Financial Factors Affect Dividend Policy Food Beverage Malaysia Finance Essay - Free Essay Example

Sample details Pages: 18 Words: 5496 Downloads: 9 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? When a company earns a profit, some of this money is typically reinvested in the business and called retained earnings, and some of it distribute to its shareholders as a dividend. Dividend is the share of the after-tax profit of a firm, distributed to the shareholders of a corporation pro rata based on the number of shares and class of shares held by the shareholders (McLaney, USER2010-07-12T12:24:00 Business finance (textbook)2005a). Most of the corporations usually issued the dividends in cash but it may be issued in the form of stocks or property. The distribution of profit as cash dividends to shareholders reduces the amount of cash available to the business. However, companies which pay stock dividends will increase the additional stock shares held by shareholders. Don’t waste time! Our writers will create an original "Financial Factors Affect Dividend Policy Food Beverage Malaysia Finance Essay" essay for you Create order Smaller firms distributed dividend usually at the end of an accounting year, whereas larger such as publicly held firms usually distribute it every quarter (Anon, 2010USER2010-07-12T12:23:00 https://www.businessdictionary.com/definition/dividend.html). The amount of the dividend is determined every year at the companys annual general meeting, and declared as either a cash amount or a percentage of the companys profit. Further, the amount and timing of the dividend is decided by the board of directors, who also determine whether it is paid out of current earnings or the accumulated earnings (McLaney, 2005b)USER2010-07-12T12:25:00 Business finance (textbook) . The shareholders who held preference shares are receive dividend at a fixed rate and are paid first. Holders of ordinary shares are entitled to receive any amount of dividend, based on the level of profit and the firms need for cash for expansion or other purposes (Elliott, 2005USER2010-07-12T12:18:00 Financial accounting n reporting (textbook)). Corporate legislation generally forbids payment of dividend out of anticipated but not yet received profit or unrealized profit. 2.1.1 Type of dividend payment In distributing its wealth to shareholders, a firm must decide what type of dividend should pay to their shareholders. The different types of dividends payment include: Cash dividend Cash dividend involves a cash payment from a firm pay out their earnings to the firms shareholder (Levy, 1998USER2010-07-13T15:18:00 Corporate finance, textbook). This kind of dividends is most commonly paid in cash through a check or electronic funds transfer. Cash dividends give shareholders flexibility to choose how to use the money, including reinvestment if the company allows (Dawn, 2010USER2010-07-13T15:18:00 https://www.ehow.com/facts_5778738_stock-dividends-vs_-cash-dividends.html). Cash dividends considered a type of investment earnings, and are taxable (Maps of World Finance, 2009USER2010-07-13T15:19:00 https://finance.mapsofworld.com/dividend/definition.html). Generally, cash dividends are paid out of the profits earned by the firms during the period cited, although it is possible for a cash dividend to be paid even when there is no net profit for the fiscal period under consideration (Tatum, 2010USER2010-07-13T15:19:00 https://www.wisegeek.com/what-is-a-cash-dividend.htm). Scrip dividend Scrip dividend is provisional certificate issued at the option of individual shareholders by a company strapped for cash but having adequate retained earnings. This scrip dividend is a scrip issue made in lieu of a cash dividend. Generally, scrip dividend is an unusual type of dividend involving the distribution of promissory notes that call for some type of payment at a future date. It also called liability dividend. Stock dividend A stock dividend does not involve cash. A stock dividend is a dividend that is paid in shares of the companys stock. Normally, the shareholders of a company are offered on the basis of a prorate allotment (Maps of World Finance, 2009USER2010-07-14T11:39:00 https://finance.mapsofworld.com/dividend/definition.html). Those stock dividends provide the shareholders with additional share ownership in the company. Therefore, in generally, the shareholders will reinvest the share in the company at the current share price as of a predetermined closing date (Dawn, 2010aUSER2010-07-14T11:39:00 https://www.ehow.com/facts_5778738_stock-dividends-vs_-cash-dividends.html). The purpose of a company chooses to issue stock dividends in order to generate more interest and trading activity with the stock (Dawn, 2010b). Property dividend Property dividend is a type of dividend paid to shareholders in anything other than cash or with the companys own stock (Farlex, 2009aUSER2010-07-14T22:08:00 https://financial-dictionary.thefreedictionary.com/Property+Dividend). A property dividend generally is distributed in the form of physical assets in lieu of the cash by the issuing company or a subsidiary company (Tatum, 2010USER2010-07-14T22:08:00 https://www.wisegeek.com/what-is-a-property-dividend.htm). Commonly, property dividends include shipping the companys product to shareholders (Farlex, 2009b). As a result, shareholders will receive any number of physical assets instead of money (Financial web, 2010USER2010-07-14T22:09:00 https://www.finweb.com/investing/what-is-a-property-dividend.html). A property dividend is attributable to its face value in the market. The distributing of assets by the firms instead of cash allow shareholders to benefit directly from the market value of the dividend received (Anon, 2010USER2010-07-14T22:09:00 https://www.beginnermoneyinvesting.com/html/property_dividends.htm). In general, a property dividend is taxable at its fair market value (David, 2003USER2010-07-14T22:09:00 https://financial-dictionary.thefreedictionary.com/Property+Dividend). 2.1.2 Payment procedures of dividend A firm announces and schedules dividend payment as follow: Thursday, Wednesday, Friday, Monday, March March March April 15 28 30 16 Declaration Ex-dividend Record Payment Date date date date Figure 3: Example of the procedure for dividend payment Declaration date. The date on which the board of directors meets and declares the terms and timing of dividend payment. Ex-dividend date. The final stock trading date for entitlement to the dividend. This date is four business days before the holder record date. Holder record date. The date on which the firm compiles a list of all current shareholders entitled to dividends. Payment date. The date on which the firm mails the dividend by check to the shareholders listed on the holder record date. 2.2 Studies on dividend policy Nowadays, dividend policy is an important subject in corporate finance, and dividends are a major cash outlay for many corporations. At first glance, it may seem obvious that a firm would always want to give as much as possible back to its shareholders by paying dividend (Jordan et al, 2001). USER2010-07-23T10:59:00 Essentials of corporate financeIn establishing its policy, a firm must decide its dividend policy strategy and level of dividend such as the amount of the dividend. These two decisions together comprise the companys dividend policy (Levy, 1998USER2010-07-18T16:30:00 Corporate finance, textbook). Dividend policy is one type determination of the division of earnings between payment to shareholders and reinvestment in the corporation. The task of a firms manager is to allocate the earnings to dividends or retained earnings. Retained earnings are one of the most significant sources of funds for financing corporate growth. Corporate growth makes it eventually possibly to get more dividends.USER2010-07-28T08:45:00 Act info get from dividend puzzle a review of dividend theories (NEED TO FIND OTHER REFERENCE) In fact, dividend policy is the regulations and guidelines for firms to develop and implement as the means of arranging to make dividend payments to shareholders (Tatum, 2010USER2010-07-18T16:31:00 https://www.wisegeek.com/what-is-a-dividend-policy.htm). Dividend policy is also mean that the trade-off between retained earnings and paying out cash or issuing new share to shareholders. The dividend policy of a firm describes that the firms plan regarding both the amount and timing of dividends (Czelusta, 2010USER2010-07-18T16:31:00 https://www.ehow.com/about_6541106_nominal-dividend-policy.html). Establishing a specific dividend policy is to the advantages of both the firm and the shareholder. 2.2.1 Type of dividend distribution policy Regardless of a firms long-term dividend policy, most firms choose one of several year-to-year dividend payment patterns as below: Constant dividend payout ratio In this policy, there is a fixed percentage of earnings paid out in dividends is held constant every year. Then, the rest of retained earnings will reinvests by the company. Although the dividend-to-earnings ratio is stable, but earnings of a company usually fluctuate every year; therefore, the amount of the dividend naturally fluctuates from year to year as profit vary (Martin et al, 1999USER2010-07-18T18:35:00 Basic financial management). Constant dollar dividend per share This policy maintains a constant-dollar dividend per share over time; say $6 per share, regardless of the companys earnings. An increase in the dollar dividend usually does not occur until management is convinced that the higher dividend level can be maintained in the future. However, some companies may increase the dividend slightly every year to compensate for inflation. This kind of policy still called a constant-dollar dividend policy. Further, management of a firm also will not reduce the dollar dividend until the evidence clearly show that a continuation of the present dividend cannot be supported (Levy, 1998USER2010-07-18T18:35:00 Corporate finance, textbook). Low regular dividend plus extras Corporations that in adopting this policy are require paying a small regular dollar dividends plus a year-end extra dividend in prosperous years. The extra dividend is declared toward the end of the fiscal year when the firms performance or profit for the period can be estimated. The objective of a firm chooses this type of dividend policy is to avoid the connotation of a permanent dividend. However, this purpose may be defeated if recurring extra dividends come to be expected by investors (Brigham, 1995USER2010-07-18T19:10:00 Fundamental of financial management). 2.3 Studies on dividend policy theory In the world of finance, there are some areas which have puzzled researches. One of them is the dividend behaviour of a corporation. Dividend policy has been one of the first areas of corporate finance to be analyzed with a rigorous model. Besides, this dividend policy topic has been one of the most thoroughly researched issues in modern finance (Kinkki, 2001USER2010-10-31T21:41:00 Dividend puzzle a review of dividend policy theory). In fact, the topic of dividend policy also is one of the most enduring issues in modern corporate finance. This has led to the emergence of a number of competing theoretical explanations for dividend policy. No consensus has emerged about the rival theoretical approaches to dividend policy despite several decades of research (Al-Malkawi, 2007USER2010-10-31T21:41:00 Determinants of corporate policy in Jordan). However, at the same time, there is no generally accepted model describing the dividend payout policy. Moreover, empirical findings are often contradictory to interpret according to the theory (Stacescu, 2004USER2010-10-31T21:41:00 Dividend policy in switzerland). In this paper, there are some behavioral and economical theories mainly for used to explain the motives and determinants of dividend policy. The dividend literature proposes numerous theories such as dividend irrelevance theory, bird-in-the-hand theory, tax preference theory, signaling as well as clientele effects. 2.3.1 Dividend irrelevance theory The dividend irrelevance theory has been argued that dividend policy has no effect on either the price of a firms stock or its cost of capital. The principal proponents of the dividend irrelevance theory are Merton Miller and Franco Modigliani (1961). The dividend irrelevance theory by Modigliani-Miller (MM) is the basis for the theory indicating that investors are financially unaffected by a corporations decision to reinvest the earnings on distributes them as dividends to their shareholders (Kania Bacon, 2005USER2010-10-31T21:41:00 What factors motivate the corporate dividend decision). According to MM theory, the value of the firm is the determined only by its basic earning power and its business risk. Further, MM also argued that the value of the firm depends only on the income produced by its assets, but not on how this income is split between dividends and retained earnings (Brigham, 1995USER2010-10-31T21:41:00 Fundamentals of financial management (textbook)). Al-Kuwari (2009USER2010-10-31T21:41:00 Determinants of the dividend policy in emerging stock exchange: GCC countries) and Azzopardi (2004USER2010-10-31T21:41:00 Dividend irrelevance and clientele effetcs) states that, there are some basic assumptions of MM approach: There exists perfect capital market where all investors are rational. Information is available to all at no cost. Besides, there are also no transactions costs and floatation costs. There are no such investors as could alone influence market value of shares. There is absence of taxes. Alternatively, there is no tax differential between income on dividend and capital gains. Firm has uncertainty as to future investments and profits of the firm. Therefore, shareholders are able to predict future prices and dividend with certainty. Obviously, these assumptions do not hold in the real world. In reality, corporations and shareholders need to pay income taxes. Corporations do incur flotation costs as well as investors also do incur transactions costs. This both taxes and transactions costs may cause the cost of capital to be affected by dividend policy (Hickman et al, 2002USER2010-10-31T21:41:00 Foundations of corporate finance act info get from brigham (textbook)). 2.3.2 Bird-in-the-hand theory In a classic study, Gordan-Lintner (1956) showed that dividend-smoothing behaviour was widespread. Gordan-Lintner laid the foundation for the modern understanding of dividend policy (Harvey et al, 2004aUSER2010-10-31T21:41:00 Payout policy at 21st century). This theory also called bird-in-the-hand theory. Allen and Michaely (2002USER2010-10-31T21:41:00 Wharton payout policy) found that, Lintner started with over 600 listed companies and selected 28 to survey and interview. According to the Lintner, perceived stability of future earnings still effects dividend policy. However, based on past researches, Harvey et al (2004b) states that, the link between dividend and earnings has weakened after fifty years later. In their opinion, many managers are more tend to repurchase because firms are viewed as being more flexible than dividends and can be used in an attempt to time the equity market or to increase earnings per share. Bruner (1999USER2010-10-31T21:41:00 Case studies (Photostat) textbook (act get info fr Determinants of Corporate Dividend Policy in Jordan: An Application of the Tobit Model) states that, the bird-in-the-hand theory asserts that in a world of uncertainty and information asymmetry dividends are value differently to retained earnings or capital gains. The reason of uncertainty of future cash flow, shareholders will often tend to prefer dividends to retained earnings. As a result, higher payout ratio will reduce the required rate of return which is also called cost of capital, and hence increase the value of the firm. 2.3.3 Tax preference theory The tax preference theory refer to the low dividend payout ratios lower the required rate of return and thus increase the market valuation of a firms stock. Due to the relative tax advantages of dividend compared to capitals gains, shareholders require a higher before-tax risk adjusted return on stocks with higher dividend yields (Kalay Michaely, 2000USER2010-10-31T21:41:00 https://findarticles.com/p/articles/mi_m4130/is_2_29/ai_67720681/). Further, another distinct benefit exists in this tax preference theory is for capital gains vis-a-vis dividend income. Taxes on dividend income are paid when the dividend is received. At the same time, taxes on price appreciation are deferred until the stock is actually sold. Therefore, when it comes to tax consideration, most shareholders prefer the retention of a firms earnings as opposed to the payment of cash dividends. Majority of shareholders are subject to taxes, therefore, certain investment companies, trusts, and pension plans are exempt on their dividend income. This theory suggests that a policy of paying low dividend will result in a higher stock price. As a result, a high dividend does not benefit shareholders, whereas low dividends and high retention benefit the shareholders. This is the logic of advocates of the low-dividend policy. 