This module can help the construction of buildings under different climatic conditions, which can affect the tank size of storage or the pump capabilities.
• Air-conditioning systems has the slurries that have dual functions, to store heat and to transfer them too. The thermal capabilities of these slurries reduced the areas of heat transfer and the reduction continued on the AC units as well (Ramakrishnan et al. 2015). A system called Cool-Phase has been developed in order to heat the office spaces.
• Microencapsulation can be included in the walls made of plastic to avoid any kind of liquid leakage as well.
• Granules embedded with PCM have been developed to avoid the leakage of liquids.

2.10 Summary

As a result of the extensive storage capacity of the PCMs, their widespread applications have been noted in the field of building construction. Relevant literature classifies the PCMs based on the physical, chemical as well as thermo physical properties of the related PCMs. The primary applications of PCM in building components such as windows, wallboards, roofs and ceilings have been identified in this regards. Furthermore, thermal energy storage is a potential aspect explored through the study of the existing literature by scholars and researchers.

2.11 Conceptual framework

Types of phase change materials

Integration of PCM in concrete or other building materials

Building applications

Thermal Energy Storage and Cooling Power Potential

PCM enhanced concrete

Recent work in the field of PCM

3.0 Methodology

3.1 Introduction

The methodology implemented for carrying out a research is one of the most significant and rudimentary aspects of a research paper. The methodology discusses the various research designs which may potentially be implemented. The rationale behind the researcher choosing a particular research approach, philosophy and research design sets the background for the research. A concept of the types of analysis to be used for evaluating the data is discussed as well. Furthermore, the type of sampling and the sample size for the research is also mentioned in the methodology. The methodology also provides an insight into the approximate time frame designed for the research to be completed.

3.2 Research outline

This research is primarily focused on the study of the various types of PCMs in existence, and the ones which are predominantly used in building construction. This research aims at discussing and evaluating the chemical and the thermophysical properties of PCMs implemented in the construction industry. Furthermore, the research explores the efficiency of the methods or techniques identified for integrating PCMs into the building materials such as concrete or bricks. It may be stated in this regards that the development of adequate and suitable strategies is essential for carrying out the research effectively. A proper research approach as well as research philosophy has been found to influence the research outcomes. Therefore, proceeding with an appropriate research design is crucial for the productivity of the research. A descriptive design is followed in this regards in order to maintain the flow of the research. Data collection has been performed from both primary and secondary sources. Moreover, qualitative as well as quantitative data analysis has been performed in the study by the researcher for developing a thorough concept of the subject for research. The research onion provides a significant insight into the concepts involved in conducting a research, as illustrated in Figure 7.

Figure 7: Research onion

(Source: Saunders et al. 2015)

3.3 Research philosophy

Research philosophy fundamentally entails the belief of the researcher to proceed with the research, following a particular procedure of data collection, data analysis and usage of the data. Positivism is the philosophy used in this research. The primary objective or rationale for choosing this particular research approach is that positivism deals in the knowledge based on the relations and properties of natural phenomena. Furthermore, the interpretation of the information or data derived from primary and secondary sources takes place through logic and reasoning. In this regards, the implementation of PCM in building construction provides a scope for the rational analysis and interpretation based on logic. In addition to that, it may be mentioned in this context that positivists approach the challenge or the issue with a scientific quantitative methodology. On the contrary, the interpretivism philosophy has been found to be more suited for qualitative approaches towards research work. Therefore, it may be stated that the researcher finds the positivism philosophy to be more suited for the purpose of the research.

3.4 Research approach

Research approach may refer to the procedure or plan which outlines the methods for data collection for the research and more. The research approach for a research is chiefly based on the nature of the research problem identified in the paper. It provides a rudimentary idea for the assumptions of the detailed methods followed for data analysis, evaluation and interpretation. The chief research approaches commonly used in research include deductive and inductive approaches. The researcher implements the use of a deductive approach in this regards as it is concerned with the development of a hypothesis which is based on existing literature or theories by scholars. Furthermore, a research strategy is developed for testing the hypothesis. Therefore, it may be stated that an overall scientific approach is implemented for the purpose of the research. However, an inductive approach is not used as it is associated with the development of a new theory based on the findings of the data. The deductive approach aims at justifying or analysing the existing literature for establishing the validity of the research regarding the implementation of PCM into building construction.

3.5 Research design

The research design primarily refers to the arrangement of collection or conditions required for a research. For instance, the researcher mentioned that a descriptive design has been implemented for this research study. The descriptive designs followed include surveys and naturalistic observation of the case of PCM integration into building construction. Correlational or experimental designs have not been used in this regards, since the researcher aims at studying the existing theories with regards to PCM integration in concrete and other building materials. Hence, it may be stated that the research approach, philosophy as well as the research design has been chosen in accordance to the subject and the research problem identified in this regards.

3.6 Data type and sampling

A mixed methodology has been implemented by the researcher for the purpose of this research. The data collected for this research have been gathered from both primary and secondary sources. The selection of appropriate and adequate data is crucial for a research as it determines the reliability or validity of a research. The primary purpose of the data is to undertake a suitable analysis, along with substantiating the research. Both primary and secondary data have been gathered by the researcher, for conducting a series of quantitative and qualitative analysis for the research. Questionnaires were used as tools for conducting the survey and the interviews for the data collection for the quantitative and the qualitative analyses respectively.

A sample size of 50 was selected to conduct the interviews for quantitative data analysis, while 3 Researchers were selected for interviews for qualitative purposes. The sample size was chosen from the research centerArizona Public Service (APS) Solar Testing and Research (STAR) center, which is regarded as one of the largest research organisations in the world. Random sampling was performed, with the objective of deriving the knowledge of the executives with regards to the integration of PCMs into building materials for construction purposes. Furthermore, the sample size was selected to be 50 as a larger sample size reduces the scope of errors due to handling and statistical calculations.

3.7 Data analysis

Relevant information has been gathered from both primary and secondary sources as formerly mentioned by the researcher. Primary data refers to the data collected by the researcher through conducting surveys and interviews. On the other hand, secondary data can be cited as information or data gathered from sources which have previously been in existence (Kylili and Fokaides, 2016). For instance, data from published works of researchers and scholars, peer-reviewed journals and more can be examples of secondary sources of data. Furthermore, the researcher has performed a quantitative analysis on the statistical data gathered from primary sources through the survey. On the contrary, a qualitative analysis has been performed on the data collected through the interviews with the Researchers at Arizona Public Service (APS) Solar Testing and Research (STAR) center with regards to the integration of PCMs in construction materials and their productivity. It may be mentioned that another qualitative analysis had been undertaken by the researcher on the secondary literature available from journals and other scholarly articles. Separate questionnaires have been prepared as tools for gathering the primary data for both quantitative and qualitative analysis purposes. Close-ended questions were included in the questionnaire for the survey, while the questionnaire for the interview comprised open-ended questions.

3.8 Limitations of the research

The consideration of larger sample sizes result in the likelihoodof errors inhandling as well as in the calculation of the data for analysis purposes. In this regards, the researcher chose a sample size of 50, which is neither small nor quite extensive. Therefore, the chances of statistical errors remain. Furthermore, gaining the appointments with the researchers at Arizona Public Service (APS) Solar Testing and Research (STAR) center proved time-consuming and difficult to obtain. Additionally, the survey with the researchers and engineers required convincing regarding the purpose of the survey and the research.

3.9 Ethical considerations

The code of conduct followed at Arizona Public Service (APS) Solar Testing and Research (STAR) center was maintained for the interview and the survey. Furthermore, compliance with legal and ethical obligations has been met with. Informed consent has been obtained from the sample size as well. Furthermore, the researcher had ensured that voluntary participation of the respondents in the survey and the interview. Lastly, the anonymity and the confidentiality of the participants had been maintained as a direct outcome of the code of conduct.

3.10 Timeframe

A Gantt chart is provided as depicted in Figure 8, to develop a concept of the time frame and the activities undertaken on a weekly basis by the research. The overall project was completed in a span of 16 weeks.

Figure 8: Gantt chart

(Source: Author’s creation)

4.0 Experimental setup

The utilization of the Phase Change Material in the construction industry will be discussed and evaluated in the section below. This is a field set that will be able to assess the concept in regard to the construction industries and I have taken up this topic for discussion as well as evaluation because it is a topic that fits perfectly with the construction industry and benefits it in various ways. As stated by Fleischer(2015, p. 89), the researcher who is conducting the study in order to generate significant data related to this topic and to analyze the data accordingly, is doing it despite of the fact that the respondents of the questions might not be 100% accurate. The researcher will continue to conduct the study even though there is no guarantee against it. Therefore, the person has adopted the method of placing close-ended queries or questions to the respondents because open-ended questions require certain specifications and details that the respondents might not be able to provide correctly. It is easier to answer questions that have a close end and the research based on it will be concluded a lot faster if the information is collected by this method (Cwiok, 2016).

The best possible respondents who can provide detailed answers to any questions regarding the Phase Change Material are the Researchers and the contractors who work in the construction industry and use the Phase Change Material on a regular basis(Ramakrishnan et al. 2015). They know the details of the concept and can give the accurate data, which is why the study was conducted in the internal operational units of the construction industry. The data for the Phase Change Management was collected by interacting with the above mentioned people physically and it took almost 3 weeks to complete the process. For the collection of data the Arizona Public Service or APS in the Solar Testing and Research (STAR) center was selected, which is located in Tempe, Arizona. After the step of collection of the data is done, the research will be carried on further by observing and analysing the collected data. Interviews will be arranged for further data collection by developing a questionnaire, which will be presented to the Researchers and contractors. The proper channeling of all these steps will help the research to reach to a positive conclusion (Dan, 2018, p. 98).

5.0 Data analysis and discussion

5.1 Introduction

Data analysis conducted in this regards have been performed in two stages as previously mentioned. A quantitative analysis has been performed through the survey conducted with the chosen sample size of 50 comprising the employees of Arizona Public Service (APS) Solar Testing and Research (STAR) center. Furthermore, the qualitative analysis was performed on the primary data derived from the interview of the Researchers at Arizona Public Service (APS) Solar Testing and Research (STAR) center, while a secondary qualitative analysis was performed on existing literature on the subject from scholarly articles and published journals.

5.2 Quantitative analysis

The quantitative analysis and the discussion for the survey is provided below:

Q1: The infusion of building materials with PCM aids in cooling in summers and maintaining a warm temperature in winter due to the latent heat of fusion. Would you say that integrating PCM into building materials enhance energy efficiency of the buildings?

Table 1: Response to Q1

(Source: Author’s creation)

Figure 9: Statistical representation of Q1

(Source: Author’s creation)

Energy efficiency is one of the major factors taken into consideration these days while constructing buildings. The heat retention and cooling properties in warm weather makes PCM effective in providing energy efficiency and offers beneficial building properties. 74% of the respondents agreed that the phase transition properties as a result of the heat of fusion of PCM aid in the enhancement of energy efficiency of buildings. 26% of the sample size remained unsure of the choices, while 20% disagreed. Therefore, taking the response into consideration, it may be stated that the properties of PCM aid in the making of energy efficient buildings.

Q2: What would you say is the prime disadvantage associated with the application of PCM in the construction industry?

Table 2: Response to Q2

(Source: Author’s creation)

Figure 10: Statistical representation of Q2

(Source: Author’s creation)

When questioned about the potential drawbacks of the integration of PCM in the building construction industry, 30% of the respondents said that low thermal conductivity is to be regarded as one of the major limitations of PCM integration in this regards. Furthermore, 28% of the participants stated a longer payback period to be a drawback. In addition to that, 26% of the sample size said that phase segregation may pose as a drawback as well. 10% of the population mentioned super cooling as another factor contributing to the pitfalls of PCM as a disadvantageous building material. Finally, 6% of the sample size considered the aspect of Fire safety as well.

Q3: What is the biggest advantage of using PCM in the construction industry?

Table 3: Response to Q3

(Source: Author’s creation)

Figure 11: Statistical representation of Q3

(Source: Author’s creation)

The biggest advantage identified by the respondents with regards to PCm incorporation in building construction is the capacity for thermal storage. 46% of the participants voted in favour of thermal storage capacity of PCM. In addition to that, 20% of the population mentioned the prevention in energy loss to be a significant factor, while 16% and 12% of the sample size respectively stated self-nucleating properties and non-corrosive nature as valuable contributions to the advantage of PCMs. however, only 6% of the participants stated that there may be other advantages apart from the aforementioned ones.

Q4: Due to the thermal storage capabilities of PCM, it is used for cooling and heating of buildings. Do you agree that PCM is an efficient and recommendable thermal storage material in the construction industry?

Table 4: Response to Q4

(Source: Author’s creation)

Figure 12: Statistical representation of Q4

(Source: Author’s creation)

80% of the respondents agreed that PCM is a recommendable and efficient thermal storage material in building construction industry. However, 10% of the participants remained neutral or unsure of their choices, while another 10% disagreed with the statement. Hence, it is evident that majority of the population in the industry of building construction would recommend PCM as an effective component in buildings.

