Its Time to Lower the Teacher to Student Ratio Essay -- Argumentative

It's Time to Lower the Teacher to Student Ratio   Ã‚   Growing up is hard enough to do in this day and age, but even more so when a small child's education is sacrificed. Today's classrooms, kindergarten through college levels, are experiencing a significant rise in the number of students in each class. This brings the teacher-to-student ratio to an unacceptable level. Teachers cannot effectively teach their students if there are too many in a single class. Therefore, it is extremely important for the United States' educational system to take an in-depth investigation into this situation and work towards a better way for our children to learn in a more focused environment. For our children's sake and for our future, we all must assist in finding a way to lower the teacher-to-student ratio.    The long and short-term benefits of reducing class size affect the students and the teachers and will continue into the future. By reducing a class to an average of eighteen students, teachers are able to spend more one-on-one time with each student. In fact, in a study done in the United Kingdom proved that, "Outcomes showed that in smaller classes the teachers interacted more effectively with the entire class, had more sustained interactions (25 seconds or more) with individual students, and required less time to manage individual student's routines" (Hargreaves, et al 123). Interactions, such as these, are especially important to those children in kindergarten through the third grade. With focuses on reading, writing, and math on children in this early stage of their education, research is showing that these children will "carry the effects of a small class with them throughout the remainder of their academic... ...ize on Teacher-Pupil Interaction in Elementary School Classes in England: Does Research Merely Confirm the Obvious? Paper prepared for the American Educational Research Association Annual Conference, Chicago, March 1997. ED 409 123. Molnar, Alex., et al. 1997-98 Results of the Student Achievement Guarantee in Education (SAGE) Program. December 1998. Milwaukee, WI: University of Wisconsin-Milwaukee. Shields, Patrick M., et al. Teaching and California's Future. The Status of the Teaching Profession: Research Findings and Policy Recommendations. A Report to the Teaching and California's Future Task Force. Santa Cruz, California: The Center for the Future of Teaching and Learning, 1999. 158 pages. U.S. Department of Education. Reducing Class Size: What Do We Know? Washington, DC: Author, 1998. 17 pages. http://www.ed.gov/pubs/ReducingClass/.   

Israel palestine conflict (final) Essay

History In 1917 the British government issued the Balfour Declaration, pledging it support for a Jewish national home in Palestine. About 300,000 Jews immigrated to Palestine, and Arab-owned land. The Arab majority feared a Zionist Plan to dispossess them and make Palestine a Jewish State. To appease the Arabs, who had staged several revolts, Britain issued the White Paper of 1939 (Bright, 1981, p. 67). It virtually cut off Jewish immigration and limited land acquisition by Jews. The Zionists objected, but nevertheless Jewish troops from Palestine supported British in World War II. Smuggling of Jewish immigrants became widespread, and there were bloody clashes between Arabs and Jews. Some Jews even conducted a terrorist campaign. The Great Britain referred their problem to the United Nations. Then the UN voted to partition Palestine between the Arabs and Jews, leaving Jerusalem in an international zone but then the Arab leaders rejected the plan, and fighting again broke out (Bright, 1981, p. 67). Until the Jewish leaders proclaimed the state of Israel and it beat off invasion by the neighboring Arab league countries. Then the Arabs were expelled from the captured areas, creating an enormous refugee problem. Tensions remained high and there were frequent border clashes until full scale war broke out in June, 1967. Many chaotic events happened years after it, not until they made a peace treaty in 1979. But then the tensions were again heightened in 1981 when the Israel annexed Golan Heights, and when the country invaded and occupied Southern Lebanon, in an attempt to expel the Palestinian guerilla forces there (Bright, 1981,p. 68). This conflict between the Palestine and Israel is still present today. I think for them to settle and resolved their problems of decades now, they should have a time to sit and talk things over. They should have an agreement which is not mediated by any organizations but them alone. They should talk on whatever things they want to do. They should agree on what to do about the Golan Heights and the other Borders that they are fighting for. They should also take time also to list all the things they want to achieve as two different countries minding the good of the citizens living there. I think the Arab Palestinians just don’t like the decisions made by the Israeli. They don’t respect the thinking or what would the Arabs would like to do, the Israeli could do things they want for their place but they should also consider the Arab Palestinians living their. Before they would make a move they should think if it is for the benefit of all or for themselves only. We can not blame the Arab Palestinians, for they just react on whatever the Israeli has decided to do. I think the Arab Palestinians just want fairness in their land. Reference: 1. Bright, John. A History of Israel, 3rd edition (Westminster Press, 1981).

