Discussing Total Quality Management standards

Discussing Total Quality Management standards Many authors have discussed TQM Standards. Samuel K. M. Ho in the article Is the ISO 9000 Series for Total Quality Management? wrote that the philosophy of Total Quality Management is that of promoting continuous improvement in an organization and focuses primarily on total satisfaction for both the internal and external customers, within a management environment that seeks continuous improvement of all systems and processes. He added that the philosophy is based on an intense desire to achieve victory. Achieving victory is a challenge for todays companies. Competition is intense and senior managers and CEOs thrive to achieve a sustainable competitive advantage over their competitors. Though some people see TQM as something necessary to reach competitiveness and emphasize the relation between TQM and success (eg U/s GAO, 1991; Becker, 1993; Ghobadian and Gallear, 1996), others claim TQM to be merely a management fad and point out that many companies have failed to implement TQM (eg B inney, 1992; Harari, 1993; Hachman and Wageman, 1995) (Ulrika Hellsten and Bengt Klefsjo) As Hellsten and Klefsjo mentioned in their article there are different opinions of TQM. The goal of this assignment is to analyze the different views of TQM and identify whether TQM standards do help companies promote quality. It also analyzes whether TQM standards vote for the satisfaction for both the internal and external customers as said by Samuel K. M. Ho, or else they are diminishing the real scope of quality by constraining innovation and creativity in todays businesses. Studies by different authors both for and against TQM will be analyzed to understand whether TQM standards improve or lessen quality of products and services. It is important to add that various authors discussing TQM mentioned that there exists different descriptions of TQM and also (Boon O K, Atumugam V, Hwa T S (2005) said that surprisingly, a limited amount of rigorous research has been done towards identifying the effects of soft TQM practices on employees work-related attitudes. To start with it is vital to understand what is meant by TQM and its purpose. Definition of Total Quality Management In order to define quality one has to first consider who the customer is, and subsequently consider what the requirements of each different customer group are at any one time. (Leicester 2007:1.3) The Total Quality Management book of Leicester says that it is important to remember that when the level of quality the customer expects is perceived by him as being exceeded by the level of quality he has received, then an opinion of good quality is formed. Vice versa the level of quality is said to be poor when the customers expectations of the level of quality he should receive exceed the level of quality the customer perceives he has actually received. Therefore for companies to succeed it is important to understand the level of quality that the customer is expecting. There are various definitions which have been identified by different authors such as; Fitness for purpose Conformance to requirements Zero Defects Though the above phrases of quality all have different meanings in general they all have common characteristics such as; aim of satisfying the customer, provide best quality at the lowest possible price and should be companywide strategy. A definition which gathers the meaning of TQM has been defined in a website of Lean Manufacturing Concepts. TQM is a process and philosophy of achieving best possible outcomes from the inputs, by using them effectively and efficiently in order to deliver best value for the customer, while achieving long term objectives of the organization Anon (2009). This sounds an appropriate definition of TQM since it emphasizes on the value received by the customer and in return the organization attains its objectives. TQM Standards and BS EN ISO 9000 TQM started in 1927 with Elton Mayos Hawthorne experiments through 1932. Later in the 1950s Edward Deming taught statistical methods and Dr Juran taught quality management techniques to the Japanese. Many of the Total Quality Management theories were originated by Armand Feigenbaun. TQM continued evolving. New methods were introduced to support TQM such as Lean Manufacturing and Six Sigma. Broughton (2009) Also organizations can become certified to ISO 9000. Various ISOs have been developed for different sectors such as ISO ISO9001, ISO9002 and ISO9003. ISO standards have been set up to focus on business planning, quality management and continuous improvement. Broughton (2009) Broughton said that the key concepts of TQM are; Structured system for exceeding customer expectations System that empowers employees Drives higher profits Drives lower costs Continuous improvement Management centered approach on improving quality As mentioned above the concepts of TQM are all centered for the benefit of the company and to satisfy the needs of the customer and ensure customer satisfaction. However, what are the impacts of TQM standards on creativity and innovation? Do TQM standards really focus on processes rather than employees thus affecting business innovation? In the next section some arguments for and against TQM standards will be discussed. Literature Review Arguments For and Against TQM standards As Wood and Peccei (1995) stated, TQM is widely agreed as a way of managing organizations with the notion to enhance employees attitudes. Quality practitioners such as Deming (1986), Crosby (1979), Juran (1991) and Feigenbaum (1983) have written much on the idea of TQM philosophies and methods. Surprisingly, a limited amount of rigorous research has been done towards identifying the effects of soft TQM practices on employees work-related attitudes. (Boon O K, Atumugam V, Hwa T S (2005) In an article namely Does soft TQM predicts employees attitudes? it is mentioned that a survey of the literature reveals that several TQM proponents believe that the soft aspects of TQM are essential to the success of TQM (Juran, 1964; Ishikawa, 1985; Deming, 1986; Aubrey and Felkins, 1998; Dale et al., 1992; Cruickshank, 2000). Powell (1995, p. 15) concluded that organizations that acquire the soft elements of TQM can outperform competitors without the accompanying TQM ideology. Evidence from the grow ing literature on TQM failure emphasizes the neglect of the soft side of quality management wherein the HR and organizational behaviour aspects of quality management are not given their deserved emphasis (Lowery et al., 2000;Wilkinson et al., 1998; Cruickshank, 2000). TQM, which has been adopted by leading industrial companies, is a participative system empowering all employees to take responsibility for improving quality within the organization. Instead of using traditional bureaucratic rule enforcement, TQM calls for a change in the corporate culture, where the new work climate has the following characteristics: An open, problem-solving atmosphere; Participatory design making. Trust among all employees (staff, line, workers, managers). A sense of ownership and responsibility for goal achievement and problems solving. Self-motivation and self-control by all employees. TQM requires that management, and eventually every member of the organization, commit to the need for continual improvement in the way work is accomplished. Business plans, strategies, and management actions require continual rethinking in order to develop