Review The House of the Spirits Free Essays

In the novel, â€Å"The House of the Spirits†, the writer, Isabel Allende utilizes the imagery of the house on the corner and the perspectives of Esteban and Clara’s journals to show the peruser that so as to comprehend the historical backdrop of the Trueba family, numerous perspectives must be contemplated. Using imagery, the house on the corner is illustrative of the Trueba’s history and how the family’s history is told through division. The house has two structures that must be seen so as to comprehend the whole home, one being propelled by Esteban, and the other being roused by Clara. We will compose a custom article test on Audit: The House of the Spirits or on the other hand any comparative theme just for you Request Now The structure that Esteban assembles is the outside and the establishment of the house. Esteban assembles a â€Å"cubic, thick, bombastic house, which sits like a cap in the midst of its green and geometric surroundings†(92). This portrayal speaks to how he recounts to his accounts of history in the novel. Esteban doesn’t utilize mysterious authenticity, he has considerably less portrayal in contrast with Clara in the novel, and his composing is direct. The way Esteban is depicted demonstrates the outside of the house to be illustrative of his portrayal as it is â€Å"cubic† and â€Å"dense†. Interestingly, Clara’s portrayal from her journals is vastly different from Esteban’s straightforward portrayal like the structure of the house. Clara doesn’t talk exclusively about significant occasions, â€Å"she likewise records trivialities† (1) and episodes that don't really prompt anything. Clara’s impossible to miss and mysterious portrayal style is spoken to by the foundation of the house, â€Å"full of projections and incrustations, of turned flights of stairs that lead to discharge spaces, of turrets, or little windows and couldn't be opened, entryways hanging in midair, and abnormal hallways† (92). The two portrayals make up the whole Trueba history a similar way the foundation and the outside make up the whole house. Every story is advised in an alternate style to represent the structure of the house. Esteban’s part in the making of the outside of the house is spotless and thick which matches the manner in which he tells history. Conversely Clara’s portrayal is progressively itemized, pointless and incorporates the nuanced accounts of the characters. Together, the outside and inside make up the house, similarly as the two portrayals make up the novel and the historical backdrop of the Truebas. With just a single storyteller, Clara or Esteban talking at once, the narrative of the Trueba family gets slanted and temperamental due to Esteban’s individual predisposition and Clara’s enchanted perspective. With the two narratives introduced the peruser comprehends a progressively exact and complete story. Allende utilizes the polarity of the house on the corner as an image to show that there are numerous sides to history. We likewise observe different sides of history through Clara’s note pads and Esteban’s portrayal. With two portrayals we get a far reaching vision of history that must be gotten by perusing numerous viewpoints. One way that Allende utilizes the portrayals to show that understanding different perspectives is essential, is through the lack of quality of the storyteller. Toward the start of the novel we first experience mystical authenticity when Clara’s Uncle Marcos leaves the nation on a â€Å"bird† that he manufactures and â€Å"[a]gainst all rationale, on the second attempt the winged animal lifts off without disaster and with a specific class, joined by the squeaking of its skeleton and the thunder of its engine. Fluttering its wings and vanishing into the clouds†(13). We are ignorant of what really happened in this occasion since we just observe one viewpoint of what occurred. When both narrators’ are utilized in the novel, the peruser can see more than one point of view of the occasions advised and the peruser can see the whole history, much the same as the outside and the foundation of the house on the corner make up the whole house. Esteban’s portrayal is one-sided and temperamental, yet using Clara’s note pads we see the opposite side to Esteban’s time at Tres Marias as the benefactor. When Esteban reviews his initiative at Tres Marias he says, â€Å"no ones going to persuade me that I wasn’t a decent patron†(51) and that he has â€Å"been a decent benefactor; there’s no uncertainty about it†(54). Not long after, we get notification from Clara’s note pads of how â€Å"[n]ot a young lady went from pubescence to adulthood that [Esteban] didn't expose to the forested areas, the riverbank, or the fashioned iron bed†(63). In the event that the peruser just heard Esteban’s portrayal, the peruser would have just observed that he â€Å"rebuilt chicken coops and stables†, â€Å"rescued the oil fields†, and arranged â€Å"an water system framework so the yields wouldn’t need to rely upon the weather†(53). During his portrayal the peruser sees all the positive things that he did, however with Clara’s note pads the peruser additionally observes the negative parts of his time at Tres Marias. Alongside observing various occasions that happened with numerous portrayals we likewise observe the sentiments of different characters. When Clara first shows up at Tres Marias â€Å"she feels that she has at long last found her crucial life†(105). While the peruser comprehends her inspiration, Esteban is unconscious that she has this drive to satisfy her crucial life. Esteban thinks she is simply â€Å"charitable and generous† and needs to make â€Å"those around her glad with the exception of [Esteban]†(178). Because of the recounting two accounts throughout the entire existence of the Trueba family we can see the relationship elements from the two sides, and therefore, comprehend the Trueba family ancestry better. Taking everything into account, Isabel Allende composed the novel with a specific goal in mind to show the peruser an alternate perspective on how history could be educated. She utilized the image of the house to demonstrate that to see the history there are different points of view to see similarly as there are different structures that make up the whole house. Allende composed the novel through the viewpoint of Clara, Esteban, and others, so the peruser can get the most far reaching recounting the Trueba family ancestry, and can see different sides so as to acquire the best understanding. Step by step instructions to refer to Review: The House of the Spirits, Papers

Affordable Wallpaper In The Industry Design Essay

Reasonable Wallpaper In The Industry Design Essay My focus on my last venture is to have an expertly completed backdrop plan. Alongside this thought I might want my backdrop to be shown in a house, maybe in a show home, so individuals can see my work and see what it resembles in a room. This is on the grounds that numerous perspectives can influence the presence of the backdrop, for instance, the lighting. In the event that the light is exceptionally cruel and splendid it can make the hues seem unique and not look as successful. Be that as it may if there is a delicate shine it can show up warm and welcoming. Inside a show home everything is new and the house is created to an elevated requirement all together that it will speak to forthcoming purchasers, in this way introducing backdrop inside this condition would be and astounding advancement medium. I am additionally going to investigate inside design and mean to ace new abilities inside this subject so I can move them into my undertaking. When I have my backdrop structure and discovered a space in which to show it, I at that point intend to make the space utilizing inside compositional projects, for example, Auto CAD so as to make a virtual room. I will likewise present furnishings, textures and shading close by my backdrop structure. This virtual room will give a model of how the completed room should look. So as to make a backdrop plan I have to investigate the historical backdrop of backdrop; Where do they originate from? How are they made? Do individuals despite everything purchase backdrop? What are the customer requests? Current styles and patterns, would they say they are financially savvy? Is the monetary atmosphere influencing the backdrop business? I additionally need to discover organizations that will print out my plan and at what cost? What is Wallpaper the History behind it? When gazed upward in the Oxford Dictionary the term backdrop, implies paper for covering the inside dividers of rooms. Backdrop is a sort of material used to cover and embellish the inside dividers of either homes, workplaces or different structures. It isn't fundamental, anyway it has become an extremely well known technique wherein to style, make a disposition or infuse shading into a room. Backdrop can be utilized for either private or organizations purposes. These contrast from one another for example; they vary in weight, usefulness and quality gauges. Private backdrops are usually produced using different materials and can be purchased either glued or pre-stuck. Anyway with regards to the business grade backdrops they are partitioned into classes dependent on weight, backing arrangement and overlay thickness. Every single business backdrop must have a vinyl surface and effectively experience thorough physical and visual tests as commanded by the Chemical Fabrics and Film Association. As indicated by the Made How site, there are four well known strategies used to print backdrops and creators have picked the printing method dependent on the expense and feel. This recommends cost is a significant issue with regards to making backdrop. The movement of backdrop can be discovered going as far go into 200BC, in China where paper was initially imagined. Anyway the most punctual backdrops utilized inside Europe was as right on time as the thirteenth century. Structures included painted pictures of famous strict symbols and were ordinarily utilized inside the homes of those which were strict anyway they were likewise used to liven up the somber, dull homes of poor people. Strict prints just stayed well known with the poor over the next hundreds of years. By the sixteenth century increasingly costly divider covers, for example, portraying embroidered works of art started to hang in the homes of the tip top. Embroidered works of art included rehashed pictures which were square imprinted in different hues spread over various sheets of texture. They added shading to the room just as giving a protecting layer. Embroidered works of art anyway were extravagant along these lines suggesting just the rich could bear the cost of them. Because of the expense of these the less wealthy citizenry went to backdrop so as to help up their homes. Backdrop plans highlighted scenes which were like those in the embroideries, anyway imprinted onto enormous pieces of paper; these were either draped free on the dividers, or stuck as opposed to being confined. By the mid eighteenth century Britain was the main backdrop maker in Europe, sending out enormous amounts to Europe yet in addition selling inside the white collar class showcase, accordingly this exchange was extraordinarily hindered because of the multi year war. However, somewhat already before the war, in 1748 the English Ambassador to Paris brightened his office with blue rush backdrop, this thus at that point turned out to be extraordinarily elegant. Inside the 1760s architects started to work with silk and embroidered artwork to create unobtrusive, sumptuous backdrops. Close to the century's end the design for beautiful backdrop restored in Britain by and by and prompted huge all encompassing perspectives on old fashioned engineering, outlandish scenes and peaceful subjects just as rehashing examples of adapted blossoms, individuals and creatures. During this timeframe two issues emerged, one issue was creating long pieces of paper for printing, the other was printing appealing backdrop reasonably. Until the mid 1700s their methods included creation cloth based paper which was independently imprinted in sheets, these were then applied to the dividers. Anyway in 1785, Christophe-Philippe Oberkampf concocted a machine for printing hued tints on sheets of backdrop. At that point in 1799 Louis-Nicolas Robert made a machine to deliver long and consistent lengths of paper. This capacity to deliver long lengths of paper thusly permitted the backdrop business to prosper. By the nineteenth century printing costs had at long last been decreased, this happened by disposing of manual square printing and supplanted with chamber printing. Wood square printing was a method which included applying a shading to each different square by hand, at that point pushed down onto the paper, tapped so as to guarantee the quality engraving, the square was then lifted up and re-inked and the procedure would be rehashed, this was an extravagant and tedious procedure. Anyway with the chamber printing the, strategy included the paper being precisely taken care of between chambers until the paper had been completely