Social Networking Security Issues and the emerging threats to users of Essay

Social Networking Security Issues and the emerging threats to users of these websites - Essay Example In this research I will outline the main security threats that have emerged recently because of extensive web based environment. This main focus of this research is to assess the social networking security. Social networks are common among the present generation and people are extensively participating in these areas. The main reason behind this participation is the availability of the huge knowledge and information at the same place. This allows the participation in different social activities, exchange knowledge, and experience, making friends, and also business marketing. These social networks offer us great advantage for all above mentioned tasks but also a great challenge for the personal privacy attacks and other type of security issues. The uniqueness of social network sites is not that they permit individuals to meet strangers, however rather that they facilitate people to develop and make recognizable their social networks. This can result in communication among users that would not in other ways be made, although that is not the major objective, and these communications are normally between "latent ties" the people sharing some offline connections (Boyd & Ellison, 2007). One thing can be concluded from the above discussion that there are security threats connected with social networking: data stealing and viruses are growing threats. The most widespread threat however frequently engages online individuals who declare to be someone that they are not. However, threat does survive not only with online networking; they also remain with networking out in the actual world, as well. For instance people are advised when meeting unknown persons at clubs and bars, school etc. So we should be careful when meeting people on line (What is Social Networking, 2009). Social networking websites have turned out to be a family name in todays world. No matter, it is our

External And Internal Determinants Of Capital Structure Finance Essay

External And Internal Determinants Of Capital Structure Finance Essay 1: Introduction 1.0 Introduction The literature on capital structure theory has made significant progress after the trend setting publications of Modigliani and Miller in1958. After the publication of Modigliani and Miller research work, various researchers have developed theoretical models based on the balancing of tax effect and inefficient distribution of information. Recently, there are many models that focus on the relationship between product and market or the effect of a particular ownership structure on the capital financing decisions of a firm (Bhaduri 2002). These models have been developed pertaining to many different sectors of economy such as manufacturing by Long and Malitz (1985) and Titman and Wessels (1988). Miller and Modigliani (1966) tested these models in the context of power generating and electric companies, while Jensen and Langemeier (1996) have focused on the agricultural firms. Among the noteworthy models proposed by researchers, the static trade off theory carries the primary importance. Modigliani and Miller (1958) contended that the static trade off theory is based on the assumption of friction and information-wise perfect markets. They also proposed the irrelevance theorem which implies that the financing decisions of firms have nothing to do with the value of organisation and their cost of financing. Titman and Wessels (1988), Rajan and Zingales (1995) and Graham (1996) have conducted their empirical research to investigate the important determinants of capital structure proposed in the theoretical models by finance commentators. In the majority of research, they found that firms decisions to achieve the target capital structure are spontaneous. In the imperfect market, these target ratios are not instantaneous and incomplete while in perfect market, these financial decisions are perfect and spontaneous. It means that firms try to adjust their optimal capital structure spontaneously as the cost of capital varies in the market. Marsh (1982), Jalilvand and Harris (1984) found that the main impediments in the way of adjusting capital structure are the adjustments and transaction cost associated to market imperfections. These imperfections arise due to the inefficiencies in financial market such asymmetric distribution of information and transaction cost etc. These researchers have found that the firms financial decisions usually taken in a two step process. Marsh (1982) and Jalilvand and Harris (1984) explained that in the first step, a firm decide its target capital structure and in the next phase, it strives to attain that target. Spies (1974), Taggart (1977), Jalilvand and Harris (1984) and Ozkan (2001) stated that financial behaviour of a firm can be best described by the partial adjustment model. In this partial target adjustment model, it is assumed that a firm adjusts to the target capital structure spontaneously. One common attribute in the research is that the capital structure of a firm varies with the change in industry type. Even after the efforts of numerous researchers, no single universally accepted capital structure theory exists. There are also a comparatively small number of empirical researches conducted up till now on this topic. One possible reason for the small number of empirical research is the intangible and conceptual nature of determinants proposed by the authors (Titman and Wessels 1988). However, the available empirical research has focused on certain factors such as the size of firms; profitability and volatility of earnings before interest, tax and depreciations etc. These determinants came out after the studies conducted in the developed countries such as the United States (USA) and the United Kingdom (UK). After the integration of markets, it is becoming increasingly more important to study these markets to test the validity of these determinants. Because of the confl icting ideas pertaining to the financial behaviour of firms, it is important to have practical research based on theoretical foundations to establish a valid capital structure determinant model. 