2.3.4 Residual dividend theory Servaes and Tufano (2006USER2010-10-31T21:41:00 The Theory and Practice of Corporate Dividend and Share Repurchase Policy) note that, a residual distribution policy is one type of investment decisions make by a firm based on opportunities and available funds. If a firm does not have sufficient funds available to make investment, then one of the issues is consider accessing capital markets. Once a firm has excess funds and the manager do not believe that the funds will need in the near future, then the remainder of funds will distribute to shareholders. Investors should want the firm to retain any earnings it can invest at a rate of return that is at least as high as the shareholder opportunity cost. Firms that agree with this concept is following a residual dividend policy where dividends are paid only if earnings are greater than what is needed to finance the equity portion of the firms optimal capital budget for the year. Therefore, if the residual dividend policy is followed, the firms should not pay dividends when it is necessary to issue new common stock to provide equity financing for the current capital budgeting needs.USER2010-10-31T21:41:00 Find author get fr CAPITAL STRUCTURE AND DIVIDEND POLICY Those firm that wishes to avoid issue of shares, will have to rely on internally generated funds to finance new positive NPV projects. Under the concept of residual dividend policy, dividends can only be paid out of what is left over. When the firm treats dividend policy as strictly a financing decision, the payment of cash dividends is a passive residual. The amount of dividend payout will fluctuate from period to period in keeping with fluctuations in the number of acceptance investment opportunities available to the firm. If those investment opportunities abound, then there will be zero percentage of dividend payout. However, on the other hand, when the firm is unable to find profitable investment opportunities, dividend payout will be 100%.USER2010-10-31T21:41:00 Find author get fr dividend policy theory 2.4 Studies on the relationship of dividend and related financial factors 2.4.1 Dividends and earnings The essential of dividend policy is actually referred to the balances earnings distribution between shareholders and future investment which after paying income tax and keeping back all kinds of reserve funds (Wang et al, 2006USER2010-10-31T21:40:00 Fr RS). As dividends are paid out of the net earnings of a firm, thus, there could be ways to look at this matter. One view is that dividends can be used as a predictor of earnings whereas another view is that earnings can also be used as a predictor of dividends. Therefore, both of these concepts are interrelated as both determine each other (Eriotis et al, 2007USER2010-10-31T21:40:00 act get fr zafar et al but use other reference (a bird eye view)). Zafar et al (2010USER2010-10-31T21:40:00 Earnings Management and Dividend Policy An Empirical comparison between Pakistani Listed Companies and Chinese listed Companies) examined a study of the impact of earnings management on dividend policy for two countries that is Pakistan and China. The study show that both Pakistan and China are neighboring developing economies however growth rate of China economy is far better than Pakistan. These two countries have recently started emphasizing on corporate governance practices, despite of very different business environment of two countries. The result shows that for both countries, earning management has no impact on dividend payout policy. Another view of impact on dividend policy such a permanent increase in profit may lead to an increase in dividend, but not necessarily to an increase in the payout ratio. However, if the aggregate profit increase were a cyclical increase that could be expected to be followed by a decline, then the payout ratio might fall. The reason is due to firms do not generally raise dividends in response to a short-run profit increase. 2.4.2 Dividends and liquidity Funds management is the core of sound firm planning and financial management. Liquidity of a company represents the ability to efficiently and economically accommodate decreases in deposits and other liabilities, as well as fund increases in assets. Firms have liquidity potential in dividend distribution policy when it has the ability to obtain sufficient funds, in a timely manner, at a reasonable cost (MBA resource, 2008aUSER2010-10-31T21:40:00 Change author , fr RS). A dividend represents a cash outflow, therefore, the greater the funds as well as the liquidity of a firm, the better the ability to pay dividend. The dividend distribution policy of a firm is depends very much on the liquidity position. A firm might lose liquidity, it will exercise influence upon dividend policy (Kumar, 2008aUSER2010-10-31T21:40:00 RS). As an example, a firm that experiences sudden unexpected cash outflows by way of large deposit withdrawals, large credit disbursements, unexpected market movements or crystallization of contingent obligations. Besides, it may also caused by some other event causing counterparties to avoid trading with or lending to the firm (Kumar, 2008b). Therefore, a firm dividend policy will be affected when the firms exposed to liquidity risk if markets on which it depends are subject to loss of liquidity. A profitable firm may have adequate earnings but it may not have sufficient cash to pay dividends. Thus, the important for the management to take into account the cash position and the overall liquidity position of the firm before and after payment of dividends while taking the dividend decision. USER2010-10-31T21:40:00 Fr dividend policy theory Company dividend distribution policy is highly dependent upon liquidity position such as particular circumstances of each institution, reflecting differences in capital levels and growth rates as well as regulatory issues. The board members of a firm must weigh the value of retaining capital to grow the firm against returning the capital to shareholders in the form of dividends (Glowasky Giese, 2003). USER2010-10-31T21:40:00 RsIn a dividend policy, stock dividend will be distributed when the cash position is weak. If cash position is good, company may distribute the dividend in form of cash (MBA resource, 2008bUSER2010-10-31T21:40:00 Change author). Mirza and Afza (2010USER2010-10-31T21:40:00 Ownership Structure and Cash Flows As Determinants of Corporate Dividend Policy in Pakistan) described that, cash generated from operations play an important role in deciding the amount of payout. Those companies which have greater cash flow generated from operations are expected to be in a better position to pay cash dividends rather than companies having negative operating cash flow. From the cash flow sensitivity point of view prior studies reported by Khurana et al (2006USER2010-10-31T21:40:00 Find this reference) stated that, financially constrained firms accumulate higher cash holdings and retain greater portion of the cash earned during the period. It means that liquidity is more important when firms cannot raise funds from external market and liquid resources are required for investment in future profitable projects. Thus, the dividend payout policy of a firm may affected or reduced. 2.4.3 Dividends and investment opportunities Investment opportunities of a firm represent the Net Present Value (NPV) investment of a particular firm. The NPV of an investment is the present discounted value of future cash inflows minus the present value of the investment and any associated future cash outflows (Anthes, 2003). It investment opportunities important in determines the dividend policy since it involve the cash flow which is factor influence of dividend policy. The high growth firms which that need great amounts of funds for positive NPV investments, it usually pay relatively low amounts of dividends when compared to firms with few positive NPV investments and vice versa. Braggion and Moore (2008) USER2010-10-31T21:40:00 RSstates that many shareholders would like to constrain the cash available to managers for fear that the companys resources would be used in wasteful activities of the companies with few investment projects. As a result, shareholders associate reductions or omissions of dividend payments with a rise of managers wasteful activities which leads to a negative abnormal return. Therefore, according to the past researches, many companies with the relatively few investment opportunities were more likely to pay a dividend. As point out by Porta et al (1999), a country with good shareholders protection and is compare two companies in that country which one with good investment opportunities and growth prospects, and another with poor opportunities. In this situation, the shareholders would accept low dividend payouts but with high reinvestment rates from a company with good investment opportunities. The reason is due to the shareholders know that when the companys investment pay off, they could extract high dividends. In contrast, a mature company with poor investment opportunities would not be allowed to invest unprofitably. As a consequence, with good shareholder protection, high growth companies should have significantly lower dividend payouts than low growth companies. 2.4.4 Dividends and taxations High taxation will reduce the earnings of companies and consequently the rate of dividend is lowered down. Sometimes government levies dividend-tax of distribution of dividend beyond a certain limit. The changes in corporate dividend payout would be expected whenever the government changes its income tax policy. Companies are obligated to make payment for corporate tax including other statutory taxes to the government when the profits are made (Nnadi Akpomi, 2008aUSER2010-10-31T21:40:00 RS). This is an essential corporate responsibility particularly profit making companies. The taxes no doubt reduce the profits available at the disposal of the organizations, either to be retained or distributed as a dividend to shareholders of the company (Nnadi Akpomi, 2008b). There are two types of taxation system on the dividend policy which is full imputation system and single tier system. According to the Tax system Malaysia (Khoo Lim, 2008), the taxation of company is based on single tier system which profit earned by companies are only taxes one, that is on the company that gained those profit. When company declares dividends, the profit thus distributed is no longer taxable on the shareholders of the company. In another word is dividend received by shareholders are completely tax free and will not need to be declare as taxable income (Chong, n.d.). The benefit of single tier system is companies with capital gains and non taxable accounting profits are able to declare dividend without any constraint. Thus, it might bring higher dividend yields to shareholder. Chen and Dhiensiri (2009) USER2010-10-31T21:40:00 Determinants of Dividend Policy: The Evidence from New Zealandconducted the study on determinants of the corporate dividend policy of firms listed on New Zealand Stock Exchange (NZSE). In this research has show that, the taxation of dividends in New Zealand was reformed with the introduction of a full imputation system which is similar to the imputation systems of Australia and the UK. Profits were taxed at the corporate level and then again as dividend income at the personnel level before reformation. The benefit behind an imputation system, apart from avoiding double taxation on the same income, is to tax the taxable income of companies at the marginal tax rate of their shareholders. This can be argued that upon the declaration of dividends, the shareholders are taxed on the grossed dividends at their own respective tax rates. A full imputation system will discourage payment of dividend, especially in the case of family controlled companies. The above different taxation system will bring different impact on dividend policy. 2.5 Studies on other dividend policy issues 2.5.1 Signaling effects Signaling theory posits that dividends can convey information about the current or future level of earnings. Gilbert et al (2008USER2010-08-01T21:58:00 Dividend policy in South Africa) states that, firms that announce changes in the dividend policy, they are conveying information to the market. In the concept of signaling theory, firms that with good future prospects should take actions that are not easily duplicated by those firms with poor prospects. One of the way to achieve this is by paying cash dividend, since the firm is making a long-term commitment to future dividend payments. Manager in struggling firms will be reluctant to divest themselves of cash in order to send a false signal of prosperity. As a result, investors are more likely to interpret positively an increase in dividends from management. Most of the favorable behavioral reactions of stockholders to positive signal dividend convey as well as the economic rationale for a reliable dividend policy suggest the underlying value of dividends. The stability in dividend policy is often necessary to eliminate uncertainty and the potential poor market valuation by investors associated with unpredictable dividend payments, as well as a decrease in dividends often results in a negative market response as seen by a reduction in the price of stock.USER2010-08-01T21:59:00 Find author (get fr WHAT FACTORS MOTIVATE THE CORPORATE DIVIDEND DECISION? The information content of dividends signaling predicts that dividends can be used to signal firms future prospects and only good quality firm can use such a device. A potential proxy for the degree of information asymmetry is the trading volume of a firms shares. In general, investors tend to invest in securities that are better known in the market such as with less information asymmetries. Therefore, other things being equal, the higher the information asymmetry of a security, the lower its trading volume.USER2010-08-01T22:00:00 Find author get fr Determinants of Corporate Dividend Policy in Jordan: An Application of the Tobit Model 2.5.2 Clientele effects Clientele effects is the tendency of a firm sets a particular dividend payout policy, which then attracts a clientele consisting of those investors who like this particular dividend policy. For instance, some investors such as university endowment funds and retired individuals more tend to prefer current income to future capital gains, so this group of investors wants the firm to payout a higher percentage of its earnings. Other group of investors has no need for current investment income may simply reinvest any dividend income received after first paying income taxes. Therefore, these investors favor a low payout ratio.USER2010-08-03T12:08:00 Fundamentals of financial management (textbook) Azzopardi (2004) surveyed a studied of dividend irrelevance and the clientele effect. In the studied, investors are attracted to different company dividend policies, and will adjust their stock holding accordingly when the company dividend policy changes. The adjustment of the stock holdings will cause the move of the stock price. Unfortunately, this may mean that the shareholders may incur cost of adjustments. Therefore, an easily identifiable dividend pattern may avoid such costs to the shareholders. At the same time, the company may incur consequential costs in the form of missed investment opportunities or costs of raising finance due to free cash flow shortage. Thus, the probably best way for a firm follows a consistent dividend policy that will hopefully attract the suitable clientele and minimize both adjustment costs for the investors and also the discussed consequential costs. USER2010-08-03T12:08:00 Dividend irrelevance and clientele effects This clientele effects study assumes that some group of investors may prefer different levels of dividends due to their different levels of taxation. Many hypothesis states that low-dividend firms attract investors with a high tax rate while that the high-dividend firms attract investors with a low tax rate. A studied result conducted by Lease-Lewellen-Schlarbaum (1976) show that, private investors preferred long-term capital gains, followed by dividend income and then short-term capital gains. USER2010-08-03T12:09:00 Kikki- dividend puzzle a review of dividend theory 2.5.3 Agency theory Jensen and Meckling (1976USER2010-08-03T14:43:00 Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure) examined the separation of ownership and management in a company gives rise to potential agency conflicts between managers and shareholders. This agency conflicts can be mitigated through an increase in ownership and monitoring by large shareholders with a significant equity stake in the company. Dividend may be viewed as one way of imposing discipline on managers, for their payment deprives the firm of some of the cash it would otherwise have available for re-investment. Thus, firms that wishing to grow will have to approach the suppliers of capital to raise the funds for new projects. It will enables those investors to monitors the use to which this capital is being invest in order to ensure that managers are making value adding investment and not just simply growing the firm. Rozeff (1982) study demonstrates that a model in which dividends serve as a mechanism for reducing agency costs, thereby offering a rationale for the distribution of cash resources to shareholders. In Rozeffs model, an optimal dividend policy is the outcome of a trade-off between equity agency cost and transaction cost. Consistent with such trade-off model, Rozeff reported the evidence of a strong relationship between dividend payouts and a set of variables proxy for agency and transactions costs in a large sample composed of one thousand US firm for the period 1974 to 1980 (Farinha, 2002USER2010-08-03T14:44:00 DIVIDEND POLICY, CORPORATE GOVERNANCE AND THE MANAGERIAL ENTRENCHMENT HYPOTHESIS: AN EMPIRICAL ANALYSIS). 2.6 Summary The brief review of literature shows a basic concept and understanding of dividend policy and the factors affecting the corporate dividend policy. To sum up, there are several credible explanation for the existence of dividends policy theories, although none of them is generally accepted or above criticism. In view of these facts, the present study aims to identifying the factors or financial variables affecting corporate dividend policy in food and beverage industry in Malaysia.

