Essay on Depreciation Methods

Memorandum To: From: Subject: Depreciation Value of your Special Purpose Machine Date: Congratulations on your purchase of this special purpose machine. With every purchase of a new machinery comes the depreciation value of the machine. In order to report the value of this machine, we first must figure out the total amount paid for your machine. It says here you purchased the machine for an invoice price of $1,200,000 and the freight cost was $6000 and the cost for installation was $64000.We would add all that up and get a total machine cost of $1,270,000. There are 3 types of depreciation methods we can use to figure out the annual depreciation value of your machine: Straight Line Method, Units of productions Method, and Double Declining Method. The Straight Line Method is plain and simple. This will tell us what to report at the end of every year for the depreciation value of your machine. First we would take the cost of the machine minus the salvage value divided by the useful lif e of the machine.I believe the salvage value would be the use of the machine in that year. For example: the total cost of machine is 1270000-200000/5=214000: 200000 would be the salvage life and 5 would be the useful life of the machine and 214000 would be our depreciation value for the year. So after the first year of use the book value of the machine would be 1270000-214000=1056000. Every year we would subtract 214000 from the previous book value. The Units of Productions Method is a little more complicated.This will tell us the estimate depreciation value of the machine. First we would take the cost of the machine minus estimated salvage value divided by the predicted units of production that your machine would produce and we would get a cost per unit (depreciable). After we get the cost per unit (CPU), we would multiply it by the units produced in the period and we will get the depreciation for the period, also in the last year of the useful life of the machinery we would deprec iate to the estimated salvage value and never depreciate below the value.For example: the cost of the machine is 1270000 minus the salvage 200000 divided by the expected units that your machine would produce in its useful life which is 1000000. 1270000-200000/1000000 = $1. 07 per unit, this would be the cost per unit. Let’s say your machine will produce 200000 in its first year, so we would take the depreciation per unit multiply the number of units produced in the period, 1. 07Ãâ€"200000=214000. 214000 would be the depreciation expense for the first year and we would minus that from the beginning book value of the machine.If the machine produced 250000 the next year, we would go thru the same process again but this time we would subtract the depreciation value from the previous year book value and not the beginning book value. The Double Declining Method is the last method we would use to figure of the depreciation value of the machine. First we need to figure the straight- line rate and in order to do that we need the percent life of the machine and the useful life of the machine.We would divide each other and come up with the Straight-line rate. For example: 100% divided by 5 years equals 20% that the machine would depreciate very year if we should the straight-line rate. Second step we would double that rate, 20% x 2 = 40%. 40% would be the double declining balance rate (ddb). The final step we take the double declining balance rate multiply by the beginning period book value. For example: 40%x1270000=508000. 08000 would be the first year depreciation expense. The book value at the end of the first year would be 1270000-580000=762000. The next year we would take 40% of 762000 and come up with the depreciation expense for that year. In its final year of useful life the machine would never depreciate below the estimated salvage value and we would just have to adjust our books. Mr. Abella, now you know how to depreciate the value of your machine. Once again I congratulate you on your purchase.

Miss Carolines First Day Essay

I walked into the classroom to see all my new pupils, I was nervous at first but then Miss Maudie introduced me to the class and everything was fine. I wrote my name on the board and told them what it said and where I am from. The class just murmured back to me. I started the day by reading the children a story about cats, I think they liked it but then again some of them did seem immune to imaginative literature. After reading I went to the blackboard and printed the alphabet in large capitals. I wasn’t surprised that everyone knew what they were seeing as most of the first grade had failed last year and where now back again for me to teach them. I choose Jean Louise Finch to read out the first line, when I discovered she could read. I then made her read My First Reader and the stock-market quotations from The Mobile Register aloud. I was shocked that Jean was literate but I told her not to tell her father not to teach her anymore as it would interfere with her reading. Jean then replied to me trying to tell me that her father hadn’t taught her anything, I just smiled and shook my head somebody had obviously taught her, she wasn’t born reading The Mobile Register. Jean then told me Jem had taught her and he read a book to her where she was Bullfinch instead of Finch. Jem said she got swapped when she was born. She was about to carry on but I just interrupted her, she was quite clearly lying to me so I told her again to tell her father not to teach her anymore because it is better to begin reading with a fresh mind and that I will try and undo the damage. Her father does not know how to teach properly. At least at the end of it she mumbled sorry to me but then again it was her fathers fault for teaching her in the first place. I am introducing a new way of teaching that I learned about in college I hope it is going to work well. The Dewey Decimal System is the new way of teaching it consists of me holding up cards to the children with words on them. I then caught Jean writing a letter so I told her to tell her father not to teach her to write either and that she doesn’t start writing until the third grade. It really surprised me that she was able to do this but also angered me because it is just going to make it harder to teach her the proper way to read and write. At lunchtime I told everyone who goes home for lunch to hold up there hands and then everyone who brought a pack lunch I told them to put it on there desk. I had a walk around to see what the children had and if I approved. I then stopped at Walter Cunningham’s desk, he didn’t have any lunch, at first I thought he had just forgot it so I asked him and he just looked straight ahead a muscle jumped in his skinny jaw then I asked him again. He finally replied with ‘Yeb’m,’, so I went to my desk and opened my purse and lifted out a quarter for him to go town and buy something then he could pay me back the next day. He shook his head and drawled softly ‘Nome thank you ma’am,’ I was getting impatience and told him to come get it, he shook his head again, and the third time he shook it I heard someone whispering to Jean saying ‘go on tell her, Scout’. I didn’t understand but then Jean told me Walter is one of the Cunningham’s and from the country. It was then clear to me that Walter didn’t forget his lunch; it was just that he didn’t have any today nor would have any tomorrow or the next day. I didn’t like the way Jean had to tell me all of this so I hauled her up to my desk; I had just had enough of her. She had started on the wrong foot in everyway. I just could not take anymore of her so without a thought I made her hold out her hands and I picked up my ruler and gave her half a dozen of quick little pats and made her stand in the corner. Now I think about it I do feel guilty but I think she did deserve it and hopefully will teach her a lesson. Everyone had now realised what I had done and broke out in a storm of laughter. I threatened the rest of the class with a similar fate and they exploded again, it only went quiet when the shadow of Miss Blount fell over them. Miss Blount is a native Maycombian as yet uninitiated  in the mysteries of the Decimal System, appeared at the door hands on hips and announced that if she hears another sound from the room she’ll up everyone in it.’ She also told me the sixth grade couldn’t concentrate on the pyramids because of the so called racket coming from my room. I did not appreciate her coming into my classroom and telling my pupils to be quiet. The bell then went for lunch everyone filed out I just sunk in my chair and put my head in my arms. A lot had happened in just half a day and there was still the afternoon to come. Everyone came back from lunch, I was standing in the middle of the room and I’m sure the children could see sheer horror flooding into my face when I saw the cootie crawling out of Burris Ewell’s hair I screamed ‘it’s alive’. Little Chuck told me not to be afraid of a cootie and brought me back up to my desk and got me a drink of water. I really do not like cooties and insects so that’s why I reacted in such a way. I took out a thick volume, leafed through its pages and read for a moment and told him a good home remedy for Burris. I told him I wanted him to go home and wash his hair with lye soap and when he’s done that treat his scalp with kerosene. He looked and me and said ‘What fer, missus?’ I replied quickly to him to get rid of the cooties because the other children might catch them and we wouldn’t want that. The boy then stood up he was filthy, his neck was dark grey and his hands were rusty also his finger-nails were black deep into the quick. Before he left I also asked hi to bathe him self before he comes back tomorrow. I was very surprised when he just laughed at me rudely and told me that I wasn’t sending him home and that he was already on the verge of leaving also that he had done his time for this year. I was quite puzzled about this so I asked him what he meant. The boy didn’t answer though .An older pupil from the class then told me he was one of the Ewell’s, and that this school is full of the apparently they only come in the first day and then leave. He had the first day of the first grade for three years now. Burris stood up and I told him to sit back down please that was a serious mistake. The boy’s condescension flashed into anger and told me to try and make him. I just did not know what to do. Luckily Little Chuck stood up and just said let him go and that he was a mean one, a hard-down mean one and  Little Chuck was right. Burris walked towards Little Chuck but then his hand went up and just said ‘Go home’. Burris seemed afraid of Little Chuck, I still didn’t know what to do so I took advantage of this of his indecision and told Burris to go home and if he doesn’t that I would call the principal. When he was walking out he shouted to me ‘Report and be damned to ye! Ain’t no snot-nosed slut of a schoolteacher ever born c’n make me do nothin’! You ain’t makin’ me go nowhere, missus. You just remember that, you ain’t makin’ me go no-where!’ I just couldn’t hold it in and I started crying, don’t know what came over me it was just what he had said, I was only trying to help him. Everyone came around my desk they all made me feel a lot better. I was happy when they asked me to read the story about the cats again, so I opened up a book and started reading for them again. I liked my first day but I hope tomorrow goes better and I get no more cheek from the children or Jean telling me lies. Other than that I think I will have a lovely time at this school.

Exam 2 Essay Example | Topics and Well Written Essays - 1000 words - 2

Exam 2 - Essay Example Strategic staffing can be defined as the process that companies utilize to identify and deal with the staffing implications of specific business plans and strategies. It includes both the idea of identifying and tackling, but not either of the two. Some organizations implement strategic staffing only to assist them identify problems like staffing gaps; in which demand surpasses supply, or surpluses; in which supply surpasses demand. Even though this identification process is essential, it is also inadequate. Strategic staffing is helpful solely when the procedure also defines what the company ought to do to reduce or eliminate those surpluses and staffing gaps most efficiently. Strategic staffing can also be defined to mean a process towards change. Emphasizing change means that staffing insinuations should be identified and discussed continuously, any time changes are made to the business plan, not just once per year (Bechet 51). Mostly, organizations perceive that the aim of strategic staffing is to forecast future staffing requirements. They then attempt to define staffing activities that must be considered in that context to get rid of issues that may or may not come up in the future. This move cannot be accurately achieved, while at the same time, has little or no impact to the company. As a result, some organizations give up to the procedure immediately since their managers have no understanding, knowledge, and skills to predict their lasting staffing needs reliably. The objective is therefore to develop a long-term context in which the most efficient short-term decisions can be made. For a company to develop a strategic staffing plan that is successful, it has to encounter several issues or problems. This can include lack of specificity on expected competencies, invalid data for making sound decisions, and poor

Review7 Assignment Example | Topics and Well Written Essays - 250 words

Review7 - Assignment Example His determination and strategically planning has been highlighted in the video clip. The interesting fact about this video clip is how it elaborates about the history of the city in precise time in a compact manner. The video has extensively covered all the major efforts of the mayor and also gives a brief and well versed political background of the mayor. The video is compiled in a catchy manner, where in the audience get a bird’s eye view of the city mentioned in the clip. The clip shows the gratitude and honor the city dwellers carry in their mind for the city which is truly appreciative. It is impressive to see the love the people have for the city and to hear how they would like to remain in this place forever. The video clip is presented in a special manner where there is a surprise element. When the video clip starts, it seems to be just like a short documentary about a city in brazil, but as it proceeds it slowly reveal the sole purpose of it. It interestingly and surprisingly reveals the aim of unleashing the unique personality of the mayor who changed the face of a Brazilian city. The video introduces the Mayor who is honored by all since many years because of his dedication to the city and the state as a whole. His plan for the city and the implementation of it is evident in all nook and corner of the city. He changed the infrastructure of the city roads and established road system for comfortable traffic movements. The contribution of the mayor is majorly evident in this video and the manner in which people idolize him is outstanding. The video showcases the mayor ship of this celebrated person of Brazil and his strategy of cleaning the slums and poor and unclean areas of Brazil. The poor were motivated to collect garbage in return of fresh vegetables and fruits which was a great nutritional aid to them. It is also hair rising to watch the road design implemented by the Mayor for the up gradation of city, which in many years proved as a

Technology Implementation Essay Example | Topics and Well Written Essays - 1500 words

