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Slides for Mba E Business Essay PIDE Working Papers 2010: 57 Corporate Governance in Pakistan: Corporate Valuation, Ownership and Financing Attiya Y. Javid Pakistan Institute of Development Economics, Islamabad and Robina Iqbal Freelance Researcher PAKISTAN INSTITUTE OF DEVELOPMENT ECONOMICS ISLAMABAD All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means—electronic, mechanical, photocopying, recording or otherwise—without prior permission of the Publications Division, Pakistan Institute of Development Economics, P. O. Box 1091, Islamabad 44000. Pakistan Institute of Development Economics, 2010. Pakistan Institute of Development Economics Islamabad, Pakistan E-mail: [emailprotected] org. pk Website: http://www. pide. org. pk Fax: +92-51-9248065 Designed, composed, and finished at the Publications Division, PIDE. CONTENTS Pages Abstract Chapter 1. Introduction 1. 1 Background 1. 2 Objectives of the Study 1. 3 Organisation of the Study Chapter 2. Overview of Corporate Governance in Pakistan 2. 1 Introduction 2. 2 Institutional Framework 2. 3 Code of the Corporate Governance 2. 4 Assessment of Corporate Governance 2. 5 Corporate Governance under Concentrated Ownership 2. Corporate Governance in South Asia 2. 7 Summary and Conclusion Chapter 3. Determinants of Corporate Governance 3. 1 Introduction 3. 2 Review of Previous Literature 3. 3 Corporate Governance Index 3. 4 Determinants of Corporate Governance 3. 5 Estimation Technique 3. 6 Empirical Findings 3. 7 Summary and Conclusion Chapter 4. Corporate Governance and Corporate Valuation 4. 1 Introduction 4. 2 Review of Previous Empirical Literature 4. 3 Data and Methodological Framework 4. 4 Empirical Findings 4. 5 Summary and Conclusion vii 1 1 3 4 4 4 5 9 10 12 13 16 16 16 17 18 20 21 22 24 25 25 26 29 31 36 Pages Chapter 5. Corporate Governance and Corporate Ownership 5. 1 Introduction 5. 2 Review of Previous Literature 5. 3 Data and Methodological Framework 5. 4 Empirical Findings 5. 5 Summary and Conclusion Chapter 6. Corporate Governance and External Financing 6. 1 Introduction 6. 2 Review of Previous Literature 6. 3 Data and Methodological Framework 6. 4 Empirical Evidence 6. 5 Summary and Conclusion Chapter 7. Conclusion Appendi ces References List of Tables Table 2. 1 Table 2. 2 Table 2. 3 Table 2. 4 Table 2. 5 Table 2. 6 Table 2. 7 Table 2. 8 Table 2. 9 Table 3. 1 Table 3. 2 Table 4. Year Wise Distribution of Companies Provincial Wise Distribution of Companies Capitalisation Break Down for the Year 2007 KSE Performance at Glance Ownership Concentration of 50 Random Companies for Pakistan for 2003-2007 Inventors Composition in Listed Private Companies Ownership Composition of Pakistan’s Top 40 Listed Companies Basic Statistics of Corporate Sector of India Types of Financial Institutions in Bangladesh Summary Statistics of Corporate Governance Index Evidence on Determinants of Corporate Governance Evidence on Corporate Governance and Firm Performance (Tobin Q) 8 8 9 9 12 13 13 15 15 15 22 23 33 60 62 64 64 69 72 37 37 39 45 48 55 55 55 Table 2. 10 Dhaka Stock Exchange Select Statistics Pages Table 4. 2 Table 4. 3 Table 5. 1 Table 5. 2. 1 Table 5. 2. 2 Table 5. 3. 1 Table 5. 3. 2 Table 5. 3. 3 Table 5. 4 Table 6. 1 Table 6. Evidence on Corporate Governance and Firm Performance (ROA) Evidence on Corporate Governance and Firm Performance (D/P) Determinants of Concentration of Ownership by Top Five Shareholders Relation between Tobin Q and Ownership by Top Five Shareholders Relation between ROA and Ownership by Top Five Shareholders Evidence on Performance and Ownership Identity Evidence on Performance and Ownership Identity Evidence on Performance and Ownership Identity Evidence on Performance and Manager-Ownership Determinants of External Financing throu gh Equity Evidence on Firm Performance and Need of External Finance 33 34 49 51 51 53 53 54 55 62 63 69 70 71 Table A1 Corporate Governance Index (CGI) Components Table A2 Description of Variables Table A3 List of Companies ABSTRACT In this study the relationship between corporate governance and corporate valuation, ownership structure and need of external financing for the Karachi Stock Market is examined for the period 2003 to 2008. We will write a custom essay sample on Slides for Mba E Business specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Slides for Mba E Business specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Slides for Mba E Business specifically for you FOR ONLY $16.38 $13.9/page Hire Writer To measure the firmlevel governance a rating system is used to evaluate the stringency of a set of governance practices and cover various governance categories: such as board composition, ownership and shareholdings and transparency, disclosure and auditing. The sample consists of 60 non-financial firms listed on Karachi Stock Exchange and comprises more than 80 percent of market capitalization at Karachi Stock Market in 2007. The results confirms the theoretical notion that firms with better investment opportunities and larger in size adopt better corporate governance practice. The proposition that ownership concentration is a response to poor legal protection is also validated by the results. The more investment opportunities lead to more concentration of ownership and the ownership concentration is significantly diluted as the firm size expands. The findings are consistent with theoretical argument claiming that family owners, foreign owners and bring better governance and monitoring practices which is consistent with agency theory. The results suggest that firms which need more equity financing practice good governance. The results show that firms with high growth and large in size are in more need of external finance. The relationship between external financing and ownership concentration is negative. The results reveal that the firms which practice good governance, with concentrated ownership, need more external finance which have more profitable investment opportunities and are larger in size are valued higher. The interaction term of any variable with law enforcement term are not significant in any model suggesting that firm performance is not affected by rule of law in countries where legal environment is weak. These results adds an important link to the explanation of the consequences weak legal environment for external financing, corporate valuation and corporate governance. The results show that Corporate Governance Code 2002 potentially improves the governance and decision making process of firms listed at KSE. JEL classification: G3 F3 Keywords: Ownership Concentration, Corporate Governance, Firm Performance, External Financing, Panel Data Chapter 1: INTRODUCTION* 1. 1. Background Good corporate governance contributes to sustainable economic development by enhancing the performance of companies and increasing their access to outside capital. In emerging markets good corporate governance serves a number of public policy objectives. It reduces vulnerability of the financial crises, reinforcement property rights; reduces transaction cost and cost of capital and leads to capital market development. Corporate governance concerns the relationship among the management, board of directors, controlling shareholders, minority shareholders and other stakeholders. In Pakistan, the publication of the SECP Corporate Governance Code 2002 for publicly listed companies has made it an important area of research of corporate sector. A corporate governance system is comprised of a wide range of practices and institutions, from accounting standards and laws concerning financial disclosure, to executive compensation, to size and composition of corporate boards. A corporate governance system defines who owns the firm, and dictates the rules by which economic returns are distributed among shareholders, employees, managers, and other stakeholders. As such, a countys corporate governance regime has deep implications for firm organisation, employment systems, trading relationships, and capital markets. Thus, changes in Pakistani system of corporate governance are likely to have important consequences for the structure and conduct of country business. In its broadest sense, corporate governance refers to a complementary set of legal, economic, and social institutions that protect the interests of a corporation’s owners. In the Anglo-American system of corporate governance these owners are shareholders. The concept of corporate governance presumes a fundamental tension between shareholders and corporate managers [Berle and Means (1932) and Jensen and Meckling (1976)]. While the objective of a corporation’s shareholders is a return on their investment, managers are likely to have other goals, such as the power and prestige of running a large and powerful organisation, or entertainment and other perquisites of their position. In this situation, managers’ superior access to inside information and the relatively Acknowledgements: The authors are Professor of Economics, Pakistan Institute of Development Economics, Islamabad and freelance researcher respectively. The authors wish to thank Dr Rashid Amjad, Dr Tariq Javed and Dr Idrees Khawaja for their valuable comments. They are grateful to Hafeez Ahmed and Shahab-u-Din for providing assistance in compiling data and Yasir Iqbal for computer assistance. Any remaining errors and omissions are the authors’ sole responsibility. 