Attracting Motivating And Retaining Generation Y Management Essay

Attracting Motivating And Retaining Generation Y Management Essay Generation Y that closely referred to as millennial is latest member in the multigenerational workforce. In fact they are the newest and the last members of the workforce, born between 1982 and 2003. Although they grew up with technology and never knew a time without mobile phones and the internet, they have some values held by traditionalists like patriotic and willing to fight for freedom. They often think in bullet points and are ravenous researchers. Speed is important and they prefer rapid feedback. Moreover, they perform best when their abilities are identified and matched with challenging work. These years companies in different countries faced different challenges such as attracting, managing and retaining the new population of workers. Members of Generation Y have an incredible amount of talent but they also have incredibly high expectations about their work environment, growth opportunities and rate of advancement. In other hand, financial crisis leads to downsizing in companies. In spite of the fact that there might be a near-term surplus of labor, the lack of existing skillful workers is obvious. It is vital to companies focused on new generation of Y workers and supplies their requirements; besides, this question came to mind that is should they just discharge the issues as just another generation gap that will eventually weaken away. Ignoring the generation Y is impossible because of big size of its population. As a group, they are nearly as large as the baby boomers generation. As such, generation Y will make up an increasing part of your workforce. Generation Y has a lot to offer. They are confident, connected, optimistic and technical savvy. Generation Y would also be a growing part of your customer base and becoming increasingly influential factor that affects the buying process. We say that technology is becoming a critical factor for business success, on view of the fact that when these different workforces will work all together, the multi generational differences in attitudes, approaches, and styles related to work could create conflicts that in turn could considered as potential threats against reaching organizational goals. Besides, this situation will decrease or even destroy employees motivation, as we know motivation can be induced by the employer or reside within the employee and the key to motivating employees is remembering that not all employees are the same. In order to ac hieve motivation, managers must know each employee and must have a wide range of motivational techniques available, since each employee has a different set of values and personal experiences that brought them to where they are today. If management could come up with these actions, they could raise the organization towards its goals. In addition, for most companies retaining talent and developing future leaders are organizational goals, hence to meet these goals, companies must understand the needs of todays diverse workforces. Since failure to embrace these differences will result in not only having limited talent required for success, but also an employee population that is not engaged as they could be. Therefore, the level of engagement is critical to an organizations overall activities. In this study, we have investigated about behavioral differences that could lead to diverse motivational levels, retention strategies in challenging labor shortage, and the effected of leadership to management style in that by knowing about these conditions, the organizations not only could prevent the failures that are more probable for them, but also could achieve their goals more rapidly. As such to be successful in managing generation Y, employers needs to know how to attract, retain and motivate these leaders of the futur e. Literature Review Generation Y has been deeply affected by several trends of the 1990s and 2000s: a renewed focus on children, family, scheduled and structured lives, multiculturalism, terrorism, heroism, patriotism, parent advocacy, and globalization. Coincidentally, Generation Y has been socialized with several core messages: be smart you are special, leave no one behind, connected 24/7, achieve now, and serve your community (Martin, 2005). It likes to reject old-fashion media and advertising feeds. Playing video games, and watch DVDs are more interesting for them rather than TV programs. Those in Generation Y tend to live with their parents before college, plan to return to their parents home after college, and are less at home in the real world than in the virtual world in which they spend more than six hours a day online. As a consumer, Generation Y is likely to be independent and not brand loyal. Conventional inside the home, it leans to be fashionable and sophisticated in the marketplace (Wei ss, 2003). Generation Ys entrance in to the workplace would seem to present many opportunities in todays ever-more competitive organizations in which high-performing workers are an asset, and demographic shifts point to impending labor shortages. Generation Y workers would seem to be a timely addition. According to the Southard and Lewis (2004) generation are mostly goal- oriented; besides, they tried to develop and improve themselves. They strongly believed on financial and personal success (Breaux, 2003). According to the Lewis (2003) Y generation feel that they would be disposed to force into a job that they evaluate it attracting and vital whilst their knowledge about this new job is too low. Some of Generation Ys characteristics may make it easier to manage than Gen X. Generation Y tends to value teamwork and fairness and is likely to be more positive than Gen X on a range of workplace issues including work-life balance, performance reviews, and availability of supervisor (What You Need to Know, 2003). Moreover, Generation Y descriptors include attributes predictive of high performance. Generation