a culture that reinforces the TQM perspective. The challenge is to develop a robust culture where the idea of quality improvement is not only widely understood across departments, but becomes a fundamental, deep-seated value within each function area as well. Anon (2009) On the other hand Crawford (1998) argues that one of the main reasons for the present economic stalemate being experienced in Japan is the obstacle to innovation which is presented by the mindset of continuous improvement. He considers that this mentality reflects, in the main, a wish to avoid the embarrassment resulting from potential failures associated with radical change. The point is also made that a strategy of continuous improvement does not necessarily work in markets which constitute high risk investment, such as pharmaceuticals and microprocessors. These types of arguments tend to imply that TQM is not a valid paradigm in a world where changes are becoming increasingly frequent and need to be made at a faster pace. Martinez Lorent A.R, Dewhurst F, Dale B G (1999) It continues that though TQM is seen as business innovation it does not necessarily mean that it promotes business innovation. Martinez Laurent, Dewhurst and Dale said that TQM tends to lessen business innovation such as improving processes and improving the way in which people are managed with the aim of adapting to the changing environment. On the other hand Curry and Clayton (1992), Imai (1986) and Miller (1995) said that progressive business innovation can be achieved by TQM through continuous improvement. In the article TQM and business innovation it is also mentioned that Companies following TQM approach can more easily assimilate innovations imported from other situations due to the willingness of its employees to accept new ideas as a result of the continuous improvement ethos promoted by TQM Martinez Lorent A.R, Dewhurst F, Dale B G (1999) It is evident from the literature reviewed that TQM is becoming a major requirement for organisations to be successful and gain a competitive advantage. As time goes by customers are becoming more demanding and companies have to focus on identifying customer needs to achieve customer satisfaction. In an article of TQM on the web it says that the views of todays companies of TQM include characteristics such as an open problem solving atmosphere and participatory decision making. Anon (2009) This is an evidence that it is not true that TQM focuses on processes and neglects the people aspect. To adapt to the changing of customers needs and this changing environment TQM promotes employee involvement and as mentioned above participatory decision making. This would also lead to employee satisfaction and motivation. Though it is claimed that TQM has various benefits various companies have claimed that TQM implementation resulted in a failure. Thus it is necessary that companies manage TQM efficiently and effectively. The next chapter of this assignment will outline some of the aspects which need to be considered for the successful implementation of TQM. Successful implementation of TQM Before applying any TQM standards a company should have a well defined strategy and mission in place. Having a strategy in place means that the company has pre defined set of objectives to achieve. The operational and management structure should be adopted to achieve the set strategy. The mission statement should reflect the values and beliefs which underpin all corporate activities. (Leciester 2007:4.5) A mission statement has to be well communicated to the employees and has to inspire people with the aim of achieving the goals set by the company. Last but not least a company should set value statements. Value statements should guide the way people within the organization function and as such should be a substantial influence on the development of a total quality culture. (Leicester 2007:4.8) Helsten and Klefsjo believe that before applying any TQM standards a company has to start with core values and only then the techniques and tools are selected as shown in the diagram below. Increase external and internal customer satisfaction with a reduced amount of resources. Techniques Core Values Tools The techniques and tools selected will then have to be adopted. For instance an example mentioned by Hellsten and Klefsjo, the core value Let everybody be committed can be implemented by techniques such as improvement groups and quality circles. The tools might be Ishikawa diagram, Pareto diagram and histograms. Core values characterize the organization and as these change overtime the techniques and tools will have to fit these values. Robert Dunn says that most importantly before implementing BS EN 9000 one has to be thinking about quality in the company and in all its activities. It is useless implementing the standard just for the sake because purchasers want the certification. (Dunn R 1995:11) Today, developing quality across the entire firm can be an important function of the human resource management (HRM) department. A failure on HRMs part to recognize this opportunity and act on it may result in the loss of TQM implementation responsibilities to other departments with less expertise in training and development. The ultimate consequence of this loss is an ineffective implementation of the TQM strategy. Thus, HRM should act as the pivotal change agent necessary for the successful implementation of TQM. Based on this customer first orientation, organizational members are constantly seeking to improve products or services. Employees are encouraged to work together across organizational boundaries. Underlying these cooperative efforts are two crucial ideas. One is that the initial contact with the customer is critical and influences all future association with that customer. The other idea is that it is more costly to acquire new customers than to keep the customers you already have. Exemplifying TQM here would mean that the HR department would need to train itself, focusing on being customer-driven toward other departments.   Anon (2009) The effective use of quality improvement teams, and the TQM system as a whole, can be reinforced by applying basic principles of motivation. In particular, the recognition of team accomplishments as opposed to those of individuals, and the effective use of goal setting for group efforts, are important in driving the TQM system. The HR department is in a position to help institutionalize team approaches to TQM by designing appraisal and reward systems that focus on team performance.    For many companies, the philosophy of TQM represents a major culture shift away from a traditional production-driven atmosphere. In the face of such radical operational makeovers, a determined implementation effort is vital to prevent TQM from becoming simply just another management fad. Senior management must take the lead in overt support of TQM.  