2 powerless position of the numerous and dispersed shareholders, mean that managers are likely to have the upper hand. The researchers have offered a number of solutions for this agency problem between shareholders and managers which fall under the categories of incentive alignment, monitoring, and discipline. Incentives of managers and shareholders can be aligned through practices such as stock options or other market-based compensation [Fama and Jensen (1983a)]. Monitoring by an independent and engaged board of directors assures that managers behave in the best interests of the shareholders [Fama and Jensen (1983)]. Chief Executive Officer (CEO)’s who fail to maximise shareholder interests can be removed by concerned boards of directors, and a firm that neglects shareholder value is disciplined by the market through hostile takeover1 [Jensen and Ruback (1983)]. The code of corporate governance introduced by SECP in early 2002 is the major step in corporate governance reforms in Pakistan. The code includes many recommendations in line with international good practice. The major areas of enforcement include reforms of board of directors in order to make it accountable to all shareholders and better disclosure including improved internal and external audits for listed companies. However, the code’s limited provisions on director’s independence remain voluntary and provide no guidance on internal controls, risk management and board compensation policies. The main focus of this study is to examine the relationship between corporate governance and corporate performance, corporate ownership, corporate financing for publicly listed Karachi Stock Exchange (KSE) firms. Therefore, we attempt to identify the relationship between corporate governance proxies and firm value in our sample of KSE firms. This emphasises the importance of legal rules and the quality of their enforcement. In Pakistan, with traditionally low dispersion of ownership, the primary methods to solve agency problems are the legal protection of minority investors, the use of boards as monitors of senior management, and an active market for corporate control. In contrast to developed markets in Pakistan corporate governance is characterised by lesser reliance on capital markets and outside investors, but stronger reliance on large inside investors and financial institutions to achieve efficiency in the corporate sector. In this case, outside (smaller) investors face the risk of expropriation in the form of wealth transfers to larger shareholders. According to Shliefer and Vishny (1997) corporate governance mechanisms are economic and legal institutions that can be altered through the political process. As regards governance reform, product market competition would force firms to minimise costs, and as part of this cost minimisation to adopt rules, including corporate governance mechanisms, enabling them to raise external capital at the lowest cost in the long run. On this evolutionary theory of A takeover which goes against the wishes of the target company’s management and board of directors. 1 economic change [Alchian (1950); Stigler (1958)], competition would take care of corporate governance. Corporate governance in agency theory perspective is referred to as separation of ownership and control [Barle and Means (1932)]. There are two most common approaches to corporate governance to protec t investors’ rights. First approach is to give investors power through legal protection from expropriation by managers. Protection of minority rights and legal prohibitions against managerial self-dealing are examples of such mechanisms. The second major approach is ownership by large investors (concentrated ownership): matching significant cash flow rand control rights. Most corporate governance mechanisms used in the world-including large share holdings, relationship banking, and even takeovers- can be viewed as examples of large investors exercising their power. We discuss how large investors reduce agency costs. While large investors still rely on the legal system, they do not need as many rights as the small investors do to protect their interests. For this reason, corporate governance is typically exercised by large investors. Despite its common use, concentrated ownership has its costs as well, which can be best described as potential expropriation by large investors of other small investors and stakeholders in the firm [Shliefer and Vishny (1997)]. 1. 2. Objective of the Study The main focus of the study is to investigate does corporate governance matters in Pakistan equity market? What are its implications for corporate valuation, corporate, ownership and corporate financing? The first dimension of this issue is measuring the corporate governance in Pakistan. Corporate governance is interpreted as mechanism–both institutional and market based, that induces the self-interested managers (controllers of the firm) to make decisions that maximise the value of the firm to its shareholders (owners of the firm) [OECD (1999)]. The aim of these mechanisms is to reduce agency costs that arise from principle agent problem; and they could be internal and/or external in nature [Klapper and Love (2002)]. Internal mechanism deals with the composition of the board of directors, such as proportion of independent outside directors, distinction of CEO and chairperson etc. another important mechanism is ownership structure, or the degree at which the ownership by managers obvious trade-off between alignment and entrenchment effects. External mechanism on the other hand rely on takeover market in addition to regulatory system, where as the take over market act as a treat to existing controllers in that it enable outsiders to seek control of the firm if bad corporate governance results in significant gap between potential and actual value of the firm. So given these mechanisms, it is investigated that the legal system is the only way to ensure good corporate governance. It is also examined that effective presence of these mechanisms positively associated with firm value. 4 The second dimension of this issue is to investigate the determinants of concentrated form of ownership structure in Pakistan and its affect on firm performance. The reason is that when the legal framework does not offer sufficient protection for the outside investors, entrepreneurs and original owners are forced to maintain large position in their companies which results in concentrated form of ownership [La Porta, Shleifer, and Vishny (1999)]. The third dimension of this study is to assess the determinants of firms to raise external finance through equity and to examine that the firms that rely more on external financing sources are performing better. 1. 3. Organisation of the Study Rest of the study is organised as follows. Chapter 2 provides overview of corporate governance in Pakistan and it also discuses the data used in the subsequent chapters. Chapter 3 measures the corporate governance by using 22 factors which constructs aggregate corporate governance index, and this index is divided in to three sub-indices. This chapter also discusses the determinants of corporate governance in Pakistan. In Chapter 5, the determinants of ownership structure are explored. The effect of ownership structure with firm performance is also investigated. The identity of owners is then related to firm value. In the Chapter 6 examines the factors that influence the need of external finance in Pakistan and its effect on firm value. Chapter 7 concludes the study. Chapter 2: OVERVIEW OF CORPORATE GOVERNANCE IN PAKISTAN 2. 