Technology Implementation - Essay Example This essay discusses that the organization need to have specific implementation procedures for the specific systems required in the organization. An EMR system is one of the technological systems required in the organization that would require successful implementation to benefit the organization. For the organization to be up to date with the modern technological development, it requires to eliminate paper work using this system. Although the organization might not achieve the required benefits from the system in the short-term, the organization stands to achieve long-term benefits following successful implementation. The benefits achieved by the organization from a successful implementation of the system will be part of organization’s return on investment. People form important components of an information system, people are not only important in the design of an information system but they also contribute in the implementation process. For the organization to implement the new information system successfully, it needs to consider the people required to run the new system. The organization will therefore consider the available staff before considering hiring new members of staff. If the existing staff can successfully implement the new system then the organization needs not hire new staff. However, if the available staff is not capable of implementing the system then the organization should bring in additional staff members.... For the organization to implement the new information system successfully, it needs to consider the people required to run the new system. The organization will therefore consider the available staff before considering hiring new members of staff. If the existing staff can successfully implement the new system then the organization needs not hire new staff. However, if the available staff is not capable of implementing the system then the organization should bring in additional staff members. The organization should therefore ensure that it has the required staff before it begins the implementation process. Although the organization will require staff members with variety of qualifications, the organization would consider a project manager to be an important member of staff. The organization should therefore begin by recruiting a project manager to advice the organization accordingly on matters concerning hiring of new staff. Secondly, the organization will require modifying its work flow and facilities. This part of the implementation process would require fine turning the existing duties and facilities with the new information system. The main reason that the organization needs to undertake this process is to ensure that the existing facilities and procedures fully accommodate the new system efficiently. To modify the workflow, the organization requires testing the capabilities of the new system on the procedures and duties performed by the organization. The implementation team will then decide how suitable the new system is in the performance of stated duties. From this process, the implementation team is capable of

Pierre-Auguste Renoir - Dance at Bougival Essay

Pierre-Auguste Renoir - Dance at Bougival - Essay Example The essay "Pierre-Auguste Renoir - Dance at Bougival" analyzes Pierre-Auguste Renoir's painting called Dance at Bougival. The â€Å"Dance at Bougivel† painting has two emotions in it, perplexed by the use of different colors and the impressions on the faces of characters present on it. There is a gentleman in a classic-blue old suit and a yellow hat that is holding a lady and they seem to dancing to the tune of a classic song. The man is faces her lady in a romantic way trying to create an impression on her while she does not face him directly. It created a kind of romanticism that is not different from what we know today; the extent a person goes to create an impression to his lover, but she is reluctant to reciprocate her feelings to him until she is sure that she is â€Å"safe†. The two lovers are clad in a manner that suggests that this dance was a special moment for them, a date. One may wonder what was in the mind of Paul Durand-Ruel when he finished this piece of art. Literature reveals that Ruel paid attention to impressionism. He dedicated his art to creating paints which portrayed passion and which, has influenced the modern way of life. During the year 1883, Ruel is said that he used his work to illuminate the experiences he had encountered in romance. His passion for art began when he inherited art gallery that was founded by his parents. Paul Durand-Ruel was born 1831 and died in 1922. Paul developed an interest in painting and he invested in promoting the work of the young artists.

You have the rights to their current 3 books, do you shoot each film Essay

You have the rights to their current 3 books, do you shoot each film individually or do you shoot all at once to make certain for continuity Discuss Strength a - Essay Example It is a well known fact that "time is money", and since time is saved in this method of filming the series or several of its movies together, it can be said that money is also saved. Furthermore, it is important to remember that in order to execute and commence the production and work on a movie, it is necessary to assemble the crew, and working on a few movies one after another avoids having to find new crew, or contacting the old movies crew to see if theyre available, or even around. Actors tend to be on the move, whether theyre beginners looking for a break, or famous celebrity actors who film movies all over the world, and may be out of the country, working on another movie. Hence, the availability of the crew and actors is very problematic, and can be avoided by filming several movies together. Moreover, filming a series saves some costs. Equipment, settings and backgrounds, as well as arrangements and payments for locations can all be used for more than one movie, especially if its a trilogy or some other sequel series, which presents a continuing plot. These can reach great amounts of money, and using them for all the movies and all at once would result in a substantial reduction in costs, meaning more profits and fewer expenses. First and foremost, it isnt known in advance whether the movie will succeed or fail. Investing resources in each movie can reach millions of dollars and more, therefore investing in a few movies means risking dozens or hundreds of millions of dollars, and if done, there is no guarantee of success. Should the series fail at the box office, the huge amounts of money poured on producing and executing the film will all be lost. Some claim that if the movie, transformed from a book or a series on television, already has a large fan base, the potential of fans going to watch the movie is greater than the risk of losing the money

Shakespeare Essay Example | Topics and Well Written Essays - 1250 words

Shakespeare - Essay Example Since Desdemona belongs to this society, Iago successfully redirects Othello’s suspicion towards her. Othello subconsciously supposes that Desdemona is one of the members of the society that would rather enslave him, if he did not have the military skill. As a result, he thinks that Desdemona could betray easily because of his racial inferiority. So, in a sense, his respectable position in the white society is also the platform of his own destruction. Indeed Iago knows this the race-induced anxiety of Othello’s mind very well. Therefore, he successfully manipulates it to bring about his destruction. The following speech of Othello is quite emblematic of his inferiority-induced distrust for Desdemona: This fellow’s of exceeding honesty And knows all quantities, with a learned spirit, Of human dealings†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Haply, for I am black And have not those soft parts o f conversation That chamberers have, or for I am declined Into the vale of years—yet that’s not much— She’s gone, I am abused, and my relief Must be to loathe her.†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.Look where she comes If she be false, heaven mocked itself. I’ll not believe ’t. (Shakespeare Act III, Scene iii 257-278) In this soliloquy, Othello expresses his wavering belief in his wife Desdemona’s chastity. ... He compares himself with other courtiers who are civilized and well-conversed than he is. He also touches on another possibility that Desdemona might cheat on him because he is old. But immediately, he dismisses such possibility and retains his earlier assumption that Desdemona might have betrayed him because of his race. But at the end of this soliloquy he reasserts his faith in Desdemona: â€Å"If she be false, heaven mocked itself./ I’ll not believe ’t.† (Shakespeare Act III, Scene iii 257-278) Here one thing is vividly remarkable that Othello never doubts Iago’s rumor. Throughout the whole play, it seems that he hears and believes Iago’s words without any much question. Even more, he attests that Iago is an extremely honest man who has a deep insight into human nautre, as he says, â€Å"This fellow’s of exceeding honesty/ And knows all quantities, with a learned spirit, / Of human dealings† (Shakespeare Act III, Scene iii 257-278). In this regard one may ask why a wise general fails to question Iago’s integrity and whether Iago is expert enough to deceive the experienced general. Indeed there is no doubt that Iago is an expert manipulator. Though as an experienced general Othello should have questioned Iago prior to doubting his wife, he fails to do so because he might have been blindfolded partly by the fact that Iago belongs to the white society for whom he nourishes a sense of revere from the very starting of his free life in it. But he is mainly blindfolded by his distrust for the society. Though he never condemns the society directly, he holds himself his racial status responsible as an inborn sin or guilt of him. Such racial inferiority complex makes him insecure in the face of Iago’s manipulation. In a racially-fragmented society, Othello have

Pi and Plato Essay Example for Free

Pi and Plato Essay Socrates, in his conviction from the Athenian jury, was both innocent and guilty as charged. In Platos Five Dialogues, accounts of events ranging from just prior to Socrates entry into the courthouse up until his mouthful of hemlock, both points are represented. Socrates in dealing with moral law was not guilty of the crimes he was accused of by Meletus. Socrates was only guilty as charged because his peers had concluded him as such. The laws didnt find Socrates guilty; Socrates was guilty because his jurors enforced the laws. The law couldnt enforce itself. Socrates was accused of corrupting Athens youth, not believing in the gods of the city and creating his own gods. In the Euthyphro, Socrates defends himself against the blasphemous charges outside the courthouse to a priest Euthyphro. Socrates looks to the priest to tell him what exactly is pious so that he may educate himself as to why he would be perceived as impious. Found in the Apology, another of Platos Five Dialogues, Socrates aims to defend his principles to the five hundred and one person jury. Finally, the Crito, an account of Socrates final discussion with his good friend Crito, Socrates is offered an opportunity to escape the prison and his death sentence. As is known, Socrates rejected the suggestion. It is in the Euthyphro and the Apology that it can be deduced that Socrates is not guilty as charged, he had done nothing wrong and he properly defended himself. However, in the Crito, it is shown that Socrates is guilty only in the interpretation and enforcement of Athens laws through the court system and its jurors. Socrates accusations of being blasphemous are also seen as being treasonous. In the Euthyphro, Socrates is making his way into the courthouse; however, prior to entering he had a discussion with a young priest of Athens, Euthyphro. This dialogue relates religion and justice to one another and the manner in which they correlate. Euthyphro feels as though justice necessitates religion and Socrates feels the opposite, religion necessitates justice. Euthyphro claims that religion is everything, justice, habits, traditions, customs, cultures, etc. all are derived from religion. Socrates went on to question what exactly would be the definition of pious. Euthyphro offered Socrates three definitions of pious and in all three Socrates was able to successfully find fault. The first definition Euthyphro offered was that piety is the life he lives (5e). Socrates disputed this definition because he said that Euthyphros way of life may be pious, but it is not the definition of pious. If it were the exact definition, only Euthyphro would be pious. He said that Euthyphro did not understand the difference between a definition and an example. Next, Euthyphro says that piety is found in things that are dear to the gods (7a). Socrates again rejected Euthyphros definition of piety. The Greek gods were anthropomorphic; therefore, another may despise what would be dear to one god. This definition offered was not distinct. Finally, Euthyphro said that what is pious is what loved by the gods (9e). However, Euthyphro cant answer whether something is pious because it is loved or it is loved because it is pious. He cant conceive the difference between cause and effect. It is in the Euthyphro that Socrates begins his defense of his actions and principles to the reader. A priest cant give him a concise answer as to what is religious; therefore, how can anyone else, especially one less religiously guided than a priest, accuse him of blasphemous actions? In the Apology, Socrates aimed to do three things: defend his ideas and principles, continue to teach those who will open their mind and state that he knew regardless of what he said he was aware that all five hundred and one jurors knew who he was and disliked him. Socrates was well aware of the fact that he had made multiple enemies, he knew that the politicians, poets, rich and craftsmen all had reasons to dislike his actions. Socrates went as far as to accuse the jury as not trusting the gods because they had not believed the oracle when it said that Socrates was the wisest in all of Athens (20d-e). If the jury and the people of Athens believed the oracle, the word of the gods, then Socrates would not be on trial. In the Apology, or defense, Socrates aims to legally justify his actions. He is accused of three things: corrupting Athens youth, not believing in the gods of the city and making up new gods. All three charges can be related back to treason and a large penalty. Socrates almost laughs off the first charge of corrupting the youth. He made a sensible argument as to why that charge made no sense and had no base. He said that willingly corrupting the youth of Athens would only make his living there more difficult. Logically, no one would aim to make his or her home a more dangerous, corrupt place to live (25d). He then asks his accusers to present some sort of evidence, a corrupted youth. Socrates knew that none of his students would speak out against him. To defend himself against the second and third charges, Socrates simply says that his belief in any new gods would necessitate believing in the old gods because the new gods are derived from the old gods (26c). In the Apology, conceivably, Socrates defended himself decisively against the three legal charges brought upon him. He was able to offer sufficient resistance, with a lack of prosecuting evidence, against the allegations. Plato uses the Crito, a discussion between Socrates and Crito, to display exactly why, even though innocent, Socrates accepted the penalties bestowed upon him. Socrates has thoroughly justified his own decision to obey the opinions of the majority and serve out the sentence that his own city has deemed appropriate for his crimes. Throughout the dialogue Socrates is explaining his reasoning for not running from the government. Crito does not understand the madness of Socrates, Crito will do whatever it takes to help his friend to flee, instead of being exiled by the government. I do not think that what you are doing is right, to give up your life when you can save it, and to hasten your fate as your enemies would hasten it, and indeed have hastened it in their wish to destroy you (58c). Throughout the Crito, two major ideas are established in the discussion of the two friends. The first being that a person must decide whether the society in which they live has a just reasoning behind its own standards of right and wrong. It is also examined whether or not the person has the option to leave if they dont agree with the laws of the city. Socrates has lived his whole life in Athens; therefore, he feels that there is an implied contract between himself and the laws of Athens. Not one of our laws raises any obstacle or forbids him, if he is not satisfied with us or the city, if one of you wants to go and live in a colony or wants to go anywhere else, and keep his property (63d). Socrates states; that making a conscious choice or effort to remain under the influence of a society is an unconscious agreement with that society to live your life by its standards and virtues. The second concept established between Socrates and Crito is that a person must have pride in the life that he or she leads. If Socrates does not face the penalties enforced, it would be the same as him disrespecting his own morals and principles. He would have followed them until they led him to hardships, and then abandoned them. In this, Socrates feels that escaping to survive would only result in the death of his teachings, the reason why he lives. I am the kind of man who listens only to the argument that on reflection seems best to me. I cannot, now that this fate has come upon me, discard the arguments I used; they seen to me much the same (59b). In establishing basic questions of these two concepts, Socrates has precluded his own circumstance and attempted to prove to his companion Crito, that the choice that he has made is just. He states that his decision is justified by the fact that the laws and governing agents of the society must command a certain degree of respect. Any person who would unjustly disobey these laws creates a deliberate attempt to destroy them, as well as, the society that has imposed them. However, that whoever of you remains when he sees how we conduct our trials and manage the city in other ways, has in fact come to an agreement with us to obey our instructions (63e). If the decisions of the citys governing agents are not thoroughly respected as just and cohesive parts of society, the very structure by which the society stands is subject to collapse. Socrates was not guilty as charged; he had done nothing wrong, as seen in the Apology. Not even a priest could tell Socrates what he had done wrong religiously, Euthyphro wasnt even able to give Socrates a precise definition of piety. It is then questioned by Crito why Socrates would remain to face a penalty for a crime he did not commit. In the Crito, it is explained why, although innocent, Socrates must accept the penalties his peers have set upon him. It is his peers that will interpret and enforce the laws, not the law which will enforce it. Even if the enforcers dont deserve attention and respect because they have no real knowledge to the situation, Socrates had put himself under their judgment by going to the trial. Therefore, Socrates must respect the decisions made by the masses because the decisions are made to represent the laws, which demand each citizens respect.

