Examining Family Business Corporate Governance

Examining Family Business Corporate Governance This dissertation sets out a study of the family businesss corporate governance, addressing the relationship between the owners and the management. Family businesses constitute a wide spectrum of enterprises, from small family owned and managed companies to a large internationally operating family controlled corporations. There are several definitions illustrates the family owned businesses, however the majority agree that Nebauer Lank definition illustrate the family business in a simple way and puts it as A firm can be regarded as a family business if a given family holds the voting control of the firm (Nebauer Lank, 1998). This dissertation argues that, given the duality of the economic and non-economic goals family firms pursue and the complexity of the stakeholders structure, family firms need governance structure that matches the complexity of their constitutes stakeholders. According to that a better research and empirical understanding as how family firms are governed is needed. In this study the focus will be on assessing the level of understanding of the corporate governance concept overall and the codes provided by the Capital Market Authority (CMA), the Capital Market Authority in Oman focusing on strengthen the family owned business by incentives them to go public. The CMA is just recently in the process to create a corporate governance to help the Family business to be prepared to do so. In this study, the focus will be to create an understating and help to create a better code to help the family business sustain in the future. On the other hand there will be an evaluation of the agency theo ry and how the family owners acceptance of this model. Furthermore a research by McKinsey quarterly shows that 95 per cent fails to succeed the generation due to the lacking of succession planning and roles defining, therefore the dissertation will be evaluating the practice and preparation if any on how the existing owner prepare companys succession planning rules and codes to handover their responsibilities to their successors. In this study the focus will be on the family businesses in Sultanate of Oman, a country in the Arabian Gulf with a fledgling capital market. Oman has made significant efforts to improves the level of corporate governance, particularly in the listed companies and now the capital market would like to expand its corporate governance codes to the family owned businesses to strengthen the chances of the sustainability of its growth. Aims And Objective This dissertation will focus on the unique corporate governance challenges that any family business faces and propose structures and practices that can mitigate these challenges and ensure the viability of the business. The detailed objectives that guide the dissertation process are: To review and analyze relevant theoretical, and other, streams of literature that focus on corporate governance and family business Analyzing the practice of the existing code of corporate governance that applied by the CMA and if it fit to be implemented in the family business companies. Asses the ownership structure and polices in the companies and testing the theory of the ownership and control separation. Asses the long term planning by the company owners and how the successor is been appointed. To assess the significance, reliability, and validity of the results; to discuss the theoretical, empirical, and practical implications of the findings; to assess the limitations The impact of corporate governance in family businesses performance. Scope of the dissertation The present study addresses the governance of family firms, focusing on the nature of various governance mechanisms and how they affect firm performance. Family businesses provide a fruitful research context to study corporate governance due to lack of governance research in the area and the distinctive characteristics of family firms. The family business context, especially, enables the study of how aspects of formal and social control vary according to characteristics of ownership structure. Research Approaches and method The methods to gather the required data will be a qualitative, where the participations will be selected based on their history and age of the company in practice. The research will be analyzing their policies and corporate governance practice. Interviews will be placed with the owners and senior managers of the companies to get all the data required for the findings and results. Structure of the dissertation Chapter 1: Introduction This chapter included the background of the study, the aim, purpose of the study, research questions and limitation of the study and it will present the structural framework of the study. Chapter 2: Literature Review This chapter will review the historical perspective, theories and related studies of corporate governance, family business and related theories to corporate governance. This chapter will include the secondary data which will be used in discussing the findings. Chapter 3: Methodology Chapter describes the methodology and procedures that were used to carry out this study. Furthermore, this chapter will review the population and participants of the study, instruments and data collection procedures. Chapter 4: Results and Findings This chapter will present the data and findings related to the research questions Chapter 5: Data Analysis and Discussion This chapter presents the data analysis and the discussion of the finding. Chapter 6: Conclusion In this chapter, the researcher will present a summary of the study and the findings, conclusion and recommendation. The structural framework of the dissertation is illustrated in Figure 1. Figure Literature Review Introduction A growing number of studies have been done on the family business ownership and management separation or combination in the past few years and what is the linkage between the performance and these two elements. In this chapter we will be presenting the theories and the studies that are related to it and selecting a frame work that will be the base of the evolution of the practice we examine in the family businesses. Family Owned Business Family enterprises or family owned businesses represent the oldest form of businesses in the world. The family owned businesses constitutes more than 70 percent of all business in most of the third world countries and in some developed countries (IFC, 2009). In the IFC research Family Businesses Corporate Handbook shows that family owned businesses are the higher contributor in any country growth in terms of economic development and employment. In Spain, for example, about 75 percent of the businesses are family-owned and contribute to 65 percent of the countrys GNP on average. Correspondingly, family businesses contribute to about 60 percent of the cumulative GNP in Latin America (IFC, 2009). in addition to, accordingly to recent researches that 95% percent of employment in the Middle East and especially in the Arabian Gulf Peninsula is in the family owned businesses. There are several definitions that explains the family business corporations, the IFC define it as a company where the voting majority is in the hands of the controlling family; including the founder(s) who intend to pass the business on to their descendants, in another words is A business actively owned and/or managed by more than one member of the same family. There are two systems that control the family businesses; which are the family system, and the management system, the two system overlap due to the dual roles that any family member take, like a family member may be a manger or an employee in the business and here where the conflict arise. The family system is based on emotional, love and care. The family system is based on the relationship in the family and they take most of these values to the business. Where in the business system is the professional values are the edge of the decision. (Managment Resources, 2010) To define a family business need to understand the environment from one to another, here are list of family business definitions that made by researcher past the year that cover the family business from different view but reserving the concept. Table Family business Definitions A company is considered a family business when it has been closely identified with at least two generations of a family and when this link has had a mutual influence on company policy and on the interests and objectives of the family. (Donnelley, [1964] 1988: 428). Controlling ownership rested in the hands of an individual or of the members of a single family. (Barnes Hershon, 1976: 106). Organizations where one or more extended family members influence the direction of the business through the exercise on kinship ties, management roles, or ownership rights. (Tagiuri Davis, [1982] 1996: 199). It is the interaction between the two sets of organization, family and business, that establishes the basic character of the family business and defines its uniqueness. (Davis, 1983: 47). What is usually meant by .family business.is either the occurrence or the anticipation that a younger family member has or will assume control of the business from an elder. (Churchill Hatten, 1987: 52). We define a family business as one that will be passed on for the family.s next generation to manage and control. (Ward, 1987: 252). A business in which the members of a family have legal control over ownership. (Lansberg et al., 1988:2). A family business is defined here as an organization whose major operating decisions and plans for leadership succession are influenced by family members serving in management or on the board. (Handler,1989b: 262). Firms in which one family holds the majority of the shares and controls management. (Donckels FrÃÆ' ¶hlich,1991: 149). A business where a single family owns the majority of stock and has total control. Family members also form part of the management and make the most important decisions concerning the business. (Gallo Sveen, 1991: 181). A business firm may be considered a family business to the extent that its ownership and management are concentrated within a family unit, and to the extent its members strive to achieve, maintain, and/or increase intraorganizational family-based relatedness. (Litz, 1995: 78). A business governed and/or managed on a sustainable, potentially cross-generational, basis to shape and perhaps pursue the formal or implicit vision of the business held by members of the same family or a small number of families. (Sharma et al., 1997: 2). A family enterprise is a proprietorship, partnership, corporation or any form of business association where the voting control is in the hands of a given family. (Neubauer Lank, 1998: 8). Family businesses share some common characteristics, largely due to the interacting and overlapping domains of family, ownership and management (Tagiuri Davis, 1982). Family firms have a complex stakeholder structure that involves family members, top management, and a board of directors. Family members, who are often significant owners, usually play multiple roles in managing and governing the firm (Tagiuri Davis, 1982). This involvement promotes loyalty