1.1 Objective This research paper will endeavour to determine the factors which serve as an impetuous for changing the capital structure of firms across the different industries operating in the United States of America (USA). The main objective of this research will be achieved investigating the relationship between following determinants; Capital structure and profitability Capital structure and tangibility Capital structure and economic growth of the country Capital structure and rate of inflation Another objective is to find and evaluate the impact of internal forces which play an important role in changing the capital structure of a firm. Literature Review: 2.0 Introduction This chapter attempts to establish the theoretical foundation of determinants of capital structure. First of all, the effect of different industry types on the capital structure has been given. Then the different capital structure theories have been described. After that, all the possible external and internal determinates of capital structure has been discussed. Lastly, the latest development in the macro and micro environment, which have significant bearing on the capital structure of a film, are discussed 2.1 External and Internal Determinants of Capital Structure In this time of financial distress, where many companies are facing impending bankruptcy because of the liquidity crunch and mismanagement of resources, it is imperative for financial managers to use the optimal mix of debt and equity in order to drive down the cost of capital and thereby increasing the profitability of their firms. Another impetuous for using optimal mix is that the financial analysts, investment houses, common stock buyers and bond rating bureaus usually compare the financial leverage of a firm with industry average figures before taking investment decisions (Moyer et al. 2009). Hence, it is in the very interest of a firm to decide its optimal capital structure in order to make its financial health more conducive to further investment by yielding handsome returns (DeAngelo and Masulis 1980). As per definition, capital structure of a firm is the mix of the total long and short term debt plus the total amount of equity (both preferred and common) which is raised by a company to finance its total capital requirements (Investopedia 2009). According to Brigham and Ehrhardt (2001), there are many internal and external factors which a financial manager has to be mindful of before chalking out business plans and policies. Similarly, decisions of capital structure are the outcome of many internal and external variables (Brigham and Ehrhardt 2001). External variables consist of many macroeconomic factors such Gross Domestic Product (GDP), unemployment, inflation, interest rates and tax policies etc (Besley and Brigham 2007). GDP is the accumulated market worth of finished goods and services produced within the boundaries of a country during a particular period of time, usually one year (Investopedia 2010). Nominal GDP (inflation not adjusted) should not be confused with real GDP (inflation adjusted) as the increase in nominal GDP (merely increase in prices) doesnt mean that country has made more money during a certain period (Investopedia 2010). Inflation means the rate of increase in the prices of goods and services over a period of time, usually measured by the Consumer Price Index (CPI) and GDP deflator (a ratio of nominal and real GDP) (Investopedia 2010). Some other important variables of macro economy are the economic growth, budget deficit and poverty. These macroeconomic factors indicate the aggregate economic performance of an economy (Investopedia 2009). As these macroeconomic factors are the result of many sub factors which collectively make a very complex economic system (Campbell, McConnell and Brue 2008). These factors, by nature, are out of the control of a firms manager so he/she cannot influence the determinants. They instead have to adjust the proportion of debt and equity according to their respective costs. Some other important external variables which affect a specific capital structure are the taxation, profitability, the interest expense, the effect of agency cost and the level of business risk faced by the company (Moyer, McGuigan and Kretlow 2009). Besides these external variables, there are many internal factors which a business manager has to consider before selecting a particular mix of debt and equity. These internal variables can be the industry specific variables such as the effect of seasonal levels of sales or these can be the internal to the firms such as the style and attitude of management. Entrepreneurial organisations, for example, have the tendency of taking bolder and riskier business decisions as compared to bureaucratic ones which shows more risk-averse behaviour. Among the most prominent internal variables are the level of profitability, degree of risk appetite of business managers and the tangibility of fixed assets etc. 2.2 Effect of industry type on the capital structure of a firm There are a lot of variations in the capital structure of firms across the different industries all over the world (Scott and Martin 1975). Capital structure of firms varies with the change in type of industries and even within the same industries (S. Titman 1984). It is evident from the Table 1 that the firms which are operating in the drugs and industrial machinery sector do not use a large amount of debt as compared to firms which are in the retail and utilities business (Brigham and Ehrhardt 2001). Some possible reasons are the uncertainties inherent in the research projects carried out by these firms or the chances of product liability law suits (Brigham and Ehrhardt 2001). Due to the low level of debt financing, these firms are also experiencing low level of financial distress (i.e. the times interest earned ratios are high) as compared to the other sectors as shown in table 1 (Brigham and Ehrhardt 2001). However, the firms which belong to the utilities sector usually rely heavily on debt financing which is evident from their common equity ratio as shown in table 1 (Brigham and Ehrhardt 2001). The major portion of total debt comprises of long term debt which they usually raise by issuing securities and mortgage bonds against their huge fixed assets (Brigham and Ehrhardt 2001). Another rational behind this phenomenon is the stable sales figures as compared to the other firms which have volatile sales (Brigham and Ehrhardt 2001). This factor enables these types of firms to use more debt financing because they can easily forecast the expected level of future sales and can have an optimal business risk (Brigham and Ehrhardt 2001). 