1. Introduction Corporate governance matters for the financial development by increasing the flow of capital to the capital market. East Asian financial crisis attract serious attention to importance of corporate governance in developing countries. The OECD has established a set of corporate governance principles in 1999 that have become the core template for assessing a country’s corporate governance arrangements. La Porta, et al. (2000) Defined, â€Å"Corporate governance is, to a certain extent, a set of mechanisms through which outside investors protect themselves against expropriation by the insiders. † They define â€Å"the insiders† as both managers and controlling shareholders. â€Å"Corporate governance comprises the private and public institutions (both formal and informal) which together govern the relationship between those who manage corporations and those who invest resources in corporations. These institutions typically include a country’s corporate laws, securities regulations, stock-market listing requirements, accepted business practices and prevailing business ethics† [Omran (2004)]. Thus, changes in Pakistani system of corporate 5 governance are likely to have important consequences for the structure and conduct of country business. The issue of Corporate Governance of banks has also fundamental importance for emerging Economies. SBP restructured the regulatory framework governing the commercial banking industry and issued some guidelines for corporate governance. The study of Kalid and Hanif (2005) provides an overview of development in the banking sector and measures of corporate governance in Pakistan. Their study observes that SBP rganised its role as a regulator and supervisor and make the central bank relatively more effectively in recent years. Moreover, the legal and regulatory structure governing the role and functions of commercial banks has b een restructured. However, as the process of corporate governance of banks in Pakistan is very recent, not enough information is available to make an assessment of the impact of these policies such as an evaluation of the improvement in bank efficiency or reduction in bank defaults. Securities and Exchange Commission of Pakistan issued Code of Corporate Governance in March 2002 in order to strengthen the regulatory mechanism and its enforcement. The code of corporate governance is the major step in corporate governance reforms in Pakistan. The code includes many recommendations in line with international good practice. The major areas of enforcement include reforms of board of directors in order to make it accountable to all shareholders and better disclosure including improved internal and external audits for listed companies. However, the code’s limited provisions on director’s independence remain voluntary and provide no guidance on internal controls, risk management and board compensation policies. The plan of the chapter is as follows. The institutional framework is presented in Section 2. Section 3 briefly reviews the code of corporate governance of Pakistan. The assessment of the code of corporate governance is provided in Section 4. Section 5 explores corporate governance under ownership structure of Pakistan. Section 6 concludes our discussion. 2. 2. Institutional Framework East Asian financial crisis and corporate failure like Enron have brought to light the importance of an effective institutional framework. In order to the improve value of the corporate governance for finance development of a country attention must be given to strengthen the institutional framework. That strong institutional framework would help in effective corporate management and for developing advanced capital markets that increases shareholder value and enhance corporate governance. The establishment of the Security and Exchange Commission of Pakistan represents an important milestone in the development of the regulatory framework of the capital market in Pakistan. The S ecurities and Exchange 6 Commission of Pakistan (The Commission) was established in pursuance of the Securities and Exchanges Commission of Pakistan Act, 1997 and became operational on 1st January, 1999. It succeeds the Corporate Law Authority (CLA), which was a Government department attached to the Ministry of finance. It was initially concerned with the regulation of corporate sector and capital market. In accordance with the approved Corporate Plan, the Commission has been organised into the following six Divisions: †¢ †¢ †¢ †¢ †¢ †¢ Company Law Division. Securities Market Division. Specialised Companies Division. Finance and Admin Division. Human Resource and Training Division. Insurance Division. Each of division is divided into Departments and Wings for effective administration. The Departments are headed by Executive Directors, with oversight by commissioners. 2 The continuing challenges of the Commission include: based on the regulatory principles develop a modern and efficient corporate sector and capital market; based on international legal standards. In order to foster principles of good governance in the corporate sector and protect investors through responsive policy measure and enforcement practice develop an efficient and dynamic regulatory body. The SECP is governed by the Securities and Exchange Commission of Pakistan Act, 1997 which encompasses the constitution of the Commission appointment and terms and conditions of the Chairman and Commissioners, functions and powers of the Commission and financial arrangements. The Securities and Exchange Commission of Pakistan is administering many laws. These includes: insurance Ordinance, 2000 (previously as Insurance Act, 1938; The Securities and Exchange Commission of Pakistan Act,1997; The company ordinance, 1984 (amended and implemented in 2002); The Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980; The Securities and Exchange Ordinance, 1969. The Policy Board is established by the Securities and Exchange Commission of Pakistan Act, 1997 in order to provide guidance to the Commission in all matters relating to the functions of the Commission and formulation of the policies. The Policy Board consists of maximum nine members appointed by the Federal Government. Out of nine members five members would be as ex-officio members and five members would be from private sector. See official website of securities and Exchange Commission of Pakistan for detail; www. secp. org. pk. 2 7 A number of significant amendments in corporate laws were made with the objective of updating these laws to keep pace with developments in the corporate sector. These include: amendm ents in Securities and Exchange Ordinance, 1969; Modaraba Companies and Modaraba (floatation and control) Ordinance, 1980; Companies Ordinance, 1984; the securities and exchange commission of Pakistan Act, 1997. Amendments in company ordinance, 1984, suggested by the SECP have been approved by the cabinet in 2002. The amendments mainly relates to incorporation of single member company. Because of this amendment an individual trader or manufacturer would be able to establish a company having its own separate entity and thus enjoying the privilege of limited liability. This new concept will help for expansion of a discipline corporate sector. The companies have been provided the period of four months in order to present audited account before shareholders. The private companies which convert into public companies after one year of their incorporation have been exempted to hold their statutory meetings. The new amendments make it compulsory that copies of minutes of meetings will be provided to every director within 14 days of the date of such meetings. Appointment of a whole time qualified company secretary by a listed company has been made mandatory for efficient corporate compliance. Through these new amendments a company may remove its auditors through special resolution mean by the majority of 75 percent. However, appointment of new auditors in place of removed auditors will be made with the approval of the Commission. Quorum of a general meeting of a public listed company has been increased from three members to ten members present in person representing not less than 25 percent of total voting power. Stock markets are important as a source of investment finance for corporations in developing countries. At present, three stock exchanges are functioning in Pakistan, namely Karachi Stock Exchange (KSE), Lahore Stock Exchange (LSE) and Islamabad Stock Exchange (ISE). Trading on all the three stock exchanges is fully automated (for performance see Table 2. 