Q5: What technology would you recommend for the better integration of PCM in construction industry?

Table 5: Response to Q5

(Source: Author’s creation)

Figure 13: Statistical representation of Q5

(Source: Author’s creation)

The integration of PCM capsule into buildings or direct integration is chosen to be one of the major technologies to be implemented in building construction. 48% of the respondents chose the integration of PCM capsule option, while 26% of the sample size voted for PCM integrated panels, which has become a common activity in building construction. 22% and 20% of the participants stated that the implementation of heat exchangers in a HVAC system, and impregnation to be the next technological development in PCM, respectively. Only 4% of the participants suggested the use of other technological developments.

Q6: Do you think that the CFD analysis is an effective method of reducing the variations in temperature of the room as well as the air temperature?

Table 6: Response to Q6

(Source: Author’s creation)

Figure 14: Statistical representation of Q6

(Source: Author’s creation)

68% of the participants agreed that the CFD analysis is an effective way for reducing the temperature variations in a building. In addition to that, 20% of the population remained unsure of their choices, while 12% of the respondents disagreed with the statement. Hence, the effectiveness of CFD analysis as a method for assessing the temperature reduction in buildings has been validated through the survey.

Q7: The use of autoclaved concrete blocks increases the porosity of the concrete. Does the application of this principle in immersion technique prove beneficial for construction purposes?

Table 7: Response to Q7

(Source: Author’s creation)

Figure 15: Statistical representation of Q7

(Source: Author’s creation)

In addition to soaking the PCM in concrete, it has been noted that another technique, namely autoclaving the concrete blocks aid in the increase in porosity of the concrete blocks. Furthermore, the primary principle identified in regards have been mentioned to be the capillary action which enables the absorption of the liquid PCMs. 60% of the respondents agreed that autoclaving improved the absorption of the concrete blocks. 24% of the participants remained unsure, while 16% disagreed.

Q8: Would you say the incorporation of PCM in building construction is cost effective?

Table 8: Response to Q8

(Source: Author’s creation)

Figure 16: Statistical representation of Q8

(Source: Author’s creation)

Only 28% of the sample size stated that the incorporation of PCM into building construction is cost-effective, while 20% of the population remained neutral regarding the subject. However, a massive 52% of the participants of the sample population disagreed with the statement. Hence, it is evident that PCM integration into building construction is not quite cost-efficient, as outlined in the identified disadvantages of PCM integration.

Q9: Does Arizona Public Service (APS) Solar Testing and Research (STAR) center consider the implementation of PCM in building construction industry to be a part of the renewable energy resource experimentation?

Table 9: Response to Q9

(Source: Author’s creation)

Figure 17: Statistical representation of Q9

(Source: Author’s creation)

72% of the respondents agreed that Arizona Public Service (APS) Solar Testing and Research (STAR) center considers the implementation of PCM in building construction industry to be a part of the renewable energy resource experimentation. 20% of the participants remained neutral in this regards, while 8% disagreed with the statement. Hence, the applications of PCM as an alternative to certain renewable sources have been evident through this survey.

Q10: Would PCM be able to contribute to the existing research of Arizona Public Service (APS) Solar Testing and Research (STAR) center in the search of alternatives to solar power and other renewable sources?

Table 10: Response to Q10

(Source: Author’s creation)

Figure 18: Statistical representation of Q10

(Source: Author’s creation)

72% of the respondents agreed that PCM would be able to contribute to the existing research of Arizona Public Service (APS) Solar Testing and Research (STAR) center in the search of alternatives to solar power and other renewable sources. However, 16% of the participants remained unsure of their choices, while 12% of the population disagreed with the statement. Hence, the research and the series of experiments conducted on PCM at Arizona Public Service (APS) Solar Testing and Research (STAR) center have been found to be of utmost importance.

5.3 Qualitative analysis

The qualitative analysis from the primary source of information has been gathered from interviews with researchers of Arizona Public Service (APS) Solar Testing and Research (STAR) center.

5.3.1 Primary sources

Q1: How do you comprehend PCM?

Table 11: Response to Q1

(Source: Author’s creation)

From the above interview with the chosen researchers at APS STAR center, it becomes evident that the primary concern of the researchers regarding PCM is related to its distinct properties of phase transition, high heat of fusion and more. Furthermore, the outcome of the high heat of fusion has been noted to be an important component in thermal storage systems implemented in building construction. In addition to that, it may be stated that the characteristic feature of PCM for melting and solidifying at convenient temperatures make it suitable for implementation in building construction industry.

Q2: Could you explain the role of PCM in construction manufacturing?

Table 12: Response to Q2

(Source: Author’s creation)

The use of PCM in the construction industry has been primarily identified with regards to its properties for maintaining the temperature variance between the room temperature as well as the air temperature. PCM is noted to be incorporated into building materials such as glass windows, panels, roofs, ceilings and floors. Furthermore, the use of PCM has been identified in the HVAC systems as well.

Q3: Could you enlist some problems or issue associated with the integration of PCM into buildings?

Table 13: Response to Q3

(Source: Author’s creation)

The drawbacks or limitations perceived with regards to PCM in the building construction industry can be stated as low thermal conductivity, commercially expensive integration as well as the general instability of the PCMs during cycles of phase segregation or phase separation.

Q4: What can you say about the capability of PCM as a potential cooling and thermal storage component?

Table 14: Response to Q4

(Source: Author’s creation)

The feature of PCM to undergo cooling and heating and thereby a phase transition aids in the retention of heating and thus providing heating and cooling facilities for the buildings, as a result of the higher thermal mass of the PCM. The thermal mass and the thermal conductivity offered by the PCM are dependent on the type or category of PCM. For instance, inorganic PCM offer higher thermal conductivity as compared to organic PCMs.

Q5: What would you say about the uses of PCM in construction of buildings; how is it beneficial?

Table 15: Response to Q5

(Source: Author’s creation)

The uses of PCM and the benefits noted through the integration of PCM in construction industry can be attributed to the non-corrosive nature, the self-nucleating nature as well. The self-nucleating properties have been known to be associated with the stability of the PCM even with the inconsistent temperature fluctuations. In addition to that, the recent emphasis on being energy efficient is noted to be a significant trend in the building construction industry. Therefore, the incorporation of PCM into buildings may aid in the development of energy efficient buildings, which may contribute to a healthy and sustainable environment as well.

4.3.2 Secondary sources

Memon et al. (2015), studied the characteristics of a light-weight aggregate of paraffin, which is macro-encapsulated. The macro-encapsulation had been performed through the vacuum impregnation of the LWA or light weight aggregates with the paraffin. The storage capacity for the latent heat of the prepared aggregate had been found to be approximately 102.5 J/g, with a sustenance of 1000 melting and freezing cycles (de Gracia, 2019). In addition to that, the compressive strength of the aggregate prepared had been established to be around 33.29 to 53.11 MPa, which makes it appropriate or suitable for implementation in construction purposes.

Furthermore, research performed by Stritih et al. (2018), discusses the implementation of PCM in building materials for the overall output of a net zero building. The articles mention the implementation of PCM into a composite wall in order to address the temporal gap between energy supply and energy demand. Hasan et al. (2016), in their scholarly article discuss the heat gain prevention of buildings in hot climates, through the integration of PCMs into the building materials. It is to be mentioned in this context that 44% heat reduction had been noted in this experiment upon the integration of PCM into the chamber.

The paper by Konuklu et al. (2015), evaluate the use of microencapsulation techniques for the integration of PCMs into variety of building materials. The size of the microcapsules has been estimated to be approximately within the range of 0.05 μm and 5000 μm (Mohseni, Tang and Wang, 2017). As stated by Su et al. (2015), Phase Change Materials are utilized in order to reduce the overall energy that the buildings require only by shifting a part of the loads of the cooling and heating to the hours that are off-peak when the demand for energy is lesser than the peaked hours under one grid (Su et al. 2015). The practices of different types of construction changes with the development of new and better equipment that is innovative. The difference in the temperature in the interior and the exterior part of a place in the winter season or the summer season is done by the consumption of high levels of energy. According to Kensby et al. (2015), the PCMs are thin layered presentations of the walls of large masses, which can be utilized in order to produce thermal comfort in the interior parts of a building (Kensby et al. 2015). The PCMs have the ability to continue the cycle of change without losing their characteristic features and prevents the loss of their mass through the process of evaporation as well.

In the article by Ramakrishnan et al. (2015), it has been stated that the PCMs liquefies and then stores the heat produced and it equally solidifies to release the heat stored (Ramakrishnan et al. 2015). There are a number of applications of PCM in the industry of construction like incorporating it in the structure of the building, tempering with the heating or cooling systems of water, electricity usage in the off-peak time, AC absorption, cool TES, cooling is stored in the night time to be used at the day time, and many more. Therefore, it had been identified that the use of PCM in the construction industry is varied and quite significant as well (Ramakrishnan et al. 2015).

5.4 Summary

The data analysis performed on the quantitative and qualitative data provided an insight into the prevalence and utility of the PCMs in building construction. The effective organic and inorganic PCMs have been identified through the interviews, while the secondary data provides insight into the research by scholars and the significant findings. Relevance with the literature has been observed with regards to the construction of energy efficient buildings through PCM integration into the buildings as well as the increase in thermal conduction and storage through PCM integration as well. Furthermore, the quantitative data provided knowledge of the existing procedures and the techniques deemed to be the most effective by the construction engineers.

6.0 Conclusion and Recommendations

6.1 Conclusion

The research project provides an insight into the study of PCMs and their integration into building construction materials. The primary categories of PCMs have been identified as eutectic mixtures, organic and inorganic PCMs. Furthermore, an evaluation of the techniques for the integration of the PCMs into the building materials such as mortar or concrete have been assessed to be performed through the techniques of immersions, impregnation or encapsulation and direct mixing. The use of Zeolite or Zeocarbon has been noted in case of direct mixing technique as it prevents the breakage of the capsule containing the PCM, through resisting the impact. In addition to that, the encapsulations have been established to be performed through a number of techniques such as in situ polymerization, by interfacial polymerization, spray drying and emulsion polymerization.

The various applications of PCM in building construction have been explored in this research project as well. For instance, the development of PCM integrated concrete have been found to effective in heat retention and cooling performance in buildings. Additionally, the it has been found that the increase in porosity of the bricks or concrete blocks can be brought about by soaking in liquid PCMs. Furthermore, autoclaved bricks have been known to have better porosity and air trapping characteristics, which in turn contributes to the heat retention properties of the buildings. However, through further research into the subject, it has been identified that the increase in porosity may result in the slight decrease in mechanical properties, such as compressive strength of a building.

6.2 Recommendations

This research work may be facilitating future works in this particular field. For instance, current works include the development of energy efficient building through the implementation of PCM into various building components used in the construction. Research in the improvement of the weakened compressive strength of buildings upon the integration of PCM can be performed as a potential future study. Furthermore, a detailed study on molecular encapsulation could be undertaken by researchers as alternatives for PCM integration techniques into building materials.

Reference List

Akeiber, H., Nejat, P., Majid, M.Z.A., Wahid, M.A., Jomehzadeh, F., Famileh, I.Z., Calautit, J.K., Hughes, B.R. and Zaki, S.A., 2016. A review on phase change material (PCM) for sustainable passive cooling in building envelopes. Renewable and Sustainable Energy Reviews, 60, pp.1470-1497.

Bland, A., Khzouz, M., Statheros, T. and Gkanas, E., 2017. PCMs for residential building applications: a short review focused on disadvantages and Proposals for Future Development. Buildings, 7(3), p.78.

da Cunha, J.P. and Eames, P., 2016. Thermal energy storage for low and medium temperature applications using phase change materials–a review. Applied Energy, 177, pp.227-238.

de Gracia, A. and Cabeza, L.F., 2015. Phase change materials and thermal energy storage for buildings. Energy and Buildings, 103, pp.414-419.

de Gracia, A., 2019. Dynamic building envelope with PCM for cooling purposes–Proof of concept. Applied Energy, 235, pp.1245-1253.

Derradji, L., Errebai, F.B. and Amara, M., 2017. Effect of PCM in Improving the Thermal Comfort in Buildings. Energy Procedia, 107, pp.157-161.

Fokaides, P.A., Kylili, A. and Kalogirou, S.A., 2015. Phase change materials (PCMs) integrated into transparent building elements: a review. Materials for Renewable and Sustainable Energy, 4(2), p.6.

Hasan, A., Al-Sallal, K.A., Alnoman, H., Rashid, Y. and Abdelbaqi, S., 2016. Effect of Phase Change Materials (PCMs) Integrated into a Concrete Block on Heat Gain Prevention in a Hot Climate. Sustainability, 8(10), p.1009.

Kalnæs, S.E. and Jelle, B.P., 2015. Phase change materials and products for building applications: a state-of-the-art review and future research opportunities. Energy and Buildings, 94, pp.150-176.