and also commitment to long-term value creation (Dyer Handler, 1994) and reduces problems that arise from separation of ownership and control, as experienced in large, public corporations (Jensen, 1989). Also, family businesses may enjoy a competitive advantage due, for example, to remaining entrepreneurial in character and having a strong sense of responsibility to society (Neubauer Lank, 1998), fast verbal and nonverbal communication, aided by a shared identity and common language of families (Gersick, Davis, McCollom Hampton Landsberg, 1997), family members. Business expertise gained during early childhood onward (Kets De Vries, 1996), and a strong organizational culture contributing to external adaptation and internal integration (Schein, 1983). However, the familys involvement in governing the firm may induce a focus on business and non-business goals, possibly leading to inefficiency (Schulze, Lubatkin, Dino Buchholtz, 2001). If the owner family is not regularly informed about the companys affairs, differing visions of the companys future may develop between management and the family. The resulting feuds between family factions may distract managements attention from value-creating activities and so reduce their commitment to strategic decisions. Owner-managers also may act opportunistically by satisfying their own needs at the expense of the companys performance and long-term survival. Entrenched owner-managers may not share their powers with others, especially not with the companys board. Furthermore the common characters of all family businesses are illustrated in the diagram below. Figure The individual represent the family members who are directly involved in daily bases with the operation, the family symbolizes the whole family where in some family businesses called the family counsel and the management dimension represents the family managers and non-family managers. McKinsey quarterly stated in the report keeping the family in business that only 5 percent will continue to create shareholders value after the third generation. Moreover; the IFC also mentioned in the family business hand book, while the third generation takes over; 95 percent of all family businesses will not survive the ownership around. These consequences might be a result to the lack of commitment and proper business education of handling the business demands. In addition, the survival of family firms is often challenged by dictatorial rule, resistance to change, lack of professionalism in management capabilities, confusion in family and business roles, rivalry and enlarged human emotions among family members, conflicts between interests of the family and the business, and a low rate of investment in business development (Donnelley, 1964; Gersick et al., 1997; Kets De Vries, 1993). All the definitions are focusing on the shareholders and their power in voting and management and these two points are actually the core strength and weaknesses of any family business. However there are other dimensions that a family business can be measured of its strength and weaknesses like: Culture Ownership and governance Succession planning Family involvement This dissertation will be reflected somehow in the culture dimension due to the strength of the factor here in the Arabian Gulf Countries and Oman. Different researcher came up with different definitions of the family business; however, the definitions imply six themes for clarifying the boundaries of the domain of family business: (1) ownership, (2) management, (3) generational transfer, (4) the familys intention to continue as a family business, (5) family goals, and (6) interaction between the family and business. These themes are similar to those found in the extant literature. For example, Handler (1989a) categorized family business definitions under four headings: ownership and management, interdependent subsystems, generational transfer, and multiple conditions. The extant literature on family business research has largely neglected the definition of the family itself. By modifying Winter.s, Fitzgerald, Heck, Haynes Danes (1998) definition of the family, the present study defines it as a kinship group of people related by blood or marriage or comparable relationship. This definition allows a multigenerational view of an extended family. Family Business in Oman According to the family firm institute (FFI) the around the 75% of Omans private companies are family owned, with their firms creating 70% of the country employment. There are 12 top families who are controlling around 75% of the contribution over all in Oman. The family owned business also control 90% of commercial activity according to Tharawat (Fortunes) Magazine. Oman is a part of the GCC Region where in the region is estimated that family businesses worth more than 1 trillion dollar, that is ready to be handled to the next generation. All family owned business share same characteristics as mentioned above, even the strengths and the weakness are similar to some extant in all family businesses. However, the family business can be categorized to two categories: Listed family businesses Non-listed family business The listed family businesses are set to fulfill the listed companies corporate governance code as per the CMA regulation, but the non-listed are not treated that way; whats so ever the size or the operations are. The CMA in Oman are concentrating nowadays to establish an attractive market and safe to all sizes of family businesses, the CMA is concentrating on converting the family closed family business to go public by Initial Public Offering(IPO) offering them a less strict rules and requirements to commence the IPO as the Head corporate governance Center declared. Furthermore there are different points that might affect the operation of any family businesses such as: family relations affect the assignment of the management family indirectly runs the company major family influence/dominance of the management (in terms of  strategic decisions) significant proportion of the enterprises senior management most important decision made by the family family control of the management of the enterprise at least 2 generations having had control over the enterprise These points might be strengthen the family business in the initial stages of the operations but there must be some kind of governance or policies on whom can make a decisions and how is not. Corporate Governance Corporate governance is a topic that has been a subject of significant debate since 2001 Enrons and other US companies crashed. Some analyst say lack of corporate governance was the main reason behind the crash (International Swaps and Derivatives Association, 2002). The international Swaps and Derivatives Association highlight that the failure was due to interests that extended certain managers at the expense of the shareholders. While the United States capital market where busy analyzing the reasons behind the crash of Enron and World Com, Sultanate of Oman has also experienced its share of corporate trouble affecting not only large companies such as Rice Mills SAOG and Oman National Investment Company Holding SOAG but also dozens of smaller companies, which have had to turn to the government for assistance (Dry, 2003). The year 2002 was the birth of the new corporate governance standards from the Capital Market Authority (CMA), but it was only covering the list companies in the Mu scat Security Market only. Since then the CMA focused on upgrading this standards and code and refine it to be in a worldwide acceptable standards and to include the best practice for the companies. The standards have been modernized since 2002 on the listed companies and the closed shared ones but nothing was mentioned on the family business side. In 2009 the CMA established the corporate governance center to help the companies implement the codes of corporate governance and to regulate the practice and monitor it, in addition to create a new standards to fit the family businesses practice. Till today the CMA and the Center did not establish a full concept on how they can produce a set of codes to be acceptable to the share holders of these businesses due to the lack of information on the family owned businesses in Oman. Theoretical framework related to Corporate Governance. The corporate governance model did not came from one framework or a certain theories, but I was built up on different practices and theories which results of different frameworks that today any economic system can customized to suit the needs to regulate the market. There are certain theories that been always associated with corporate governance practice which is set out the relation between the principle (shareholder) and the agent (management): The agency theory Stewardship Theory Stakeholder theory The agency Theory Agency theory having its roots in economic theory was exposited by Alchian and Demsetz (1972) and further developed by Jensen and Meckling (1976). Agency theory is defined as the relationship between the principals, such as shareholders and agents such as the company executives and managers. Agency theory argues that in the modern corporation, in which share ownership is widely held, managerial actions depart from those required to maximize shareholder returns (Berle and Means 1932; Pratt and Zeckhauser 1985). Since Jensen and Meckling (1976) proposed a theory of the firm (Agency Theory) based upon conflicts of interest between various contracting parties à ¢Ã¢â€š ¬Ã¢â‚¬Å" shareholders, company managers and debt holders à ¢Ã¢â€š ¬Ã¢â‚¬Å" a vast literature has been developed in explaining both aspects of these conflicts. Jensen and Meckling (1976) further specified the existence of agency costs which arise owing to the conflicts either between managers and shareholders (agency costs of equity) or between shareholders and debtholders (agency costs of debt). Financial markets capture these agency costs as a value loss to shareholders. The agency theory argues that an agency relationship exists when shareholders (principals) hire managers (agents) as the decision makers of the corporations. The agency problems arise because managers will not solely act to maximize the shareholders wealth; they may protect their own interests or seek the goal of maximizing companies growth instead of earnings while making decisions. Jensen and Meckling (1976) suggested that the inefficiency may be reduced as managerial incentives to take value maximizing decisions increased. Agency costs are arising from divergence of interests between shareholders and company managers. Agency costs are defined by Jensen and Meckling as the sum of monitoring costs, bonding costs and residual loss. (1) Monitoring Costs Monitoring costs are expenditures paid by the principal to measure, observe and control an agents behavior. The economic impact of asymmetric information also results in various corporate agency problems. Firm managers (insiders) know more about their firm than shareholders and debt financiers (outsiders). When outsiders are unable to judge over the firms performance, they tend to qualify a firms performance as moderate. A result of this asymmetric information is that shares of a firm with a great performance are undervalued and vice