Teaching Methods For General Psychology - 918 Words

I believe I have fairly effective study methods for general psychology, but there are things I could change. The main form of studying that I do for this class is note taking, which is very helpful for me. Currently I do most of my studying in the room, but when I study in the library it seems like I am able to get much more work completed. I tend to get very distracted by my phone when I’m studying. I have positive reinforcement of getting a good grade in this class. Typically I study with my roommate who is also in general psychology. This can be distracting sometimes, but it is also helpful because we are able to prepare for exams together and talk through any concepts that one of us doesn’t understand. The three things I want to do to improve my study behaviors are new location, setting up a schedule, and eliminating competing behavior, specifically my phone. The new location that I would choose is a study room in the library, this would become a new antecedent or signal for me to study. A study room is a much better study location than my dorm because my dorm is more of a signal to relax and hang out with my friends or watch netflix. The next thing that I want to do to improve my study habits is set up a schedule for studying. Right now I just study whenever I feel like and I do whatever homework I feel like doing at that present time. I’m usually done with class around 3:00 or 3:30, so the best times for me to study would be right after class until dinner atShow MoreRelatedA Research Study On Learning Theory Essay979 Words   |  4 Pagesabout learning theory was seen as a practice, psychology and science was found in the literature of scholars across the world. The Germany scholar named Lay (1903) studied the relationship between psychology and the practice of teaching subjects in Language Arts and Literacy and math (Lay, 1903. P.1). 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Direct and Indirect Cash Flow Models-Free-Samples for Students

Questions: Discuss about the Direct and Indirect Cash Flow Models. Answers: Analysis: According to the calculations and analysis over the cash flow statement of the company, it has been found that the total cash inflow from operating activities of the company is $ 12500 which depict that the company has earned $ 12,500 cash in the year. Further, it has been found that the net cash flow inflow from investing activities of the company is $ -3500 which depict that the company has spent $ 3500 cash in the year which expresses about the expenditure of the company. Lastly, it has been found that total cash inflow from financing activities of the company is $ -2500 which depict that the company has spent $ -2500 cash in the year (Garleanu Pedersen, 2007). Through the analysis, it has been found that net cash inflow of the company is 6500 which depict that the performance and the position of the company is average. The company is required to manage the financing and investing activities to manage the cash flow in the operations of the company (Davies Crawford, 2011). Company could reduce the level of the cash outflow through reducing the extra expenditure of the company and enhancing the cash inflow of the company which would enhance the level of the net cash inflow of the company (Garrison, Noreen, Brewer McGowan, 2010). Thus the senior management of the company is suggested to stop buying the extra equipments for the activities and the operations of the company and it would also help the company to attract more investors towards investment into the company. The liquid position of the company would also be better in regards to the net cash flow. References: Davies, T. Crawford, I., (2011).Business accounting and finance. Pearson. Garleanu, N. B., Pedersen, L. H. (2007).Liquidity and risk management(No. w12887). National Bureau of Economic Research. Garrison, R. H., Noreen, E. W., Brewer, P. C., McGowan, A. (2010). Managerial accounting.Issue

An Analysis of Teen Dating Violence free essay sample

A Rise in Efforts to Spot Abuse in Dating, highlights the prevalence of abuse (physical, sexual, and verbal) within teen relationships—identifying females as the most prevalent victims. As the article emphasizes the need for preventive programming, this paper will present the internet resource, Heather’s Voice and provide suggestions for a program within schools that may utilize this resource in the prevention and identification of teen dating violence/abuse. In addition, this paper will present suggestions on how this program can be evaluated. The NYT article discusses the prevalence of teen deaths due to dating violence in the U. S. over the past several years and discusses national, statewide, private, and institutional measures to aid in the prevention of this epidemic (retrieved April 20, 2009, www. nyt. com). Of the cases presented, Heather Norris’s case is highlighted to give insight around the commonness of teen dating violence and how easily it can progress and/or go undetected. We will write a custom essay sample on An Analysis of Teen Dating Violence or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Social Problem Intimate-partner violence, sometimes called domestic violence or spouse abuse, includes acts of physical aggression, sexual coercion, psychological/emotional abuse and controlling behaviors by a current or former partner or spouse (Heise Garcia-Moreno, 2002). It can happen within marriage, long-term partnerships or short-term intimate relationships, and can be perpetrated by ex-partners when these relationships have ended. It has been documented as largely perpetrated by men against women, although such violence also occurs in same-sex couples and can be perpetrated by women against men. As a category of interpersonal violence, intimate-partner violence includes dating violence that occurs among young people, although the pattern of such violence may be different to that experienced in the context of long-term partnerships, and studies often examine the two issues separately. Research suggests that roughly one in three high school students has been or will be involved in an abusive relationship (physical, emotional, sexual). Furthermore, one in five adolescent girls experiences physical or sexual violence perpetrated by her dating partner, according to a recent arge-scale study. International research increasingly shows that violence within intimate relationships is not a phenomenon unique to adulthood, but rather a disturbingly common feature of adolescent dating relationships (Pinheiro, 2006). The prevalence of dating violence is staggering, its impact enormous. In an effort to educate teen girls on dating violence and provide support to those already in abusive re lationships, Heather’s mother, Debbie Norris created the website, Heather’s Voice. The site states that it aims to educate teens about dating violence and domestic abuse. The website shares Heather Norris’s story and provides educational information, outside resources/hotlines, and tools geared to teen girls around awareness and prevention of dating abuse. The educational information is provided through definitions and key terms, check-list of signs of abuse (how to detect abuse in your own relationship and how to detect if someone you know is being abused), relevant articles, and statistics. The site also provides an Ask Debbie link that allows the user to ask anonymous questions around abuse and dating violence. Program Theory Primary prevention framework In a public health framework, primary prevention means reducing the number of new instances of intimate-partner violence or sexual violence by intervening before any violence occurs. The impact of primary prevention is measured at population level by comparing the frequency with which either victimization or perpetration occurs. This approach contrasts with other prevention efforts that seek to reduce the harmful consequences of an act of violence after it has occurred, or to prevent further acts of violence from occurring once violence has been identified. Primary prevention relies on identification of the underlying risk and protective factors for intimate-partner violence and/or sexual violence, and action to address those factors. Its aim is to reduce rates of intimate partner violence and sexual violence. Since research suggests that a large percentage of teens/adolescents in the U. S. use Internet between 3-5 hours a day, as a source of entertainment, education, and communication—such programs that utilize internet based prevention resources may increase the likelihood of reaching their goals and objectives. Similarly, programs integrated within schools and/or school curriculums have also been proven to support positive outcomes (Lavoie, et. al, 1995, p 519). Many programs have been created in the prevention and education of teen dating violence since the 1980’s, that incorporate these aforementioned components, yet, there is a lack in research evaluating the effectiveness of such programs in decreasing the problem of violence or changing attitudes (Lavoie, et. al, 1995). Most public high schools across the United States require a component of health education, which mainly includes reproduction, hygiene, and sexual health (i. . sexually transmitted diseases). Even though there is a rise in teen dating violence and abuse, there is only a limited amount of schools that provide educational interventions and even fewer have such programs as a requirement (Lavoie, et. al, 1995, p 517). Therefore, the proposed program, Our Voices, will be implemented as a component of high school healt h education curriculums. Program Description Our Voices, a school-based program in the prevention of adolescent dating violence (perpetration and victimization) was developed utilizing the interactive educational website, Heather’s Voice. The program will be a component of the physical education requirement and will take place during the second semester of freshman year (9th grade 13-14 year olds), and its meeting times and hours will be consistent with core requirement standards. Consisting of a personal workbook for each participant and Facilitator’s Guide, which is used in tandem with the website, the aforementioned program emphasizes an early prevention framework, seeking to provide youth the education on dating violence to avoid, recognize, and escape abusive situations. At the same time, it also includes exercises to help survivors of abuse deal with their experiences and begin to heal. Topics include qualities of a healthy relationship, setting boundaries, assertiveness and communication, danger signs, defining abuse, gender stereotypes, what to do in case of assault, legal rights, understanding feelings, and dealing with trauma. The program will be modified for males and females separately and both will address same-sex couples. Even though females in heterosexual relationships are more likely to be victims—it is important not to exclude males or same-sex couples, â€Å"primary prevention strategies will not be effective if they focus on women and girls alone—men and boys must be included, program working with men should approach men as partners and agents of change† (Harvey, et al, 2007, p28). Additionally, research shows that education programs for perpetrators or potential perpetrators in addition to potential victims have been effective in the prevention of abuse or amelioration of abusive behaviors through awareness and understanding (Harvey, et al, 2007, p15). For the purpose of allowing for group comfort, bonding, and disclosure it is beneficial to have a separate group for males and females. Also, adolescents are more likely to modify their responses in order to appease the opposite sex, thus decreasing the efficacy of the program. Program Objectives: †¢Build awareness amongst participants around teen dating violence †¢Help students understand the components of a healthy relationship †¢Build assertiveness and partner communication skills †¢Build a support network for students both in school and online Program Goals: Reduce rates of intimate partner violence and sexual violence amongst teens and young adults †¢Increase identification of teen dating violence within participating schools through self-reporting and witness reporting Program Evaluation An outcome evaluation will be necessary in assessing the efficiency of the program—whether or not its objectives were met. In order to assess the outcome of the program, the participants will be required to complete a self-report survey before and after the completion of the course. The survey will be composed of 20 questions on a 5 point Likert Scale.