printed, in this way no hand printing being included. This in this way prompted the fruitful decrease of cost, subsequently bringing about it being less expensive to backdrop a house than it was to paint it. The improvement of the steam controlled print machines additionally greatly affected the backdrop business as this permitted makers to mass produce backdrop, again reducing the expenses and making it moderate to the average workers. Backdrop profited by a high blast in prominence in nineteenth century and it had set up itself as one of the most famous family unit things over the western world. Todays Styles Trends Backdrop has changed incredibly since it was first evolved, in todays industry it comes in different examples, plans and surfaces. Backdrop producers like Cole Son have understood the buyers requirements for intense alluring backdrops. As hubpages.com has called attention to, todays mortgage holders today need their dividers to be more than just secured they need them to say something. Apparently a divider covering is a bit of craftsmanship and a declaration of ones character. By simply perusing through the web for well known backdrop plans there are various styles and surfaces accessible. Anyway hubpages.com gives a portion of the businesses contributions: Hubpages.com proposes that metallic backdrop is one of the mainstream current styles today. It is created in an assortment of hues and examples. Because of its rich visual surface it quickly makes a point of convergence for a room in this manner catching eye. Despite the fact that this style of backdrop is a cutting edge method, the examples which are utilized are very customary, frequently with a botanical recurrent print. The hues utilized inside todays advertise are splendid and striking which have a cutting edge feel to them. This along these lines proposes to me that the present market patterns are a blend of conventional structures with current splendid hues. Anyway it very well may be contended that during the 1970s brilliant orange was infused into the universe of insides. As Lesley Hoskins (1994 p.226) brings up, The initial not many long periods of the 1970s were brilliant in each regard, Also as indicated by hubpages.com, The most well known shading palettes in the seventi es were situated in nature dim woods, overgrown greens, splendid pumpkin orange, daffodil yellow and the pervasive reap gold commanded the insides of rural seventies homes. In this manner tentatively are splendid hues a cutting edge pattern? Or then again have they quite recently stayed well known since the 1970s? Metallic backdrop fluctuates in cost depending where you buy it from it can go between  £10 a job in stores, for example, Focus and up to  £50 a job from Cole Son. Along these lines indicating that this sort of backdrop is reasonable for everybody and it is additionally a famous style because of the wide scope of stores selling it. Herd is a customary style of backdrop and has been around for incalculable years, it turned out to be extremely well known in the mid seventeenth century. It has a somewhat raised textural design that has a delicate smooth feel to it. This can be bolstered by hubpages.com as they state, it is wealthy in both visual and material surface. This style is rich and lavish. During the 1760s it was incredibly regarded inside the business as confirmed by Charles C. Oman and Jean Hamilton (1982 p.21) The group papers of this period then again, are, nearly no matter what, crafted by entirely proficient fashioners. Their beautiful characteristics were to such an extent that their concealment by different sorts of backdrop later in the century was unmistakably because of an adjustment in taste, as opposed to the development of more prominent creative appreciation. In spite of the fact that Flock is a conventional divider covering it has stayed right up 'til the present time a stylish decision of backdrop, as it is sold by makes, for example, BQ, Cole Son, Osborne little and Zoffanny. Herd backdrop is pricey contrasted with other divider

How to Optimize Supply Chain Management with Big Data

How to Optimize Supply Chain Management with Big Data It has been said that Big Data has applications at all levels of a business. This is definitely true of supply chain management the optimization of a firm’s supply-side business activities, such as new product development, production, and product distribution, to maximize revenue, profits, and customer value. Big Data management has tremendous implications for supply chain management. Firms that can aggregate, filter, and analyze internal data, as well as external consumer and market data, can use the insights generated to optimize decision-making at all levels of the supply chain.However, while many firms have noted the tremendous potential of Big Data for supply chain management yet not integrated it into their operations because they lack the financial, technological or human resources to do so. While these are clearly challenges, it is estimated that the digital universe will be over 40 trillion gigabytes by 2020 â€" a significant portion of that being data that can be leverag ed to generate business insights. As time passes, those firms who have integrated Big Data into their supply chains, and both scale and refine that infrastructure will likely have a decisive competitive advantage over those that do not. © Shutterstock.com | Mascha TaceIn this article, we will cover 1) the benefits of Big Data for supply chain management, including its role in 2) real-time delivery tracking, 3) optimized supplier chain management, 4) automatic product sourcing, 5) customized production and service, and 6) optimized pricing, as well as 7) building a Big Data supply chain, and 8) the future of Big Data and supply chain management.BENEFITS OF BIG DATA FOR SUPPLY CHAIN MANAGEMENTBy strengthening its supply chain, a firm can get the products and services a consumer wants to them quickly and efficiently. Firms that demonstrate such value to consumers can increase repeat purchase behavior, deepen consumer brand loyalty, and derive more value (purchases and referrals) from the customer over his or her lifetime.To leverage this opportunity fully requires the firm to analyze internal and external data for decision-making efficiently. The management tools and techniques that have evolved for use with Big Data such as real-time business intelligence systems, data mining, and predictive analytics, can be leveraged to make fulfillment more efficient and profitable; optimize both supply costs and pricing to maximize profits; automate product sourcing; and deploy mass customization product strategies.REAL-TIME DELIVERY TRACKINGBig Data’s management systems include real-time analytics solutions that can be used to strengthen fulfillment. These systems include both Big Data hardware/software for warehousing and processing and inputs from bar-codes, radio frequency identification (RFID) tags, global positioning systems (GPS) devices, among others. Such systems can capture traffic sensor data, road network data, and vehicle data, in real-time to allow logistics managers the capacity to optimize delivery scheduling. They can address unforeseen events (such as accidents and inclement weather) effectively; track packages and vehicles in real-time no matter where they are; automate notices sent to customers in the event of a delay; and provide customers with real-time delivery status updates. Firms can also aggregate and filter relevant unstructured data from sources, such as social networking sites for insights on the delivery process, and respond to issues in real-time.Further, vehicle sensor information can be used for predictive maintenance â€"maximizing the life of business equipment (in this case, vehicles and transportation-related equipment such as forklifts) by scheduling preventive maintenance based on current and historical data.Transportation data, when integrated into a commercial or in-house implementation of a distributed file system, such as Hadoop, a network-based one like Gluster, or other similar system, can be leveraged by other strategic business units. For example, a firm can configure its transportation business intelligence system to route notification of delivery delays to customer service centers automatically; customer service representatives can th en anticipate, and respond to, customer complaints appropriately.OPTIMIZED SUPPLIER MANAGEMENTTo maximize profits, firms want to sell the most products at the lowest costs. Cost determinations become increasingly complex the more raw materials used to produce a product, the greater the variability in the price of those inputs, the more products the firm offers, and the larger the geographical distribution area. The supplier relationship management process â€" which once, for many firms, had more to do with drinks, golf games, and other shared social experiences â€" these days, must incorporate more quantitative measures to determine whether the firm is receiving the most bang for its buck.Big Data allows firms to develop complex mathematical models that forecast margins if different mixes of suppliers are chosen. These models can take into account a wide range of variables, such as the additional costs due to variations in the speed with which different suppliers can deliver their g oods; one-time switching costs, such as long-term contract cancellations; and even estimates of supplier reliability, which firms can use to generate performance predictions of various supplier mixes. Managers can then select those with the highest return on the lowest investment to maximize profits.OPTIMIZED PRICINGSimilar to supplier selection, Big Data has many benefits for pricing. Firms can use consumer data, from both internal and external sources, to develop pricing models that maximize profit margins, and use predictive analytics tools to forecast demand for a particular product at different price points. Firms can then test these price points with soft launches, and incorporate consumer behavior and feedback â€" both quantitative and qualitative â€" into their pricing strategies. Further, firms can develop models to determine which combinations of related products consumers are likely to buy together, and use this information to develop and refine upselling strategies.Anoth er application of Big Data management and analysis to pricing involves sales forecasting. Firms can use predictive analytics to make real-time predictions about the firm’s sales performance overall, in a region, or even a specific location; they can adjust pricing to ensure that they meet those projections when necessary. Dynamic pricing can also be used to maximize revenue during times of increased market demand and/or supply shortages. Common in ground and air transportation during the holidays, dynamic pricing allows operators to increase prices for empty bus, plane, and train tickets when empty seats are scarce. However, industries ranging from hotels to sports entertainment to retail employ dynamic pricing to increase revenue.CUSTOMIZED PRODUCTION AND SERVICEBig Data collected to optimize supply chain management often holds key insights about consumer needs and wants. Firms can leverage these insights to develop new product and/or brand extensions, where sufficient consumer d emand warrants. In many cases, economies of scale reduce the costs of product extensions to the point where the additional costs are negligible. For example, a firm might introduce a jacket in three different colors, but through an analysis of aggregated social media mentions, customer service feedback, and online reviews, release the product in a fourth color. This is known as cosmetic customization.Many firms also leverage economies of scale to employ a mass customization strategy â€" one where customers provide firms with product features for common products, and the firm builds the product to the customer’s specifications. Auto manufacturers often employ this strategy, manufacturing large volumes of common components, and then allowing users to “build” their car by inputting desired features on the corporate website. However, many firms, from eyewear designers to toy companies, use this strategy, known as collaborative customization.Other firms, such as software firms, emp loy adaptive customization, which provides users with products that consumers can then customize themselves, according to their changing needs and desires. Still others employ transparent customization, wherein customers do not know that firms have customized products specifically for them. Often, this is employed not only with product manufacturing but also with fulfillment: firms analyze consumers’ usage patterns of commodities, and produce and offer, and distribute replacements when needed.In addition to adding value for the consumer, mass customization enhances a personalized purchase experience considerably, deepening both brand engagement and loyalty. Firms often use Big Data, including supply chain data to personalize their customer service experience. Firms with effective customer service departments integrate all available data about a consumer, including