versa. More specifically, information asymmetries between shareholders or bondholders and corporate executive management creates the necessity of monitoring (costs) and complications for the structuring of financial contracts. They may include the costs of preparing reliable accounting information and audits, writing executive compensation contracts and even ultimately the cost of replacing managers. Denis, Denis, and Sarin (1997) contended that effective monitoring is restricted to certain groups or individuals. Such monitors must have the necessary expertise and incentives to fully monitor manager. In addition, such monitors must provide a credible threat to managements control of the company. (2) Bonding Costs To minimize monitoring costs, managers tend to set up the principles or structures and try to act in shareholders best interests. The costs of establishing and adhering to these systems are known as bonding costs. They may include the costs of additional information disclosures to shareholders, but management will obviously also have the benefit of preparing these themselves. Agents will stop incurring bonding costs when the marginal reduction in monitoring equals the marginal increase in bonding costs. As suggested by the agency theory, the optimal bonding contract should aim to entice managers into making all decisions that are in the shareholders best interests. However, since managers cannot be made to do everything that shareholders would wish, bonding provides a means of making managers do some of the things that shareholders would like by writing a less than perfect contract. (3) Residual Loss Despite monitoring and bonding, the interest of managers and shareholders are still unlikely to be fully aligned. Therefore, there are still agency losses arising from conflicts of interest. These are known as residual loss, which represent a trade-off between overly constraining management and enforcing contractual mechanisms designed to reduce agency problems. There are some other types of agency costs as following: (4) Agency Costs of Debt There are three groups of participants in a firm, suppliers of equity, debt suppliers and firm managers. It is logical that they would try to achieve their goals with different measures. Suppliers of equity, or shareholders, are interested in high dividend ratios and high share prices. Debt suppliers, on the other hand, are interested in interest and debt repayments, whereas firm managers would be focused on their financial remuneration. These conflicts of interest give rise to opportunity costs (whereby best strategies are often not adopted) and real costs (e.g., inspection costs). These costs decrease the market value of a firm. Kim and Sorensen (1986) investigated the presence of agency costs and their relation to debt policies of corporations. It is found that firms with higher insiders (managers) ownership have greater debt ratios than firms with lower insider ownership, which may be explained by the agency costs of debt or the agency costs of equity. (5) Agency Costs of Free Cash Flow The free cash flow theory presumes that there are enormous conflicts of interest between shareholders and stakeholders. This implies that managers decisions do not always maximize the value of a firm (Jensen, 1986). Jensen (1986) also emphasized the continuous agency conflicts between top managers and shareholders. These conflicts are especially severe in firms with large free cash flows. A free cash flow is the balance of money a company is left with when all projects are financed. If top managers hold more cash than profitable investment opportunities, they may overspend money on organization inefficiencies or invest it in projects with net present value (NPV) less than zero. The logic has it that higher debt levels reduces free cash flows and consequently increases the value of the company. Examining Family Business Corporate Governance Examining Family Business Corporate Governance This dissertation sets out a study of the family businesss corporate governance, addressing the relationship between the owners and the management. Family businesses constitute a wide spectrum of enterprises, from small family owned and managed companies to a large internationally operating family controlled corporations. There are several definitions illustrates the family owned businesses, however the majority agree that Nebauer Lank definition illustrate the family business in a simple way and puts it as A firm can be regarded as a family business if a given family holds the voting control of the firm (Nebauer Lank, 1998). This dissertation argues that, given the duality of the economic and non-economic goals family firms pursue and the complexity of the stakeholders structure, family firms need governance structure that matches the complexity of their constitutes stakeholders. According to that a better research and empirical understanding as how family firms are governed is needed. In this study the focus will be on assessing the level of understanding of the corporate governance concept overall and the codes provided by the Capital Market Authority (CMA), the Capital Market Authority in Oman focusing on strengthen the family owned business by incentives them to go public. The CMA is just recently in the process to create a corporate governance to help the Family business to be prepared to do so. In this study, the focus will be to create an understating and help to create a better code to help the family business sustain in the future. On the other hand there will be an evaluation of the agency theo ry and how the family owners acceptance of this model. Furthermore a research by McKinsey quarterly shows that 95 per cent fails to succeed the generation due to the lacking of succession planning and roles defining, therefore the dissertation will be evaluating the practice and preparation if any on how the existing owner prepare companys succession planning rules and codes to handover their responsibilities to their successors. In this study the focus will be on the family businesses in Sultanate of Oman, a country in the Arabian Gulf with a fledgling capital market. Oman has made significant efforts to improves the level of corporate governance, particularly in the listed companies and now the capital market would like to expand its corporate governance codes to the family owned businesses to strengthen the chances of the sustainability of its growth. Aims And Objective This dissertation will focus on the unique corporate governance challenges that any family business faces and propose structures and practices that can mitigate these challenges and ensure the viability of the business. The detailed objectives that guide the dissertation process are: To review and analyze relevant theoretical, and other, streams of literature that focus on corporate governance and family business Analyzing the practice of the existing code of corporate governance that applied by the CMA and if it fit to be implemented in the family business companies. Asses the ownership structure and polices in the companies and testing the theory of the ownership and control separation. Asses the long term planning by the company owners and how the successor is been appointed. To assess the significance, reliability, and validity of the results; to discuss the theoretical, empirical, and practical implications of the findings; to assess the limitations The impact of corporate governance in family businesses performance. Scope of the dissertation The present study addresses the governance of family firms, focusing on the nature of various governance mechanisms and how they affect firm performance. Family businesses provide a fruitful research context to study corporate governance due to lack of governance research in the area and the distinctive characteristics of family firms. The family business context, especially, enables the study of how aspects of formal and social control vary according to characteristics of ownership structure. Research Approaches and method The methods to gather the required data will be a qualitative, where the participations will be selected based on their history and age of the company in practice. The research will be analyzing their policies and corporate governance practice. Interviews will be placed with the owners and senior managers of the companies to get all the data required for the findings and results. Structure of the dissertation Chapter 1: Introduction This chapter included the background of the study, the aim, purpose of the study, research questions and limitation of the study and it will present the structural framework of the study. Chapter 2: Literature Review This chapter will review the historical perspective, theories and related studies of corporate governance, family business and related theories to corporate governance. This chapter will include the secondary data which will be used in discussing the findings. Chapter 3: Methodology Chapter describes the methodology and procedures that were used to carry out this study. Furthermore, this chapter will review the population and participants of the study, instruments and data collection procedures. Chapter 4: Results and Findings This chapter will present the data and findings related to the research questions Chapter 5: Data Analysis and Discussion This chapter presents the data analysis and the discussion of the finding. Chapter 6: Conclusion In this chapter, the researcher will present a summary of the study and the findings, conclusion and recommendation. The structural framework of the dissertation is illustrated in Figure 1. Figure Literature Review Introduction A growing number of studies have been done on the family business ownership and management separation or combination in the past few years and what is the linkage between the performance and these two elements. In this chapter we will be presenting the theories and the studies that are related to it and selecting a frame work that will be the base of the evolution of the practice we examine in the family businesses. Family Owned Business Family enterprises or family owned businesses represent the oldest form of businesses in the world. The family owned businesses constitutes more than 70 percent of all business in most of the third world countries and in some developed countries (IFC, 2009). In the IFC research Family Businesses Corporate Handbook shows that family owned businesses are the higher contributor in any country growth in terms of economic development and employment. In Spain, for example, about 75 percent of the businesses are family-owned and contribute to 65 percent of the countrys GNP on average. Correspondingly, family businesses contribute to about 60 percent of the cumulative GNP in Latin America (IFC, 2009). in addition to, accordingly to recent researches that 95% percent of employment in the Middle East and especially in the Arabian Gulf Peninsula is in the family owned businesses. There are several definitions that explains the family business corporations, the IFC define it as a company where the voting majority is in the hands of the controlling family; including the founder(s) who intend to pass the business on to their descendants, in another words is A business