Anon (2009) Part of HRMs functional expertise is its ability to monitor and survey employee attitudes. This expertise can be particularly important for a TQM program, since getting off to a good start means having information about current performance. Thus, a preparatory step is to administer an employee survey targeting two primary concerns. One involves identifying troublesome areas in current operations, where improvements in quality can have the most impact on company performance. The other focuses on determining existing employee perceptions and attitudes toward quality as a necessary goal, so that the implementation program itself can be fine-tuned for effectiveness. Beyond communicating the TQM philosophy, the specific training and development needs for making TQM a practical reality must be assessed. Basically HR professionals must decide the following: What knowledge and skills must be taught? How? What performance (behaviours) will be recognized, and how will we reward them? HRM has faced these questions before and can best confront them in the TQM process. Training and development that does not fit within the realm of these questions will more than likely encounter heavy resistance. However, training and development does fall within the realm of these questions probably will be accepted more readily. Testimonies from Various Companies TQM standards help you clarify and identify customers requirements. Furthermore TQM help a company deliver what the customers order and on time, spot product deficiencies and improve processes and also improve competitiveness. Alan Davis from Ind Coope Burton Brewery highly believes that the company is committed to a total quality culture. He adds that with this approach all parts of the company are involved in continuous improvement in return this gives the assurance of quality to the customer. He also added that the company will soon be ready to seek registration of its quality system to BS 5750. (Moritiboys Oakland J 1994:35). Acorns Nurseries of Cardiff which is a child care centre claimed that by seeking registration under BS EN ISO 9002 they would be able to demonstrate the quality of their service thus would inspire confidence in their customers. Acorns said that the advantages of having a documented system are; Ensure standards are throughout amongst all their sites. Well kept records, stock control ensures consumables are available and parents concerns are replied quickly. Most importantly the efficient management system allows the nursery nurses to get on with what they are best at looking after children. (Dunn R 1995:7) Below are some of the benefits of TQM standards by Robert Dunn; Motivate staff to improve performance Define key roles in the company Consistent in orders and delivery Good management of customer complaints Continuous improvement Glossop Carton a company which achieved certification in 1992 says that since the certification gross profit has risen and when things go wrong, they can now pin point where they have gone wrong. Therefore then they can adjust accordingly and learn from mistakes thus promoting a better quality product for the customer. Conclusion In the book of Leicester in an article by Moritiboys Oakland it is mentioned that The International Standards Organisation (ISO) Standard 9000 Series sets out the methods by which management system, incorporating all the activities associated with quality, can be implemented in an organization to ensure that all the specified performance requirements and needs of the customer are fully met. In the article Implementing BS EN ISO 9000 it is said that the standard is flexible and companies big or small can adapt it to their needs and be compliant. A proof of this is the write up by Pat Martin founder of Stelmax a business employing 12 people. I used to think BS EN ISO 9000 was just for the big fish in the sea. She emphasizes that quality is important to all firms no matter the size. She says that the quality of the products improved which is highly required factor in this increasingly competitive market. (Dunn R 1995:6) It is evident from the literature reviewed that TQM standards are important for organizations and as time passes its popularity is increasing considerably. TQM standards are also required to outcompete competitors in this increasing market. However for a successful implementation and to promote innovation and creativity it is necessary that organizations primarily identify the core values and also do not neglect the human resources aspect. Training and development, setting up TQM focus teams, support from senior managers, involvement in decision making, communication and rewards are the essence of successful TQM implementation. These all lead to employee satisfaction and in return will ensure customer satisfaction which is the fad of TQM. Last, TQM is necessary because it works. The pioneering firms in TQM include American Express, IBM, Xerox, 3M, Toyota, Ricoh, Canon, Hewlett-Packard, Nissan and many others. Samuel K.M (1993)

Research Proposal: Corporate Governance and Firm’s Performance

Research Proposal: Corporate Governance and Firm’s Performance Background and rationale of the study Corporate governance is a recent concept that encompasses many issues like internal control, rights and relation with stakeholders, social responsibility of the business, structure and role of the management committee, management transparency (refers to the disclosure of all reliable and relevant information) and accountability (refers to broader corporate objectives to manage the socio-economic resources efficiency) and the like. It also entails planning and strategic development of the company, day-to-day operation, and knowledge of the market and the sound understanding of the business itself. Precisely speaking, corporate governance is all about corporate practices to meet the corporate objectives. According to Byrnes et al. (2003), after the high profile scandals of Enron, WorldCom etc. corporate governance is imputed in the Sarbanes-Oxley Act of 2002. This paper will try to find out the impact of corporate governance on firm performance. This paper will also try to show that be tter use of corporate governance help the firm to perform in an optimum level and if it is right better governed firm will have better performance than worse governed firm. Jensen and Meckling (1976); Fama and Jensen (1983); Shleifer and Vishny (1997) cited that, incentive has been given to the managers to confiscate the assets of the firm by taking profitable projects but this is much beneficiary to the managers than maximizing shareholders wealth. According to Shleifer and Vishny (1997), effective corporate governance control the awards given by the stakeholders and creditors and increase the profitability of the firm by investing in a positive net present value projects. Brown and Caylor (2004) argued that, regulators and governance advocates argue that in most of the cases stock price goes down because of poor governance and if this is right the market price of the well governed firm should be relatively high than poor governed firms. On the other hand by considering cash flow hypothesis Jensen (1986), says that shareholders expects cash flow via dividend payout but large free cash flow through dividend decrease the liquidity condition of the firm a nd this disables the firm to invest in the profitable projects and lower the profitability. Arnott and Asness (2003) finds that, better governed firm give more cash in dividend payout which also can be considered as firm performance. Moreover Bowen, Rajgopal, Venkatachalam (2008) found that, corporate governance also can be found from the accounting discretion, firm with weaker governance structure generally produce report with poorer future performance. According to Gompers, Ishii, and Metrick (2003), studying the impact of corporate governance on firm performance finds that, strong shareholders rights and returns of the firm outperform on risk-adjusted basis. This result indicates that corporate governance also can be