Family issues becoming social problems Essay Example for Free

Family issues becoming social problems Essay Family, as what sociologists address, is a social institution. Families are shaped by the family members’ personality. Individual members affect their relationship that is greatly influenced by experience. Families are also affected with the other social institution in the society like law, religion and education. Thus, families are subject to changes whether these changes gave advantages and disadvantages, the family has to cope up and make adjustments. Failure to do so will affect society and social problems might arise. This twist and turns have been quite evident as the time passes by. Single parents, careerist mothers, absent fathers, and live-in partners are blamed as the root cause of many of societys problems that could lead to persistent poverty, drug abuse, academic failure or out-of-school youths, and juvenile crime. This can be traced back to the early society that calls for historical perspective(Steven Mintz, 2003). History of the American Family In 1920, majority of American families are the traditional type; the father is the breadwinner, the wife is the home-maker and the children attend the school. Unwanted pregnancies happened between 1940 and 1958. Families of the 1950s are characterized by increase in birth rate, a stable divorce rate, and the age of marriage decline. During the early and at the middle of the nineteenth century, divorce rate began to rise because of its legislative order to be legalized. Spousal and child abuse gave rise and this can be reflected with the increase in assaults and murders committed against relatives and family members. Highest divorce cases happened at the beginning of the twentieth century. Single parenting, children in orphanage, infant mortality and early widowhood are the other changes happened in the past years(Steven Mintz, 2003). Family issues becoming social problem Divorce and single parenting From the point of view of some, divorce is an indication of failure of American family. But for others, it is viewed as a sign of freedom from men that women do enjoy. After World War II, it is documented that the rate of divorce increased and these may be an indication of the changing views and role of women in the society and their need to be free from social and financial dependence upon men. However, the dramatic increase of divorce rate has greatly affect the economical and social stability experienced by most of the divorced women that caused social problem for the economic well-being of the divorced women and the children are highly compromised. On average, women earn less income than men, households that headed by the divorced women are further disadvantaged, also, the lack of adequate and consistent child support added to the economic dilemma of divorced women (Dennis L. Peck). Spousal Abuse  Among the cause of violence between couples are: incompatibility between them which they discovered after the marriage and such difference arises when there is great disagreement and animosity between them, the couple is under stress and frustration therefore burst it out to one another and lastly, if the wife is a masochist or very awkward or very provocative(Rudi Dallos). Child abuse and neglect A child that is not properly taken cared of, not properly fed, deprived of basic necessities, proper medical care and treatment, and too much physical abuse is a violation to the child’s welfare and is considered as a criminal behavior. Juvenile Delinquency According to a study, broken homes are associated with juvenile delinquency. Levels of juvenile delinquency were much higher in teenagers living with single fathers and lowest among teenagers living with both parents and one of the suggestive reasons for this is due to inadequate parental involvement in the life of the child. The lack of guidance and the absence of close relationships between the child and parents contributed to the causes of the delinquency(Crystal L. Murry). Financial stress Financial stress can directly and indirectly affect children because it increases parental mental and emotional distress, which limits a parent’s capability to respond sensitively and consistently to their children’s needs. More specifically, parents that are more commonly observed among low-income populations have behaviors of parental harshness, non-responsiveness, and inconsistency and are assumed to arise in part from the high levels of parental stress that accompany poverty. Parents having low income have the tendency to fail to express their affection and fail to respond to their child’s needs. (H. Abigail Raikes). Gay and Lesbian Families Sigmund Freud viewed homosexuality as a disturbed psychosexual development wherein the social orientation of the child is due to its relationship with his or her parents. Psychologists, as well as other professionals form other disciplines such as endocrinology and genetics have studied and discovered other possible causes of homosexuality (Dennis L. Peck). Before, same-sex families were inconceivable. However, in 1980s, the situation began to change and have changed the views of family life for gays and lesbians. Due to socioeconomic independence of women of lesbian families, the medical advances of in-vitro fertilization and sex transplant, acceptance of gays and lesbians by adoption agencies and courts, planned gay and lesbian parenting had increased tremendously but during the late 1980s and early 1990s, there was argument about same-sex families, particularly child-rearing by gays and lesbians. Solutions to Problems Having time for the family will be helpful in strengthening the family and businesses providing flexible working schedule will be of great help. The power of media has great influence on the youth; therefore, they should make effort on portraying positive views on marriage and valuing education. The parents should be attentive to their child’s learning in and out of school. No-fault divorce legislation establishes conjugal property that should be divided by both parties, assigning the child’s custody, and awarding alimony. Open communication is important so that problems and conflicts can be addressed within the members of the family. Nowadays, it is acceptable that both parents are working to support the financial needs of the family but make sure that there is still time for relaxation and bonding of the family members especially during special occasions. There are also government agencies, insurance company, law firms and consultants that provide legal and financial support for the child, spouse and elder that are victims of domestic violence.