Innocent drinks Company Essay

â€Å"Innocent drinks† is company that selling famous drinks in The United Kingdom which started by 3 Cambridge students in 1999. This is a drink that makes with 100 percent pure and natural fruit juice. Smoothies are the primary product of â€Å"Innocent drinks† and people are aware of it due to its healthy image. The company provides different product range and the distribution of channels covered most of the supermarkets, coffee shops and etc. For every year â€Å"Innocent drinks† will donate 10 percent of their profits to charity and this called The Innocent Foundation. This foundation has helped a lot of people. This report will analyses the process of â€Å"Innocent drinks† from 1999 to 2013. 1.Organization Structure There are many types of organization structure, for example, hierarchical structure, matrix structure and etc. For different structure, it has different result, management and objective. â€Å"Innocent drinks† was a small business in very competitive markets which is fit to entrepreneurial structure. The advantages of this structure are that the core team can make decisions quickly and for the members they can give some ideas to the core team and solve the problem that they are facing. â€Å"Innocent drinks† started from entrepreneurial structure and turned to hierarchical structure after few years. The reason of â€Å"Innocent drinks† turned into another structure is because they cannot satisfy their needs. They want to make themselves to be more famous and to earn more profit. â€Å"Innocent drinks† thinks that hierarchical structure has a good scale that can separate into different departments to achieve specialization. This can let the employees know what spot they are doing and they can exert their abilities. For example, in marketing they can help to promote the product or to think of a new design to attract the customers to buy it. When every department do well in the way they have to, it is easy for â€Å"Innocent drinks† to manage and achieve expected target like turnover. Ownership According to Finance maps of world ( 2012 ), â€Å"Business ownership means having the control over business enterprise and being able to dictate is functioning and operations.† From the beginning of â€Å"Innocent drinks† there were created by three Cambridge students who are Richard Reed, Adam Balon and Jon Wright. They used 500 pounds to set up this business with  partnership. The advantages of having a partnership are they can share the responsibility and operate for the common goal of making a profit. On the other hand, partnership lack of finance to expend so â€Å"Innocent drinks† decided to turn into private limited company in 2007 and it can separate legal identity, which can safeguard the operation of business and the company can debt more money from the bank it is because â€Å"Innocent drinks† can be a mortgage. Moreover, being a private limited company can have the purchase discounts and this can save some money for the company. Two years later, â€Å"Innocent drinks† has sold 18 percent of the company to Coca Cola which means that Coca Cola has the right to operate â€Å"Innocent drinks†. In 2013, Coca Cola has fully control â€Å"Innocent drinks† with 91 percent share. This cause that â€Å"Innocent drinks† has only a small minority holding. Hence, â€Å"Innocent drinks† turned into consultancy business which can only provide ideas and services. Growth Investopedia ( 2013 ) point out that â€Å"Growth is an increase in the capacity of an economy to produce goods and services, compared from one period of time to another.† Since the market change rapidly â€Å"Innocent drinks† has to create new type of product to cater the needs of the customers. From the beginning, â€Å"Innocent drinks† has only 3 recipes to almost 30 more over the years. The juice ranges of â€Å"Innocent drinks† started from the original taste and evolve to mixed taste. The product ranges is different, including kid, smoothie and thickies. For example, kid drinks are specially made to provide all the essentially vitamins to sustain their growth. In this product, â€Å"Innocent drinks† has made a different design and size to cater the needs children. 2.Reason of growth There are few reasons why â€Å"Innocent drinks† can be grown rapidly. Firstly, advertising. â€Å"Innocent drinks† has different advertisement on the television and for each advertisement it will represent their main product and shows that â€Å"Innocent drinks† never sweetened and never concentrated. The use of the advertisement is to build up a healthy image of â€Å"Innocent drinks† so that the customers will start considering to purchase this product. Secondly, PJ’s smoothies is the main rival of â€Å"Innocent drinks†. PJ’s smoothies has changed the image and increased price because it wants to be a  premier brand. While PJ’s smoothies increased its price, it lost some loyal customers at the same time. â€Å"Innocent drinks† might be cheaper than PJ’s smoothies, therefore, this cause more customers to choose â€Å"Innocent drinks†. Finance is another factor that enhances the growth of â€Å"Innocent drinks†. In 2004, the annual profit is 968000 pounds and it increases to 3066000 pounds in 2005. 