Y workers are inclined to he sociable, hopeful, talented, collaborative, inclusive, and civic-minded. Besides, Raines (2002) mentioned that in order to be skillful with high technically knowledge, they try to be open-minded, achievement-oriented, and able capable to be multi-tasking. Cautiously they are optimistic and enthusiastic about their future. Generation Y is likely to have a solid work ethic and entrepreneurial spirit. Based on the Pekala (2001) it leans to not only respect talent, especially traditionalists, but also strength, collaboration, energy, compliance, good qu ality, and responsibility. Generation Y has a strong sense of company loyalty, is at least as satisfied with supervisors as are older workers, is as content as the others with the amount of praise received, and is as satisfied as the others with amount of vacation time and work flexibility or hours required. Additionally, Generation Y feels no more workplace stress than the other workers and is as satisfied as the others with retirement and health benefits (Saad, 2003). At the same time, Generation Ys entrance to the workforce seems to present some challenges. Although Generation Y workers tend to be more positive than Gen X about working in general, Generation Y tends to be less satisfied than Gen X with their jobs and employers. Present study tries to explain different dimensions of the dissatisfaction. Further, Generation Y is more open than Gen X to leaving for something better. Generation Y is likely to equate job satisfaction with a positive work climate, flexibility, and the opportunity to learn and grow more than any prior generation. Generation Y tends to have less respect for rank and more respect for ability and accomplishment. Cui et al. (2003) mentioned that Y generation like to trade more salary for job it thinks is significant at a firm where it experiences good feelings. Generation Y tends to value respect and wants to earn it. Having freedom to execute is a significant behavior in Y generation (Dealing with Your New Generational Mix, 2004). Additionally, Generation Y workers are likely to dislike menial work, lack skills for dealing with difficult people, and be impatient (Raines, 2002). Less than half of these young people form youngest generation like to introduce themselves as talent people who are ready to enter the work environments. The problem shoes itself when these young people technical talent are not fitted with communication skills, independent thoughts,and time managing (Pekala, 2001). In a survey by Mercer Human Resource Consultant (2002) it was disclosed that generation Y rating employers lower than other employees do on being treated fairly, getting necessary cooperation from others, and having opportunity to do interesting and meaningful work (The Next Generation, 2003). Furthermore, employees in generation Y like to have immediate enjoyment rather than investing for a long time and effort (Southard and Lewis, 2004); consequently, they preferred to invest on some especial projects. The Y generation employees like to be negotiators and questions in different events. Base Lewis (2003) cited that The forty hour workweek doesnt apply and how meetings become why meetings. Tulgan as an Intergenerational management expert explained the problems that challenge Y generation based on the Breaux (2003) as below: Generation Yers is like Xers on steroids. They are the most high-maintenance generation to ever enter the work force (Breaux, 2003). Discussion/ Issues Scheduling to attract, manage, and retain the new employees generation is a considerable challenge toward the companies. But its a challenge that companies simply cannot afford to ignore. Generation Y is nearly as large as the baby boomer generation, and is expected to have nearly as big an impact on business and society. Generation Y are said to be un loyal, have poor communication, are impatient and has no respect for authority and they spend to much time on the internet instead on concentrating on the real work ( Sprague and Caroline, 2008) Generation Y are already entering the workforce and their numbers will increase over time. The issues is the companies that dont figure out how to harness this growing resource are likely to find themselves at a distinct disadvantage, not only in the talent market, but in the broader market as well. After all, Generation Y is not just the next generation of workers; they are also the next generation of consumers, and as such will ultimately determine whether future businesses succeed or fail. Here are some specific things companies can do today. There are 3 main Generation Y issues and challenges faced by companies. They are: 3.1 Attracting The most pressing challenges are how to attract the Generation Y. The tasks is daunting because this generation has different attitudes and expectations that the other generations. Companies are thinking hard and fast on attracting the new millennium workforce. Due to the fact that generation Y has seen a lot of job turbulence, recession in their lifetime and they have seen their parents loosing their jobs, generation Y are more interested in taking their own responsibility for their own employability by constantly improving and building on their own job skills. As such, they are more interested in organization that offers it employees professional development, continuing education and career coaching. Some other benefits cited as valuable by generation Y are extra vacation time, access to health club and social gathering tied to the workplace. Generation Y also looks at the opportunity of career mobility within the organization as an attracting factor. While the market for employees is a competitive one, paying high range of salary is not a excellent strategy to find new skillful people. Find out how you can present your companies to these new workers to attract and retain them. Some companies are tackling the challenges of recruiting and retaining Generation Y using innovative strategies tailored to Generation