Mobile Device Security Policies Research Paper Example | Topics and Well Written Essays - 500 words

Mobile Device Security Policies - Research Paper Example It mitigates any other forms of software and device abuse such as use of pornographic materials. The policies and restrictions apply to all the users in a specified area which is covered with such a policy. This is to protect usage of network. The policies are enforced on anyone who uses the devices, and there are penalties for noncompliance which include civil or criminal litigation, restitutions and fines (Long and Long, p 91). The policies that might be proposed to protect mobile devices may include, but does not narrow to the following; There must be a password to protect every device (Negri, p63). This is to limit its use to unauthorized persons. It should be a strong password, for example, eight characters in length. Another policy is ensuring physical security of the devices. This is to be ensured by the owners and any other authorized user and ensure the devices are always kept in a secure place (Bott, p 85). Another policy on mobile devices is that all sensitive and confidential documents stored should be encrypted to ensure security (Henten, p 13). It also ensures data is removed in case the device is to be disposed. Mobile device options that are not in use should be disabled to ensure there are no breaches on any information. Screen locking and screen timeout should be implemented as a security policy. Mobile devices should be scanned for viruses this to protect deletion of files by the virus (Ca lhoun, p 62). Software restrictions policies are part of Microsoft security and management to help their customers to make their devices more reliable and manageable (May, p 32). The restrictions ensure that viruses are fought using the best ways possible to avoid loss of data. The company also restricts which activeX controls can be downloaded. This is to ensure their users use only the recommended software (Panchal and Sabharwal, p 42). The company also insists on using scripts which are digitally signed. This reduces the

Business - Smucker's Case Assignment Example | Topics and Well Written Essays - 1500 words

Business - Smucker's Case - Assignment Example It expanded itself beyond jams and jellies so that it can shield itself from becoming an acquisition of any of the larger firm. The company has been successful at expanding its operations, enhancing its sales and revenues by greater margins and increasing the price of the stock (Gamble, J. E., â€Å"Smucker’s in 2011: Expanding the Business Lineup†). The products of J. M. Smucker Company helped it to achieve its long-term goals. The company’s brand demonstrates strategic fit in the sense that all its brands are performing quite well. Smucker’s expected its net sales to augment by 6 percent annually by increasing the sales growth to 2-3 percent resulting from future acquisitions, and increase in sales by 1 percent from the introduction of the new product. It is identified that in the year 2010, the company was capable of becoming the market leader in 11 of its food categories such as fruit spreads as well as dessert toppings, roasted and ground coffee, heal th and natural beverages, peanut butter, cooking oil and condensed and evaporated milk. It can be stated that it is feasible for the company to expand its operations beyond its core competencies in order to fight the competition that it confronts from its rivals. This will help the company to generate high sales and revenues, along with that it will also assist the company to increase substantial market share. Question Two One of the factors impacting the successful operations of Smucker’s is taxation. Changes in the tax rates and laws have a significant influence upon the company. Competition is the other macro environmental factor which hampers the sales and profitability of the company. Nestle and Kraft Foods are the main competitors of the Smucker’s in United States. Economic slowdown and recession in the USA has an impact upon the operations of the firm. It is observed that the first three months of the year 2011 seemed to be promising despite the persistent impac ts of economic downturn in the United States. The revenues of the company were same for the period i.e. first three months in the fiscal year 2010. However, there was rise in the operating income by 5 percent in the first quarter from $185 million of the year 2010 to $195 million in the very first quarter of the year 2011. When the USA faces with the issues related to currency and interest rates fluctuations, the companies like Smucker’s may have to face significant problems since these companies have its branches in many of the foreign nations. There has been change in the consumption pattern of the people of the USA during the period of recession and as a result the organization had to focus upon the budget cuts and concentrate more upon the home made meals rather than readymade meal as sold by Smucker’s. Sudden change in the consumption habit has a significant impact upon the company. Therefore, it is quite significant for the company to take certain initiatives so that it can minimize the negative impacts of such threats and help in the enhancement of the sales and revenues of the company. If such issues are not paid due attention, then the company’s profitability will be hampered to a great extent. Question Three There are many subsectors of processed food industry and each subsector has different growth expectations, competitive intensity, profit margins and business risks. The industry can be identified as attractive in the

Research On Initial Public Offering And Underpricing Finance Essay

Research On Initial Public Offering And Underpricing Finance Essay Initial Public Offering (IPO) of firm is widely underpriced. IPO underpricing is presented as the percentage difference between the offer price and the closing price of the first-trading-day, usually in appearance of initial positive return when shares are newly issued. IPO underpricing is seen as selling shares at discount in the initial offering. The discount requires issuer to leave money on the table to compensate investors, which incur wealth loss for the issuer (Camp, Comer and How, 2006). Therefore, there are numerous theories established to explain the reason for this discount sale in IPO, which generally categorized into four branches: asymmetric information, institutional reasons, control considerations, and behavioral approaches (Ljungqvist, 2007). Among these theories, asymmetric information theory is the most studied direction in the past 40 years. Nevertheless, studies on the institutional and behavioral aspects are heating recently, especially when shedding lights on e merging IPO markets where lack of efficient institutional support and exist over-speculation behavior environment. Evidence of underpricing IPO underpricing phenomenon is firstly academic documented in 1970s (Stoll and Curley, 1970; Reilly, 1973; Logue, 1973; Ibbotson, 1975). Early findings (exclusively focused on US market) indicate that underpricing is influenced by particular periods (Ibboston and Jaffe, 1975) and particular industry, usually natural resource (oil and gas) industry (Ritter, 1984). However, these findings are challenged by Smith (1986) who claimed that underpricing occurs in the entire period of 1960s-1980s, rather than concentrates in particular periods, and underpricing level exists across all industries with average exceeds 15%. Recent study is more convincible with larger time period and sample observations. Loughran and Ritter (2004) document this underpricing discount has averaged around 19% in the US since the 1960s. Nevertheless, underpricing level (i.e. the average first-day return) tends to fluctuate, 21% in the 1960s, 12% in the 