Karaipekli, A., Sarı, A. and Biçer, A., 2016. Thermal regulating performance of gypsum/(C18–C24) composite phase change material (CPCM) for building energy storage applications. Applied Thermal Engineering, 107, pp.55-62.

Kenisarin, M. and Mahkamov, K., 2016. Passive thermal control in residential buildings using phase change materials. Renewable and sustainable energy reviews, 55, pp.371-398.

Kensby, J., Trüschel, A. and Dalenbäck, J.O., 2015. Potential of residential buildings as thermal energy storage in district heating systems–results from a pilot test. Applied Energy, 137, pp.773-781.

Konuklu, Y., Ostry, M., Paksoy, H.O. and Charvat, P., 2015. Review on using microencapsulated phase change materials (PCM) in building applications. Energy and Buildings, 106, pp.134-155.

Kylili, A. and Fokaides, P.A., 2016. Life cycle assessment (LCA) of phase change materials (PCMs) for building applications: a review. Journal of building engineering, 6, pp.133-143.

Lee, K.O., Medina, M.A., Raith, E. and Sun, X., 2015. Assessing the integration of a thin phase change material (PCM) layer in a residential building wall for heat transfer reduction and management. Applied Energy, 137, pp.699-706.

Memon, S.A., Cui, H., Lo, T.Y. and Li, Q., 2015. Development of structural–functional integrated concrete with macro-encapsulated PCM for thermal energy storage. Applied Energy, 150, pp.245-257.

Mishra, A., Shukla, A. and Sharma, A., 2015. Latent heat storage through phase change materials. Resonance, 20(6), pp.532-541.

Mohseni, E., Tang, W. and Wang, Z., 2017, September. Structural-functional integrated concrete with macro-encapsulated inorganic PCM. In AIP Conference Proceedings(Vol. 1884, No. 1, p. 030002). AIP Publishing.

Qiu, Z., Ma, X., Li, P., Zhao, X. and Wright, A., 2017. Micro-encapsulated phase change material (MPCM) slurries: Characterization and building applications. Renewable and Sustainable Energy Reviews, 77, pp.246-262.

Ramakrishnan, S., Sanjayan, J., Wang, X., Alam, M. and Wilson, J., 2015. A novel paraffin/expanded perlite composite phase change material for prevention of PCM leakage in cementitious composites. Applied Energy, 157, pp.85-94.

Saunders, M.N., Lewis, P., Thornhill, A. and Bristow, A., 2015. Understanding research philosophy and approaches to theory development.

Sharma, R.K., Ganesan, P., Tyagi, V.V., Metselaar, H.S.C. and Sandaran, S.C., 2015. Developments in organic solid–liquid phase change materials and their applications in thermal energy storage. Energy Conversion and Management, 95, pp.193-228.

Silva, T., Vicente, R., Rodrigues, F., Samagaio, A. and Cardoso, C., 2015. Development of a window shutter with phase change materials: Full scale outdoor experimental approach. Energy and Buildings, 88, pp.110-121.

Souayfane, F., Fardoun, F. and Biwole, P.H., 2016. Phase change materials (PCM) for cooling applications in buildings: A review. Energy and Buildings, 129, pp.396-431.

Stritih, U., Tyagi, V.V., Stropnik, R., Paksoy, H., Haghighat, F. and Joybari, M.M., 2018. Integration of passive PCM technologies for net-zero energy buildings. Sustainable Cities and Society, 41, pp.286-295.

Su, W., Darkwa, J. and Kokogiannakis, G., 2015. Review of solid–liquid phase change materials and their encapsulation technologies. Renewable and Sustainable Energy Reviews, 48, pp.373-391.

Appendices

Questionnaire for quantitative analysis

Questionnaire for qualitative analysis

Herman Bailey

With a student-centered approach, I create engaging and informative blog posts that tackle relevant topics for students. My content aims to equip students with the knowledge and tools they need to succeed academically and beyond.

Quagan: Exploring French-Caribbean Delights in Farnborough

by Herman Bailey | Jul 25, 2023 | Essays | 0 comments

Introduction

In this globalized business environment, all organizations are constantly struggling to gain competitive stability within the market. In this context, the restaurant business can be sufficient to gain an effective industrial market performance. The scope of a restaurant chain in the UK market is attractive over the last years. Therefore, business entrepreneurs have planned to open a French-Caribbean Restaurant at Farnborough town, which is located in Northeast Hampshire. The Start-up managerial team has proposed the company name primarily as ‘Quagan’. Farnborough is well known for the association and support from aviation such as Royal Aircraft, Farnborough Aerodrome, and Airshow. In each year, 55% tourists increase is reported in this city, and it will be supportive for getting upward profit growth within the market. The main agenda of this company is to give a wide number of choices to consumers according to their food culture.

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Figure 1: Company Logo

(According to first draft plan)

Mission statement

The concept behind the deliverance of French–Caribbean taste in the market borrowed from the distinct food culture of the consumers in the different regions. For instance, seafood is served in the Caribbean with distinct ingredients and spices. This food is a very important aspect of various family traditions as well as Caribbean culture. Also, this taste culture is comprised of indigenous, Chinese, European, African, and American influences. Therefore, business managers have selected this food culture along with existing French tradition for gaining a positive market reputation as well as growth within the industry.

Vision and objectives

The service objectives of Quagan are as follows:-

• To create the restaurant environment, which is for handling consumer expectations
• To increase per year sale up to 25% through word-of-mouth referrals and superior performance
• To maintain media may be restricted from advertising some products. For example, the advertisement of large food cost under the revenue of 35%
• To gain average sales between £1,600,000- £2,300,000 per year
• To expand the market in other regions

Quagan will build a sufficient customer base. For that purpose, the organization has selected an excellent location through understanding the demographics at all levels. Also, an aggressive marketing program can be handled by experienced employees. These factors will be effective for gaining desired business outcome.

Customer/Market analysis

Market research allows a company to prepare a structured agenda for the positive business approach. This task supports the organization to recognize the organizational capability as well as the viability of new service processes such s French –Caribbean restaurant service in the UK market. This research will be done through the company authorities. These factors can be cultured through understanding existing restaurant business performance within the market. Quagan will access several previous types of research regarding the UK food concept and business strategies. Quagan has done market size evaluation through segmentation targeting and positioning components. As per the current report of Guardian, immigrant communities have dramatically changed the style of capital for individuals to venture into the grocery vending business using carts as advised by Michimi & Wimberl (2010). They would aid bring healthy food to the UK. As per the report of 2013, £66.5 million of package food sales are reported, and this rate is now gradually decreased to £9.5 million in 2017. Marketers have said that people prefer restaurant foods due to the availability of wider choices as per their food culture. The immigrant restaurant companies in the UK have revealed the favorite recipe and tastes exist in subcultural lifestyles that are rooted in the level of education and personal characteristics that govern behavior. The culture influence.

Quagan is focused on following the type of Customer group

• Cultural trend of people
• Urban Professional
• Tourists

These customers will be served according to their beliefs, value, and lifestyle regarding distinct food couture. Market segmentation chart is prepared according to these perspectives. This plan is mentored as per the first draft plan.

Health factors

Due to excessive use of conventional package food for a long time, people are suffering from obesity. A large number of people are experiencing several diseases. Therefore, health is also a significant factor in market segmentation for maintaining well being of the consumers. Therefore, marketers have planned to adopt the ingredients, which are suitable for maintaining good health. It will be an attractive viewpoint for the business of Quagan for getting a larger number of consumers. The growing trend of immigrant taste in the market will be a positive point for Quagan. However, after Brexit, restaurant organizations are experiencing staffing problems at the operational level. For instance, immigrant workers have low skill in the consumer taste United States (Arroyo, 2001). The Japanese culture, which will be an issue for handling product demand. Therefore, employment factors need to be taken in a sincere context.

•Strategy & Structure

Figure 2: Organisational structure of Quagan

(According to first draft plan)

A charge of £15.00 per square foot is being charged to acquiring 191,000 sq ft retail space. Therefore, all tenants will be required for incurring this cost. Following marketing strategy will flow.

Advertising

• Brochures will be placed in the shops of Farnborough
• The paid advertisement will be done in well-known magazines
• Coupons will be handed out on site
• Social media will be taken for creating a page, where customers can know the restaurant description, another consumer review, and menu choices

Public Relation

For maintaining public relations, managers have to recognize the consumers changed food trends. Survey cards will be placed on each table for collecting the following data.

• Demographic data for target marketing efforts
• Quality of food and services
• Area of improvement

Website programming

• Coupons can be downloaded from the website
• Online product delivery is required to be handled through websites

Marketing packages

• Wedding packages in conjunction with spa and hotel resorts
• Catering packages will be available for local industries

•The Team/HR

Adriano Chatter will be the account manager of Quagan. He will operate the entire business under a contract of ten Years; previously he has worked in Custodian partnership food & beverages organization London. Also, the strength and performance is positive fir marinating customer relationship. In the operation team, the following staff will be involved.

• Account manager
• Technical adviser
• Market Executive staff
• Sales executive staff
• Chefs
• Cleaning staffs

Also, the technical team will be required for handling the online delivery process, which is a new service approach for UK residents.

•Financial Plan

Start-up business expense

Table 2: Startup business expense

(Source: Created by author)

Sales forecast

Quagan is expecting a conservative percentage increase in sales revenue annually over the next three years. With the support of additional revenue, sales will increase in 2018, 2019, and 2020.

Table 4: Sales forecast

(Source: Created by author)

Quagan financial statement

Their financial statement is based on the assets and liabilities of the business. The investors and bankers will analyze these factors before starting up this restaurant.

Table 5: Quagan financial statement

(Source: Created by author)

Table 6: personal assets and liabilities

(Source: Created by author)

The prediction of annual profit growth in 2018 has displayed a more tremendous opportunity to get sustainable business growth. In the competitive market, Quagan market tactics will be hopeful from the standpoint of business entrepreneurs.

Figure 3: Predicted Annual Profit

(According to first draft plan)

Table 7: Predicted Annual Profit

(Source: Created by author)

Operations Plan

Production and strategic planning

Quagan has planned to produce their product through the support of immigrant workers, who have proper knowledge of French Caribbean taste. They will follow the traditional and self-assist way of the food production system. In this system, the traditional process includes microwaving, sterilization and pasteurization. The staff will be sincere to maintain food safety. Therefore, they will recruit experienced workers for improving the service along with the standard of food.

Financial plan and Supply chain management

For growth and cost management, financial viability is an effective factor, where Quagan should include multiple sources for food supply. They should negotiate volume discounts from the suppliers.

Food deliverance

The organization will follow Buffet services for managing the purpose of efficiency in resource management. Through the support of a few staff, consumers can choose their [8] Moreover, the place is also a market mid-point for the people from the land of the black people on their route to Barbary. Alvise da Cadmasto further describes the natives’ food by saying that the foods from the bulk. Therefore, it is useful for maintaining food deliverance within a short period.

Herman Bailey

With a student-centered approach, I create engaging and informative blog posts that tackle relevant topics for students. My content aims to equip students with the knowledge and tools they need to succeed academically and beyond.

Analyzing Economic Growth and Inflation Trends in the United Arab Emirates

by Herman Bailey | Jul 25, 2023 | Essays | 0 comments

Introduction

The United Arab Emirates, as soon as seven impartial states underneath British supervision has appeared right into a worldwide financial inspiration since of its plentiful herbal sources, a success monetary investments, and big recognition on actual property and tourism. Having the sector’s 6th biggest oil preserves and 5th biggest usual fuel preserves, the UAE is balanced for the year above year financial development, which has permitted them to cognizance greater closely on monetary diversification or supporting improvement. As this wilderness United States of America maintains to produce, therefore does their confidence in the power, which has encouraged a main legislative attempt to become aware of renewable, power assets to balance utilization. Renewable power plans that the UAE contains followed group the funding guidelines complete in this evaluation. (Becker G.,1962)

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UAE’s economy has visible excessive expansion in current years, as seen using over common GDP and eight discern year-above- year exchange extra ever since 2003. This economic growth is extra staggering whilst allowing for the UAE burly drive to improve its reliance on oil sell abroad and expand into a different company. Presently, earnings from oil exports constitute approximately 33% of the financial system. Risky oil costs, which closely associate with country productivity, have become much less essential to universal economic increase. Exploits similar to this assist to alleviate hazards for capability shareholders and have to make the country extra appealing within the overseas speculation area.

Capital markets inside the UAE also are presented day and strong. They revel in two inventory exchanges; have carried out an in-depth market supervision company to defend the honesty of their markets, and feature formed some authorities- investment possessed speculation establishments to assist promote funding diversification. The country greeting new enterprise, as they’ve hooked up free deal regions that provide a lot of blessings to shareholders that installation process inside UAE boundaries. The country positions number one along with Arab international locations in overseas funding and is measured international commercial enterprise middle for its stable detection of communal, monetary, and technological improvement.

This study explains the issue of excessive and non-stop inflation costs in the UAE throughout the previous decade. This stage is vital to steer the evaluation of inflation in the UAE.

