Chinese Business Culture Essay

In accordance with our theories, it is necessary for Western exporters to learn about the Chinese business culture in order to be successful in marketing in China. There is an old Chinese proverb, â€Å"Enter village, follow customs†. The Chinese civilization has a long history and evidence shows that the way to get things done in China is to do it in the Chinese way. Chinese business culture is the key to the Chinese way of doing business and their style of negotiating (Fang 1998, p. 71). In this chapter, we aim to provide a framework to help those Western exporters get a better understanding of Chinese people’s business culture. 1. 0 Influence of Confucianism The Chinese culture encompasses diverse and competing philosophies, of which, Confucianism has been identified as the foundation of China’s great cultural tradition. Confucian values emphasis on interpersonal relationship and has provided Chinese business people with a relationship-based business approach (Bond & Wang 1983). An ordinary Chinese person would also agree that business and marketing in China is about relationships to a great extent. The principle of harmony and trust in Confucianism reflects an aspiration toward a conflict-free and group-based system of social relations, and also means that communication in a business negotiation should be harmonious. Further, the principle of hierarchy emphasizes that each individual should be conscious of her or his position in the society, which is also evident in a business negotiation in China, especially in a decision-making process. (Bond & Wang 1983) 2. 0 Guan Xi The Chinese term guan xi, rooted from Confucianism and translated into relationships or connections, is one of the most important traits of Chinese business culture, referring to the concept of drawing on connections or networks in order to secure favours in personal or business relations (Davies et al. 1995). It is a set of concentric circles of contacts, typically stretching from close family, to distant, to more distant relatives, to classmates, to friends, to friends’ friends, and so forth. In the Chinese business world, networking of guan xi is a peculiar advantage which can contribute a variety of commercial privileges and a great deal of business potentials for the marketer. This approach contrasts sharply with the deal-focused, task-oriented business cultures of North America and northern Europe (Gesteland & Seyk 2002). Therefore, to establish a great guan xi with the Chinese counterpart, partners, customers, even the Chinese authorities and government should be an extremely important marketing strategy of Western exporter that wants to be successful on the Chinese market. 3. 0 Establishing a relationship Being relationship-focused, Chinese prefer to deal with family, friends, and persons who they know well and who they can trust. They are uncomfortable talking business with strangers, especially strangers who also are foreigners (Gesteland & Seyk 2002). For this reason, the first step of business negotiation in China takes a lot of time outside of the office for socializing. The Chinese invite foreign guests for dinners, sightseeing, and other activities in order to facilitate the process of getting to know each other. The Chinese will want to know about this foreign company, its reputation and its management, and will be especially interested in the background, rank and personality of the individual foreign executives making the visit. A Western executive may become impatient with this step, both out of pressure to reach a deal quickly and out of the desire to separate business from the private aspect. However, what the Chinese are really doing at this stage is to test the sincerity, intelligence and deference of their prospective business partner before considering doing business with him or her. (Fang 1998) 4. 0 Attitudes to contracts Confucianism’s principles of interpersonal relationship and trust can even make many Chinese business people put relationships before contract (Alston & He 1996). Many Chinese believe that risk in the business can be minimized by developing a quality relationship of guan xi with their business partners. They are more likely to see a contract as a basis of relationship rather than a legal document. Most of the Chinese executives involved in international business realize that Western executives require formal documents in which delivery dates, responsibilities and procedures are explicitly stated and will respect the clauses which they have agreed to. While the Chinese tend to think that, once a relationship has been established, future problems can be solved without legal recourse. And the Chinese are inclined to prefer agreements that are less detailed than the Westerner. Because, for them, changes are anticipated and those detailed contracts can become relatively useless. (Alston & He 1996) Therefore, for a Western exporter, it would be wise to follow the Chinese model and only enter into business relationships with partners one knows and trusts. 5. 0 Face Another important Chinese cultural trait is the Chinese concept of face. In China, face is one’s good reputation in others’ eyes, one’s self-respect, dignity and prestige. If a Chinese is insulted, embarrassed, shamed or criticized in public, he or she will lose face. People can also give their counterpart face by making compliments and doing small favours. Giving face is an effective way to build a solid relationship (Gesteland & Seyk 2002). Face issue is also evident in a Chinese business negotiation context. In the business world, negotiations should be conducted to assure that the Chinese counterparts keep face. Because of face consciousness, a Chinese negotiator would refuse to make any concession. Some of the many delays that Western business negotiators encounter are caused by the Chinese counterpart’s unwillingness to risk losing face. A lot of evidence has shown that a great deal will be gained by helping the Chinese to win face and a great deal will be lost by any slight action which may cause the Chinese losing face. As a result, cognition of the Chinese concept of face plays a critical role in successfully doing business with the Chinese. (Fang 1998) 6. 0 Holistic thinking In general, the Chinese have a deductive cognition, which means reasoning based on theory and logic (Brake et al. 1995). The Chinese are highly deductive in their assessment of opportunities and problems. They usually want to be introduced to a new product, service or other business opportunity by way of a theory. This theory should provide them with a straightforward overview of the opportunity. The meaning and application of the principles of this theory should then be demonstrated with data and facts, although quantitative justification and analysis play a less important role in China than in many inductive Western business environments. Chinese people are likely to be resistant to business proposals which are not presented first in a logical form. (Brake et al. 1995) 7. 0 Speech acts As China has a high-context culture, hinting is an exceedingly common way of communication for the Chinese. Sometimes, Chinese speakers feel that they have been very frank with a clear hint, while the Western listeners still can’t catch the point at all. Elements of â€Å"atmosphere† surrounding the conversation, such as previous experience, hierarchy and many other cultural factors modify the literal meaning of a Chinese speaker’s sentences. For example, â€Å"I agree† might mean â€Å"I agree with 15 percent of what you say†. And â€Å"We might be able to† could mean â€Å"Not a chance†. What is said is often not what the listener is expected to understand. This is one of the biggest culture shocks in many business negotiations between the Westerner and the Chinese (Johnston 1991, p. 209).

Plato and Baudrillard Essay

The central argument of Plato’s Republic is that the just life is preferable to the unjust one. Socrates argues this point against his friends, who put up various objections to the thesis. The principal objection concerns appearances; because it is apparent to all that the unjust dissimulator reaps the fruits of the world, while the just and virtuous person, who refuses to compromise with the world, suffers poverty, rejection and general hardship. The argument of Socrates proceeds along the lines that appearances are liable to deceive. In Book 7 the argument has strayed into epistemology. Here again the argument of Socrates is that material knowledge is deceptive. In order to make this point he gives us a vivid and extended analogy of the cave-dwellers. The dwellers of this cave are sitting facing the wall of the cave, and their heads are constricted so that they must always be gazing at the wall, not being able to turn their heads at all. Behind them there is a fire, and between the fire and the dwellers a road. There are bearers who carry objects and walk along the road. The shadows of the objects, as well as those of the bearers, fall on the cave wall, and this is what the dwellers see, and is the sum of their visual knowledge. Plato is arguing that in the phenomenal world our knowledge is constrained. That we cannot reach the essence of things, and that our knowledge must be content with the hazy shadows of things. Because such knowledge is so incomplete, it is liable to produce error in our judgment of things. But Plato is not promoting skepticism. He extends the analogy to suggest that we may come to know the essence of things, but this is only after we have been released from the bondage of material existence. He goes on to consider the condition of the cave-dwellers once they have been released from their constraints. They see the objects with their profusion of detail, and the clarity overwhelms them, so that they refuse to accept the objects themselves as real, and instead insist that the shadows on the wall were more real. In the next stage of their enlightenment they are guided to outside the cave, and then they see things with the greatest clarity of all, and this by the light of the sun. Eventually they come to the understanding that all light originates in the sun. The suggestion that Plato makes is that there is indeed clarity of knowledge, and that it lies beyond the realm of the material and of appearance. The possibility itself is the saving grace of man. The preserve of wisdom is the shelter that man seeks as he stumbles through the morass of error. The Allegory of the Cave is highly pertinent to how Jean Baudrillard pictures modern society. In his essay â€Å"Simulations and Simulacra† he contends that modern society has lost all referential links to reality, and has supplanted reality with an artificial construct, which he terms â€Å"hyperreality†.   In terms of Plato’s allegory, the shadows on the wall become the starting points on which to construct a comprehensive reality. In Baudrillard’s general epistemology, all knowledge necessarily deals with the signification of things, and never with the essence of the things themselves. These units of knowledge are â€Å"signs†. A sign has no meaning in itself, but derives all meaning through its reference to all other signs. Therefore it has â€Å"self-referential† meaning only. True and total meaning can only emerge when the references have been taken to all other possible signs. But the finite capacity of man precludes this possibility, even though he always strives for total meaning, in order to overcome his limitation. He constructs simulacra, i.e. models that combine the signs in logical formulations, and meant to represent reality by similitude. But this is a doomed endeavor. The message of Baudrillard is no different from that of Plato. The shadows on the cave walls are merely signs of the real presences. Yet the cave dwellers are forced to build all reality from these shadows, and commit error if they try to limit reality to the shadows. The stress of Baudrillard is not on the possibility of true understanding, which nevertheless is tacit in his philosophy. He is more intent on pointing out that modern society has fallen into grave error by â€Å"the cartographer’s mad project of an ideal coextensivity between the map and the territory† (Baudrillard 170). The result in Western societies has been a â€Å"precession of simulacra† (Ibid 169). The original project, as taking place in the Age of Enlightenment, is the construction of simulacra, which he likens to maps which are meant to be co-extensive with reality, because atomic level detail is strived for.    The next stage is second-order simulacra, where the original simulacra tend to be copied, instead of taking reality as the first reference point. But the plight of modern society is even more serious than this, for here we have arrived at third order simulacra. This is when the signs are employed in order to simulate reality, so that all reference to the original is severed, and now it is â€Å"the map that precedes the territory† (Ibid). Because it is so Baudrillard claims that reality has been effaced for the dwellers of modern society, and has been replaced by â€Å"hyperreality†. In this completely simulated existence there is no room for advance any more, but only a meaningless spinning around of fads and fashions, or â€Å"the orbital recurrence of models and the simulated generation of difference† (Ibid 170). It is natural that Baudrillard emphasizes the plight of modern society. In Plato we find the seduction of material knowledge, and the consequences are to be imagined. Baudrillard is confronting the consequence face to face, because material knowledge has transpired as a social norm. This is why Plato is more concerned with telling us the possibility of true knowledge, whereas Baudrillard gives us a physiology of the false, because he sees it extant before him. Works Cited Baudrillard, Jean. Jean Baudrillard: Selected Writings. Translated by Jacques Mourrain. Palo Alto: Stanford University Press, 2001.