2.3 Theoretical Foundations of Capital Structure Franco Modigliani and Merton Miller (famous as MM) (1958) are pioneers, having studied the impact of internal and external determinants on the capital structure of an organisation (cited in Bhaduri 2002). In the years since, there has been a large volume of research by many researchers to determine the individual effect of these environmental factors on the capital structure of a firm in different countries of the world (Al-Najjar and Taylor, 2008). Modigliani and Miller proposed that in a supposed no-competition world, the value of a firm is independent of its capital structure (cited in Bhaduri, 2002). Further they also assumed that their theory is valid under the assumptions of perfect competition, no taxation cost, not transaction cost. They also stated that the productivity of firms is not dependent on mode of financing (cited in Bhaduri, 2002). In the above mentioned scenario, internally generated sources of funds are almost the perfect substitute of external funds (Bhaduri, 20 02). Hence, companies are indifferent to the sources of financing. After the publication of their work, researchers have found some imperfections such as Kim (1978) introduced the idea of bankruptcy cost. The idea of facility of tax shield was introduced by DeAngelo and Masulis (1980) and the agency cost by Jensen and Meckling (1976). All these researchers agreed that the optimal capital structure is the most realistic solution to the capital structure dilemma faced by the todays firms. As the cost and benefits of leverage changes from one industry to the other, many previous researchers are of the opinion that industry must have significant impact on the capital structure of firms (Scott and Martin 1975). Every firm tries to chase the average industry ratios (Tucker and Stoja, 2007). Ang (1976) said that firms can only have an optimal gearing ratio rather an ideal universal ratio for all in the real world scenario. Remmers et al. (1974) agreed with the Ang (1976) by stating the gea ring ratio of firms varies with industries. They also said that firms that belong to the same industries face same environmental conditions which lead them toward common earning and sales patterns (Remmers, Wright and Beekhuisen 1974). Scott (1972) and Scott and Martin (1975) said that most of the firms tries to choose the gearing ratio that is appropriate to their risk/return profile and their inherent business risks. Antoniou et al. (2002) found that the UK, German and French firms continuously adjust their debt ratios according to the target ratio, but at their own rates which is contingent to whether they belong to the manufacturing or services sector. Bradley, Jarrel and Kim (1984) said that the agency cost and bankruptcy cost are just the partial determinants of leverage. It means that these factors also have impact on the capital structure of firm but in a less likely fashion. Many researchers endeavoured to tackle the issue of optimal capital structure (Bhaduri 2002). All these works have collectively contributed in the development of financial theory (Bhaduri 2002). In spite of all these efforts, there is no one comprehensive solution to the capital structure dilemma (Titman 1984). Moreover there have been very little practical evidence regarding determinants of capital structure till recently (Harris and Raviv 1991).The main reason behind this limited number of empirical research evidence on this topic is the abstract nature of determinant such as size of firms, their growth rates, intensity of capital, gross profits, volatility of future sales and free cash flows and the impact of taxation on changes in the capital structure of a firm (Harris and Raviv 1991). Another important issue is pertaining to the geographical locations that most of the available research works have focused on the United States of America (USA) market (Bhaduri 2002). Less economically developed countries (LEDCs) lag behind due to the neglected role of the private sector in the economic development of country and the limited sources of funds for the companies belonging to the LEDCs (Bhaduri 2002). 2.4 Main Factors Influencing the Capital Structure of a Firm The chief determinants of capital structure are the attributes and factors that have very significant impact on the leverage ratio of a firm. The following is the detail of the most relevant determinants of capital structure of a company. Asset Structure According to the agency cost and asymmetric information theories, the composition of tangible assets owned by a company greatly affects its capital structure (Jensen and Solberg 1992). Agency cost theory states that shareholders of a firm, which has high proportion of debt in its capital structure, have the intention to invest sub-optimally (Galai and Masulis 1976; Jensen, Solberg and Zorn 1992). A positive relationship has also been found between the collateralisable assets and debt structure of a firm. Another factor is the over consumption habit of business managers which ultimately reduces the value of a firm (Bhaduri 2002). Financial Distress If a firm is using a huge amount of debt and it has to pay heavy payments periodically, there is very high probability that it will go bankrupt in the case of falling revenues or future free cash flows (Brigham and Ehrhardt 2001). This implies that the firms, which are having volatile sales figures, usually use less debt financing in order to avoid probable financial distress (Ensen and Meckling 1976). Fear of bankruptcy forbade the firms to rely heavily on the debt financing (Bhaduri, 2002). Non-Debt Tax Shield DeAngelo and Masulis (1980) said that one of the firms objectives of using debt financing, is to avail the benefit of a tax shield because interest expense reduces the taxable income of a firm. So the firms which have a large non-debt tax shield are likely to use less debt financing. Size There are is large number of evidences that the firms which are large in size and well diversified are less likely to experience financial distress (Demsetz and Lehn 1985, Remmers, Wright and Beekhuisen 1974). This encouraged them to use relatively large amount of debt financing (Warner 1977; Ang and McConnell 1982). Age The age of firm is also a very pertinent factor that influences the firms decision about having a specific of capital structure (Scott 1972). Young firms are more intended to use debt financing because of the high appetite for risk taking and limited amount of information at hand (Scott 1972). So they find borrowing from banks a cheaper and convenient way as compared to use equity financing. Growth Fast growing firms experience a higher cost of agency problem as compared to the firms which not growing very fast. Bhaduri (2002) said that fast growing firms have more chances of adjustments in the coming years. Hence there is a negative correlation between the longer term debt and the future growth of a firm. Myers (1977) said that the short term debt is the remedy to this problem. By doing this, fast growing firms dont need to enter into long term debt contrast and can easily adjust their capital structure according to the requirements of growth and financial conditions (S. Myers 1977). Profitability If managers of a company are not capable and credible enough to convince venture capitalists to lend capital, they will preferentially rely on the internal sources of revenue (e.g. retained earnings) (Myers and Majluf 1984). Myers and Majluf (1984) noted that profitable firms usually have more money as retimed earning in order to invest in the growth projects. Hence there must be negative relationship between debt proportion and historical profitability of the company (Myers and Majluf 1984). Uniqueness It is found that the firms which are producing unique kind of products usually have low leverage ratio (Bhaduri 2002, Antoniou, Guney and Paudyal 2002). These firms face great difficulty in borrowing debt from the financial institutions because in case of liquidation, their assets cant be used for some other substitute purposes (Auerbach 1985). Industry effect It is one of the most important variables that affect the capital structure of firms (Harris and Raviv 1991). The companies which belong to those industries where there is greater degree of uncertainty in the research projects and expected future sales, they rely less on debt financing (Remmers, Wright and Beekhuisen 1974). Contrary to this, the firms which have more level of certainty in their future cash flows and huge amount of fixed assets, they intended towards more debt financing (Remmers, Wright and Beekhuisen 1974). Maksimovic and Zechner (1991) said that the diversity of technologies used by firms is also the key determinant of using their capital structure. They argued that the firms which are using multiple technologies have the facility of sourcing capital from various sources of financing (Maksimovic and Zechner 1991). Where these firms can raise their funds from multiple sources, they can also reduce their risk by spreading over the wide range of technologies (Maksimovi c and Zechner 1991). 2.5 Most Important Capital Structure Theories 2.5.1 Static trade-off theory This theory of capital structure assumes that company should pursue a financing mix where tax shield advantage should be equal to the interest rate expense, keeping the other factors constant such as credit crunch and probability of bankruptcy costs (Jensen and Meckling 1976). This theory mainly deals with the pros and cons of issuing fixed asset securities like debt (S. Myers 1977). It assumes that there exists an optimal point under which the value of the firm is maximized. This optimal point is achieved by balancing the benefits and cost of issuing more debt (Myers 2001). One of the main advantages of issuing more debt is to take the benefit of tax deductable. This simple benefit can be more complicated when manages and owners have to pay personal tax and the issue of an absence of tax shield (Myers 2001). Debt financing also reduces the chances of agency conflict (Maksimovic and Zechner 1991). The rational is that the use of debt reduces the amount of free cash flows at the dispo sal of managers and there reducing the chances of conflict between managers and shareholders (Jensen and Meckling 1976). 2.5.2 The Trade-Off Theory of Capital Structure The basic idea behind this theory is that a firm normally conducts the cost-benefits analysis before taking any decision regarding its capital structure (Tucker and Stoja 2007). It means that company will just rule out the possibility of convenience in this important financial aspect as stated by the pecking order theory (Jensen and Meckling 1976). In spite of criticism by Miller (who called it a comparison of horse and rabbit), the advanced dynamic model of this theory is very robust and practical (Tucker and Stoja 2007). 2.5.3 Pecking order theory The pecking order theory talks about the cost of asymmetric information (Myers and Majluf, 1984). It says that firms choose their sources of financing according to the rule of least effort or least resistance (Myers and Majluf 1984). This implies that the firms will choose the equity financing as a financing mode of last resort (Myers and Majluf 1984). According to this theory, firms will prefer debt financing as long as it is feasible and when it is no longer possible, then they will opt for equity financing (Myers and Majluf 1984). 2.6 Capital Structure and Financial Risk The Financial risk of a firm is the risk associated with a lack of a sufficient amount of future free cash flows in order to meet its short term obligations (Brigham and Ehrhardt 2001). In other words, financial risk also increases as the use of fixed income securities increases like preferred stock increases in the total financing of the firm (Harris and Raviv 1991). Brigham Ehrhardt (2001) asserted that as the amount of debt increases in the overall mix of capital structure, the degree of financial leverage increases. Financial leverage means that the total amount of debt that is used in the capital structure of a firm (Harris and Raviv 1991). Another related concept is that of operating leverage which means that the portion of fixed cost used in the total cost of production of a particular product or range of products (Moyer, McGuigan and Kretlow 2009). Investors are very much concerned about the financial risk of firms because this is the kind of additional risk which they have to bear because of debt financing besides equity, in the firms total capital structure (Brigham and Ehrhardt 2001). It is the main objective before the financial managers to design the capital structure so that the value of the firm is maximized and at the same time mitigate the risk at hand (Harris and Raviv 1991). To gauge the financial risk of a firm, Times Interest Earned (TIE) ratio carries special importance in the eyes of these investors (Besley and Brigham 2007). Times interest ratio is of immense importance to analyse the true interest cost coverage ability of a firm (Brigham and Ehrhardt 2001). TIE depends upon three important factors: the amount of debt in the total capital structure, the cost of debt and the profitability of the firm (Haugen 1995). Usually the industries which are less leveraged such as Drugs and electronics etc. have a very high TIE ratio (Brigham and Ehrhardt 2001). However, the firms which are in the business of retailing or utilities which rely more on debt financing, have low interest coverage ratios (see table1) (Brigham and Ehrhardt 2001).There are also variations in the capital structure of individual firms operating in the same industry due to the different attitude of managers and their particular risk/return profiles (S. Myers 1977). The firms where manger s are more aggressive and have high risk appetite usually use more debt financing than those firms where managers are risk-averse (Hull 2008). The tools used to find the optimal capital structure are EBIT/EPS Analysis and EPS indifference Analysis (Brigham and Ehrhardt 2001). 