The United Arab Emirates’ economic system as an element of the worldwide economic system remunerated an elevated fee to cast off the inflation fee. The international financial disaster introduced a profound decline still in the majority of advanced nations. The predicaments manifestly assaulted the UAE economic system as properly. One advantage increased changed to decrease the inflation fee from 12.3% (2008) to kind of 1.5% (2009) as launched with the aid of UAE countrywide Bureau of records. (Abu-Quarn A. and S. Abu-Bader. ,2007)

The study examines the hassle of excessive and non-stop inflation rates in the UAE in the course of the ultimate decade. So, we can start with an in-depth précis of a macroeconomic idea as a way to position a theoretical structure of inflation.

2. Brief Literature review:

Unemployment theories

Because of the top-notch recession in December 2007, many nations whether urbanized or growing has skilled an elevated price of unemployment. There are one-of-a-kind kinds of unemployment. In this section, the following five sorts of unemployment are mentioned on the subject of empirical proof.

Frictional unemployment:

An evolution among the roles is referred to as frictional employment. The change between the activity may be for lots of causes which encompass: appearing for a higher-paid task, relocation from one kingdom to any other, from element-time to full-time employment or the vice versa.

Structural unemployment 

A difference between the type of the process and the provision of the ability reasons structural unemployment in a nation. It’s far the case with mainly of the international locations that employers do now not find the specified skill and the exertions do now not locate the desired or a thrilling activity.

Regional unemployment

Unemployment because of the local differences is referred to as nearby unemployment. Therefore, structural unemployment occurs inside the neighborhood or local vicinity it’s far referred to as local unemployment.

Seasonal unemployment

Unemployment because of seasonal modifications is called seasonal unemployment. Many people get unemployed in intense hot season in UAE and severe wintry weather in the UK.

Inflation Theories

Inflation is a sustained boom in the typical fee stage in a financial system. Meaning a continuous boom over a sure time period. For example, it’s far from 2003 to 2008.

Raise and demand Theory

It is a boom inside the normal price stage which means that the fees of goods and services will amplify on common slightly than growth in some merchandise. Speaking approximately the entire financial system of the UAE. That is to mention, the growth covers the maximum of the divisions and merchandise. Inflation is specifically precipitated – because of macroeconomic concept – by using a growth (excess) in combination call for. That is referred to as call for – pull inflation. The boom in the collective call for may also happen because of elements which include: a growth inside the currency provide an amplify in supervision acquire and a growth in exports that’s a global demand on the disgusting home product. Inflation may also occur by way of a boom in production expenses that is known as price – push inflation. (Shihab M.,2001)

The maximum harmful consequence of inflation is an augment in speculation hazards which worsens speculation degree and monetary expansion fee and forces the financial system into depression because it occurred internationally or in the U.A.E. financial system at the stop of 2008.

Economic Theory

An herbal implementation of an open corporation economic system is oscillations of actual monetary behavior as visible inside the first to determine. For the duration of an expansion segment, the inflation fee will increase. At some point in the recession phase, the unemployment charge will increase. We must put in force apparatus of economic and financial guidelines to eradicate the oscillations and convey the financial system into a prospective stage as represented with the aid of fashion augmentation. (Rostow W.W.,1960)

Consistent along with recent theories, as irrational anticipations yet non-accelerating inflation virtue over unemployment, so we yoke between force expansionary guidelines, the inflation five increases yet unemployment decreases underneath the herbal virtue over unemployment. There should lie a pace beyond factor A after factor B. however; the expectations will change the bent rightward. The vertical row represents a longer-term fashion with an intensive platform over the herbal value of unemployment. The expansionary guidelines would possibly result in the growth of inflation. (IMF. 2013).

UAE GDP Structure and Theories

Following are the two principal theories

1. Monetary coverage concept is coverage to manipulate the cash supply with the aid of the central bank of the UAE. The bank utilizes its equipment to reduce wealth delivery. The bank has to:

• Growth of the concession charge

• promote government safety measures

• Growth of the specified put to one side relative amount

1. Monetary Policy Theory: Making modifications within taxes and regime execution is called Fiscal policy. The regimen must extend taxes and cut its carrying on among a strive in conformity with stop inflation from increasing.

Oil and Non-oil GDP Principle

From the last ten years, the U.A.E. has extra than two times its GDP, totaling A.E.D. 3.58 trillion in 2005. Conversely, the share of oil in GDP has been diminishing all through the running period; non-oil GDP’s has been the principal motive force of the U.A.E. economic system. The proportion of overall GDP become 73 percentages in 2005.

Tourism Principle

Among the enterprise sectors, tourism is previously an essential region of the U.A.E.’s economic system. From 2011 data over 8.2 million out of the country traffic sought after the UAE as a holiday vacation spot.

3. Analysis:

The united states have faced extreme financial growth in the early 2000s but has dropped notably in an increase through 2008, 2009, and 2010. However now analyze the performance of UAE’s financial system by using analyzing the gross home product, unemployment, and Inflation.

United Arab Emirates data on Unemployment

Economic development in the advance sector over 2019 appears after have been reserved, by on-hand data. In the dark lantern division, manufacture cuts decided to via the UAE in an OPEC+ bear because quickly January probably saved output removed then dragged overgrowth, although that sustained cost. For now, the boom in the non-oil economy fell in imitation of an above 2-year paltry in February afterward a hard begin in January, by PMI data. The non-oil private area stays mired between a complicated aggressive environment, with firms gashing costs to appeal to innovative business or cracking jobs according to preserve charges down. Moreover, newly-unconstrained statistics prove the economy—while nonetheless rebounding out of 2017—fared less nicely than an anticipated closing year. Notably, the boom in Dubai knock according to a nine-year low in 2018, most of the back over dim industrial yet residential actual zemindary markets due to slipping expenses then oversupply. (Schilirò D.,2010).

Unemployment chart of United Arab Emirates

Note: Unemployment in % levels of the active population in the U.A.E.
Source: World Bank.

United Arab Emirates data on Inflation

Consumer fees fall penetratingly in January attributable to excessive foundation outcome from V.A.T. creation purchaser fees knockdown zero.12 percentage of the month in January, enhancing from the zero.31 percentage of the turndown documentation in Dec.

In 12 months-on-one year phrases, purchaser fees thrust 2.4 percent in Jan., strikingly divergent the zero. 3 percent produce is registered in Dec. the razor-sharp turn down scrutinized in the month emerge as principally because of an abrupt pedestal consequence, because the government had brought a 5% charge brought Tax in Jan 2018, which have become often suck up through the financial system over the following months. The inflation rate reached eleven% (2007) and improved to 12% in 2008. Cash supply rose to 51% in 2007 and 15% in 2008, even as the actual GDP grew much slower than money deliver. The real monetary growth charge changed to 6% in 2007 and 7% in 2008. Able to come to an end now that a gradual increase in money delivers in 2009 of seven% was a motive to go down inflation all the way downstairs to 1. Five % in the corresponding 12 months. (Foray D., 2004)

United Arab Emirates Inflation Forecast

Focus Economics Agreement estimate observers look ahead to inflation to middling 2 percent in 2019 and lesser than 0.1 percentages of points from the last month’s estimation, and 2.4 percent in 2020.

Inflation data on the United Arab Emirates

Note: Twelve-monthly dissimilarity of consumer price index in %.
Source: National Bureau of Statistics.

United Arab Emirates data on GDP

Growth dips in 2016 as fiscal austerity bites

The UAE’s economy slowed last year according to recently released figures from the Federal Competitiveness and Statistics Authority (FCSA), in line with other countries across the Middle East. Growth dipped from 3.8% in 2015 to 3.0% in 2016, the slowest expansion since 2010, dragged down by fiscal austerity measures and low oil prices.

Private consumption rebounded last year following a sharp contraction in 2015- 2016: +11.7% year-on-year; 2015: -13.1% years to years), likely due in part to subdued inflationary pressures boosting households’ purchasing power. Public spending fell for the second consecutive year, as the government continued to exercise fiscal restraint in the face of low oil prices and a consequent revenue shortfall (2016: -1.2% years to years; 2015: -0.3% years to years). Fixed investment growth was dampened by a fall in public investment, as the government tightened the purse strings concerning both capital and current spending (2016: +2.3% years to years; 2015. +4.3% years to years).

According to the yearly record 2005 published by using U.A.E. Central Bank, volume charge charges using 31% (2005) based regarding cutting-edge fees represented as like volume 12 demands, while the heart domestic manufacture grows with the aid of 13% (2005) primarily based on regular prices as corresponds to as much actual output. The dissimilarity desire put inflationary stress on the UAE economy. The hole persevered into aggregate call represented by amount fees (nominal GDP) and total furnish represented using real GDP. Total costs elevated by using 18% (2007) yet 23% (2008), while real GDP roseate by 6% (2007) then 7% (2008). The gap was born in conformity with a high inflation dosage of about 11% (2007) and 12% (2008). We perform conclude at present up to expectation the decline into volume claim by 2% between 2009 yet a faint – but positive – extend among real GDP with the aid of 1% born according to a tremendous arrive between inflation according to 1.5% into the correspondent year. (Pissarides C. A.,2001).

The inflation quantity reached 11% (2007) then multiplied by 12% (2008). Money grants rose by way of 51% (2007) and 15% (2008), while the actual GDP grew a good deal slower than money supply. The real monetary increase dosage was once 6% (2007) and 7% (2008). We can cease now as sluggish growth on money grant between 2009 regarding 7% was a purpose in conformity with decay inflation down in imitation of 1.5% within a similar year. 

In 2005, the government disbursements took 22 percentage of the entire outflow on G.D.P.

Focus financial side agreement estimate contestants expect G.D.P. to make bigger 2.3% in 2017, which is down 0.2 percent points from last month’s projection. For 2018, the panel sees the economy growing by 3.4%.

Conclusions and recommendations

The file provides a top-level view of various unemployment theories and data as regards scholastic journalism. The main principles and theory examinations and discuss the study record encompass structurally, nearby, cyclic, frictional, and scientific unemployment. The valuations of these theories make the publics that UAE is normally go troughed without scientific unemployment. To beat the unemployment in the UAE, the government wish has in imitation of drink the consonant actions:

It must provoke energetic and successful hard work to advertise packages which ought to goal at the least 5000 activity huntsman’s in line with annual term to decrease the unemployment in the vicinity.

Khalifa fund has to be set up for amortization empowerment, for you to enhance the home labor force demand.

Authorities ought to the consciousness of the overseas manual labor policy to restrict the roles for them and enhance a service fee for the UAE countrywide. Authorities have to additionally improve the participation rate within the non-public area if you want to help decrease the unemployment fee because of technological development.

The unemployment price multiplied in 2009 relative to 2008. Cash supply elevated sooner than the boom in the actual unpleasant home creation which brought about an augment inside the basic stage of expenses. The main motive of inflation was an extra mixture requires inspired by using authority’s prices. The UAE financial system relies mainly on importations and the constant family member with US greenbacks caused a speedy growth in import prices. The critical bank must spark off the equipment of economic coverage to modify the quantity of money delivers consistently with the stage of impending G.D.P.

References:

Abu-Quarn A. and S. Abu-Bader. 2007. Sources of Growth Revisited: Evidence from Selected MENA Countries, World Development, 35(5): 752-771.

Acemoglu D., Johnson S., and A. Robinson. 2005, Institutions as a fundamental cause of long-run growth, in P. Aghion and S. N. Durlauf, eds., Handbook of Economic Growth, Volume 1A., Amsterdam, Elsevier.

Becker G. 1962. Investing in Human Capital: A Theoretical Analysis, Journal of Political Economy, 70(5): 9-49.

Dubai Economic Council. 2011. Business Environment, Enterprise Performance, and Economic Development in Dubai. A Policy Report, Dubai.

Emirates Competitiveness Council (ECC). 2011. Economic Growth, Productivity, and competitiveness, Policy Action, issue 2.

Foray D. 2004. The Economics of Knowledge, Cambridge (MA), MIT Press.

Helpman E. 2004. The Mystery of Economic Growth, Cambridge (MA), The Belknap Press of Harvard University Press.

IMF. 2013. World Economic Outlook, Washington DC, April.

Krane J. 2012. An Expensive Diversion: Abu Dhabi’s Renewables Investments in the Context of its Natural Gas Shortage, Cambridge Working Paper in Economics 1237, July.

Masood O. and B.S. Sergi. 2008. Quantitative Measurement of Economic Sectors Effect on the Non-Oil GDP in the United Arab Emirates, International Journal of Trade and Global Markets, 1(3): 239-258.

Pissarides C. A. 2001. Employment Protection, Labour Economics, 8(2): 131-159. [12] Romer P. 1986. Increasing Returns and Long-Run Growth, Journal of Political Economy, 94 (5): 1002- 1037.

Rostow W.W. 1960. The Stages of Economic Growth. A Non-Communist Manifesto, Cambridge, Cambridge University Press.

Schilirò D. 2010. Investing in Knowledge: Knowledge, Human Capital, and Institutions for the Long Run Growth, in M.J. Arentsen, W. Van Rossum, and A.E.Steenge (eds), Governance of Innovation. Cheltenham, Edward Elgar, 33-50.