Postpartum Depression Pamphlet Assignment Example | Topics and Well Written Essays - 1000 words

Postpartum Depression Pamphlet - Assignment Example It is the professional calling of the medical staff to inform every pregnant mother well in time, as if she is among those 1 of the 10, likely to be affected by postpartum depression. Even if she is not the one, the knowledge about the salient features of the pamphlet is invaluable. The personal experience of Sebastian is an eye-opener for all the mothers. She recalls â€Å"After all, I had wanted this baby very much. So even though I thought I was prepared, I was caught off guard by the roller coaster of my moods† (p.1). So it is desirable for each woman to familiarize with the various issues related to postpartum depression and face the eventuality boldly and with fortitude. The list is not exhaustive and contains some introductory features. The medical fraternity knows that each individual is different and as such the issues have varying impacts, depending upon the level of progression of a particular person who needs the services. 1. About 10 percent of the women are going to suffer from postpartum depression. Imagine for a while that you are going to be one of them. If you are not one, it is still advisable for you to own the knowledge as you can always share this precious advice for the benefit of your friends and relatives when the occasion demands. Sebastian cautions â€Å"If new mothers and their families realize that depression and anxiety are possible, they may seek early treatment before the symptoms worsen† (p.13). Such mothers have a new responsibility of a life that has just arrived on Planet Earth. 2. Prevention is always better than cure and as such you need to identify the symptoms. 3. Notice the mood change and some sort of sinking feelings in the first or second week after the birth of the child. 4. The duration of the state of depression may be well up to twelve months barring extreme cases when it will be of longer duration. 5. From the point of view of treatment, each woman is different, each one is special. 6. PPD can be a transmitted phenomenon, meaning family history counts. 7. If the problem has been there during the first pregnancy, it may recur during the second and subsequent pregnancies. 8. Do introspection and you are likely to get answers for some of the issues. Your problem may be due to an unwanted pregnancy, a complicated child birth and a child being born with acute ailments. 9. The Joint Family System is an element of fiction now. The young couple believes in the concept of ‘it is my life and I’ll live it according to my choices’. Whether that approach is right or wrong is another issue. When the first flush of infatuation-dominated love is over, the realities related to the married life come to the fore. With the arrival of one little baby, the entire perception of life changes drastically. Now the mother has to face the caretaking responsibility of her newborn with little or no help, and she regrets for having isolated herself from the elders of the family. When the outside world is not actively co-operating with her in her hour of need, she develops postpartum depression. 10. Hormonal changes that happen during and after pregnancy are the contributing factors. 11. Bouts of depression are normal part of life. The new mother thinks about the consequences of enormous responsibility that she has been

SCREEN CULTURE Essay Example | Topics and Well Written Essays - 1500 words

SCREEN CULTURE - Essay Example Besides, they use this for program scheduling of day to day programs at certain times of the day or night. In this essay, it argued that genres are the cultural categories that operate within the television industry. It is also argued that very little research has been done on screen culture to explain the role of genres. This essay, therefore, looks at the television media genres by inclusively using contemporary cultural theory comparing it to the traditional one in order to find the answers to these arguments. This lack of theoretical exploration is explained by a number of factors. Most scholars view the entire body of genre theory as sufficient enough to explain the genre in any medium. The film genre does not account for some of the industry and audience norms which are uniquely identified with the television. In particular, the major question which motivate scholars in the current days is: how do these television programs compare to the historical systems of politics and power? The solutions to this questions have not been adequately given. This is because most television genre scholars seem to be contented with the initial research done. The few who seem to care have been quickly convinced into buying the idea of the film and literally theories, in which, they seldom notice the errors made and recommend it for more research to be done. Most traditional approaches to the television genres have relied on a few assumptions which should be studied and resurfaced in the contemporary theoretical paradigms. Traditionally, the genre has been looked at by the media scholars as a component of the text using various guiding questions. This seeks to identify the core elements entailed in a particular genre by looking at the texts in order to cripple any formal mechanisms that constitute the viability of that genre. Another approach, which most probably is common in the media studies raises the questions of interpretation by critically studying

Approaches to banking regulation Essay Example | Topics and Well Written Essays - 1250 words

Approaches to banking regulation - Essay Example As the search for the best supervision and regulation approaches continues, it is essential for the involved countries to conduct thorough assignments on the fundamental principles to employ in order to attain financial system stability and growth (Barth et. al. 2004, p.208). This paper looks into two banking regulation approaches, which are the ring-fencing and total separation strategies. Approaches to banking regulation Ring-fencing Ring-fencing is a strategy that structurally distinguishes retail banking activities from wholesale and investment bank activities. Ring-fencing mainly focuses on ensuring that provision of services is not interfered with in case of a bank’s failure. Secondly, ring-fencing aims at making it easier and less costly in resolving banks. Thirdly, this approach controls incentives for excessive risk-taking. Apart from the three main objectives of ring-fencing, this approach offers several benefits such as insulating vital UK retail bank services from global financial crises, it allows for an easier monitoring of banks under ring-fencing and in a much transparent way. The other possible benefit is the ability to promote competitiveness because UK retail banking can be made safer (Bertsch 2012, p.2). The ring-fencing approach offers a number of advantages compared to the total separation approach of bank regulation. To begin with, ring-fencing has the potential to preserve diversification benefits because it allows for an efficient use of capital, and probably lower funding costs. The second advantage is that the ring-fencing strategy preserves a higher degree of operational synergies. Thirdly, ring-fencing approach offers the advantage of having reduced legal obstacles in comparison to full separation. In addition, ring-fencing approach can be implemented with the existing European Union framework, which includes foreign banks within UK subsidiary (Independent Commission on Banking 2011, p.35). In 2011, the independent commission on banking recommended retail ring-fencing of UK banks over total separation. The main aim was to isolate banking activities in areas where continuous provision of services is of the essence to the economy and customers at large. Settling on ring-fenci ng approach would create a scenario of mutual advantageous interaction between various bank operations, which produces a higher effect than when the operations are carried individually (Independent Commission on Banking 2011, p39). Ring-fencing bank regulatory approach offers a number of restrictions to ring-fenced banks. The first restriction is that banks are not permitted to render services that are not offered to customers within the EEA. The other restriction prohibits such banks from offering services that lead to an exposure to a non-ring-fenced banking institution or non-banking financial organization. Moreover, ring-fenced banks are not allowed to offer services that would lead to trading book asset such as investing in stock, and corporate debt securities. Apart from these restrictions, under this regulatory approach, they are restricted from offering services that would influence the necessity to hold regulatory capital against counter-party credit risk or market risk. Th ese risks include the purchase or origination of derivatives. Finally, ring-fenced banks are prohibited from offering services that relate to the secondary market activity (Singh 2007, p.178). In ring-fencing

AsianAmerican Study-how intersectional identities must shape an Asian Assignment - 1

AsianAmerican Study-how intersectional identities must shape an Asian American agenda for SOCIAL CHANGE and what that agenda should look like in the 21st century - Assignment Example This is whereby, coupled with other discriminative strategies, those that are in the system of oppression focus more on the fact that the victim is a foreigner. This paper’s focal point is to outline how these intersectionalities are constantly being used in various regards in the discrimination of the Asian American community. The Dream Act refers to an existing piece of legislation that is bipartisan. It relates to young people that have grown up in the United States, through its high school system but their future has become bleak as threatened by immigration laws. It should be noted that 11% of immigrants into the U.S.A are Asian American (Havard Kennedy School, 29). Although the Dream Act focuses on a number of requisites in order for one to be registered as American, this paper, only focuses on two. Firstly, the provision that one must be of sound moral character has been a point of confusion for Asian Americans as it is not specific enough. There have been cases where Asian Americans faced deportation and proved in accordance with the law that there were of good moral conduct but still emended up on the blunt side of the law. Secondly, the provision for military enlistment is one that has been used to lure many Asian- Americans into the military only to have them do it in vain as they never acquire registration. In the same light, the immigration laws have for the most part been used against Asian Americans. This beats the logic of legislation because rather than shed light on the issue it has cast the Asian American community further in the dark. As previously stated the moral standing clause is one that is not sufficiently in use as even Asian Americans that have met all assertions, of it, still face deportation. Furthermore, the immigration laws are not fully effective to deal with some rarities. For instance as in the case of Tam Tran, a 24 year old university student, the country upon which one may be deported to (on the