America and The Grapes Of Wrath Essays

America and The Grapes Of Wrath Essays America and The Grapes Of Wrath Essay America and The Grapes Of Wrath Essay Essay Topic: The Grapes Of Wrath In The Grapes of Wrath by John Steinbeck, the time period is set during the Dust Bowl and the Great Depression around the 1930s. Both of these devastations occurred relatively around the same time creating many problems across America. In the Great Plains region, the Dust Bowl hit forcing families into havoc. When families transitioned from their farming lands to industrial factories they were hit with the Great Depression. This affected about 15 million people throughout America. The Dust Bowl surrounded Oklahoma, Texas, Kansas, Colorado, and New Mexico. With almost no rainfall, loose soil, and high winds all of these factors combined to create dense dust clouds called â€Å"black blizzards†. From 1934 to 1937, the soil lacked the strong root system to resist the winds. The recurring storms strangled cows and pasture lands moving 60% of the population from the region. Most of these people moved to the west towards cities. The federal government mobilized several new agencies, principally the Soil Conservation Service formed in 1935, to promote farm rehabilitation. Farmers were instructed to plant trees and grass to anchor the soil, to plow and terrace in contour patterns to hold rainwater, and to allow portions of farmland to lie unplanted each year so the soil could restore. 11.3 million acres of land were purchased to keep out of production and by 1941 much of the land was rehabilitated. The region repeated its mistakes during World War II as farmer s again plowed up grassland to plant wheat when grain prices rose. Drought threatened another disaster in the 1950s, prompting Congress to subsidize farmers in restoring millions of acres of wheat back to grassland. The Great Depression was the longest lasting economic downturn in history. After the stock market crashed in October 1929, Wall Street wiped out millions of investors in a panic.Steep declines in industrial output and rising levels of unemployment as failing companies laid o

Romeo and Juliet Act3 Scene 1 Essay Example

Romeo and Juliet Act3 Scene 1 Essay Example Romeo and Juliet Act3 Scene 1 Essay Romeo and Juliet Act3 Scene 1 Essay What happens in Act 3 Scene 1? It is a crucial scene, a turning point and it determines the rest of the action. It is a tense and exciting scene for the audience and tragic at the same time. In this scene, soon after Romeo and Juliet secret marriage, Tybalt kills Mercutio and then Romeo kills Mercutio to take revenge. Then, Romeo is banished from Verona. Paragraph1: Why were tension and excitement created? Mercutio is not in a good mood but he is in argumentative mood, he seems angry. The audience is prepared for the fact that a fight is going to occur (tension and suspense are built). He tells Mercutio that if someone is in a bad mood, everything even an unimportant cause will end to a fight. Benvolio is warning Mercutio that because it is a hot day he is sure there will be a fight (and if we meet we shall not scape a brawl-Benvolio). He suggests Mercutio that they should go home. The strong use of vocabulary and personification here increases the tension. for now, these hot days, is the mad blood stirring, Benvolio). We know that a fight is inevitable. The use of symbolism with awhiskers in beards, cracking nuts etc make the audience even more worried for what will happen after (thou, why, thou wilt quarrel with a man that hath a hair less in his beard than thou hast, Mercutio). When Tybalt arrives, the atmosphere immediately changes, becoming much tenser, because of his dangerous reputation, yet he remains polite to Mercutio as Mercutio is not his real target. Mercutio uses provocative language towards Tybalt and Tybalt reacts in a similar way (make it a word and a blow, Mercutio) (you shall find me apt enough to that sir, an you give me a reason, Tybalt) Tybalt tells Mercutio with irony that he hangs out with Romeo, so Mercutio gets angry and threatens. It is evident that he will not withdraw calling him aa villaina (Romeoa ¦ thou art a villain, Tybalt). This is a great insult to Romeo who is of noble birth. He tries to start a fight with Romeo and he accuses Romeo to antagonize him in the hope of starting a fight. The audience adopts negative feelings towards Tybalt.

Case study Essay Example | Topics and Well Written Essays - 500 words - 10

Case study - Essay Example 5. The initial cause was the launching of the diversity program without a clear definition among managers as well as employees. The problem worsened when it was left to employees and facilitators, rather than management, to define what they thought diversity was. The effect was that the rules probably went beyond what management initially expected. Naylor (1999) mentioned that the underlying value in American culture is the freedom to one’s beliefs. These would include unpopular beliefs that work against diversity. A seminar and training at the workplace may not be enough to change these beliefs, leading to a hidden resentment in some workers. 6. Alliant operates in an industry that is high-tech, requiring constant innovation, creativity, and fresh ideas. An organization that can come up with technical advances first, operate more efficiently, and provide reliable service at the safest and cheapest way possible, will be differentiated from its competitors. But if the company puts priority on diversity before its need to find the best technical materials and people, efficiency and safety may suffer. 7. Diversity in the workforce provides a greater source of creative ideas and knowledge of customers; it therefore creates competitive advantages for the organization. Diversity among suppliers may lower costs and improve sources of materials as suppliers compete with each other. But Alliant wants people to accept diversity at a personal level. At this level, accepting any belief is a personal choice, so the company’s efforts may be interfering with personal freedoms beyond what the work demands. 8. The company must set a boundary so that diversity in the workplace is attained without interfering with personal prerogatives. Attitudinal change deals with deeply rooted ideas about race, gender, ethnicity, religion, and class, which people were raised with (Healey, 2005). The company

TEAM PROCESSES Essay Example | Topics and Well Written Essays - 1000 words

TEAM PROCESSES - Essay Example As a part of customer service, it was required to assist the customers to select the merchandize and offer them suitable products as per their needs. In terms of handling the complaints of the customers, the role had to comply with the company policies of no refund but only exchange. Thus the entire team was dynamic in its work functions with specific purpose of adhering to the company policies and in maintaining the overall profitability of the retail business. This was achieved through improved customer service that played the role of attracting the customers time and again to the retail store. A situation was encountered when the customer wanted a refund of money due to the non-receipt of a free product that was offered with the product. It was found that the stock of the free product was depleted in the retail store for which it could not be provided while selling the primary product to the customer. However, the customer had a non-negotiable approach on his demand. This created an undesired situation which occurred due to lack of effective communication and non-fulfillment of roles and responsibilities of the team. Analysis of team activity: overall effectiveness, limitations, challenges, interactions with other teams The analysis of the overall effectiveness of the team activity has been given below. The activities in the retail sales in the store demand healthy interaction of the different functions of the retail sales. The spontaneous interactions lead to strong co-ordination between the teams and its members. Due to exchange of information, the areas of concern within the team could be addressed. The experience encountered was solely due to lack of co-ordination among the team members and non-availability of updated information on the product sold to the customer. The non-availability of stock of the free offerings with the product was not communicated to the sales person by the store manager who did not inform the same to the customer. The customer af ter buying the product checked later on to find that the free offer was not packed with the sold item by the retail store. This created a sense within the customer of being cheated. For this reason, the customer wanted a refund from the store as the contract of buying and selling was breached by the retail store. This shows the limitations of overall effectiveness of the retail business in dealing with their customers. This is a challenge faced by the team as the there was no free exchange of information. The integral function of the retail store is an aggregation of the individual retail functions (Brannick,  Salas and  Prince, 1997). The communication with other teams is thus important for delivering effective customer service and in sustaining the profitability of their business. Key recommendations for improvement In order to deal with such situation in the future, the key recommendations for improvement of the retail operations are given below. There should be respect among the team members for each other and they should be aligned to overall retail sales activity. The alignment of the roles towards common interest of the overall work of retail sales triggers action from the individual roles that are aimed to make the system error free. In this experience in retail sales, the team members should have exchanged information on