The Factors affecting dividend payout policy

The Factors affecting dividend payout policy INTRODUCTION Dividend policy in the firm has been the major matter for recognizing how managers set dividend ratio and change dividend given to stockholders. The existing literature on dividend payout ratios provides firms with no generally accepted prescription for the level of dividend payment that will maximize share value. Black (1976) in his study concluded with this question is that what the corporation should do about dividend policy. It has been argued that dividend policy has no cause on either the price of a firms share or its cost of capital. Thus, extensive studies were done to find out various factors affecting dividend payout ratio of a firm. The setting of corporate dividend policy remains a troublesome issue and involves ocean deep judgment by decision makers. The behavior of dividend policy is the most debatable issue in the corporate finance literature and still keeps its prominent place both in developed and emerging markets. Many researchers try to uncover the issue regarding the dividend behavior or dynamics and determinants of dividend policy but still dont have an acceptable explanation for the observed dividend behavior of firms (Black, et.al (1976), Allen and Michaely, 2003 and Brealey and Myers 2005). One of the well known explanations of dividend behavior is the smoothing of firms dividends vice versa earnings and growth. Linter (1956) found that firms in the United States adjust their dividends smoothly to maintain a target long run payout ratio. Numerous studies appeared after this work and facts suggested that the dividend policy of the companies varies from country to country due to various institutions and capital market differences. The study examined the relationship between determinants of dividend payout ratios from the context of a developing country like Pakistan. The primary objective of this thesis is to find out whether numerous factors influence the dividend payout ratio of Sugar Sector in Pakistan. The purpose of this study is to investigate the dynamics and determinants of dividend policy of sugar firms in Pakistan. After that it explored how Pakistani firms set their dynamic dividend policies in a different institutional environment than that of developed markets. This study examined whether Pakistani firms follow stable dividend policies as in developed markets or they are going to retain their earnings. The paper also identified the areas of firm level factors that influence the degree of dividend smoothing. This paper indicated that importance of institutional features towards the dynamic of dividend policy and also critical out the advantages of examining the dividend policy in different institutional environments. The outcomes of the thesis provided meaningful and handy information in the role of institutional factors which creates dividend policy at firms level. More than a few studies become visible after this work and evidence suggest that the dividend policy of the c ompanies varies from country to country due to various institutions and capital market differences. The Pakistans capital market and the economy have several important features for examining the dynamics of dividend policy. Firstly Pakistan is moving towards the development and improving the economy position in the world since the 1980. Pakistan capital markets are much better than before. Many studies conclude that firms are likely to pay constant dividend during the high growth period and it is interesting to find that how dynamic dividend policy is determined in growing economy like Pakistan. In fact, in Pakistan the many major investors are still disagreed with dividends and consider stock prices positive reception as the major part of stock returns therefore, it is assumed that investor attitude towards dividends is expected to have an impact on the way in which firms set their dividend policy in Pakistan. Sugar Industry in Pakistan The sugar industry plays an important role in the economy of the Pakistan. It is the second largest industry after textiles. The Pakistan sugar industry is the second largest agro based industry consists of 78 sugar mills with per year crushing capacity of over 6.1 million tones. Sugarcane farming and sugar manufacturing contribute significantly to the national exchequer in the form of various taxes and levies. Sugar manufacturing and its by-products have contributed appreciably towards the foreign exchange resources through import substitution. The Sugar industry employs over 75000 people, including management experts, technologists, engineers, and financial experts, skilled, semiskilled and unskilled workers. It contributes around 4 billion rupees only under the head of excise duty and other levies to the Government are also paramount significance. In the year 2008-09 sugarcane production is estimated at 51.5 MMT, a decrease of 19 percent over the previous year due to both a decline in area harvested and yield. Milling policies and practices, coupled with attractive prices for alternative/competing crops (rice, cotton and sunflower) and insufficient irrigation supplies are major factors limiting crop expansion in the country. In the year 2009-10 sugarcane production is estimate at 53.6 MMT, an increase of 4 percent over the previous year due to an expected increase in area and yield. A shortage of cane supply during the current crushing season led to an increase in cane prices. This situation benefitted growers who received prices higher than the indicative prices announced by the Government. This development is expected to contribute to an increase in sugarcane area and productivity in the ensuing year. Moreover, last years higher production of rice and sunflower led to lower prices received by farmers, thereby encouraging the switch back to sugarcane. Purpose of the Study In Pakistan there were few firms which paid dividend to stockholders constantly. For this explore, the listed sugar firms of Karachi Stock Exchange (KSE) were not able to pay their dividends and which factors are influencing or determining the dividend policy in Pakistan. In this thesis it examined the number of firms various factors and their function in dividends policy. The liquidity of the stock market, is the profitable firms are paying dividends in Pakistan, is the firms with greater investment opportunities pay less dividends in Pakistan, is the dividends and debts are substitutes and the degree of leverage is negatively associated with dividends payments and finally examined the firms with greater cash flows pay lesser dividend in Pakistan. Research Objective Objective of thesis has to find out the relationship between dividend policy and operating cash flow, EBIT, Sales and Debt to Equity Ratio. It is very important for investors to examine the factors of dividend policy that whether they have been impact on the sugar sector of Pakistan or not. Hypotheses Development H1: There is association between CFO and dividend payout ratio. H2: There is association between Debt to Equity and dividend payout ratio. H3: There is association between Revenue and dividend payout ratio. H4: There is association between EBIT and dividend payout ratio Thesis Structure: This thesis is composed of five chapters. The first part of a thesis is introduction (Chapter I).Then after it evaluates and discusses the literature review in (Chapter II), in this chapter it examined the dividend payout policy of Pakistan and the main factors that influenced on it, theories, models put forward by many well-known authors is examined various studies. In (chapter III), it explained research methods and sample in detail. (In chapter IV),examined the dividend payout policy and the main indicators that affect the dividend payout policy of listed firms on the Karachi Stock Exechange 100 over the period 2003-2008 and present the interpretation of results. Finally in Chapter V, we present and discuss the main contributions and conclusion, implication and recommendation of this thesis. CHAPTER-2 LITERATURE REVIEW Naceur (2006) found that the high profitable firms with more stable earnings can manage the larger cash flows and because of this they pay larger dividends. Moreover, the firms with fast growth distribute the larger dividends so as attract to investors. The ownership concentration does not have any impact on dividend payments. In Indian case Reddy (2006) showed that the dividends paying firms are more profitable, large in size, and growing. The corporate tax or tax preference theory does not appear to hold true in Indian context. Amidu and Abor (2006) found dividend payout policy decision of listed firms in Ghana Stock Exchange is influenced by profitability, cash flow position, and growth scenario and investment opportunities of the firms. Lease (2000) the firms should follow a life cycle and imitate managements assessment of the importance of market imperfection and factors including taxes to equity holders, agency cost asymmetric information, floating cost and transaction costs. Linter (1956) studied and developed a compact mathematical model based on survey of 28 well established industrial U.S. firms which is well thought-out to be a finance classic. According to him the dividend payment pattern of a firm is influenced by the current year earnings and previous year dividends. Linters (1956) study of dividend policy found that a firms bottom line net income is the key determinant of dividend changes, which in his sample are largely dividend increases since he primarily surveys healthy firms. If one can extrapolate this finding to dividend decreases, it implies that low bottom line earnings drive dividend reductions. Jensen (1986) argued that debt is an effective substitute mechanism for dividends in this respect. By issuing debt instead of equity, managers give bondholders the right to take the firm into bankruptcy court if managers do not maintain their promise to make the interest and principal payments. This substitutability between debt and dividends as alternative mechanisms for reducing the agency costs of FCF implies that firms that use low debt ratios will tend to follow a policy of high- dividend payout. Alli (1993) the liquidity or cash flows position is also an important determinant of dividend payouts. A poor liquidity position means less generous dividends due to shortage of cash. It reveals that dividend payments depend more on cash flows, which reflect the companys ability to pay dividends, than on current earnings, which are less heavily influenced by accounting practices. They claim current earnings do no really reflect the firms ability to pay dividends. Farzad Farsio and Amanda Geary (1983) in their research the relationship between Dividends and Earnings say that dividends have no explanatory power to forecast future earnings. They presented four cases for possible effects of earnings on future dividends and show that there should be no significant relationship between dividends and future earnings in the long run. The contribution of this study is that it provides financial managers and investors with evidence that it would be a mistake to base investment decisions on inferences about dividend/earnings relationships that rely on some certain short-term periods. John and Kalay (1982) Debt agreement to minimize dividend payments are necessary to prevent bondholder wealth transfers to shareholders. An additional way dividend payout ratio affects agency costs is the reduction of agency cost through increased monitoring by capital market. Analysis shows the positive association among profitability and dividend payout ratio, corporate tax and cash flows. The study also suggests that when the liquidity of companies increases the companies disburse more dividends. The companies with dynamic profitability find out hard to disburse dividends. Last but not least, conclusion of the study shows that cash flow, profitability, growth and investment opportunities influence the dividend payout policy. Amidu and Abor (2006) conducted and they have taken the Payout Ratio as dependent variable and defined as dividend per share divided by earning per share. The included the explanatory variable profitability(profit), risk(risk), cash flows (cash), corporate tax(tax), institutional holdings(INSH), Sales Growth and Market to Book value(MTBV). By using the Panel data which involves the pooling of observations on a cross sectional of unit over several time periods and provides the results that are simply not measurable in pure cross-sections or exact time series studies. Because the panel time series is different from a regular time series or cross section regression equation and each variable use the double subscript in the data. Jensen (1986) concluded that funds remaining after financing all positive net present value projects cause conflicts of interest between managers and shareholders. Dividends and debt interest payment decrease the free Dividend payout ratios in Ghana cash flow available to managers to invest in marginal net present value projects and manager perquisite consumption. Crutchley and Hansen (1989) examined the hypothesis that financial leverage, dividends and managerial ownership are jointly determined by firms attempts to minimize the total agency costs of debt and equity. Chaplinsky and Niehaus (1992) examine whether managerial ownership share and financial leverage common determinants. In addition to the agency costs of debt and equity, they also assess whether these decisions are governed by the tax advantage of debt, the costs of issuing securities and the demand for risk sharing by insiders. Avazian (2006) conducted the study on United Stated listed firms at NYE and find that decision to smooth dividends depend at the part of public market access as proxies by the rating of bonds. In their study dividend payment is the optimal for firms raising debts in the public Unknown bond markets but not for firms in the private informed bank markets. In this logic the dividend decision is related to information asymmetric between the managers and the creditors of the firms. Pruitt and Gitman (1991) found that risk (year-to-year variability of earnings) also important factor firms dividend payout ratio. A company that has constant earnings is often able to forecast approximately what its future earnings will be. Company is therefore more likely to pay out a higher percentage of its earnings than a firm with unpredictable earnings. The liquidity or cash flow from operation is an important factor of dividend payouts policy. A less liquidity position means less generous dividend due to shortage of cash. He exposed that dividend payments depend more on cash flows, which reflect the companys ability to pay dividends, than on current earnings, which are less heavily influenced by accounting practices. They claim current earnings do not really reflect the firms ability to pay dividends. (Alli, 1993) Green (1993) questioned the irrelevance argument and investigated the relationship between the dividends and investment and financing decisions. Their study showed that dividend payout ratio is not totally decided after a firms investment and financing decisions have been made. Dividend decision is taken along investment and financing decisions. Higgins (1981) indicated a shortest link between growths and financing needs, speedily growing firms have external financing needs because working capital needs usually exceed the cash flows from new sales. Daniel (2007) conducted the study that they found that firms are more likely to manage their earnings upward when their earnings would otherwise fall down of expected dividend levels. The earning management behavior significantly impacts