measured or constructed from publicly available data. According to Klein, Shapiro and Young (2005), there are not any clear evidence that can suggest that better corporate governance will enhance the firms performance. One alternative way to measure firm performance is measuring the performance of companies with shareholders rights. Core, Guay and Rusticus (2004) said that, in current decade share returns of companies are strongly related with shareholders right companies with poor shareholders rights do not over perform in their performance. The companies which maintain strong shareholders right may not exhibited superior return on their performance. On the other hand, if the firms risk adjustment not done properly, corporate governance may correlate with unrecognizable risk factor(s). One other thing is that the relation between corporate governance and firm performance might be increase distrust about causality explanation. In most countries the common mechanism for determining collective action problems among shareholders partial ownership and control is given to the hand of large shareholders. In this situation two important forms of corporate governance need to be considered by the firm. First, there may be conflict among the shareholders with management against small investors; and secondly, the liquidity from secondary market will decrease. To boost the liquidity crisis of the stock market corporate law is enforced and which limits the power of the large shareholders of the company and also limit the violence of the minority shareholders. In this system generally the firms depends on the board of directors to maintaining and functioning the actions of the shareholders. Sometimes the actions of the board of directors become ineffective. Where the minority shareholders get better protection the interest of the mangers also become an issue of prudence. Finally, the primary goal of the corporate govern ance is to control the regulation of activity the shareholders and managers and made a check and balance to protect the interest of both shareholders and mangers. This paper will try to find out how corporate governance can help the firm to accelerate their performance. For doing so there lies a need for developing a measure to scale corporate governance practice of the firm and to allocate a governance score for each firm then calculation of the financial and economic performance by using governance score will become possible. This paper will also conduct a cross sectional analysis to relate firms performance with their corporate governance practices. Keywords Corporate Governance, Firm performance, Corporate Governance and Firm Performance. Problem of the study This paper will develop to find out the following problems: How corporate governance impact on firms performance? Why firms performance is influenced by corporate governance? When corporate governance influence firms performance? Aims The aim of this paper is to find the influence of corporate governance over firms performance. Objective of the study This research will be conduct to fulfill the following objectives: To measure the industry wise corporate governance practices. To find the impact of corporate governance with the firm performance. To measure the degree of performance influenced by corporate governance. To find out the major indicators of corporate governance. To find out the best practices of corporate governance. Literature Review The concept corporate governance actually gives an insight regarding the code of conduct of the companys business. Corporate Governance is the process by which companies are governed and held accountable to their owners. Corporate Governance is the whole system of managing and controlling a company. Many view corporate governance in the light of the long-run value creation of shareholders. Corporate Governance is the enhancement of the long-term shareholder value while at the same time protecting the interest of other shareholders. From this view, corporate governance focuses on structure and rules of the board of directors; the independent audit committee and control management. So, corporate governance is a pervasive concept, which basically tells about the corporate practices. This is such a concept encompassing the relations and rights of shareholders with the board and other stakeholders; effective risk management; management transparency and accountability to the stakeholders g roup and overall corporate practices that aims at meeting the corporate goals. OECD set few principles of corporate governance, which have been adopted by the member countries of the OCED. These principles are available in the web site: www.oecd.org. In summary, they include the following elements: The rights of shareholders: These include a set of rights including secure ownership of their shares, the rights to full disclosure of information, voting rights, participation in decisions on sale or modification of corporate assets including mergers and new share issues. The Equitable Treatment of Shareholders: Here the OCED is concerned with protecting minority shareholders rights by setting up systems that keep insiders, including managers and directors, from taking advantage of their roles. The Role of Stakeholders in Corporate Governance: the OCED recognizes that there are other stakeholders in companies in addition to stakeholders. Banks, bondholders and workers for example are important stakeholders in the way in which companies perform and make decisions. Disclosure and Transparency: The OCED also lays out a number of provisions for the disclosure and communication and key facts about the company ranging from financial details to governance structures including the board of directors and their remuneration. The Responsibilities to the Board: The guidelines provide a great deal of detail about the functions of the board in protecting the company, its shareholders, and its stakeholders. These include concerns about corporate strategy, risk, executive compensation and performance, as well as accounting and reporting systems. John, K. et.al. (1998) conducted a study to relate Corporate Governance with managerial risk-taking. The study showed how the investor protection environment affects corporate managers incentives to take value-enhancing risks. It suggested that the manager chooses higher perk consumption when investor protection is low and vice versa. Lower investor protection is associated with conservative investment policy and least firm growth. Finally the authors suggested that the corporate risk-taking and firm growth rates are positively related to the quality of investor protection (whether the investment generated by the firm is used is a safe and secured way). This situation indicates that a risk-taking firms growth rate is higher than the less risk-taking firm so find out the concerns towards the investors it is necessary to calculate that whether the firm is taking much risk for increasing its growth, which may arise adverse situation for the investor by decreasing the protection of the i nvestment. According to John and Senbet (1998), a common belief is that boards of directors are become more independent as the number of outsider director increases. Though, Fosberg (1989), found no relation of firm performance with the outsider directors, he rather emphasis on other variables like SGA expenses, sales, return on equity and number of employees. Hermalin and Wrisbach (1991) also dont find any