Y characteristics. These methods which are contained supplying on site academic leadership, arranging official tutorial agenda to increase Y generation associability, and giving early chances to perform consequential job. To better reach Generation Y, some are streamlining the recruitment process and providing longer vacations after shorter service. As a same reason, some companies arrange inclusive intranet sites, for possibly conversion of unexploited managerial leave into cash, and letting conversion related to health into deferred reward accounts (Southard and Lewis, 2004). Some companies are literally going where Generation Y workers are, connecting with them through the media and locations such as Internet cafes and video game stores. Or they recruit Generation Y through on-site career-day seminars in which ranking personnel share their own success stores. Some companies are using their Generation Y employees as the first out reachers to peer Generation Y candidates in an effort to quicken the pace of recruitment. In this way, the companies aim to both engage their Generation Y employees more fully and to create a workplace ally for the Generation Y candidate (Employing Generation Why, 2004). 3.2 Motivating Based on the Herzberg definition, motivation is concluded from different definition such as the challenge of the works, with achievement, recognition, the work itself, responsibility, advancement, and growth. Dissatisfaction comes from the maintenance factors, which represent those lower-level needs that employees assume will be adequately met. High level administrators with acceptable work conditions are the samples of these kinds of workers needs. Few managerial or professional people would say these job factors motivate them most. Yet, the minute a boss or working conditions becomes a principal concern, factors such as interesting job content and opportunity for advancement lose their power to motivate. As a conclusion, executing a job in its different aspects relies on the satisfaction of both motivation and maintenance needs. Motivation level of a worker will affect by factors such as age, personal, outside environments, and the worker current life situation and career. For instance, steady employment and good pay often rank higher among all generations during times of economic uncertainty. When the economy is flourishing, employees tend to take these maintenance factors for granted; when unemployment and inflation are high, their principal motivators change. On view of the fact that when these different workforces will work all together, the multi generational differences in attitudes, approaches, and styles related to work could create conflicts that in turn could considered as potential threats against reaching organizational goals. Besides, this situation will decrease or even destroy employees motivation, as we know motivation can be induced by the employer or reside within the employee and the key to motivating employees is remembering that not all employees are the same. In order to achieve motivation, managers must know each employee and must have a wide range of motivational techniques available, since each employee has a different set of values and personal experiences that brought them to where they are today. If management could come up with these actions, they could raise the organization towards its goals. In addition, for most companies retaining talent and developing future leaders are organizational goals, hence to meet these goals, companies must understand the needs of todays diverse workforces. Since failure to embrace these differences will result in not only having limited talent required for success, but also an employee population that is not engaged as they could be. Work life balance can be offered in the form of flex time that would allow employees to work over one day, and work less hours on the next day. Employee growth and development could be management training programs that allow employees to advance their careers. Employee wellness programs would allow employees to stay physically fit, and the organization could have training programs to promote safe work habits. Employees need to be recognized for their work, and management could be trained to offer more praise to employees for tasks completed correctly. Organizations can make employees feel more involved simply by holding meetings where they have a voice for their ideas, and concerns from the employees can be heard by management. By utilizing these practices an organization could expect the organizational improvements, employee well being, and retaining the elusive Generation Y worker. 3.3 Retention Retention means that an employee work with the company until the end of their contract date and it is useful for both employee and company. If they find unfair situation in their job condition, they will explore a better opportunity and they will shift to the new job. Consequently one of the important duty of company manager is to find the best employee and try to keep them and prepare acceptable work condition for them. Pay the salary and extra rewards are not a way to bring satisfy to them. Compared to baby boomers and other generations in the workforce, Generation Y tend to be more concerned about meaningful work and relationships with coworkers, attitudes that are the key for employers to remember in retention efforts. Generation Y are hardly the first to long for a job that offers more than a paycheck and a way to fill their days. They are a socially conscious generation. Participating in charity work and green activites which help the environment improvement is a dream for Y generation. Sustainability and green are the hot words today. Generation Y are very interested in social and environmental happenings through the media as well as their employer. It can be as simple as spending a day rebuilding or renovating a house for somebody in the community, planning ways to make your office green, having local nonprofit come in to discuss volunteer