Schilirò D. 2011. Innovation And Performance Of Italian Multinational Enterprises Of The “Fourth Capitalism”, Journal of Advanced Research in Management, II (2): 89-103.

Schilirò D. 2012. Knowledge-Based Economies And The Institutional Environment, Theoretical and Practical Research in Economic Fields, III(1): 42-50.

Shah N.M. 2006. Restrictive Labour Immigration Policies in the Oil-Rich Gulf: Effectiveness and Implications for Sending Asian Countries, UN/POP/EGM/2006/03, United Nations.

Shediac R., Abouchakra R., Moujaes C.N., and M. Najjar. 2008. Economic Diversification. The Road to Sustainable Development, Abu Dhabi, Booz, and Co.

Shihab M. 2001. Economic Development in the UAE, in I. Alabed, P. Hellyer (eds.), United Arab Emirates: A New Perspective, Trident Press Ltd.

Herman Bailey

With a student-centered approach, I create engaging and informative blog posts that tackle relevant topics for students. My content aims to equip students with the knowledge and tools they need to succeed academically and beyond.

Islamic Finance in Saudi Arabia: A Guide to Shariah-compliant Banking

by Herman Bailey | Jul 25, 2023 | Essays | 0 comments

Abstract

Saudi Arabia, even as various could believe is a wealthy nation paradoxically has an elevated-implicit poverty problem. Such poverty could be related to a small degree of commercial interest also its conventional variance in phrases of a monetary guide. While currently being supported internationally, successful little and middle-companies (SMEs) have large possible to assist alleviates poverty. In Saudi Arabia, the SME area presently added much below forty% of the GDP with a financing diffusion rate of most effective 2%. To improve their presentation, these organizations ought to gain from the use of microfinance inventions. The primary goal of this research is to obtain the estimation of SME owners concerning Islamic Microfinance in Saudi Arabia and discover its possibilities closer to encouraging commercial hobby and therefore poverty discount. Facts have been received from semi-structured interviews performed with four CEOs or high-level management employees of various classes of MSMEs in Saudi Arabia. Based on a qualitative evaluation, this has a look at located that low get entry to finance is appropriate to unreasonable necessities, and that the interviewees are conscious of Islamic finance however not Islamic microfinance. The research shows higher courting among banks and MSMEs to supplement the trade and boom output.

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Ch 1: Introduction

Background

Microfinance is the source of financial services for entrepreneurs and small businesses lacking access to banking and related services. The term includes three things, namely microloans, micro-savings, and microinsurance. Dr. Mohammad Yunus, a noble prize winner, pioneered the concept in developing country Bangladesh to help the financially marginalized start a business by providing them the necessary capital and thereby allowing them to work towards financial independence. Dr. Yunus’s experiment stated with offering small loans, which he himself founded, to women in his country who were making furniture using bamboo as raw material. These women used to depend on loans from local lenders on unfair and predatory terms for financing the expenses of production. The loans being very small in amount were not honored by the traditional banks, but these loans made significant changes in the lives of these small entrepreneurs. Taking the initiative forward, Dr. Yunus established Grameen Bank in Bangladesh and brought opportunities and risk-management tools to the doorsteps of these poor people, most of them are women, who, when given a chance, not only repaid the loan but also created a viable business model. The Grameen Bank now serves more than seven million poor women in Bangladesh.

Several studies have shown that poverty persists due to the exclusion of the poor from the financial system. It is the financial exclusion that, in turn, prevents a large section of the poor population from taking part in the development process. With no access to the traditional financial system, these poor people find it extremely difficult to reap the benefits generated by economic growth. They cannot build assets, educate their children, and secure themselves from financial shocks. It is this financial exclusion that pushes them further into the vicious cycle of poverty.

The basic objective of microfinance is to alleviate poverty by removing this financial exclusion, create more jobs, and develop self-reliance among the population belonging to the lower strata of the economy. Inspired by the model from Bangladesh, many developing nations have attempted to replicate the model, but have faced multiple difficulties in achieving the level of success that Grameen Bank did. The majority of issues included the high cost of financing, women-only approach, and focus on financing economically active people only leaving chronically poor and destitute aside.

Although the movement of microcredit found its success in an Islamic country, most of the other Muslim dominated countries have not accepted the concept in its original form. The financial system in these countries follows Islamic finance which is based on the holy book Quran and Sharia law. The Sharia law specifically dictates not to charge any interest on loans and Quran forbids usury or Riba.

However, the requirements of the poor in Islamic countries are no different from that of non-Islamic states. They also need financial assistance to make expenses beyond their available means in mainly three categories of events: life cycle events, exigencies, and investment opportunities. In fact, poor people may need more than just credit. They require a gamut of financial services such as credit, savings, money transfer facilities, and different forms of insurance (Obaidullah, 2008).

Saudi Arabia is one of the wealthy Islamic nations in the world. However, the country is not devoid of its fair share of issues like poverty and unemployment. The Saudi government does not release statistics on poverty regularly. Hence, there is no concrete information on the overall poverty rate of the country. According to some outside agencies, as of 2017, its poverty rate stood at 12.7 percent (Lee, 2018). Different media reports and private estimates state that there are between two to four million people in the country who live life below $530 a month, i.e. about $17 a day. The majority of the poor are migrant workers. The World Bank projects an increase in the poverty level in the country. Owing to increased poverty, begging is very common in slums and what is more astounding is that majority of beggars are women. The most recent finding by the World Bank states that in 2014 more than 80,000 children were not unable to attend primary school (Gillespie, 2018).

Thus, there is scope for the inclusion of poor people in the mainstream of the Saudi Arabian economy using concepts like microfinance. But Saudi Arabia is a country driven by Sharia law, which forbids interest on loans. In this context, it is important to study whether there can be an effective counterpart of the practices of microfinance which is interest-based, in Islamic finance which is Sharia-based.

Research Question

Q1. Is there an efficient counterpart of the interest-based microfinance system in Islamic law?

Q2. Is the concept of microfinance helpful for the poor people of Saudi Arabia?

Q3. How can they be made aware of it and an inclusive financial system developed?

Aims and Objectives

The objective of this study is three-fold:

• To find an efficient counterpart of the interest-based microfinance system in Islamic law.
• To ascertain whether a concept like microfinance is at all helpful for poor people in Saudi Arabia?
• If yes, how can they be made aware of it? If no, what alternative system can be devised to ensure an inclusive financial system?

Scope of the Study

The scope of the study is to consider a country like Saudi Arabia, its economic conditions, and the role of microfinance in uplifting its poor people.

Limitations

The research is limited to the Islamic countries only with Saudi Arabia as its representative. The study restricts itself to the discussion of the relevance of microfinance in Sharia law-driven country with an Islamic financial system.

Ch 2: Literature Review

Islamic Finance Law

Islamic finance is dictated by Sharia law which originates from the Quran, the holy book of Islam, and from Hadith, a compilation of sayings of prophet Mohammad that are not present in the Quran. According to Encyclopedia Britannica, Islamic jurisprudence or fiqh is “the science of deducing and applying the principles and injunctions of Shari’ah, as well as the total of deductions by particular jurists”. Fiqh interprets and adapts Sharia law to make it applicable in modern life “according to time and circumstance is necessitated by changes in society, and the influx of various cultures and material conditions” at the same time ensures that the principles follow the writings of Quran. Islamic finance is based on the prohibition of riba, which is excess over and above the number of loans. Riba can be classified into credit riba ((riba’ al-nasi’ah) and surplus riba ((riba’ al-Fadl) (Az-Zuhayli 2006). According to Islamic law, no excess can be extracted neither from credit nor from surplus.

Imam Fakhruddin Razi in his book al-Tafsir al-Kabir states three reasons why riba is unlawful. First, it leads to an exploitation of borrowers by the lenders as interest or riba make the lender well off at the cost of the borrower. Second, interest or riba can become a source of livelihood for a group of people who may not be willing to undergo the hardship of earning money, as it is certainly easy to earn income merely by lending money. Lastly, the concept of interest is in contradiction to the ideas of mutual sympathy, human goodness, and obligation (Rahim and Rahman, 2007).

The Islamic Fiqh Academy made a resolution in the year 1985 which states the following:

• Any excess or profit on a loan for deferred payment when the borrower is unable to repay it after the fixed period and similarly any excess or profit on a loan at the time of contract are both forbidden as riba in the Shari’ah.
• Alternative banks should be established according to the injunctions of Islam to provide economic facilities.
• The Academy resolves to request all Islamic countries to establish banks on Shari’ah principles to fulfill all the requirements of a Muslim according to his beliefs so that he may not face any repugnance (Rhule, 2016).

After this resolution, Islamic finance and banking expanded in many countries who wished to operate under these rules. Islamic finance is based on an alternative of riba, which is profit and loss sharing (PLS) arrangement. This arrangement is believed to be more equitable and egalitarian compared to the interest-based approach (Rahim and Rahman, 2007).

Islamic Microfinance

Despite the significant expansion of Islamic banking worldwide, the concept of microfinancing has not developed well in the Islamic states. Microfinance is an interest-based concept that leaves the majority of Islamic countries out of its realm as Islam does not support charging of interest on loans (Juliette, 2013). Bangladesh could witness the setting up of Grameen Bank in 1976 as the country is classified as “moderate Muslim” by the United Nations and does not follow Sharia law strictly. The country’s legal system is based on British Common Law rather than Sharia law (Yasmin, 2013).

As defined in the Microcredit Summit (1997), microfinance means “programs that extend small loans to very poor people for self-employment projects that generate income in allowing them to take care of themselves and their families” (Rhule, 2016). It involves micro-credit, micro-equity, micro-savings, micro-transfer, and micro-insurance. The primary objective of microfinancing is to alleviate poverty, create more job opportunities, and make the poor section of the population independent and capable (Rahim and Rahman, 2010).

Obaidullah (2008) in his work found that there is no fundamental difference or inconsistency between the models of microfinance and the Islamic values. The only thing that differentiates the two is the concept of riba involved in conventional microfinancing. But there is an opportunity to find alternative models of microfinancing that will allow the implementation of the concept in a Sharia-compliant manner (Obaidullah, 2008).

In his research Rahim (2007) discuses several Sharia-compliant microfinance schemes such as “Hodeibah microfinance program in Yemen, the UNDP Murabahah based microfinance initiatives at Jabal al-Hoss in Syria, Qardhul Hasan based microfinance scheme offered by Yayasan Tekun in Malaysia, various schemes offered by Bank Rakyat Indonesia, and Bank Islam Bangladesh”.

On the other hand, Ahmed (2002) has found several differences between conventional microfinance and Islamic microfinance. The following table will summarize these differences:

Source: Rahim (2007)

Microfinance in Saudi Arabia

Saudi Arabia is known as a rich country but has undeclared poverty which is very high. An unofficial study by Tawfik El Seif (2013) revealed that there are almost 10 million Saudis who live below the poverty line. There is a severe mismatch of financial support to encourage entrepreneurial activities of the people lacking financial strength but with the zeal to achieve. It is worldwide proven that small and medium-sized enterprises (SMEs) have the most potential to support poverty alleviation. However, in Saudi Arabia, SMEs contribute merely less than 40 percent of GDP with a financing penetration rate of a mere 2 percent (Adewale, al-Jaafreh, and Osman, 2015).

The findings of Adeyemi, al-Jaafreh, and Osman (2015) are quite significant. They show that the terms of formal financing in Saudi Arabia are highly unfair towards small enterprises. In 2006, the government of Saudi Arabia initiated the Kafalah program through the Saudi Industrial Development Fund (SIDF) to “act as guarantor to banks for providing credit for SMEs” (p.63). The program was successful in providing a credit of around 950 million US dollars in 2013. Despite the success, it has been found that banks are mostly unwilling to offer funds to SMEs due to a lack of sufficient market and feasibility studies. This implies that there is a scope for innovation and implementation of microfinancing in Saudi Arabia.

Adeyemi, al-Jaafreh, and Osman (2015) also made a significant contribution to the literature by revealing that the concept of Islamic microfinance is not widely known among the SMEs of the country. Most of their interviewees expressed interest in getting Islamic finance products from the well-structured system of Islamic banking. They opined that there is a huge potential for banks and other financial institutions to provide Islamic microcredits to SMEs in Saudi Arabia.

In their work Aboud and Faisal (2017) discuss the challenges and prospects of the microfinance institutions of Saudi Arabia. They are of the view that the major challenges that the microfinance institutions of Saudi Arabia face are lack of governance, professional management, internal transparency, high cost, poor targeting of low-income groups, their inability to move beyond the credit requirements of the loan seekers, and help them with better financial infrastructure, advice, and risk management tools and techniques. The absence of proper regulation, supervision, and assistance from the apex bank also adds to the problem of the microfinance institutions of Saudi Arabia.