Midterm Assignment Example | Topics and Well Written Essays - 1500 words

Midterm - Assignment Example Researchers may find legal briefs important because they will not only cite important case and statutory law, but can be used to help the researcher analyse a similar research issue. Question 3: The US Code is a chronological organization of all permanent/current laws of the US Congress. The US Code is published every 6 years with each edition reflecting all amendments and supplements to the law currently in effect. Thus each subsequent edition of the US Code will be expected to reflect only the current law or laws currently in effect. For instance, if an Act or provision of an Act was repealed, the next edition of the US Code will reflect the repeal. However, if an Act or provision was amended or supplemented by an additional provision, the new provision or supplementary provision will be reflected in subsequent editions of the US Code. Question 4: Legal professionals and legal scholars might share an interest in the original intentions of the US Constitution as a means of understan ding what the framers’ initially intended the Constitution to mean. By taking this approach, the possibility of conflicting and confusing interpretations is reduced and the US Constitution is understood and applied with greater consistency and predictability. In looking for the original intentions of the framers of the US Constitution, legal professionals and legal scholars will look at the debates between the Federalists and the anti-Federalists at the time before and during ratification. The debates will be found in the Federal Papers. Another important source is the Declaration of Independence. Question 5: Court opinions, statutes, and documents containing arguments of the framers of legislation and constitutions are regarded as primary sources because they are authoritative in nature. In other words, primary sources of law reflect actual statements of the law or the original intention of what the state law will or are intended to be and how it should be interpreted and ap plied. Question 6: Cite-checkers as secondary sources of law are features providing information relative to a specific area of the law. The information typically includes headings and primary sources to which the heading relates. For example a cite-checker for the US Code will identify whether or not the statute is revised. Editorial notes relating to the primary source will also be included and relevant information not included in the primary source. Legal digests differ only in that they will provide indices of legal issues and the case and statutory laws supporting the specific position. Cite-checkers and legal digests are therefore valuable secondary sources of information for researchers because they direct the researcher to primary sources of information. Question 7: Encyclopedias and legal periodicals both provide statements of the law as it is, as it was and as it should be. However, what distinguishes encyclopedias from legal periodicals is content. Encyclopedias are genera l and concise statements of the law. However, legal periodicals are far more comprehensive and provide both theoretical and practical discussions over a period of time. While neither source is authoritative, both can be valuable guides to where a researcher might look for primary and authoritative sources of law. Legal periodicals however, usually reflect opinions and analyses that can have persuasive value even to judges determining a legal dispute. Thus researchers should only use legal