actively owned and/or managed by more than one member of the same family. There are two systems that control the family businesses; which are the family system, and the management system, the two system overlap due to the dual roles that any family member take, like a family member may be a manger or an employee in the business and here where the conflict arise. The family system is based on emotional, love and care. The family system is based on the relationship in the family and they take most of these values to the business. Where in the business system is the professional values are the edge of the decision. (Managment Resources, 2010) To define a family business need to understand the environment from one to another, here are list of family business definitions that made by researcher past the year that cover the family business from different view but reserving the concept. Table Family business Definitions A company is considered a family business when it has been closely identified with at least two generations of a family and when this link has had a mutual influence on company policy and on the interests and objectives of the family. (Donnelley, [1964] 1988: 428). Controlling ownership rested in the hands of an individual or of the members of a single family. (Barnes Hershon, 1976: 106). Organizations where one or more extended family members influence the direction of the business through the exercise on kinship ties, management roles, or ownership rights. (Tagiuri Davis, [1982] 1996: 199). It is the interaction between the two sets of organization, family and business, that establishes the basic character of the family business and defines its uniqueness. (Davis, 1983: 47). What is usually meant by .family business.is either the occurrence or the anticipation that a younger family member has or will assume control of the business from an elder. (Churchill Hatten, 1987: 52). We define a family business as one that will be passed on for the family.s next generation to manage and control. (Ward, 1987: 252). A business in which the members of a family have legal control over ownership. (Lansberg et al., 1988:2). A family business is defined here as an organization whose major operating decisions and plans for leadership succession are influenced by family members serving in management or on the board. (Handler,1989b: 262). Firms in which one family holds the majority of the shares and controls management. (Donckels FrÃÆ' ¶hlich,1991: 149). A business where a single family owns the majority of stock and has total control. Family members also form part of the management and make the most important decisions concerning the business. (Gallo Sveen, 1991: 181). A business firm may be considered a family business to the extent that its ownership and management are concentrated within a family unit, and to the extent its members strive to achieve, maintain, and/or increase intraorganizational family-based relatedness. (Litz, 1995: 78). A business governed and/or managed on a sustainable, potentially cross-generational, basis to shape and perhaps pursue the formal or implicit vision of the business held by members of the same family or a small number of families. (Sharma et al., 1997: 2). A family enterprise is a proprietorship, partnership, corporation or any form of business association where the voting control is in the hands of a given family. (Neubauer Lank, 1998: 8). Family businesses share some common characteristics, largely due to the interacting and overlapping domains of family, ownership and management (Tagiuri Davis, 1982). Family firms have a complex stakeholder structure that involves family members, top management, and a board of directors. Family members, who are often significant owners, usually play multiple roles in managing and governing the firm (Tagiuri Davis, 1982). This involvement promotes loyalty and also commitment to long-term value creation (Dyer Handler, 1994) and reduces problems that arise from separation of ownership and control, as experienced in large, public corporations (Jensen, 1989). Also, family businesses may enjoy a competitive advantage due, for example, to remaining entrepreneurial in character and having a strong sense of responsibility to society (Neubauer Lank, 1998), fast verbal and nonverbal communication, aided by a shared identity and common language of families (Gersick, Davis, McCollom Hampton Landsberg, 1997), family members. Business expertise gained during early childhood onward (Kets De Vries, 1996), and a strong organizational culture contributing to external adaptation and internal integration (Schein, 1983). However, the familys involvement in governing the firm may induce a focus on business and non-business goals, possibly leading to inefficiency (Schulze, Lubatkin, Dino Buchholtz, 2001). If the owner family is not regularly informed about the companys affairs, differing visions of the companys future may develop between management and the family. The resulting feuds between family factions may distract managements attention from value-creating activities and so reduce their commitment to strategic decisions. Owner-managers also may act opportunistically by satisfying their own needs at the expense of the companys performance and long-term survival. Entrenched owner-managers may not share their powers with others, especially not with the companys board. Furthermore the common characters of all family businesses are illustrated in the diagram below. Figure The individual represent the family members who are directly involved in daily bases with the operation, the family symbolizes the whole family where in some family businesses called the family counsel and the management dimension represents the family managers and non-family managers. McKinsey quarterly stated in the report keeping the family in business that only 5 percent will continue to create shareholders value after the third generation. Moreover; the IFC also mentioned in the family business hand book, while the third generation takes over; 95 percent of all family businesses will not survive the ownership around. These consequences might be a result to the lack of commitment and proper business education of handling the business demands. In addition, the survival of family firms is often challenged by dictatorial rule, resistance to change, lack of professionalism in management capabilities, confusion in family and business roles, rivalry and enlarged human emotions among family members, conflicts between interests of the family and the business, and a low rate of investment in business development (Donnelley, 1964; Gersick et al., 1997; Kets De Vries, 1993). All the definitions are focusing on the shareholders and their power in voting and management and these two points are actually the core strength and weaknesses of any family business. However there are other dimensions that a family business can be measured of its strength and weaknesses like: Culture Ownership and governance Succession planning Family involvement This dissertation will be reflected somehow in the culture dimension due to the strength of the factor here in the Arabian Gulf Countries and Oman. Different researcher came up with different definitions of the family business; however, the definitions imply six themes for clarifying the boundaries of the domain of family business: (1) ownership, (2) management, (3) generational transfer, (4) the familys intention to continue as a family business, (5) family goals, and (6) interaction between the family and business. These themes are similar to those found in the extant literature. For example, Handler (1989a) categorized family business definitions under four headings: ownership and management, interdependent subsystems, generational transfer, and multiple conditions. The extant literature on family business research has largely neglected the definition of the family itself. By modifying Winter.s, Fitzgerald, Heck, Haynes Danes (1998) definition of the family, the present study defines it as a kinship group of people related by blood or marriage or comparable relationship. This definition allows a multigenerational view of an extended family. Family Business in Oman According to the family firm institute (FFI) the around the 75% of Omans private companies are family owned, with their firms creating 70% of the country employment. There are 12 top families who are controlling around 75% of the contribution over all in Oman. The family owned business also control 90% of commercial activity according to Tharawat (Fortunes) Magazine. Oman is a part of the GCC Region where in the region is estimated that family businesses worth more than 1 trillion dollar, that is ready to be handled to the next generation. All family owned business share same characteristics as mentioned above, even the strengths and the weakness are similar to some extant in all family businesses. However, the family business can be categorized to two categories: Listed family businesses Non-listed family business The listed family businesses are set to fulfill the listed companies corporate governance code as per the CMA regulation, but the non-listed are not treated that way; whats so ever the size or the operations are. The CMA in Oman are concentrating nowadays to establish an attractive market and safe to all sizes of family businesses, the CMA is concentrating on converting the family closed family business to go public by Initial Public Offering(IPO) offering them a less strict rules and requirements to commence the IPO as the Head corporate governance Center declared. Furthermore there are different points that might affect the operation of any family businesses such as: family relations affect the assignment of the management family indirectly runs the company major family influence/dominance of the management (in terms of  strategic decisions) significant proportion of the enterprises senior management most important decision made by the family family control of the management of the enterprise at least 2 generations having had control over the enterprise These points might be strengthen the family business in the initial stages of the operations but there must be some kind of governance or policies on whom can make a decisions and how is not. Corporate Governance Corporate governance is a topic that has been a subject of significant debate since 2001 Enrons and other US companies crashed. Some analyst say lack of corporate governance was the main reason behind the crash (International Swaps and Derivatives Association, 2002). The international Swaps and Derivatives Association highlight that the failure was due to interests that extended certain managers at the expense of the shareholders. While the United States capital market where busy analyzing the reasons behind the crash of Enron and World Com, Sultanate of Oman has also experienced its share of corporate trouble affecting not only large companies such as Rice Mills SAOG and Oman National Investment Company Holding SOAG but also dozens of smaller companies, which have had to turn to the government for assistance (Dry, 2003). The year 2002 was the birth of the new corporate governance standards from the Capital Market Authority (CMA), but it was only covering the