Jean Piaget Essay Example | Topics and Well Written Essays - 500 words - 2

Jean Piaget - Essay Example noted that all children develop through all these stages with a childs understanding of the world changing as a child moves from one stage to another. In his study, Piaget was able to prove that choices that people make in life are dependent on the developmental stage that a person has reached (Pressley and McCormick, 2007). This is after the psychologist proved that because children and adults think differently, the choices that people make depend on whether an individual is still a child or an adult. Certainly, Piagets theory of human development has significantly influenced the choices I have made in life. I have particularly used Piagets child intelligence and thought process to guide for pursuance of education as the ultimate means of succeeding in life. For instance, I did not take education seriously during my childhood days. To me, everything was normal because I used to think mostly in an abstract manner. In fact, I used to find it difficult going to school since I did not view education as something important in life. Such thought process continued until middle adolescent when I began to learn of the importance of education in the present day society. Piagets findings can explain the sudden change in my thought process. In this case, Piaget demonstrated that, once an individual has reached the formal operational stage, the individuals moral decision-making process is refined (Van Blerkom, 2008). Similarly, I began to realize the importance of education upon reaching at adolescent stage. Nevertheless, as much as I was aware of the importance of education, the fact that I still had childhood thinking prevented me from studying hard. However, as soon as I approached 16 years old, I realized that, for me to succeed in life I have to study hard and obtain good grades. Otherwise, my life will be a misery. My understanding of the importance of studying hard to perform well in class can be explained by Piagets developmental stage theory. In this regard, Piaget

Case Management Strategies Essay Example | Topics and Well Written Essays - 1000 words

Case Management Strategies - Essay Example Qualification in case management is the provision that requires case managers and support staff to have the necessary expertise to handle cases. Caseload size involves the magnitude of cases that requires handling at the same time by the manager and the support staff. Support staff is other staff members such as nurses, social workers who assist the manager in handling patient cases. Training and education in case management is offered to the staff members to equip them with skills and knowledge required to handle client cases. Finally, supervision entails following up on the patient to ensure that they are doing what is prescribed by the intervention program. 2. Intake is the initial step in case management. In this part, I would only ask the client their name, the problems they have and who referred them among other basic questions. In the assessment part, I would evaluate the client’s condition by exploring the historical background to his/her problem and knowing all the dimensions of the problem. Next will be explaining to the client the services I provide and discuss the contract including issues of informed consent. The next step would be goal setting where in collaboration with the patient, we would set attainable and appropriate goals. This would be followed up by the intervention planning, which is the actual action of implementing helpful strategies (Cameron & Turtle-Song, 2002). In case the case I am handling requires a referral, I will refer the patient to helpful social networks and agencies for assistance. Then, I will continuously monitor the progress of the client to ensure that all the goals are met. In re-assessme nt, it would be about evaluating whether the goals of the strategy have been met. Finally, the outcome evaluation would involve meeting the outcomes against the goals set at the beginning of

Goldman Sachs - Management Analysis Assignment Example | Topics and Well Written Essays - 1750 words

Goldman Sachs - Management Analysis - Assignment Example It has been noted from the annual report of the company that the main focus of the company has been at four key areas. The four key areas have been the creation of the jobs as well as the overall growth of the economy, building up of the economy as well as stabilising them, enhancing the opportunities of education and thus glorification of the services as well as expertise. The main aim of the paper has been to analyse the company’s decision making with the help of the management theories. Among the several management theories such as the Taylor’s Rational Goal Theory, Fayol's and Mintzberg's Internal Systems Theory, Mayo’s Human Relation Theory and Porter’s Strategic & Peters’ Cultural Theory; the research paper will make use of the two theories such as Mayo’s Human Relation and Fayol and Mintzberg’s theory. The rationale behind choosing Goldman Sachs for the purpose of the study is that during the period of Lloyd Blankfein, CEO and C hairman of the company, it was accused of fraud by the SEC (Securities and Exchange Commission) in the year 2010. It can thus be identified that the performance of the company during this period has been comparatively inferior. Therefore, through this report, it will be aimed at understanding the kind of decision that the management followed that led to such a huge turmoil. The report will try to comprehend the reasons of failure during the rein of Lloyd Blankfein. The analysis will be conducted using the various theories that have been identified and finally recommendations will be provided with regards to how the management can improve its managerial decision making capabilities. Managerial Decision Making At Goldman Sachs The main business of the Goldman Sachs has been to invest the money belonging to the large organisations as well as the wealthy individuals. It has further been identified that the firm tends to put its own funds as well at risk. Organisational Structure Lloyd B lankfein has been the Chairman and CEO of the company since the year 2006. Lloyd Blankfein by nature has been quite affable and smart. His five years tenure in Goldman Sachs can be classified into three different groups. He experienced unstable growth till early 2008. Furthermore, the financial crisis that took place because of the breakdown of the Lehman Brothers was also evident during his ruling period. The bank, further expected to recover in the year 2009, despite various regulations that was formed after the post-crisis and the fall in their reputations. The other person who has been working with the company under Mr. Lloyd Blankfein is David Viniar who has been the Chief Financial Officer and has served the company for more than ten years. Mr. E. Gerald Corrigan has been the Co-chair of the Risk as well as Global Compliance and Controls Committee. Mr. Henry Paulson was the Chief Executive of the Goldman Sachs prior to Lloyd Blankfein (Steinert-Threlkerd, 2009). Alan Cohen has been the Compliance Officer at Goldman Sachs, John Rogers has been the Secretary and Gary Cohn is the President as well as the COO (The Official Board, 2011). It has been evident that the company has outperformed in its operations in most of the areas. It has been positioned among the best three underwriters. It is because of the consistent and best performance along with the commitment of the top management towards the municipal business as well as the public sector. The company also has

The Destruction of the Berlin Wall Coursework Example | Topics and Well Written Essays - 5000 words

The Destruction of the Berlin Wall - Coursework Example The Berlin Wall was constructed in 1961 in an attempt to prevent the crà ¨me da crà ¨me of East Germany from going to West Germany. It was built post World War II and inaugurated on the 16th August of the same year. The eastern sector of Berlin was under the control of the Soviet Union and the western sector under United States, France and Great Britain. Technically and officially East Germany also known as German Democratic Republic (GDR) was a communist state. It existed for around forty one years under Soviet control spanning it through the 1949-1990 eras. Soviet sector constituted all the major hubs including Friedrichshain, Kreuzberg, Mitte, Prenzlauer Berg, Kreuzberg, and Lichtenberg; it was also the biggest o the spot and the whole idea was to prevent an imminent brain drain, departure of well educated talented elite from east Germany. It also aimed at keeping at bay various spy centers and other organizations from intruding.It was then when a threat of yet another Great Dep ression engulfed Europe and Germany constituted the league of those severely affected.   A majority of German city had been effaced while the transportation system remained shanty. Seldomly, refugees from the East would be seen moving to the west in search of a sound society ready to work for some measly money in this bid. In what many perceive as a rare move, the allied victors sought to rehabilitate and rebuild the destructed cities. The move aimed at assuaging the economic crisis and was popularly called the Marshall Plan.... It existed for around forty one years under Soviet control spanning it through the 1949-1990 eras. Soviet sector constituted all the major hubs including Friedrichshain, Kreuzberg, Mitte, Prenzlauer Berg, Kreuzberg, and Lichtenberg; it was also the biggest o the spot and the whole idea was to prevent an imminent brain drain, departure of well educated talented elite from east Germany. It also aimed at keeping at bay various spy centers and other organizations from intruding. It was then when a threat of yet another Great Depression engulfed Europe and Germany constituted the league of those severely affected. A majority of German city had been effaced while the transportation system remained shanty. Seldomly, refugees from the East would be seen moving to the west in search of a sound society ready to work for some measly money in this bid. In what many perceive as a rare move, the allied victors sought to rehabilitate and rebuild the destructed cities. The move aimed at assuaging the economic crisis and was popularly called the Marshall Plan. It was named after the then U.S Secretary of State George C. Marshall, the first one to make the call for the reconstruction of Europe apparently. His successful strategy later earned him the Nobel Peace Prize. (Harrison) In another move, on July 1958, the East Germany Congress announced all agricultural products be collected and distributed at whole sale prices. The move aimed at improving industrial output and formed the basis of the seven year economic stimulus which was originally meant to bring the PPC of East Germany at par with that of West Germany. The plan also severed trade and gas supply routes behind the Iron Curtain and the situation become even worse. The policies in the East could not

Thinking Fast and Slow Essay Example for Free

Thinking Fast and Slow Essay 1. One of the book’s more stunning examples of the priming effect takes place in an office kitchen. Employees would typically make themselves coffee or tea and in return would drop a small fee into an â€Å"honesty† box. Researchers designed an experiment that involved alternating weeks where either a picture of a flowerpot or a picture of a set of eyes was in the room. Donations were checked after ten weeks and researchers found that significantly more money was contributed on weeks in which the eyes were in the room. Given this, and other examples of priming, do you find it feasible for organizations to devise methods that attempt to prime their employees to perform or react in a desirable manner? 2. One of the errors of System 1 is known as the framing effect. This refers to the ability of the way in which a problem is presented to influence an individual’s solution to it. Kahneman’s example in the book involves doctors at Harvard Medical School. In seeking their opinion a question is framed using either survival rate or mortality rate, with relative figures being the same. Despite this, 84% of the participants selected surgery that referred to a patient’s survival rate. Knowing the effects of framing a question either too broadly, too narrowly, or incorrectly all together, what are measures that organizations can take to ensure that their employees understand how to properly frame problems in such a way that the companies’ primary objectives are being targeted? 3. The book advocates that in our search for a causal link between occurrences in our lives we often dismiss the legitimacy of luck’s involvement in our success. To demonstrate this point, Kahneman points out that the gap in corporate profitability and stock returns between high performance firms and less successful firms dissipates to nearly nothing over time. In fact, over a 20 year period the returns of companies that originally had the worst ratings went on to earn much higher returns than their counterparts, which he refers to regression to the mean. Given that we may not necessarily be as talented as we perceive ourselves to be, what are steps that organizations can take to ensure that top brass is better able to understand what may actually be creating the company’s success?