the likelihood of dividend cut. The firms made discretionally accruals because reported earnings to exceed the expected dividend levels are significantly less likely to cut dividends than those firms whose reported earnings fall down of expected level of dividends. They conclude that managers treat expected dividend levels as a vital earning threshold. Higgins (1972) and McCabe (1979) et.al the leverage (Lev) also influenced the dividend behavior of the firm, if the level of the leverage is high that mean the firm is high risky in the cash flows. The negative effect of leverage on dividends payments is documented in the literature, finds that the firms with higher leverage pay lower dividends in order to evade the cost of raising external capital of the firm. Lintner (1956) founded that past dividends of the companies and current earnings are the key determinants of current dividends and managers prefer to maintain stable dividends and make cyclic adjustments toward a target payout ratio. Arditti (1976) carried out research in order to evaluated dividend policy with respect to taxes and uncertainty. The purpose of this paper has been to tackle the distressing dilemma of the zero dividend solution by clearly incorporating MMs original proposal that dividends have an information aspect that is of potential worth to investors. The analysis of ambiguity they have offered is only one of many possible hypotheses which can account for the experimental fact that companies naturally do not take on intense dividend policies. Arnott and Asness (2003) suggested that a higher payout ratio results in low future growth, based their study on America stock market it founded that higher aggregate dividend payout ratios were associated with higher future earnings growth. Modigliani and Miller (1985) carried out research to evaluate dividend Policy under asymmetric information. The Standard finance model of the firms dividend/investment/financing decisions gives manager more appropriate information regarding the firms current earnings. The purpose of research is to replace the assumption built by Miller and Modigliani that the outside investors and inside managers have the same information about companies profit and future income with the assumption that inside managers know more than outside investors about the actual situation of firms current earnings. James A. Gentry (1990) informed about free cash flow analysis, showed that the financial position of a company depends upon its ability to generate net operating cash flows that are sufficient to cover up a hierarchy of cash outflows. The profiles generated from a large sample of companies show that relative cash flow components vary across company size and across industry groups. The researcher hopes that these profiles will serve as benchmarks for comparing cash flow components and encourage financial analysts to use cash flow analysis. Miller and Modigliani et.al (1961) suggest that in perfect markets, dividend do not affect firms value. Shareholders are not concerned to receiving their cash flows as dividend or in shape of capital gain, as for as firms doesnt change the investment policies. In this type of situation firms dividend payout ratio effect their residual free cash flows and the result is when the free cash flow is positive firms decide to pay dividend and if negative firms decide to issue shares. They also conclude that change in dividend may be conveying the information to the market about firms future earnings. Gordon and Walter (1963) present the bird in the hand theory which says that investors always prefer cash in hand rather than a future promise of capital gain due to minimizing risk. Jensen and Meckling (1976) the agency theory is based on the conflict between managers and shareholder and the percentage of equity controlled by insider ownership should influence the dividend policy. Easterbrook (1984) gives further explanation regarding agency cost problem and says that there are two forms of agency costs; one is the cost monitoring and other is cost of risk aversion on the part of directors or managers. The firm size (SIZE) defined as natural logarithm of total assets is expected to have a positive effect on dividend payouts as large more diversified firm are likely to have very low chance of bankruptcy and can sustain higher level of debt. In investigating the determinants of dividend policy of Tunisian stock Exchange, found that the high profitable firms with more stable earnings can manage the larger cash flows and because of this they pay larger dividends. (Naceur, 2006) Baker (2007) reports that Canadian dividend paying firms are significantly larger and more profitable, having greater cash flows, ownership structure and some growth opportunities. The liquidity or cash flows position is also an important determinant of dividend payouts. A poor liquidity position means less generous dividends due to shortage of cash. Alli et.al (1993) reveal that dividend payments depend more on cash flows, which reflect the companys ability to pay dividends, than on current earnings, which are less heavily influenced by accounting practices. They claim current earnings do no really reflect the firms ability to pay dividends. Megginson and Eije (2006) examined that the dividend paying tendency of fifteen European firms decline dramatically over this period 1989 to 2003. The increase in the retained earnings to total equity doesnt increase the payout ratio, but company age does. The empirical study of Canadian dividend-paying firms found that they try to maintain stable dividends per share, are reluctant to decrease the payout level, and smoothly adjust the level of payout based on level of expected future earnings. (Adjaoud, 1986) Easterbrook (1984) argues that increasing dividends raises the probability that additional capital will have to be raised externally on a periodic basis and consequently, the firm will be subject to constant monitoring by experts and outside suppliers in the capital market. Green (1993) questioned the irrelevance argument and investigated the relationship between the dividends and investment and financing decisions. Their study showed that dividend payout levels are not totally decided after a firms investment and financing decisions have been made. Dividend decision is taken along investment and financing decisions. Partington (1983) revealed that firms use of target payout ratios, firms motives for paying dividends and level to which dividends are determined are independent of investment policy. Lipson (1998) conducted study to examine the factors that derives dividend initiations and earnings surprises, look at the performance of newly firms that started dividends with those that did not. Earnings increases following the dividend initiation and earnings revelations for initiation firms are more constructive than for those non initiating firms. In an economy that charges taxes on investment income, dividends are obviously a disadvantageous means of transferring wealth to shareholders. To validate dividend costs, two clarifications are typically given: dividends are used to solve agency problems inside the firm, or dividends are used to communicate information to the market. H. Kent Baker, Gail E. Farrelly (1983) in their study A Survey of Management Views on Dividend Policy say that the major determinants of dividend payments today appear strikingly similar to Linters behavioral model developed during the mid-1950. In particular, respondents were highly concerned with dividend continuity. Second, the respondents seem to believe that dividend policy affects share value, as evidenced by the importance attached to dividend policy in maintaining or increasing stock price. Although the survey does not uncover the exact reasons for their belief in dividend relevance, it does provide evidence that the respondents are generally aware of signaling and clientele effects. Finally, the opinions of the respondents from the utilities differ markedly from those of the other two industries. Smith and Watts (1992) examined the relationship among executive compensation, corporate financing and dividend policy. They concluded that a firms dividend policy is affected by its other corporate policy choices. Jensen et.al, Solberg and Zorn (1992) linked the interaction between financial policies (dividend payout and leverage) and insiders ownership to informational asymmetries between insiders and external investors. They found that corporate financial decisions and insider ownership are interdependent. Lintner (1956) suggested that the firms have long run target dividend payout ratios and place their attention more on dividend changes than on absolute dividend levels. He also finds that dividend changes follow shifts in long-run sustainable earnings and managers are hesitant to make dividend changes that may later need to be reversed. Managers also try to stabilize dividends and avoid dividend cuts. Linter developed a partial adjustment model to describe the dividend decision process that explained 85 percent of year-to-year dividend changes. Gordon (1959) argued that an increase in the dividend payout raise stock price (value) and lowers the cost of equity, but practical support for this position is weak. Bemstein (1996) maintain that dividend policy makes no difference because it has no effect on either stock prices or the cost of equity. According to Gordon (1959) a higher payout ratio will reduce the required rate of return (cost of capital), and hence increase the value of the firm. Miller and Rock (1985) dividends contain this private information and therefore can be used as a sign device to influence share price. An announcement of dividend increase is taken as good news and accordingly the share price reacts favorably, and vice versa. Only good-quality firms can send signals to the market through dividends and poor-quality firms cannot mimic these because of the dissipative signaling costs. According to Easterbrook (1984) the agency costs thesis predicts that dividend payments can reduce the problems associated with information asymmetry. Dividends may also serve as a mechanism to reduce cash flow under management control, and thus help to mitigate the agency problems. Reducing funds under management discretion may result in forcing them into the capital markets more frequently, thus putting them under the scrutiny of capital suppliers. The tax-preference theory posits that low dividend payout ratios lower the required rate of return and increase the market v aluation of a firms stocks. Because of the relative tax disadvantage of dividends compared to capital gains investors require a higher before-tax risk adjusted return on stocks with higher dividend yields. Higgins et.al indicated that a direct connection between growth and financing needs: growing firms have outside financing requirements because working capital needs normally go beyond the incremental cash flows from new sales. It showed those payouts ratios are negatively related to firms need top fund finance growth opportunities. (Higgins, 1972) De Angelo (2004) conducted a study on dividend policy, agency cost and earned equity. The study told that why companies pay dividends? If they didnt have their assets and capital structure, would ultimately become unsustainable as the earnings of successful firms surpass their investment opportunities. They found that dividend payments prevented major agency problems since the retention of the earnings would have given the managers command over an additional $1.6 trillion without access to better investment opportunities and without any monitoring. This sense suggests that firms with high retained earnings are especially likely to pay dividends. In this view, firms pay high dividend when earned equity to total equity is high, and decline when this ratio declines and when this ratio is zero or near to zero, meaning that firms dont have the earned equity. They finally found that the highly significant association between the decision to pay dividends and the ratio of earned equity to t otal equity controlling for size of the firm, profitability, growth, leverage, cash balance. CHAPTER-3 RESEARCH METHODS As a various factors available in literature review have been identified that they affect the dividend policy decisions of the companies. It includes some important variables in order to achieve at some positive conclusions. Multiple linear regressions model has been developed to conduct the research, which contain of dependent variable and independent variables. Dependent variable in this study has dividend payout that is defined as the percentage of earnings disbursed as dividends. While the independent variables include of profit (EBIT), sales, debt equity ratio and cash flow from operation. These four variables are used as predictors in order to conclude that how much each of the variables affects the dividend payout of sugar firms listed on the Karachi Stock Exchange over the period of eight years (2001-2008). Model: DP = ÃŽÂ ± + ÃŽÂ ²1 EBIT + ÃŽÂ ²2 sales + ÃŽÂ ²3 CFO + ÃŽÂ ²4 DER+ ÃŽÂ µ DP is the annual dividend paid by firms during the period, while ÃŽÂ ± is Alpha constant in the model. Whereas ÃŽÂ ² (beta) shows the times of the variable in the model and ÃŽÂ µ represents the error term. Variables include in the model are Earning before interest and tax, Sales per year, Cash flow from operation and Debt equity ratio. Dependent Variable: Dividend payout ratio: The dividend policy is the one of the very important issue of corporate finance. It developed the dividend model which becomes very famous and known as Linter Partial Adjustment Model. According to the Linter each firms i has target dividend payout ratio. By using the target payout ratio linter calculated the target dividend at time (Dit*) as percentage of net earnings of the firms i at the time t (Eit), i.e Dit*= ri. Eit. John Linter (1956) In this study we used dividend payout ratio as dependent variable. It is calculated by percentage of net earnings of the firms paid at the end of period. The set of determinants of dividend payout ratio consist of following variables. CFO (cash flow), Sales, EBIT (earning) and Debt to Equity Ratio (leverage). Independent Variable: There are four independent variables are used in this thesis to find out their impact on the dependent variable as dividend payout. Operating Cash Flow: The liquidity or cash flows position is also an important determinant of dividend payouts. A poor liquidity position means less giving dividends due to shortage of cash. Alli (1993) reveal that dividend payments depend more on cash flows, which reflect the companys ability to pay dividends, than on current earnings, which are less heavily influenced by accounting practices. They claim current earnings do no really reflect the firms ability to pay dividends. The market liquidity is defined as annual value of stock traded divided by the stock market capitalization. Market liquidity is one of very important factor that can influence the decision or behavior of the dividend policy. Belanes (2007) there is a negative relationship between the market liquidity and dividend yield in Tunisian Stock exchange (TSE). OCF= EBIT +Depreciation-Taxes H1: There is positive impact of CFO on dividend payout ratio. Debt to Equity Ratio (leverage): The leverage has been used as proxy of Debt to equity ratio and variable in this study. Because debt to equity is very important variable for the determinants of dividend policy,if the level of the leverage is high its mean the firm is more risky in the cash flows. The effect of negative leverage on dividends payments is already documented .Higgins (1972) and McCabe (1979) suggested that long term debt had