relevant supply chain data (such as a history of on-time and delayed deliveries, for example) into files available to customer service representatives. Having that data at their fingertips helps customer service reps address customer inquiries received.Firms can even use this data to anticipate such inquiries and respond proactively. For example, a firm might face greater demand for a particular product than they have inventory to meet. In such a case where the product has a lengthy manufacturing and/or distribution time, the firm can reach out to those who have placed orders with an explanation and apology for the delay; they can also update their website to notify new customers of the delay.AUTOMATIC PRODUCT SOURCINGIn late 2013, Amazon filed a patent in the U.S. for the process of predictive shipping â€" a distribution method wherein a firm uses predictive analytics to forecast future sales based on historical data; they then source and ship products to local and/or regional distribution centers in advance of those orders. It remains to be seen how successful this method may be, yet given Amazon ’s pioneering success in the online retail space, driven in no small part by its embrace of Big Data management tools, techniques and technologies, it would be tough to bet against them.Twelve years earlier, the firm filed a patent for automated product sourcingâ€" a process and its related technologies that played no small part in Amazon’s success; it has since been replicated by many other online retailers to varying degrees of success. Automated process sourcing refers to a firm’s ability to, upon receipt of a customer order, analyze inventory at multiple fulfillment centers, estimate delivery times, and return multiple delivery options (at different price points) to the customer in real-time. This enhances value for the customer, and allows Amazon to optimize distribution, as well as inventory management. Many other firms, from Best Buy to eBay, have either developed their own automated product sourcing systems or purchased software and process management solutions from ve ndors.BUILDING A BIG DATA SUPPLY CHAINThe benefits of paring Big Data with supply chain management make it an obvious choice; the ever-accelerating volume, velocity, and variety of data make it a necessary one. However, integrating Big Data into a firm’s supply chain is more involved than releasing a management directive or signing a purchase order.It is often advisable to start with individual links on the supply chain â€" such as departments, build Big Data into their operations, and replicate their successes across the organizations. The buy-in from this approach will help managers mitigate internal resistance to an innovation many find abstract or overwhelming. Executives and managers must review (and where needed update) the strategic business goals that drive the specific operational unit.For example, a corporate fleet might count as KPIs on-time deliveries, cost per delivery measured in fuel, wear and tear, and other measures, delivery times, positive customer feedback, lac k of negative customer feedback, and other similar indicators. Internal data scientist leads should work with must work with executives and managers (in this case the management team of the corporate fleet) to create operational goals and insights that drive these goals. For example, such insights might include the optimal time by which deliveries must be made to elicit positive customer feedback, optimal delivery routes that minimize cost per delivery and delivery times in real-time, and others that can allow the corporate fleet to add value to the organization as a whole. Data scientists then must work with I.T. (and vendors where necessary) to develop a Big Data infrastructure that allows them to meet these goals.Fundamentally, such architecture would include hardware/software and internal procedures and protocols for collecting, processing, and storing existing and new data, in real-time where possible and necessary. This architecture would also allow data scientists to clean, s earch, and filter data pre-analysis, analyze it as necessary, generate useful reports, and share actionable insights across the organization, and in some cases, to consumers. Further, this architecture must be scalable â€" as the volume of data will only grow, and secure, as a failure to maintain the privacy of consumer data can be a tremendously expensive mistake. Such architecture should communicate with existing (or new) customer relationship management systems and provide real-time intelligence to provide the most value for internal and external stakeholders.THE FUTURE OF BIG DATA AND SUPPLY CHAIN MANAGEMENTSeveral innovations and trends will not only accelerate the volume of data as a whole, but also the volume of data relevant to supply chain management. Mobile will continue to provide a major source of supply-chain relevant data, driven by the GPS technology in mobile devices, as well as the proliferation of social networks specializing in social discovery, which allows users to discover people and events of interest based on location. Deep analysis of consumer location information can afford firms even greater efficiency at getting products to consumers, whether through optimizing the locations of regional fulfillment centers or even distribution of products at those events and venues well frequented by its consumers.The Internet of Things â€" the attachment of sensors and other digital technologies to traditionally non-digital products to capture data, are currently, and will continue to be a major source of data of use to data scientists working on supply chain optimization. For example, a smart device can be built to send messages to the manufacturer when they are broken, which can generate production on a replacement part or full device, before its owner calls customer service. If the device is outmoded, its signal to the manufacturing firm can provide the customer service representative (and/or sales staff) with the information to prepare for an u psell.Cloud computing itself has driven Big Data’s growth significantly, as its inherent digitization of a firm’s operational data demands new methods to leverage it. As more firms take advantage of the benefits of cloud computing (such as reduced capital costs, economies of scale, and increased flexibility), adoption of Big Data’s management tools and techniques will grow. Moreover, as it grows, firms will demand increasingly sophisticated business intelligence systems, methods of predictive analysis, and tools for data mining, which the market will provide.

An Analysis Of The Egyptian Stock Market Finance Essay - Free Essay Example

Sample details Pages: 25 Words: 7567 Downloads: 9 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? Dividend policy and the factors behind its determination are considered to be a widely tackled topic in the world of modern finance given the indefinite theories supporting its crucial impact on the firms value and hence arousing great controversy. Most of the research implemented tackled developed markets as opposed to emerging markets which are believed to add a lot to the debate that deeply roots to the seventies given the different nature and lack of efficiency that emerging markets possess and hence adds to the attractiveness of the debate. This paper will mainly cover the key determinates to the dividend policy and how these determinants impact its formation in the most tradable listed companies in the Egyptian stock market over a period of five years 2006-2011 in the first research done by the author. Don’t waste time! Our writers will create an original "An Analysis Of The Egyptian Stock Market Finance Essay" essay for you Create order This paper is structured as follows: Chapter 2 deals with literature review tapping on its theoretical and historical background. Chapter 3 deeply covers methodology, research question, objectives, and hypothesis analysis. Chapter 4 Data Analysis, Results and recommendations. Keywords: Dividend Policy, Dividend theories, Ownership Structure (Capital Structure), Cash Flow, leverage, Taxes, Sector, Profitability. Literature Review Theoretical background There are various researches and studies which examine a number of theories related to determinant of dividend policy. The main objectives of these theories and studies were to examine and find correlation between firm characteristics and dividend policy. Companies pays dividend when it has sufficient internal sources of funding, if companies reduce dividend payout the company owners may become worried about the company performance , since they consider it as a signal of company poor performance and low profits which leads to decline in stock price. According to the outcome model, dividends are paid because minority shareholders pressure corporate insiders to pay cash, while as per the Substitute model, insiders interested in issuing equity. In general, higher dividends payouts lead to lower Retained Earnings and Capital Gain and vice versa, leaving total wealth of shareholders unchanged. In certain countries, shareholders are taxed more heavily on dividends receipts th an on capital gain. Firms can signal future profitability through paying dividends. Firms that initiate dividends, experience share price increases, and vice versa. Recently an idea has been focused on, implementing that dividends policies address agency problems between corporate insiders and outside shareholders. This theory implies that unless profits are paid, it might be diverted by the insiders for personal use, or which may result in commitment to unprofitable projects with benefits to those insiders. Dividend Theoretical back ground. Agency Theory. Insiders, who control corporate assets, can use these assets for purposes that are detrimental to the interest of outside investors. They also can use corporate assets to pursue investment strategies that yield them personal benefits of control. Through dividends, insiders return corporate earnings to investors and wont be able to using such earnings to benefit themselves. This is because managers who possess cash would like to reinvest in projects that will yield them personal benefits Also paying dividends exposes companies to the possible need to come to the capital markets in the future to raise external funds. Paying dividends result in lesser cash flow available in the hands of insiders (managers), which mitigate their ability to spend on projects which benefit their own interest. Dividends could serve as a tool to reduce or eliminate agency cost, in addition companies will pay lower dividend when manager holds equity in the company. If mangers hold a position in the company equity it will defiantly affect the dividend policy. Chen Steiner (1999). , Al-Najjar and Hussainey2009. Agency cost might be reduced if insiders boost their share in the company by making the managers the eventual owners of company, yet this ultimate ownership by management will lead to a conflict of interest between the management and outsiders since the insiders will try to retain more cash under their management either by decreasing payment of dividends or by continuously paying out dividends at a at low level bearing in mind the tax consideration above in developed markets (Jensen and Meckling 1976). Directors manage the companies through a contract between the shareholders and managers, in which the mangers have power and authority to manage the company in order to maximize shareholders wealth in return of a specific benefit. Jensen and Meckling (1976). If inside managers increase their common stock-ownership in the company, they will be keen on aligning th eir interest with shareholders interests; this will result in reducing equity agency cost. The higher common stocks held by managers, the more likely such owner-managers act in the interests of Shareholders and work on optimizing the companys value. Thus, a higher level of insider ownership will lead to lower agency problems and reduces the role of dividends as a monitoring tool to control for agency cost Controlling shareholders can effectively determine the decisions of the managers, and can implement policies that benefit themselves at the expense of the minority shareholders The main target of Corporate Governance is mainly reaching a compromise between the company management and the shareholders,( Jiraporn et al. (2008). If the company has a strong a well-established corporate governance regulations investors will be paid high dividend, both are positively correlated .Michaely and Roberts (2006) . Kowalewski et al. (2007). Companies with qualified and quality corporate governance team are more capable of controlling Agency cost and reducing them, thus paying more and higher dividends. Investors would prefer to maintain the companys debt ratio to the lowest level possible, out of belief that it will results in more dividends to them and thus it will reduce cash available to managers (Jensen 2009a , Meckling 1976). Also paying dividends exposes companies to the possible need to come to the capital markets in the future to raise external funds. Since