3.Business strategy Business strategy is a business plan that takes place long-term in order to help achieve a specific goal or objective. Christina C (N.D.) The company analyzes the external and internal business environment before making an accurate decision. SWOT and PESTLE are the planning methods to evaluate the company. Strengths – â€Å"Innocent drinks† products are highly competitive because it made with 100 percent pure fruit juice and high quality and low price these are the advantages over the rivals. Weaknesses – distribution channels are small and weak brand reputation compare to other drink companies. Opportunity – â€Å"Innocent Drinks† serve the expectation of producing 100% fruit drinks and change the consumer tastes because the new products can attract their attention. Moreover, the company expands the market including target elderly. This is a unique area that preferable than other competitors. Threats – weather, the weather might affect the quality of the fruits and the transport and â€Å"Innocent drinks† has many rival, for example, PJ’s smoothies, Pepsi and Tropicana. Political – The government is very concerned about health and safety. â€Å"Innocent drinks† has to list out the ingredient on the product because it has to protect the consumer. Economic – Since inflation and the increase rate of unemployment will affect the confidence of consumers. Therefore, they tend to buy a cheaper brand instead of ‘Innocent Drinks’. Moreover, the economic condition also influences the company. For example, the high costs of purchasing ingredients and the taxation. Social – education, nowadays people are more concerned about their health therefore they will choose to buy a drink that is healthy for them, for example, 100 percent pure fruit juice and without any sugar. For population, â€Å"Innocent drinks† has not o nly targeted the adults and kids but also the elderlies. Furthermore, â€Å"Innocent drinks† will strengthen their brand through the advertisement, establish the healthy image in the society. Technological – affect the production level of  Ã¢â‚¬Å"Innocent drinks† because of the innovative technology. It leads to producing the juice efficiency and reduce the productive average costs by economies of scale. Moreover, the advance of technology can improve the communication flow which is beneficial of making accurate decision. Furthermore, the use of technology is helpful for ‘Innocent Drinks’ to recycle the bottles. Legal – minimum wage, for the company of â€Å"Innocent drinks† they have to sign a contract with every worker to protect their pay. Environmental – the trend of the world. The earth is facing global warming which makes â€Å"Innocent drinks† decided to recycle the plastic bottles to save the world

Finance Strategy

Strategic Corporate Finance Required Articles/Cases (Included in Harvard Course Pack) The following is a list of articles you will find when you register with HBR and purchase the Course Pack. Cost of Capital (CAPM, WACC): Case: Midland Energy Resources, Inc. : Cost of Capital (Brief Case), Joel L. Heilprin, Timothy A. Luehrman (Product number: 4129-PDF-ENG) Accompanying Student Spreadsheet: Midland Energy Resources, Inc. : Cost of Capital, Spreadsheet for Students, Joel L. Heilprin, Timothy A. Luehrman (Product number: 4140-XLS-ENG) Article: â€Å"What's Your Real Cost of Capital? James J. McNulty, Tony D. Yeh, William S. Schulze, Michael H. Lubatkin (Product number: R0210J-PDF-ENG) Article: â€Å"Applying the Capital Asset Pricing Model,† Robert S. Harris (Product number: UV0402-PDFENG) Article: â€Å"Does the Capital Asset Pricing Model Work? † David W. Mullins Jr. (Product number: 82106PDF-ENG) Article: â€Å"The Corporation's Cost of Capital and the Weighted-Aver age Cost of Capital,† Kenneth Eades (Product number: UV0389-PDF-ENG) Article: â€Å"Business Valuation and the Cost of Capital,† Timothy A.Luehrman (Product number: 210037PDF-ENG) Financial Accounting (Statement Analysis): Article: â€Å"Introduction to Financial Ratios and Financial Statement Analysis,† William J. Bruns Jr. (Product number: 193029-PDF-ENG) Article/Case: â€Å"An Overview of Financial Statement Analysis: The Mechanics,† Brandt Allen, Paul Simko (Product number: UV0911-PDF-ENG) Case: Financial Statement Analysis (Identify the Industry), Graeme Rankine (Product number: TB0069PDF-ENG) International: Case: Groupe Ariel S.A. : Parity Conditions and Cross-Border Valuation, Timothy A. Luehrman, James Quinn (Product number: 4194-PDF-ENG) Accompanying Student Spreadsheet: Groupe Ariel S. A. : Parity Conditions and Cross-Border Valuation, Timothy A. Luehrman, James Quinn (Product number: 4196-XLS-ENG) Article: â€Å"Cross-Border Valuation,† K enneth A. Froot, W. Carl Kester (Product number: 295100-PDF-ENG) Mergers and Acquisitions: Article: â€Å"The New M&A Playbook,† Clayton M.Christensen, Richard Alton, Curtis Rising, Andrew Waldeck (Product number: R1103B-PDF-ENG) Net Present Value: Book Chapter: â€Å"Net Present Value and Internal Rate of Return: Accounting for Time,† (Product number: 5245BC-PDF-ENG) Strategy & Innovation: Article: â€Å"Blue Ocean Strategy,† W. Chan Kim & Renee A. Mauborgne (Product number: R0410D-PDFENG, 2004) Article: â€Å"The Five Competitive Forces That Shape Strategy,† Michael E. Porter (Product number: R0801EPDF-ENG) Article: â€Å"Innovation Killers: How Financial Tools Destroy Your Capacity to Do New Things,† Clayton M. Christensen, Stephen P. Kaufman, Willy Shih (Product number: R0801F-PDF-ENG)

Corporate Governance Essay

ABSTRACT This paper examines whether the remuneration of the Chief Executive Officer position in Hong Kong public firms is affected by board composition, given the influence of family control on the boards of many Hong Kong companies. It is hypothesized that I) in family-controlled boards, Chief Executive Officers receiver higher compensation and II) Chief Executive Officers in family-controlled boards serve as Chief Executive Officer positions longer. In family-controlled boards, corporate governance is of very high importance as the independent non-executive directors can exert less influence over the board, compared to non-family-controlled boards (â€Å"dispersed boards†). Keywords: Board composition, Remuneration, Corporate Governance. 