2.6.1 EBIT/EPS Analysis Earnings Per Share (EPS) of a firm vary with changes in the amount of debt in the capital structure of a firm (Warner 1977). Theoretically, as the amount of debt increases in the capital structure, the financial risk increases (Warner 1977). Because of this high financial risk, investment houses change higher interest rates for the further debt which ultimate increases the cost of capital for a firm (Brigham and Ehrhardt 2001). Surely extra amount of financial leverage increases the capability of a firm to earn higher earnings per share in the coming years (Jensen and Solberg 1992). Brigham Ehrhardt (2001), however, suggested that EBIT/EPS ratio should range from 0 to 5%. To find the exact point in this range, financial managers have to conduct an EPS indifference analysis. 2.6.2 EPS indifference analysis The purpose of this analysis is to find out the point where a firm is insouciant as to whether it uses debt or equity for the same ratio of EPS (Brigham and Ehrhardt 2001). Brigham and Ehrhardt (2001) found that a firm will report higher EPS at a low level of sales and firm is using the more equity than debt. On the other hand, an organization will experience faster increase in EPS with the increase in sales if a firm is using more debt than equity (Brigham and Ehrhardt 2001). The point worth noting is that if business managers are confident about a certain level of sales of their firm, they should go for debt financing and vice versa (Besley and Brigham 2007). Financial risk of a firm is usually measured by interest coverage ratio, fixed charge coverage ratio and longer debt ratios (Moyer, McGuigan and Kretlow 2009). These ratios are usually compared with industry average ratios to gauge the true financial health of a firm (Moyer, McGuigan and Kretlow 2009). These ratios are also compared to the previous years ratio of the same firm to determine the trend of firms performance over a period of time (Brigham and Ehrhardt 2001). The Financial risk of a firm depends upon a number of factors such as financial leverage, Operating leverage, expected future free cash flows and so on. Because of the intense competition and uncertainty in the market, it becomes essential for the finance executives of companies to manage the risk of their organisations by either diversification, adopting an optimal capital structure, or using the sophisticated derivative securities (Hull 2008). An optimal capital structure is to arrange the financial structure of the firm in such a way that minimises the weighted-average cost of capital and thereby maximises the value of the firms stock (DeAngelo and Masulis 1980). The dilemma here is that when a firm is trying to maximise its EPS by increasing the amount of debt, its financial risk also increases at the same time (DeAngelo and Masulis 1980). On the other hand, if a firm tries to minimise its financial distress, it has to reduce its financial leverage which ultimately hurts the EPS of the firm (Bhaduri 2002). Hence there arises the need of an optimal financial structure which increases the EPS of a firm and reduces its overall finan cial distress simultaneously (Bhaduri 2002). This choice of the optimal capital structure depends upon a number of factors such as the size of firm, its growth rate, cash flow projections and product and industry characteristics. (Bhaduri 2002). There is a school of thought advocating that derivatives are the most useful tool to hedge financial risks at the firms level (Jalilvand, Tang and Switzer 2000). Yet there is another group who believe that there are some alternative (i.e. using less debt financing) as compared to the typical hedging techniques available which can be used to reduce the financial risk at corporate level (Berkman, Bradbury and Magan 1997). From these studies, it is evident that managing the financial risk of firms is very important for firms in order to be competitive in the market place. Some companies have made internal risk management policies as part of their corporate business strategy (Maksimovic and Zechner 1991). Smith and Stulz (1985) commented on the goal of risk management in these words: The primary goal of risk management is to eliminate the probability of costly lower-tail outcomes those that would cause financial distress or make a company unable to carry out its investment strategy(p. 3 95). It is clear from the words of Smith and Stulz (1985) that the main goal of companies is to manage risk by either means. During the last decade, there has been a lot of research on the impact of industry in deciding the capital structure of firms (Booth, et al. 2001). Booth et al. (2001) studied whether the factors affecting the capital structure of firms are country specific or not. For this purpose, their study focussed on ten developing countries: India, Pakistan, Thailand, Malaysia, Zimbabwe, Mexico, Brazil, Turkey, Jordan and Korea. They reported that: In general, debt ratios in developing countries seem to be affected in the same way and by the same types of variables that are significant in developed countries. However, there are systematic differences in the way these ratios are affected by country factors, such as GDP growth rates, inflation rates and development of capital market (Booth et al. 2001 p. 118). The institutional owners who hold large amount of shares of a firm also play a very significant role in deciding the capital structure of these firms (Al-Najjar and Taylor 2008). As these owners have the right to elect the board of directors, they can influence the mangers of their firms to adopt specific risk management policies and finance capital in a certain and specific manner (Al-Najjar and Taylor 2008). 2.7 Financial market Dysfunction In developing countries, banks and other financial institutions are main sources that provide liquidity to the economic system by advancing credit to the films (Demsetz and Lehn 1985). In repressed financial system, banks provide short and medium term loans to the young and established entrepreneurs; while big and developed financial institution provide long term loans to the big corporation (Kester 1986). These loans are mostly given to the particular sectors of national economies such as agriculture and transport and housing (Antoniou, Guney and Paudyal 2002). Governments used to influence these commercial institutions to favour certain sectors and advance soft credit to the small industry (Leech 1987). Regularity agencies mostly restrict the banks from advancing credit to certain limits (DeAngelo and Masulis 1980). Antoniou, Guney and Paudyal (2002) said that the limitation on the financial institutions by the authorities result in the form of credit rationing. Another hu

Free Hamlet Essays: The Perspective of Aristotle on Hamlet :: GCSE Coursework Shakespeare Hamlet