4). The three stock exchanges are also linked to the Central Depository System (CDS). Since the last decade, the capital markets of Pakistan have witnessed a substantial growth leading to a manifold increase in the trading volume. The custody and safe keeping of physical certificates required maintenance of huge vaults by the individuals and institutions and the physical settlement of certificates was no longer feasible. Moreover, the manual system was also plagued by lengthy delays, risks of damage, forgeries and considerable time and capital investment. Central Depository Company of Pakistan Limited (CDC) was incorporated in 1993 and subsequently became operational in 1997 to manage and operate the Central Depository System (CDS). CDS is an electronic book entry system to record and transfer securities. Electronic book entry means that the securities do not physically change hands and the transfer from one client account to another takes place electronically. CDC provides the backbone for smooth and efficient settlement operations of the Pakistani capital market. Almost all of the total settlement of the stock exchanges is now done through the CDS. 3 To encourage corporate governance the institute of corpora te governance of Pakistan a non-profit organisation is established under Section 42 of company ordinance, 1984. It is public private partnership. Securities and Exchange Commission of Pakistan, State Bank of Pakistan, three stock exchanges and banking and insurance institutions are founding members of this institution. In 2006 PICG in collaboration with IFC and State Bank of Pakistan conducted a conference of banking reforms in Pakistan. The conference aspired to create increased understanding of the need for good governance among Pakistan’s banking sector. Charged Table 2. 1 Year Wise Distribution of Companies Financial Year 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 Incorporated Companies 968 1074 1169 1183 1553 2207 3078 6186 4703 No. of Equity Issue to Public (Rs bill) 0. 44 0. 00 2. 03 1. 99 5. 97 0. 98 48. 88 24. 34 9. 60 Source: Annual Report of SECP 2006-07. Table 2. 2 Provincial Wise Distribution of Companies 2005 2006 Province / Territory (% Share) (% Share) Punjab Sindh NWFP Baluchistan Islamabad Territory 43 39 11 1 6 39 29 9 4 19 2007 (% Share) 46 34 6 1 13 Source: Annual Report of SECP 2005, 2006, 2007. 3 See official website of CDC www. CDCPakistan. com. 9 Table 2. 3 Capitalisation Break Down for the Year 2007 Listed Com Paid Up Capital (Rs) Up to 10,000 1 100,000 to 500,000 1 500,001to1,000,000 0 1,000,001 to 10,000,000 34 10,000,000 to 100,000,000 226 1000,000,001 to 500,000,000 236 500,000,001 to 1,000,000,000 45 1,000,000,001 and above 69 Source: Annual Report of SECP 2007. Unlisted Private Public Com Com 448 20,607 343 7,037 105 4,566 343 10,804 662 3,168 224 319 32 29 36 18 SMCs 373 100 59 48 28 2 0 0 Total 24,429 7,481 4,730 11,229 4,084 799 106 123 Percentage 42. 87 14. 97 9. 46 22. 47 8. 17 1. 60 0. 21 0. 25 Table 2. KSE Performance at Glance 2004 KSE 100 Index 5,279. 18 Market Capitalisation (Rs bill) 1,421. 58 Turnover (Shares Mill) 389 Source: Annual Report of SECP 2004,2005,2006,2007. 2005 7,450. 12 2,068. 19 343 2006 9,981. 40 2,801. 28 321. 10 2007 13,772. 26 4,019. 46 367. 96 2. 3. Code of the Corporate Governance Many new financial instruments are introduced by the SECP in order to enhance corporate governance. The code of corporate governance was issued in March 2002 by the Security and Exchange Commission of Pakistan in order to improve transparency, governance and protect the interest of the investors by improving the disclosure in financial reporting of companies. The Code of Corporate Governance is the results of the joint effort of Securities and Exchange Commission of Pakistan and Chartered of Pakistan in collaboration with Institute of Cost and Management Accountants of Pakistan (ICMAP) and three Stock Exchanges. The code includes many recommendations in line with international good practice. All listed companies publish and circulate a statement along with their annual reports to set out the status of their compliance with the best practices of corporate governance. The Code primarily aims to establish a system whereby a company is directed and controlled by its directors in compliance with the best practice so as to safeguard the interest of diversified stakeholders. It proposes to restructure the composition of the board of directors in order to introduce broad based representation by minority shareholders and by executive and nonexecutive directors. 4 ’5 The Code emphasised openness and transparency in 4 All listed companies shall encourage effective representation of independent non-executive directors, including those representing minority interest, on their Boards of Directors so that the Board as a group include core competencies considered relevant in the context of each listed company (Clause (i) of Code of Corporate governance, 2002). 5 Implementation of the clause of non-executive directors is voluntary not mandatory. 0 corporate affairs and the decision making process and requires directors to discharge their fiduciary responsibilities in the larger interest of all stakeholders in a transparent, informed, diligent, and timely manner. The salient feature of the Code includes setting up of audit committees and internal audit funct ions by all listed companies [Code of Corporate Governance (2002)]. In August 2002 SECP launch a project on corporate governance in collaboration with UNDP and Economic Affairs Division of Government of Pakistan. This project is launched mainly for the implementation of code of corporate governance and strong regulatory frame work for the corporate sector in Pakistan. In 2007 the Security and Exchange Commission of Pakistan, International Financial Corporation (IFC) and Institute of Corporate G overnance of Pakistan (PINCG) conducted a Survey on â€Å"Code of Corporate Governance of Pakistan†. The survey targeted the local listed and large local non-listed companies and financial sector institutions. Among the key findings in the survey, a major one is the need for creating awareness amongst the directors of companies about the benefits of the Code, so that they could go further than the tick-box approach to implementing the Code, and understand and implement the Code in its true spirit. Security and Exchange Commission of Pakistan developed a board development series (BDS) with the help of IFC. PICG conducted many workshops for the purpose of understanding corporate governance and responsibilities of boards of directors. 2. 4. Assessment of Corporate Governance The SECP is enforcing corporate governance regulations SECP is receiving technical assistance from Asian Development Bank to improve corporate governance enforcement programme and also from World Bank is build awareness and training. Other elements of enforcement regime are not so strong ICAP has some self regulatory function and stock exchanges are lacked the resources and expertise to effective monitor implementation of the code. Karachi Stock Exchange has set up a Board Committee on the Code of Corporate Governa