Cultural determinants of Japan and United States

Cultural determinants of Japan and United States The purpose of this report is to explore the cultural determinants of both Japan and United States. The report elucidates the differences between the two countries in terms of leadership styles as influenced by their respective different cultures. The reason in selecting Japan as one of the research countries is because of its deep rooted strong cultural beliefs and group centered style in a business perspective. It is well known to the world that Japan is a closed economy but at the same time, extremely competitive. On the other hand, United States make a good contrast in terms of its open culture and individualistic style of doing business. Despite the differences, both are amongst the most competitive and successful nations in the world. The compromising Japanese and confrontational Americans do make this research journey an exciting and interesting one. Different cultures exist in the world and their impact on leadership styles in their respective countries is significant. As defined by Luthans and Doh (2009, p96), Culture is the acquired knowledge that people use to interpret experience and generate social behaviour. And culture is gained through transmissions between individuals in forms of symbols, rituals, languages, stories told and etc. It will be interesting to find out that the countries cultures do in fact influence their leadership styles to quite a great extent. In this report, two entirely different cultures; Japan and United States will be explored in depth to provide a better understanding of their background. The seven determinants of culture in these two countries will be individually discussed as well. Leadership styles in these two countries will also be examined to establish a relationship with their respective cultures. In the later part of the report, an analysis on the cultural and leadership differences between Japan and United States will give the readers a clear outline of the contrasts which exist currently. 2. Overview of Theories 2.1 Hofstedes Cultural Dimensions Geert Hofstede developed five dimensions of national culture. He had specifically examined the role of national culture in work related values and information system design (Hofstede, 1980). National culture can be defined as a collection of relatively uniform and enduring values, beliefs, customs, practices and traditions that are shared by a countrys members, learned by new members and transmitted from one to the next (Huczynski and Buchanan, 2001). According to Hofstede (1984), culture is a kind of mental programming that lies between human nature on one side and personality on the other. Through the completion of his study in 1980, it was found that the differences between cultures can be understood by the following four distinctive dimensions: Power Distance Individualism Vs Collectivism Uncertainty Avoidance Masculinity Vs Femininity Power Distance It is the extent to which people expect and accept unequal power distribution. These people are usually the ones with less power and control. Countries can be referred to as either having High power distance or Low power distance. The former has a tall and centralised structure, instructions and orders (from superiors) are obeyed without queries or rather, heedlessly. The latter, on the other hand, has a flat and decentralised structure. Superiors give lots of respect and trust to subordinates. Individualism vs. Collectivism In an individualistic culture, people look after themselves and are more self-centred. The ties between people are not strong as each person is focused on their own goals. This type of culture is mostly found in western countries. In a collectivist culture, great emphasis is placed on groups. It is more of a We culture instead of I. This type of culture can be described as harmonious and there is almost zero confrontation in times of conflict. As opposed to the individualistic culture, collectivist is more common in Asian countries. Uncertainty Avoidance It is the preference of a society for unambiguous and risk free situations. In a high uncertainty avoidance country, there are more regulations and policies to adhere to and they tend to reduce risk to the minimum. Whereas in a low uncertainty avoidance country, people are tend to push boundaries and are more daring to take risks. Masculinity vs. Femininity In simple terms, when a societys most important social values are associated with money and success, it is said to be highly masculine. It is highly stressful to be working in such environments. Feminine societies, in contrast, believe in quality of life and helping others over anything else. 2.2 Leadership in the International Context Leadership is the process of influencing people to direct their efforts toward achievement of organization goals. A good leader takes ownership over projects, while simultaneously empowering everyone in his or her team to contribute according to their key strengths. They are accountable for any mistakes made, but ensure each is a learning experience for everyone, and capable of drawing their own intuitive conclusions on the progress or outcome of a project, or foresee any roadblocks which may arise. Initiative is another key leadership trait. Successful leaders jump to their feet and run the extra mile to exceed expectations. They are two comparative areas provide a foundation for understanding leadership in the international: 1) the philosophical grounding of how leaders view their subordinates and 2) leadership approaches as reflected through use of autocratic-participative characteristics and behaviours of leaders. Douglas McGregor, an American social psychologist, proposed his famous X-Y theory in his 1960 book The Human Side Of Enterprise. The specific philosophical assumptions of Theory X leaders are humans inherently dislike working and will try to avoid it if they can. Because people dislike work they have to be coerced or controlled by management and threatened so they work hard enough. Average employees want to be directed and dont like responsibility. Average humans are clear and unambiguous and need security at work. Theory X leaders conducive to large scale efficient operations and apply to mass manufacturing Production Workers. This classify as Authoritarian, a hard management style. The specific philosophical assumptions of Theory Y leaders described people view work as being as natural as play and rest. Humans expend the same amount of physical and mental effort in their work as in their private lives. Provided people are motivated, they will be self-directing to the aims of the organization. Control and punishment are not the only mechanisms to make people work. Job satisfaction is the key to engaging employees and ensuring their commitment. People learn to accept and seek responsibility. Average humans, under the proper conditions, will not only accept but even naturally seek responsibility. People are imaginative and creative. Their ingenuity should be used to solve problems at work. This apply to professional services workers for participative complex problem solving. This classify as Participative, a soft management style. McGregor sees Theory Y as the preferable model and management method, however he felt Theory Y was difficult to use in large-scale operations. In 1981, William Ouchi came up with a variant that combined American and Japanese management practices together to form Theory Z, Theory Z essentially advocates a combination of all thats best about theory Y and modern Japanese management, which places a large amount of freedom and trust with workers, and assumes that workers have a strong loyalty and interest in team-working and the organisation. Authoritarian Leadership (Autocratic) leaders provide clear expectations for what are need to be done, when it should be done, and how it should be done. There is also a clear division between the leaders and the followers. Some of the appropriate conditions are to be use when you have all the information to solve the problem, you are short on time, and your employees are well motivated. Participative Leadership (Democratic) leaders offer guidance to group members, but they also participate in the group and allow input from other group members. Participative leaders encourage group members to participate, but retain the final say over the decision-making process. Group members feel engaged in the process and are more motivated and creative. Delegative (Laissez-Faire) leaders offer little or no guidance to group members and leave decision-making up to group members. While this style can be effective in situations where group members are highly qualified in an area of expertise, it often leads to poorly defined roles and a lack of motivation. 3. Overview of Japan Japan is an industrialised, and one of the most efficient countries in Asia, in terms of its economy and trades. Due to the limitation of natural resources, Japan has turned to international trades for its constant supplies. The people of Japan are well educated and worldly known as extremely well mannered. Japan has strived to achieve and maintain very high health standards surpassing many other countries in the world, with its life expectancy rate exceeding that of the United States. (US Department of State, 2010) 3.1 Determinants of Japanese Culture The ancient Japanese culture has cast a massive impression on many people over centuries for being one of the most homogeneous countries in the world. Traditional, indirect, seniority based, collectivist, are some of the various terms associated with the Japanese. Their national culture is so strongly rooted that till this day, it is one of the very few countries in the world which operates in a total different and unique way with traditional customs and feudal values, and still clinging firm to them. It surely has left many people wondering and pondering, having in mind that globalisation and internationalisation is so common these days. The below are some determinants of the Japanese culture which is worth to understand. Existing Feudal Values Founded in 600 B.C and having its roots in Buddhism and Confucianism, the Japanese believes in tall hierarchical structures with strong importance placed on seniority, respect, loyalty and family. One of the feudal values is the unequal treatment of women. Women are regarded as low status in the highly masculine society of Japan. However, there are researches which shows that there has been some change to that, women are slowly paving their way up and even successful in their careers. (Bucknall, 2005) Interesting to know from Bucknalls (2005, p16) study is that the Japanese culture has a strong central core which sees things as being either right or totally wrong, nothing in between. To the Japanese, losing is unacceptable and disgraceful because losing is just totally wrong. Hence, since the ancient Japan, they have regarded themselves as being a highly superior cast of people who just cannot lose to anyone, to Conquer is what they aim to achieve. (Recall World War II) Another ancient value of the Japanese is that the seniors (in terms of age), are treated with reverence. The young people could only patiently wait for their turns for promotions. No way could they rise fast in an organisation even though they are out-performing or outstanding. Religion According to Lee and Trim (2008), the Japanese adopted Buddhism and then merged it with Shintoism. It led to the ability of the rulers of Japan to develop government ceremonies in accordance with Shinto rituals. (Osumi, 1992) Buddhism teachings emphasise on doing the right actions and making right decisions. It also involves three elements; mental culture, wisdom and morality. (Lee and Trim, 1999) Besides the above, the Japanese have also been deeply influenced by Confucian thought. (Mei, 1967) Confucianism focuses on 4 main elements; benevolence, wisdom, righteousness and decorum. It is important for foreigners to note that religion in Japan has played a crucial part in shaping their national identity. Buddhism and Shintoism intertwined, evolving their central government system. Hence, understanding religions of Japan would be highly recommended and should not be regarded lightly. Social Structure A study by Levy, (1992) showed that there are six social classes which can be distinguished in modern Japan. They are namely; The Imperial Family Consists of the Emperor and his relatives (Sacred objects mentioned by Levy, 1992, p3), unlike the King and royal family in England, the Japanese Emperor holds a symbolic position in Japans social system and extremely significant. Nobility Consists of descendents of the Kuge, Samurais, Dukes and counts. (Nobilities in ancient Japan). Highly respected group in Japan. Upper Middle Class Consists of people who are not necessarily descendents of any nobility, but have high status in modern Japan. i.e Directors of large corporations, high ranking civil servants, etc. Lower Middle Class They are the normal working class people in modern Japan. Most of the people fall under this category. Industrial Proletariat They are the blue collared workers. Peasants The rest of the population with lower than average income. Political Philosophy There are seven political parties in Japan, namely Democratic Party of Japan (DPJ), the Social Democratic Party (SDP), the Peoples New Party (PNP), the Liberal Democratic Party (LDP), the New Clean Government Party (Komeito), the Japan Communist Party (JCP), and Your Party (YP). Japan is a constitutional monarchy with a parliamentary government (US Department of State, 2010). Economy Japan is the second largest free-market economy in the world following United States. (US Department of State, 2010) It has a highly competitive and efficient economy with few natural resources. The wages in Japan are the highest in the world (EconomyWatch, 2010), but fact that the living conditions/standards are extremely high has to be considered as well. Language Almost all Japanese people converse and use Japanese as a business language. Even though they know English, they would be too shy to speak in that. Silence would be the answers in the case of dealing with foreigners. It may seem strange to many foreigners, but this is the typical behaviour of many Japanese people. Very restricted use of English (despite being an international language) would be seen in most business meetings, limited to simply Good mornings and Good Byes. They do not show willingness to converse to foreigners in another language other than Japanese, perhaps due to their extreme shyness. Education As mentioned earlier, Japanese are a group of homogeneous people. As such, their education system is highly uniformed. Hence, it can be perceived that almost all Japanese share the same ideas and beliefs. In Japan, all children are taught the same things in school, freedom to customise the curriculum is near impossible as the Ministry of Education in Japan closely supervises the education system. The Japanese government places significant importance in the education system. The Ministry of Education, Culture, Sports, Science and Technology in Japan introduced five policies in January 2002 to improve the quality of education system. One of which is to increase the number of teaching personnel so as to achieve smaller teaching groups for more focus on each student. 