association between the number of independent directors and firm performance. In 2002 Bhagat and Black became unable to find any relationship between the numbers of outsider directors. But in contrast Baysinger and Butler (1985) and Rosenstein and Wyatt (1990) find rewards for the firm for appointing outsider directors. Anderson, Mansi and Reeb (2004) showed that, the cost of debt is inversely related with the independence of the board of directors. According to Brickley, Coles and Terry (1994), there are a positive linkage between the number of outsider directors and stock market response. Bhagat and Bolton (2007) argued that, better governance can be measured by GIM and BCF indices, stock owned by the board of directors, performance of CEO etc. Lipton and Lorsch (1992); Jensen (1993) argued in their evidence that, it is believed by some people that limiting the board size of the firm will have impact in the performance of the firm because increase number of the board members will increase the monitoring, communication and decision making ability. On the other hand Yermack (1996) found an inverse relationship between board size and profitability, asset utilization and Tobins Q. Board of director plays a vital role in the firm performance. As they divide their duties and responsibilities so increase in the number of directors make the responsibilities and duties more narrowed, so if the number of director increases the firms performance should be increased. On other side if the firm appoint experienced CEO or director in the firm it have a positive impact on the stock price of the firm which reflects the practice of good corporate governance has a positive impact on firms performance. According to Bhagat and Bolton (2008), Corporate governance has the authority to make any modification or change in any important decisions including investment policy, management compensation policy, boards decision etc. so it becomes easier for the firm to monitor and implement their activities efficiently by practicing good corporate governance this will help the firm to increase its overall performance. A negative relationship has been found by Klein (2002), between audit committee independence and earnings management. Whereas Anderson et al. (2004) documented that firm with self-governing audit committee has low debt financing costs. Frankel, Johnson and Johnson (2002) show an inverse relationship with the firm earnings management and the independence of the audit committee. On the other hand, Ashbaugh, Lafond and Mayhew (2003) and Larcker and Richardson (2004) show disagreement about the inverse relationship between firm earnings management and independence of the auditor in th eir evidence. Bhagat and Bolton (2008) provided some evidence to associate the relationship between audits related governance factors and firm performance: Audit committee those are solely independent are positively related with dividend yield but not related with firms operating performance or valuation; Annual meetings held by the firm are not related with the performance; Consulting fees and audit fees paid to the auditors are negatively related with the firms performance measurement; Company policy for rotating auditors are positively related with the return on equity but not related with any other performance factors. As audit committee plays an important role for establishing and implementing firms investment policy, compensation policy and other management decision the role of audit committee influence the firms performance. The performance of audit committee can vary due to various factors such as audit fees, independence of the committee etc. as Bhagat and Bolton (2008) finds several audit related governance factors but this area needs further research to find out the exact situation. Gompers, Ishii, and Metrick (2003) introduced a corporate governance measure which is equal weighted index of 24 corporate governance factors, these factors are gathered by the Investor Responsibility Research Center (IRRC), those are, classified boards, golden parachutes, poison pills, cumulative voting supermajority rules for selecting and approving managers. Whereas, Brown and Caylor (2004) created their corporate governance index through the use of Institutional Shareholder Service (ISS) data. Hermalin and Weisbach (1998, 2003); Bhagat, Carey and Elson (1999); Brickley, Coles and Jarrell (1997) states that, board independence, stock ownership of board members and whether CEO and Chairman are individual person etc. are considered as a importance characteristics of corporate governance. Brown and Caylor (2004) identified 52 factors for considering corporate governance practice of the firms where Gompers, Ishii, and Metrick (2003) considers 24 factors for measuring corporate charter position and board characteristics. According to Bhagat and Bolton (2008) management compensation features, board characteristics, and corporate charter position creates the personality of firms corporate governance while creating the corporate governance index these factors need to be weighted otherwise it will become unable to give optimum result. If the weight are not equally weighted the relationship between the corporate governance and firm performance will give an unrealistic result with incorrect inferences between the relation of corporate governance and firm performance. While selecting the factors for creating the governance score it must be consider that the factors need to be available for all kinds of firms from different industry, otherwise the result may become bias. On the other hand if the researcher did not find weighted average the outcome of the study becomes questionable so for making the evidence more reliable it is necessary to find out the weighted average o f the governance score. Some variables of measuring corporate governance can be motivated by incentive-based economic models of managerial behavior. This model can fall into two categories. First one is agency model, in this model the interest of managers are take into action as a result it becomes costly for the shareholders. In this model shareholders become unable to observe the behavior of the managers directly, but sometimes ownership are given to the managers to reduce this type of action and use the resources for the best interest of the shareholders. This problem is cited by Grossman and Hart in 1983. Another model is adverse situation model; this model is motivated by the hypothesis of differential ability which also cannot be observed by the firms shareholders. In this model the power of managers is control to reduce the use of cash flow for the private benefit or managers personal information cannot be used to control the firms cash flow. This model is provided by Mayerson (1987). From the above situation it is clear that sometimes corporate governance is controlled by the relationship between managers and shareholders and in this case managers behaviors and ability are directly associated with the firms performance. Berle and Means (1932), find the impact of the cost of the shareholders ownership, they found a positive relationship with ownership structure and firm performance. However, Demsetz (1983) argued that, if we scrutinize the success factors of the public companies with diffused share ownership we will see clear offsetting benefits of the shareholders. Other factors that may impact of the firm performance are performance based compensation and insider information