Company Contract: Constitutions and Director Role

Company Contract: Constitutions and Director Role Question 1. Is the contract enforceable against Beanstalk Ltd owing to the fact that Jack did not have the capacity to enter into that kind of contract? Employees of a company have a clear mandate on their powers and this are usually spelt out in the in the articles and memorandum of association of a given company. The corporation act has come in handy to address this scenario. Section 124 dwells on the powers of the company and its legal status. Sec 124 (2) provides that a company legal capacity to do a particular thing is not affected by the fact that the company interests are not served by doing it. Section 125 of the CA is to the effect that a company constitution may have an express restriction on the way a company may exercise its powers. Suffice to note that the exercise of a power by the company is not invalid merely because it is contrary to an express restriction or prohibition in the company’s constitution. Subsection 2 is to the effect that an act done by the company is not invalid merely because it is contrary to or beyond any objects in the company’s constitution. Sec 126 is to the effect that an agent appointed by the company and he has the power to make, vary, ratify or discharge a contract. The person may be exercising express or implied authority and on behalf of the company. The power may be exercised without using a common seal. The court always takes the view that the duty to act in good faith in the best interests of the company means that the directors must act in the interests of the shareholders as a collective group as illustrated in the Greenhalgh v Arderne Cinemas Ltd[1]. In addition to the above sections, section 128 entitles one to make assumptions in section129 in relation to dealings with a company. The company is not entitled to assert in proceedings in relation to the dealings that any of the assumptions are incorrect. Section 130 on the other hand is to the effect that a person is not taken to have information about a company merely because the information is available to the public from ASIC. Section 128(4) is to the effect that a person is not entitled to make an assumption in section129 if at the time of the dealings they knew or suspected that the assumption was incorrect. Section 129(b) details the presumption in section 128. Section 129(2)(b) is to the effect that one may assume that a director has authority to exercise the powers and perform the duties customarily exercised or performed by a director or company secretary of a similar company. In our case scenario Beanstalk is obligated to pay even if Jack surpassed his powers unless they can prove that Giant ltd were aware of the limitations imposed on jack and they disregarded them. The Beanstalk constitution was available in the public record and Giant ltd had an obligation of knowing and complying with the con tents Section 130 of the CA serves to address the issue of notice on the limitations imposed on the directors or agents of the company. It provides that the company cannot escape liability on the premise that the person dealing with the company should have been aware of the limitations. The two Sections just before section 130 are of the following effect: Section 128(4) is to the effect that a person is not entitled to make an assumption in section129 if at the time of the dealings they knew or suspected that the assumption was incorrect. Section 129(b) details the presumption in section 128. Section 129(2)(b) is to the effect that one may assume that a director has authority to exercise the powers and perform the duties customarily exercised or performed by a director or company secretary of a similar company. One also need to look at the organic theory which states that where the agents of the company acts within the boundary of powers conferred to them by the company constitution or replaceable rules, then they are deemed as being the company itself as was illustrated in Northside Developments Pty Ltd v Registrar-General[2]. But this may always turn out not to be true as was espoused in the case of Smorgon v Australia and New Zealand Banking Group Ltd[3], where it was observed that such an act requires the attribution of mental states to corporations Company’s legal capacity At common law the company could only enter into legal obligations only if its’ constitution so authorizes. Any part to the contract was deemed to be aware of any restrictions contained in the constitution of the company. Capacity is catered for under Corporations Act 2001. Section 124 accords the company the same legal capacity as an individual and this encompasses power to make an agreement. S 125is to the effect that performance of an act including entry into an agreement by the company will not be invalidated merely on the premise that its beyond the power of the company’s constitution. Thus Giant limited will not be stopped from staking it claims of payments merely because Beanstalk limited had made it constitution public as provided for under s125. Section 128 and 129 are to the effect that where one enters into any dealing with the company on the belief that he is dealing with the right person, then the company will have to honor its obligations. Thus despite the constitution being made public, section 129 and 130 states that the company is still bound by the acts of it officers who are duly appointed to carry out such a task. Thus beanstalk will have to prove that despite Giant ltd being aware of the limitations, they violated what was in the public domain. Question Two Pan Ltd is a company without a constitution. At a members meeting five items of business were passed as special resolutions and placed in a new constitution of the company. These were: that dividends can only be paid if they have been recommended by the directors and declared by the members; Dividends Dividends are the payments made out to shareholders when the company is a going concern and if the directors have approved such payments. They can only be paid if the company assets are sufficiently in excess of its liabilities immediately the dividend is declared and if the dividend is fair and reasonable to the company shareholders as a whole and this does not prejudice the company ability to pay its creditors. This is governed by sections 254T and 254U. (b) That the transfer of shares in the company requires the approval of the directors; Transfer of shares A shareholder in a company who wants to terminate his relationship with the company may decide to offload his shares by way of sale. The shareholder may encounter some difficulties if he wants to sell the shares to an outsider of the company. Some of the difficulties which may arise under the replaceable rules are: The directors have the discretion to refuse to transfer the shares and There might a restriction in the company constitution (if any) on shares transfers. Sections 707. Section 140(2) stipulates that a member may refuse to be bound by modifications after becoming a member if such a modification imposes or increases restrictions on the right to transfer the shares already held by the member, unless the modification is made: or (i) in connection with the company’s change from a public company to a proprietary company under Part2B.7; or (ii) to insert proportional takeover approval provisions into the company’s constitution. Thus the discretion of shares transfer lies with the directors unless a contrary intention as envisaged in section 140 (2) is adduced. that Wendy Weird be a director of the company for life; The CA doesn’t set the specific time for retirement of directors. One can only fail to serve as a director under the circumstances contemplated in Part 2D 3 of the CA. this can be removed by members through the annual general meeting, through resignation or incapacity. To this end one can be a director for life. Those directors of the company are to be appointed by Wendy Weird; A director may appoint another director under section 201 H (replaceable rule—see section135). A person can be appointed as a director with a view of the company establishing the requisite quorum for a directors meeting. Section 201J provides that the directors of a company may appoint 1 or more of themselves to the office of managing director of the company for the period, and on the terms (including as to remuneration), as the directors see fit. To this end Wendy can be appointed under the conditions envisaged in the above sections. That the directors may issue the company’s shares only with the approval of the members. Directors have the powers to issue new shares as provided for under section 254D. Before issuance of new shares of a given class, the directors of a proprietary company must offer them to the existing shareholders of that class. The directors must give the shareholders a statement setting out the terms of the offer. Question Three In order to obtain the funds necessary to expand its business Growth Ltd is to make a $M20 share issue. Advise the directors of Growth Ltd over the following matters. REQUIRED: Can the funds be raised from existing members or anyone else without a prospectus? (2 marks) There are several ways of raising funds by companies in Australia. Public companies (i.e. those with more than 50 non-employee shareholders) can raise funds from the general public by issuing securities. Private companies (ie proprietary limited companies that have no more than 50 non-employee shareholders) on the other hand can raise funds: From existing shareholders and employees of the company or a subsidiary company, and from the general public if the fundraising does not require a disclosure document. Section 708 is to the effect that any personal offers of a body of securities do not require disclosure to the investors. But this doesn’t apply to offers which might amount to indirect issue. Vital documents one is supposed to give potential investors when raising funds? As a general rule of procedure, if a public company is desirous of raising capital or offering securities for sale (for example shares or debentures) a disclosure document must be availed to the potential investors. This is document whose main purpose is to describe all regulated fundraising documents for the issue of securities (for example shares or debentures). All companies which are allowed to raise funds can use a prospectus. A company also relies on an offer information statement or a profile statement and this is informed by the type of fundraising one intends to carry out and whether the restrictions imposed by virtue of using these documents are satisfied. Offer information statements An offer information statement (OIS) has in it a lower threshold for disclosure but can only be used for fundraising up to $10 million. If the company intends to use an OIS then it is required to include a copy of an audited financial report with a balance date within the last six months. Profile statements This is a document which sets out limited key information in relation to the company and the offer. This kind of statements can only be relied upon if ASIC has approved their use. To this end a company can raise funds from without reliance on the prospectus. In summary, a disclosure document is not required when: an offer is a personal offer, and if: offers or invitations have been made to fewer than 20 persons in the previous 12 months, and the new offer will not result in more than $2 million being raised in that 12 months; Note: you must not advertise the offer when you rely on this exemption the offers are made to specified people who are presumed not to need disclosure because of their financial capacity, experience, or wholesale status; the offers are made to current holders of the securities; no money or other form of payment is payable for the securities; other disclosure regimes under the Corporations Act apply (i.e. takeovers, schemes of arrangement); The offer is made by certain types of financial institutions. Will the directors be safe from prosecution if they provide to investors in a prospectus everything they know that is relevant about the investment? (2 marks) The Corporations Act does not detail out everything that ought to be included in the prospectus. But section 710 is to the effect that a prospectus must contain all information that the investors (and their professional advisers) would reasonably require, and reasonably expect to find in the prospectus. This information should be availed so that the investors can make an informed assessment of material matters relating to the company and these do include: †¢ The assets and liabilities, financial position, profits and losses and prospects of the company. †¢ The rights attaching to the securities being offered. Some other information such as terms and conditions of the offer, disclosure of certain payments made to the directors and advisers in connection with the IPO and the expiry date