3.2 Leadership style and relationship to Culture in Japan Japanese leadership style is unique and differs from the convention X-Y theory proposed by Douglas McGregor. In 1981, William Ouchi came up with a variant theory Z which is essentially a combination of Theory Y and Japanese management. Buddhism has been around since Japan feudal era, practices by samurais and bushi (warrior) as Zen Buddhism. When the samurai class unified the country under the leadership of shogun Tokugawa Leyasu in the Edo period (1600-1868), the sects encouraged values of hard work and patience according to their Buddhism teachings. Today, Buddhism is the most popular religion in Japan with some 85% of the population professing the faith.This forms the hardworking culture of Japanese and shapes the foundations of their leadership behaviour. Most Japanese managers believe that their employees are hard-working and are self-motivated by teamwork, that they want to share responsibility for attaining group goals and therefore seek participation in management process. Due to the participative approach of employees, Japanese managers use a blend of both task-centered and people-centered approach to lead subordinates. Both leaders and subordinates are motivated by a powerful sense of commitment to be a part of a greater whole. This is contributed by the social structure and educational system of Japan. The social structure hierarchy of Japan which consist of the Royal family down to the peasants and their strong sense of loyalty due to their Shinto teachings resulted in the Japanese believe that they are part of a greater whole, in country context Japan as a whole. Japan has one of the most successful and renowned education system. In recent years, there is a rise in higher education of Japanese in both private and government sector. Thorough its education system, it has reach attain a 99% literacy population. It has the highest literacy rates in Asia. Most Under theory Z leaders, Japanese employees seek out responsibility and strive for opportunities to advance in organisations. They work towards the goal to be in the upper middle class of their social structure. Japanese leaders believe that the employees are self-satisfied when they contribute to organisational success through teamwork. In return for their organisations long-term commitment to providing job security (often for life), workers develop strong bonds of loyalty towards their employer. Communication Flows As theory Z Seniority Leadership Due to the Japanese Feudal value, Japanese leaders are mostly base on their seniority. Evaluation of work and promotion is very slow and promotions are not base on individual performance. Seniority and age are much more important factors in Japan. Because of their emphasis on seniority, some of the major organisations in Japan are still family owned. They are managed and passed down to the Head of the family, usually the Male eldest of the descendants instead of the most capable of the family. The concept of family owned business may not work out on many other countries with different culture but miraculously organisations that are family owned showed great performance results. It is recognized in Japan to decide the heir of the business base on seniority and it is right that all others of the family must obey all instruction that the head has pass down to them. Any subjugation towards the family head will be deemed as wrong and will not be accepted by the Japanese society. This is also due to the Japanese National Religion of Shinto. They are loyal to their familiar way of life and places, therefore able to maintain their practice. Guideline: Leadership style should relate to culture determinants in 3.1. To show how the culture had influenced the kind of leadership style in Japan 3.3 Hofstedes Cultural Dimensions in the Japanese context Power Distance Japan has a score of 54 on power-distance index (PDI) and a ranking of 44 out of 69 countries (Refer to Appendix 1). Japan is considered as a high power distance although the score is slightly below the world average of 55. Having a high power distance index, this will influence the leadership style of Japan. According to Hofstede, G. et al (2010), in high power distance circumstances; subordinate acknowledges the existence of inequity. Thus, hierarchical system was the result of it. With a centralized and tall structure, the power is not evenly distributed and mainly control by the people from the top management (mostly seniors). Hofstede, G. et al (2010) suggested that it is essential for management to identify the strength of local culture and make use of it to complete certain tasks. Japanese leader would delegate tasks which require subordinates discipline in order to get the work done in an orderly manner. Tasks would be completed with less conflict and disputes as subordinates would normally do what they are instructed to do. However, this would result in no or minimal initiative by the Japanese subordinates at work. Individualism Vs Collectivism Japan has a score of 46 on Individualism Index (IDV) and a ranking of 31-33 out of 69 countries (Refer to Appendix 1). The Individualism score for Japan is slightly above the world average of 43. However, Japan belongs to the group of collectivism. This is because Japan has the tendency to handle stuffs based on the relationship and believe that they have responsibility to one another. Hofstede, G. et al (2010, p120) stated that Poor performance of an employee in this relationship is no reason for dismissal: one does not dismiss ones child. Therefore, Japanese leaders would first establish a relationship and some form of trust instead of demanding work to be done. Hofstede, G. et al (2010) stated that collectivist individual has a one of the culture norm with strong concept of face where one should not embarrass another. Thus, Japanese leaders would need to opt for a correct method to disseminate the negative news instead of criticise and give negative feedback openly. Furthermore, under collectivist society, collectivist individual tends to perform the best in group and badly on individual basis. Therefore, Japanese leaders would tend to allocate more group works to their subordinates. However, when a group of employees completed their work, rewards should be given to the group as a whole and not individual. Uncertainty Avoidance Japan has a score of 92 on Uncertainty Avoidance Index (UAI) and a ranking of 10-11 out of 69 countries (Refer to Appendix 1). Japan has a considerably high Uncertainty Avoidance Index. According to Hofstede, G. et al (2010, p213), Britain has produced more noble Prize winners than Japan, but Japan has put more new products on the world market. Japanese prefer to develop ideas which are established rather than to move ahead to supply new ideas. Furthermore, they have a systematic way to get things done which is good as this lead to actual products being produced. According to Luthan and Doh (2009), high uncertainty avoidance also implies that subordinates are less ambitious. They have low risk appetite and because of this there is an emotional need to create rules. However, not all the rules work. Therefore, leader would have to find ways to lead and motivate their subordinates to achieve excellent result. Masculinity Vs Femininity Japan has a score of 95 on Masculinity Index (MAS) and a ranking of 2 out of 69 countries (Refer to Appendix 1). Japan has the second highest Masculinity Index. Therefore, Japan emphasises the importance of having the main values which are associated with money and success. According to Hofstede, G. et al (2010), work goals such as earnings, recognition, advancement and challenge are deemed to play an important role. After identifying Japanese having a high masculine culture and background of what they want to achieve, leaders can based on the criteria and lead the team effectively. The main items that Japanese are seeking for is money and success. Therefore, leaders should provide opportunities and encourage high performance from their Japanese subordinates in order for them to achieve their goals. Leaders should also note that incentives and rewards are based on equity and not equality. 4. Overview of USA The United States of America, one of the worlds largest developed countries located between the North Atlantic Ocean and North Pacific Ocean. USA is highly abundant with natural resources, providing the world with its largest coal reserves. Apart from the lands and resources, USA is also considered having the worlds strongest and leading technological economy. Being one of the developed countries, USA is currently facing environmental issues like air, land and sea pollution cause by factories, mines and other industrial developments (The World Factbook, 2010). 4.1 Determinants of US Culture USA, the largest economy, deals massive trades among the rest of the world. Studying the culture norms and values of would be important to businessman and entrepreneur that are boarding the shore of the US economy. American possess a strong believe in the concept of equality. Each individual should have equal rights, equal employment opportunity and equal social obligation no matter which ethnic or gender the individual belongs to. Individualism, direct, high uncertainties are some values that are tagged to American by numerous studies. Somehow these values have its roots related to the culture of the country. Religion Although USA has a wide diversity of ethnics namely the North American, South American, Alaska native, Hawaiian native, Asian and others races; Christianity still remains as their largest form of religious belief. Among the Christian, Protestant (including Baptist, Lutheran, Methodist, and Presbyterian) outnumber the Roman Catholic with 51.3% of the total population and the later 23.9%. Followed by Jewish, Islamic, Muslim and others reported by World Factbook (2010). Social Structure In USA, most American would believe that there is equal opportunity and economic mobility and social classes does not exist. Moreover, Dennis Gilbert (1998) did defined USA social structure into 6 different classes; Capitalist Class American upper class These are the minute top notch individual that has high influence in the economy of USA, example Warren Buffett and Bill Gates. Upper Middle Class These are highly educated professional that has a high annual household income, example Lawyers, professor, and dentist. Middle Class These are college graduates that are employed for white collar position in an organization, examples managerial position. Lower Middle Class These usually consist of blue collar workers or those performing clerical position. Lower Class These refer to the working individual that draws minimal annual household income, example farmers. Under Class These refer to individual that are unemployed. Political Philosophy A national government with 50 states government, USA is considered as a federal republic country. Democrats and Republicans are 2 major parties dominating the political systems of USA. The government can be divided into three different branches. The government is headed by the Executive branch which comprises of the president and its appointed cabinet. Each state has a different government constitution, the Legislative branch consist of Senate from each state and its House of Representatives. Each state have two Senates elect by the citizen of the state. Senates will need to be re-elect after six years of service Lastly the Judiciary branch is headed by the US Supreme Court. This is the highest court that reviews and maintains the interpretative of the whole nations constitution (USA Country Brief, 2006). Economy USA has the largest and most important market in the world (EconomyWatch (2010). Even though it is the largest economy, government have much regulation protecting certain home-grown sectors. Two thirds of US economy is highly driven by its own consumer and therefore US economy can also be regard as Consumer Economy. According to World FactBook (2010), USA GDP rose to about 14 trillion in end of 2009. It is about 3 times as higher than the next largest economy, which is Japan. Despite of that, USA have also top the chart for its private and public debts owned. This could be possibly due to the economic depression in 2008 where there is an acute rose of oil prices putting the country in a state of inflation with high unemployment rate. In 2009, USA government borrowed billions to purchases equity from banks and Industrial Corporation, in order to perform additional injection to the economy for jobs creation and stabilizing the global economic downturn. Language There is actually no official language stated by Law in USA, English and Spanish are 2 most common languages. In addition, English is the language use in legislation and a main form of business communication. Hawaiian is the official state language for Hawaii (Grimes, 2000). Communication style of an American can sometimes be regarded as straight forward and aggressive. Going around the bush in meetings or discussion is considered time wasting. American has its own style of name format which is different from Asian, they would address First Name (given name) followed by Last Name (family name) as in Julia Roberts where Roberts is the family name and Julia is the given name. Whereas for Asian, we would address Last Name (family name) followed by First Name (given name). Politeness is highly valued in USA. When meeting someone for the first time, it is always polite to address them with a salutation of Mr, Miss, Madam or Dr. Please and Thank You are two most common words heard in a conversation with American. Education Slight differences can be spotted in the education system in different states but generally they are still common. For most children in USA, education starts at an earlier age of 5 and graduated from high school at the age of 17. Parents can choose to send their kids to public schools which are funded by public tax; these would be the common choice for most US citizen. In another hand, if the parents thinks that the public education systems does not suit their kids, they can still send them to private schools owned by churches, individuals and private groups (WorldWidelearn, 2010) 4.2 Leadership style and relationship to Culture in United States Guideline: Leadership style should relate to culture determinants in 4.1. To show how the culture had influenced the kind of leadership style in United States The U.S. is one of the most religious of all the large nations of the world. Gallup International reports that 57 percent of American citizens regularly attend religious services. Politicians frequently discuss their religion when campaigning, and many churches and religious figures are highly politically active. Most American religious take concrete form as congregational voluntary associations. They provide their members with multiple and continuous opportunities to observe, learn and practice the skills of community life and leadership. By doing so, religious members are exposed to have chance to acquire and practice a series of useful capacities and skills. These include group decision making, raising and budgeting funds, leading discussion, mobilization consens