payment of dividends prevents management from continuing to invest in bad projects, we should expect earnings and profitability to increase. However if the board decides on dividends, before management has a chance to overinvest, then it is difficult to predict and assess how future earnings will be relative and compared to past earnings Paying dividends result in lesser cash flow available in the hands of insiders (managers), which mitigate their ability to spend on projects which ben efit their own interest. If inside managers increase their common stock-ownership in the company, they will be keen on aligning their interest with shareholders interests; this will result in reducing equity agency cost. The higher common stocks held by managers, the more likely such owner-managers act in the interests of Shareholders and work on optimizing the companys value. Thus, a higher level of insider ownership will lead to lower agency problems and reduces the role of dividends as a monitoring tool to control for agency cost. Shareholders can utilize their legal powers in voting for Directors who offer better dividends policies, or by suing companies that spend too lavishly on activities that benefit only insiders. Good investor protection makes asset diversion legally riskier and more expensive for insiders. The greater the rights of the minority shareholders, the more the cash they can extract form the firm, other things equal. In the high protection countries shareh olders are able to extract dividends from companies by their ability to resist oppression rather than having any specific dividends rights. Generally, Shareholders, who feel protected, would accept low dividends, and high The investment policy of the firm cannot be taken as independent of its dividends policy, thus paying dividends may reduce the inefficiency of marginal investment. Also the allocation of profits to shareholders on pro rata basis cannot be taken for granted Firms in common law countries, where investors protection is better, make higher dividends than firm in civil law countries. Also, in common law countries, high growth firms make lower dividends than low growth countries.- Corporate and other laws grant outside investors, including shareholders, certain powers to protect their investment against expropriation by insiders. Power such as equality in receiving the same per share dividends as insiders, to the power to vote on important corporate matters. Common law countries appear to have better legal protection of minority shareholders, than civil law countries. Such better protection contributes to the efficiency of resource allocation and to economic growth. Reinvestment rates, from a company with good opportunities, as they know that when these investments pay off, they could extract high dividends. In contrast, if protection is poor, shareholders will try to get what they can. A firm must establish a reputation for moderation in expropriating shareholders, in order to have the chance and competences to raise funds from external resources at low cost and approach capital markets for funds. In countries with stronger shareholder protection, the need for reputational mechanism is weaker, and hence the need to pay dividends. Other things equal, dividends payout ratios should be higher in countries with weak legal protection than in those with strong protection. Firms with better growth prospects have a stronger incentive to establish a reputation. As they have need to raise fund from external resources. Thus firms with better growth prospects may choose higher dividends payout ratios than firms with poor growth prospects. The relationship between growth prospects and dividend payout is ambiguous, as in contrast to the above; firms with good growth prospects have a better use of funds than the ones with poor growth. In common law countries, payout ratios are strictly higher for slowly growing firms than rapidly growing ones. Results are consistent with the predications of the outcome of the Agency model, according to which well protected minority investors are happy with low dividend payout firms with good growth prospects In Civil law countries, in contrast, rapidly growing firms appear to pay higher dividends. On all measures of dividends payouts, countries with better shareholder protection have higher dividends payout ratios than do countries with worse protection. Within countries with good shareholder protection, high growth firms have lower dividends payout than low growth firms. Within countries with low shareholder protection, high growth firms have higher dividends payout than low growth firms. Agency approach is highly relevant to an understanding of corporate dividends policies. Signaling theory Firms with high future earnings and rewards would prefer announcing and signaling that to investors and outside parties in the market, while firms with low cash flow expectation will not declare or be able to do the same, as managers are not supposed to send wrong signals to the market. Investors can assume information about firms future earnings through the signal coming from dividend announcements, both in terms of the stability of, and changes in, dividends. The signaling hypothesis argues that special dividends provide a signal to investors of the firms improving potential earnings; Signaling theory could be tested through the company future increase in earnings.( Watts (1973).) Managers use special dividends to signal future operating performance for firms with high growth opportunities, and use special dividends to reduce agency costs for firms with low growth opportunities. The market reacts more strongly to the disbursement of excess cash flow by firms with low gro wth opportunities than it does to the announcement of a special dividend as a signal by firms with high growth opportunities. Also, the market reacts moderately to the special dividend announcement of a firm with higher growth opportunities and higher preannouncement cash flow, whereas the reaction is insignificant for firms with higher growth. Usually the stock market reacts positively to dividend announcement, when companies announce paying dividends the stock price moves up, we can say that there is a positive relation. Stock price react positively to any increase or special dividends, which enhance the signaling hypothesis, also it serve as an evident to the fact that mangers will be willing to pay dividend if they have faith in the company future earnings that it will steadily increase and grow, dividend also serve as a signal to future cash flow of the company, which reflect stability in future earning and positive cash flow vis versa. Lintner(1956). Lipson Maquieira and Megginson (1998) ( Kale Noe (1990). As managers are likely to have more information about the firms future prospects than outside investors, they may be able to use changes in dividends as a vehicle to communicate information to the financial market about a firms future earnings and growth. Outside Investors may perceive dividends as a reflection of the managers assessment of a firms performance and prospects. However, managers should possess private information about the firms prospects, and have incentives to convey such information to the market. Based on that, a signal should be true, that is, a firm with poor future prospects should not send false signals to the market by increasing dividends payments. Thus the market should be able to rely on the signal to differentiate among firms. If these conditions are fulfilled, the market should be able to react favorably to the announcements of dividends increase and unfavorably otherwise. (Al-Najjar and Hussainey 2009b). Div idend payout is an indication of the company historical healthy performance however future earnings could be negative, which means that company current positive performance could not be an indication of future performance. We can notice companies paying good dividends and in the coming years it could be in a financial squeeze and are not able to pay any dividend. (Benartzi et al. 1997). Companies with strong corporate governance will prefer to announce low dividend payout, in case there is potential future investment opportunities, on the contrary companies with poor corporate governance will prefer to announce high dividend payout since it acts as a signal that the company management is doing a good job for the shareholder interest. (.Aharony and Swary, 1980 ) . Pecking order Theory Companies will initially seek Retained Earnings to finance announced dividends, and then seek debt to borrow, if Retained Earnings are insufficient, instead of issuing new shares. Companies usually prefer internal funding on external one .Mayers (1984), and Myers and Majluf (1984). Financing comes from three sources: internal funds, debt and new equity, Companies prioritize their sources of income, first priority to Internal Financing, debt, and then finally raising of equity is the last resort. Raising capital through equity is not usually preferred means; since shareholders sometimes thought that managers believes that the company is overvalued they are trying to benefit from this mispricing, at that point investor will not be willing to place high value for the new issue. The issue of equity would signal lack of confidence in the board and that the stock price is overvalued. Thus such issue can lead to a drop in share price if stock price is overvalued, the issue of equity would be favored. Myers (1984) From the point of view of an outside Investor, Equity is more risky than outside Debt, as it will demand higher rate of return on Equity than on Debt, however from the prospective of those inside the company, Retained Earnings are better source of income than Debt, and debt is a better deal than equity finance. This theory maintains that business usually adhere to a certain hierarchy of financing sources and prefer internal financing, if available, and then will prefer debt over equity for external financing. New Equity means issuing shares, which results in bringing external ownership into the company. The issue of debt signals the boards confidence and trust that an investment is profitable and that the current stock price is undervalued. The companies will adhere to pecking order theory to finance its operations (Al-Najjar Hussauney, 2009b). As equity markets become larger and more liquid, dependence on marginal debt financing drops sig nificantly. In the presence of both debt and equity markets, the relative importance of debt (as captured by aggregate debt to equity ratio) appears to fall as economies grow. Transaction cost Theory Companies that enjoy low transaction costs of equity or debt issuance may be more willing to pay dividends than firms that have high transaction costs. A company will be willing to pay dividends when its internally generated funds are not completely utilized for investment purposes, and when it experiences low growth. Rozeff (1982). Larger companies possess the privilege of smaller transaction (issuing cost) because of economies of Scale. Companies size plays an important role in the dividend pay-out ratio. Larger companies have easier access to the capital market, which reduces their dependence on internally generated funding and allows for higher pay-out ratios Companies that have a low transaction cost of equity or debt issuance may be more willing to distribute cash dividends more than companies with high transaction cost. Firms that have low transaction costs of equity or debt issuance may be more inclined to distribute cash dividends than firms that have high transac tion costs. The more paid dividends the lower will be the agency cost incurred. However, the more paid dividends will lead to an increase in the transaction cost. If Shareholders seek a steady flow of income from their capital investment, then dividend payments would be the cheapest way to achieve such goal. The companies size will be an important determinant of the dividend policy, since the small companies would mainly rely on debts to finance their activities and payment of dividends, thus such small companies will face higher transactions cost than larger ones. If dividend payments will minimize transaction costs shareholders, then positive dividends payout would be optimal. There is an argument that, despite the fact that Transactions cost has dramatically been reduced, such reduction should have resulted in lower demand in dividends, as the alternative options have been reduced, but there is no apparent evidence of a shift or reduction in dividends payment which is related to such change in transaction cost. Such argument specifically applies to small investors who do not hold many shares, thus the cost of transaction will be higher. Bird in hand Theory The bird-in-the-hand may sound familiar as it is taken from an old saying: a bird in the hand is worth two in the bush. In this theory the bird in the hand is referring to dividends and the bush is referring to capital gains. Dividend, as a general rule, increase firms value, Shareholders have preference for cash than future capital gain on which stocks to build a position in. Thus a divided