of the prospectus must be contained in the prospectus. To this end the directors will be immune from prosecution as they will not have breached any requirement bestowed on them. If the company issues a prospectus and the directors then become aware that there is a false and misleading statement in it, what alternatives are available to them under the CA? (3 marks) Where a company directors have become aware of a false or misleading statement in the prospectus which has already been issued to the public, the can petition the ASIC to issue Stop Orders. Though these are the preserve of the ASIC to issue this can be sought so that the issues can be rectified on time. Stop orders: what they are and when we will issue one section 719 A stop order is an administrative mechanism that allows ASIC to prevent offers being made under a disclosure document where we believe it contains: a misleading or deceptive statement an omission of information required to be provided under the legislation, or a new circumstance has arisen since the disclosure document was lodged. Where a stop order is issued on a disclosure document, then the company is not allowed to offer, issue, sell or transfer its shares while that order is in force. An interim stop order may be sought for up to 21 days during which time the company will be accorded a hearing to put across its views to an independent delegate. It’s after the hearing that the interim stop order may be lifted or a final stop order on the disclosure document may issue. . Does the CA provide any protection for directors where funds are raised under a prospectus that contains a misleading statement? (3 marks) The liability for directors under corporation falls under section 1308, which provides inter alia that misleading misstatements amounts to a crime and such an offence, is one of strict liability. The CA offers protection to directors by availing the following defences. There are a range of defences available to potential civil and criminal liability, some of which include: †¢ The ‘due diligence defence’, that is, that the person has made all enquiries which were reasonable in the circumstances and having made these enquiries, they believed on reasonable grounds that a statement was not misleading or deceptive or that there was not a material omission from the prospectus. †¢ Where a new circumstance has arisen and it can be established that the person was not aware of the new matter. †¢ Establishing that the person reasonably relied on information provided by someone outside the company, such as a professional adviser, for statements contained in the prospectus But the director should not conceal such information when it comes to his attention. [1] [1946] 1 All ER 512 (CA) [2] (1990) 170 CLR 146 [3] [1976] HCA 53 Is Globalisation A Threat Or An Opportunity? Is Globalisation A Threat Or An Opportunity? Is globalisation a threat or an opportunity for business? The key objective for any business organisation is to maximise profit, if a manufacturing or service industry in any country is progressive in their field of practice, there maybe a need for them to invest or open other subsidiary operation in other country where there is a rising demand for their goods or services Sloma (2004). Furthermore, (Post et al, 1999:146) states that globalisation consist of assembling goods from components produced in several nations, buying of raw materials from overseas suppliers or selling finished goods or services to customers in other countries, also (BBC, 2011) defines globalisation as the involvement of the world becoming highly interconnected as a result of increased cultural and trade exchange. Therefore this essay would explain the cause/effect, opportunities and threat of globalisation on businesses. The main causes of globalization may; trade liberalisation, transportation, and communication (Bhagwati et al, 1983). In trade liberalisation, legislation reducing trade and foreign direct investment have been relaxed. Some governments offer tax incentives to persuade overseas companies to invest in their country, this maybe linked to what is known as free trade (BBC, 2011). Transportation is relatively becoming cheaper, fast and easy to access. People travel for holiday, business, migrate and emigrate from one country to another. Businesses organisations can ship goods and raw materials between countries more easily making goods and services from all over the world available to consumers. While communication, the internet, telephony and the television have paved way for free flow of information and ideas. Outsourcing is a example these, thus a businesses organisation in a country can have a call centre in another country answering calls from customers of the main country. One of the main effect of globalization is inequality, this refers to the income disparity that exist between countries across the world. It maybe argued that globalisation contributes in creating more wealth in developed countries, thus it does not help to close the gap between the worlds richest nations and the worlds poorest King King (2005:199). The internet can be viewed as an opportunity of globalization for businesses. The internet can also be seen as a gateway to participate in the game of globalization (BBC, 2010). Through the Internet, business organisations have been able to go beyond borders, to reach their end customers with their goods or services, thus this could be referred to e-commerce. Communications can be made quickly and easily to any anywhere in the world, but at the same time businesses are exposed to big competition, Holton (1998). There are millions of websites on the Internet, despite the seemingly easy participation, the reality of the Internet can be seen as oligopoly, Sloman (2004). Furthermore, with the internet playing a roll in globalization. It may be good for a business organisation to have access to anyone anywhere in the world, but it also exposes the business to competition. In the internet competition, winners are very few, which creates a big gap between the large and small business. Howev er, there are still opportunities for small business in the world of globalization. This could be; the variety of cultures, languages, social systems and customs, etc. Take the differences of language for illustrative example. Your website may not be seen by customers if it is only in English. Actually, many web pages in the Internet are written in English. However, the business should know there are many languages in the world. If a business website has a page in a different languages, their competitors may be reduced. Another key opportunity for business, is the transfer of technological advancement and knowledge in globalisation. Corsi (2000) points out that this has led to growth in innovation and better techniques of production to business. The main result of this is the growing income and appreciation of the companys economic achievement. Foreign migrants coming to work in multinational companies contribute to the knowledge of developing businesses thus which makes the business more efficient. Economic policies, management techniques and Increased knowledge about production methods present invaluable inputs in small businesses (SME) King King (2005). In globalization there are opportunities of cheap labour for business organisations, thus Jennifer (2005) argues that developing nations are encouraged to open their economies to international trade, with the aim that free trade would bring development and prosperity. Opening its economy to international trade does not translate to economic development and instant prosperity for developing countries, but rather it signifies the exposure of the developing economy to multi-national corporations and foreign direct investors, many of which seek to expand their operations in developing economies because of the cheap labour available in these economies. Growing portions of these cheap labour sources consist of women and MNCs have been accused of intentionally hiring economically and poor educated deprived women to reduce labour costs. With cheap labour a clothing company in the UK can sell a shirt for  £60 that cost less than 10 pence in labour to produce. While globalisation may be seen as an opportunity for big businesses, it can also be argued to be a threat to big and small businesses (SME). Carper (2010) argues that energy and transportation costs increases when jobs are outsourced, as big businesses revise their business strategy and produce goods overseas. Customer service often decreases as companies pay for their goods to be transported from a foreign warehouse to their before being dispatched to the customer. Call centers, are also affected by globalization, as its being flooded with clerks who do not speak fluent English. As energy use increases, domestic supply costs increase as more businesses compete for natural resources. Intergovernmental relations between two countries can have an influence on multinational corporations. For example, If two countries are are war, there will be no trade between them. Furthermore, business operations may be influenced by the political ties of host and home country governments even when there is no war. The United States and Japan have had an important, but difficult, relationship since the end of World War 2. The United States helped rebuild Japans steel, auto industries and shipbuilding , and by the 1970s Japans productivity had increased massively. It used its efficiencies to export steel, automobiles, and semi-conducts to the big U.S. Market. The United States has shifting political relations with Great Britain, China, Russia and Brazil, and many other nations. Economic relations are affected, for better or worse, by political change, and national political priorities shape business relations. The United States, for example, banned U.S. Manufacturing industries fro m selling military products to countries that government agencies believe may be a threat U.S. Security; it restricts high technology exports; and it has banned U.S. Companies from doing business dealings in Cuba (Post et al, 1999:159). Increased Competition is another main concern, as it is threat to domestic businesses. Government of developing countries are faced with this problem as they look to export more and import less to increase the countrys GDP. Globalisation threaten domestic companies as domestic businesses have to compete with foreign business organisation, they are forced to raise their customer satisfaction levels and standards in order to survive in the market. In addition, In developing countries, this is disturbing for domestic companies as they are unable to contend with foreign companies as they are too dependent on the government for funds and therefore lack competitive edge. And also, this is were the government moves in to protect small companies by creating trade barriers and imposing tariffs on imported products. Protectionism does not apply to only developing countries but also developed countries also have the highest trading restrains, Borkakoti (1998). In conclusion, it appears to the author, based on what this essay talks about to point out that globalisation can be an opportunity also a threat to large and small business. Furthermore, globalization has played a big role in the movement of goods and service, making resources available to consumer, it may be argued that globalisation has created global expansion for big business as it has paved the way for small domestic businesses to export their goods or service. However globalization has its disadvantages as well, because of its vulnerability to intergovernmental relations (in the case of war) and its opens domestic businesses to foreign competition. REFERENCES Anup, G (1997) E-commerce security : weak links, best defenses. Oxford: Wiley. BBC (2010) Globalization. Available at: http://www.bbc.co.uk/schools/gcsebitesize/geography/industry/globalisation_rev1.shtml [Accessed: 14th March, 2011] Bhagwati, J. N, Panagariya, A., Srinivasan, T. N. (1983) International Trade. 2nd edn. Massachusetts: The MIT Press. Borkakoti, J (1998) International Trade. London: Macmillan Press Ltd Carper, T (2010) The Threat of Globalization. [Online] Available at: http://www.thaynecarper.com/globalization/ [Accessed: 20th March, 2011] Corsi, C (2000) Innovation and market globalization. Amsterdam: IOS Press. pp9 Holton, R. J. (1998) Globalization and the nation-state. London : Macmillan Press. Jennifer, M. (2005) The Double Edge of Globalization. Available at: http://www.allacademic.com//meta/p_mla_apa_research_citation/0/7/0/6/8/pages70681/p70681-1.php [Accessed: 14th March. 2011] King, P King, S (2005) International Economics and International Economic Policy. 4th edn. New York: Irwin/McGraw-Hill Post, J., Lawrence, A., Weber, J. (1999) Business and Society. 9th edn. Boston, MA: Irwin/McGraw-Hill. Sloman, J. (2004) Essentials of Economics. 3rd edn. Harlow : Financial Times Prentice Hall