which should be determined through ownership. For example, if the performance of the firm increase the value of the stock and the managers owned some ownership, it will increase the value of their ownership this incentive will help the firm to preserve the interest of both shareholders and managers by boosting the performance of the firm. Hypothesis This research will focus on following hypothesis: H1: Company with good Corporate Governance has a better operating performance. H2: Company with poor Corporate Governance has a poor operating performance. Methodology of the study Research method To fulfill the objectives of this paper and find out the relationship of corporate governance with firm performance both qualitative and quantitative method of research will be used. The main objective of this paper is to find out the relationship between corporate governance and firm performance and to find out the degree of influence of corporate governance on the firm performance to find out this evidences researcher need to go through an exploratory research. Some case studies also will be analyzed and discussed to find out the actual position and this will make this research more realistic. This paper will try to develop a governance measure (governance score) to find out the degree of corporate governance practiced and also identify some factors to measure the performance of the firm and score them with a relevant range. Governance score will be composite measure of about 50 factors which will encircling on several corporate governance categories like audit committee, board of directors, executive and directors compensation, compensation policy for the managers, industry, progressive practices, directors education, charter/ bylaws etc. Then researcher will do a cross sectional analysis between governance score and firm performance score. For measuring operating performance Tobins Q, GIM, return on equity, profit margin, sales growth, and other financial measurements will be used. Data collection This paper will create a summary metric of the governance score to measure the strength of the firms governance. Researcher will collect data related with corporate governance and firm performance from the annual report and publicly available information sources mostly researcher will depend on the secondary sources for preparing this report; though researcher will try to collect data from the reliable sources like stock exchange, annual report, magazine etc. This paper will take a large number of individual firms as my sample for this studies thus it will reflect real phenomena. This paper will take data for measuring firm performance for the 2009 fiscal year end. Sampling The population for this report will be listed companies in the London stock exchange. The researcher will take at least fifty companies as sample from five different industries they are automobiles and parts, banks, beverages, food producers, and electronic and electrical equipment. The companies will be chosen randomly. Scope of the study This paper will try to find out how good corporate governance practices impact on the firm performance. This paper will contribute on the literature on the following way: first, the role of the board of the directors plays on the performance of the firm. For example: the numbers of independent directors or dependent director can play a role in the governance and also contribute on the performance of the firm. This may varied from industry to industry so researcher will took a descriptive analysis on the following matter, for collecting the evidence on the following matter GIM, and Tobins Q will play a great role. This paper will also find out the variables that may impact on the performance related with this topic. Secondly, researcher will try to find out the better incentive policy given to the manager stock option or cash dividend which will be more effective to protect the right of the stockholder as well as boosting the performance of the firm. The performance of the firm can be measured in various ways this paper will focus on the financial performance and the right of the stockholder in measuring the performance of the firm. Thirdly, this paper will come with the functioning of the audit committee; audit committee plays a vital role on the both in the corporate governance practices of the firma and the firm performance. Compensation given to the internal and external audit committee also has impact on the firm performance do find out these impacts an explanatory research will be conducted. Finally, researcher will come with the degree of corporate governance practices with the firm performance. This paper will find out extent of the impact of the corporate governance with the firm performance. Concluding remarks Corporate governance plays a vital role to balance between the economic and social goals and between individual and communal goals. The governance framework is very much important to boosting up the performance of the firm and to protect the interest of the stockholders. Because it ensures the efficient use of resources, make the management accountable and ensures the best benefit of all the parties. As a result corporate governance has impact on the overall performance of the firm because it control most of the performance factors and the good practices of corporate governance will allow the firm to protect the interest of the stockholders.

Issues of Survival :: Essays Papers

Issues of Survival â€Å"We will only change if we survive, but we will only survive unless we change.† I believe that the Dalai Lama, in his book Ethics for a New Millennium, discusses many issues pertaining to the current state of our society that are of dyer importance if we hope to survive into the next few generations. Primarily, I am referring to his discussion of happiness as it relates to inner peace, the acknowledgement of universal responsibility, and the need to educate our children responsibly, inside and outside of the classroom. The Dalai Lama makes the assertion that, as humans, we are all ultimately searching for happiness. The way we can become truly happy is by acknowledging that, â€Å"the principal characteristic of genuine happiness is peace: inner peace.† (55) We can achieve this inner peace by putting others needs on the same plane as our own needs and by recognizing that our own well-being is intimately attached to that of others. I believe this is crucial to our survival. By raising others needs to a level of our own, we are acknowledging that they are an asset to our lives and equally contribute to the human family. This, in my mind, guarantees them the universal rights of food, water, shelter, education, health services, and safety. We are improving our own lives when we lift up the lives of others. Whether one believes in karma or not, it is true that we feel a positive emotion after thinking of or helping others. â€Å"The impact of our actions—both positive and negative—register deep within us.† (88) That is why we need to continue to think of others well-being; it lifts our spirits and helps us achieve inner peace. True inner peace and happiness cannot be achieved, in my opinion, without the acceptance of the Dalai Lama’s ideas of universal responsibility. My thoughts regarding this are based off the idea that we can never be truly happy while there is human (or environmental) suffering. If it is true happiness for which we are searching, we have a responsibility to everyone’s happiness.