1970s, 16% in the 1980s, 15% in 1990-1998 and then exploded to more than 65% in the 1999-2000 internet bubble period, and falling back to 12% in 2001-2008 (reference). Table Empirical studies have extended the scope of research from the US to the whole world. Underpricing is internationally documented, and the level is extremely high in emerging markets. According to (reference)s research, China (1990-1996, 226, 388%); US (1960-1996, 13308, 15.8%); Japan (1970-1996, 975, 24%). Table. (Reference) provides wider research. France: 3-14%; Australia: 11-30%; Taiwan: 30-47%; Greece: 48-64%; Brazil: 74-78.5%; China: 127-950%. Table Due to its short history with strong government control characteristics, Chinese IPO market draws research interest. The average initial return of IPOs in China during 1999-2002 was 3.3 times the average emerging markets initial return (excluding China) and 6.9 times that of developed countries (Reference). Sample size Sample period Initial return (%) Mok and Hui (1998) 87 1990-1993 289.20% Datar and Mao (1998) 226 1990-1996 388.00% Su and Fleisher (1999) 308 1990-1995 948.59% Chen et al. (2000) 277 1992-1995 350.47% Liu and Li (2000) 781 1991-1999 139.40% Chi and Padgett (2002) 668 1996-2000 129.16% Su (2003) 587 1994- 1999 119.38% Chan et al. (2003) 570 1993-1998 175.40% Chan et al. (2003) 286 1999-2000 104.70% Wang (2005) 747 1994-1999 271.90% Kimbro (2005) 691 1995-2002 132.00% Li (2006) 314 1999-2001 134.62% Asymmetric information theory The cornerstone of this theory is that there is asymmetric information among parties (issuer, underwriter, and investor) in the IPO. Chambers and Dimson (2009) proved that the level of trust between investors, issuers, and underwriters plays a crucial role on the level of IPO underpricing over time in the UK. Asymmetric information leads to ex ante uncertainty among parties. Higher ex ante uncertainty results in higher underpricing. Ritter (1984) raised the changing risk composition hypothesis, which assumes that riskier IPOs will be underpriced by more than less-risky IPOs. Beatty and Ritter (1986) then extend Rock (1986)s asymmetric information model (winners curse) by introducing the ex ante uncertainty about an IPOs market clearing price. The ex ante uncertainty among investors over the value of firm determines the underpricing level of the IPO (Loughran and Ritter, 2004). The level of underpricing increases with the degree of ex ante uncertainty about the value of the firm (Beat ty and Ritter, 1986; Ljungqvist, 2007). Firms with more uncertainty about growth opportunities have higher levels of underpricing than other firms on average (Ritter, 1984; Beatty and Zajac, 1994; Welbourne and Cyr, 1999). Under the scope of asymmetric information theory, there are three models: winners curse, principal-agent and signaling. Winners curse assumes informed investors have better information. Principal-agent model argues underwriters gain better information. Signaling model emphasizes on the better information retained by issuers. Winners curse model is based on asymmetric information between informed and uninformed investors (Rock, 1986). This model assumes informed investors have better information about the new firms prospects than the issuer and its underwriters. Uninformed investors would only get unattractive IPO firms shares because informed investors have already picked up attractive firms share with better information. That is to say, uniformed investors would only expect negative return. Consequently, uniformed investors are willing to participate only if new-issue offer prices are low enough to compensate them for expected losses on less attractive issues (Rock, 1986; Ritter and Welch, 2002). Under this assumption, issuers or underwriters have to underprice their IPO shares, i.e. selling with discount, to attract these uninformed investors. Underpricing is seen as compensation to uninformed investors (Beatty and Ritter, 1986). Underwriters have the intention to underprice the IPO shares in order to keep the uninformed investors stay in the market to make offering successful. Underwriter could use underpricing to obtain full subscription in order to make the shares offering successfully. Moreover, Loughran and Ritter (2002) argue that winners curse is not the dominate explanation in IPO underpricing now. Winners curse problem and dynamic information acquisition were main explanations in 1980s in US IPO market. In 1990s US, analyst coverage and side payments to CEOs and venture capitalists (spinning hypothesis) are main reasons (ibid). Welch (1992) claims that underpricing is caused by the cascades effect in the IPO market. This Cascades effect is presented as the asymmetric information between informed and uninformed investors. Underpricing generates information momentum, which results in a higher market clearing price at the end of the lockup period (the time between share-offer day and listed day) when insiders (first buyers) typically start to sell some of their shares. These first buyers behavior would influence the following buyers perception on value of shares. Since there is selling pressure when IPO ends and the analyst coverage starts, the market price could still maintain at a high level in the first-trading-day, thus incur significant underpricing level (Bradley et al. 2003; Ofek and Richardson, 2003; Bradley, Jordan, Roten, and Yi, 2001; Brav and Gompers, 2003; Field and Hanka, 2001). Principal-agent model focuses on asymmetric information between underwriters and issuers (Baron and Holmstrom, 1980; Baron, 1982). Baron (1982) assumes that underwriter is better informed about demand conditions than the issuer, leading to a principal-agent problem. In this model, the function and role of underwriters are mainly studied. Underwriters want to underprice IPOs (Baron and Holmstrom, 1980; Baron, 1982; Loughran and Ritter, 2002/2004; Ljungqvist and Wilhelm, 2003). First of all, underwriter has to underprice in order to sell all shares, i.e. underwriters use underpricing to obtain full subscription in order to make IPO successfully. There are uninformed investors who have the money to invest in the market. Underwriters convince issuers into underpricing to prevent these uninformed investors from leaving the IPO market. Underpricing is to induce underwriters to put forth the correct level of effort (Baron, 1982). Underwriter has to balance this trade-off in the principal-ag ent problem. On one side, underpricing would incur wealth loss for the issuer and reduce commission revenue for underwriters, on the other side, Beatty and Ritter (1986) argue that as repeat players, underwriters have an incentive to ensure that new issues are underpriced by enough lest they lose underwriting commissions (especially for those uninformed investors) in the future. Empirical studies (Nanda and Yun, 1997; Dundar, 2000) claim that underwriters subsequently lose IPO market share if they either underprice or overprice too much. However, the principal-agent model is challenged by Muscarella and Vetsuypens (1989), who argue that underpricing phenomenon still exists in underwriter (investment bank) IPO itself in which there is no principal-agent problem. Second, underpricing could incur over-subsucription in an IPO, which gives underwriter the discretion to allocate IPO shares. Underwriters can decide to whom to allocate shares if there is excess demand. In this case, underwriters discretion acts like interest exchange with their clients. They want to retain the buy-side clients, thus to allocate underpriced IPOs to them. Recurrent institutional investors would get the IPO shares and enjoy a positive initial return (Loughran and Ritter, 2002). Underwriters have an incentive to underprice IPOs if they receive commission business in return for leaving money on the table. Underpricing could