or donation opportunities. With getting everybody inv olved by creating the emotional equity, making it a bit difficult for them to leave the firm. Recommendation The following has seen to be the strategies in attracting, motivating and retaining the generation Y into the work-force: Flexibility This can be seen in creating learning opportunities, sponsored learning capabilities, long range career planning, promote employee mobility within organization and cross country training opportunities. Work Life Balance This is a social aspect where flexible working schedules are design, developing a formal or informal networking circle for career development, hosting social or charitable events that is tied up to work. The work life balance initiatives were aspects such as paid leave to care for dependents, flextime, study assistance, eldercare, and time off to attend non work events, job sharing, telecommuting, on-site healthcare, and various other things the Generation Y workers are wanting in a career. Access to Technology -This strategy is linked to the organization adaptation of new technology in increasing work productivity. This is looked at where the workforce are equipped with state of the art laptops, access to internet, i-phones, PDA, video conferencing, e-learning and many more. This group of people would not live without cable television and access to mobile phones. With the focus on technology, flexible work schedules and spaces are also crucial to Generation Y. Offering the employees the benefit of arriving at work an hour early or later gives them the flexibility to schedule life issues such as daycare, eldercare or doctor appointment. Sense of purpose and meaning to the job -This stress on core values, rich corporate culture, sense of achievement and contribution to the achievement of organization goals. The generation Y also looks at branding. The organization brand plays a pivotal role in attracting the generation Y to join and contribute with the sense of belonging. Good Management i.) Management style Flat line management is top choice lately and for a lot of good reasons. Generation Y tend to be a bit self-centered. They will not stay in their job if they feel unsatisfied and there is no challenge role in their job. Generation Y particular were encouraged to find the perfect fit in their selection of everything from childhood activities to a college and they now seek a similar sense of place in their job. ii.) Mentoring and Feedback Generation Y has grown up hyper scheduled. Generation Y has been coached and tutored and guided and over-parented at every step of the way in their short lives so far. They thrive on one-on-one, personalized attention. Creating an environment that solicits input from employees demonstrates to them that their opinions are valued, ergo, they are valued. In return, they feel more valued and loyal to the company. Compensation-Fair compensation is still important to the employees. Organizations must offer an appealing compensations package include tangible rewards such as pay (base salary, stock etc) and benefits (i.e. health care, paid vacation etc) and intangible rewards such as learning and development and a satisfying working environment. Even though base salary and benefits constitutes hygiene factors for Generation Y, other parts of the compensation package will work as motivators. As the title and salary are no longer the number one priorities, Generation Y are more interested in self-fulfillment and work-life balance. 5.0 Conclusion The workforce deficit that is proposed to occur in 2014 is expected to be remedied by the generation Y workforce. However, problems with retention in employment with this group have been widespread across America. There is no set procedure to be implemented in order to retain this workforce; however the proposed model does encompass the problems associated with retaining these people. The model lays the foundation for organization specific procedures to be written from, and according to past experiences and research these methods should greatly reduce turnover in this group. Further research should be conducted to measure the effectiveness of these factors in employee retention of people who are categorized into generation Y. 6.0 Limitation Although recognizing and considering the different attitudes and needs of four types of generation could help the management for achieving the organizational goals, some limitation could be realized in this situation in that some researchers have found before too. As a case in point a new model of human resource solutions for achieving intergenerational interaction in organization that adopted from theories of Park (1950) and Kubler-Ross (1969) could be considered. Most of the researchers have divided the human resources into four different generation types and in turn they have detected and allocated some characteristics for each generation. It could not be considered these specifications would be the same for all the human beings in all the societies and task environment absolutely. Moreover, the combinations of different generation within the work environments or even societies are different from each other. Therefore, the outcome of studying in different situations could be somewhat different from each other. The generation groups who differ from the conventional culture usually cannot participate in defining the rules and standards used to make meaning. Hence, coordinating of these different group workers in such a task environment is often very controversial. The group that would be dominant among the other task groups in the work area usually spread their own beliefs and attitudes as if its views and approaches are universal and accepted by all other groups and members. Assimilation among these groups promotes self-alienation by engendering self-denigration where individuals differ from the neutral accepted norm. In addition it could provide the condition for covering or even demolishing individual beliefs and customs.