1.INTRODUCTION The economic turmoil in Asia in 1997 has led to a wider recognition of the importance of corporate governance. In line with global trends towards higher standards of corporate governance, the duties and liabilities of the directors of the listed companies have therefore become more stringent. It follows that many corporate governance mechanisms designed to monitor board members may be less effective for family-owned and family-controlled firms. However, to attract outside investors, family-owned and family-controlled firms tend to encourage greater independence and monitoring from the board. For the purposes of the study, family-owned and family-controlled are used interchangeably. The reason is that actual family ownership is difficult to ascertain due to various shareholdings and special purpose vehicles that are used, and cannot be deduced from annual reports. Thus, in this study we classify family-control and family-ownership when the board is made of a majority of related family members as a â€Å"family-controlled board†. When it is not, we classify it as a â€Å"dispersed board†. In practice, there are instances where the family owns the majority of a company but comprise of a minority of the board, and it is possible that the family is able to exert influence via other avenues, however, this study will not be examining such. Family-owned firms are common throughout Asia. Studies show that, family-owned firms hold more than 20 percent of the equity of listed companies in Asia, and more than 60 percent of the listed companies have connections with family-owned groups (Bebchuk & Fried, 2006). Family-owned businesses represent the predominant form of listed companies in Hong Kong (Standard & Poor’s, 2002). Such family ownership structure implies the strong influence of dominant shareholders and provides limited voice for minority shareholders. Compared to the Anglo-American environment, where ownership blocks are less concentrated but institutional investors are more prevalent, in Hong Kong, there is less of a culture for non-executive directors or minority shareholder activists to challenge. Variations in ownership structure may lead to differences in the nature of agency conflicts, the roles of directors may vary in accordance to the ownership structure. For family-owned firms, Shleifer and Vishny (1997) argue that the primary agency conflict is between a family owner and non-family owners. Meanwhile, for widely held firms, Berle and Means (1932), and, Jensen and Meckling (1976) argue that the primary agency conflict is between executives and shareholders. As a consequence, tying remuneration to performance of executives may prove the most efficient way to mitigate this agency conflict. To date, a vast of literatures published in recent years show the growing recognition of influences of family-owned firms and executive remuneration on corporate governance. Many studies have tended to focus on the use of remuneration contracts to align interests of executives with owners in family-owned firms. The rise in executive remuneration in recent years has been the subject of public criticism, which further intensified corporate governance scandals. Therefore, the question whether a correlation exists between remuneration and family-control in board composition at Hong Kong-listed companies. 2.OBJECTIVES In 1994, Hong Kong Exchanges and Clearing Limited introduced rules that require listed firms to disclose the remuneration of directors. Before 2004, there was no requirement to disclose the names and remuneration of directors (Cheng & Firth, 2005). The Disclosure of Financial Information rule under Hong Kong Exchanges and Clearing Limited’s Listing Rules was amended on 31 March 2004 to require full disclosure, on an individual and named basis, of directors’ fees and any other reimbursement or emolument payable to a director. In addition, Hong Kong Financial Reporting Standard 2 requires listed firms to disclose directors’ share-based remuneration. The Code on Corporate Governance Practices forms part of the Listing Rules and came into effect on 1 January 2005. According to the Code on Corporate Governance Practices, Hong Kong’s listed firms should be overseen by an effective board, which should assume responsibility for the leadership and control of the listed firm, and the members of which should be collectively responsible for promoting the success of the firm by directing and supervising its affairs. Directors should make decisions objectively in the best interests of the firm. In regards of remuneration policy for firms’ directors, the Code on Corporate Governance Practices requires the disclosure of information related to the firm’s directors’ remuneration policy and other remuneration-related matters. There should be a formal and transparent procedure for setting policy on executive directors’ remuneration. The Chief Executive Officer, a director in the board of company, will hence have his/her full remuneration disclosed. It is recommended that remuneration should be set at a level sufficient to attract and retain directors of the caliber required to run the company successfully, but companies should avoid paying more than is necessary. However, it is argued that many corporate governance mechanisms designed to monitor board members may be less effective for family-owned firms. However, to attract outside investors, family-owned firms tend to encourage greater independence and monitoring from the board. In Hong Kong, there are quite a number of listed companies have a high concentration of family ownership. It is common for the top executives of family-owned firms in Hong Kong to be family members. The rise of remuneration of family executives in family-owned firms has been the subject of public criticism. Recognizing this, the purpose of this research is to find out whether there is any relationship between family-board-control of firms and remuneration of Chief Executive Officers. To summarize, this study revolves around the following major objectives. †¢ To test whether there are significant differences in Chief Executive Officers’ remuneration for family-controlled and non-family-controlled firms (specifically firms with family-controlled boards and firms without family-controlled boards); †¢ To find out whether â€Å"Family Chief Executive Offices† (cases where the Chief Executive Officer are family members of the family-controlled boards) are awarded excessive compensation, compromising standards of corporate governance; †¢ To examine the tenure of Chief Executive Officers for family-controlled firms vs non-family-controlled firms, given that there may be differences in the board’s ongoing approval and demand of the results delivered by the Chief Executive Office; and †¢ To test whether there are significant differences in corporate governance structure of family-controlled and non-family-controlled firms. 