facilitate the loyalty between underwriter and its clients, which could in turn facilitate underwriters sale of subsequent IPOs and seasoned offerings. For example, in the late 1990s IPOs were allocated to investors largely on the basis of the past and future commission business on the other trades (Reuter, 2004). Third, spinning effect induces underwriter to underpricing. The spinning explanation describe issuers are willing to hire underwriters with a history of underpricing because issuers receive side-payments. Spinning may be used by the underwriter to acquire IPO deals and influence IPO pricing, but it can also be used as part of a long-term business strategy with a given issuer to attract future underwriter mandates. The side-payments of spinning makes issuers reluctant to change its original underwriter for subsequent offerings (Dundar, 2000; Krigman, Shaw and Womack, 2001; Burch, Nanda and Warther, 2005; Ljungqvist, Marston and Wilhelm, 2006/2009). Spinning effect was first documented by Siconolfi (1997) in a Wall Street Journal article. Specifically, underwriters set up personal brokerage accounts for venture capitalists and the executives of issuing firms in order to allocate hot IPOs to them (Siconolfi, 1997). The hot IPOs means shares those are underpriced and would gain a huge po sitive initial return aftermarket, which would increase the personal wealth of the managers of issuing firms (Loughran and Ritter, 2002). The use of hot IPOs to reward issuers created an incentive for issuers to seek out underwriters who willing to offer this hot IPO through underpricing, rather than to avoid such underwriters. Allocating hot IPOs to the issuers and their friends (through friends and family accounts) allowed underwriters to underprice even more, i.e. selling at a friendly price (larger discount) (Fulghieri and Spiegel, 1993; Loughran and Ritter, 2002; Ljungqvist and Wilhelm, 2003). Underwriters may be more inclined to give favorable allocations of shares to preferred investors (friends, family, executives, etc.) and unfavorable allocations to non-favored non-connected investors. The latter would require higher underpricing to participate in the IPO market. The outcome of this process is not due to ex ante uncertainty, but due to discretionary allocation of shares by underwriters. Furthermore, this discretion is not mitigated by strong institutional framework. During the late 1990s and early 2000, spinning was a widespread practice in the US, despite having one of the strongest investor protection rules at the same time (Liu and Ritter, 2009). Signaling model, first referred by Leland and Pyle in 1977, assumes the issuer itself best knows its prospects (possesses better information). Underpricing is a signal that the firm is good (Allen and Faulhaber, 1989; Grinblatt and Hwang, 1989; Welch, 1989). If the issuer possesses the best information about its true value, a high quality firm could use underpricing as a means to distinguish itself from low quality companies. These firms with the most favorable prospects find it optimal to signal their type by underpricing their initial issue of shares, and investors know that only the best firms can recoup the cost of this signal from subsequent issues. In short, a partial offering of shares is made initially, information is then revealed, and subsequently more shares will be sold. In contrast, low quality companies might tend to price fully (Bergstrom, Nilsson and Wahlberg, 2006). Hiring reputable underwriter with influential analysts would mitigate ex ante uncertainty, thus reduce the underpricing level. Empirical study shows the more market power of underwriter (with strong analyst team, influential and bullish, usually), the more underpricing extent (Hoberg, 2007). Hiring a prestigious underwriter (Booth and Smith, 1986; Carter and Manaster, 1990; Michaely and Shaw, 1994) or a reputable auditor (Titman and Trueman, 1986) is seen as a specific way to reduce the ex ante uncertainty. Carter and Manaster (1990) and Carter et al. (1998) argue that IPOs taken by prestigious underwriters benefit from superior certification. The choice of underwriter indicates the quality of this IPO implicitly, because the reputation of underwriter may provides certain guarantee on the value of the issuer, which in turn, mitigates the ex ante uncertainty, thus the underpricing level would be reduced. Nevertheless, empirical evidences show a mixed result. There is a negative relati on between underwriter prestige and underpricing level in the 1980s, but a positive relation in the 1990s (Beatty and Welch, 1996; Cooney, Singh, Carter, and Dark, 2001). Issuers want to hire reputable underwriters who have, not only because of this could reduce ex ante uncertainty, but also the influential and bullish analyst coverage provided by reputable underwriters (Dunbar, 2000; Clarke, Dunbar and Kahle, 2001; Krigman, Shaw and Womack, 2001). Analyst coverage is crucial on the discovery of true value of the firm, especially its impact on sequent shares offering. Ljungqvist, Jenkinson and Wilhelm (2003) prove that influential analyst could bring the businesses for underwriters (investment banks). Prestigious investment banks also tend to recruit analysts who making optimistic forecasts (Hong and Kubik, 2003). Although analyst coverage is expensive for underwriters (the largest US investment banks each spent close to $1 billion per year on equity research in 2000, for example) (Rynecki, 2002), these costs are covered partly by underwriting fee charging from issuers. Due to the information production cost, many firms would prefer later IPO. Firms d o IPO firstly could incur analyst coverage advantage (more information revelation) for other firms wanting for IPO in the same industry (i.e. free ride effect). In this case, underwriter compensate this information cost for the before Firms with underpricing to investors (Benveniste, Busaba, and Wilhelm, 2002; Benveniste et al., 2003). Moreover, issuers feel reluctant to change its underwriter for seasoned equity offering (SEO) if the underwriter did analyst coverage and the underprice effect is significant in the IPO. Cliff and Denis (2004) proved this with the example 1050 US IPO firms during 1993-2000. When initial offering shares, the issuer increases emphasis on the advertisement effect brought by analyst coverage from underwriter, rather than the level of underpricing itself. Empirical studies (Cliff and Denis, 2004; Dunbar, 2000; Clarke et al. 2007) illustrates that many US issuers accepted underpricing in 1990s since they focused more on choosing an underwriter with an influential analyst than on getting a high offer price. The underlying principal is that underpricing could attract investors attention to this firm. Issuers have the incentive to reduce underpricing, and model their optimal behavior. Firms could gain advertisement benefits from underpricing, which creates beneficial condition for sequent offering (Habib and Ljungqvist, 2001). A high quality firm is underpriced (sell shares at discount) at the initial offering in order to attract market attention through following analyst coverage, usually, massive and efficient analyst coverage would mitigate the asymmetric inf ormation among investors and present the high quality of the firm, finally, the more realization on the true value of the firm among investors could help the firm sell its sequent seasoned offering shares at a higher price (i.e. recoup the loss from the underpricing in the initial offering). This process is called partial adjustment phenomenon (Hanley, 1993). About one-third of all IPO issuers between 1977 and 1982 had reissued equity by 1986, the typical amount being at least three times the initial offering (Welch, 1989). Analyst coverage relates to the future predicted value of the issuer, thus