Custom Written Essays - The Perspective of Aristotle on Hamlet One of the foremost Elizabethan tragedies is Hamlet by William Shakespeare and one of the earliest critics of tragedy is Aristotle. One way to measure Shakespeare's work is to appraise it using the methods of classical critics and thereby to see how if it would have retained its meaning. Hamlet is one of the most recognizable and most often quoted tragedies in the all of English literature. Aristotle, is concerned with the proper presentation of tragic plays and poetry. Aristotle defines tragedy as: "...a representation of an action that is worth serious attention, complete in itself, and of some amplitude; in language enriched by a variety of artistic devices appropriate to the several parts of the play; presented in the form of action, not narration; by means of pity and fear bringing about the purgation of such emotion. (Aristotle 38 - 9) Shakespeare uses character, plot and setting to create a mood of disgust and a theme of proper revenge, as opposed to fear and pity, hence Aristotle would have disapproved of Hamlet. It is the above mentioned elements; character, plot and setting, used in a non- Aristotelian way, that makes Hamlet work as a one of the English language's most renown tragedies. By proper revenge we refer to the Elizabethan view that revenge must be sought in certain cases, for the world to continue properly. This is the main plot of Hamlet. In Poetics, Aristotle defines for us, the element of plot and shows us how he believes it must be put together. He also believes in various unities which he states are necessary for a proper tragedy. Aristotle believes in what he calls "Unity of plot" (Aristotle 42 - 3). This "Unity" leaves no room for subplots, which are crucial to the theme of Hamlet. Without the subplot of Laertes' revenge and the subplot of Fortinbras' revenge, we are left with a lugubrious play where the ending, although necessary, is pointless. The three sub-plots together as a unit, allow us to understand what Shakespeare thought of revenge. Another of the ways Aristotle defines plot in tragedy as "The noble actions and the doings of noble persons"(Aristotle 35). By this definition, Hamlet should be a noble person, who does only noble things.

Analysis on Business Marketing

â€Å"Everything is worth what its purchaser will pay for it. † This phrase was said many centuries ago and is still worth today. Any time customer, in fact these customers whose costs are driven by what they purchase, increasingly look to purchasing as a way to increase profits and thus pressure suppliers to reduce prices. A good example beside the one in the article is when you are going to buy a car and you start searching about what car dealer is the best for you to buy yours. How can you decide which of the dealers it's the best for you, it is a good question. A growing number of suppliers have created a customer value models, that is no more than data-driven representations, of the worth in monetary terms, of what the suppliers are going to could do for its customers. I have been talking about values, but what they are and what values are in business is what I'm going to explain right now. In business market values are the worth in monetary form of the technical, economic, service and social benefits any customer receives in exchange for the price it pays for a market offering. An example of value in monetary term is dollars per unit, guilders per liter, or kroner per hour. On the other hand, benefits are no more than in which any costs a customer incurs in obtaining the desire benefits, except for purchase price, are included. And finally value is what a customer gets in exchange for the price it pays. In fact, value is one of the two elemental characteristics of marketing offer; the other one is price. Field value assessments that is the most commonly and accurate method used to build customer value models. This value is used to collect data about customer value models. However, if the field value does not work suppliers use direct and indirect survey question and focus groups. As everything in our life, the first time you do something is the most difficult. To get started with the customer value model the first thing a supplier need to do is to put together the right kind of value research team. In this team should be included the people with the product, engineers in the specified field, and people with marketing experience. This last option is very important because it is really important to have people who know the customer way of thinking. The next step is to know the right market segment. Knowing this, the suppliers create a base with at least twelve customers to build an initial value model. Then it is a good time to generate a comprehensive list of value elements. These elements will be the one that affects the costs and benefits of the offering in the customer's business. The elements could be technical, economic, service or social in nature and will vary in their tangibility. But suppliers have to be very carefully on checking which elements left out, especially those that might make the suppliers' market offering look unfavorable next to the next-best-alternative offering will undermine the projects credibility. By knowing as many elements as possible the team will be able to determine more accurately the difference in functionality and performance its offers provides relative to the next-best-alternative. Most of the time the customers do not know that they have the data information that the suppliers are looking for. Some time the only way to find this data is for the team members to ask around until they come across the person who knows where to find the information. These teams also need to be creative in finding other sources of information. Independent industry consultants or knowledgeable personnel in the supplier company can be good sources of initial estimates. The comfort with which team can establish monetary estimates for its value elements will vary. Actually, most suppliers do not even attempts to assign monetary amounts to social elements. Instead, they put those elements and discuss them with the customer in a qualitative way after presenting quantitative results. An example of this is the Qualcomm Company, that not assign monetary amounts to many less-tangible elements but still includes them in its analysis as â€Å"value placeholders. † In any field value assessments, the suppliers will find that some assumptions must be made in order to complete an analysis. It is critical to suppliers to be explicit about any assumptions it makes. If a customer does not know how or why the team assigned a certain value to an element, the supplier's credibility will be compromised. After building the initial value model the suppliers should validate it, by conducting additional assessments with other customers in the market segment. Doing this