list companies in the Mu scat Security Market only. Since then the CMA focused on upgrading this standards and code and refine it to be in a worldwide acceptable standards and to include the best practice for the companies. The standards have been modernized since 2002 on the listed companies and the closed shared ones but nothing was mentioned on the family business side. In 2009 the CMA established the corporate governance center to help the companies implement the codes of corporate governance and to regulate the practice and monitor it, in addition to create a new standards to fit the family businesses practice. Till today the CMA and the Center did not establish a full concept on how they can produce a set of codes to be acceptable to the share holders of these businesses due to the lack of information on the family owned businesses in Oman. Theoretical framework related to Corporate Governance. The corporate governance model did not came from one framework or a certain theories, but I was built up on different practices and theories which results of different frameworks that today any economic system can customized to suit the needs to regulate the market. There are certain theories that been always associated with corporate governance practice which is set out the relation between the principle (shareholder) and the agent (management): The agency theory Stewardship Theory Stakeholder theory The agency Theory Agency theory having its roots in economic theory was exposited by Alchian and Demsetz (1972) and further developed by Jensen and Meckling (1976). Agency theory is defined as the relationship between the principals, such as shareholders and agents such as the company executives and managers. Agency theory argues that in the modern corporation, in which share ownership is widely held, managerial actions depart from those required to maximize shareholder returns (Berle and Means 1932; Pratt and Zeckhauser 1985). Since Jensen and Meckling (1976) proposed a theory of the firm (Agency Theory) based upon conflicts of interest between various contracting parties à ¢Ã¢â€š ¬Ã¢â‚¬Å" shareholders, company managers and debt holders à ¢Ã¢â€š ¬Ã¢â‚¬Å" a vast literature has been developed in explaining both aspects of these conflicts. Jensen and Meckling (1976) further specified the existence of agency costs which arise owing to the conflicts either between managers and shareholders (agency costs of equity) or between shareholders and debtholders (agency costs of debt). Financial markets capture these agency costs as a value loss to shareholders. The agency theory argues that an agency relationship exists when shareholders (principals) hire managers (agents) as the decision makers of the corporations. The agency problems arise because managers will not solely act to maximize the shareholders wealth; they may protect their own interests or seek the goal of maximizing companies growth instead of earnings while making decisions. Jensen and Meckling (1976) suggested that the inefficiency may be reduced as managerial incentives to take value maximizing decisions increased. Agency costs are arising from divergence of interests between shareholders and company managers. Agency costs are defined by Jensen and Meckling as the sum of monitoring costs, bonding costs and residual loss. (1) Monitoring Costs Monitoring costs are expenditures paid by the principal to measure, observe and control an agents behavior. The economic impact of asymmetric information also results in various corporate agency problems. Firm managers (insiders) know more about their firm than shareholders and debt financiers (outsiders). When outsiders are unable to judge over the firms performance, they tend to qualify a firms performance as moderate. A result of this asymmetric information is that shares of a firm with a great performance are undervalued and vice versa. More specifically, information asymmetries between shareholders or bondholders and corporate executive management creates the necessity of monitoring (costs) and complications for the structuring of financial contracts. They may include the costs of preparing reliable accounting information and audits, writing executive compensation contracts and even ultimately the cost of replacing managers. Denis, Denis, and Sarin (1997) contended that effective monitoring is restricted to certain groups or individuals. Such monitors must have the necessary expertise and incentives to fully monitor manager. In addition, such monitors must provide a credible threat to managements control of the company. (2) Bonding Costs To minimize monitoring costs, managers tend to set up the principles or structures and try to act in shareholders best interests. The costs of establishing and adhering to these systems are known as bonding costs. They may include the costs of additional information disclosures to shareholders, but management will obviously also have the benefit of preparing these themselves. Agents will stop incurring bonding costs when the marginal reduction in monitoring equals the marginal increase in bonding costs. As suggested by the agency theory, the optimal bonding contract should aim to entice managers into making all decisions that are in the shareholders best interests. However, since managers cannot be made to do everything that shareholders would wish, bonding provides a means of making managers do some of the things that shareholders would like by writing a less than perfect contract. (3) Residual Loss Despite monitoring and bonding, the interest of managers and shareholders are still unlikely to be fully aligned. Therefore, there are still agency losses arising from conflicts of interest. These are known as residual loss, which represent a trade-off between overly constraining management and enforcing contractual mechanisms designed to reduce agency problems. There are some other types of agency costs as following: (4) Agency Costs of Debt There are three groups of participants in a firm, suppliers of equity, debt suppliers and firm managers. It is logical that they would try to achieve their goals with different measures. Suppliers of equity, or shareholders, are interested in high dividend ratios and high share prices. Debt suppliers, on the other hand, are interested in interest and debt repayments, whereas firm managers would be focused on their financial remuneration. These conflicts of interest give rise to opportunity costs (whereby best strategies are often not adopted) and real costs (e.g., inspection costs). These costs decrease the market value of a firm. Kim and Sorensen (1986) investigated the presence of agency costs and their relation to debt policies of corporations. It is found that firms with higher insiders (managers) ownership have greater debt ratios than firms with lower insider ownership, which may be explained by the agency costs of debt or the agency costs of equity. (5) Agency Costs of Free Cash Flow The free cash flow theory presumes that there are enormous conflicts of interest between shareholders and stakeholders. This implies that managers decisions do not always maximize the value of a firm (Jensen, 1986). Jensen (1986) also emphasized the continuous agency conflicts between top managers and shareholders. These conflicts are especially severe in firms with large free cash flows. A free cash flow is the balance of money a company is left with when all projects are financed. If top managers hold more cash than profitable investment opportunities, they may overspend money on organization inefficiencies or invest it in projects with net present value (NPV) less than zero. The logic has it that higher debt levels reduces free cash flows and consequently increases the value of the company.

Tom Brown’s Schooldays

Schooldays Different Interpretations Tom Brown’s Schooldays by Thomas Hughes was first published in 1857, yet it is still currently used in several literature classes. The book is a phenomenal piece of literature that has motivated several people into creating their own adaptations in a media format. The main protagonist in the story is Tom Brown, a young thirteen year old boy with great Christian morals before attending Rugy School. The antagonist and bully of the story is Harry Flashman who is corrupted by the power he receives from his father’s influential role in funding the school.The Story follows Brown’s transformation from a kind and gentle young man into a cruel boy with no remorse. The main influence on Brown’s metamorphosis was Flashman’s constant harsh treatment of weaker and younger students attending Rugby. At the end of the story Brown takes a look back at the time he spent at Rugby and is forced to question his morals. The 2005 movie adaptation was very well scripted and contained most of the basic themes that were portrayed in the book. After doing an acceptable amount of research about the movie I discovered that it was filmed at the actual Rugby School described in the book.I was surprised to see that most of the cast members fit my description of what the characters should look like from reading the book. Watching the movie and reading the book were similar in the way of developing an emotional bond between the characters and the audience. An example of this would be my hatred toward Flashman because of his harsh treatments on the weaker children that couldn’t defend themselves. Although the movie was quiet of an emotional thrill ride there were significant differences from the original story.It is an extremely difficult task to depict the same story in a novel onto a movie or TV screen, and Tom Browns Schooldays directed by Dave Moore was no exception. The movie had left out two significant parts of the story that were crucial to the introduction and conclusion of the novel. The beginning of the movie started off with Brown’s father talking to him about not loosing his Christian morals and sending him to Rugby. In the novel it begins with Brown’s pleasant life before Rugby School, this helps the reader establish Tom’s personality and experiences. I was disappointed when I idn’t see this in movie because it helps the reader develop a sense of Brown’s past and compare it to his life at Rugby. The conclusion of the movie ends with Brown as one of Arthur’s pallbearers at his funeral. It was interesting to see this in the movie because in the original novel Arthur never died and actually helps the other students realize their harsh methods, inevitably changing their ways. There was also an added scene in the movie that never occurred in the book. The sex scene involving Flashman and Sally which I found quite pointless to include in the movi e.After comparing the novel and movie it is hard not to notice the differences but the main theme of a young man realizing his moral obligation is still portrayed. I enjoyed reading and watching the story but overall I have to say the novel was much better because the movie kept on straying away form the original story. I understand that Dave Moore was trying to make the movie original because of the previous movies before, but it felt like a different story in the introduction and conclusion of the movie. Tom Brown’s Schooldays by Thomas Hughes is a wonderful work of literature that will still be widely used in future.