3.LITERATURES REVIEW, HYPOTHESIS DEVELOPMENT 3.1 Agency theory It is commonly acknowledged that ownership structure, the basis of corporate governance, is important to the overall performance of firms. While there are a large number of literatures discussing ownership structure, agency theory is frequently cited as a foundation. In modern corporations, the separation of ownership and control leads to agency conflicts that can be alleviated through various corporate governance mechanisms (Fama and Jensen, 1983). As one such mechanism, compensation schemes are designed to provide incentives that align the behavior of agents to act on behalf of principles (Jensen and Meckling, 1976). This relationship between executive compensation and firm performance has received considerable attention from the general public and academics. One of the issues in the field of management is the impact of family influence (Mishra et. al., 2001; McConaughy et. al., 1998) and corporate governance on the value of a firm (Khatri et al., 2001; Kwak, 2003; Black et al., 2003). There are various studies in diverse areas like accounting, economics, finance, law and management have been conducted to study such impact (Mishra et al., 2001; Kwak, 2003; Blacket al., 2003; Andersen and Reeb, 2003). These studies have resulted in interesting and useful observations. According to Alchian and Demsetz (1972), the principal agent problem comes from hidden action due to asymmetric information. The essence of a firm is that, it permits people to work as a team. It is the cooperation of a team that leads to a firm’s output. Thus, the agency problem inevitably arises in corporate governance. According to Jensen and Meckling (1976), agent problem arises from the conflict of interests between shareholders as the principals and the executives as the agents. Consequently, residual control rights fall into the hands of management instead of the residual cash flow claimants. As a result, the sum of monitoring expenditures be incurred by the principal, bonding expenditures incurred by the agent, and the value of the lost residual borne by the principal are included as the cost of agency. In general, when ownership of a firm becomes more dispersed, the agency problem will be deteriorated due to the inability of the relatively small shareholders to monitor the behavior of management. The monitoring of managers by shareholders is also weakened by free-rider problem. To mitigate the problem of agency, Ang (2000) and Denis and Sarin (1999) suggested the shareholding of management to be increased in order to make the executive a significant claimant. An inverse correlation exists between the dispersed ownership and firm performance (Berle and Means, 1932), because executives’ interests do not coincide with the interest of shareholders so that corporate resources are not used for the maximization of shareholders’ wealth. This view has been supported by many scholars. Shleifer and Vishny (1986), McConnell and Servaes (1990), and Zingales (1995) found a strong positive relationship between ownership concentration and corporate performance. In transitional economies, Xu and Wang (1999) and Chen (2001) found a positive relationship between actual firm performance and ownership concentration for a sample of listed Chinese companies. 3.2Ownership Structure It is common in Hong Kong, that ownership structure is characterized by single dominant owners (Chau & Leung, 2006). A report of the Corporate Governance Working Group of the Hong Kong Society of Accountants in 1995 indicated that a high concentration on family-controlled listed firms is highly entrepreneurial and opportunistic in their business strategies, however, the report also indicate that these firms with single dominant owners lack resources and corporate culture to maintain strong internal corporate control. The 2001 Review on Corporate Governance by the Hong Kong Standing Committee for Corporate Law Reform, as well as a report from Standard & Poor’s, indicated that family ownership structures present particular challenges. Theoretically, there is a major puzzle regarding the role of family in large firms (Bertrand & Schoar, 2006; Villalonga & Amit, 2006). In family-controlled firms, threatening factors may negatively influence the firms’ value (Demstez, 1983; Demstez and Lehn, 1985). Table 1 as below lists positive and negative factors affecting the relationship between family control and firm value. It shows that there is still difference of opinion among researchers on this topic of importance. 