it is important. Moreover, the development of internet and cable television extend the influence of analyst coverage on the share price. In this way, the share price aftermarket would increase, which further provides the opportunity for issuer to offer higher price for its seasoned offering. Behavior Finance Speculative bubble theory After the internet bubble collapse in the US in early 2000, the academic focus transferred to behavior finance. The asymmetric information theory is based on the efficient market hypothesis. The ex ante uncertainty leads to the difficulty on firm valuation for investors, therefore, issuer and underwriter would set higher underpricing level to attract investors. Underpricing is seen as deliberate selling strategy for an IPO, once listed in the secondary market, share price would return to its fair value. Asymmetric information theory predicts lower underpricing if information is distributed more homogeneously across investors (Michaely and Shaw, 1994). However, it is challenged by heterogeneous expectation hypothesis in the stock market (Miller, 1977), which argues this deliberated underpricing strategy of IPO (selling at discount) disrupts the market efficiency (Loughran et al., 1994). According to Miller (1977), there are two assumptions in the market: the heterogeneity expectation and restriction on short-selling. The optimistic investors buy and hold shares, whereas pessimistic investors can not participate in the trade since the short selling is restricted. Consequently, share price reflects the opinion from optimistic investors, and thus the share price is overvalued compared to its fair value. Aggarwal and Rivoli (1990) raised the speculative bubble theory to argue that IPO underpricing is caused by faddish behavior on behalf of investors. This theory reveals there is speculative environment in secondary market, which increases the market price of the first-trading-day, thus incurs severe underpricing phenomenon. The speculative bubble theory to Ibbotsons opinion that underpricing is cyclical, which could date back to 1970s. Ibbotson and Jaffe (1975) found the level of underpricing fluctuates between different time periods. One explanation for the fluctuation may be the fact that there are hot and cold IPO markets (Ibbotson et al., 2001). In a hot IPO market, the average level of underpricing is large and the amount of firms going public increases. Afterwards there is a high rate of firms going public, but the level of underpricing decreases. The following cold period starts with fewer firms going public and very low underpricing or even overpricing. There is strong empiri cal evidence for this recurrent pattern, but the existence of this pattern has not yet seen sufficiently explained theoretically (Ibbotson and Ritter, 1995). Aggarwal (2000) provides empirical evidence to prove there is positive relationship between underpricing level and market index. Faddish investor hypothesis claims that in the hot market, over-optimistic (irrational) investors overpriced the IPO. This means the high initial return of IPO is not caused by deliberate underpricing pre-IPO solely, but is overpriced by optimistic investors in the secondary market. On one side, large amount of irrational investor is the root of high initial return in IPO, because irrational investors determine the transaction price in the secondary market (Ljungqvist, Nanda and Singh, 2003). Ljungqvist and Nanda (2002) claim that personal investor is seen as irrational investor, whereas the issuer, underwriter and institutional investors are seen as rational investor. Ljungqvist and Wilhem (2003) proved that personal investors have over-optimistic expectation on stock return in the hot market and these personal investors are typical noisy traders in IPO market, who prefer to make investment decision in terms of past initial return of previous IPOs. Delong, et al. (1990) reveal the influence of noisy trader on the share price. These noisy traders in IPO market are typical positive market feedback traders. When recent initial returns are high in the IPO market, these investors would purchase new issues, thus these purchases increase the demand for following IPOs, thus raise the initial return for these following IPOs. On the other side, it is believed that inequality of demand and supply of IPO primary market causes or intensifies the speculative environment in the secondary market (Aggarwal, 2000). Inequality between demand and supply leads to speculative opportunity. The underlying reason for this inequality is that IPO mechanism is not market-oriented in some countries, which is controlled by government (China, for example) (Su, 2004). IPO supply in the primary market is not adequate because of the government control. When new issues are over-subscribed, the irrational investors (speculators), who are constrained in the primary market, would be released in the secondary market. Meanwhile, due to the restriction on short selling (in China, for instance), investors could only make money when price increases. Therefore, investors push up the price on the first-trading-day, which causes severe underprcing level. Legal framework theory Legal framework theory could explain the different underpricing level among different countries. Legal framework has significant impact on ex ante uncertainty in IPO market. Ex ante uncertainty caused by regulatory constrains, wealth redistribution, and market incompleteness, leads to the IPO underpricing phenomenon (Mauer and Senbet, 1992). Difference in legal frameworks of various countries explain the ex ante uncertainty degree and the decisions made by investors in the market (La Porta et al., 1997/1998/2002). Cross-country differences in the legal framework affect ownership structure (La Porta et al., 2002), ownership effectiveness (Heugens et al., 2009), capital structure (De Jong et al., 2008), asset structure (Claessens and Laeven, 2003), dividend policy (La Porta et al., 2000), corporate governance (La Porta et al., 2000; Mitton, 2002) and corporate valuation (La Porta et al., 2002). Legal frameworks deem to reduce uncertainty by creating a stable foundation in which subsequ ent human interactions can be grounded (North, 1994; Peng, 2009; Van Essen et al., 2009). First of all, legal framework affects issue firms value. Legal framework can influence the ex ante uncertainty about firm value in more or less the same way as ex ante firm-specific risk at the time of IPO. Firms operating in a legal environment with poor protection of intellectual property rights are unwilling to invest in intangible assets (Research and Development capability, or branding effect, for example), leading to lower firm growth and thus lower firm value. Second, legal framework affects investors decision. Stronger investor protection could reduce the investment risk (for example, lower asset volatility, lower systematic risk, lower stock volatility, higher risk-adjusted return as measured by the Sharpe and Treynor index) (Chung et al., 2007; Hail and Leuz, 2006; Chiou et al., 2010). In countries with weaker legal protection, investors will be more uncertain about realizing a return on their investment (Shleifer and Vishny, 1997). Lower levels of legal protection for investors will create more uncertainty with respect to post IPO strategies and managerial decisions that may negatively affect firm value (Claessens and Laeven, 2003). In a country with a weaker legal framework, managers or dominating shareholders have more opportunities to transfer profits or assets out of the firm at the expense of the minority shareholders. Weaker legal framework could provide opportunity for damaging firm value through transfer pricing, asset strippin g and investor dilution (Cheung et al., 2009; Berkman et al., 2009). This increased probability of ex