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Civil Rights and Civil Liberties Civil rights and civil liberties are two common statements that sometimes are used inadvertently with one another. The two statements do coincide with each other, but mean different things. Civil rights â€Å"are the rights belonging to an individual by virtue of citizenship, especially the fundamental freedoms and privileged guaranteed by the 13th and 14th amendments to the U.S. Constitution and by subsequent acts of Congress, including civil liberties, due process, equal protection of the laws, and freedom from discrimination† (American Heritage). The 14th amendment states that â€Å"no State shall make or enforce any law which shall abridge the privileges or immunities of citizens†¦ No State shall deprive any person of life, liberty, or property without due process of law† (Articles-website). Civil liberties on the other hand are â€Å"fundamental individual rights such as freedom of speech and religion protected by law against unwarranted governmental or other interference† (American Heritage). Civil rights and civil liberties may seem like the same exact thing but when you break them down, the difference between the two is clear. Civil rights are the rights that are given to U.S. citizens that make ‘everyone created equal.’ Civil rights have to do with slavery, racial discrimination, women’s equal rights, gender-based discrimination, equal protection, affirmative action, and the rights of gay males and lesbians, as well as many more. Civil liberties are the protected laws given to everyone – even people that are not citizens – who is in the United States such as freedom of speech, freedom of religion, freedom of the press, as well as the other rights stated in the 1st amendment. The focal point of this paper will be on racial discrimination; specifically to Arab-Americans since the tragedy of September 11, 2001. One year ago, our nation was faced with one of its biggest chall... Free Essays on CIVIL RIGHTS AND CIVIL LIBERTIES Free Essays on CIVIL RIGHTS AND CIVIL LIBERTIES Civil Rights and Civil Liberties Civil rights and civil liberties are two common statements that sometimes are used inadvertently with one another. The two statements do coincide with each other, but mean different things. Civil rights â€Å"are the rights belonging to an individual by virtue of citizenship, especially the fundamental freedoms and privileged guaranteed by the 13th and 14th amendments to the U.S. Constitution and by subsequent acts of Congress, including civil liberties, due process, equal protection of the laws, and freedom from discrimination† (American Heritage). The 14th amendment states that â€Å"no State shall make or enforce any law which shall abridge the privileges or immunities of citizens†¦ No State shall deprive any person of life, liberty, or property without due process of law† (Articles-website). Civil liberties on the other hand are â€Å"fundamental individual rights such as freedom of speech and religion protected by law against unwarranted governmental or other interference† (American Heritage). Civil rights and civil liberties may seem like the same exact thing but when you break them down, the difference between the two is clear. Civil rights are the rights that are given to U.S. citizens that make ‘everyone created equal.’ Civil rights have to do with slavery, racial discrimination, women’s equal rights, gender-based discrimination, equal protection, affirmative action, and the rights of gay males and lesbians, as well as many more. Civil liberties are the protected laws given to everyone – even people that are not citizens – who is in the United States such as freedom of speech, freedom of religion, freedom of the press, as well as the other rights stated in the 1st amendment. The focal point of this paper will be on racial discrimination; specifically to Arab-Americans since the tragedy of September 11, 2001. One year ago, our nation was faced with one of its biggest chall...

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Wal-Mart - Research Paper Example Among the biggest complaints about Wal-Mart that the average shopper has is the fact that even at the busiest times the store seems to open only a few of its banks of checkout registers. Ask almost any regular visitor to a Wal-Mart what their biggest beef is and you will get the same response: long lines. When I arrived in the store I was immediately reminded why I like shopping there instead of a regular grocery store. It's well lit, clean, and the aisles are bigger. In addition, if I'm shopping for food and happen to remember I need a non-food item I don't have to make another trip elsewhere. But as I walked past the long line of checkout lanes, I also remembered why I join the legion of frustration shoppers. Despite the fact it is just after 5:00 PM, a time when Wal-Mart is usually quite busy due to the influx of people stopping by on their way home after a weekday at the job, I noticed more checkout lane lights off than on. The Wal-Mart I visited was a SuperCenter, the kind of store that combines grocery shopping with food, toys and electronics. There are two entrances, one at the end with the food and the other where most of the non-food merchandise is located. I entered through the food entryway and notice right away that that there are five express lanes open. The express lane is ideally meant to speed up the process by which customers get in an out as only those who have less than 20 items are supposed to be allowed. I can't help but notice there are at least three shoppers who have noticeably more than 20 items in their basket. I also cannot fault them; besides the express lanes at grocery end of the aisle, I can count only seven other lanes open all way down to the other hand. I didn't actually count how many total checkout registers this particular Wal-Mart, but after I realized there were at least twice as many closed registers as open ones I got the point. I came across an article from 2005 that indicated that Wal-Mart was aware of the problem of people having to wait in line. According to the article, they were supposedly considering a technological approach called line rushing technology using a "mobile scanner that allows employees to check out merchandise while customers wait in line. Customers receive a print-out with a bar code, so cashiers only need to scan the paper and take payment" (Abelson). It sounds like a terrific idea. So why haven't I or anyone I know ever seen in action I decided to see if perhaps I'd just missed out on all the fun so I approached a woman who looked particularly disgusted to be waiting in line. Her name was Hakima and she was one of those who quite obviously had more than twenty items in her cart despite being in the express checkout lane. I explained that I was writing a paper Wal-Mart, specifically on the consumer complaints lodged against the company and without even bringing up the subject she launched into a tirade against the long lines. Hakima told me that she probably had been first in line before at Wal-Mart, but that she couldn't remember it. I asked her how long she perceived to be average wait in a line at Wal-Mart was and she responded, "It seems like a half hour every time, but probably is only ten minutes. That's still a long time, though, when you're standing here looking at all those empty lanes." Those

Market-Based Management Case Study Example | Topics and Well Written Essays - 1000 words

Market-Based Management - Case Study Example Boeing can seek to eliminate waste by streamlining processes while at the same time improving quality, empowering employees, responding fast to customer demand, and increasing profits. Boeing can thus embrace lean, which is an idea that advocates, designing, manufacturing, delivering and supporting products more effectively and at costs that are lower-while methodically identifying as well as eliminating waste-throughout the life cycle of the product. Lean utilizes the just-in-time system which provides external and internal customers with what they need, when they need it, and at the best possible low price. MBM will thus equip Boeing with an overall framework (paradigm) for understanding the firm’s problems. It will also assist Boeing in examining and evaluating the tools of total quality management, just-in-time inventory as well as other concepts for improving its performance. For Boeing to remain relevant and carry on as an aerospace pacesetter, win new businesses in addi tion to creating and maintaining jobs, it continuously must look for ways to make its planes cost-competitive. Boeing can integrate MBM with Value Driven Management (VDM) so as to arrive at better decision making in the company at all levels.VDM, for instance, acknowledges that top-down command in addition to control structures may not function properly, particularly in the big multibusiness corporation such as Boeing. VDM, therefore, calls upon managers to utilise value-based performance metrics so as to make better decisions.