Organization and Administration of Higher Education :: Education Essays

Organization and Administration of Higher Education General Objectives: The purpose of this course is to provide an overview of the administration of institutions of higher education. The course is concerned with providing basic information about major administrative units in institutions of higher education, philosophical and theoretical foundations of administration, and current issues faced by administrators. An important feature of this course is to explore issues of leadership and accountability in post secondary education. Specific Objectives: Following are the specific objectives of the course: 1. To orient and familiarize students with the philosophy and administrative organization of institutions of higher education. 2. To examine specific administrative units of institutions of higher education. 3. To identify leadership skills necessary for those who contemplate a career as an administrator in colleges or universities. 4. To examine current issues faced by college and university administrators. 5. To provide students with an opportunity to study one or more administrative units in detail. 6. To improve writing and reporting skills. Accommodations. Students in need of a specific accommodation under Section 504 of the Rehabilitation Act of 1973 or the Americans with Disabilities Act of 1990, please contact the instructor privately. Every attempt will be made to provide reasonable accommodations for such students. Readings will be assigned from Internet resources. Students must have access to the World Wide Web to be successful in this course. The WWW is available in the departmental computer lab, the college of education computer lab, and the Parks library. Sequence of Instruction Date Course Topic January 14 Organization of the Course January 21 Holiday January 28 Overview of Higher Education February 4 Institutional mission, Carnegie classification system, accreditation, HBCU’s. February 11 Strategic Planning February 18 Governing Boards and The Presidency--Abstracts due February 25 The Faculty March 4 Mid Term Examination March 11 The Curriculum March 18 Spring Break March 25 Managing Financial Resources April 1 Student Affairs April 8 Measuring Quality-- Papers due April 15 Student Reports April 22 Student Reports April 29 Student Reports May 6 Final Examination Evaluation 1. Each student will submit abstracts of 20 articles or chapters that pertain to the general subject matter on 4x6 cards. Please use no more than one card per abstract. The summary should include the title of the piece (APA Style Manual, either 4th or 5th edition), a brief summary of the purpose of the citation including its contents and conclusions, if any.

Rainy Mountain :: Essays Papers

Rainy Mountain Summary of â€Å" The Way To Rainy Mountain â€Å" ( Momaday p. 430 ) Momaday, tells the story of his grandmother and how she evolved from a land of her ancestry. She, being one of the few â€Å"belonging to the last culture to evolve in North America† (431). In a descriptive detail, Momaday, portraits the events that takes us on a journey through time before our modernized society had come into existence. A time of survival, rituals, suffering, and extinction. He starts out by setting the scenery of the place where his grandmother lived. A somewhat rigid area of the Southern Plains, where the seasons were of raging intensity. A place in time occupied by his grandmothers people, the Kiowas. A very â€Å"lordly and dangerous society of fighters and thieves, hunters and priest of the sun† (431). They had descended down out of Montana, and â€Å"war was their sacred business, and they were the finest ho rseman the world has ever known† (430). But as time had evolved into the migration of civilization, her people were forced to surrender their way of life to the soldiers. Fortunately, this was before her time. Momadays grandmother, Aho, lived an eventful life amongst her people, bearing stories of her participation in one of the last rituals of the sun-dance, which was interrupted by the soldiers.

Pahela Baishakh

Pahela Baishakh 1st day of Baishakh is the Bengoly new year counting day. We the people of Bangladesh celebrate it with different types of activities. This day comes with lots of hope. Pahela Baishakh is the biggest festival of Bangladesh. By reminding our food, our culture reminds us who we are and where we all are came from. On this day we start with â€Å"Panta Ilish†. With this tasty food we feel our old days, when there was a proverb, â€Å" †. Different kinds of vartas , pithas etc are also seen spreading it’s own scent.Air smells the bengoly flavour with Baishakhi foods. Different types of fair and program are seen here and there. Ramna Batamul is the main point ,where all people get together. Charukola gets a new festive look on this day. Cultural programs are very common affair in these types of fair. Rabindra sangeet and classical dance is the highlighted activity of these programs. Pahela Baishakh comes with new color to make us more hapy and ambitio us. In pahela Baishakh shopkeepers and businessmen open new halkhata. Which is the new book of their accountance.They welcome all customers with sweets and sandes. This tradition indicates the end of all past evidence and start of a new colorful journey. Pahela Baishakh is for all Bengoly people. No matter from which religion or which color he is. Different people of different cast comes from different places to celebrate 1st day of bengoly new year. It reminds us our historical past and our golden culture. It teaches us to be united as Bangladeshi forgetting all differences. Pahela Baishakh is our glorious event ,which we celebrate with proud from our core of the heart.

Importance of accountability Essay

I have been tasked with writing this 1000 word essay on the importance of accountability of sensitive items within the military. The reason I have been assigned to do this task is due to my failure of being attentive and securing my weapon and having it with me at all time. I failed by leaving my M9 Berretta at home in my safe before I left in support of the Boston Marathon. I was told by certain individuals to leave it at home, but I failed as an NCO to ask my section leader on how to properly secure my weapon. I did what I thought was best and left it to at home limit the amount of time I traveled with it. In doing so was wrong, if anything would have happened to that weapon there would have be severe consequences that not only myself would have to face, but individuals in my command that would have been affected due to the negligence of my actions. This whole process is new to the unit and me on how to transport a weapon properly and safely from California to Massachusetts. I secu red my weapon in weapon case with and lock and a slide lock following JetBlue regulation and TSA regulations. Once I landed in Massachusetts I would secure my weapon in the 1st CST safe for safe keeping. A day prior to the Boston marathon I would be issued it again and along with 45 rounds of hollow point ammunition from the 1st. Once the Boston Marathon was over I would have the weapon remain with me until my departure back to home station. In AR 710-2 (Supply Policy below the National Level), AR 735-5 (Policies and Procedures for Property Accountability) and AR 190-13 (The Army Physical Security Program). All these Army Regulation cover the Army policy for property accountability. Some sensitive items are your weapon, military ID card, communication equipment, etcetera. Sensitive items are anything that can be used by opposing forces or the enemies to counter attack, weaken forces, and gain information, and so on. Throughout our lives we come across many things of value. Some things are more valuable than others, either because they cost more money or they hold a sentimental value that we keep close to our hearts. In the military regardless of what branch you are, it is instilled in our heads that our weapon is the most valuable thing you will ever have. You train with it, you eat with it, you sleep with it, you use is to protect yourself and your battle buddies and you take care of it like it was your child. In the end it becomes a part of you and you cannot foresee yourself without it. Your weapon is considered a sensitive item because if it ends up  in the enemies’ possession, it could possibly be used against you and your comrades. Keeping track of where your weapon is or having it on you at all times will help prevent any of that happening. An so I forget the value of my weapon and what it means to me. Always having your sensitive items is very important and I should have treated my weapon as one of those. Instead I chose to leave in my safe thinking it was just another items that I needed to bring. Compared to the active army side the very smallest punishment for misplacing a weapon, if it’s found within a reasonable amount of time, is a â€Å"Company Grade Article 15.† That means you can lose one grade of rank, a week of pay, and two weeks of extra duty. If that’s all you lost, you got off very, very lightly. More often, and especially if you lose your weapon in a combat zone, you’re looking at a â€Å"Field Grade Article 15† if your chain of command is feeling very generous. You would risk losing at least one or as many as three grades of rank (E-4 to E-1), one half of your base pay for two months, 60 days restriction, 45 days extra duty. That’s only for enlisted though. If you do the same as an officer, you won’t get the same slap on the wrists as a punishment. Your career is over. You may as well start looking around for a new job and hope you don’t get a bad discharge. So we check our sensitive items religiously. Normally I check to see if I have my sensitive equipment with me thru out the day or we do a check at the end of each exercise to make sure each one of us on our team is not missing valuable equipment. Most of the times our gear is either on your person, or locked up somewhere secure. Accountability and personal responsibility for your equipment is something the military takes so seriously it’s not even funny. Because if there’s a fight, and you don’t have your weapon, then you’re a huge liability to everyone. You also can’t be trusted to do certain thing due to fact of not being able to hand the responsibility. It is very important to know that my action don’t affect me but everyone around me. I now know that because my failure I will be always sure to get my proper information from senior leaders before making a decision or do my research more extensively. I don’t want to be a liability but an asset that everyone can rely on to get task or mission done, in a time and correct manner. I won’t make the mistakes like leaving my sensitive equipment at home or unsecure. I will also come to my section leaders first  in the event I have a serious question. I am sure they will be able to guide me in the right direction every time. From Steve Maraboli, Life, the Truth, and Being Free, â€Å"It is important that we forgive ourselves for making mistakes. We need to learn from our errors and move on.† and moving on is exactly what I am going to do from this experi ence.