post expropriation by management or dominating shareholders increases the ex ante uncertainty at the time of IPO (Johnson et al., 2000). The higher the expropriation risk, the more the offer needs to be underpriced to compensate for this ex ante uncertainty. There is conflicts between dominating shareholders and outside shareholders because outside shareholders require higher risk premiums (higher cost of capital) which caused by the weak legal framework (Himmelberg et al., 2004; Giannetti and Simonov, 2006; Albuquerue and Wang, 2008). Although it is argued that issuers can independently improve their level of minority investor protection by a listing on a foreign stock exchange with higher standards of investor protection (i.e. cross-listing), it is doubtful that they can fully compensate for the lack of an adequate legal framework at the country-level (Black, 2001; Reese and Weisb ach, 2002; Roosenboom and van Dijk, 2009). Third, Underpricing could avoid potential legal liability, which is another explanation theory provided by Tinic (1988). It is claimed that underpricing reduces both the probability of lawsuits if subsequently the firm does not do well in the aftermarket, because the investor is the direct recipient of the benefit from underpricing (Milgrom and Roberts, 1986; Tinic, 1988). Underwriters are unwilling to price these offerings at high level, in case that the market would concern about lawsuits and thus damage to its reputation if the shares eventually dropped in price aftermarket. The argument is based on that unsophisticated and uninformed investors were bidding up the price to unjustified levels, and the underwriters were unwilling to price the IPOs at the market price determined by these noise traders. Ownership control theory Ownership control theory is described as IPO is expected to bring in new shareholders, who would dilute the control power of original shareholders (managers), therefore, issuers have less motivation to bargain for higher offer price, and result in underpricing. Ljungqvist and Wilhelm (2003) explain this ownership fragmentation would incur underpricing through the realignment of incentives hypothesis. Logically, the issuer firms holding large proportion shares would have incentive to argue for higher offer price thus reduce the underpricing level (Barry, 1989; Habib and Ljungqvist, 2001; Bradley and Jordan, 2002; Ljungqvist and Wilhelm, 2003). Moreover, the excess demand for shares caused by underpricing enables managers to allocate small stakes of shares to many dispersed small investors. Therefore, original managers control power is strengthened since they would be the dominate shareholders. In other words, underpricing could give the managers power on control (Brennan and Franks, 1 997; Boulton et al., 2007). However, the ownership control theory is challenged. Other substitute mechanisms for retaining control such as takeover defenses, non-voting stocks and alike are more effective, because underpricing can not prevent outside investors from accumulating larger stakes of shares once trading begins in the aftermarket (Ljungqvist, 2007). Issue mechanism Fixed price Offer price = Predetermined price Bookbuilding Underwriter set the final offer price by consulting with investors Auction Offer price = lowest price which bid the final share Hybrid Bookbuilding + Fixed price; Auction + Fixed price Bookbuilding, by which underwriter has the discretion on share allocation, can induce investor to reveal their information through their indications of interest, which can reduce information asymmetry thus lower underpricing (Benveniste and Spindt, 1989; Benveniste and Wilhelm, 1990/1997; Sherman and Titman, 2002; Ritter and Welch, 2002; Gondat-Larralde and James, 2008). On one side, underwriters tend to allocate IPOs to investors who provide information about their demand (i.e. the price discovery process). Price discovery eliminates the winners curse problem, thus reduce underpricing level. On the other side, bookbuilding authorized underwriter the discretion on share allocation (so called rationing allocation). After collecting investors indications of interest, the underwriter allocates no (or only a few) shares to any investor who bid conservatively. This rationing share allocation could reduce the underpricing level. Koh and Walter (1989) found the likelihood of receiving an al location in this mechanism was negatively related to the degree of underpricing, and average initial returns fall substantially from 27% to 1% when adjusted for rationing allocation in Singapore case study. Levis (1990) and Keloharju (1993) claim Rationing share allocation mechanism could reduce the initial return in UK, and in Finland respectively. Aggarwal, Prabhala, and Puri (2002) also find that institutional investors earn greater returns on their IPO allocations than do retail investors largely in bookbuilding mechanism, because they are allocated more shares in those IPOs that are most likely to appreciate in price. However, imposing constraints on the underwriters allocation discretion can interfere with the efficiency of the bookbuilding. The quality of bookbuilding in many European and Asian countries is damaged by certain restriction on the use of bookbuilding, which leading to higher underpricing (Ljungqvist et al., 2003). Requiring that a certain fraction of the shares be allocated to retail investors, as is common in parts of Europe and Asia, reduces underwriters ability to target allocations at the most aggressive (institutional) bidders and so may force them to rely more on price than on allocations to reward truth-telling. Moreover, empirical study indicates that bookbuilding in countries outside the US only reduces the level of underpricing when used in combination with US investment banks (underwriter) and targeted at US investors. Although the functioning of the different issuing me

Matthew Henson and Merrick Johnston Discovery of the North Pole :: essays research papers

Matthew Henson and Merrick Johnston both achieved something extraordinary. Matthew Henson was awarded as the co-discoverer of the North Pole. Merrick Johnston was the youngest person ever to climb Mt. McKinley. Although they differ, both of their ambitions were hard to achieve and were a huge milestone for each person. Life was forever changed for both Henson and Johnston when they reached their destination. In the dictionary, a goal is â€Å"something that one hopes or intends to accomplish.† Henson accomplished his goal on April 6th, 1909. As a boy, he traveled around on ship and achieved seagoing experience. When he was a store clerk, Robert Peary hired him and introduced Henson to his new goal, which was to climb the North Pole. After a number of tries, he finally reached the top. Johnston had her dream of climbing Mt. McKinley since she was 9. She finally started her journey up the mountain on June 2nd. Although snow occasionally kept her from advancing on her path, Johnston finally touched the top on June 23rd when she was 12 years, 5 months, and 5 days old. Henson and Johnston both accomplished their dreams. Henson and Johnston each needed certain qualities and characteristics to achieve their goals. Henson had experience at sea, was fluent in the Eskimo language, and was skilled in making useful equipment that was needed to survive the path to the North Pole. His perseverance kept him trying to achieve his dream after a number of times in which he failed. Johnston’s training had consisted of gymnastics, hiking, skiing, and snowboarding. She even climbed Mt. Goode to get more experience. Her ability to keep focus on her goal brought her to the top of Mt. McKinley. Determination burned in both Henson and Johnston day after day. If it was not for these qualities, Henson and Johnston might not have reached their destination.