Le Corbusier's Toward's a New Architecture and Adolf Loos' Ornament Essay

Le Corbusier's Toward's a New Architecture and Adolf Loos' Ornament and Crime - Essay Example nt roles in the transformation of the conception of art and architecture, the dawning of a new age in styles and composition, making a mark in the discipline of architecture. In this paper, we will discuss and compare the similarities in the theories of Loos exhibited in â€Å"Ornament and life† to that of Le Corbusier’s â€Å"Towards a New Architecture†. We will discuss in specific, the most influential theory presented by Le Corbusier, in â€Å"eyes which do not see† in comparison to Adolf Loos’ â€Å"Ornament and Crime†, both relating to the need to emphasize the role of purpose or utility of an architectural structure and the absence of ornaments. The interesting aspect of the comparison between Loos and Corbusier lies in the two common vies they shared. On the one hand, the work of both is concerned with the autonomy of architectural means; on the other, both try, each in his own way, to place his work in a context, something which each makes particularly clear in his writing. (Risselada, Loos and Beek, 1). In Corbusier’s reading of â€Å"eyes which do not see†, he begins with explaining the need to see the connection between architecture and the new machine age, implying that architecture must focus not on art but on needs and functionality. He explains this aspect by comparing the evolution of architecture to the evolution of a car. In the beginning, the sole purpose was transportation, later began to give importance to durability, resistance and such. Further, they went on to incorporate luxury and style on having attained the basic necessity. With the lapse of time, appearance and luxury began to delude people and the main aspects were given less importance, as if resistance and durability were aspects that were to be sidelined. He believes that architecture has taken that direction, competing in beauty and magnificence, while failing to address purpose. This may be easily compared to the view of Adolf Loos in â€Å"Ornament and Crime†, where he

Downsizing Strategy Is Being Used Management Essay

Downsizing Strategy Is Being Used Management Essay Given the issues relating to this research field are introduced and research objectives are also be proposed carefully in Chapter 1. In Chapter 2, the researcher would like to continuous introduces the concepts, definitions and theories relevant to the issues that already mentioned in Chapter 1, through that, Chapter 2 will provide and build research hypothesis for research. Basically, Chapter 2 includes the main parts as follows (1) The definition of downsizing, (2) The definition of Survivors Syndrome, (3) The research hypothesis (4) Chapter summary. Definition of Downsizing In the economic context of continuos competitive, developing, changing and unpredictable, organizations suffering severe downturns in their business or facing difficulties, downsizing strategy is being used by many organizations in every industries and sectors with different goals and visions, their perception regarding the implementation of the downsizing policy within their organization also be different. There is not a single downsizing definition accepted by all researchers (Davis, Savage, Steward Chapman, 2003). There are many different definitions or understanding about downsizing, for example Cameron, (1994:194) defines downsizing as a positive and purposive strategy for organizations: a set of organizational activities undertaken on the part of management of an organization and designed to improve organizational efficiency, productivity, and/or competitiveness. Businesses for a long time that no longer considered downsizing as a situation solution in the hard time period, but they considered downsizing as an effective strategy to reduce costs, human focus, create job opportunites, increased job challenge and promotion. The right sizing contributes to better decision-making and the control of human resource so that the cost of expenditure can be cut short effectively. It develops a value system of proactive work culture where the members in the organisation get opportunity for better participation and involvement in the decision making process. It develops an ownership mentality among members and they shoulder forward an organization with more collaboration, fidelity, and accuracy. According to Mishra and Spreitzer (1998) defines downsizing has become the strategy favored by many organizations attempting to cope with fundamental, structural changes in the world economy. Or Freeman and Cameron (1993) defined downsizing as a set of activities, undertaken on the part of the management of an organization, designed to improve operational efficiency, productiv ity, and/or competitiveness. Downsizing as a deliberate reduction in size or complexity of a firms activities intended to improve the profitability, productivity, and/or competitiveness of the firms continuing operations(Legatski II, 1998). But in conclusion, most researches have defined downsizing as any reduction in the size of the organization (e.g. Budros, 1999; Cascio, 1993; Freeman Cameron, 1993; Kozlowski, Chao, Smith Hedlund, 1993). Downsizing, in general, refers to the reduction of work for certain organization. For employees, downsizing is considered as a management weapon to enforce greater control over the workforce. To management, it is a strategic measure to bring optimized operation efficiency and productivity in organization. Cameron and colleagues (e.g Cameron et all., 1991, 1993; Cameron, 1994b) have identified three organizational strategies to achieve downsizing: workforce reduction strategy, work redesign and systematic change. The first strategy is workfo rce reduction is typically a short-term strategy, which simply focuses on reducing organizations headcount. In a confirmatory study, Mishra and Mishra (1994) found that such strategy might lead to loss in valued organizational competency or negative outcome of those who remains. Human resource is essential and is a factor that makes the decision for the development of organizations. Lack of human resource will increase workload, anxiety about losing their jobs at any time, and these feeling leads to insecurity psychological, these are reasons that cause labor productivity reduced. Work reduction is applied by organizations through some programs such as attrition, early retirement or voluntary severance packages, layoffs and terminations. The second and third strategies are work redesign and systematic change strategies. While work reductions resulted is lead to reduction, rather than improvement, the work redesign and systematic change are positively related to organizational perfor mance in term of both cost reduction and quality improvement (Cameron et all.,1993; Mishra and Mishra, 1994) and to survivors (people who remains) of downsizing having a positive learning orientation (Farrell and Mavando, 2004). Many previous researches indicated that the use of workforce reduction is increasing and become popular despite the harmful impacts may arise for organization. Workforce reduction or simply called workforce downsizing is becoming the most popular strategy and a plethora of workforce reduction strategies for downsizing of employees has been proposed (e.g. Greenhalgh et al., 1988; Gutchess, 1985; Leana Feldman, 1992; Price, 1990). Whenever reduce equipments, machinesà ¢Ã¢â€š ¬Ã‚ ¦ organizations can find out the outcome and its impact through simple calculations, but in workforce downsizing, the emotions, loyalty, and human effort can not simply calculate. In an organizational context, employees not only contribute their individual skills and knowledge, they also collaborate and integrate their separate skills toward creating firm capabilities. As such, both human and social capital-and therefore the commitment and the loyalty of employees-play an important role in dictating a firms c apacity to create competitive advantage. Reducing headcount may lead to immediate labor cost savings, but it can also seriously erode employee commitment and loyalty, with negative consequences for firm competitiveness and performance. So the questions are what the impacts of workforce downsizing to organizations are, how it effects, and what the advantage and disadvantage of the impact are? Some researches indicated the opinion that organizational downsizing produce better result in performance and productivity, while, others indicate downsizing as a threat to the human resources and existing organizational culture. Downsizing has been defined as an attempt to increase organizational effectiveness(Kozlowsky, et. al. 1993). Freeman Cameron (1993) and Tomasco (1990) indicate from their findings that the presumed benefits of downsizing include faster decision making, greater flexibility, and improvements in quality and increased efficiency and productivity. Cascio (1993:97) suggested that proponents of downsizing generally expect the following benefits: lower overheads, less bureaucracy, faster decision making, smoother communications, greater entrepreneurship and increases in productivity. Downsizing