To What Extent Does Market Liberalisation Influence Competition In Gas And Electricity Sector

ABSTRACT Market liberalization is a modern concept adopted by many governments around the world. It has gained fame due to its ability to enhance efficiency and quality due to competition. This paper presented an analysis of the liberalization of gas and oil sectors in the United Kingdom. The analysis was limited to the level and effects of downstream liberalization of these sectors. The approach adopted by this paper included review of several sources that relate the various changes that have taken place in the UK electricity and Gas sector since 1980s. From the analysis of the concept of liberalisation and its application in the gas and electricity sectors in the UK, it is evident that it is directly linked to the introduction of competition. Liberalisation in these sectors involved unbundling of downstream infrastructure and activities, opening up the sectors for competition. The fact that UK produces most of its electricity and gas makes it to have full control of its downstream liberalisation. UK has effectively managed to introduce and maintain downstream competition enhancing the impact of liberalisation in the sectors. In addition, the separation of the activities of the sectors promotes free competition in the downward segment of the two industries as the government is in a position to offer independent regulatory framework that promotes liberalisation i n the sectors. INTRODUCTION Market liberalisation has been a major policy in most developed economies in regard to electricity and gas sectors[1]. The push of introducing competition through privatisation in the gas and electricity sectors emerged in the 1980s with the United Kingdom and the United States pioneering liberalisation in these sectors with a success[2]. The adoption of liberalisation in the gas and electricity sectors has resulted to shift from state owned vertically integrated monopolies to privately owned, liberalised market participants that operate under government regulations are well as environmentally conscious environment[3]. Consequently, the traditional approach to doing business in the gas and electricity sectors has been changed as the industries move from large dependence on the capacity to reliance on short-term market price signals, flexible energy policies and tentative environmental regulations[4]. Therefore, the ultimate approach adopted in introducing downstream liberalisation in the oil and gas sectors was through the introduction of various reforms by the government that initiated a shift from government owned monopolies to a competitive formation[5]. As much as the eventual benefit of downstream liberalisation is increased efficiency and competitiveness that results to lower prices for commodities in the market, government regulations play a central role in regulating operations of these sectors[6]. This paper will focus on analysing downstream liberalisation in the gas and electricity sectors in UK and how it promotes competition BACKGROUND INFORMATION ON ELECTRICITY AND GAS SECTORS IN THE UK The underlying principles for reforms in this sector was that privatisation of the sectors would provide better competition than direct state ownership[7]. The analysis of the two sectors was conducted independently for development of deeper insights of the level liberalisation as well as future prospects in terms of downstream competition.The Gas SectorUK is the third largest consumer of gas in the world. Its use of gas is not limited to a source of energy as its use as a fuel in electricity generation is on the increase as the use of coal is being dropped due to its heavy carbon footprint. Most of the gas used in the UK is sourced from its offshore gas fields; however, this is bound to change in the future as its deposits are diminishing[8]. The offshore production process in UK is very competitive with numerous fields exhibiting diffuse ownership.[9] Onshore pipeline operations are dominated by Transco as much as there are 11 other independent pipeline operators in the UK[10]. Dow nstream competitiveness is also boosted by over 100 wholesale gas outlets who mainly deal with gas shipment. Compared to other countries in Europe, competition in UK’s gas sector is very steep due to the boundless extraction potential in its offshore sources,[11] enhancing downstream competition. Before liberalisation of the gas sector in UK, wholesale gas contracts were restricted take-or-pay commitments, long-term and linked to international oil prices. The emergence of liberalisation in the 1990s resulted to competition with an upsurge of players[12]. This automatically resulted to reduced contract periods, take-or-pay commitments were lessened, and the price of gas is no longer linked to the oil prices. Furthermore, the UK has implemented measures that promote relationships between gas transports as a service and gas supply as energy has enhanced the level of stratification of the gas sector as more wholesalers enter into the business[13]. Subsequently, the process of production of gas and transportation of gas in the UK are separated and operated by different companies. The UK gas pipeline system is connected to the mainland Europe which functions in two ways. Most of the connection is used for gas export purposes to other European countries while during winter the pipeline is used for importation to bridge the demand gap as production is slowed down during those times[14]. The large size of Europe market relative to UK results to price arbitrage between UK and Europe, which in most cases increases the wholesale prices of gas in UK. The effect of low level of downstream liberalisation in the European gas sector makes the shift in gas prices in UK insignificant due to poor levels of downstream competition in Europe[15]. The 1972 Gas Act resulted to the merger of the coal gas supply industry to a government owned monopoly. This