Banana Fibre Manual

Waste to Wealth : Craft Development Using Banana Fibre A PEOPLE’S MANUAL WASTE TO WEALTH : CRAFT DEVELOPMENT USING BANANA FIBRE CAPRE FOUNDATION | Page 1 www. caprefoundation. org A People’s Manual Waste to Wealth : Craft Development Using Banana Fibre About CAPRE Foundation CAPRE Foundation is a non-profit, voluntary organization registered in 1999 under Section 21 of the Societies Registrations Act, 1860. It was founded by grass roots people including tribals with a social conscience to work for socio-economic, cultural and educational upliftment of marginalized/underprivileged people.The foundation has been actively involved in social concerns such as sustainable livelihood, health and non formal education and is working on development programmes in rural areas of Uttar Pradesh, Bihar, Jharkhand and Delhi. Mission Creating Awareness Programs to promote development as a liberating force aimed at inclusivity, social justice, economic growth and selfreliance for the upl iftment of rural marginalized and underprivileged people. Vision To create global awareness about the exclusion that underprivileged people suffer in India together with becoming a leading organization in transparency, good governance and best practice ________, Editor  © CAPRE Foundation, Allahabad Address Registered Office : 24 Strachey Road Civil Lines Dist. – Allahabad – 211001 (UP) Field Office : Professor’s Colony, Near Manavi, Shiv Pahar, Dumka – 814101, Jharkhand E-mail : [email  protected] com Website : www. caprefoundation. org Printed By : Page 2 A People’s Manual Waste to Wealth : Craft Development Using Banana Fibre Contents The Tree The Fibre Fibre Extraction Characteristics of Banana fibre Applications of Banana fibre Cost Benefit Analysis CAPRE Foundation ‘s efforts promote banana fibre craft A few products being developed by CAPRE Foundation 4 4 5 5 6 7 8 9Page 3 A People’s Manual Waste to Wealth : Craft Developmen t Using Banana Fibre The tree Banana is the common name for herbaceous plants of the genus Musa and for the fruit they produce. Bananas come in a variety of sizes and colors when ripe, including yellow, purple, and red. Almost all modern edible parthenocarpic bananas come from the two wild species Musa acuminata and Musa balbisiana. The scientific names of bananas are Musa acuminata, Musa balbisiana or hybrids Musa acuminata ? balbisiana, depending on their genomic constitution.The old scientific names Musa sapientum and Musa paradisiaca are no longer used. The major banana producing states of India are Tamilnadu, Maharashtra, Karnataka, Gujarat, Andhra Pradesh, Assam and Madhya Pradesh. The Fibre Banana plant not only gives the delicious fruit but it also provides textile fiber, the banana fiber. It grows easily as it sets out young shoots and is most commonly found in hot tropical climates. All varieties of banana plants have fibers in abundance. These fibers are obtained after th e fruit is harvested and fall in the group of bast fibers.This plant has long been a good source for high quality textiles in many parts of the world including India. After the fruit and the leaves are harvested, the bark of the tree is used which otherwise would have gone waste. The fibre is extracted from the bark of the tree which is the mother of so many beautiful handcrafted banana fibre products. Page 4 A People’s Manual Waste to Wealth : Craft Development Using Banana Fibre The banana fibre is composed of cellulose – 62%, lignin – 29%, hemicellulose 3%, rectin – 2%, miscellaneous – 4%. By-products of the fibre are : fabrics, ags, various types of mats, interior decoration items, window blinds, cushion covers, bolster covers, table lamps and folders, to name a few. The products are completely eco-friendly and bio-degradable. There is no consumption of electricity while making the products as it is made on the handlooms. Also, no chemicals are used in the manufacture. It is an excellent substitute for plastic and paper. Fibre Extraction Banana Fiber is extracted from Banana tree bark. The trunk is peeled. Browngreen skin is thrown away retaining the cleaner or white portion which will be processed into knotted fibers.The fibers are extracted through hand extraction machine composed of either serrated or non serrated knives. The peel is clamped between the wood plank and knife and hand-pulled through, removing the resinous material. The extracted fibers are sun-dried which whitens the fiber. Once dried, the fibers are ready for knotting. A bunch of fibers are mounted or clamped on a stick to facilitate segregation. Each fiber is separated according to fiber sizes and grouped accordingly. To knot the fiber, each fiber is separated and knotted to the end of another fiber manually.The separation and knotting is repeated until bunches of unknotted fibers are finished to form a long continuous strand. This fiber can now be use d for making various products. Characteristics of Banana fibre Banana fiber is a natural bast fiber. It has its own physical and chemical characteristics and many other properties that make it a fine quality fiber. ? Appearance of banana fiber is similar to that of bamboo fiber and ramie fiber, but its fineness and spinnability is better than the two. ? The chemical composition of banana fiber is cellulose, hemicellulose, and lignin.Page 5 A People’s Manual Waste to Wealth : Craft Development Using Banana Fibre ? It is highly strong fiber. ? It has smaller elongation. ? It has somewhat shiny appearance depending upon the extraction & spinning process. ? It is light weight. ? It has strong moisture absorption quality. It absorbs as well as releases moisture very fast. ? It is bio-degradable and has no negative effect on environment and thus can be categorized as eco-friendly fiber. ? Its average fineness is 2400Nm. ? It can be spun through almost all the methods of spinning in cluding ring spinning, open-end spinning, bast iber spinning, and semi-worsted spinning among others. Applications of Banana fibre In the recent past, banana fiber had a very limited application and was primarily used for making items like ropes, mats, and some other composite materials. With the increasing environmental awareness and growing importance of eco-friendly fabrics, banana fiber has also been recognized for all its good qualities and now its application is increasing in other fields too such as apparel garments and home furnishings. Banana fiber is also used to make fine cushion covers, Necties, bags, table cloths, curtains etc.Rugs made from banana silk yarn fibers are also very popular world over. Different applications of the fibre are – ? Banana fibre has great potentialities for paper making special demand of Hand made paper. ? Its fibre has used like rope, mats and other composite materials. ? Banana fibre has recognined for apparels and home furnishings. Pa ge 6 A People’s Manual Waste to Wealth : Craft Development Using Banana Fibre ? Polypropylene reinforced with banana fibre is used by automobile companies for making underfloor protection panels in luxurious cars like Mercedes. Banana fibre mostly used in making handicrafts and home decorative. ? Composite material of banana fibre used in building boards and fire resistance boards. ? Banana fibre is making products like paper bags, filter paper, greeting cards, decorative papers, pen stands, lamp stand and many more. ? Banana fibre in used currency notes in Germany and trial run in India also. ? During the research, it was found that paper made out of this fiber has shelf life of over 100 years as it is the strongest of the long fibres ever found amidst natural fibres.It can be folded for as many as 3,000 times. It can used currency and value-able documents like manuscript document preserver (Pundulipies). Cost benefit analysis (These costs are average estimates) Input cost: Nil Fixed Cost: Fibre Extraction Machine : Rs. 40,000 Variable cost: Plant cutting and useable raw material cost (Rs/acre): 3000 Labour cost (Rs/ month): 5000 Electricity charges (Rs/month): 1000 Other charges (Rs/months): 1000 Total cost (Rs/month): 10000 Output : Income from banana fibre (Rs/ Acre): 8000 Income from banana ibre (Rs/month): 16000 Income from Manure (Rs/Acre waste): 2000 Page 7 A People’s Manual Waste to Wealth : Craft Development Using Banana Fibre Total income: 18000 Net Income Rs : Output- Input : 8000 CAPRE Foundation ‘s efforts promote banana fibre craft The latest innovative idea being pushed by CAPRE Foundation is teaching women how to produce banana fiber and craft items from this fiber in Shankargarh and Kaurihar II block in Allahabad district with collaboration from Eco Green Unit of Coimbatore.Considerable work has been done in the field of direct use and product development from banana fruits. However, not much attention has been focused on effective utilization of the huge biomass generated in the form of pseudostem, leaves, suckers etc. In India, presently this biomass is dumped on roadside or burnt or left in situ causing detrimental impact on environment. Though, the technologies for extraction of fibres and paper making from pseudostem are available, not much has been done in northern India in this regard whilst Southern India is the leader in banana fibre craft.Capre Foundation has taken the lead and in collaboration with ECO GREEN UNIT from Coimbatore. However, there exists a vast potential of extracting fibres from pseudostem and using the fibre in making craft such as coasters, mats rugs wall hangings which CAPRE is already implementing with an effective marketing strategy in place with 100 per cent buy back by Eco Green Unit in Coimbatore. Page 8 A People’s Manual Waste to Wealth : Craft Development Using Banana Fibre A few products being developed by CAPRE Foundation Page 9 A People’s Manual

character analysis of quentin essays

character analysis of quentin essays Quentin is the oldest child of the Compson family. He is a very intelligent boy. When he is preparing to go to Harvard, and his family sells a large land to a local golf club in order to afford the funds to send him there. We understand that Quentins future is very important for the family. He is the honor of the Compson family. I think Quentin is the most qualified person in the family because His brother, Benjamin is a speechless idiot who is always crying and moaning. His other brother, Jason is a cruel man that he blackmails Miss Quentins money. His father is an alcoholic who dies of alcoholism, and her mother is a pride and empty person. Caddy is also not a bright person he is a promiscuous girl. But Quentin loves so much her; he is always interested in Caddy. When Caddy loses her virginity, Quentin threatened to kill her and himself because Caddy is very important for Quentin. Quentin is a sensitive person and he always thinks about bad events in the family. He has lots of tragic memories about his family. Quentin is obsessed with Caddy and memories of her; especially he is obsessed with her promiscuity. The loss of her virginity gives a deep pain to Quentin. The pain that Caddys promiscuity causes Quentin seems too intense to be merely a disappointment at the staining honor. And Quentins response to her promiscuity is telling his father that he and Caddy committed incest. It is not the act a person concerned with family honor. It is rather the act of a boy who is in love with his sister and so obsessed with her purity and virginity. When he understands that Caddy had sex with Dalton Ames. He became very angry and he said III kill him I swear I will father needtnt know until afterward and then you and I nobody need ever know we can take my school money we can cancel my matriculation Caddy you hate him dont you these were words of a brother who wants to p rotect ...