3.3â€Å"Family† Chief Executive Officers In this study, whether a person belonging to the family acts as a Chief Executive Officer is taken into account. We classify family-control and family-ownership when the board is made of a majority of related family members (â€Å"family-controlled board†). When it is not, we classify it as a â€Å"dispersed board†. Family Chief Executive Officers have substantial stockholdings of 5 percent or more (Daily & Dollinger, 1993), with such given bargaining power, can be expected to influence the size and structure of their remuneration packages to their own benefit. Thus, for the purposes of this study, Chief Executive Officers with stockholdings of less than 5 percent are not counted as â€Å"Family Chief Executive Officers†. There are differing opinions on whether such Family Chief Executive Officers have higher or lower remunerations at such family-controlled firms. Some believe that such Family Chief Executive Officers are receiving above-average compensation due to the family-controlled board, as well as their strong ability to influence remuneration committee. Oh the other hand, others take the opposite view and see that Family Chief Executive Officers should be receiving below-average compensation. There is several reasons for this expectation. First of all, both anecdotal (Applegate, 1994; Kets de Vries, 1993) and empirical (Allen & Pamian, 1982; Gomez-Mejia et al., 2001; Schulze et al., 2001) evidence suggest that incumbents with family ties to owners enjoy high employment security. As argued by Beehr (1997), the Family Chief Executive Officer inherently plays two overlapping and interdependent roles: a work role as steward of the company, and a non-work role as fulfillment of family obligations. In reciprocity for this role duality, the Family Chief Executive Officer is rewarded with a relatively assured job (Allen & Pamian, 1982; Kets de Vries, 1993; Gomez-Mejia et al., 2001). Moreover, some literatures suggested that evaluators are more likely to make positive performance attributions to employees when there are emotional ties between monitoring and those being judged (Cardy & Dobbins, 1993). It is expected that in family-controlled firms, board members in their role as monitors may be less inclined to attribute disappointing results to the Family Chief Executive Officer, giving the benefit of the doubt to the incumbent when interpreting ambiguous performance data. Agency theory suggests that there are inherent conflicts between shareholders and executives. Applying agency theory’s logic, the above scenario suggests that in family-controlled firms, risk adverse agents would trade higher job security for lower earnings if they are related to principals. Family Chief Executive Officers mitigate usual agency costs because of their aligned interests with the owners (Anderson & Reeb, 2003). The information asymmetry problem in agency relationships may also be reduced given the close ties between Family Chief Executive Officers and the owners. Since they hold high ownership stakes, Family Chief Executive Officers have sufficient incentives to place family welfare ahead of personal interests, thus may perform better than firms with non-family Chief Executive Officers. Barney (2001) suggested that appointing family members as Chief Executive Officers may be beneficial. Tradition, loyalty, and bonding relationships determine how resources are deployed in family firms. Family Chief Executive Officers build common interests and identities (Habbershon & Williams, 1999) and play a dual role by being both owners and executives (Chang, 2003; Yiu, Bruton, & Lu, 2005). Through social relationships with managers and employees, Family Chief Executive Officers may help to obtain intangible resources such as goal congruence, trust, and social interactions, providing valuable, unique, and hard-to-imitate competitive advantage (Chu, 2011; Liu et al., 2011; Luo & Chung, 2005). The Code on Corporate Governance Practices recommends remuneration committee to seek advice from the Chief Executive Officer on the matter of directors’ remuneration. Executives in firms controlled by a large shareholder receive more compensation for performance, than executives in firms lacking a controlling owner (Gomez-Mejia et al., 1987). Mehran (1995) examined the relationship between executive remuneration, ownership structure and firm performance. The results indicate that firms, which have more outside directors, have a higher percentage of executive remuneration in equity-based form. Moreover, the percentage of equity-based remuneration is inversely related to the outside directors’ equity ownership, i.e., the executive’s equity-based remuneration rose if the outside directors’ owned less of the company, and vice-versa. Next, Mehran (1995) turned to firm performance, and its relationship to executive remuneration and ownership structure. He used Tobin’s Q and return on assets as measures of firm performance. He found firm performance to be positively related to the percentage of executive remuneration that is equity-based. However, Mehran (1995) no relationship between firm performance and ownership structure. He concluded that the results support the notion that executive remuneration should be tied to firm performance. There is a vast amount of literature on turnover of the Chief Executive Officer position (Furtado and Karan, 1990; Kesner and Sebora, 1994; Finkelstein and Hambrick, 1996; Pitcher et al., 2000). However, according to Finkelstein and Hambrick (1996), the relationship between remuneration and turnover has not been subjected to rigorous empirical examination, even given the emphasis on retention as a justification for high remuneration of Chief Executive Officer. The following hypotheses are framed: Hypothesis 1: In family-controlled boards, Chief Executive Officers receive higher compensation. Hypothesis 2: Chief Executive Officers in family-controlled boards serve as Chief Executive Officer positions longer. 