Leadership And Management Skills Portfolio

Introduction This reflective work focuses on assessing my personal weaknesses in different areas. It starts by a self –assessment of my personal development needs.The next section looks at the difficulties I experienced on various issues. Finally, the action plans for self-development in the various areas are suggested. Portfolio Section 1Planning and personal management skills Using a paper exercise, I assessed my planning and personal management skills to determine areas of development. Concerning planning, I scored 13, which is a relatively low score. This indicates an area for development because my score was less than 24, which was the score I had to attain to show that I did not further development. I knew this was a weakness and a concern for me prior to starting my postgraduate studies while working full time. On the time management dimension, I scored 15 and this demonstrated a need for further development. I should have a score of above 24 to demonstrate that this area did not require further development. The issue of time management was a concern for me because of starting my postgraduate studies and working full time. I have had challenges in the past characterized by attempting to do too much at work and not managing my time effectively. The low scores on both planning and time manageme nt reveal that I have challenges with task prioritization. An action plan for self-development in these areas is presented later under task prioritization.Learning style Honey and Mumford designed a Learning Styles Questionnaire that is used in assessing the learning styles of individuals, and these are categorised into activists, theorists, pragmatists, and reflectors (Jarvis, 2005). When I completed this questionnaire, the results showed that I have a strong preference for the activist learning style and a moderate preference for the pragmatist learning style. As an activist, I enjoy novel experiences, I am active and depend on intuitive decision making and I have an aversion to structure (Jarvis, 2005). I learn best from learning activities that provide new problems and experiences, role playing and working together with others in group tasks and opportunities for dealing with challenging tasks. In addition, I prefer tasks with high visibility including presentations, leading discussions, and chairing meetings.However, I learn less when I have to listen to lectures, think, write or read on my own, or absorb and understand a lot of data. Furthermore, my learning is impaired when I have to follow precise instructions without any form of flexibility. As a pragmatist, I prefer risk-taking, group work and application and testing of concepts (Jarvis, 2005). I learn best when there is a clear association between the learning topic and actual issues in life. Learning activities should be structured around demonstrating techniques for accomplishing tasks with clear, realistic advantages. Furthermore, I prefer to be provided with opportunities for trying out and practicing techniques with feedback or coaching from a reliable expert. Similarly, I need examples or models that I can emulate, and I should be taught techniques that are presently applicable to my work context. I also prefer being offered with opportunities for immediately applying any new knowledge that I have learnt. As a pragmatist, l learn less when the learning activities are not associated with an immediate need, lack clear guidelines, and when there are obstacles to implementation of acquired knowledge. Such obstacles can be personal, managerial, organisational or poli tical in nature. These learning styles have an important influence on the learning activities undertaken in the action plan for developing different skills as demonstrated later. Assessment of how I work In a paper exercise, I assessed the way I work and the results revealed that I procrastinate when faced with tasks that I do not really like, I spend a lot of time attempting to perfect things, and I am unable to find things and notes whenever I require them. This is an indication that I have poor prioritization skills, and this will be addressed through an action plan on task prioritization that is explained later.Personality indexI assessed my personality index using an online exercise, and the results demonstrated that I possess various traits. First, I demonstrate low assertiveness as I do not need to be in constant control, and I have a higher orientation toward teamwork than tasks. Second, I am an extreme extrovert because I need to discuss issues in detail with other people. Third, I am extremely impatient as I find it challenging to concentrate on repetitive tasks, and I have a high sense of urgency. Finally, I am highly detailed because I want to acquire knowledge and become an expert. These traits of my personality affect how learning activities will be structured in the action plan to improve learning. Portfolio Section 2Group leadershipIn the first week of my course work, I was leader of my group. I did not know my fellow colleagues very well as we had just started on the course. Therefore, stepping up and being a leader of people I did not know was tough considering that I am not a manager or leader at work. I had to lead the group in the preparation of a group presentation on a case study of someone else’s leadership skills and present with them. I needed to take control and set the direction for the team more rapidly, and a lot of time was wasted as I did not know what was expected of me as a leader. For instance, a group or team leader is required to set the goal of the group and establish performance expectations (Morgeson, DeRue & Karam, 2010). This was a challenging undertaking as I decided to choose an informal approach to this activity where the group members actively facilitated the process of setting goals and determining how the members would be held responsible in relation to the performance expectations. This approach resulted in wastage of time because it was difficult for consensus to be achieved among the group members on the goals and performance expectations. Similarly, I had challenges in structuring and planning the group in terms of developing a shared understanding among the group members on the best approach for coordinating action and working together to achieve the established goals (Morgeson et al., 2010). I faced difficulties in determining how the activities would be performed, the individual’s responsible for specific tasks, and when the group activities would be done. On the issue of when the group activities would be performed, it was challenging to achieve consensus because the group members had conflicting schedules that interfered with choosing an appropriate time for the group meeting to determine the progress of the tasks. Although I faced various challenges during the initial process of forming group, I eventually embodied the role of the group leader. However, I did not always allow everyone to have input. It is suggested that soliciting and using continuing feedback from the group members is vital for achievin g the group objectives (Morgeson et al., 2010). By failing to allow the group members to offer their input into the group presentation, I ended up not including their diverse and useful perspectives on the group activity.Coaching sessionI acted as a coach on how to reactively write. There are specific skills required of coaches including social competence, emotional competence, listening, questioning, framing and contributing (Maltbia, Marsick & Ghosh, 2014). Social competence is associated with establishing relationships with individuals being coached by increasing a supportive and a safe environment that is characterized by freedom in expression thoughts, mutual respect, and trusted partnership (Goleman, 2006). However, I lacked in this competency as I did not allow the individuals I was coaching to freely express their opinions on reactive writing. Rather than encouraging engagement with my peers, I monopolized the coaching process. Emotional competence is associated with having self-awareness of one’s emotions and those of other people to ensure that the coaching relationship is experienced as productive, flexible, and open (Maltbia et al., 2014). I had a difficult time managing my own emotions when coaching others as I got angry whenever any person I was coaching did not understand what I was communicating to him or her. Furthermore, I did not recognize the effects of my actions on the emotions of the people I was coaching. For instance, some of the people I was coaching were visibly frustrated during the coaching process but I did not take time to address these issues. Listening involves understanding the meaning of what the person under coaching is saying with regard to achieving desired outcomes (Maltbia et al., 2014). When I started the coaching session, I did not ask the person I was coaching the specific outcomes they desired from this activity. It is suggested that a hierarchy should not exist in the relationship between the coach and the p eople being coached (O’Broin & Palmer, 2009). By failing to include the objectives of the people being coached into this relationship, their agenda failed to take precedence in the coaching process. As a coaching skill, questioning entails inquiry for revealing the information necessary with the highest benefit to the client (Maltbia et al., 2014). I was lacking in this competence as I rarely asked the person I was coaching questions related to the coaching process. I took on the role of an active coach and required the people I was coaching to assume a passive role in this process.Framing is characterized by expanding the world views of the people being coached through an examination of whether learning