Moral Leadership and Business Ethics

Moral Leadership and Business Ethics Business Ethics Morality Morality entails the application of opinion, principles and laws of good behavior in any specific society. Although morality is hinged on the intrinsic aspects of society, some principles are applicable in a universal manner.Advertising We will write a custom essay sample on Moral Leadership and Business Ethics specifically for you for only $16.05 $11/page Learn More Permissibility of conduct is dependent on the moral standing of the parties involved in judging the conduct, the timing and other factors. As a result, what is morally acceptable in one location may be unacceptable elsewhere. Poulton (2006) observed that morals are determined on a limited geographical, social, political and cultural setting, thereby inculcating the uniqueness of the standards. Pup (2010) morality is fundamental to human existence, considering that moral dilemmas rarely exist. The intrinsic nature of humanity confers a clear understanding what is morally acceptable and solutions are automatically identifiable. According to Gini (1996), â€Å"John Dewey argued that at the pre-critical, pre-rational, pre-autonomous level, morality starts as a set of culturally defined goals and rules which are external to the individual and are imposed or inculcated as habits†. Human beings form a major component in the business, and every entity is part of business. As a result, morality still remains a major concern for any business place, since it is impossible to separate the three elements. Ethics As a branch of philosophy, ethics is concerned with the conceptual, logical and rational determination of right from wrong. Ethics play a major role in determination of good from bad, morality from immorality and justice from injustices.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More In most cases, ethical conduct is intrinsic, with the outcom e of judgments founded on the conduct of the subject of the actions. As a result, ethical conduct is mostly hinged on ‘preaching and drinking water’ and walking the talk. The underlying motives for ethical conduct are what determine the morality of the conclusions by the individuals. Over the past, standard codes of ethics have been developed, with these standards playing a major role in guiding decisions (Poulton, 2005). There are an amorphous number of dimensions of ethics, based on normative, descriptive and comparative foundations. With regard to the business place, ethics are the applicable and moral principles which guide conduct in the business place. Due to the pluralistic and ultra-egoist nature of ethics, the fact that it relates to the conduct of one person with regard to others elevates its importance in the business place. According to Poulton (2005, p. 1), â€Å"Business ethics, pertains to human in ­teractions when sourcing, producing and marketing goo ds and services for profit, and include the relationships between business management and their employ ­ees, the firm and its primary stakehold ­ers, the business and its relationships to the community, government and society in general†. In the determination of what is right or wrong in the business setting, it is important to take into consideration the nature of the activities and the stakeholders to be affected by the decisions. In the pursuit of generating wealth for the investors and satisfying consumer expectations, businesses are expected to certain scenarios with conflicting implications of outcomes. The principles of business ethics are considered fulfilled if the outcome is just, fair and equitable with regard to the wellbeing of human beings. The social construction of business implies that it is impossible to disengage business entities from society, since they are interrelated.Advertising We will write a custom essay sample on Moral Leadership and Bus iness Ethics specifically for you for only $16.05 $11/page Learn More Moral Responsibility According to Poulton (2005), this describes the status where a person, natural or legal, serves acknowledgement in the form of praise or reprimand, primarily due to their actions or omissions. As a primary concern of ethics, moral responsibility is hinged on the actions, intentions and omissions of the moral agents, or individuals who are responsible in any capacity in society. The magnitude and nature of moral responsibility is dependent on the status of an individual in society, and the rationale behind the expectations by society. The foundation of moral responsibility is the existence of determined and tangible moral standards in the specific society. Moral responsibility exists in two dimensions. The first dimension is associated with obligation or compulsion. In this accord, an individual is morally responsible for outcomes which he had control over, was knowledgeable a nd failure to avert the outcomes (Velthouse and Kandogan, 2005). Moral responsibility can also originate from actions that are unintentional, but involve injurious outcomes, either to a person, or to according to existing legal provisions. It is thus necessary for an individual to display reasonable skill and care in their action in order to avoid moral responsibility from obligations and culpability. Corporate Responsibility Also referred to as corporate social responsibility, this approach to self-regulation is incorporated into business in order to ensure that entities comply with the norms on an international level, existing and expectations of the wide range of stakeholders (Phillips, 1996). Organizations have found it necessary to establish corporate social responsibility standards in order to support other efforts in achievement of organizational goals.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More In addition to enhancing appeal across society, organizations have found it beneficial to establish intricate social responsibility approaches aimed at enhancing the positive effects of its activities on the ecological set up, society, consumer groups, jurisdictions and other forms of stakeholders. Poulton (2005) noted that the entry of the multinational form of operations widened the importance of corporate responsibility. As a strategic imperative across all industries, social responsibility has played a wide range of functions to complement and supplement core functions of businesses including window dressing, pre-empting regulatory actions and distracting stakeholders from focusing on the economic functions of a business. Corporate social responsibility has risen to the top echelon among the non-financial goals for any business wishing to succeed in the highly competitive world. Organizations at all scales of operations have found it necessary to go the extra mile in ensuring th at the stakeholders’ expectations are met. This is regardless of the fact that such efforts actually entail costs and expenses which are not directly linked to revenue-generating capabilities. As a result, corporate social responsibility exists as a unique aspect in acquisition of competitive advantage in the market place. Ethical Principles Professional Responsibility and Competence Professional responsibility arises from acquisition of certain competencies in a specific area of knowledge. Responsibility in professional circles originates from expertise and ability to comprehend intrinsic aspects of the subject. Phillips (1996) directed that the ability to understand and conceptualize the code of conduct, how to overcome conflict of interest and act in a professional manner can only be achieved through an intricate appreciation of the primary and secondary principles in the specific areas. Professional responsibility is determined depending on the specific professions and th e extent to which the individual qualifies as a professional. Competence on the other hand relates to the ability to conceptualize aspects of a specific discipline. Competence originates from actions directed towards acquiring knowledge and experience in a specific field. Competence is not necessary academic in nature, which is a basis of professional responsibility. Ethical standards are closely linked to professional responsibility and competence. Professionals and competent Learning and Development According to Phillips (1996), learning and development provides employees with an opportunity to acquire custom designed and unique approaches to understanding the needs of consumers. In most cases, learning and development provides organizations with the necessary inputs in capturing the interests of the society in which it lives in. Acquisition of professional competencies is based on widely practices principles, which are not specific to the internal and external environment facing the organization (Poulton, 2005). As a result, ethical operations can only be established through learning and development programs. The design and contents of the learning and development programs have to be objective and tangible. Responsibility to the Organization Responsibility to the organization originates from the fact that the people running the organization are not necessarily the owners (Phillips, 1996). Managers are expected to play a role in the achievement of the organizational goals. Successful organizations are based on identification of ways to satisfy a certain category of needs and wants. In most cases, these organizations represent an important aspect of any society, since the goods they provide are