payment is associated with increasing firms value investors prefer higher dividend which reduces uncertainty about future cash flows. A high payout ratio will reduce the cost of capital and thus increase share value (Gordon and Lintner, 1962). If company will increase its dividend payout ratio, shareholders became concerned about the firm future capital gain, since the retained earning will be negatively affect , this also could hinders management from potential future investment opportunities which could increase in future earnings One of the leading theories back then was the bird in hand theory and explicitly stating that investors prefer dividends as opposed to retained earnings as they viewed dividends to offer more certainty than retained earning which came second in terms of certainty and inevitability Current dividends are relatively more certain than future capital returns. Shareholders are risk averse and prefer to receive dividends in the present than to future capital gains (Gordon, 1962, Miller and Modiglianis 1961). Shareholders are not entitled to fixed returns. Current dividends are relatively more certain than future capital returns. Shareholders are risk averse and prefer to receive dividends in the present than to future capital gains. Investors values each dollar paid as a dividend four times as opposed to each dollar kept on as retained earnings; also it has greater and more positive effect on share performance. (Diamond, 1967 ). Literature Review. Share price and perfect market. Dividend policy has been a fertile topic of discussion since Miller and Modigliani (1961) imposed that dividends are irrelevant and have hardly any influence on a firms share price in the event of having a perfect capital market, a matter that has created great debate. Opposing practitioners to the Miller and Modiglianis theory declined this preposition by stating that a perfect capital market assumption does not exist and introduced competing theories and research to provide pragmatic evidence that dividends matter most in imperfect capital markets which are the case in real world and hence dividends do have an impact on a firms share price. Baker and Wurgler (2004) companies are willing to initiate dividend when the stock prices react positively when deciding initiating dividend. When the market positively reacts with initiating dividend and adds premium to the stocks value. Fama and French (2001), Grullon, Michaely, and Swaminathan (2002), and DeAngelo, DeAngelo, and St ulz (2006)). Explains the life cycle theory for dividend payment, which shows that companies with high retained earnings compared to its total asset will be willing to initiate dividend Taxes. Sighting this debate from a tax preference angle we shall dig deep in the 1970s and 1980s where several research suggested that dividends are more disposed to higher tax cut than capital gains. (Brennan, 1970; Elton and Gruber, 1970; Litzenberger and Ramaswamy, 1979; Litzenberger and Ramaswamy, 1982; Kalay, 1982; John and Williams, 1985; Poterba and Summers, 1984; Miller and Rock, 1985; Ambarish et al., 1987) and that dividends are taxed directly but capital gains will be taxed/realized only when the stocks are sold and hence investors are more prone to keep a companys profit as opposed to distributing a cash dividend for tax related concerns. The benefit behind the tax treatment in capital gains may lead investors to prefer a low dividend payout. However this does not apply to Egypt as of yet since there is no tax charged on neither dividends nor capital gains. But this matter has been proposed for implication especially amid the January 25th revolution a matter that abolish ed economic stability with the government it brought down leading to an increase in the balance of payment deficit. Despite the turbulence arousing, all successive governments who normally disagree on one view came to unite in solving this problem by suggesting the imposition of taxes to both dividends and capital gains in attempts to increase its financial resources. Ownership structure. Among other determinants is the ownership structure where a correlation between ownership structure and dividend performance existed which is normally referred to the Agency problem in (Easterbrook, 1984; Jensen, 1986), which imposes that idea that dividends provide an indirect means of control to the management of a firm. Jensen and Meckling (1976) focused on the issue of Agency Cost Hypothesis and stated that dividend limits the cash under insiders management, therefore leaving them under tough capital market analysis. Jensen and Meckling (1976) argued that agency cost might be reduced if insiders increase their ownership in the firm by making the managers the eventual owners of company yet this ultimate ownership by management will lead to a conflict of interest between the management and outsiders since the insiders will make efforts to collect more cash under their management either by reducing payment of dividends or by continuously paying out dividends at a at low level bear ing in mind the tax consideration above in developed markets. Glen et al. (1995), Gul (1999a), Naser et al. (2004) and Al-Malkawi (2007) point out that in government ownership in emerging markets is major element of the dividend decision-making process. Gul (1999a) proposed a positive relationship between government ownership and dividends, debating that firms with high Government ownership face less hurdles in financing investment projects, and accordingly can afford to pay more dividends. On the contrary, firms with limited or no government ownership face difficulties in raising money, and instead rely on retained earnings for investments by paying small dividends. Legal Protection Text Glen et al. (1995) stated that shareholders in countries with poor legal protection need to be protected. Governments are normally heavy weighted investors and accordingly they should defend minority investors through observing the directors and forcing them to expel cash. Naser et al. (2004) added that in emerging market, there is a poor legal protection for investors; governments plays important role in order to build up a solid firm reputation where there is no abuse of minority shareholders by paying out large dividends. They further stressed building this reputation has substantial on emerging exchanges where the minority shareholders are suffering. Al-Malkawi (2007) communicated that the government plays an important role on behalf of its citizen who do not manage firm. The government was found to be the most the most powerful in influencing the dividend policy especially among large shareholders in firms listed on the Amman Stock Exchange. Accordingly in firms like the one discussed above a conflict might exist that is normally referred to as a double principal-agent conflict. This conflict may happen between citizens and government representatives or managers and government representatives in case the former does not act in the latters best interest. This problem could be solved through the payout of a larger dividend value which shrinks the cash flow available to managers and accordingly minimizing the agency problems of the firm. This explanation concurs with the study carried by Gugler (2003) who examined the dividend policies in Australian firms. Wrapping up the above there is a clear positive correlation between the dividend payout and the government ownership where the percent of shares owned by the government can be an indicator to the companys ownership structure. Free cash Flow. The percent of shares held by various types of shareholders is not being the only determinant of the dividend-agency framework; the free cash flow may also be of great significance. Jensen (1986) defined free cash flow as the cash flow in surplus of the funds essential for all projects with a positive net present value (NPV). He proved that as the increase in free cash flow escalates the agency conflict between the interests between the management and outside shareholders leading to a decrease in the performance of the company. While shareholders require their managers to maximize the value of their shares, the managers may have a conflicting interest and prefer to derive benefits for themselves. Jensens free cash flow hypothesis has been reinforced by studies by Jensen et al. (1992) and Smith and Watts (1992). La Porta et al. (2000) added that when a firm has a free cash flow, its managers will engage in extravagant practices. Various studies have argues that firms with a greater free cash flow need to pay more dividends to lower the agency costs of the free cash flow (Jensen, 1986; Holder et al., 1998; La Porta et al., 2000; and Mollah et al., 2002). Based on the above studies there is a positive relationship between the free cash flow and the dividend payout ratio and hence the dividend payout is positively associated with free cash flow. The Free Cash Flow Hypothesis (imposed by Jensen 1986) stipulated that companies normally focus on finding opportunities in new project to generate income profitability where the focus on dividend payout is less prior and is normally financed off the residual balance. Given this debate, the concept of complete separation between ownership and management is the most alluring to avoid conflict of interest between both parties. A study by Afza and Slahudin, 2009 concluded that the more profitable investment opportunities the less efficiency in the use of cash resources by management. the firms financial competence and liquidity position are considered key determinants of the dividend value. Companies facing liquidity squeeze will be more prone to pay out a stock dividend versus a cash dividend since paying stock dividends will not burden the companys liquidity status. Paying dividends in the form of stocks will lead to the company to increase its number of outstanding shares which directly hits the shareholders value and hence forces the company to strive more to increase its profit by at least the same percentages of increase in its shares to avoid dilution of its EPS. Company Size. The size of a firm plays an integral role on the level of financial constraint the firm is facing and accordingly is considered a key factor in determining the dividend amount paid out by such company. The bigger the firms size the higher value of their assets and hence it is easier for them to obtain funds through external capital markets whether by debt or equity. Large size firms also do not lower the amount the pay out as dividend to finance future profitable projects they are normally able to do both unless in its extremely inevitable for them. Small firms on the contrary, have restricted access to external debt or equity markets try to increase the amount of funds generated internally by growing their retention ratio which lowers the dividend payout ratio in an attempt to increase cash in hand to finance its new projects. Eddy and Seifert (1988), Jensen et al. (1992), Redding (1997), and Fama and French (2000) indicated that large firms allocate a higher amount of their net profits as dividends as opposed to small firms. Numerous studies have verified the influence of firm size on the dividend-agency association. Lloyd et al. (1985) were among the leaders to adjust Rozeffs model by adding firm size as an supplementary variable. They considered it an important descriptive constituent, as large companies are more likely to increase their dividend payouts to lower their agency costs. Their adjustment to the Rozeff model actually supports Jensen and Mecklings (1976) debate that stated that agency costs are connected with firm size. They supported the idea that for large firms the ownership structure has a bargaining control which hence increases agency costs. Adding to this, Sawicki (2005) demonstrated that dividend payments can help to indirectly monitor managers performance in large firms. In large firms, information irregularity surges due to ownership dispersal, shrinking the shareholders capability to control the internal and exter nal activities of the firm. This result in a decreased inefficient control by the management where paying out a large dividend value can be a solution to this problem since it escalates the need for external financing which accordingly leads to more control on these firms from external creditors. Holder et al. (1998) communicated illustrated in a study that a positive relation exists between dividends, firm sizes and transaction costs. The study revealed that larger firms have better access to capital markets and accordingly have easier access to raise funds at low costs which allows a payout of higher dividends. Leverage. The firms capital structure and leverage also affect its dividend decisions. A study by Darling (1957) debated that highly leveraged companies need more cash and liquidity to meet its future payment obligations. Also high leveraged company are normally threaten by liquidity shortage and accordingly are subject to insolvency due to the extended burden on the companys liquidity position and the non-payment of interest which normally reduces the companys cash flows available for dividend payments making having high debt ratio companies pay low dividends (Rozef, 1982) Profitability. On the other hand, companies profitability is an important measure of dividend payout determinant. Lintner (1956) found that companies net profits are important determinant of dividend change and De Angelo Et. Al (1992) claimed that current profit is a critical determinant of dividend decision. This is why managers are unwilling to lower dividend payout ratios unless when earnings are very low; also the more profits generated by a company the more dividends it pays out. Mayers and Frank, 2008 Fama and French (200). In line with Fama and French (2001), we concluded that companies who pays dividend always profitable large companies, on the other hand this relation is not always the case across different countries it could be different. The fact that the ownership of firms isnt diversified or slashed into small group creates the burden of financial tunneling as major shareholders strive to work for the benefit of their big stakes which normally conflicts with the benefit of the firm and smaller shareholders exploiting the financial capabilities for their interest. Research Gap. From the previous studies we found that there isnt any study that analyze or examine determinates of dividend policy of the Egyptian listed companies. Methodology In the last chapter I find that there is a research gap, since there isnt any studies which examine or analyze the determinates of dividend policy of the Egyptian listed companies (most active) Research Questions Accordingly, we can say that our research question is what are the main determinates of dividend policy for the Egyptian listed stocks EGX 100) Research Objectives 3.2.1. Determining theoretical back ground of dividend policy. 