is rooted in experience (Maltbia et al., 2014). This skill requires the coach to establish whether the coaching process has had a positive effect on learning in terms of addressing the initial challenge or problem that influenced this activity to be undertaken. During the coaching sessions, I did not frame the coaching process to establish if the people I was coaching had benefited from this activity. Finally, contributing entails effective communication during the coaching sess ion as a mechanism for achieving balance between the support and challenge required for facilitating growth and learning (Maltbia et al., 2014). As initially mentioned, I monopolized conversations, and this prevented the people I was coaching from effectively contributing to the coaching process. Moreover, I failed to offer adequate challenges to promote learning in relation to reactive writing.Role playing as a manager in an appraisalPerformance appraisal is an important process as it is utilised in assessing recent performance and addressing future opportunities and objectives (Chartered Institute of Personnel and Development, 2014).). When conducting a performance appraisal, employees have to be provided with sufficient notice of the expected performance standards and timely and regular feedback about their performance (Heslin & VandeWalle, 2011). During my role play as a manager in an appraisal, I did not offer timely and regular feedback on individual performance toward the ach ievement of expected performance standards. It is also suggested that employees should have an input in the appraisal process and be provided with opportunities for challenging it if they view it as being unfair (Heslin & VandeWalle, 2011). Conversely, during the appraisal, I did not allow the individuals with opportunities for presenting their views and opinions in relation to assessment of their performance. In this regard, I failed to consider the voice of these individuals that would have provided a deeper understanding of the performance achieved.Acting as a consultantI took up the role of as a consultant in a team of two individuals to pitch to a client our ideas for their people strategy of their new business. According to the Institute of Management Consultants (2014), consultants need competencies to deliver consulting services. Some of these competencies are balanced judgment, awareness of the organisational context and external environment, and listening (de Caluwe & Re itsma, 2010). Balanced judgment entails a comparison of potential courses of action and evaluating available information and using relevant criteria, which leads to realistic decisions (de Caluwe & Reitsma, 2010). In the role of consultants, my colleague and I only focused on a single course of action for the organisation in relation to the people strategy for the new business. Consequently, when the clients asked us any alternative courses of actions that might be undertaken, we were unable to provide satisfactory responses because we were unprepared. Furthermore, external environment awareness is related to being adequately informed about issues in the business environment that have influences on strategies and utilising such knowledge for the benefit of the organisation (de Caluwe & Reitsma, 2010). In our case, we considered legal, economic and technological factors that affect an organisation’s people strategy. However, we failed to consider trends influencing human reso urces in the organisation and political issues. Thus, the clients were dissatisfied as the people strategy we developed did not take into consideration all the factors in the business environment that have impacts on the organisation’s human resources management strategy. Listening skills are important in management consultancy as they provide the client with the space for expressing their opinions, focusing on their reactions, responding suitably and posing further questions (de Caluwe & Reitsma, 2010). Regarding this, my colleague and I did not focus on the clients’ reactions. We were focused on pitching our strategy and thus we were unable to capture nonverbal signals that would have communicated to us whether the clients were in agreement with the arguments we had made in the people strategy that the organisation had to adopt. Regarding organisational context, management consultants are expected to understand how an organisation operates and considering these issues when developing an action (de Caluwe & Reitsma, 2010). We strived to develop a people strategy that reflected the organisation’s current practices related to management of human resources. However, the information related to this issue was not easily available. Therefore, we ended up pitching a people strategy that we considered as non-existing in the organisation. We later discovered that some aspects of the people strategy were already present in the organisation, which means that we had not provided a more effective solution to the clients.Task prioritisation I had two finance classes but missed the first one but then I attended the second class. It was only after attending the second class that I realised that I should have attended the first one. The content covered in the second class was only a continuation of the issues addressed in the first class. Therefore, by failing to attend the first class, I missed out on the necessary context for understanding the topics covered in the second class. This negatively interfered with my learning. Upon reflection, I learned that I did not attend the first class because I did not prioritise the things that I had to do. I have to deal with conflicting demands of working full time and pursuing my postgradu ate education (Armstrong, 2012). In this regard, I missed the first finance class because I was attending a meeting at work where I was presenting an important report to senior management.Negotiating as a ClientMy colleague and I assumed the role of a client negotiating with a software vendor on delivery times and price. As clients, we argued and debated with the software vendor on the relevant issues. For instance, there was prolonged argument and debate on the delivery times because we were considering small insignificant factors on this issue. The outcome was that the arguments related to the main issue of delivery times were largely neglected. Indeed, it is suggested that it is important to have awareness of any insignificant arguments that might derail the negotiation process (Pinet & Sander, 2013). In our case, we concentrated on being right rather than winning the arguments associated with the price and delivery times. The negotiation process deviated from the agenda establi shed prior to the meeting with the software vendor. Consequently, a lot of time was wasted on these arguments and compromises were achieved after a protracted process.Portfolio Section 3This section presents an action plan for developing my postgraduate, management and leadership skills further. The action plan covers skills required for group leadership, management consultant, appraisal manager, coaching, negotiation, and task prioritization as presented below.Action plan for group leadership skillsObjective To improve my skills in leading and managing groups in completion, of course, related tasks Tasks Read and brainstorm with my peers on available literature including books, reputable online articles and journal articles about team leadership. I will focus on literature that looks at leadership functions on the different phases of teams namely the transition and action stages. The transition stage is a time when a group or team focuses on activities associated with the team’s structures, planning tasks, and assessing the performance of the team in terms of the whether the team has the ability of achieving its objectives (Marks, Mathieu & Zaccaro, 2001). The specific leadership skills that I will learn about for this phase include defining the mission of the team, goals, and performance standards, structuring responsibilities and roles in the team, and promoting feedback processes (Morgeson et al., 2010). The action stage is where the team or group members are focused on tasks that directly contribute to goal achievement (Marks et al., 2001). In this phase, I will learn rele vant leadership skills including creating a positive climate in the group, encouraging autonomous actions by members, resource acquisition for the group, problem solving, involvement in the group’s work, and monitoring the group(Morgeson et al., 2010). Discuss with managers and leaders in my workplace about effective approaches for leading and managing groups or teams Evaluation After acquisition of the necessary leadership skills, I will apply to future group assignments in my course work. I will evaluate the acquired group leadership skills by asking my peers to rate my performance as a leader. I will design a checklist where the group members will provide their responses about my overall leadership skills and areas that require improvement. Review date The reading of literature, applying the relevant knowledge to actual practice, and evaluating leadership skills will be reviewed on a regular basis whenever there is a group assignment.Action plan for coaching skillsObjective To become a very effective coach Tasks Read books, journal articles, and online publications on the coaching process and the required skills and competencies for this activity followed by a brainstorming exercise with my colleagues. Participate in training in coaching provided by my organisations to equip with necessary skills. Ask a senior manager in my workplace to act as my coach to enable me to understand this process from a practical perspective and model it. Evaluation The knowledge acquired from literature, training, and