Geely Automobile

International Business Environment Analysis for Geely plc. 1 International Business Environment II Module title: International Business Environment (P13KL9) Module convener: Lei Li Title: Critical Analysis of International Business Environment in UK and Malaysia : A Project of Geely plc‘s Foreign Expansion Group Name List GROUP NO. ID NO. 6501184 6501425 6501559 6501825 6501972 6500420 6501843 NAME Chen Yiduo Wang Hao Yin Xiaoyun Wang Zheng Zhu Weixing Zhu Leizhen Wu Gaoying Number of Words: 4201 Submission Time/Date: 14th May, 2010 2 International Business Environment II Covering Note: Yiduo, Chen(6501184), Leader: ASEAN, Leverage the multinational institutions—ASEAN, UNNC Gaoying, Wu (6501843): WTO, UNNC Hao, Wang (6501425): EU, Leverage the multinational institutions—EU, UNNC Leizhen, Zhu (6500420): Income profile, Culture, Marketing analysis—Income profile, UNNC Introduction, Econography, Political risk, Assessment, Conclusion, UNNC Weixin, Zhu (6501972): Xiaoyun, Yin (6501559): Legal System, Exchange rate, Geely‘s Reacts, Recommendations, UNNC Zheng, Wang (6501825): Tax regime, Restrictions, Marketing analysis—legal system, UNNC 3 International Business Environment II Table of contents Pages 1. Introduction †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 5 2. ECLIPTER facotrs analysis†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 5 2. 1Econography 2. 2 Culture 2. 3 Legal system 2. 4Income profile 2. 5 Political risk 2. 6 Tax Regime 2. 7 Exchange rate 2. 8 Restrictions Institutions†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. †¦.. 13 3. 1 WTO 3. 2 EU 3. 3 ASEAN 3. 4. Assessment of Geely’s overall international expansion strategy†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 15 5. Marketing analysis†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢ € ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 16 5. 1 Legal system 5. 2 Income profile 6. Geely’s reacts to the impact of the ECLIPTER†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 8 7. Leverage the multilateral institutions†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. †¦Ã¢â‚¬ ¦.. 19 7. 1 ASEAN 7. 2 EU 8. Implications and Recommendations†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 20 9. Conclusion†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 21 10. References†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. 22 11. Appendix (Interview)†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦28 4 International Business Environment II 1. Introduction Geely, the China-based auto company and one of the newly-emerged multinationals in the world auto market, exerts tremendous influences on the auto industry. This essay will conduct a critical analysis of the international business environment that the company faces. In the first part, the ECLIPTER factors including econography, culture, legal system, income profile, political risk, tax regime, exchange rate and restrictions, together with the multilateral institutions such as WTO, EU and ASEAN will be examined by using UK and Malaysia as examples. Then based on this analysis, it will provide an assessment of the company‘s overall international expansion strategy and process. In the second part, legal system and income profile, the two most important ECLIPTER factors on Geely‘ overseas operations, will be evaluated. Furthermore, the scheme which Geely used to deal with the impact of these two factors and leverage the multilateral institutions will be shown. Finally, this report will analyze whether the company‘s international adaptation of the business function is effective, and then give some recommendations and lessons. 2. ECLIPTER Factors Analysis 2. 1 Econography Econography refers to physical and human assets including distance from major markets, and natural resources of nations that affect industry performance. In the first, the close distance between parent company and foreign subsidiary can help the company to reduce the transport costs and overhead expenses; it also can improve the connection between them. If the parent company is in China, it is better to build a subsidiary in Asia such as Malaysia. Secondly, the natural resources used for making cars mainly include steel, copper, and aluminum. If the country owns rich mineral resources, it can greatly provide benefit in the production of automobiles. One of the major purposes for many multinational corporations establishing overseas subsidiaries is to exploit the foreign natural resources. This is good for companies to 5 International Business Environment II reduce production costs and get competitive advantages. As World Steel Association reported in 2009 that the crude steel production of United Kingdom is 13. 5 in 2008, whereas the crude steel production of Malaysia is 6. 1 in 2008. 2. 2 Culture This paragraph will analyze the effects of culture on auto industry through power distance index and saving rate. Firstly, power distance index measures the degree of inequality exists in a society (Hofstede, 1997). The power distance index is 80 in Malaysia whereas it is only 35 in UK (Hofstede, 2008). The unequal distribution of wealth makes most Malaysian citizens prefer to hold a commercial auto. So the inexpensive Geely auto could be a good option for them. Secondly, saving rate could be a standard to show the attitude of citizens. The saving rate of Malaysia was 47 per cent in the year 1998 which ranks second in Asia (Azia, 2004). In contrast, the saving rate in UK was significantly low, which was less than 10 percent in the past ten years. For instance, the saving rate of UK household in 2008 was only 1. 7 percent (chart 1)(Presser, 2008). So UK citizens are apt to consume a relatively high price car. Chart 1 Resource from Posser (2008) 6 International Business Environment II 2. 3 Legal system The auto industry has been affected by laws and government regulations since the 1960's. The first safety act passed in 1966 by Congress and was called the National Traffic and Motor Vehicle Safety Act (Highfill, 2004). This act forced manufacturers to improve the safety for the passengers, the driver visibility, and the braking of the car. Not only safety, but also environment is being growingly concerned even before the oil crisis. The Vehicle Air Pollution and Control Act passed in 1965 was the first act to set standards for automobile pollution. Then in the 1970's, Congress passed the Clean Air Act that led to a 90% decrease in automobile emission within the next six years (ibid). In the 1970's the oil crisis led to the approval of The Energy Policy and Conservation Act of 1975 which stated that all automobiles must meet a certain mileage per gallon. The act required that all automobiles had to meet a standard of 20mpg by the 1980 model and then 27. 5 mpg for the 1985 model (ibid). EU 2020 growth strategy also emphasizes the importance of low carbon automobile (Society of Motor Manufacturers and Traders, 2010). There are also many special laws for auto industry in different countries, such as Malaysia, which has built a free trade area for production and assembly of products for export-oriented enterprises. Companies can enjoy the minimum tariffs, raw materials and simplified mechanical equipment import formalities. Nevertheless, the Malaysia government regulates that more than 80% products should export to other countries (Daily News, 2006). Furthermore, the UK Byers Acts Measures to cut the average price of a car by ? 1,100 and save private car buyers around ? 1 billion a year. Although it may lower the profitability of auto industry, the number of consumers will increase gradually (DTI, 2000). 2. 4 Income profile Since automobile is not inferior goods, the demand of automobile would rise when income increases. In the economic aspect, income could be an indicator of the purchasing power of individuals and nations. Data from UK national statistics office (2010) demonstrated that despite the contracted 4. 9 percent of GDP in the whole year, the GDP increased 0. 4 percent in 7 International Business Environment II the fourth quarter of 2009. Furthermore, Household expenditure also rose 0. percent in the fourth quarter of 2009 in UK (chart2). For Malaysia, the GDP growth in the fourth quarter of 2009 was 4. 5 though the figure was negative in the whole year (chart 3) (Malaysia statistics, 2010). It can be observed that the economy of both UK and Malaysia seem to recover from the global financial crisis. This positive signal predicts the growing demand and diste nsible market for Geely in both countries. Chart 2 Resource from UK statistics 2010 Chart3 Resource from Malaysia statistics 2010 8 International Business Environment II The core competitiveness of Geely automobile relies on its high performance-price ratio. Per capital GNI (Gross national income) in Malaysia was 25784 RM in 2008. By analyzing the 2004 United Nations Human Development (UNHDP) report, except the 20% population of richest and poorest class, Geely will be a better choice for the rest citizens in Malaysia(chart 4) (Lumpur, 2004). In comparison, the young people account for a great amount of population in UK. A source from HMRC shows the average income of under 20 years is ? 9,570 and 20-24 years is ? 13,200 which is below the average (chart 5). It implies that when young generation decide to buy a car, price is the first consideration factor. For medium quality car manufacture companies, young population in UK could be a potential group of customers. Chart 4 9 International Business Environment II Chart5 Median Age Band Under 20 years 20 – 24 ? 11,800 years 25 – 29 ? 17,000 years 30 -34 ? 19,500 years 35 – 39 ? 20,100 years 40-44 ? 20,200 years 45 – 49 ? 20,300 years Resource from Lumpur (2004) ? 28,600 ? 24,800 ? 35,400 ? 15,200 ? 20,100 ? 28,100 ? 24,600 ? 34,600 ? 14,900 ? 19,800 ? 26,800 ? 23,600 ? 31,700 ? 15,500 ? 20,100 ? 23,900 ? 21,600 ? 26,700 ? 16,400 ? 20,100 ? 19,300 ? 17,800 ? 20,600 ? 15,900 ? 17,800 ? 3,200 ? 12,400 ? 13,800 ? 11,200 ? 12,300 ? 8,130 ? 9,570 ? 8,490 ? 9,810 ? 7,990 ? 9,250 Median Income Mean Income Income (Men) (Men) (Women) (Women) Income Income Income Mean Median Mean 2. 5 Political risk According to Guinger (2001), political risk describes the stability of government institutions. It can be measured in a variety of ways such as likelihood of foreign aggressio n and civil insurrection. The Transparency International (2009) showed that UK and Malaysia both face some problems of political corruption, which adversely affects the efficiency of economic operation. World Bank estimates that corruption could cost Malaysia as much as RM10 10 International Business Environment II billion a year – an amount equivalent to 1 or 2 per cent of GDP. The corruption in the UK is lighter than Malaysia, which ranked 17, whereas Malaysia ranked 56 in world in 2009 based on Corruption Perceptions Index 2009. But the corruption in UK is not unheard. Surveys by Control Risks and Simmons & Simmons show that the awareness of UK laws against foreign bribery may be decreasing over time. In 2002, after the act came into force, 68 percent of respondents said they were familiar with its main points. But in 2006, 48 percent people said that they have totally ignored it (Global Corruption Report, 2009). 2. 6 Tax Regime Tax regime refers to the tax instruments that governments use to raise revenues from multinational firms, such as corporate taxes. The tax of Malaysia is transparent, the multinational corporate must be taxed 30% of the corporate income which is just the same as Malaysia companies Marketing directory, 2005) According to the tax incentive treaties, auto ( . ndustry may be eligible for pioneer status which is given by the way of an abatement of 70% of the profits for five years (ibid). The remaining 30% of the profits will be taxed at the prevailing corporate income tax rate. The profits abated are exempt from tax and will be available for distribution as tax-free dividends. In UK the resident corporate tax is the lowest in Europe, even the tax is zero for t he small companies in 2002(Lawandtax-news, 2010). According to the tax treaties, multinational corporate which set up, purchase or control the companies in UK can follow the resident tax (Navstar, 2009). In the ordinary course of events, foreign companies cannot follow the low corporate tax, but with regard to double taxation and the agreement between UK and China, Chinese multinational corporates in UK now pay the low tax (ibid). 2. 7 Exchange rate Stable trade policies are extremely important for both the economic welfare of the countries and the multilateral trading system. Unfortunately, the liberalization measures were adopted by many countries. As Dornbusch‘s 1976 analysis has pointed out that when the exchange rate is used to provide protection for domestic firms, it is through undervaluation. An undervalued 11 International Business Environment II exchange rate protects domestic firms from imports and gives domestic firms greater incentives to export. For example, the Balance of Payments Committee of the WTO has received 39 requests from member countries for derogations from their international obligations and for a temporary increase in temporary protection. Moreover, several developing countries, such as Malaysia, have recently increased tariffs in response to financial crises even though the higher rates remain below the rates these countries bounded in the WTO. Moreover the analysis said China has become a great auto exporter, as a result of the huge subsidies, an undervalued exchange rate and dirt-cheap credit (Swaminathan, 2009). 2. 8 Restrictions Restrictions refer to the taxes and limitations that host governments place on foreign products and services or on foreign firms themselves when they enter or leave the host economy. Because of the policy of protecting their national automobile industry, the import tax of automobile is relatively high in Malaysia. Since 2004, Malaysia began to reduce the automobile import tax: for the import components the tax is reduce from 25% to 10%, and for the whole automobile the import tax is drop from 130% to 30% for the companies outside of Southeast Asia (MEI, 2009). In 2010, according to the agreement of ASEAN, the automobile import tax will be zero to all the regions of ASEAN. UK is a member of EU, it followed the economic agreement of EU which sets no import or export tax between members of EU and they must charge the same tax when they have business with the third country (European competitiveness, 2009). 12 International Business Environment II Scoring Analysis of UK and Malaysia Country Score Econography Culture Legal System Income Profile Political Risk Tax Regime Exchange Rate Restrictions Total (10) (10) (20) (20) (10) (10) (10) (10) (100) 8 7 18 8 8 8 7 7 71 7 6 16 15 5 9 8 9 75 UK Malaysia 3. Institutions 3. 1 WTO The major objectives of WTO‘s roles are ? the creation of a common automobile market through the elimination of barriers to intra-Community trade; the maintenance and expansion of a competitive world automobile industry; the use of voluntary import restrictions to prevent cheap imports and to maintain competitiveness? European Commission, 2006). For example, in 2006, WTO announced the establishment of a panel to examine whether China's tariffs on imported auto parts violate WTO trade rules, following a joint complaint made by the United States, the European Union and Canada, who accused China for its discriminatory charges on imported auto parts. After examining Ch ina‘s related regulations, WTO panel declared that China's regulations are inconsistent with China's WTO obligations. China has agreed to make the necessary regulatory changes by September 2009 (Herd, 2006). 13 International Business Environment II WTO facilitates Geely‘s international expansion since the elimination of trade barriers has cleared its path to world market and made it integrated to the world economy. In 2002, after China joined into WTO, 100 automobiles of Geely exported to Syria (Luo, 2005). 3. 2 EU EU functions as a rule-imposer. It sets strict requirements and institute rules and regulations to improve vehicle safety. Besides the vehicle crash tests executed by Euro NCAP (European New Car Assessment Program backed by European Commission), there are also some regulations set to protect the environment. First, in order to respond to the gradual aggravation of greenhouse effect, the European commission developed a mandatory emission standard to limit the emission of one major kind of greenhouse gas, CO2. The regulation set a fleet-average CO2 emission target for passenger cars, which is 120 g/km to be reached by 2015 (European Commission, 2010). The vehicle manufacturers must reach the CO2 emission target of 130g/km, with an additional reduction of 10 g/km to be provided by supplementary measures, such as the use of hydrogen fuel. A long-term target of 95 g/km to be reached by 2020 is also stablished by the regulation (ibid). This regulation will take effect in 2012. From 2012 onwards, vehicle manufacturers who do not meet this target will have to pay penalty for their excess emissions. According to DieselNet (2010), from 2012 to 2018, the penalties are â‚ ¬5 per vehicle for the first g/km of CO2; â‚ ¬15 for the second gram; â‚ ¬25 for the third gram; â‚ ¬95 from the four th gram onwards. From 2019, manufacturers will pay â‚ ¬95 for each g/km exceeding the target. Another congressional mandate imposed by European Commission requires tire pressure monitoring systems on all new cars in 2012. According to Europe‘s Information Society (2010), many road accidents resulting in fatalities and physical injuries are linked to tire defects. Furthermore, under-inflated tires can result in severely inefficient use of fuel and cause an extra two million tons of CO2 emitted into the atmosphere per year. So this mandate enhances vehicle safety and protects the environment. 14 International Business Environment II These regulations have incurred a rise in car prices since vehicle manufacturers are forced to increase price to offset the cost of upgrading. These regulations put Geely in an unfavorable position. Since Geely is better known for making low-tech and cheap cars, making eco-friendly cars is not included in the competencies of the company and huge R&D spending is inevitable for nurturing this competence. They set a high bar for the competition and limit Geely‘s ability to expand market in Europe. 3. 3 ASEAN ASEAN – Association of South East Asia Nations is a geo-political and economic organization of 10 countries located in Southeast Asia. China and ASEAN are both newly-emerged, rapidly-developing auto markets. Cooperation in auto industry between China and ASEAN will bring a win-win situation for the two sides and make their cars more competitive in a global competition. For instance, according to Xinhua News Agency (2006), a report released by the Ministry of Commerce Indonesia has announced that compared to the expensive Japanese sedans, the China-made ones gradually gain popularity for more favourable price-performance ratio. ASEAN country also needs investment from Chinese carmakers to expand local employment and for more price-favourable cars, said a Germany auto expert at the China-ASEAN Expo, 2006. Consequently, in general, ASEAN opens its gate to Chinese car companies including Geely to achieve a win-win situation. 4. Assessment of Geely’s overall international expansion strategy Geely‘s current international strategy is to produce affordable automobile, so the market size and consume power of a foreign market are highly valued by Geely. Malaysia automobile market resembles China more than UK, in the aspects such as the people‘s income, the similar culture, and the similar geographical position, etc. As by now most cars have been exported to some developing countries like South-East Asia, Ukraine, Russia, and Mexico, Malaysia will be good choice. Meanwhile, although UK does not represent a neighboring or ? home‘ market, 15 International Business Environment II as markets in South-East Asia do, UK could be seen as an interesting market with a potential for higher margins, higher price levels and a more mature market for branding, technology, etc, as the UK‘s income per capita, and the automobile sales volume are higher than that of Malaysia. Considering the future international development, Geely should focus on UK. Therefore, at first, it is better for Geely to develop its ? producing automobile which most of people can buy‘ strategy in Malaysia, and when Geely is able to enter high-end automobile market, UK will be a better choice. In terms of multilateral institution, after evaluating the influence of international organizations, we suggest that Malaysia is a better choice for Chinese car companies to exploit new markets. Firstly, a win-win situation guarantees a favourably corporate relationship between Geely and ASEAN (Eichengreen, 2006). Secondly, there are various quality-related requirements and constraints in EU and probably NAFTA, which puts up a strong challenge for those Asian auto makers. Moreover, by far, there is no evidence to prove the acquisition of Manganese Bronze and Volvo have considerably increased Geely‘s sale in developed nations. Thus considering the opportunities and threats faced by Geely, it is recommended that the company emphasizes on developing nations‘ markets, rather than the developed markets. 