Scales Of Justice :: Free Essays

  Ã‚  Ã‚  Ã‚  Ã‚  Scales of Justice shows a police force where there is a culture of corruption. The parts of the TV program that we saw were made up of two parts, The Job, and the Game. The Job is about a new probationary officer named Webber, and how he is forced to accept the corruption that occurs in the force, and ends up getting fired. The Game takes corruption to a new level involving higher powers such as MP’s and non-uniformed officers. They both are good examples of how it is a culture for them.   Ã‚  Ã‚  Ã‚  Ã‚  The corruption that occurs in the Job is nothing unusual or abnormal, even to some of the higher ranked officers. Much of it involves accepting small bribes and breaching the code of conduct that is involved in being a policeman. For example, on more than on occasion, Sergeant Borland drinks and smokes while he is on duty. He then ended up influencing the new officer, Webber, to drink on duty. There is also an instance where Borland was offered an insufficient bribe so he locked the guy up and took him to court. He then influenced Webber to testify and say that he saw the man offer the bribe, which he didn’t see.   Ã‚  Ã‚  Ã‚  Ã‚  Many times it is shown that officers avoid crime because there is too much paperwork to go with it. While Webber and Borland were on duty, the saw a moving car collide with a parked car, and Webber was told to do a U-turn. This was because if they caught the guy that did it, they would have to do several hours of paperwork. There was also a scene in the show when Borland told Webber about a time he found a corpse in a river, and they dumped in back inside because it would be too much of a hassle dealing with it.

Jackie Robinsn: A man who Changed America Essay -- essays research pap

Jackie Robinson made one of the most daring moves by playing Major League baseball. The amount of pain and suffering this man went through was so harsh that I don't know how he was able to play. Carl Erskine said,"Maybe I see Jackie differently. You say he broke the color line. But I say he didn't break anything. Jackie was a healer. He came to rectify a wrong, to heal a sore in America"(Dorinson back cover). Jackie was born January thirty-first 1919. Shortly after he was born, his father deserted his family. Almost a year after that, Jackie's uncle came to visit and convinced his family to move to California with him. The whole family moved out there with his uncle. They moved to Pasadena,California. The neighborhood they moved into was mostly a white neighborhood. The white people did not want them in the neighborhood. They would criticize Jackie and his family. When he was about eight years old, he had learned to stand up for himself and answer back when the occasion demanded. Jackie went to Muir Tech. High School. At high school is where he began to get interested in sports. He competed in football, baseball, basketball, and track. He was a good player in every sport. During high school, college recruiters failed to pay attention to him. He didn't receive any scholorship, so he decided to go to Pasadena Junior College. Pasadena Junior College is where Jackie began to get noticed for his athletic abilities. He set many records in track, baseball, and football. Babe Horrel wanted to recruit Jackie from Pasadena Junior College. One of the best athletes on the West Coast(Tygiel 27) After two years at Pasadena Junior College, he transfered to UCLA. Jackie went here so his brother, Frank would be able to attend most of the games. His brother never did get to see a game because he died in a motocycle accident. At UCLA, Jackie lettered in four sports in one year. He was the first player to do that. He played track, baseball, basketball, and football. ... ...id become friends with him. It was his teammate Peewee Reese. Reese was a white man that played shortstop for the Dodgers. During one game, Jackie mad a diving catch to win the game for the Dodgers. Jackie got hurt on the play. Reese goes over to second base to make sure Jackie was alright. No one else came over to see if he was alright. It showed a lot of courage for Reese to do that. Reese took a lot of crap for doing it but he didn't care. Thus in eight years America's most prominent national sport moved from a tradition of seventy years discrimination to almost complere intergration(Tygiel 156). The big step of Jackie joining major league baseball changed everything in sports and life. He was a civil rights leader just like Martin Luther King Jr. He made the big step to show that it's not impossible to get things to be equal.We should all be very thankful for what Jackie Robinson has done. He didn't give into fear and run away from the challenge of breaking the color barrier. He took the challenge and conquered it. He changed the history of baseball and the rest of life. He helped the blacks become equal to the white race.