3.4Board Composition The role of the board is expected to represent shareholders, provide strategic guidance to and effective oversight of management, foster a culture of good governance, and promote a safe and healthy working environment within the company. In accordance to Hong Kong Stock Exchange Listing Rule 3.10, the board of directors is required to have at least three independent non-executive directors. The presence of â€Å"truly† independent non-executive directors in the corporate governance regime is seen as one way of mitigating agency problem associated with concentrated family ownership. In family-owned firms, given the influence of family control on the remuneration and performance relationships exists, where the majority of shares are in the hands of family members, under this circumstance, the executive and risk-bearer functions are merged and more of the wealth consequences of the executives’ decisions are internalized. In other words, there is less separation of ownership and control and thus lowering agency costs, which in turn leads to less cost for monitoring by outside directors. Therefore, firms closely controlled and managed by family members are expected to use lower proportion of outside directors compared with firms with disperse ownership. In widely held firms, with ownership dispersed among many investors, investors are often small and poorly informed to exercise even the control rights they actually have. Moreover, the free-rider problem faced by individual investors makes them uninterested in expending effort to learn about the firms they have financed, or even to participate in the governance (Shleifer and Vishny, 1997). As a result, the larger degree of separation of ownership and control in widely held firms leads to greater conflicts. The use of outside directors by widely held firms is expected to be more. 3.5Remuneration Committee In 1999, remuneration committees were uncommon in Hong Kong, with only few firms reporting their existence (Cheng & Firth, 2005). Since 2006, Hong Kong Stock Exchange proposes a rule to require issuers to set up a remuneration committee, with the committee chairman and a majority of the members being Independent Non-executive Directors. In family-owned firms, the positions of the Chief Executive Officer are usually held by family members, who can influence the level of remuneration paid to directors. The Code on Corporate Governance Practices recommends remuneration committee to seek advice from the Chief Executive Officer on the matter of directors’ remuneration. The Code on Corporate Governance Practices recommends that the majority of remuneration committee members be Independent Non-executive Directors. The presence of Independent Non-executive Directors on the remuneration committee is supposed to be used as monitoring mechanism that prevents excessive remuneration for executive directors (Basu et al., 2007), including that of the Chief Executive Officer. The role of independent non-executive directors and large institutional shareholders becomes crucial to curtailing the possible self-serving behavior of top managers (HKSA, 2001). Studies of firms in other countries show conflicting results on the relationship between remuneration and remuneration committee. Some findings show that remuneration committees tend to reduce remuneration, whereas others report the opposite (Conyon & Peck, 1998; Ezzamel & Watson, 1998). However, in practice it is highly likely that the Chief Executive Officer has some influence over the compensation decision (Murphy, 1999). An important question relating to the composition of remuneration committee concerns the ideal combination of outsiders and insiders. Insiders may face distorted incentives due to their lack of independence from the Family Chief Executive Officer (Bushman et al., 2004). 3.6 Components of Remuneration The basic components of remuneration of Chief Executive Officer are similar, however, the relative level and weights on the components differ (Abowd and Kaplan, 1999, and Bryan et al., 2006). Generally, remuneration of Chief Executive Officer can be divided into four basic parts: a base salary, an annual bonus which is tied to some accounting measure of company performance, stock options, and long-term incentive plans, such as restricted stock plans and multi-year accounting-based performance plans. †¢ Base salary: is the fixed part of remuneration of Chief Executive Officer, causing risk-averse executives to prefer an increase in base salary rather than an increase in bonuses. Most components of remuneration are specified relative to base salary. †¢ Bonus: in addition to the base salary, most companies offer their executives an annual bonus plan based on a single year’s performance. The purpose of such bonuses, as well as options, is to align the incentives of the Chief Executive Officer with that of the shareholders. †¢ Stock options: are contracts, which give the owner the right to buy shares at a pre-specified exercise price. Stock options reward stock price appreciation, not total shareholder return, which includes dividends. In this study, stock options are excluded, as full details of such information would not be retrievable from annual reports. †¢ Other forms of compensation: restricted stock to be received by executives, it is restricted in the sense that shares are forfeited under certain conditions, which usually have to do with the longevity of employment. Many companies also have long-term incentive plans in addition to the bonus plans, which are based on annual performance. Top executives routinely participate in supplemental executive retirement plans in addition to the company-wide retirement plans. Most executives have some sort of severance arrangement. Finally, executives often receive benefits in the form of free use of company cars, housing, etc. Based on the various conceptual and empirical evidences presented above, this study aims to understand whether the remuneration of a Family Chief Executive Officer is influenced by the board composition, i.e. whether it is family-controlled or not. This ties into the original Hypothesis 1, thus, the further hypotheses is framed as follows: Hypothesis 3: The higher the proportion of independent non-executive members on the board of directors at family-board-controlled firms, the lower the Chief Executive Officer remuneration.