Microfinance and Poverty Alleviation

The purpose of microfinancing is to make capital accessible to poor people so that they can build assets and opportunities on income and move out of poverty towards self-sustenance. Miled and Rejeb (2015) confirmed the role of microfinancing in poverty reduction in their study where they analyzed cross-sectional data and panel data of 1132 microfinance institutions in 57 developing countries. Their study found that “a country with higher MFIs’ gross loan portfolio per capita tends to have lower levels of Poverty Head Count Ratio and a higher level of per capita”.

Another study by Iqbal, Iqbal, and Mushtaq (2015) found that microfinance has helped poverty alleviation by generating more self-employment opportunities and improving the standard of living in a district of Punjab, Pakistan.

However, not everybody agrees with this proposition. Zhang (2017) is of the view that microfinance need not necessarily reduce poverty. Aneel Karnani (2007) makes it clear that though microcredit yields some non-economic benefits, it does not contribute significantly to poverty alleviation. In fact, in some cases, microfinancing creates more problems than solutions for people at the bottom of the pyramid. This is because the cost of borrowing through microcredit institutions is higher compared to that of the conventional banking system. This lowers the cash flow to the poor. Secondly, those who seek microcredits are often liberated or barely literate. They do not have the skill, vision, creativity, or persistence to be an entrepreneur. Without any operational assistance, it becomes difficult for them to conduct a successful business.

Banerjee and Jackson (2017) added to the literature when their study reflected a different picture contradicting the immense popularity of microfinance as a means of poverty alleviation. They found that instead of promoting empowerment while enhancing social capital in poor communities, microfinance increased indebtedness among already poverty-stricken communities and thereby exacerbating their economic, social, and environmental vulnerabilities. The authors argue that microfinancing is providing funds but not the knowledge and skill needed to convert that fund into assets and start up a business venture. Devoid of any expert knowledge and understanding of formal business these poor people are not always becoming successful in their endeavors which is increasing their indebtedness and difficulty of life. Moreover, the aggressive payment tactics involving public shaming of defaulters are adversely affecting the social ties within the communities and their family members. As a result, many poor people are getting secluded from their communities and are facing difficulty in developing social capital in terms of trust, reciprocity, and cooperation.

Microfinance has also been criticized from an ethical perspective as did Hudson and Sandberg (2013). They questioned the lending techniques and charging of an abysmally high rate of interest by the microfinance institutions from an ethical point of view. They argued that it is exploitative and unfair to ask for an interest rate that is above the market rate form people who barely has any resource to fiancé their daily lives. Their study challenges the much-hyped poverty alleviating role of microfinance and suggest how to balance financial and social goals with the help of financial institutions.

Chapter 3 – Methodology

This section aims to describe the research approach, tools used in the research, and the hypotheses formulated regarding awareness of microfinance in Saudi Arabia.

3.1 Scope of the research

The research questions are centered on the effectiveness of Sharia-based microfinance in Saudi Arabia and whether people of this country are aware of its benefit. Notwithstanding the economic prosperity of the country, microfinance has a vital role to play in improving the employment scenario of Saudi Arabia. The state has un-declared poverty issues which are mostly because of a lack of entrepreneurial activities and a traditional mismatch in terms of financial support. The conventional banking sector has not been active enough to extend their helping hands towards this group of people belonging to the lowest strata of the economy. Sharia-compliant microfinance institutes can support people from financially constraint backgrounds to set up small and medium-sized enterprises and be self-sufficient. The result of such endeavors will have a direct positive effect on the economy of Saudi Arabia.

The encouraging effects of microfinance can only be seen on the economy of the country when people belonging to the weaker section will be aware of its benefits and will come forward to take its advantage. One of the primary target groups of microfinance schemes is women. With support from microfinance institutions, women are encouraged to venture into businesses that are suitable within the society of the country and be empowered. The objective is to bring in greater gender equality in society. Another aim of microfinance is to extend financial security to capital constraint groups of people and make them capable so that they can lead a better life, manage their life events, invest in education, and head towards a meaningful life.

The research will attempt to offer recommendations on the awareness about microfinance can be improved in the Kingdom country. The youth and the people with low financial capacities need to understand the benefits that microfinance can bring to their lives and what are its challenges. This is especially true for women who want to move ahead in the path of self-reliance.

3.2 Research methodology

The research methodology is important as the whole of the dissertation rests on the findings of the research which can only be arrived at using the right research methodology. Three types of methodology can be used to carry out research, namely quantitative research, qualitative research, and mixed research.

The quantitative research method is concerned with the collection of data, analysis thereof, and their final interpretation. Quantitative research design can be either descriptive, where the variables are measured once, or experimental where the variables are measured before and after treatment. In social sciences, the descriptive method is generally used, and it establishes an association between variables. The basic characteristics of quantitative research methods are a high degree of control, emphasis on the operational definition, replicability, and hypothesis testing. Quantitative research deals with data that can be measured in numbers analyzed applying convergent reasoning and represented visually.

Qualitative research methodology emphasizes the qualities of variables where data are not in the form of numbers. This method is more concerned with the socially constructed nature of realities, the profound interrelationship between the researcher and the subject of study, and situational barriers that outline inquiry. Qualitative research follows a method of collecting and analyzing information in many different forms, which are primarily non-numeric. The objective of the qualitative approach is to explore things in great detail, examine the smaller numbers of instances from all possible perspectives, and achieve depth instead of breadth. The significant characteristics of the qualitative research method are that the contexts of inquiry are neutral. Nothing is predefined or assumed. The researcher gets personally involved in the issues that they are studying and views the problems from a broader perspective not just as a variable. This method of research is more experience-based and strived to understand the experiences and different perspectives.

This research is based on a quantitative method where the research question will be answered by studying behaviors of a few variables for which numeral data will be collected and analyzed. The rationale behind the choice of research method is that quantitative research allows a broader study involving a more significant number of objects and thereby helping in the generalization of the result. It has more objectivity and accuracy so far as the results are concerned and do not involve personal bias.

Now there are two typical modes of data collection, a name using primary sources and using secondary sources. Data that are collected directly from the field of research for the first time by the researcher to conduct a specific study is known as primary data. The origins of primary data are interviews, questionnaire surveys, Delphi technique, projective techniques, and focus group interviews. Secondary data are those that were collected by someone else for a different purpose and may have undergone statistical analysis but is being used by the current researcher for his or her study. There are two sources for collecting secondary data: internal and external. Internal sources include financial statements, sales reports, customer details, management information systems, and the like. The external sources of secondary data are government reports, business journals, books and magazines, newspapers, libraries, databases, and the Internet.

This study will use both types of data to understand the awareness of microfinance in the Kingdom of Saudi Arabia and analyze its significance. This is because the subject of study is vast, and it requires the right amount of information to fulfill the aim and objective of the study.

To be able to grasp the notion of proprietors’ at the usefulness of Islamic microfinance in Saudi Arabia, a qualitative observe changed into behavior. Semi-established interviews became used due to the number one research technique. The interview become conducted at some stage in March 2015 with an aggregate of statements on bank performs and relation to Short firms, and interviews with micro-entrepreneurs and financial executives of short and middle corporations. There have been four interviewees such as micro-marketers, an economic executive in a middle business venture with differences in economic know-how, and the population so that you can hold close the banks’ lodging to each resident and citizens of Riyadh, Saudi Arabia. The motive for the pattern volume would be the joblessness of additional comparable stage tops of agencies or industrialists, as the studies try and discover the high relationship of banks to companies and recognition of those corporations to Islamic microfinance as a format.

3.3 Collection of research data

This study took the help of the questionnaire method to collect primary data. A questionnaire was prepared which contained queries related to demographic information and a set of questions about microfinance, its effects, and awareness. The surveys were distributed to 150 individuals who were randomly selected.

For the collection of secondary data, caution was maintained concerning the reliability of the information and sources. Authentic sources such as an online database like EBSCO Host, Emerald, Science Direct, and Social Science Research Networks (SSRN) were extensively used to gather published articles on the subject of microfinance. Besides books related to banking and finance were also consulted to collect authentic and relevant data.

The data obtained had been subjected to an interpretive analysis to locate commonplace themes amongst responses supplied with the aid of the interviewees. This becomes achieved to apprehend the perception of these interviewees on numerous financing strategies and mainly the Islamic microfinance. The small sample and widespread traits of these interviewees will limit the similarities that are what the examiner is aiming to obtain. Furthermore, the analysis takes observe to the present-day financial institution practices and focuses on the similarities between the real bank processes to the MSMEs section within the market and the understanding of the interviewees to the bank’s practices.

Chapter 4 – Findings and Discussion

4.1 Demographic profile

4.1.1 Gender

Out of 150 individuals interviewed, 85 were male, and 65 were female, which makes the gender ratio 57 percent is to 43 percent.

4.1.2 Age

The age distribution of the 150 respondents is represented in the following table and the graph.

Table 1.

Sixty percent of respondents are in the age group of 3-40 years, 20 percent are in 20-30 years. 13 percent are more than 40 years old and a mere 7 percent is less than 20 years old.

4.1.3 Marital Status

The marital status of the 150 respondents is represented in the following table and the graph.

Table 2.

The sample consisted of 45 percent of married individuals. 26 percent are single. 19 percent have lost their spouses, of which most are women and 10 percent had their marriages terminated.

4.1.4 Education

The level of education of the 150 respondents is represented in the following table and the graph.

Table 3

The sample had 44 percent individual with an education level of school or metric level. 28 percent completed high school. 13 percent received vocational training, and 7 percent is illiterate.

4.1.5 Occupation

The kind of occupation these 150 respondents are engaged in is represented in the following table and the graph.

Table 4

The survey had interviewed 13 percent of people with services, 21 percent of people engaged in self-employment, 11 percent working as labor, 17 percent are housewives, 25 percent unemployed.

4.2 responses to the questionnaire

Question 1: Microfinancing helps in poverty reduction

37.33 percent of respondents are not aware of whether microfinancing has any positive effect on poverty eradication. 23.33 percent think that microfinancing helps eradicate poverty, 14.67 percent do not agree with the view. There is a lack of awareness reading the effects of microfinance.

Question 2: Microfinancing contributes to the improvement of income level

No information is available to 38.67 percent of people whether microfinancing improves income level or not. Despite that, 24 percent think that microfinancing can be a key instrument in improving income level and 16.67 percent strongly believes so. But there is 15.33 percent of people who do not agree with this view. People surveyed seem not aware of how microfinance impacts impact level.

Question 3: Microfinancing uplifts social status

Again, the impact of micro financing on social status is not very clearly understood by 42 percent of respondents. However, there seems to be an important segment of the population that understands the impact. 26; percent agree that microfinance can uplift social status and 26 percent strongly agree with this opinion. Another indication of a lack of awareness is reflected through these responses.

Q4: Microfinancing enhances recognition in the family

There seems to be a sense of dissent concerning the question of whether microfinance can help in enhancing recognition in the family with 31.33 percent responding negatively to this question. But 16.67 percent strongly believe it does and 22 percent are neutral. There is a general perception that microfinance does not alter one’s position inside the household.

Q5: In developing countries, people are not aware of microfinancing

A whopping 30 percent of respondents strongly agree that people are not aware of microfinance in developing countries, 24 percent aggress to it and 18 percent expressed their opinion against it. Participants have acknowledged the absence of awareness regarding microfinance in most developing countries.

Q6: Microfinancing originates from Islam and its principles.

Most of the individuals find no relation between Islam rule and microfinancing. 45.33 percent believe that it is against the rules of Islamic laws. 20.67 percent disagrees with the notion that microfinance originates from Islam and its principles. There is a dearth of basic understanding so far as Islamic law and microfinancing are concerned, which perhaps has led to its low popularity.

Q7: Microfinancing based on Sharia law is better than traditional microfinancing.

Those surveyed are highly in favor of Sharia law based microfinancing as 52 percent strongly believes that Islamic microfinancing is better than traditional microfinancing. Preference towards the Sharia-based microfinancing system makes it the need of the hour.

Q8: Saudi Arabia has a strong system of microfinancing based on Sharia law for its poor population

Saudi Arabia has a robust system of Sharia-compliant microfinancing system things 26.67 percent of respondents. Contrarily, 23.33 percent strongly oppose this view. A significant 22 percent remain neutral. Although many are aware of the Sharia-compliant microfinancing system, efforts are needed to create greater awareness.

Q9: Developing countries need to spread awareness about microfinancing among its population.

The need for the spread of awareness about microfinancing in developing countries is strongly felt by 54 percent of respondents. 11.33 percent are neutral, and 12.67 percent disagrees. Microfinancing has proved to be an effective tool for poverty eradication in many countries. Hence, it must be promoted in developing nations as well.

Q 10. Microfinancing can cause a higher level of indebtedness.

Arabs are apprehensive that microfinance can increase their indebtedness as 28 percent strongly thinks so. 20 percent are again neutral, and 18.67 percent strongly disagree. The apprehension is rather harmful to the spread and progress of the microfinancing system in Saudi Arabia.

Q11: The techniques applied for loan repayment are rather harsh.