monopoly was reinforced by the fact that the government owned all onshore gas infrastructures. The liberalisation program was introduced in 1980s by formulation of the Oil and Gas Act of 1982 that aimed to introduce competition in the sectors[16]. This act passively promoted competition through the development of a better framework for awarding contracts[17]. The 1986 Gas Act initiated privatization of government owned BG Company as an effort of cultivating liberalisation and competition in the gas sector. However, real competition in the gas sector in UK emerged in 1990s. This was boosted by the Gas Act of 1995 that promoted unbiased competition in the gas market where production process and transportation process were separated and price control for storage and transportation was split[18]. This was an important aspect that promoted an increase in the number of players in th e field promoting competition.The Electricity SectorThe process of liberalisation of the electricity sector in UK was initiated in 1990[19]. This was initiated by splitting of the government owned Electricity Company into four companies[20]. Three companies were involved in generation while one was involved in transmission of electricity in UK. The two non-nuclear companies were privatised by 1991while the nuclear company remained a public company. The supply system was transferred to 12 regional private companies[21]. The main aspect of this shift of ownership from government to private in the electricity sector was the horizontal downstream severance, which resulted to competition. To enhance downstream competition, the pool system was introduced with the aim of centralizing trade in the electricity as well as develops a balance between demand and supply[22]. The pool system is a single price system that is defined by the bids offered by the generators. The government also introdu ced regulated reintegration of the electricity production and supply sectors as an approach to promoting efficiency. In 2001, the pool system was abandoned in favour of the wholesale market framework based on New Electricity Trading Agreements (NETA) that promoted integration of gas and electricity sectors as gas became a major fuel for electricity generation in the UK[23]. The introduction of NETA as the main regulatory system in the electricity sector enabled the development of effective linkages between the regulated monopoly of balancing and the competitive market. This system promoted segregated downstream ownership, which has reduced the number of regulations needed to guarantee non-biased access to the networks. Downstream competition is no longer managed by price regulations. Quality has become the main threshold of downstream regulations resulting to intensification of quality controlled competition[24]. There are numerous reasons that affect the process of liberalisation in this segment Firstly, the changes in the UK electricity sector were based on reforms that aim to develop competition through privatization[25]. The argument was that a pro-competitive industry is better that one that is devised based in regulations in managing maker powers. The privatization of electricity generation required numerous regulations, which require a long period of time to completely eliminate all the anti-competitive forces in the sector. Secondly, the use of regulations is slowly defining activities that promote completion in a sector that had a high level of monopoly. The competition problem in this sector emerge due to various activities require application of natural monopoly. These challenges are handled by sustained changes in the regulatory framework to promote complete downstream liberalisation in the electricity sector[26]. The strong vertical relationship in the electricity sector also results to complications where downstream competition problems affect upstream competition[27]. For instance, capacity problems at one production unit may require other production system to alter their production to compensate the deficit. Likewise, vertical competition is easy to distort due to availability of various avenues that may promote distortion of competition. This is common where the returns of the market are regulated below the monopoly price. As a result, competitive activities by former monopolies results to various challenges with regard to regulations[28]. The main successes realised in the reforms of the electricity sector in the UK is the implementation of the Ofgem proposal[29]. This proposal has resulted to extension of NETA by introducing tradable electricity, financial firm, and development of market based electricity production system. Generally, the electricity reforms taking place currently aims to completely eradicate regulation systems such that the downstream liberalisation in the electricity sector is fully realised to promote full-scale competition, where the operations of the sectors are fully controlled by the market forces[30]. DESCRIPTION OF ELECTRICITY AND GAS SECTORS IN THE UK From the above preview of what is happening in the electricity and gas sectors in the UK, it is evident that the sectors are moving towards the realization of complete liberalisation as regulations loosen. The development of regulations was initiated with a focus on price regulation but as time went by, they are mainly focussed on quality control. These changes have raised some issues that require detailed analysis to develop a comprehensive presentation of how downstream liberalisation in these sectors promotes competition.Downstream Gas sectorThis is majorly driven by the 1995 act provisions that define the activities of downstream gas sector and how competition is achieved. To be able to analyse the process of downstream competitiveness, it is necessary analyse the elements of the code as it determines how downstream competition in the gas sector is achieved. The first aspect of the code is that the shippers book supply to the