Impact of Capital Structure on Profitability

Impact of Capital Structure on Profitability Introduction A capital structure concerns the composition of the liability of a company or, more specifically, which is the relative participation of the several financing sources in the composition of the total obligations (Brealey and Myers, 1992; Gitman, 1997 and Weston Brigham, 2000). Capital structure decision is very vital for any organization; every organization wants a mix or arrangements that eventually achieves or increases its profitability and overall value. Different alternatives available to companies to finance its self sometimes through issuing shares securities, or some time from debt, organizations achieve different combinations huge or small amount of debt. An organization takes the combinations, which increase their efficiency and profitability and its market value. These types of decisions are very difficult in an uncertain economy. Such as; In Pakistani scenario existence of the macro environment factors such as lofty interest rates in double figures and volatility in economy and in political situations are big factors for the combination of capital structure. Consequently, the financing decisions experienced a significant rise of costs, in addition the diminution of the economic activity, which also raise the uncertainty. However, many theories and practical approaches contributed on capital structure, which ultimately give abundant literature: Target Capital Struture For the establishment of a target capital structure, the firm should analyze certain factors such as; mix of debt, preferred stock and common equity. The specific capital structure may be changed accordingly to conditions. The change in capital structure occurs due to the debt ratio. If the debt ratio is below the target level, the debt should be issued to raise the capital. If the conditions are in reverse, visa versa; the debt ratio is above the target the expansion capital should be raised by issuing equity. The firm, in its structure policy, involves a balance between risk and return in order to achieve the best combination to maximize the firms value. There are four primary factors, which influence capital structure decisions, they are: Business risk The firms tax position Financial flexibility Managerial conservatism or aggressiveness The above four factors largely determine the target capital structure. If no debt is used in the firms operations, it is at greater business risk while its favourable debt ratio is lower. If the firm uses the debt, the interest is deducted and the effective cost of the debt is lowered that is the major reason for using debt in the firms capital structure policy. If the firms income is sheltered from certain taxes such as; depreciation tax shields, interest on currently outstanding debt, tax loss carry-forwards. In such conditions, the firms tax rate will be low and in that condition additional debt will not be as advantageous as with a higher effective tax rate. If the conditions are adverse the firm should raise the capital on reasonable terms as steady supply of the capital is necessary for long run success it is in the knowledge of treasurer that at the time of tight economy or operating difficulties the suppliers of capital provide the funds with strong financial statements. It has, therefore observed that need for funds and the results of the fund shorted influence the capital structure. Hence, if the future need for capital is greater the consequences of capital shorted become worse. Therefore the financial statements should be stronger. The managerial conservatism or aggressiveness also influences the capital structure, managers of different firms possess different nature and observations or approaches some are aggressive than others and some are inclined to use the debt to get more profits. Though this factor is in effective to the favorable is value maximizing capital structure, yet it has great influence on the managerial target capital structure. On the whole the target capital structure is much influenced by the above four factors, due to which operational conditions can cause the actual capital structure to vary from the target capital structure. Optimal Capital Struture Most favorable capital is a capital which maximizes the worth of the companys stock it is also with a minimum weighted-average cost of capital generally known WACC. It does not necessary increases or maximizes earnings per share (EPS). Maximum earning per share (EPS) is not always achieved by attainment of the greater stock prices. With higher debt ratio may result in maximum earning per share (EPS), but may also increases firms risk level. Some debt employed by in optimal capital structure, but does not hundred percent (100%) debt employed. Some firms try to achieve different combinations of optimal capital structure; but they could not achieve this optimal capital structure or optimal point. There are many ways of the estimation of required rate of return on equity capital (RROE); through accumulating companys long-term cost of debt. Theories Of Capital Structure It has been observed that the capital structure of different industries vary form each other it is due to different reasons. If we observe two different companies from two different companies such as; pharmaceutical companies and airline companies the capital structure of the both companies quite different from each other. The reasons of the different capital structure of the different firms and industries are given in the theories, which are subjected to empirical tests. Modern capital structure theories are based on the published articles of professors Fransco Modigliani and Marton Miller (1958), generally known as (MM). According to MM the firms value is not affected by its capital structure and they further contributed were that the capital structure is irrelevant to a firms operations hence; MM has presented some unrealistic assumptions such: There are no brokerage costs There are no taxes There are no bankruptcy costs Investors can borrow at the same rate as corporations All the investors have the same information as management about the firms future investment opportunities EBIT in not affected by the use of debt Though some of the above assumptions are quite unrealistic yet; they are important as they indicate the conditions under which capital structure is irrelevant. MM have not only given unrealistic assumptions but they have also provided different clues, which show the required relevant capital structure and also affect a firms value. Thus MM assumptions gave the way to modern capital structure research and helped to develop more realistic theories of capital structure. The Trade-Off Theory The trade-off theory is very important theory; because it deals with the finance and equity. Which ultimately, elucidate how firms finance their venture for a time by equity and debt, theory also discuss the pros and cons of both ways. Companies best possible leverage change is inclined by firms adjustment toward an optimal leverage is inclined by three features such as: taxes, costs of financial distress and agency costs. Taxes And Bankruptcy Costs Tax rate and leverage are positively related; markup is a tax deductible, it reduces tax liability and enhances the after tax cash flows being a tax subtracts expense. Companies get on elevate point of debt if the tax charge is higher because Firms wants in their endeavor to enlarge cash flows and market value. Taxes Chance of defaulting enhances when the level of debt away from best possible point. When firm failure to pay loan than power of the firm will be transferred from shareholders to bondholders who will strive to recover their venture throughout the practice of bankruptcy. With financial distress company may incur two natures of bankruptcy costs. Direct and indirect costs direct cost comprise of administrative costs of bankruptcy practice. These costs will be lower proportion of the total cost when the firm size is large and vice versa with small size firm and may important variable in choosing the level of the debt. When investment policies of the company change which results in occurring of indirect costs. Firm can reduce the chance of bankruptcy with cutting down expenses on training, advertisement, research, and development etc. It also increases the customers reservations about companys offerings, which result in lower sales, market share, customer loyalty, and market share price et c. This entails that the prospective benefits from utilizing leverage are outlined by the latent costs of bankruptcy. Miller And Modigliani Theory Modigliani and Miller (1958) give you an idea about that the value of the firm does not change when any change occur in the capital structure. Firms build total cash flows for all investors are unchanged despite the consequences of capital structure. Altering the capital structure does not amend the total cash flows. Consequently the overall assets value provides ownership of these cash flows should not change. MM argue if worth of the firm depends on capital structure; which may be result in arbitrage opportunity in the perfect capital market. In addition, capital structure decision may be counteract when investors and firm can have access to at same rate. Despite the fact that MM theory is stands on numerous impractical assumptions, yet it presents the essentials theoretical background for further research. Agency Theory Jensen and Meckling (1976) discuss about the potential disagreement or relationship between companys executives and shareholders, according to theory managers do not have 100% interests in firm. Executives are the representatives of the shareholders and strive to assets away from bondholders to shareholders through captivating more loans and empowering in risky assets. Information Costs And Signaling Effects Capital structure can also be elucidate when disparity in information have available to stockholders and stranger regarding the investment opportunities and income allocation of the firm. This information parity may consequence in two separate results for capital structure, it is known as signaling with percentage of debt. Ross (1977) contributed that manager always familiar about the financial position of the company and its return allocation. When executives take debt decisions, it produce affirmative signal to stakeholders; about the financial position of the organizations and its ability to retire its debts and truthful allocation of return of the company. Managers always try to increase stakeholders or investors confidence, consequently with increasing equity value as result in also using significance amount in the capital structure. Pecking Order Theory Myers and Majluf (1984) state that shareholders always think executives employ confidential information when they offer risky securities and also overpriced. This observation guides under pricing of fresh equity offerings, this also may result in significance loss of present shareholders. For these reason organizations keep away from offering new projects through equity financing and use its internal funds if further financing is required they issue debt last option is equity financing. Factors Affect Capital Structure Decisions Capital structure decisions are very important for companies to make so there are certain factors which firms take in view when making capital structure decisions and they are: Sales stability: A firm takes this factor under consideration at the time of capital structure decisions. If compare two firms, one having stable sales and other having unstable sales, the firm whose sales is relatively stable can safely take on more debt and incur fixed charge in comparison to the company with unstable sales. For instance, the utilities companies use more financial leverage than industrial firms because they have stable sales Operating structure: This is another factor which is involved in making capital structure decisions. A firm having less operating leverage can imply financial leverage in better way as it will have less business risk. Assets structure: This factor may affect the capital structure decisions; there are two types of assets-general purpose assets and special purpose assets. The real state companies usually use general purpose assets as it makes good collateral. While the companies which are involves in technological research use special purpose assets, as they are not highly leveraged. Profitability: The factor of profitability also plays an important role in capital structure decisions; because the firms which get high rates of return on investment do not use high debt, but they use relatively little debt, as high rates of return on investment make them able to do financing with internally generated funds. Growth rate: This factor plays an important role in capital structure decision making. It has been observed that faster growing firms mostly rely on external capital as the flotation costs exceeds those incurred when selling debt this is the reason that rapidly growing firms rely more heavily on debt. It is also possible that the firms relying on external capital may often face greater uncertainty due to which those firms reduce their willingness to use debt. Control: there is great affect of control situation on capital structure decisions, because in such a situation when management has 50% voting control between the debt and equity. If the management is not in a position to buy or purchase any more stock, the other option for it is to use debt for new financing. But in the situation when the firms financial position is so week that the use of debt may be the cause of serious risk of default. In this situation the control considerations could lead to use either debt or equity. Taxes: As far as interest is concerned it is, no doubt a deductible expense which is much valuable to firms with high tax rates. It is therefore the firms use much debt because if firms tax rate is higher the advantage is also greater. Management attitudes: different management attitudes may bring different changes in capital structure decisions. Some managements are conservatives and others are aggressive these both managerial styles exercise accordingly to their own judgments and analytical approaches about the proper capital structure. If the management attitude is conservative it uses less debt, where is the management having aggressive approach uses more debt to get higher profits Lender and rating agency attitudes: A part from managers analysis of the factors lenders and rating agencies also plays an important role in financial structure decisions. The corporations give much importance to the lenders and rating agencies and make discussions with them about the capital structure and mostly act accordingly to their advice. Market conditions: Capital structure also depends on market conditions, a firms optimal capital structure or favorable capital structure depends on long-term and short-term changes. Low rated companies which are in need of capital either go for the stock market or to the short-term debt market without taking consideration of target capital structure. Financial flexibility: financial flexibility has also a bearing on capital structure decision. Affirm or company makes the decision according to its financial flexibility, if a company is financially good it can raise capital with either stock or bond. But; when its financial position is week the suppliers of capital make funds available, if that company gives them a secure position in shape of debt. Seeking all above thoughts in mind it can be said that the companies should maintain the financial flexibility or adequate reserve borrowing capacity because it depends on the factors which are necessary in making capital