3.2.2. Determining the historical back ground of dividend policy. 3.2.3. Scanning literature review regarding determinants of dividend policy 3.2.4. Discover main determinants of dividend policy. 3.2.5. Studying the effect of each determinates of dividend policy. 3.2.6. Studying the relative importance of each determinates of dividend policy. 3.2.7. Directing the other researchers towards the future researched dividend policy. 3.2.8. Studying the effect of each determinates of dividend policy. 3.2.9. Studying the effect of each determinates of dividend policy. Research Model Profitability Leverage Ownership structure Free Cash flow Control Variables Industry. Size Determinants (Independent) Cash Dividend. Dividends (Dependent) Stock Dividend. The Independent Variables: Size: continuous quantitative variable Leverage: Continuous quantitative variable ranges from 0 to 1. Cash flow : Continuous quantitative Variable Profitability: Continuous quantitative variable ranges from 0 to 1. The Industry : Nominal variable contains 29 industry The Ownership Structure: Binary Variables contains 2 categories 0 for the companies which is More than 50% of ownership is Anchor or institutional, and 1 for the companies which is More than 50% of ownership is Retail. The Dependent variables: The cash Dividend. : a continuous variable The Stock Dividend. Binary variable contains 2 categories 0 no stock dividends and 1 yes. Hypotheses 3.4.1. There is a positive relation between the company size dividends paid. 3.4.2. There is a positive relation between the company profitability dividend paid. 3.4.3. There is a negative relation between intuitional ownership dividend paid. 3.4.4. There is a positive relation between retail ownership dividend paid. 3.4.5. There is a positive relation between the company free cash flow and divided paid 3.4.6. There is a negative relation between the company leverage and dividend paid 3.4.7. There is a positive relation between the company size and dividend paid Population and sample In this research paper we gathered data for the most active listed companies, about 100 companies included in the EGX 100ondex. Data Collection Our sample is prepared using data gathered from Bloomberg Mubasher; the sample includes all firms included in the EGX 100 .Bloomberg offers information on total assets, ROE, ROA, Free Cash flow, Leverage, ownership structure for years 2006 till 2011. Research limitation Though this paper was cautiously prepared, I believe that there are some limitations. The number of Egyptian listed stocks is limited. Companies do not report its financials in unified shape Lack of companys historical financials since Egypt is considered as emerging market. Lack of data sources. During the last 5 years a lot of profitable companies were bought by anchor or institutional investors which limits and change the number of active and profitable companies in the study. Data Analysis, Results and recommendations In this section of the research we will examine the hypothesis. As stated previously, this paper used historical data for the stocks include in the EGX 100 and special statistical techniques (multiple-regression) to study the correlation between variables in addition examine hypotheses Descriptive Statistics Table: Descriptive Statistics of The Variables Included in the investigation: N Minimum Maximum Mean Std. Deviation Size (in what Unit for ex millions) 479 3.8795 94952 6060 14136 LEVERAGE % 376 .0001 735 59.5 91.3 Cash Flow (in what Unit for ex millions) 463 -363 113.80 -2.497 33.9891 Profitability % 427 -127.33 161.9773 16.051 19.789 Cash Dividend (in what Unit for ex millions) 588 .000 310.480 1.07201 12.8896 The means of SIZE, LEVERAGE, CASH FLOW, and CASH DIVIDENDS are 6060, -2.479, 16.051, and 1.07201 respectively. These variables have high variability as measured by standard deviations of 14136, 91.3, 33.99, and 12.89, respectively. But, the mean of the PROPFITABILITY is 16.051, and has low variability, as measured by a standard deviation of 19.789.These higher degrees of variability indicate that there are large differences among companies. Table: Frequency Table f or Stock Dividend variable: Frequency Percent Valid No 508 86.4 Yes 80 13.6 Total 588 100.0 86.4% of the companies dont give stock dividends while only 13.6% do. Table: Frequency Table for ownership variable: Frequency Percent Valid 50% Retail 348 59.2 = 50% Retail 240 40.8 Total 588 100.0 40.8% of the companies with more than 50% Retail ownership while 60% of the companies with more than 50% Anchor or institutional ownership. Table: Frequency Table for industry variable: Industry Frequency Percent Valid Percent Valid 1 42 7.1 7.1 2 30 5.1 5.1 3 18 3.1 3.1 4 30 5.1 5.1 5 138 23.5 23.5 6 54 9.2 9.2 7 12 2.0 2.0 8 6 1.0 1.0 9 6 1.0 1.0 11 6 1.0 1.0 12 30 5.1 5.1 13 12 2.0 2.0 14 30 5.1 5.1 15 12 2.0 2.0 16 18 3.1 3.1 17 12 2.0 2.0 18 24 4.1 4.1 19 36 6.1 6.1 20 6 1.0 1.0 21 6 1.0 1.0 22 6 1.0 1.0 23 6 1.0 1.0 24 6 1.0 1.0 25 6 1.0 1.0 26 6 1.0 1.0 27 6 1.0 1.0 28 12 2.0 2.0 29 6 1.0 1.0 30 6 1.0 1.0 Total 588 100.0 100.0 Correlation First Studding the effect of The Independent Variables on the Cash Dividends: Table: Pearson Coefficient Correlation Matrix: Profitability Cash Flow LEVERAGE Size Cash Dividend Profitability Pearson Correlation 1 .129** .043 .199** .026 Sig. (2-tailed) .009 .422 .000 .586 N 427 407 344 427 427 Cash Flow Pearson Correlation .129** 1 .049 -.097* .014 Sig. (2-tailed) .009 .365 .040 .758 N 407 463 350 443 463 LEVERAGE Pearson Correlation .043 .049 1 .104* .018 Sig. (2-tailed) .422 .365 .043 .732 N 344 350 376 376 376 Size Pearson Correlation .199** -.097* .104* 1 .147** Sig. (2-tailed) .000 .040 .043 .001 N 427 443 376 479 479 Cash Dividend Pearson Correlation .026 .014 .018 .147** 1 Sig. (2-tailed) .586 .758 .732 .001 N 427 463 376 479 588 Cash Dividend Vs Profitability: Sinc e P-value =0.586 which is greater than ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±/2 =0.025 so we dont reject Ho: ÃÆ' Ãƒâ€šÃ‚ =0 i.e. we are 95% confident that there is no significant relationship between Cash Dividend Profitability i.e. they are independent. Cash Dividend Vs Cash flow: Since P-value =0.758 which is greater than ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±/2 =0.025 so we dont reject Ho: ÃÆ' Ãƒâ€šÃ‚ =0 i.e. we are 95% confident that there is no significant relationship between Cash Dividend Cash flow i.e. they are independent. Cash Dividend Vs leverage: Since P-value =0.732 which is greater than ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±/2 =0.025 so we dont reject Ho: ÃÆ' Ãƒâ€šÃ‚ =0 i.e. we are 95% confident that there is no significant relationship between Cash Dividend Leverage i.e. they are independent. Cash Dividend Vs Size: Since P-value =0.001 which is less than ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±/2 =0.025 so we reject Ho: ÃÆ' Ãƒâ€šÃ‚ =0 i.e. we are 95% confident that there is significant linear weak relationship between Cash Dividend Size with ÃÆ' Ãƒâ€šÃ‚ =0.147 Table : Eta measure for association between Cash Dividend and Industry: Value Nominal by Interval Eta Cash Dividend Dependent .082 Industry Dependent .593 Using Eta Measure it seems there a weak relationship between Cash Dividend and Industry. Table : Cramers V measure for association between Cash Dividend and Industry: Value Approx. Sig. Cramers V .572 .000 Since P-value 0.0005, we reject Ho: Independence I.e. there is an intermediate relationship between Industry and Cash Dividend. From The above Tables we deduce that 2 variables only would be used in the regression model: The Size of the Company. The Industry. To be used in the regression, The Variable of Industry would be reco ded into New 29 variable to have a binary variable represent each sector with value 1 if the company belongs to that sector and 0 otherwise. Regression The Variables Entered to the model: Model Variables Entered 1 Size Table : Goodness of fit Model Adjusted R Square 1 .020 This Model Explains 2% of the variations in Cash dividend variable, i.e its a poor fit model. Table : The Significance of The model: Model Sum of Squares df Mean Square F 1 Regression 2112.156 1 2112.156 10.575 Residual 95272.863 477 199.733 Total 97385.019 478 a. Predictors: (Constant), Size b. Dependent Variable: Cash Dividend Since p-value = 0.001 which is less than ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±=0.05 we are 95 % confident that the model is significant. Table : the Significance of the Coefficients: Beta 1 (Constant) .402 Size .147 Since the p-value of the constant Coefficient ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²o equals 0.568 i.e. More than ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±=0.05 Then we dont reject Ho: ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²o=0 Since the p-value of the constant Coefficient ÃÆ'Ã… ½Ãƒâ €šÃ‚ ²1 equals 0.001 i.e. less than ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±=0.05 Then we reject Ho: ÃÆ'Ã… ½Ãƒâ€šÃ‚ ²1=0 I.e. when the size of the company increases by one unit the cash Dividend would increase by 0.147 units. Table : The Excluded Variables From the model: Model Beta In t Sig. Partial Correlation Co linearity Statistics Tolerance 1 Ownership structure -.047a -1.034 .302 -.047 .995 sec2 -.003a -.073 .942 -.003 .995 sec3 -.006a -.126 .900 -.006 .997 sec4 .008a .174 .862 .008 .994 sec5 .077a 1.714 .087 .078 .999 sec6 .014a .307 .759 .014 .986 sec7 .005a .104 .917 .005 .999 sec8 -.002a -.037 .970 -.002 .999 sec9 -.003a -.070 .944 -.003 .999 sec11 -.008a -.186 .852 -.009 1.000 sec12 -.095a -1.899 .058 -.087 .819 sec13 -.002a -.045 .964 -.002 .996 sec14 -.023a -.498 .619 -.023 .997 sec15 -.006a -.143 .886 -.007 .998 sec16 -.011a -.244 .807 -.011 .999 sec17 -.004a -.087 .931 -.004 .997 sec18 -.033a -.670 .503 -.031 .851 sec19 -.003a -.058 .954 -.003 .991 sec20 -.018a -.403 .687 -.018 .991 sec21 -.008a -.168 .867 -.008 1.000 sec22 .004a .093 .926 .004 .998 sec23 -.003a -.057 .955 -.003 .998 sec24 -.006a -.133 .894 -.006 .999 sec25 .003a .076 .940 .003 .998 sec26 .004a .090 .929 .004 1.000 sec27 -.002a -.050 .960 -.002 .999 sec28 -.004a -.083 .934 -.004 .997 sec29 -.003a -.065 .949 -.003 .998 sec30 -.002a -.033 .973 -.002 .998 Since P-value of All the variables in the above table is more than ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±= 0.05 So all t he coefficients are insignificant so all this variable have no significant effect on the Cash dividend so they are excluded from the model b. Dependent Variable: Cash Dividend The prediction Model: (Expected Cash Dividends)= (0.147) (Size) SECOND: Studding the Effect of The independent variables on the Stock Dividend: Table : Comparing Means of Profitability between Companies give Stock Dividends and Companies dont: Levenes Test for Equality of Variances F Sig. Profitability Equal variances assumed 4.040 .045 Equal variances not assumed Since P-value of Levenes test =0.045 which is ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±/2 =0.025 then we dont reject Ho i.e. we assume equal variances Since P-value =0.797 which is ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±/2 =0.025 then we dont reject Ho: My=Mn i.e. we are 95% confident that there is no significant difference in profitability between The Companies that give Stock Dividends and the Companies that dont give on average. I.e. profitability and stock dividend are independent. Table : Comparing Means of leverage between Companies give Stock Dividends and Companies dont: Levenes Test for Equality of Variances F Sig. LEVERAGE Equal variances assumed 1.321 .251 Equal variances not assumed Since P-value of Levenes test =0.251 which i s ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±/2 =0.025 then we dont reject Ho i.e. we assume equal variances Since P-value =0.322 which is ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±/2 =0.025 then we dont reject Ho: My=Mn i.e. we are 95% confident that there is no significant difference in leverage between The Companies that give Stock Dividends and the Companies that dont give on average. I.e. leverage and stock dividend are independent. Table : Comparing Means of Cash flows between Companies give Stock Dividends and Companies dont: Levenes Test for Equality of Variances F Sig. Cash Flow Equal variances assumed .282 .596 Equal variances not assumed Since P-value of Levenes test = 0.596 which is ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±/2 =0.025 then we dont reject Ho i.e. we assume equal variances Since P-value =0.759 which is ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±/2 =0.025 then we dont reject Ho: My=Mn i.e. we are 95% confident that there is no significant difference in Cash flows between The Companies that give Stock Div idends and the Companies that dont give on average. I.e. Cash flows and stock dividend are independent. Table : Comparing Means of Size between Companies give Stock Dividends and Companies dont: Levenes Test for Equality of Variances F Sig. Size Equal variances assumed 4.249 .040 Equal variances not assumed Since P-value of Levenes test = 0.04 which is ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±/2 =0.025 then we dont reject Ho i.e. we assume equal variances Since P-value =0.224 which is ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±/2 =0.025 then we dont reject Ho: My=Mn i.e. we are 95% confident that there is no significant difference in Size between The Companies that give Stock Dividends and the Companies that dont give on average. I.e. Size and stock dividend are independent. Table : Measuring the association between Industry and Stock Dividend: Value Approx. Sig. Uncertainty Coefficient Symmetric .023 .024 stock dividend Dependent .095 .024 Industry Dep endent .013 .024 With Stock Dividend dependent. Since P-value = 0.024 which is less than ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±=0.05 we reject Ho: independence we are 95% confident that Industry and STOCK DIVIDENDS are associated Table : Measuring the association between Ownership structure and Stock Dividend: Value Approx. Sig. Ordinal by Ordinal Gamma .040 .743 Since P-value = 0.743 which is less than ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±=0.05 we dont reject Ho: independence we are 95% confident that build and .private are independent. From the above tables we assume that all the variables cant be included in the logistic regression model except for Industry. The Logistic  Regression: Table : the dependent Variable: Original Value Internal Value no 0 yes 1 The Variable of Industry would be recoded into New 28 variable with base category sector 1 to have a binary variable represent each sector with value 1 if the company belongs to that sector and 0 otherwise. Table: Variables Excluded from the Model: Variables not in the Equation Score df Step 0 Variables Industry 38.176 28 Industry(1) 1.607 1 Industry(2) 1.295 1 Industry(3) 3.173 1 Industry(4) 1.100 1 Industry(5) 1.438 1 Industry(6) 1.943 1 Industry(7) 1.929 1 Industry(8) .955 1 Industry(9) .955 1 Industry(10) .955 1 Industry(11) 10.467 1 Industry(12) .290 1 Industry(13) .252 1 Industry(14) .098 1 Industry(15) 1.173 1 Industry(16) .098 1 Industry(17) 3.940 1 Industry(18) .907 1 Industry(19) .955 1 Industry(20) .955 1 Industry(21) .048 1 Industry(22) .048 1 Industry(23) 2.007 1 Industry(24) .048 1 Industry(25) 2.007 1 Industry(26) .048 1 Industry(27) .290 1 Industry(28) .955 1 Overall Statistics 38.176 28 Table : Goodness of fit Chi-square df Sig. Step 1 Step 44. 609 28 .024 Model 44.609 28 .024 Since p-value of step wise =0.024 ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±=0.05 since p-value of model 0.024 ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±=0.05 Then, the model is significant Step Nagelkerke R Square 1 .133 This Model Explains 13.3% of variations in the dependent variable. Table : The Classification table: Classification Tablea,b Observed Predicted stock dividend no yes Step 0 stock dividend no 508 0 yes 80 0 Overall Percentage A. Constant is included in the model. b. The cut value is .500 The model succeeded to classify all the observations of category 2 but failed to classify any in category 1 which means the model is imbalanced. Variables in the Equation B S.E. Wald df Sig. Step 1a Industry 20.461 28 .847 Industry(1) -.956 1.249 .586 1 .444 Industry(2) -1.030 1.317 .611 1 .434 Industry(3) .654 1.215 .290 1 .591 Industry(4) .223 1.187 .035 1 .851 Industry(5) .000 1.119 .000 1 1.000 Industry(6) -.916 1.212 .571 1 .450 Industry(7) -19.593 1.160E4 .000 1 .999 Industry(8) -19.593 1.641E4 .000 1 .999 Industry(9) -19.593 1.641E4 .000 1 .999 Industry(10) -19.593 1.641E4 .000 1 .999 Industry(11) .916 1.162 .622 1 .430 Industry(12) -.788 1.514 .271 1 .602 Industry(13) .000 1.200 .000 1 1.000 Industry(14) .000 1.342 .000 1 1.000 Industry(15) .357 1.233 .084 1 .772 Industry(16) .000 1.342 .000 1 1.000 Industry(17) -19.593 8.2 04E3 .000 1 .998 Industry(18) -.788 1.250 .398 1 .528 Industry(19) -19.593 1.641E4 .000 1 .999 Industry(20) -19.593 1.641E4 .000 1 .999 Industry(21) .000 1.549 .000 1 1.000 Industry(22) .000 1.549 .000 1 1.000 Industry(23) .916 1.396 .431 1 .512 Industry(24) .000 1.549 .000 1 1.000 Industry(25) .916 1.396 .431 1 .512 Industry(26) .000 1.549 .000 1 1.000 Industry(27) -.788 1.514 .271 1 .602 Industry(28) -19.593 1.641E4 .000 1 .999 Constant -1.609 1.095 2.159 1 .142 a. Variable(s) entered on step 1: Industry Since P-value of all coefficients is larger than ÃÆ'Ã… ½Ãƒâ€šÃ‚ ±=0.05 Then all The Coefficients of the Model are insignificant. References: -Afza, Talat and Ch. Slahudin. (2009). Management Ownership and Firm Performance: Evidence from An Emerging Economy, Corporate Ownership and Control Journal, Vol.6, issue 4, pp.88-95. -Al Kuwari, 2009, Determinants of the Dividend Policy in Emerging Stock Exchanges:The Case of GCC Countries.Global Economy Finance Journal vol. 2 No. 2 September 2009. Pp. 38-63.https://ssrn.com/abstract=1793150 -Al-Malkawi, H. N., 2007, Determinant of Corporate Dividend Policy in Jordan, Journal of Economic and Administrative Since 23, 44-71. -Ambarish, R, K. John and J. Williams, 1987, Efficient Signalling with Dividends and Investments, Journal of Finance 42, 321-343. -Black, F., 1976, The Dividend Puzzle, Journal of Portfolio Management 2, 5-8. -Brennan, M., 1970, Taxes, Market Value and Corporate Financial Policy, National Tax Journal 23, 417-427. -Brigham, F. and J. Gordon, 1968, Leverage, Dividend Policy, and the Cost of Capital, Journal of Finance 23, 85-103 - Darling, P.G. (1957). The Influence of Expectations and Liquidity on Dividend Policy, Journal of Political Economy, 65(3), p 209-224. -De Angelo, Harry, L. De Angelo. and D. J. Skinner (1992). Dividends and Losses, Journal of Finance 47, 1837-1863. -Easterbrook and H. Frank. (1984). Two Agency- Cost Explanations of Dividends, American Economic Re

Why Im Considering Becoming a Mechanical Engineer Essay

Finding out how and why things work and discovering how products are made has always my passion. I regularly watch engineering and science shows on the television. From my childhood, I have always been a very curious person who would not believe just because someone told me, but I had to know the reason behind it. Science always fascinated me, and I always wondered how we remained on the ground and never fell off something that is spherical. In school I was more interested in maths and science rather than History or Arts and this made me choose Chemistry, maths and physics as my Higher subjects. This has helped me appreciate how Science has been utilised to improve man’s life and make it easier. It is because of this that I would like to†¦show more content†¦Apart from my curriculum, I am involved in various extracurricular activities such as cricket and basketball. 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Ethics, CSR and Leadership Report †“Business Must Act Ethically” Free Essays

string(60) " Code of Best Practice in their annual report and accounts\." 1.Introduction Given the impact businesses have on society it is integral that they act ethically in order to ensure that the needs of society are continuously being met. If businesses do not act ethically they risk losing shareholders, stakeholders and customers (The Times, 2013, p. We will write a custom essay sample on Ethics, CSR and Leadership Report – â€Å"Business Must Act Ethically† or any similar topic only for you Order Now 1). If businesses do not act ethically then they will be unable to survive in the competitive world. This is because businesses with strong ethical values are highly respected and enable better decisions to be made (Fenando, 2010, p. 110). Businesses are therefore required to act ethically in order to protect their own interests as well as those of society. This report will examine why businesses must act ethically by answering numerous questions surrounding business ethics. 2.Organisational Issues Regarding Business Ethics This question will identify, evaluate and critically analyse the issues an organisation needs to consider with respect to business ethics. In doing so, the importance of business ethics will first be identified, followed by a review as to how businesses can ensure that business ethics are being incorporated into their business. There is a growing need for organisations to reduce the risk of litigation by placing greater emphasis on the issues surrounding business ethics. Businesses are continuously recognising the need to take extra care by prioritising the â€Å"the application of ethical values, including integrity, fairness, respect and openness, to business behaviour† (Institute of Business Ethics, 2013, p. 1). Essentially, organisations are now more aware than ever that business needs to be conducted to a high standard, especially since the number of corruption allegations and subsequent investigations that have been made in recent years. Different policies and processes are frequently created so that organisations can ensure that they are conducted business in a way that minimises corruption (United Nations, 1999, p. 5). However, organisations cannot conform to proper business ethics by the creation of policies alone. They need to ensure that such policies are being implemented within the day-t o-day running of the business. Corrupt agents are a major problem for many businesses (Groenendikj, 1997, p. 207) as they are not always easy to detect. Nevertheless, in order to avoid any problems arising as a result of corrupt agents and therefore mitigate the risks associated with unethical business practices, businesses should ensure that they set out the clear needs of a particular agent. Businesses should also provide explanations as to why certain means cannot be used to perform business tasks, which ought to be subject to approval from senior executives. They should also set out clear guidelines that are designed to assist proposed payments for all tasks and carry out comprehensive due diligence processes. Businesses should also ensure that they have face to face meetings with all agents that they deal with and cash payments should be strictly prohibited. The agent should also be required to sign a contract which states that they will fully adhere to the organisations anti-c orruption policies and Code of Conduct. Organisations also have to consider facilitation payments, especially if dealing with underdeveloped countries where facilitation payments are commonplace (SFO, 2010, p. 2). Strict prohibitions should thus be in place with regards to facilitation payments, however as this is not possible in all countries where facilitation payments often need to be made, certain conditions should be attached to the payments. This will minimise the likelihood of corruption and will ensure that the organisation is operating ethically. Gifts and hospitality are further issues organisations need to be careful of as these can be seen as bribes. This occurs in situations whereby the bribe is disproportionate and thus imposes an obligation on the recipient. In avoiding situations such as this, organisations must ensure that they have clear guidelines in place for what is and is not considered acceptable as a gift or hospitality. In addition, individuals that have high level management responsibilities shoul d provide approval before any gifts or hospitality can be accepted. If organisations are conducting business oversees they will also be required to adhere to the laws of other countries as there may be different bribery laws that exist (Healy and Ramanna, 2013, p. 1). Given that different organisations will