primary to survival. As a result, if such organizations fail, the society is bound to suffer from the lack of the specific goods and services from the market. For example, failure of a banking institution is bound to result to loss of life savings and trust in the fina ncial system, thereby propagating domino effect across the globe. As a result, ethical and moral standards are primary features in the responsibility to the organization, for people who have decision-making and operational powers. Responsibility to the Society According to Boatright (2009) businesses are expected to be responsible to the society, primarily due to the fact that all resources available for production are drawn from the society itself. Right from skilled and unskilled employees to the inputs for production, businesses have no option but to recognize the input of society. The end-result of the production cycle is destined for society as well, since these are the individuals who provide the consumers with life sustaining products and services. Training Training provides organizations with the capability of understanding the best approach to achieve the organizational goals. The training programs are aimed at ensuring that the organization has the employees with the neces sary skills and competencies to handle their roles. Knowledgeable employees are able to appreciate what is good from bad. In addition, the employees will appreciate the expectations of society, making them capable of conducting themselves in a morally upright manner. Trainings are designed to cater for diversity, sexual harassment, mentoring and cultural training. Diversity Training in diversity provides organizations with the ability to understand the differences in cultures and social set ups across the globe. Training on diversity normalizes the expectations based on morals, ethics and legal requirements. As a result, employees are able to appreciate the exact reason why customers and other stakeholders have differing demands. In addition, employees will be able to understand the differences in needs and wants among consumers across the organization. This will play a major role in appreciating the best approach to delivering services, products and other aspects such as corporate social responsibility. Ethical standards vary from place to the other, making training in diversity an important aspect in the maintenance of ethical standards. Sexual Harassment Sexual harassment is a gender based form of discrimination, influencing the ability of individuals to co-exist (Boatright, 2009). Morality issues are closely linked to sexual harassment, making it necessary for employees to understand what entails sexual harassment in the workplace. Different cultures have varying perceptions regarding what sexual harassment is. In addition, employee strained in sexual harassment is able to increase productivity by eliminating the challenges originating from sexual harassment. In most cases, sexual harassment exists between employees and rarely between employees and other stakeholders. As a result, it is necessary for the company to appreciate the aspects of sexual harassment in the workplace. Cultural Training Cultural training is an important part of ensuring that organiz ations working in multicultural training are able to understand the intrinsic requirements for each culture. Appreciating cultural implications provides organizations with the ability to determine the expectations of the stakeholders, who are drawn from different cultures. As indicated in the definition of ethics and morals, it is important to understand the expectations of individuals in order to find a common ground. Individuals working for organizations are expected to possess moral and professional responsibility, which is only possible through a clear understanding of cultures. Mentoring According r to Velasquez, M. (2006), mentors play a significant role in ensuring that organizational culture is maintained across generations. Mentors provide formal and informal avenues through which training and development of new employees can be achieved without the need for outlay of resources. In most cases, mentors perform development of employees in a unique and custom-designed approach . This approach depends on the mentor and the person being mentored. Mentoring is also possible for ethical and moral standards. Individuals who are well-versed with these aspects stand an opportunity to promote the knowledge standards among other employees for the betterment of the organization. Conclusion Businesses have no option but to align objectives with goals. Financial and non-financial performance is hinged on the ability of the organization to appeal in totality. Comprehensive appeals entail performing according to expectations, and going the extra mile. In the spirit of seeking competitive advantage, most organizations have found it necessary to establish ethical and moral standards. Although such morals are hard to achieve, organizations have no option but to invest in training and development, training on diversity in the workplace, develop corporate social responsibility and ensure that all its actions are ethical. On a personal level, each employee has to ensure that they are aware of the dimensions of diversity through mentoring and cultural training, ensure that their actions exude responsibility to society and the organization, and avoid actions which are considered repugnant to society at large. References Boatright, J. (2009). Ethics and the conduct of business (6th ed.). Upper Saddle River, NJ : Prentice Hall. Gini, A. (1996). Moral Leadership and Business Ethics. Loyola University Chicago In Ethics and Leadership Working Papers. Web. Phillips, M. J. (1996). Corporate Moral responsibility: When It Might matter. Business Ethics Quarterly, 5(3). Poulton, M. S. (2005). Organizational Storytelling, Ethics and Morality: How Stories Frame Limits of Behavior in Organizations. Electronic Journal of Business Ethics and Organization Studies, 10(2). Pup, A. (2010). An agenda of Morality for Business Ethics. Annals of the University of Petrosani, Economics, 10(1). Velasquez, M. (2006). Business Ethics: Concepts and Cases (6th ed.). Upper Saddle River : Pearson Prentice Hall. (F.I.M. 2003- 2008), First impression management. Web. Velthouse, B. and Kandogan, Y. (2005). Ethics in Practice: What Are Managers Really Doing? Web.

Return to haifa Essay Example | Topics and Well Written Essays - 500 words

Return to haifa - Essay Example The, fleeing home of Said and Safeyya in Haifa during the 1948 Nakba can be equalled to the detaining of Nelson Mandela in 1962.   However, 20 years later, Said and Safeyya returned home only to find out that a Jewish family had actually adopted their son who entered Haifa (Suganda web). Likewise, for Nelson Mandela, he found out that many things had changed in his mother country South Africa when he was released from prison. Indeed, Mandela had to take time to adapt to his own country, which he had missed after many years in detention. Whereas Said and Safeyya find their home occupied by Miriam, Mandela found that the whites had indeed occupied the good parts of his country. The theme of regaining political identity after many years of detention for many political leaders shares the same story line with â€Å"Return to Haifa.† Although Mandela has been provided as an example, many political detainees all over the world experienced the same

A Comparison between two UK companies Essay Example | Topics and Well Written Essays - 1000 words - 1

A Comparison between two UK companies - Essay Example The success of Sofitel hotel shows the level of success of its marketing strategy while the dwindling profitability of the Britannia Hotels shows the failures of the marketing strategies the hotel employs as the analysis below portrays. Sofitel hotel is a five star hotel that offers a number of high quality services including spa, luxury rooms and conference facilities among many others. The hotel has a number of services that continue to grow its services after realizing that diversification is the key to achieving profitability. The chain management of the hotel has succeeded in developing high-end hotels in a number of leading destinations across both Europe and the United States. The Sofitel Hotels in the United Kingdom enjoy immense success and profitability evident in the growth of the hotel’s services and facilities. The success of Sofitel Hotel arises from a number of factors key among which is the provision of high quality services. The level of cleanliness of the rooms, diversity of cuisines and level of hospitability of the wait staff at the hotel enhances the quality of services at thereby succeeding building a desirable name for the hotel. The quality of services of the hotel is effective in creating a desirable reputation for the hotel. Travelers come to the hotel owing to referrals from their friends while numerous others are returning customers who confessed their love and admiration of the level of professionalism of the employees of the hotel coupled with the level of hospitality and serenity of the hotel (Venison, 2005). The hotel employs a number of effective marketing strategies all of which continue to enhance its profitability. The hotel has an efficient chain management that has succeeded in developing appropriate customer loyalty reward programs (OFallon & Rutherford, 2011). The chain has a number of facilities throughout