structure decisions. Firms internal conditions: this is also one of the factors which affect the capital structure decisions. If a firm succeeds in completing any project than the probability of higher returns increase in the near future. Due to such internal conditions a company would not issue stock because the new earnings are neither anticipated nor reflected in the stock prices. So in such condition the company or firm would give preference to finance with debt and till the higher earnings are materialized and or reflected in the stock prices. Statement Of The Problem Capital structure decision is very crucial and important for any organization in any sector or economy. It is always very much difficult for organizations to identify or gets the right combination of debt and equity (Capital Structure), which ultimately satisfies them or brings favorable and profitable results for the organizations. So; eventually this report mainly focusing on right combination of â€Å"Debt and Equity (Capital Structure) in the characteristic of Short-term Debt (SDA), Long-term Debt (LDA) and Total Debt (LA)† for any organization in Pakistan. In Pakistan modest research has done on such problem. It is important to work on such problem and come up with information, which gives some comfort level to investors and organizations to take correct financing decisions. Objective It is very important in Pakistani scenario to evaluate or investigate the impact or the influence of capital structure over the firm profitability. In this way the objective of this study is to investigate or evaluate the relationship among the rates of return of the listed non-financial firms on Karachi Stock Exchange (KSE-100) index related to composition of the capital structure. More exclusively, this is based on the assertion that whether short-term debt divided by total capital (SDA), long-term debt divided by total capital (LDA), and Total debt divided by total capital (TD) has positive or negative relationship with profitability. Research Scope/Limitations The scope of study to analyze impact of capital structure on profitability, also promotes as an aim for future research. Few limitations fixed up in this study: This research would just cramp to secondary data. The admittance would restrict to public information, all organizations would not share information that would confidential in nature. This study would not get into the details concerning factors that lead to capital structure or the reasons due to which capital structure comes in different combinations. Thesis Structure The report is systematized as follows. Phase one (1) introduction of the thesis, which includes the statement of problem, scope and limitations objectives hypothesis etc, this phase, also contains the some of the theoretical perspective regarding the capital structure. In phase 2 we describe Methodology that is constitutes the data and we justify the choice of the variables used in our analysis sample, technique and also estimate model used in analysis. In phase 3 we presents and analysis the results which taken after the data processing. The phase 4 contains the results and conclusions and recommendations. Literature Review Pakistan has not yet got much development in the bond market; therefore, many firms of Pakistan give preference to equity or internal financing in comparison to debt, but one day when this negative relationship between profitability and leverage of the firm will be removed, the Pakistani firms will realize the importance of debt financing, because it is the debt financing which increases the value of the firm and the wealth of the share holders (Ilyas. 2000). Study conducted (Rafiq, et al., 2008); it has been observed that the chemical sector of Pakistan gives preference to equity over debt and large firms borrow more debt because they have no fear of bankruptcy whereas small firms are afraid of more debt because of the fear of bankruptcy. In chemical sector huge cash flows are needed, therefore, the chemical industry of Pakistan uses more debt than equity to finance the new projects because the internal sources are not enough for a new firm, therefore, it depends on the debt because the fixed direct costs of bankruptcy constitutes a smaller portion of the total value the firm. The other reason for which most of Pakistani firms prefer to equity or internal financing over debt is that the bankruptcy process is slow an ineffective in Pakistan due to which firms face no or low bankruptcy costs. Study conducted (Hijazi and Tariq, 2006); study reveals that as for as the firm size is concerned, the Static Tradeoff Theory suggests that if the firm size is bigger, more debt will be used, but in Pakistan, the case is in reverse, here, the firm size is negatively correlated with leverage and the bigger firm size use less debt which supports the Pecking Order Approach and rejects the Static Tradeoff approach. After the deep observation of Asset structure, it has been concluded that asset structure of Pakistani firms does not depend on their capital structure. As the large firms of Pakistan have no fear of bankruptcy and have less chances to fall into financial distress or in other words, they are strong enough to bear shocks, so they employ more debt in comparison to smaller firms which have fear of bankruptcy because large firms face lower bankruptcy costs, therefore, there is, in large firms, strong relationship between profitability and leverage. The profitability, in large Paki stani firms, supports the Pecking Order Theory which is measured by net profit before taxes divided by total assets. Research conducted by Abor (2005) supports or investigates the relationship between the capital structure and profitability of listed firms on GSE. Data taken for this between 1998/02, twenty-five listed firms qualified for this study. Regression analysis methodology used in the assessment of functions involving the return on equity (ROE) with measure of capital structure. Capital structure is the combination of debt and equity used in the firms operations. Capital structure is related to the marketing, because different firms issue different securities in many different combinations, which maximize the market value. The impact of capital structure on profitability had been accounted in a considerable number of studies weather experimental or theoretical perspectives. Capital structure decision is very important for any organization to get higher return and profits and meet with the competition, different combinations of capital structure available to organizations; they select one w hich eventually satisfies or maximizes the firms market value. Huge return and profitable firms always use more short-term debt, short term is important part of total debt, and usually firms use 85% of short-term loan against long-term debt. Long-term debt and return on equity have negative relationship; total debt and return on equity are positively related. Coleman (2007) conducted study to find out the impact of debt policy on the performance of microfinance firms. Findings of the study demonstrate positive relationship between debt and firms performance. Long-term debt has positive relationship with outreach but not significant where as; short-term debt exercise force on management to extend a MFIs outreach. Long-term debt helps management through the time, so that the pressure of refund decreased which ultimately; give management flexibility to improve their profitability or returns by manipulating their operations. In microfinance organizations the leverage is positively related with outreach stage; when the leverage increase which also result in the increase of outreach level; credit advance leads to higher premium. This premium further converted into companys profitability and income flow which can also be employed to examine the debt. Higher outreach lowers the cost of operation by enabling firms to enjoy the economies of scale. Size is insignificant variable and outreach is negatively affected by it. Long-term debt and short-term debt are insignificant basically describe that maturity may not essentially be of spirit with default charge employee as performance variable though; total debt ratio determine significant relationship between leverage and default rates. Microfinance organizations which want to improve firms profitability and want to retire its debt obligations management can achieve these results by reducing the annual default rates especially for largely leverage microfinance organizations. Default rate has negative relationship with the size of microfinance organizations; for the reason that firms make sure refund of loans advanced and also become aware for future transactions this all happens when firms expands their sizes. There is negative relationship between debt and default rate, greater mean variation result in lower default rate. Though management of the firms try to reduce default rate s with the higher mean deviation found in risk level. So ultimate findings of the study reveals that microfinance institutions in Ghana finance their operations through the long-term debt as compare to short-term financing and they tend to be highly leveraged. Microfinance organizations benefit from scale of economies, additional customers when they are significantly leveraged; and also understand and increase ability to deal with risk and other alternatives easily and importantly. Study conducted by (Chen et al., 2009) in insurance industry Taiwan, to know the relationship among capital structure, operational risk, and profitability. Factor analysis and path analysis methodologies used to examine correlation among the capital structure, operational risk, and profitability sample of listed insurance companies in America was also taken. Result of research was firms values is not related with capital structure, a close relationship shown among operational risk, profitability, capital structure. Capital structure is negatively related with profitability if equity ratio increases or reserve-to-liability ratio decreases which result in higher profits. Capital structure has negative relationship with operational risk, same relationship between the operational risk and firms profitability. Research conducted by Carpentier (2006) Quebec Canada. Objective of study was to investigate the changes in capital structure do not affect the firm value. The bivariate tests and multivariate regression analysis methodologies are used for this study. Sample size of 243 French firms has taken for this study during the time period 1987-96. If all other things equal, then capital structure dont define any changes in the value of business organizations. Investors take debt in the considerations in order to determine the stock prices. Cross-sectional relationship found between the value of firm and debt exists, many factors affect firm value in long run the debt-value relationship. The static trade-off theory posits that the firm value increase (decrease) as the financial structure moves closer to (away from) the target. French companies tend to use a higher proportion of total debt and a higher proportion of institutional debt (non spontaneous funds) than US companies. Study was conducted by (Groth Anderson, 1997). Study explains capital structure and investigates its influence on the cost of capital and the value of company. This study sketches practical concerning the choices and management of capital structure. A theoretical and practical understanding of these relationships will support the professional manager in his or her efforts to gather added value for shareholders and stakeholders. Firms value and its stock prices does not affected by capital structure, optimal way to finance the firm exists. Capital structure theory is of value even if the arrays of assumptions in the theory do not hold. If an economic variable changes for example: interest rates, recessions, and the price of bearing risk affect the management decision of capital structure. Capital structure offer prospect of enhancing value for shareholders, it also time reduction in cost of capital to the economy and the standard of living. Research conducted by Rocca (2007) Italy, main purpose of this research to scrutinize the relationship between capital structure and firm value. Capital structure represents a corporate governance device that can protect corporate governance competence and protect its ability to create value. Methodology or approach used for this study is theoretical approach that can contribute in clearing up the relationship between capital structure and corporate governance. Descriptive, model also used which provides a research proposition and some suggestions, which would be used for future empirical research and precise design given for empirical analysis. Finding of this study is that, relation between capital structure and a firms value needs to take directly into account the role of moderation and/or mediation of the corporate governance. It is also necessary that presence of complimentary between capital structure and corporate governance variables such as: managerial ownership; ownership c oncentration; role of board of directors, etc. Study conducted (Ebaid, 2009) study mainly focus on relationship between the different debt-equity combinations with companys performance. Multiple regression technique used to find out the impact of debt policy on companys performance. Enormous studies conducted on debt policy alternative on firms performance; among them majority of researches conducted in developed countries; just few studies performed in emerging countries or economies one of them is Egypt. The research mainly focus on the relationship between alternative debt policy with firms firms performance data taken from listed Egyptian companies; performance is measured through accounting-based perspective such as: Return on Assets, Gross Profit Margin, and Return on Equity generally known as (ROA, GPM, and ROE), capital structure is measured with short-term debt and long-term dent and total debt abbreviation as (STD, LTD and TTD). Findings of the study reveal that both (STD and TTD) are negatively related by ROA. Alternat ively capital structure including total debt (TTD) in not significantly related with Return on Equity and Gross profit margin (ROE and ROA). Results of the study suggest that the performance of the Egyptian listed companies in not controlled (weak-to-no influence) by capital structure alternatives. Though; particularly in emerging markets debt policy remains debatable and mystery. Further research might observe determinants of Egyptian firms capital structure such as growth, business risk size and also evaluated with developed economies. The impact of capital structure on Egyptian firms value as well necessitates analyzing empirically. Findings of the study reveal that ROA and firm performance negatively related. It can also be investigated the impact of the maturity structure on its performance and capital structure decisions. Firms performance can jointly be by both ownership structure and capital structure in further studies in listed Egyptian firms. Study conducted (Eriotis et al, 2007) to investigate the firm characteristics that affect debt-equity combination. Data has been taken from 129 Greek listed firms at Athens Stock Exchange five (5) years time have taken under observation from 1997-2001, it is the 63% of listed companies in 1996. Through diverse theories companys characteristics are investigated as determinants of capital structure. The firms which employed debt ratio of 50% or more are also categorized in this research with a dummy variable. Results of the research reveal that firms debt ratio is negatively related with its growth rate and also its interest coverage ratio and quick r