national transmission system for a 12-month period whe re the price of supply are determined by location of injection point[31]. Gas is bought and sold by Transco based on flexibility mechanism to ensure no shortfalls are experienced as a result of shippers’ imbalances[32]. Transco is also responsible of ensuring the available inventory sustains peak seasons such as during winter[33]. Analysis of the offshore gas mining fields reveals intense liberalisation strategies that promoted competition. Specifically, the North Sea gas fields in UK are managed by 25 different operators that share 129 gas exploration licences[34]. The introduction of various players in the production process automatically eliminated monopoly, which has been a major problem in downstream gas liberalisation. However, government still regulates the production process of gas resulting to partial liberalisation in the production system[35].Downstream oligopoly in the gas sectorThe fact that gas supply is limited to a few locations that are mostly offshore and some imported from a few countries that are globally known for their huge amounts of gas reserves, there are very few players in the production and supply of gas in the UK. The ability of UK to produce its gas locally makes its supply chain manageable and directed to full liberalisation covering both upstream and downstream[36]. Oligopoly as a market structure in the gas sectors has been in existence in the UK since 1970s with its upstream market. The perception of oligopoly in the UK gas sector is founded on the fact that a market that is exposed to perfect competition has players that have fewer concerns about the operations of their counterparts. An action by one players results to a reaction by the other. For instance, if one firm is unable to meet its production requirements, another company increases its supplies to ensure the gap left by the other firm is levelled. Similar case is evident in product pricing where all the companies develop almost similar pricing partly regulated by regional needs within the UK[37]. Therefore, UK gas supply system is operated based on oligopoly of its 25 main supplies from the offshore gas fields where the final price of the gas is determined by the effects of informal collision between the suppliers. The collision price of gas in UK is also affected by the global oil price that is normally used as a reference point in most cases. The fact that currently there is no excessive dominance in the downstream segment as most government operations have been privatized; the prices charged by the wholesale suppliers is similar.Implications of liberalisation in UK’s Gas SectorBefore the concept of liberalisation was introduced in the gas sector in the UK, there was a high level of monopoly in the gas production system with the government owning almost all offshore gas fields in the UK[38]. Liberalisation has resulted to entry of new players with government monopoly being eliminated and competition taking its roots. However, downstream gas sector in the UK is not fu lly liberalised as in the case of upstream due to high levels of government regulations in an effort of ensuring supplies meet the demands and prices are regulated within acceptable standards. Furthermore, the high costs of investments needed in downstream segment of UK’s gas sector limit entry of new players resulting oligopoly as the main approach to downstream competition in the gas sector. Therefore, downstream liberalisation in the gas sector has opened it up to competition through processes that resulted to separation of the production chain from supply chain, introduction of competition through privatization of government monopolies, and development of regulatory frameworks that control areas that are still affected by natural monopoly[39].Downstream Electricity SectorThe production of electricity in the UK has undergone numerous changes since early 1990s when coal and nuclear dominated the generation system. New plants that operate using gas and nuclear have been inst alled while several coal and oil based plants have been shut down as the country embraces the spirit of green energy. The concept of liberalisation is also evident in the system as most of the new generation systems developed from the 1990s are privately owned[40]. The introduction of private companies in the power generation automatically resulted to the decline of dominance in the sector by national power and power gen which are state owned companies. This is evident as government dominance in power generation is lowest in the UK as compared to the rest of Europe. The success of UK electricity sector is founded in its effective regulatory framework that has protected it from the faults that were evident in California and Australia when downstream liberalisation was introduced[41]. The regulatory system adopted in downstream electricity sector in the UK is market based. Moreover, the UK downstream electricity sector is devised based on strong market incentives that promote entry of new players as a way of fostering competition[42]. NETA has successfully managed to keep the wholesale electricity prices low making it possible for new players to enter into the production system and compete favourably. The fact that the transmission system is still monopolised, downstream liberalisation is limited to production as much as the government has set various measures to ensure it does not interfere with downstream and upstream liberalisation[43]. The government has initiated various regulatory changes that promote competition between market players. The main aspect that promotes completion is the market share that is defined by a company’s effectiveness and competitiveness. The most important aspect of liberalisation in the electricity production system is to introduce competition as the main aspect of promoting innovativeness and efficiency among the players in the sector[44]. The success of UK system is