on-the-practice will be utilised in coaching my peers in coursework on different topics. The performance data that will be collected to establish the level of my effectiveness as a coach will be obtained from interviewing the individual that I will be coaching. Review date Ongoing throughout my course work.Action plan for management consultant skillsObjective To enhance my skills as a management consultant Tasks Read available literature on management consultancy and look at case studies on the process of management consultation. After reading alone, I will brainstorm these issues with my study group. Discuss with management consultants within and outside my organisation to learn the criteria for success. Evaluation Evaluation will be based on establishing the extent to which the client is able to achieve desired outcomes in relation to the consultation services I will offer them. This will be achieved by using a questionnaire to ask the clients whether I demonstrate the skills of a management consultant. Review date Ongoing based on management consultancy projects.Action plan for managerial skills in appraisalsObjective To improve my skills in conducting performance appraisals Tasks Read widely and brainstorm on skills for performance appraisals. Role playing with my peers on posing the right questions to the individual under appraisal. Discuss with senior managers in my workplace about successfully performing performance appraisals. Evaluation The assessment of my skills in this area will be based on determining to which I successfully complete a performance appraisal. This will involve asking individuals involved in the appraisal process to rate my performance using a checklist. Review date This activity will be completed on a monthly basis.Action plan for negotiation skillsObjective To improve my negotiation skills as a client Tasks Reading widely and brainstorming with colleagues on negotiation skills for clients to understand negotiation skills, negotiation phases, and sources of conflict in negotiation process. Engage in role play to assist in clarification of responsibilities and roles in working in a negotiating team. Evaluation Evaluation will involve collecting evidence indicating whether I applied competencies and skills required in negotiating as a client. This will be achieved by interviewing the other parties to the negotiation process to determine the level of my skills in negotiating as a client. Review date This will be completed by February 2015.Action plan for task prioritizationObjective To enhance my skills in prioritizing both work and education tasks. Tasks Listing all the tasks that I have to perform on a daily basis in my work and college and categorising them based on their impacts on my work and educational pursuits. Using a personal calendar to plan my tasks. Using a checklist to determine completion of tasks on daily basis. Evaluation Performance in task prioritisation will be evaluated by assessing the extent to which I complete all the tasks required in my workplace and at college. Review date This activity will be completed on a daily basis. Conclusion This reflective work has identified areas that require further development in improving my managerial and leadership skills. Based on this reflective work, it is evident that I lack skills in different areas including leadership, task prioritization, effective coaching, managerial skills in performance appraisal and management consultancy. Therefore, these skills have to be improved to ensure that I am effective as manager and leader. Therefore, action plans for improving the different skills have been presented. It is expected that implementation of the action plans will equip with skills that are applicable to my workplace and educational setting. References Armstrong, M. (2012) Armstrong’s handbook of management and leadership: developing effective people skills for better leadership and management. PA: Kogan Page. Chartered Institute of Personnel and Development (2014). Performance appraisal. [Online]Available from: http://www.cipd.co.uk/hr-resources/factsheets/performance-appraisal.aspx (Accessed: 15 Dec. 14). De Caluwe, L., & Reitsma, E. (2010) `Competencies of management consultants: a research study of senior management consultants’, In Buono, A., & Jamieson, D (Eds), Consultation for organisational change, pp. 15-40. NC: Information age publishing. Goleman, D. (2006) Social Intelligence: the new science of human relationship. NY: Banam books. Heslin, P., & Vandewalle, D. (2011) `Performance appraisal procedural justice: the role of a manager’s implicit person theory’. Journal of Management, vol.37, no.6, pp.1694-1718. Institute of Management Consultants (2014) The management consultancy competency framework. [Online] Available from: http://www.imcusa.org/?page=CONSULTINGCOMPETENCY (Accessed: 15 Dec. 14). Jarvis, M. (2005) The psychology of effective learning and teaching. UK: Nelson Thornes Ltd. Maltbia, T., Marsick, V., & Ghosh, R. (2014) `Executive and organisational coaching: a review of insights drawn from literature for inform HRD practices’. Advances in Developing Human Resources, vol.16, no.2, pp.161-83. Marks, C., Mathieu, J., & Zaccaro, S. (2001) `A temporally based framework and taxonomy of team processes’, Academy of Management Review, vol.26, pp. 356-76. Morgeson, F., DeRue, S., & Karam, E. (2010) `Leadership in teams: a functional approach to understanding leadership structures and processes’. Journal of Management, vol.36, no.1, pp.5-39. O’Broin, A., & Palmer, S. (2009) `Co-creating an optimal coaching alliance: a cognitive behavioural coaching perspective’. International Coaching Psychology Review, vol.4, no.2, pp.184-94. Pinet, A., & Sander, P. (2013) The only negotiation book you’ll ever need. Littlefield Street, MA: Adams Media.

Fiji Water and Corporate Social Responsibility Essay

Nova School of Business and Economics 2nd Semester 2011/2012 Marta Andre Lopes n º10265 International Management – 4th Case Study Summary – Fiji Water and Corporate Social Responsibility: Green Makeover or†Greenwashing†? 1. Introducing the Case The case traces the establishment and subsequent operation of Fiji Water LLC and its bottling subsidiary, Natural Waters of Viti Limited, the first company in Fiji extracting, bottling and marketing, both domestically and internationally, artesian water coming from a untouched ecosystem in the main of Fiji Islands. It takes us through the growth and market expansion of this highly successful company. The company has grown rapidly over the past decade and a half, and now exports bottled water into many countries in the world from its production plant located in the Fiji Islands. In 2008, Fiji Water was the leading imported bottled water brand in the United States. Despite of a great marketing success of the Fiji brand, particularly in the U. S. market, the case shows us how the company has responded to a number of corporate social responsibility (CSR) issues, including measuring and reducing its carbon footprint, responsibilities to key stakeholders, and concerns of the Fiji government with regard to taxation and transfer pricing issues. It also leads us to think of CSR challenges that may jeopardize the sustainability of a great marketing strategy. In this case, Fiji Water faces CSR issues such as the carbon footprint on its production, responsibilities to stakeholders, relations and legal issues with the Fiji authorities on tax incentives, export duty claims and transfer price that may jeopardize an otherwise successful marketing strategy. . Challenges Ahead The firms’ strategies should not only focus on the stakeholders’ or the employees’ interests, they should also take care of the outsiders’ interests affected by the firms’ business since every firm, irrespective of its business or size, must have an obligation to satisfy the social interests when it does the business in the sake of the stakeholders. The case showed that a corporation’s marketing and ethical strategies should not only focus on the interest of the stakeholders and the legal compliance of that corporation’s business, but also center on the moral and social responsibilities. A corporation with a more socially responsible practice would consider itself as responsible corporate citizen of the entire society for every course of business actions. Also, if a corporation fails to maintain a good CSR practice, it exposes the business to various green nterests groups which may trigger the corporation’s sustainability. Given this, it is very important that corporations and their marketers care about CSR practice to ensure the sustainable strategy, which help to ensure the achievement of the stakeholders’ interests by managing economic, legal, social, cultural, and environmental risks. Fiji Water LLC showed a great contribution in Fiji with respect to tax revenue, jobs for local workers, foreign currency collection from export sales and so on. These factors ensure that the production facilities in Fiji can be sufficiently operated and expanded over the years to meet the increasing demand from consumers. I think that the company could develop a comprehensive program on measurement, tracking, reporting, and audit on corporate commitments and responsibilities on environment protection of itself and its vendors, which could help to Fiji Water LLC and its vendors to improve its environmental credibility in certifying that Fiji Water LLC is carbon negative. Also, the company should start paying more corporate taxes to demonstrate that it is a good corporate citizen by revisit its transfer pricing practice. As a consequence, it should review and optimize its business operations to be more efficient and effective by reducing its costs,balancing the interests of its stakeholders and Fijian government.