Loan repayment techniques applied by financial institutions are rather harsh thinks 39.33 percent of respondents, 24 percent resonate with this view and 19.33 percent disagrees. People need to be sensitized about the repayment processes to make them feel comfortable about approaching microfinance credits.

Q12: Microfinancing institutions often support poor entrepreneurs with needed decision-making skills and managerial practices.

The role of microfinance institutes as a supporter of small enterprises is not widely known in Saudi Arabia as 32 percent are neutral, 24.67 percent disagree that microfinance companies ever extend a helping hand to small enterprises. The microfinancing companies are not active at promoting themselves and their contributions.

4.3. Discussion

The demographic profile of the sample of 150 individuals consisted of 57 percent male and 43 percent female making it a near gender neutral sample. Sixty percent of the sample size belonged to the age group of 30-40 years and 20 percent 20-30 years, which means that majority of those surveyed are in the prime of their youth and are in the most productive and enthusiastic phase of life. Thirteen percent are retired, and seven percent are in their late teens. The marital status of the respondents shows that a large portion of them are married and are running a household while the next highest population is single. There is 19 percent of people who have lost their spouses. Since a significant part of this section is a woman, they are in dire need of financial support to become self-sustaining and independent. So far as the education level of the respondents is concerned, the majority of them have either studied till matriculation or have passed high school. The study also found 13 percent of people who have undergone some kind of vocational education and 7 percent are illiterate. Thus, this study will reveal the viewpoints of those who are not considered highly educated and broadly aware. The participants are engaged in different occupations. Thirteen percent are jobholders, 21 percent self-employed, 11 percent labor, 17 percent housewife and a meager 8 percent belong to a family-owned business. What is noteworthy is that 25 percent of those surveyed are unemployed, which is an indication of the underlying problem of unemployment and undeclared poverty in Saudi Arabia.

A significant section of the sample population is neutral (37%) to the question of whether microfinancing helps in poverty reduction, which is an indication that either they have never approached any institution for microfinance or are not aware of its benefits. Twenty-three percent of people agreed with the view and 18 percent strongly agreed. But interestingly, 14 percent of people expressed their opinions against this statement, which is another signal that awareness regarding microfinance is not high among the less educated youth of Saudi Arabia.

Concerning questions that tried to understand the opinion of the sample population regarding the benefits of microfinancing in terms of raising the level of income, uplifting social status, and enhancing recognition, it was found that the majority of respondents are neutral which again reinforces the premise that awareness about microfinance is low in the country.

Nearly half of those who were surveyed strongly agreed that developing countries people are not aware of microfinancing. When asked about the connection between microfinance and Islamic principles, 45 percent of respondents disagreed. They are of the view that microfinance is a concept based on the charging of interest on the sum of money lent, which is against the rules of Islam. On the same line, 94 percent of those surveyed believe that microfinance or for that matter any kind of finance that is Sharia-compliant is better than the traditional form of financing.

The opinion of whether Saudi Arabia has a robust system of microfinancing based on Sharia law for its impoverished population is widely distributed. Around 27 percent think it has, 23 percent strongly things it does not, and 22 percent is not aware of any such facility. But a large section of 54 percent feels that it is essential to spread awareness about microfinancing in developing countries.

There seems to be a negative outlook about microfinance in Saudi Arabi as 28 percent think that microfinancing can cause a higher level of indebtedness. Here again, 20 percent of people are neutral. Additionally, there is a strong opinion against the methods applied to recover microfinance loans. An apprehension is looming large that there is a likelihood of public humiliation in case of loan default.

When asked the role that microfinance institutes play in supporting the poor entrepreneurs with needed decision-making skills and managerial practices, 32 percent of the respondents seemed unaware. And a staggering 25 percent thought that they play no such role.

A more detailed analysis of the data has revealed that the awareness about microfinance is particularly lacking among women, especially those who are interested in running their business to support their families in cases of no support from male partners either due to their demise or for other reasons.

Chapter 5 -Conclusion and Recommendation

5.1 Conclusion

From the findings of the research based on primary data, it is clear that youth of Saudi Arabia who is not from educated background lack knowledge and understanding of microfinance as a system that can improve their possibility of leading a better life with an enhanced level of income and greater respect in the society and family. Rather, there is a negative feeling about it as a system that is against the rules of Islam. Questions are also being raised about the methods that microfinance institutes use o recover loans and the role that these institutions are supposed to play in offering the small entrepreneurs managerial and risk management skills. There is a fear that microfinance may lead to increased indebtedness.

The secondary research reveals that efforts are being made in Saudi Arabia to increase the number of microfinance institutions and spread Shari compliant microfinance across those people who are either willing to start small scale businesses or are eager to add to the productivity of their existing businesses or are looking for opportunities of self-employment to get rid of the pangs of unemployment and poverty. However, the primary research tells that those efforts have not reached the target audience in the way they should have. Moreover, women who are the prime target of microfinance are severely unaware of the benefits of microfinance in Saudi Arabia.

5.2 Recommendations

It is an urgent need to spread awareness about microfinance across the country so that people from the backward section of the society can find employment and income opportunities. Women must be given special attention to awareness programs as one of the top objectives of microfinance is the empowerment of women.

To achieve the desired outcome efforts from government and semi-government and non-government organizations must come forth. Seminars and lectures can be organized to let people know what microfinance is, how its related to the principles of Islam, how Sharia-based microfinance works, and finally how they can be benefited. The microfinance intuitions can also run awareness programs among their target groups and show them an example of other countries where people have overcome poverty with the help of microfinance. They should make all-out efforts to remove all the misconceptions that are prevalent in the minds of people concerning the side effects of microfinance such as an increase in indebtedness, the possibility of being humiliated in society, and disrespected inside the family. These people must be given assurance that the microfinance institutes will be there to support them not only with financial resources but also with knowledge, training, managerial skill, and risk management techniques.

It must be understood at the governmental level of Saudi Arabia that dependence on oil for the economic property is not a sustainable growth strategy. Alternative methods of growth need to be adapted to maintain the prosperity of the economy and its people. With an increasing population, the requirement for employment is sure to rise, which if unattended will heighten poverty and misery. Microfinance is the tool that can act as a savior. More support should be offered to the microfinance institutes so that they can reach out to those in dire need of finance and capital.

It is the responsibility of the microfinance institutes to be real support of those people who they lend their money to. They must understand that these people are not equipped with adequate knowledge, information, skill, and technology to run a business. They need constant assistance and guidance which will place on the path to success. Microfinance companies must earn the trust of these people and be their guiding light so that the borrowers can utilize their funds effectively in a venture and earn adequate revenue to repay the loan along with heading towards a life full of prosperity and satisfaction.

Reference

Aboud, O., Faisal, S.M. (2016). Challenges and prospects of micro-financing institutions: A detailed study in India and Saudi Arabia. Research Journal of Finance and Accounting, 7(6). Retrieved from https://www.researchgate.net/publication/322049667_Challenges_and_Prospects_of_Micro_Finance_Institutions-_A_Detailed_Study_in_India_and_Saudi_Arabia_in_the_Research_Journal_of_Finance_and_Accounting_ISSN_2222-1697_Paper_ISSN_2222-2847_Vol7_No6_May_20

Abdul Rahim, A., Rahman, A. (2007). Islamic microfinance: A missing component in Islamic banking. Kyoto Bulletin of Islamic Area Studies,1(2), 38-53. Retrieved from http://www.asafas.kyoto-u.ac.jp/kias/1st_period/contents/pdf/kb1_2/06abd_rahim.pdf

Abdul Rahim, A., Rahman, A., (2010). Islamic microfinance: An ethical alternative to poverty alleviation”, Humanomics,26(4), 284-95, https://doi.org/10.1108/08288661011090884

Adewale, A.A., Al-Jaafreh, A.S., and Osman, M.A. (2015). Islamic microfinance and MSMEs development in Saudi Arabia: A qualitative inquiry. International Journal of Education and Research, 3(9). 59-72. Retrieved from https://www.researchgate.net/publication/290429954_ISLAMIC_MICROFINANCE_AND_MSMES_DEVELOPMENT_IN_SAUDI_ARABIA_A_QUALITATIVE_INQUIRY

Ahmed, H. (2002). Financing micro-enterprises: An analytical study of Islamic microfinance institutions, Journal of Islamic Economic Studies 9(2).

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Banerjee, S.B., and Jackson, L. (2016). Microfinance and the business of poverty reduction: Critical perspectives from rural Bangladesh. Human Relations, 70(1), 63-91. https://doi.org/10.1177%2F0018726716640865

Encyclopedia Britannica, (2018), Shari’ah Islamic Law

Gillespie, A. (2018, Jun.8). Transparency, transformation, and alleviation: Poverty in Saudi Arabia. Borgen Magazine. Retrieved from https://www.borgenmagazine.com/poverty-in-saudi-arabia/

Hudson, M., and Sandberg, J. (2013). The ethical crisis in microfinance: Issues, findings, and implications. Business Ethics Quarterly, 23(4), 561-589. https://doi.org/10.5840/beq201323440

Iqbal, Z., Iqbal, S., and Mushtaq, M.A. (2015). Impact of microfinance on poverty alleviation: The study of district Bahawal Nagar, Punjab, Pakistan. Management and Administrative Sciences Review, 4(3), 487-503.

Institute of Islamic Banking and Insurance, (2018), Shari’ah rulings and finance.

Juliette, (2013). What is Islamic microfinance? Retrieved from https://www.microworld.org/en/news-from-the-field/article/what-islamic-microfinance

Karnani, A. (2007). Microfinance misses its mark. Retrieved from https://ssir.org/articles/entry/microfinance_misses_its_mark#

Lee, R. (2018, Oct. 31). 15 facts about poverty in Saudi Arabia. The Borgen Project. Retrieved from https://borgenproject.org/tag/poverty-in-saudi-arabia/

Miled, K.B., Rejeb, J.B., (2015). Microfinance and poverty reduction: A review and synthesis of empirical evidence. Procedia- Social and Behavioral Sciences, 195(3), 705-712.Retrieved from https://www.sciencedirect.com/science/article/pii/S1877042815038185

Obaidullah, M. (2008). Introduction to Islamic Microfinance. IBF Net (P) Limited, India. Retrieved from https://www.researchgate.net/publication/228201195_Introduction_to_Islamic_Microfinance

Rhule, K. (2016). Islamic microfinance: A vehicle for promoting financial inclusion. Retrieved from https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=1024&context=international_immersion_program_papers

Yasmin, L., (2013), Religion and after Bangladeshi identity since 1971. Open Security. Retrieved from https://www.opendemocracy.net/opensecurity/lailufar-yasmin/religion-and-after-bangladeshi-identity-since-1971

Zhang, Q. (2017). Does microfinance reduce poverty? Some international evidence. The B.E. Journal of Macroeconomics, 17(2). https://doi.org/10.1515/bejm-2016-0011

Herman Bailey

With a student-centered approach, I create engaging and informative blog posts that tackle relevant topics for students. My content aims to equip students with the knowledge and tools they need to succeed academically and beyond.

Engineering for a Sustainable Tomorrow: Embracing Eco-friendly Practices

by Herman Bailey | Jul 25, 2023 | Essays | 0 comments

Introduction

Sustainability as a concept is increasingly being applied in the 21st century in diverse engineering fields such as construction, power, automobile industries amongst others. The grave challenges posed by global warming particularly resulting from rising human population, environmental pollution, widespread depletion of natural resources, scarcity of food and water as well as threats to energy security have necessitated a paradigm shift in engineering and design solutions. To achieve sustainable outcomes in the field of engineering and engineering management, it is critical to embrace sustainability by adopting sustainable engineering practices and thereby facilitate sustainable development. Sustainability is defined as the capacity to ensure that we maintain an improving the quality of life for all people, now as well as in the future is, while also simultaneously ensuring that ecosystem services and natural resources critical for life to sustain on earth are available on a continues basis (Hood 1999). Sustainable engineering implies the application of engineering in systems sustainably by utilizing sustainable resources so that the system provides a sustainable output (Rosen 2012). Sustainable development, on the other hand, is an approach towards development such that the needs of the present-day world are met and at the same time there is no compromise on the capability of the future generations to meet their own needs (WECD 1987, p. 8).

Sustainability consists of three pillars: environmental, economic, and societal sustainability, and engineering is directly linked to each of these components (Rosen 2012). Balancing these aspects is a challenging task faced by organizations but successful implementation of these principles is crucial to achieve good standards of living, foster social and cultural development, social stability, minimize wastage of resources thereby ensuring continuous availability of ecosystem services. This indicates that sustainability and sustainable development involves the balancing of the fine line between our need to advance economically and technologically and at the same time ensure that we protect the environment in which we live so that the ecosystem services critical to the survival of earth are readily available to us as well as our future generations. This report will firstly review and critique existing literature about sustainability in the engineering management sector and finally address the importance of embracing sustainable engineering management practices to achieve a functioning sustainable society.