From the Bigs to NU: Performance Enhancement :: Journalism Essays

From the Bigs to NU: Performance Enhancement From the very first time he touched the newest and hottest in a long line of drug fads, Justin Hedrick, then high school running back, now star pitcher for the Northeastern baseball team, was swept up in the craze of ephedra. Looking back, he realizes what a fortunate decision he made to stop using the common muscle supplement linked to as many as 155 deaths around the country since its introduction in the mid-1990s. â€Å"Before (football) season, we used to cut down a little bit of weight in order to see how fast we could run or get our 40 times up a bit,† he said. â€Å"A couple of us running backs took it to see what it was like, and took it for about a month. â€Å"We just got ripped, it was ridiculous. It was perfect,† he added. â€Å"Our 40s went up, everything that we were doing, the amount of time we were working †¦ everything increased and we were like, ‘Ok, this stuff is awesome.’ After we played the season and were going to get on it next season, all the reports came out saying it was going to cause heart attacks. After researching it †¦ I was just a stupid, young, high school kid and I didn’t look into it before. But, once you do, you realize it’s basically speed. You kind of frown upon that after awhile. I mean, it’s great for the time being, but once you research it you find out what it does – and that’s just scary.† How does it work? Ephedra (also known as the Chinese herbal treatment ma huang), has been used in China for thousands of years. But, what makes it kick? â€Å"In simple terms, the human body reacts to ephedra as it does to a surge of adrenaline,† explains diet-pills-information.org. â€Å"Adrenaline is the ‘fight-or-flight’ hormone which is released by the body during the periods of stress and exercise. It speeds up heart rate and sends extra blood to muscles. The difference is that whereas an adrenaline rush typically lasts only a few minutes, the effects of ephedra can last for hours. Ephedra also stimulates the release of large quantities of adrenaline. Such a surge of adrenaline can make the heart beat even faster and deplete oxygen that keeps the heart working – resulting in heart strain or even heart attack.† This process, according to numerous researchers, is an even greater danger when combined with caffeine, which is found in most ephedra-containing supplements.