the supplier will also learn how the value its offering provide varies across kinds of customers. The supplier will also need to create value-based sale tools. One common sale tool is a value case history, which is no more than written accounts that document the costs savings or added value that a customer receive from its uses of a supplier market offering. Now it is a good time to put an understanding of value to use. A good way to do this is using the supplier knowledge to tailor supplementary service, programs and systems in its current market offering and to guide the development of new offerings. A company's ability to manage flexible markets offerings successfully rest on its understanding of the value each component of an offering creates as well as its associates cost. Identifying and eliminating value drains result in better allocation of resources and improved profitability. Gaining customer is another of the steps of this project. Knowing of how the market offers specifically deliver value to customer enables suppliers to craft persuasive propositions. By providing evidence to customers of the company's accomplishments, suppliers demonstrate their trustworthiness and commitment to customers. In this way customers feel more self-confident with the company they are doing business with. Understanding value in business is the essence of customer value management. It is also good for delivering superior values and obtain an equitable return for it. Now are you ready to choose your car's vendor.

Business Torts Wk 2

Business Torts Pearl leos University of Phoenix Buisness Law/ 531 Kelly Dickson June 10, 2010 Proposed actions a company  may take to avoid tort liability and litigation are vital to organizations. Proposed actions a company  may take to avoid product liability risk may be a way out of liability issues. Assessing methods for managing legal risk arising from domestic and international regulatory matters is the best way to beat business torts. an integral aspect of a business liability practice is to take ongoing proactive measures through direct collaboration to avoid lawsuits before they are filed.Seeking advice from government authorities, specialists and risk-management consultants is a technique buinsess should use. It is in every company’s business interest to allocate resources to identify risks and avoid descrepancies within the buisness (Parchomovsky, 2008). Business Torts In order to develop methods to reduce or eliminate torts, risks need to be identified and step s need to be taken. Proposing actions for a company  to avoid tort liability and litigation is a way to keep ahead of the game.A company  may take actions to avoid product liability risk such as; identifying risk, risk management, analysis and risk control to avoid torts. Assessing methods for managing legal risk arising from domestic and international regulatory matters is vital. Employing risk and management principles will not always prevent a businesses from being sued or from suffering loss but financial burdens can be significantly reduced. Identifying Risk An integral aspect of a business liability practice is to take ongoing proactive measures through direct collaboration to avoid lawsuits before they are ever filed.Not all companies understand how to completely guard themselves of outside entities that have ill will and malice intent therefore it is important to completely understand how to handle these circumstances. Such risks have an impact on a company’s exis ting assets, earnings, and often, reputation. In the context of tort liability arising out of noncompliance of government regulations, it is in every company’s business interest to allocate resources to identify those risks, and to implement action plans to avoid such risks.Assessing methods for managing legal risk arising from of domestic and international regulatory matters (Wilson, 2009). Regulatory risks and tort liability are nothing new to companies within the business world of todays’ society. Business members should be aware of specific goals, business needs, economics and the impact of potential liability as well as managing risk and risks associated with the failure to comply with a whole host of governmental regulations. In the event those risks do develop, the company needs to have system in place to properly manage and contain monetary and repetitional loss to the company.Additionally, companies will also benefit by anticipating what regulatory changes are upcoming instead to adjust the business practices accordingly, thereby minimizing the exposure to tort liability arising out of noncompliance of regulations (Wilson, 2009). Risk Management This may be as simple as continuing to operate as usual or as complicated as restructuring or abolishing an entire department. Risk IdentificationThe first step in the risk management process is to identify all potential losses facing a municipality. Risk identification is an on going process that changes with each new situation.Risk identification, or exposure identification, requires the development of an inventory of all municipal operations, knowledge of the potential liabilities that may be imposed by either statute or common law, and knowledge of the worth of all municipal assets and sources of revenue. This step must include an evaluation of all potential events that might adversely affect the finances of a municipality. Contracts should be reviewed thoroughly, before being signed, to ensu re that the municipality is obtaining the best deal possible.In some cases, risks can be transferred to the contracting party. Potential losses of income and extra expenses that a municipality might incur are two areas often overlooked in risk identification. (Parchomovsky, 2008). Other areas where risk management principles should be applied include vehicle usage, maintenance of property and facilities, public use of facilities, use of independent contractors and consultants, personnel questions and personal injury and property injury exposure. All municipal activities should be evaluated and facilities inspected.Court decisions and legislation that affect municipalities must be reviewed. Insurance and risk management publications should be studied for the latest information on loss avoidance. Attending courses on risk management may prove beneficial. The importance of the human element cannot be overemphasized when identifying risks. Asking employees and supervisors for their inpu t because they are in the best position to identify risks. It is important to communicate with people in other municipalities who are involved in risk management that might have faced and solved a similar problem in the past.Obviously, a great amount of guesswork is involved in risk identification, and some potential losses may