5. Marketing analysis 5. 1 Legal system According to Alistair Darling‘s pre-budget report, UK will bring new opportunities for the low-carbon industries. Through the Innovation Investment Fund and the Carbon Trust's Venture Capital scheme, UK will invest at least ? 160m in low carbon projects (Guardian, 2009). They will also invest ? 90m in the European Investment Bank's new 2020 fund, which will put 6. 5 billion Euros of finance in green infrastructure projects. In this report, there are alterations to the climate change levy, company car tax, and fuel benefit charge (ibid). This is good news for Geely because now it dedicates itself to produce high-tech and eco-friendly automobile. In 16 International Business Environment II UK the amount of car tax depends on the price and the discharge amount for carbon, which is from 9% for electric motor car to 10%-35% for petrochemical car. UK also has a successful car scrappage scheme, which gives consumers a ? 2,000 discount off. If they scrap their old vehicle, it will help up to 125,000 families replace their inefficient boilers with new models (Julia, 2009). Through the government‘s support of low-carbon industry, Geely has more opportunities to innovate high-tech and eco-friendly automobile. Furthermore, because of the low tax and car scrappage scheme, customer is inclined to buy or change an electric motor car,. In 22nd March 2006, Malaysia published the new automobile policy (MEI, 2009). Since that day, the import taxes of CBU (Complete Built Unit) are reduced from 20% to 5% for the ASEAN members and 50% to 30% for other countries. The import taxes of CKD (Completely Knock Down) are 10%. In 28th October 2009, Mustafa Mohamed announced many new policies for auto industry which will give much more preferences and subsidies for the new energy automobile companies (ibid). . 2 Income profile It is known that the success of Geely relies mostly on keeping low cost and offering the affordable cars. For instance, Geely's best-selling four-door sedan, the King Kong, has been sold 6127 in April 2010 and the retail price is between 47,800RMB – 58,800RMB (Jiang, 2010). Geely sold 329,014 passenger cars in 2009, making it is the third largest domestic car producer (Zheng, 201 0). However, Geely's winning formula is under pressure in china because Chinese consumers are becoming wealthier; the higher-end models will gradually be affordable for them. Meanwhile, brands such as the Chery QQ, Ford Fiesta, and Honda Civic are threatening Geely‘s current market position. Geeky‘s winning formula is also challenged at the oversea markets like UK and Malaysia. Date from HMRC (HM Revenue & Customs) indicates that nearly 50% of the population in UK earns ? 16400 annually which is much higher than the middle class income of Malaysia. This group of population could be a dominant power in the automobile market in UK. It is not a wise choice to sell its inexpensive cars in UK considering that low price would not be 17 International Business Environment II attractive for these relatively rich citizens. The similar situation also happened in Malaysia which made Geely‘s low price cars less competitive. This is because that the predicted real GDP growth in 2010, 2011 and 2015 are 4. 7%, 5. 0% and 5. 0%, Malaysian people are becoming richer than before(IMF, 2010). Their increasing incomes will directly affect their car buying choice. People nowadays prefer the higher-end models and the market share of Geely‘s lower-end models are estimated to reduce gradually. 6. Geely’s reacts to the impact of the ECLIPTER First, since the middle of 2009, the sales of car exports decreased from 37940 in 2008 to 6297. Furthermore, although Geely exports to more than 50 countries, most of them are developing countries which are not so effective in the promotion of the brand image. In order to get rid of low-end image, Geely changed its strategy from ? produce automobile which most of people can buy‘ to ? do not produce cars which price is below 40000 Yuan‘ (Fang, 2009). Besides, Geely take over Volvo which also expressed its desire to promote the brand image. Geely‘s strategy changes starts in May 2007, which is focus on transforming its competitive advantage from price to technology. In 2007, Geely used three new motorcycle type—Yuan Jing, King Kong and Zi You Jian, which have relatively higher value added to substitute the Haoqing, Meiri and You Liou. For doing that, Geely scraped its old molds, jigs and production line which worth up to 8 billion Yuan. In 2008, the sales of these three new auto types grew 12% without discount marketing strategy (Geely annual report, 2009). Furthermore, in 2010, Geely will market 21 new auto types, and some of them were designed by Fabrizio Giugiaro, the Italy‘s famous auto manufacturer. Moreover, the new energy auto will also be produced in 2010, which will include Panda and DiHao (Wenqing, 2010). These new energy auto types have been showed in the Beijing car exhibition 2010 (Phoenix auto, 2010). In order to deal with these two factors, Geely also has a complementary strategy: cooperate or takeover other well-known international auto manufacturers. It will not only help Geely to promote its auto manufacture technology, but also improve its brand image. Geely has already cooperated with 18 International Business Environment II Britain‘s Manganese Bronze to produce luxurious brand-named taxi (China car Times, 2010) and assembled cars with Information Gateway Corp Sdn Bhd (IGC) in Malaysia, 2006 (Tan, 2006). 7. Leverage the multilateral institutions 7. 1 ASEAN One of the stunning news in 2005 was the political barriers Geely met in Malaysia, which was considered as the biggest challenge for its overseas expansion so far. Geely‘s President Li Shufu described Malaysia as ? an unexpected trap? because of Malaysia government‘s rejection on fulfilling the contract. After examining the ECLIPTER factors of Malaysia market, Li Shufu and his team regarded Malaysia as the first pillbox and cornerstone of its expansion to ASEAN countries. He believed the learning in Malaysia could be helpful. Therefore, in May 2005, Geely has made a joint contract with Malaysia IGC group for building CKD factory in Malaysia. However, Malaysia government denied the contract after a new document on automobile being published. According to the document, all cars made by foreign automobile manufacturers were prohibited to sell in Malaysia. Then the situation in Malaysia went against its expection of getting a huge sale. However, according to Geely officials, to some extent, ASEAN agreements have made Geely to reconsider the importance of Malaysia (Harwit). In South East Asia nations, there are some strict tariff-related regulations for automobile industry. Contrarily, tariff among ASEAN countries is in a minimum rate. According to an inner-ASEAN agreement, from 2003 to 2009, Indonesia, Thailand, Malaysia, Philippine, Singapore and Vietnam exempted auto import tariff for each other. From 2010, all ASEAN countries will implement zero auto import tariff for each other. At the same time, Indonesia, Thailand and some other ASEAN nations‘ demand of cars is increasing considerably (JAMA, 2008). Especially after an impressive increase in 2007, the car-sale in Indonesia becomes significantly dazzle. Therefore Geely 19 International Business Environment II planed to only manufacture cars in Malaysia and then export cars to other ASEAN countries, which seems like a forward-looking plan in a long-term development. Finally, Geely decided to move its Malaysia CKD manufacture center to Indonesia. However, its vision of leveraging ASEAN to pursue a sale performance in all ASEAN nations has not changed. 7. 2 EU In terms of EU regulations, since Geely has acquired 100% ownership of Volvo, the Sweden‘s company, Geely is no longer an outsider of European market. According to the EU Single market concept (European Commission, 2010), a free circulation of capital, labor, goods and services between EU members is granted. Geely now have got over tariff barriers and competes as an insider. . Implications and Recommendations One of the strategies of Geely is to promote new energy automobile, there are two advantages for this strategy: Firstly, Geely can get powerful support from government since the development of new energy is encouraged by the government. Secondly, since new energy automobile is environmental friendly goods, it not only reduces the carbon emissions, but also decreases the expenses o n routine maintenance (Bond newspaper, 2010). However, there are also drawbacks, such as the inadequate facilities. Acquiring other world famous bands is the other strategy of Geely, which facilitates the company‘s global expansion. For instance, Volvo is well-known by its safety, which could provide Geely with a competitive advantage on its brand trust. It also provides a valuable, more upscale user image. Therefore, through merger or acquisition of international well-known brands, Geely can get greater international fame and advanced technology, integrate into the world market and attract more consumers. However, certain risks should be considered when Geely acquires Volvo. The first risk is that the culture conflicts between two countries. It has been reported that one of the hindering factors is that the union of Volvo in Sweden disagrees the acquisition for their reduced 20 International Business Environment II welfare and unemployment (Gasgoo, 2009). The second risk is that the value of acquired equity. It has been said that Volvo‘s vaunted reputation for safety has been challenged by other manufacturers which can also provide automobiles with same safety standard. In this case Volvo‘s ? safe? advantage may not be as competitive as before. 9. Conclusion To sum up, this essay has analyzed the ECLIPTER factors of Geely‘s two overseas markets, Britain and Malaysia, and examined influence of the related multilateral institutions. According to this matrix analysis, legal system and income profile have the most important impact on the auto industry. For multilateral institutions, ASEAN and WTO generally promote the Geely‘s international expansion strategy, while EU regulations are less favored in its expansion. Considering both ECLIPTER factors and related multilateral institutions, it is suitable for Geely to enter developing nations to acquire market share at its initial development. But for long-term development, Geely need to pay attention to research and develop higher-end models. With the development of Geely Company and the overall auto industry, Geely‘s focus will shift from developing countries to developed countries. Currently, Geely‘s low price strategy is challenged by the legal system and income profile of developed countries. Therefore, Geely is increasing its efforts in releasing new model cars and tapping into developed countries through merger or acquisition. Geely intends to promote its brand image and enlarge its market share through these strategic moves, although it has to face the risk of culture conflicts and the uncertainty of acquisition value. 21 International Business Environment II 10. References: Azia, A. Z. (2004) Malaysia-Encouraging Saving in a Dynamic Economy [Online]. Available at:< http://www. bis. org/review/r040115c. pdf> [17 April 2010] Bond newspaper (2010) (There are many advantages of new energy automobile but it needs improve) [online]. Available at: [6 May 2010] China Car Times. 2010) London Taxi‘s should now be renamed Hangzhou Cabs. [Online] A vailable at: [11 April 2010] Daily News (2006) 10 ,80% (Geely will produce automobiles in Malaysia, 80% should not sell to other countries)[online]. Available at: [25 April 2010] DEPATMENT OF STATISTICS MALAYSIA Official Website (2009) Population [Online]. Available at: [12 April 2010] DieselNet (2010) Cars: Greenhouse Gas Emissions [online]. Available at: [15 Ap ril 2010] DTI (2000) Byers Acts to Reduce Car Price [online]. Available at: [27 April 2010] 22 International Business Environment II Eichengreen, B. 2006) China, Asia, and the World Economy: The Implications of an Emerging Asian Core and Periphery China & World Economy / 1 – 18, Vol. 14, No. 3, 2006 [Online]. Available at: [24 April 2010] European Commission (2010) A Single Market for goods [Online]. 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(2009) Scrappage Scheme Bosst Continues As New Car Sales Up 31% On Last Year [Online]. Available at: [20 April 2010] Lawandtax-news (2010) Corporate Taxation for Multinationals [online]. Available at: [21 April 2010] Lumpur, K. 2004) 2002 WORLD SUMMIT ON SUSTAINABLE DEVELOPMENT [Online]. Available at: [15 April 2010] Luo, J. (2005) The Growth of Independent Chinese Automotive Companies [online]. Available at: [15 April 2010] Malaysia statistics (2010) Gross Domestic Product [Online]. Available at: [15 April 2010] 25 International Business Environment II Marketing directory (2005) (the Summary of Investment Environment of Malaysia)[online]. Available at: [21 April 2010] MEI (2009) (the New Policy of Automobiles in Malaysia) [online]. Available at: [20th April 2010] Navstar (2009) the detail of the corporate tax in UK) [online]. Available at: [21 April 2010] Office for National Statistic (2009) National Projections UK population to exceed 65m by 2018 [Online]. Available at: [11 April 2010] Phoenix auto website (2010) ( the new energy car showed in Beijing car exhibition) [online]. Available at: [5 May 2010] Posser, D. (2008) UK saving rate sinks to 49-year low as growth falters[Online]. Available at : [17 April 2010] Society of Motor Manufacturers and Traders (2010) EU 2020 growth strategy emphasises significance of low carbon automotive [online]. Available at: < http://www. eemsonline. co. uk/press_releases/08-03-10_3> [1 May 2010] Swaminathan S Anklesaria Alyar. TNN(2009) How India beat China in auto exports [online]. Available at [3 May 2010] 26 International Business Environment II Swee-Hock, S. (2007) The population of Peninsular Malaysia. [Online] Available at: [13 April 2010] TRANSPARENCY INTERNATIONAL (2009) Corruption Perceptions Index 2009 [Online]. Available at: [11 April 2010] UK statistics (2010) GDP Growth [Online]. Available at: [15 Apr 2010] Wenqing F. (2010) 21 Geely will market 21 new types of automobile, new energy car also will produce)[online]. Available at: [24 April 2010] World Steel Association (2009) WORLD STEEL IN FIGURES 2009 [Online]. Available at: [11 April 2010] World Bank (2008) Gross National Income Per Capita 2008,Atlas Method and PPP [Online]. Available at: [15 April 2010] Xinhua News Agency (2006) China Eyes ASEAN for Car Assembly, Export [Online] Available at: [18 April 2010] 27 Internati onal Business Environment II 11. Appendix An interview with the Geely official Distinguished guest: Mr. Zhao Jie, Vice President of Geely Holding Group, In charge of Geely‘s international business. Time: 28 April 2010 Location: Mr. Zhao Jie‘s office Selected Q&A: Q: How does Geely react to the EU’s high standard of safety and emission? A: The high standard in Europe is indeed a big challenge for us late-movers. However, we have investigated a lot on the R&D and have made some success. As our new motto cited, we will ? devote ourselves to produce the safest, most energy-saving and environmental-friendly cars in affordable prices?. In spite of the European standard, we will also investigate on those aspects. Besides, we have acquired Volvo, a company with best reputation on its safety and reliability. Volvo will bring us the experience and advanced technology in pursuing safety. Moreover, developing new energy is not only the trend of all car companies, but also all those energy-based industries. Under the support of our government, we are confident in making a breakthrough in this area. Q: Have you got any type or design which could achieve the standard? A: Yes we have. Most of the automotive types in our series-EC were produced based on the EU standard. Q: We know Geely acquired Manganese Bronze. How can you successfully acquire Volvo from Sweden and DSI from Australia? 28 International Business Environment II A: Firstly, I am grateful to the lead of our Party and the flourishing Chinese economy. China now attracts the whole world‘s attentions. As one of the best Chinese companies, Volvo has its own advantage. As we have emphasized, you could not acquire Volvo only by money. That‘s like a free marriage, not an obligatory acquisition. They have already accepted us. As a fast developing China-based company, we could give Volvo continuous capital support. Also, our promotion will make Volvo more famous in China. In terms of DSI, there are several parades of their employees due to the downsizing. The company is on the edge of bankrupt. People clap their hands to welcome us, because they see the hope. Besides, we have developed the technology of gearbox for about 6, 7 years, we are able to understand and accept the technology of DSI. Q: Will there be any problems caused by culture collision after the acquisition of them? A: I don‘t think it is a problem for us. Firstly, Volvo is an international company who will make decisions with a global vision. Although everybody loves their country, the asset of an international company is complex, especially after becoming a listed company. It depends on the structure of the asset. For instance, who do you think Toyota belongs to? The asset structure is global, in which Japanese capital accounts for only a small part. However, the culture of Toyota is still Japanese. We think the situation is similar to Volvo, whose culture will not be changed by us. Our relationship is more likely a brotherhood, rather than hierarchical relationship. What we need to do is communication, respecting and taking care of each other. Q: Will Geely transfer the entire Volvo product line to China? A: Automobile needs indigenous producing, R&D and sale, and more importantly, the maximum indigenous complement. So the current factories in Sweden and Belgian will be remained permanently. Q: What’s your opinion on the Malaysia event, I mean the broken of your corporation? 29 International Business Environment II A: Based on the evaluation of all aspects, including the demand, competition, income and wage level, even the political aspect itself; we believed Malaysia was our best choice to enter ASEAN. Malaysia had already accepted our contract; we even signed the contract witnessed by both governments‘ staff. You know Wu Bangguo, chairman of National People's Congress and Malaysia‘s head of Parliament have attended the ceremony. I don‘t know why and how they allowed themselves to make such a decision. They denied the unilateral contract which goes against WTO regulation. I don‘t want to talk about it anymore. Q: The Geely Panda is transformed to â€Å"Tobe† and being sold in Taiwan, it is said that the real purpose is the ASEAN markets. Can you explain it a little bit? A: Sure. Firstly, Taiwan has an advanced system in sales and service. We could improve our service, especially after-sale service. Secondly, Yulon Motor has abundant experience in overseas sales. This ? Tobe? has already being sold in Vietnam, and will be sold in Malaysia, Indonesia and Philippine. Q: What’s your future plan? A: Except ASEAN, we have run our business well in many markets. For instance, AIS Company from Ukraine, our best agency, sold out 8000 units for us in Ukraine and made ? Exterior? the most famous autotype in Ukraine. Considering the geographic advantage that Ukraine possesses, we will build CKD factory there, in order to expand to Russia and Eastern Europe. We also have signed a contract with a Mexico partner to build a 130-million-dollar all-around industrial centre. Our plan is, by 2015, build 15 produce centers abroad, and sell 2 million cars, in which 1. 3 million will be sold in overseas markets. Contacts: Address: Suite 15E, West Tower, 668 East Beijing Rd, Shanghai, 200001China Tel: 86-21-53086111 53086126 Fax:86-21-53085062E-mail:[email  protected] com 30 International Business Environment II