have different rules and policies on business ethics, extra caution also needs to be taken when entering into acquisitions, joint ventures and contractors. All companies entering into new business relationships must therefore undertake ethical due diligence checks to identify whether different policies and procedures are in place (Brown and Mitchell, 2001, p. 20). If this is the case, they will then be required to come to some agreement as to how business should be conducted in order to ensure that their business ethics code is being adhered to. Although many believe that business ethics reduces competition because of the fact that organisations will become â€Å"soft†, it is important that all company’s do act ethically in order to prevent the company’s reputation from being damaged. Effective ethical policies and procedures can also act as a powerful marketing tool and also helps companies ensure that they are fully compliant with the law. Business ethics improves professional standards and allows the company to see to the needs of the community, which in turn has a positive effect upon the company in the long term. By ensuring voluntary compliance with ethical codes of conduct, businesses avoid having to make drastic changes when new rules and regulations are implemented. Despite this, it is often very difficult to determine what is actually considered ethical as each organisation will have different ethical needs. However, provided that a company adopts accepted ethical standards of behaviour that reflect the nature and size of the business then business ethics will be satisfied. Ethical guidance is provided to organisations by the Institute of Directors’ guidelines and by the Institute of Management’s code of conduct and guides to professional m anagement practice. In addition to this, all organisations are now required to state whether they have complied with the Cadbury Code of Best Practice in their annual report and accounts. You read "Ethics, CSR and Leadership Report – â€Å"Business Must Act Ethically†" in category "Essay examples" Therefore, although organisations do have the right to set their own moral codes of ethics according to the nature and size of their business, they are still required to ensure that they are acting ethically in accordance with standard practice. The effectiveness of business ethics will, nonetheless, depend upon enforcement. This is because although the Cadbury Code of Best Practice states that all employees of a business are obliged to comply with the provisions of the Code, there also has to be procedures in place which allow people within the company to raise concerns about any unethical business practices which they may have witnessed. Therefore, it is integral that appli cable policies and procedures are in place that deal primarily with business ethics (Loscher, 2012, p. 2). 3.Lessons Learnt from News Corporation Scandal This question will discuss the different lessons companies can learn from the News Corporation Scandal. In doing so, a review as to what led to the scandals taken place will be undertaken, followed by a discussion relating to the importance of ethical polices with respect to Corporate Social Responsibility. The 2011 News Corporation phone hacking scandals have taught businesses a valuable lesson to ensure that they have effective compliance programmes in place. This is because the scandals that took place clearly illustrated that compliance risks were not being managed appropriately, which subsequently led to corrupt practices being undertaken by the News Corporation properties. Whilst the scandal initially appeared to involve a single journalist, it soon became apparent that there was a much wider pattern of wrongdoing that took place. The News of the World newspaper was subsequently closed as a result of the scandals, which demonstrates just how serious unethical business practices are. Businesses that have personal ties to political parties are at a higher risk of being bribed and in cases such as this, it is imperative that effective controls are in place to deal with this. This could be achieved by creating policies that deal with compliance risks appropriately and red flags should be raised by compliance departments if such relationships exist (Wrage, 2013, p. 2). In addition because the majority of employees found to be wrongdoing were at the top end of the hierarchal system, businesses must ensure that all of their employees are committed to compliance regardless as to what level they are at. Businesses could also compel their employees to take part in compliance and ethics training (Daft and Marcic, 2011, p. 153). This will not only allow the business to test its employees on compliance risks but it will also allow employees to test their abilities in dealing with ethical issues, such as bribery. Another lesson that companies can learn from the scandal is the need to undertake internal investigations on a regular basis by an independent investigator. This appears to be something that News Corporation had in place, which allowed the investigations to take place efficiently (Romm, 2011, p. 1). Since news of the scandals broke out, it seems as though there has been a furore of internal investigations taking place across the whole industry. This is common practice for a corruption scandal and often sees organisations taking a more robust approach with their compliance responsibilities (Urofsky et al, 2012, p. 1145). Although the lessons to be learned have been known for some time, it seems as though businesses are now starting to take compliance risks more seriously than they had done previously after seeing the consequences of non-compliance (Cobert and Pascal, 2012, p. 14). It is particularly important for businesses to have in place corporate social responsibility (CSR) policies since the concept of corporate governance has become a significant issue over the years. Many corporate collapses have lef an overhaul in the way corporations are to be regulated and as put forward by Gobert and Pascal (2012, p. 14); â€Å"it is timely to think further about how best not just to regulate but to control corporations and their directors, whether to use and in what combination, administrative, civil or criminal laws to address corporate misconduct.† The Organisation for Economic Co-Operation and Development (OECD) is just one of many organisations which seeks to ensure that governments can tackle the economic, social and governance challenges that frequently emerge within a globalised economy. Nevertheless, because there are no specific rules surrounding CSR it is generally up to the organisation to ensure compliance. It has thus been said that there is a â€Å"lack of prescription as to how the company’s board organises itself and exercises its responsibilities† (McColgan, 2001, p. 16). Still, the Combined Code on Corporate Governance (UK Corporate Governance Code 2010), that was issued by the FRC in 2003 does seek to ensure that good corporate governance practices are being adhered to by all companies. It is questionable just how effectiv e this is, however, since companies can employ a different approach than that encouraged by the Code. 4.Role of Corporate Leadership in Ethics and CSR This question will discuss the role a company’s leadership should play in the promotion of ethics and Corporate Social Responsibility. The primary feature of good governance is the relationship between the company and its stakeholders. A company’s leadership therefore plays an important role in making decisions and conducting business with the interests of the company’s stakeholders in mind (Bryan, 2012, p. 14). The provisions under the Code demonstrate the need for leadership; accountability; remuneration and relations with shareholders. However, it cannot be said that these principles are always being adhered to (PIRC, 2007, p. 2), yet it is apparent that compliance with the Code is on the rise. All companies need to be managed appropriately, whilst also providing accountability to its shareholders. This will certify that appropriate safeguards are in place for a company’s shareholders whilst also preserving a company’s ability to develop. Hence, as pointed out in the Cadbury Report (1992, p. 32); â€Å"the effectiveness with which boards discharge their responsibilities determine Brit ain’s competitive position. They must be free to drive their companies forward but exercise that freedom within a framework of effective accountability.† Accordingly, a system of good governance is important for any organisation if CSR and ethics are to be promoted. In order for CSR and ethics to be promoted an appropriate corporate structure needs to be implemented that is individually suited to the business needs as one approach will not be suitable for all. Although, this enables corrupt practices to be employed more easily, companies are still required to adhere to the Code and other legislative provisions. The UK thereby imposes duties upon all organisations to conduct business in an ethical manner, yet because of the difficulty in identifying whether this is being achieved additional strategies need to be implemented by businesses themselves. This can be achieved by a more robust management and control system. A number of precautions may be taken by organisations in order to eliminate or reduce compliance risks and preserve the interests of the company as a whole. This will inevitably benefit the economy overall and fewer corporate scandals and corrupt practices will be undertaken. Such precautions include risk management strategies, the conduction of regular reviews and internal investigations. As put by Ferran (2008, p. 95); â€Å"to minimise the risk, policymakers contemplating the imposition of higher minimum capital requirements for companies generally would need to take on the complex task of designing a carefully set of requirements that achieved a degree of commensurability between the specific risks undertaken by individual companies and the amount of capital that each of them was required to hold.† All companies should therefore minimise any risks by implementing various controls that assess the risks associated with the business. CSR does help to promote business ethics t o a large extent since the actions of a company will be strictly monitored under CSR policies. This will prevent unlawful and unethical conduct from taking place and will also assist in sustainable development (European Commission, 2011, p. 3). Corporate transparency is one of the most important traits a business can have since it will allow greater transparency and accountability to be effectuated. Hence, as pointed out in the Cadbury Report (1992, p. 32); â€Å"the lifeblood of markets is information and barriers to the flow of relevant information represent imperfections in the market.† Not only will this benefit the economy but it will also benefit the organisations as investors will be more likely to invest in a transparent company than a non-transparent one. As such, all companies should ensure that they are fully compliant and transparent when it comes to disclosing their business affairs. 5.Conclusions Overall, in considering the recent corporation scandals that have occurred in recent years, it is imperative that all businesses act ethically by managing compliance risks in an effective manner. Because of the importance business ethics has on the community and on the business itself it is integral that policies and procedures are in place that are aimed at dealing with the main risks that are applicable to the business in question. This will ensure that the interests of the business and society are being protected. Given the increasing emphasis that is being placed upon business ethics, those that are not found to be compliant will suffer the consequences as stakeholders will not be interested in any aspect of the business. This will have a major effect upon the business as a whole which is why adequate procedures need to be in place that deals primarily with business ethics. 6.Recommendations It is recommended that the organisation implements policies within the day-to-day running of the business so as to avoid any possible risks that may arise. When agents are being used organisations must ensure that they receive prior approval from a senior executive who will be able to perform a risk assessment as to whether there is any likelihood of corruption. When considering facilitation payments organisations must also ensure that conditions are attached if they are a necessary requisite of the business activity. In addition, internal reviews and investigations should be undertaken frequently and appropriate training should be given to all staff on how to deal with business ethics. 7.Bibliography Brown, M. E., and Mitchell, M. S., (2001) Ethical and Unethical Leadership: Exploring New Avenues for Future Research, Business Ethics Quarterly, Volume 20, Issue 4. Bryan, C. S., (2012) The role of leadership in fraud deterrence, Financial Executive. Cobert, J., and Pascal, A., (2012) European Developments in Corporate Criminal Liability, Taylor Francis US. Daft, R. 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