Hypnosis :: Biology Essays Research Papers

Hypnosis: It Isn't Just For Circus Sideshows Anymore The highlight of my second day at Bryn Mawr College was going to see an exciting hypnosis show. I was one of the lucky few chosen to go up on stage and be made a fool of in front of three hundred other freshman. I stood up on the well-lit stage and listened intently to the oddly-dressed hypnotist. He told me to attempt to hold out my arms straight and look at the ceiling, without moving my head. I followed his instructions, but five minutes later, I was asked to sit down because the performer did not feel that I was as susceptible to hypnosis as the other ten women on stage. Embarrassed, I returned to my seat to watch the merriment. I giggled as I watched people I had been on stage with laugh uncontrollably, dance the hula, and quack like ducks. After the show, I could not help but ask myself why these seemingly normal people would behave so ludicrously at the suggestion of a stranger. After talking with the some of the subjects after the show, I was convinced that they were in a com pletely different brain state than the audience; some of my friends felt the opposite. Such is the nature of hypnosis. Some believe that while under hypnosis the brain differs from other states; others believe that this is not the case. Like the brain, hypnosis is mysterious. Therefore, it is no wonder that there is so much contention about hypnosis, it's uses and effects. But, how does hypnosis work? What does it do to the brain? Is it a legitimate way to get in touch with the unconscious? Evidence of the existence of hypnosis is seen as early as the ancient Egyptians and Greeks. In fact, "hypnosis" comes form the Greek word, hypnos, meaning sleep. It has been used extensively throughout history and it recently recieved an increase in it's legitimacy when in 1996, the National Institutes of Health publicly recommended that hypnosis be covered by health insurance, when used in conjunction with other forms of therapy (1). Hypnosis is a versatile tool. It is used for entertainment, medical recovery, and therapy, such as behavior modification and memory recollection. Hypnosis has been documented to allieve pains, phobias, addictions, irritable bowel syndrome, and asthma. Hypnosis has also been linked to memory recall. A person can hypnotize herself or agree to be hypnotized by another (2).

Relationship between Fiction and Reality Explored in The Things They Ca

Relationship between Fiction and Reality Explored in The Things They Carried      Ã‚  Ã‚   In many respects, Tim O'Brien's The Things They Carried concerns the relationship between fiction and the narrator. In this novel, O'Brien himself is the main character--he is a Vietnam veteran recounting his experiences during the war, as well as a writer who is examining the mechanics behind writing stories. These two aspects of the novel are juxtaposed to produce a work of literature that comments not only upon the war, but also upon the actual art of fiction: the means of storytelling, the purposes behind them, and ultimately the relationship between fiction and reality itself.    Through writing about his experiences in Vietnam, O'Brien's character is able to find a medium in which he can sort through his emotions, since "by telling stories, you objectify your own experience. You separate it from yourself. You pin down certain truths" (158). He does not look upon his stories as therapy--he recounts his stories since they are a part of his past, and who he is now is the direct result of them:   Forty-three years old, and the war occurred half a life-time ago, and yet the remembering makes it now. And sometimes remembering will lead to a story, which makes it forever. Stories are for joining the past to the future. Stories are for those late hours in the night when you can't remember how you got from where you were to where you are. (38)    O'Brien's character makes several comments on storytelling in certain sections of the novel, such as "How to Tell a True War Story." Through making these comments, the narrator is not only justifying the intent of The Things They Carried,but he is also provid... ...ally draws attention to its status as an artifact in order to pose questions about the relationship between fiction and reality." --Patricia Waugh, Metafiction: The Theory and Practice   of Self-Conscious Fiction.New York: Methuen, 1984.    Sources Cited and Consulted: Calloway, Catherine. "'How to Tell a True War Story': Metafiction in The Things They Carried." Studies in Contemporary Fiction 36.4 (1995): 249. Expanded Academic ASAP. Jarraway, David R. "'Excremental Assault'" in Tim O'Brien: Trauma and Recovery in Vietnam War Literature.": Modern Fiction Studies 44.3 (1998): p.695-711. Kaplan, Steven. "The Undying Uncertainty of the Narrator in Tim O'Brien's The Things They Carried." Studies in Contemporary Fiction. 35.1 (1993): 43. Expanded Academic ASAP. O'Brien, Tim. The Things They Carried. New York: Broadway Books, 1990.