be overlooked. However, by making a conscientious effort, the most common losses can be reduced or perhaps totally avoided (Marcus, 1986). Analysis The next step is to calculate the potential severity and frequency of losses facing the municipality in each of the identified risk areas. A review of the past experience of the municipality, as well as statistical information and probability analysis, is necessary. The impact of a particular risk on a municipality is difficult to determine.The use of statistics and probability analysis involves guesswork. To determine where a municipality should concentrate its risk management efforts, the risk analysis should be performed carefully. Some risks may involve such a small amount or probability of loss that the municipality will decide to simply absorb any losses which occur. The potential loss may be so large and difficult to avoid that insurance might be the only recourse (Marcus, 1986). Risk Control Once the risk areas are identified and analyzed, the next step is to eliminate, reduce or transfer the risk.Steps toward risk control are taken prior to suffering a loss, with the primary goal being loss prevention. However, when a loss cannot be prevented, risk control principles may help reduce the financial liability suffered by a municipality. Elimination of a risk is the most desirable goal. If a municipality discovers a way to eliminate a risk, there is no need to worry about its future effect or to insure against it but risks cannot always be eliminated. For instance, abolishing the police force will eliminate all loss exposure in that area, but in most cases, that action is not desirable. After an analysis, a municipality may decide to stop performing some activities or to transfer the risk to a private operator. If a risk cannot be eliminated, the next choice is to attempt to reduce the risk. Risk reduction primarily involves safety. Some common techniques for reducing risks include adoption of policies for, and proper training of, personnel, particularly for the police and fire protection services, and proper inspection and maintenance of equipment and facilities. Segregation of equipment may also help avoid the loss of all equipment at one time during a disaster such as a fire at a storage site (Gray, 2003).Steps Reducing Risk If the risk cannot be eliminated or reduced, two last options are available. First, if the risk is not large, a municipality may decide that the best option is to retain the risk and fund it itself. The municipality must be aware of its financial condition, its cash flow and the availability of additional funds before deciding to assume a ri sk. Retaining the risk is the appropriate action in many cases. Studies have shown that municipalities retain far fewer risks than they are financially able to. By deciding to retain a risk rather than purchasing insurance, a municipality may save money in the long run.Again, this decision can only be made after the financial condition of the municipality has been analyzed in detail (1964). Second, a municipality may be able to transfer the risk to another party. This does not always mean obtaining insurance. The most common form of risk transference is probably the †hold-harmless agreement,† in which a supplier or contractor agrees in the contract to assume risks for which the municipality would normally be responsible. Of course, the added cost to the supplier or contractor of obtaining insurance or otherwise guarding against loss may be passed on to the municipality.In such case, a municipality must calculate costs to determine if transferring the risk in this manner is the best option. In some instances, insurance remains the ultimate solution to a risk management problem. A municipality may want to retain some of the risk of an activity and transfer (1997). Identifying Risk Program Developing a Risk Management Program on a practical level, is the first step in developing a municipal risk management plan to define the scope of the program. This definition should be in writing and should set out the objectives or reasons for establishing the program.Second, it is important to delineate the responsibilities of all persons involved in the risk management function. All persons engaged in identifying and analyzing the risk and implementing the risk management program should be included. Cooperation is one of the keys to successful risk management. Third, a municipality must develop a formal risk retention policy. Once the retention limits are established after a thorough survey of the financial strength of the community, the working policy should be drawn up as a formal policy (Del,n. d).A municipality or board may want to form a safety committee which will be responsible for the conduct of a mandatory safety program for employees. This committee should recommend safety policies to be carried out by administrative personnel and should review all accidents and claims against the municipality. Most of fee accidents and claims are usually found to result from the performance of a relatively few activities. Concentrated efforts can be devoted to the correction of procedures in these areas, thereby minimizing possible losses.The second principal duty of the committee should be that of inspection of municipal procedures and installations, concentrating the search on possible defects which might cause injury and liability. Finally, the committee should confer with insurance carriers and their representatives for the cost of insurance coverage in areas where liability dangers are greatest (Del, n. d). Professional input and guidance b ecome necessary and a professional consultant is best suited to help a municipality determine what steps should be taken to protect against torts. ConclusionRegulatory risks and tort liability are nothing new to companies within the business world of todays’ society. monitoring the risk environment in a structured way is vital. Looking at legal activity elsewhere and seeing how that might impact the business is a technique to use to avoid torts. There is a lack of awareness among employees about why their companies get sued. It's not just the board's responsibility but must be spread throughout the corporation. Other priorities compete for a worker's time, so there needs to be mechanisms put in place to identify, monitor and address risks.Put in place a strong in house legal team with clear lines of responsibility and accountability. There are a number of cases that have escalated into litigation because of the failure of companies dealing with customers when they register a complaint. Capturing issues at the outset and dealing with them, thereby avoids an escalation of problems and is the best way in tackling situations that pertain to protecting businesses agains torts.