can suggest to financial markets or government funding agencies that an organization is cutting costs and reducing waste, which may increase availability of capital for subsequent activities (Cascio, 1993; Dial Murphy, 1995; Palmon, Sun Tang, 1997). Downsizing has been defined as an attempt to increase organizational effectiveness (Kozlowsky, et. al. 1993). It develops a value system of proactive work culture where the members in the organization get opportunity for better participation and involvement in the decision making process. It develops an ownership mentality among members and they shoulder forward an organization with more collaboration, fidelity, and accuracy. However, many others strongly disagree with those arguments and indicate that it has devastating effect on human morale, motivation, and productivity. Downsizing may provide a decrease in operating expenses in the near term, but the long term impacts may not be so positive (Difrances, 2002). Downsizing can lead to a loss of knowledge and experience base because of some laid off will be the people who worked for a long time with organization, old people, who may not have a fast and efficient action in work like young people, but they have extensive knowledge, experiences that young people learn in short time, loss available mentors for existing and new employees, loss of corporate culture, and downsizing can have direct impaction to the customers such as loss of established customer service and contacts. Therefore, whenever workforce downsizing is chosen by organizations in hard time or peaceful time, there is definite and obvious impact good or bad on organizations. But in all the affected elements, the human factor is probably the most affected element. They are staffs of organization, they dedicated their soul to the development of organization, they are people who be laid off or people who lucky enough to keep their job. The individuals who lose their jobs (called victims) are obviously the most affected by downsizing. Numerous researchers have focused on the impact of downsizing on workers whose employment is terminated due to reasons independent of job competence (Cappelli, 1992). These individuals are often known as the victims of downsizing due to research that documents the devastation of job loss, focusing on negative consequences in terms of psychological and physical well-heing (e.g., Bennett, Martin, Bies, Brockner, 1995; Cappeili, 1992; Fallick, 1996; Leana Feldman, 1 992). The real pains of downsizing cannot be minimized. Careers change, families struggle, and downsized victims suffer loss of prestige, income and security. While a few downsized individuals may be victims of their own past inefficiency, the vast number are those who have performed well and played by the rules but have become the victims of a changing economic environment. However, several researchers have analyzed those who remain in the downsized organization called survivors (e.g., Allen, Freeman, Russell, Reizenstein, Rentz, 2001; Appelbaum Donia, 2001; Brockner, 1988a; 1992; 1995; Brockner, Grover, OMalley, Reed, Glynn, 1993; Cascio, 1993; Mollica Gray, 2001; Noer, 1993; ONeill Lenn, 1995; Shah, 2000). The survivors of downsizing are not the happy campers, grateful to have their jobs, but rather that surviving is so difficult that continuing employees experience higher levels of stress than displaced employees (Collins-Nakai, Devine, Stainton Reay, 2003). The downsizing has more effect on the psychological contract that exists in between management and workers within the organization. Many researches reported that it would develop stagnation, deterioration, low morale, low trust and productivity. The fear and anxiety of the retainers of the organization is more, as there is more uncertainty and insecurity feeling among them. This is called a s survivors syndrome. Definition of survivor syndrome The literature suggests a condition referred to as survivor syndrome, or a set of attitudes, feelings and perceptions that occur in employees who remain in organizational systems following involuntary employee reductions (Collins-Nakai, Devine, Stainton Reay, 2003 p.109-110). Survivor syndrome is defined by some human resource professionals as being the mixed bag of behaviors and emotions often exhibited by remaining employees following an organizational downsizing (Appelbaum, Close Klasa, 1999 p.424-436). Survivor syndrome has become known as the emotional and attitudinal characteristics of those who have survived from a downsizing (Mossholder et al., 2000; Iverson and Pullman, 2000; Allen et al., 2001). The emotional responses of each survivor are different. There are not many previous researches confirmed the positive response for survivor when downsizing occurs, some note that concentrating on core operational competencies can reduce unnecessary management layers and increase the speed of decision-making (DeWitt, 1993; Tomasko, 1989), somes even suggest that fear of termination may increase individual effort among employees who wish to retain their jobs (Kraft, 1991). A few active survivors feel themselves so lucky because they still have their job, survivors may work more hours without compensation to help the organization through the transition. They believe that they quite understand the difficulties as well as the main reasons why organizations choose to apply downsizing strategy, they are willing to stick with organization for a long time and continue add their efforts to the development of organizations. Contrary to a few positive responses, a stream of research, both laboratory and field, has provided a lot of evidences of the h armful effects downsizing can have on survivors, these effects have been described in terms of lower morale (e.g., Armstrong-Stassen, 1993), high stress (e.g., Leana and Feldman, 1992), and anger, envy, and guilt (e.g., Noer, 1993). According to Collins-Nakai, Devine, Stainton Reay (2003) consistent with the terminology of a syndrome, this collection of symptoms includes anger, depression, fear, distrust, and guilt, or Baruch and Hind (2000) indicates that survivors exhibit a plethora of problems, such as de motivation, cynicism, insecurity, demoralization and a significant decline in organizational commitment. Termination of co-workers may lead to perceptions of organizational injustice and distrust of top management (e.g. Brockner Greenberg, 1990; Mishra Spreitzer, 1998; Noer, 1998). A lot of research shows that in case of downsizing, the organization breaks the implicit psychological contract between employer and employee-a contract that implies lifetime employment in return for hard work and loyalty. As a result, the feeling of dependency that may have evolved into entitlement is transformed into a sense of betrayal. Downsizing survivors often curious about management and spend their times to observe the intention of management after downsizing occurs; they have greater concern on their future with the organization. It leads to stress and strain among members in the organization; it affects their next attempt and the willing to stay with the organizations. With survivors, organization may thinks they are lucky, but in the reality of many people, their emotions are anger, loneliness, feel lost in broken team work because of missing their colleages, they do not feel confident enough for work due to their wondering about their job. Downsizing occurs that means org anization is left with fewer employees who are expected to put in their best effort in a manner that enhances organizational productivity (Kets de Vries Balazs 1997). They are the ones who organization put their faith in; expect long term commitment, but with fews people, it may lead to workload, role conflict, and role ambiguity tend to be high among the remaining staff after downsizing (Hellgren et al. 2005; Parker et al. 1997; Tombaugh White 1990). Workload reflects the perception of having too much work to do in the time available (Beehr, Walsh Taber 1976). Workgroup membership changes also may be associated with the loss of important organizational knowledge (Fisher White, 2000). Role conflict concerns the experience of having to deal with conflicting terms, instructions, and demands in the work environment (Rizzo, House Lirtzman 1970). Role ambiguity relates to the individuals experience of not knowing what is expected of her at work (Caplan 1971). Beside that, survivors may view downsizing as a threat to their job security, an indication of poor organizational performance, or a symptom of unfair management behavior. Survivors may also develop negative feelings toward the organization, as well as perceiving that organizational goals are difficult to achieve. According to Isabella (1989) has noted that while organizations are usually prepared to meet the needs of those being laid off, they are often unprepared for the strong emotions, lengthy adjustment periods, diminished morale and lower productivity often experienced and expressed by survivors. Managers may expect survivors not only to be grateful they were spared and to forgive what happened to their friends, but also to put their feelings aside and work harder. But the