Major Historical Developments of the Early Renaissance

According to Perry in his book, during the Middle Ages people praised the greatness of God.   They saw preparation for heaven as the most important reason for life.   The beginning of the change from the medieval outlook to a modern one is called the Renaissance, or rebirth.   It was the time of gradual change, not a sharp break in the Middle Ages.   They continued to believe in the teachings of the Church.   But to their religious beliefs they added many worldly interests and activities. During the Medieval Europe, we can say that the Church plays an important role in the society, particularly the Christian belief.   It is said that it was the foundation of medieval civilization.   It gives form, direction and unity in the society.   The people believe that the path to heaven is through the church. The church was the center of life among medieval people.   It was used as a community center.   The church services were part of medieval people’s daily lives.   The priests also play as the teacher among villagers.   They taught them the sacraments and teachings of the church.   They provided services among the villagers like mass, provided care for the needy and sick, and taught children Latin.   The Monks and Nuns were the finest examples of the Christian way of life according to the people during this period. One contribution to civilizations of the Middle Ages was that the convents and monasteries during this time established hospitals and provided shelter for travelers.   It is also consider as the center of learning.   They converted pagans to Christianity.   Mendicants were visible in towns and even on open roads. They preach and they meet their needs by begging.   Among those mendicants were Franciscans, Poor Clares and the Dominicans.   The Dominicans main goal was not only to preach but also to convert every individual. The Church during this time insisted that people should obey the rules and doctrines of the Church in order to reached heaven. They tried to persuade heretics to return to the fold.   If that failed, it would threaten them with excommunication.   An excommunicated person would be expelled from the church and denied the sacraments.   In the Age of Faith no punishment could be worse than this one. Renaissance Renaissance is the term used during the beginning of change from the medieval outlook to a modern one; it also means rebirth.   It was also the time of gradual change.   Renaissance people during this time were neither nonbelievers nor heretics.   They still believe in the teachings of the church.   But as time goes by, changes have brought to their beliefs that affect their activities and worldly interests.   Renaissance does not only bring some changes in the beliefs of the people.   Humanism is one example of this.   There are individuals who were known as humanists. The first great humanist of the Renaissance was Francesco Petrarch.   He collected ancient Latin and Greek manuscripts and imitated the style of Great Roman poets.   He explored and sought his innermost feelings.  Desiderius Erasmus, a gentle Dutchman was one of the respected Christian humanists.   He was interested in studying human behavior.   He wanted people to be kind and reasonable.   He was consider as a Christian humanist because he spread the new learning and sought a deeper and purer religious devotion. There were medieval artists that were known during this time like Raphael, Michael Angelo Buonarotti, and Leonardo da Vinci.   They express their feelings through paintings.   Their work of art focuses on religion.   Among their work of art were Madonna by Raphael; the paintings of Michael Angelo in the ceiling of the Sistine Chapel; and even Mona Lisa of Leonardo da Vinci.   All of this was reflections of the Christian religion.  Like the Renaissance, the Reformation plays a big role during this time.   Reformation was the time when many Christians left the Catholic Church. There are people that led to this reformation. One is John Wycliffe, he was from England who questions the basic teaching of the church – – that people can reached heaven through the Church.   Another reformist was John Huss of Bohemia who was influenced by Wycliffe.   He challenged the authority of the Pope, denounced the wealth of the clergy and called the deepening of spiritual feeling.   The third reformist was Martin Luther, who was a German Monk who believes that people could reach God by Faith alone. He also nailed on the door of Wittenberg his Ninety-Nine Theses which denounces the indulgences of the Church. As a whole I can say that reformation plays a big role in the changes that occur to the religious beliefs of the people.   It divided the unity of faith among westerners from Catholicism emerge Protestantism.   The Reformation also helps to develop modern economics attitudes.   The secular attitude of the Renaissance contributed in the politics and the economic life of people in the society. Reference: Unfinished Journey: A World History. 1983. Marvin Perry. Houghton Mifflin Company. Boston, Massachusetts. ISBN: 971-11-0125-4      

Major Parts of Corporate Entrepreneurship.

* 4 major parts of corporate entrepreneurship. 1-New business venturing ( corporate venturing) Corporate venturing refers to the creation of a new business within an existing organization. Business dictionary defined corporate venturing as the practice where a large firm takes an equity stake in a small but innovative or specialist firm, to which it may also provide management and marketing expertise. Specifically, corporate venturing emphasized an internal capital resources, proprietary knowledge, and marketing expertise.The concept of corporate venturing has existed for many years in the US where many of the top companies have a venture capital fund or offer strategic alliances. While the number of companies involved is much smaller in this country, it has existed for many years and in many sectors. Traditionally corporate venturing has appealed to high-growth sectors such as pharmaceutical or technology companies. 2. Innovativeness It’s product and service innovation, with emphasis on development and innovation in technology.The innovation of product and services are crucially important to every economy. Innovation and new business development can be initiated by independent individuals or by existing enterprises. Corporate entrepreneurship is ever more considered as a valuable instrument for revitalizing existing companies. It is brought into practice as a tool for business development, revenue growth, and profitability enhancement for pioneering the development of new product, services and processes. 3. Self-renewalIt’s transformation through renewal of key ideas on which an organization is built. Self-renewal has strategic and organizational change implications and includes the redefinition of business concept, reorganization, and the introduction of system-wide changes for innovation. Self-renewal is entrepreneurial because it involves entrepreneurial efforts that result in significant changes to an organization’s business or corpora te level strategy. 4Proactiveness This term includes initiative, risk taking, competitive aggressiveness, and boldness.It attempts to lead rather than follow competitors. A proactive firm is inclined to take risk through experimentation. Some opinion conceives of proactiveness as a continuous search for market opportunities and experimentation with potential responses to changing environmental trend. Entrepreneurial proactiveness depends on the attractiveness of an opportunity and ability of the firm to grasp once it is perceived. Organizational performance depends on entrepreneurial proactiveness if there is uniqueness in the creation of new product from the available resource