Selection of Consultants Benefits Administration Operations Thesis Proposal

Selection of Consultants Benefits Administration Operations - Thesis Proposal Example 2.0 Project Terms of Reference 2.1 Introduction and Background LRH Financial is a global investment management firm. The company has been a pioneer in providing new and innovative investment management services to our clients worldwide. 2.2 Project Objective Employees are the most important resource an organization has and LRH recognizes the importance of providing employee well-being by offering state of the art benefits package to our employees. The objective of this project is to update Benefits Administration of LRH. This will improve and enhance the benefits package that our employees obtain from the company. 2.3 Project Scope LRH likes to outsource the following benefits administration operations to a vendor who can provide all of most of the following services, preferably for 5 years. The broad scope of this project covers the following (Wayne State University, n.d.): 2.3.1. Medical and Dental Insurance - Company offers a variety of medical insurance services like hospitalization expenses etc., to employees and their dependants. The vendor will manage the medical insurance records and claims. 2.3.2. Life Insurance - The vendor will develop procedures for maintaining life insurance files and systems for the company's employees. 2.3.3. Retirement Plan - Retirement allowances and severance pay etc. will be calculated and maintained by the vendor for the company. 2.3.4. Tuition Assistance Plan - The company offers tuition assistance to its employees' children. The records and related calculation systems will be operated by the vendor observing the company's directives. 2.3.5. Online access to Benefits Administration for self-service functionality - A self-service function will be available on the company's intranet where all...The objective of this project is to update Benefits Administration of LRH. This will improve and enhance the benefits package that our employees obtain from the company. LRH likes to outsource the following benefits administration operations to a vendor who can provide all of most of the following services, preferably for 5 years. The broad scope of this project covers the following (Wayne State University, n.d.): 2.3.1. Medical and Dental Insurance - Company offers a variety of medical insurance services like hospitalization expenses etc., to employees and their dependants. The vendor will manage the medical insurance records and claims. 2.3.4. Tuition Assistance Plan - The company offers tuition assistance to its employees' children. The records and related calculation systems will be operated by the vendor observing the company's directives. 2.3.5. Online access to Benefits Administration for self-service functionality - A self-service function will be available on the company's intranet where all the employees can have secured access to their benefits administration records. They should also be able to communicate with relevant vendor personnel to resolve any queries they might have.

BUSINESS ANALYSIS - JOHN LEWIS PARTNERSHIP Essay

BUSINESS ANALYSIS - JOHN LEWIS PARTNERSHIP - Essay Example Initially started as a draper store in Oxford Street London, the firm has been able to make critical progress over the period of time by making acquisitions of strategic nature. The very structure and organization of the firm therefore provides it a unique identity and organizational culture which has allowed it to develop and grow over the period of time. A closer analysis of the financial performance of the firm would suggest that it has been able to continuously register an increase in its profitability and revenues. Such consistent performance of the firm therefore indicates that it is one of the leading businesses with stable revenues and profitability. This report will analyse the strategic position of John Lewis Partnership, making direct reference to the key challenges and opportunities for the organistaion and the capabilities which John Lewis can utilise in addressing these issues besides critically evaluating the current strategy of John Lewis and comment on their appropri ateness to the competitive position. A Brief History of John Lewis Partnership John Lewis Partnership started as a draper store in Oxford Street, London in 1864 by John Lewis. The store later on went on to become the departmental store when Mr. Lewis started to purchase other stores and started to expand his business. The store thrived on the promise that the prices will be low as long as long as the prices of the neighborhood stores are low. This strategy seems to have worked for the store and store soon started to grow and generate higher levels of sales. In 1905 John Lewis purchased Peter Jones and made a change towards becoming a departmental store. It was during 1914 that John Lewis gave control of Peter Jones to his son who started the store on more modern footings and implemented new organizational changes including making employees as partners in the firm. 1 During 1955, firm opened first Waitrose store and the management also changed from Lewis family to Bernard Miller. How ever, after the retirement of Miller, the management of the firm was transferred back to the family. Management again changed during 1990s when Peter Lewis retired as Chairman of the firm. John Lewis’s major strategic change occurred with the launch of its online store during 2001 and the establishment of Ocado. Ocado was opened in order to deliver the grocessories purchased on Waitrose. (Wilson & Reynolds, 2006). John Lewis is now in the top 10 list of retailers in the country with more than 30 John Lewis Stores and 246 Waitrose supermarkets.2 SWOT Analysis SWOT Analysis of the firm is as follows: Strengths 1. Rich history of successfully operating for more than 200 years. 2. Overall organizational structure and democratic nature of the firm. 3. High level of employee motivation because of employee partnership in the business. (Russell, 2010). 4. Large and diversified network of stores and web stores. 5. Efficient and effective supply chain management system. 6. High brand r ecognition and value in the eyes of customers Weaknesses 1. Only caters to the mid and high end customers. 2. Privately owned partnership therefore restricting itself to procure cheaper funds from capital markets. 3. Largely concentrated into UK with no or very little presence abroad. 4. Too few departmental stores across the country i.e. less than 30 considering 200 years history of