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Annotated Bibliography on Sustainable Engineering & Management

2.1 Journal Article 1

Bhutto, AW, Bazmi, AA, Zahedi, G & Klemeš, JJ 2014, ‘A review of progress in renewable energy implementation in the Gulf Cooperation Council countries’, Journal of Cleaner Production, vol. 71, pp. 168-180.

This article assesses the benefits of funding and investments in renewable energy projects, explores potential sources and avenues for the development of renewable energy, and debates the policies and strategies to help promote and develop renewable energy for GCC to counter the increasing use of non-renewable energy sources, diversify economies, reduce dependency on oil and address the challenges of a post-oil future. This environmental awakening among GCC is attributed to their accession to the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol as these frameworks demand continuous commitment towards the reduction of greenhouse gases. Developing and adopting technologies and management strategies about alternative energy sources, carbon capture and sequestration (CCS), and energy efficiency is the way forward for GCC to simultaneously reduce carbon emissions and enhance economic diversity. The article states that strategic location and climatic conditions have created huge opportunities for the development of photovoltaic and wind systems and in that regard, the GCC countries need to create subsidies for investments and develop specific legislation to promote renewable energy and foreign investments in their energy-intensive markets. The information presented in the article is of critical interest to engineering professionals and companies looking to capture the energy-intensive markets of the middle-east as renewable energy is the only way forward to ensure that human development takes place sustainably, now and into the future. By highlighting the need to train and support new generations on renewable energy technologies, the article addresses the need for national planning so that new, niche, and competitive technologies are developed which suit their climatic conditions.

2.2 Journal Article 2

Islam, KMA & Salma, U 2016, ‘The renewable energy and sustainable development: a case study of Bangladesh’, International Journal of Finance and Banking Research, vol. 2, no. 4, pp. 139-146.

This article assesses the potential of various renewable energy sources to generate power and examines the different promising technologies available for sustainable power generation in Bangladesh such as solar homes, wind, and hydro energy amongst others. A review of the current energy situation in Bangladesh suggests that the existing energy generation infrastructure is dependent on fossil fuels and hence is not in the interest of sustainability. With the demand for power expected to grow exponentially in the future, the article’s focus on integrating various impacts on the environment. Industrial sectors should practice the consumption of renewable energy technologies in the power sector is highly relevant to achieving sustainability in the country’s power sector and these sources also have the potential to ease the bottleneck caused by the power sector about overall development in Bangladesh. Furthermore, it is seen that renewable energy projects are becoming popular in Bangladesh in recent times owing to relevant government policies and institutional facilitation, however, the country still faces issues in accelerating the growth of these projects due to fluctuating stakeholder interests. The article addresses this issue by suggesting that mechanisms be developed to maximize stakeholder participation by collaborating between the public sector, private sector as well as NGOs’ to ensure a wide range of knowledgeable inputs flows into the development of a strong policy framework to effectively move towards sustainable energy development. The most important highlight of the article is its emphasis on implementing sustainable projects under the Clean Development Mechanism of the Kyoto Protocol to help the country meet its energy requirements sustainably. Upon successful implementation of the above policies, renewable energy sources can be used efficiently to generate power and it is also possible to penetrate isolated rural areas thereby lifting the living and social standards of the people.

2.3 Journal Article 3

Liew, WH, Hassim, MH & NG, DKS 2014, ‘Review of evolution, technology and sustainability assessments of biofuel productions’, Journal of Cleaner Production, vol. 71, pp. 11-29.

This article acknowledges the importance of biofuels to counter the dual problems of fossil fuel depletion and climate change to achieve sustainable engineering outcomes which are attributed to the fact that these fuels are derived from sustainable sources and help in minimizing the greenhouse effect. By reviewing the evolution of biofuels, the article examines the current state-of-the-art technologies for biodiesel and bioethanol production, lignocellulosic biomass conversion, technology for algae processing as well as bio-refineries where biomass is converted into products like biofuels, bio-oils for power generation. Emphasizing the large-scale opportunity of biofuel production, the article highlights the importance of assessing the potential impacts of the production technologies for biofuels and in that regard, review the impact of biofuels on the three pillars of sustainability; economic, environmental, societal impacts, and subsequent performance. It is seen that despite the numerous advantages of biofuels, there are certain economic barriers towards commercializing biofuel production such as capital and feedstock cost, process yield, plant capacity, and availability. On the contrary, while assessing the social impacts of biofuels, the authors state that the biofuels will considerably aid towards societal sustainability because of the increased demand for agricultural feedstock which would result in higher income generation and creation of job opportunities particularly in the rural areas of poor countries resulting in the development of the agricultural economy. A concentrated effort towards the development of biofuel production technologies as well as an assessment of the biofuel production process in its design phase is required to optimize engineering and installation costs so that sustainability is guaranteed in all its aspects thereby benefiting humans and the environment in the long run.

2.4 Journal Article 4

Rosen, MA 2012, ‘Engineering sustainability: a technical approach to sustainability’, Sustainability, vol. 4, no. 9, pp. 2270-2292.

This article addresses the key components such as the selection of sustainable resources, use of sustainable processes, enhancing the efficiency of engineering processes while reducing environmental impact, and fulfilling other sustainability aspects like equity, economic affordability, stakeholder involvement, and appropriate land use to achieve sustainability in engineering and ultimately, the overall sustainability for human development. A key takeaway from this article is that pathways and options for engineering sustainability can be achieved by addressing the above factors. The advantages of various sustainable resources useful in engineering such as biomass, renewable sources such as solar, wind, geothermal energy with special emphasis on the use of wastes as inputs to engineering processes to reduce or eliminate the need for new natural resources are reviewed in the article. While discussing sustainable processes, the article acknowledges the need for a sustainable approach to design and manufacturing as well as the need to control and monitor the processes so that they remain sustainable in the long run. An interesting highlight of this article is its emphasis on using the Life Cycle Assessment (LCA) approach to assess the cradle-to-grave impacts of an engineering activity or a product on the environment (Figure 1). The focus on the need to transition towards Net-Zero Energy Buildings and Communities which generate the same amount of electricity as they consume finally illustrates how all the above-mentioned sustainable aspects such as resources, processes can be integrated to function as one sustainable system. This literature is highly relevant to the field of engineering sustainability as we get a comprehensive understanding of how the different aspects of sustainability can be integrated to get an effective and sustainable engineering output.

Figure 2. 1. Scope of life cycle assessment of a product or process, showing steps in the life

cycle vertically and inputs and outputs horizontally.

Source: Rosen (2012)

2.5 Journal Article 5

Sharma, R 2016, ‘Sustainable buildings in the hot and dry climate of India’, International Journal of Engineering Research and Applications, vol. 6, no. 1, pp. 134-144.

With regards to the increasing use of energy in commercial buildings in India and its detrimental effect on the environment due to increased greenhouse gas emissions, this article focuses on the critical attributes of sustainability in construction engineering by examining the model of sustainable buildings. By reviewing the sustainable building concept, the article highlights an engineering idea that can be employed across the world to reduce energy consumption and at the same time not hamper the development rate. Focussing on the built environment in hot and dry places such as in the city of Jodhpur in India, the article argues that Solar Passive technology needs to be integrated into the building materials and elements to mitigate the undesirable effects of the dry and hot climate so that the interiors stay warm in winter and cool in summer. Passive systems contribute to a great extent in achieving sustainability because they considerably reduce the size of traditional cooling or heating systems as well as the quantity of non-renewable fuels required to maintain optimum temperatures in the buildings. A key takeaway from this article which is in the interest of sustainability is that these buildings will balance all the aspects of energy use such as ventilation, space conditioning, and lighting through the use of passive solar technologies, renewable sources of energy, and energy efficiency machinery. Despite all the advantages of this technology mentioned in the article, there is a need to also address the limitations, conduct more research, and design practical solutions especially in the case of developing countries. However, it is worth noting that infrastructure needs and costs can be greatly reduced by enacting sustainable building policies and using an integrated approach to urban planning.

Journal Article 6

Sutar, BH & Gokhale, VA 2016, ‘Conceptualising sustainable transportation for the city of Pune, India’, International Journal of Engineering Research and Applications, vol. 6, no. 1, pp. 83-89.

With regards to the increasing traffic, road congestion, air, and noise pollution changing land-use patterns, and taking care of future generations in terms of environmental and financial capacities, this article stresses the need for the development of a sustainable transport system in the western city of Pune in India. With the city witnessing large-scale urban sprawl and rapid growth in car ownership, traffic congestions and air pollution are increasing at an alarming rate and in that regard, this article calls for the development of a mass rapid transit system in the city covering long distances. The article also surveys the primary advantages of such a rapid transport system such as a reduction in greenhouse emissions due to the reduced number of cars on the road, lower levels of pollution, reduced energy conservations amongst others. Furthermore, various initiatives like urban case study in Los Angeles. Los Angeles: School of Architecture and Urban       planning, strict control of parking spaces, and access regulations will influence people’s choice of transport and lead to an increase in the use of the rapid transit system. However, successful completion of this project requires the large-scale land acquisition and this issue must be resolved at the earliest.

2.7 Journal Article 7

Urbanic, K, Mikulčić, H, Wang, Y & Duić, N 2018, ‘System integration is a necessity for sustainable development’, Journal of Cleaner Production, vol. 195, pp. 122-132.

This article highlights the importance of integrating various engineering systems by utilizing the waste from one system as a resource for another and at a time when it benefits all to foster a sustainable, balanced and inclusive development. By reviewing the recent advances, the article provides a good insight into different areas strategic to sustainable system integration including water and energy issues, sustainable engineering solutions, environmental engineering and management, and large-scale sustainability approaches. By surveying different ways of integrating various systems about energy, water, and the environment about sustainability, the article has touched on many important aspects of sustainability in engineering. Various aspects of sustainable energy use like biomass as a replacement for solid fuels in iron-producing factories to reduce greenhouse gas emissions, using flammable waste gases instead of fossil fuels from the steel industry for the iron-ore sintering process have been mentioned in this article. By modifying those processes, these principles could even be applied in coal-based power plants and other factories responsible for the majority of greenhouse gas emissions and thereby contribute to sustainability. However, this article does not mention the limitations of any of these technologies as it is critical to consider the limitations of each process, assess the system as a whole, examine its sustainability about the triple bottom line framework so that we reap the benefits of a fully functioning, efficient and a truly sustainable system.

Towards Effective Sustainable Engineering Management Practices – Lessons from Literature

Increasing existential threats to ecosystem services, our future generations, and the environment calls for engineers across the world to not only provide solutions by solving problems within fixed boundaries but to also pay special attention to the upstream and downstream impacts of the proposed perfect solution. In other words, engineers must have an innovative and holistic approach to account for the whole of life impacts so that there is a net sustainability benefit in terms of its social, environmental, and economic aspects. Moreover, there is a need to practice responsible engagement with the community and relevant stakeholders from the private sector as well as various non-governmental organizations and eventually practice engineering to promote an environment where health, safety, and well-being of the environment and the broader community is of paramount importance. It is required that the governments, industries, and enterprises must embrace sustainable business models and integrate sustainable best practices into their operations so that sustainability engineering becomes the new corporate world order. Diffusion of renewable energy technologies must be accelerated to reduce dependency on fossil fuels and to facilitate this, the engineering cohort must actively work with government agencies to design relevant policies. Furthermore, the Life Cycle Assessment approach must be made mandatory to assess every engineering activity, process, and product from its infancy till handover so that the environmental, social, and economic impacts of that activity are addressed appropriately. Embracing “Design Thinking” in engineering products or activities is an efficient way of achieving sustainability because of the human-centric approach of the concept. It is recommended that practicing engineering professionals work closely with engineering students so that sustainability principles are embedded in the students and they help develop the responses to our sustainability challenges that will shape our current and future life. Table 3.1 shown below summarises the sustainability approaches in engineering.

Table 3.1 Sustainability Approaches in Engineering

Source: PennState College of Earth and Mineral Sciences (2018)

Conclusion

After reviewing the literature, it is seen that sustainable engineering is not only about designing and constructing economically efficient systems, but it is also about addressing the social and environmental aspects of sustainability so that we do not compromise the natural environment or the rights of the future generations to live and satisfy their own needs. Even though the current technologies are in their nascent phase, investments directed towards the research and further development of these technologies is the need of the hour. Furthermore, future engineers must adapt and increasingly engage with society so that the ultimate potential of sustainable engineering is realized and societies across the world become truly sustainable in all respects. Finally, it is worth noting that through sustainable engineering, we can further accelerate the shift towards overall sustainability since engineering activities are embedded in almost every activity in the society and plays a major role in economic development as well as enhancing living standards.

References

Hood, D 1999, Lecture Series for Engineers Australia, Canberra.

PennState College of Earth and Mineral Sciences 2018, Principles of Sustainable Engineering, viewed 09 December 2018, https://www.e-education.psu.edu/eme807/node/688

World Commission on Environment and Development 1987, Our Common Future, Oxford University Press, Oxford.

Herman Bailey

With a student-centered approach, I create engaging and informative blog posts that tackle relevant topics for students. My content aims to equip students with the knowledge and tools they need to succeed academically and beyond.