founded in its approach that promoted competition amid independent producers and existing government firms. Competition as a result of liberalisation of the UK’s electricity downstream sector was promoted by development of regulation of monopolies in the sector with the aim of eliminating the traditional vertical integrated system. Liberalisation broke down the structure into three sections, which were downstream, transmission, and upstream where competitive markets replace the vertically integrated firms with government monitoring and regulation. The approach to liberalisation in the UK’s electricity sector was based on transmission system operators (TSOs)[45]. This system is based on the concept that ownership and transmission planning are integrated components of the market and system operation[46]. The state ownership of the transmission system is central to the success of the system as it ensure unbiased treatment of the firms involved in the downstream production of electricity. More so, the use of TSOs has enhanced coordination between the electricity producers enhanci ng competitiveness as information exchange is encouraged[47]. The electricity market is complex due to inability of the producers to store the produced power in large quantities and the existence of varied demand conditions. The need of electricity production system to meet the demand needs and flexibility makes the process of downstream liberalisation to be regulated to ensure system stability[48]. The lack of constant consumption pattern in electricity results to price volatility in the wholesale electricity market. These complexities tend to play down on competition as reliable supplies are used during peak seasons resulting to instances of oligopoly in the downstream electricity sector. Generally, there are some complexities in downstream electricity sector in UK; however, the introduction of liberalisation that has been subjected to continuous improvement to ensure liberalisation is fully realised has created competition as evident in the introduction of the pull system that resulted to competition lowering prices[49]. NETA is another major body that not only enhanced competition in the electricity sector but also resulted to further drop of prices as players increased promoting price competitiveness[50]. The recent vertical reintegration in the UK electricity sector where large electricity producing companies are acquiring retail distribution businesses this is another factor that will further enhance competitiveness in the sector as players develop links that offer them direct access to the final consumer of their product[51]. CONCLUSION The analysis of the concept of liberalisation and its application in the gas and electricity sectors in the UK reveals its direct link to the introduction of competition due to the introduction of many players in the downstream segment and the eventual opening up of the segments to market forces that are ineffective to monopolistic market structure[52]. The paper examined a historical account of the regulatory changes in the process of liberalizing the UK gas and electricity sectors providing links between liberal policies and regulations and opening up of the sectors to competition. The most evident aspect of liberalisation that promoted competition was the privatization of government monopolies in the production of electricity and gas in the country. Specifically, it was evident that the process of liberalisation of gas and electricity sectors is affected by the types of commodities that are handled by the players in the two industries. Furthermore, the fact that UK produces most of its gas and electricity locally makes it an interesting participant in downstream liberalisation. However, the uniqueness of the properties of electricity and gas require infrastructural systems that are managed by the government to ensure a level playing field for the downstream segments in the gas and electricity industries in the UK. References Primary sources International Decisions OECD. 2005. The Benefits of Liberalising Product Markets and Reducing Barriers to International Trade and Investment: the Case of the United States and the European Union. OECD Economics Department Working Paper 432, Paris National Legislation Great Britain. 2009. UK offshore oil and gas: first report of session 2008-09, Vol. 1: Report, together with formal minutes. London, UK: The Stationery Office Great Britain. 2011. The UK’s energy supply: security or independenceeighth report of session 2010-12, Vol. 1: Report, together with formal minutes, oral and written evidence. London, UK: The Stationery Office Secondary sources Books Armstrong, M., Cowan, S. & Vickers, J. 1994. Regulatory Reform, Economic Analysis and British Experience. Cambridge, MA: MIT Press Geradin, D. 2001. The Liberalization of Electricity and Natural Gas in the European Union. South Holland: Kluwer Law International Gao, A. M. 2010. Regulating Gas Liberalization: A Comparative Study on Unbundling and Open Access Regimes in the US, Europe, Japan, South Korea, and Taiwan. South Holland: Kluwer Law International Parker, D., 2012. The Official History of Privatisation, Vol. 2. London, UK: Routledge Smith, M. P. 2012. States of Liberalization: Redefining the Public Sector in Integrated Europe. New York, NY: SUNY Press Surrey, J. 2013. The British Electricity Experiment: Privatization: the Record, the Issues, the Lessons. London, UK: Routledge Articles Joskow, P. & Tirole, J. 2000. Transmission rights and market power in electric power networks. Rand Journal of Economics, 31(3), 450-487 Newbery, D. 2005. Electricity Liberalisation in Britain. The Energy Journal, special issue on European Electricity Liberalisation. Wolak, F. & Patrick, R. 2001. The Impact of Market Rules and Market Structure on the Price Determination Process in the England and Wales Electricity Market. NBER Working Paper 8248

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