reality is not that, a bag of survivor behaviors or called survivors syndrome has always existed, it is like a contract between employees and organizations, the contract gives survivors psychological control over their work enviro nment, which lets them freely invest themselves in caring for customers. Trust Granovetter (1985) and Lewis and Weigert (1985) define trust as a willingness to be vulnerable to others, based on the prior belief that those others are trustworthy. Another definition of trust is offered by Mayer, Davis and Schoorman (1995), who proposed that trust is the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party. Or according to Mishra Spreitzer (1998) trust is related to psychological contracts since trust is the expectation of a future action based on the action in the past by observing the rules of behaviors in relationships. If these expectations are not met, the expecter becomes hopeless, frustrated and will lose confidence, distrust will appear instead of trust (Robinson, Kraatz Rousseau, 1994). The trust is an essential part of managing people and building a high performance, pro ductivity organization. Trust is the foundation of all relationship from top to bottom in the organization. If employees believe in their manager, their organization, this relationship will always help to create good working conditions, employees are willing to stand up for their organization at any situations, they will naturally want to do a good things, contribute their best effort for the success of their organization. Conversely, if there is no trust between employees and managers, employees will have negative actions, will not devote their energy to the development of their organization, the relationship is broken. Downsizing organizations appear to suffer a deterioration of trust (Buch Aldridge, 1991; Cascio, 1993) and an increase in fear (Buch et al., 1991). The occuring of downsizing makes employees feel uncertain about organization, stress à ¢Ã¢â€š ¬Ã‚ ¦ the responses tends to score lower in problem solving, creativity and the ability to learn new skills, uncertainty and anxiety reduces the focus of work. Trust between employees and organization also reduced because downsizing is usually a headful though of managers, they need along time for making the decision, but with employees, downsizing is just a sudden result, sometimes they do not have a chance to prepare or may not believe that they will be the one who be laid off. According to ONeill Lenn (1995), survivors who believe that management is competent and reliable, may view downsizing as less threatening because they believe that the managers will keep their promise, be honest và   open và ¡Ã‚ »Ã¢â‚¬ ºi what is going on with their employees. Trust is instrumental in overcoming resistance to change, for it shapes how individuals interpret the implementation process (Kotter Schlesinger, 1979). If they have trust, survivors are willing think that all the things that organization do, have a reason, it is a good thing for them, for organization, downsizing just helps organization stand in difficult time as well as creating opportunities for employees in the future. In other words, trust in top management minimizes the categorization of threat by helping survivors to understand and believe in managements intentions and expected behavior. If they do not have trust, survivors wil have negative thinking such as the decision of manager is wrong, or managers put their personal interests above the interests of employees. Without trust, employees are likely to feel threatened by downsizing, leading to resistance and retaliation, rather than the constructive cooperation that is necessary to facilitate deep change (Quinn, 1996). Commitment There are a lot of definitions about employee commitment such as A force that stabilizes individual behavior under circumstances where the individual would otherwise be tempted to change that behavior (Brickman, 1987), or The relative strength of an individuals identification with and involvement in a particular organization (Mowday et al, 1979) or simply A psychological state that binds the individual to the organization (Allen Meyer, 1990). Commitment is loyalty to the organization. A loyal employee identifies with an organization and is involved in being an employee of that organization (Price Mueller, 1986). Committed employees feel that there is a tight string between them and the organization, which, in the positive form, makes them more willing to perform their job. Organizational commitment is the driving force behind an organizations performance (Suliman and Iles, 2000, p. 408). The multidimensional approach poses that organization commitment is influenced by three constru cts: emotional attachment (affective commitment), perceived costs (continuance commitment) and moral obligation (normative commitment) (Allen and Meyer, 1990). Affective commitment is mean that employees stay with organization because they want to, they believes in organization and feel it like their home. Normative commitment is mean that employees stay with organization because they feel obligated to continuew to work for many different reasons and purposes. Continuance commitment is mean that employees stay with the organization because cost of giving up the job is too high for them. (European Motivation-Index.com). It has also been proposed that different types of commitment can have different effects on behaviors and attitudes (Iles et al., 1990). For example, continuance commitment can have detrimental effects on job satisfaction compared to the beneficial effects of affective commitment (Suliman and Iles, 2000). Affective commitment has been shown to be the best predictor of intention to leave (Stallworth, 2004) and found to be more important than job satisfaction in determining service quality of customer-contact employees (Malhotra and Mukherjee, 2004). It can be seen that in human resource management process, organizations should pay attention to the affect commitment group because these people will add value, increase productivity and quality to the organization, but they also be the most affected by downsizing, or in other word maintaining a high level of employees affective commitment to the organization is assumed to be a critical factor for successful downsizing, but downsizing tends to reduce employees affective commitment to the organization (Lee Jaewon, 2002). According to many research about employee commitment, in downsizing context, employees commitment to an organization is challenged. Moreover, commitment has been shown to positively influence other variables related to survivor syndrome, such as job satisfaction (Liou, 1995; Fletcher and Williams, 1996; Mowday et al., 1974; Wong et al., 1995; Vandenberg and Lance, 1992), performance (Hartmann and Bambacas, 2000) and perceived organizational support (Eisenberger et al. , 2001). A negative relationship has been shown for absenteeism (Iverson and Deery, 2001; Metcalfe and Dick, 2000) and turnover intention (Schnake and Dumler, 2000) Stress According to Casico Wynn (2004) stated that the downsizing create a breach of an unwritten rules that constitute the psychological contract between employer and employee leads to a rise in stress and a decrease in satisfaction, commitment, intention to stay and perceptions of an organizations trustworthiness, honesty, and caring about its employees. Stress has been defined as a stimulus, a response, or the result of an interaction between the two, with the interaction described in terms of some imbalance between the person and the environment (Cooper, Dewe ODriscoll, 2001). When downsizing occurs, like the victims, the survivors often lose control over their employment status and work situation. Survivors often feel angry and overwhelmed by the sudden disruption of the workplace, similar to people who be laid off, survivors also have feelings of betrayal and fury when downsizing occurs. Research also indicates that other stressful characteristics tend to emerge when work has to be carried out by fewer employees (Hellgren Sverke 2001; Hopkins Weathington 2006; Pfeffer 1998). The lack of people to work become overwhelmed, constant anxiety because of imbalance as well as job lossed can be happened anytime that creates stress to survivors. Employee stress can take many forms and significant impact on both employees and organizations; it can manifest as anxiety, irritability, dependency, depression and it results in reduced productivity, employee burnout, absenteeism (Valueoption.com). It has been suggested that layoff survivors experience stress that is as great, or even greater than, the stress felt by those who have been laid off (Kaufman 1982). Job insecurity Job insecurity is the exact opposite of job security, is defined as the perceived powerlessness to maintain desired continuity in a threatened job situation by Greenhalgh and Rosenblatt (1984). Job insecurity represents one of the most frequently investigated stressors in the context of organizational change and downsizing (e.g., De Witte 1999; Sverke/Hellgren 2002). The string sticks employees with organizion is job, in other word, any organization keeps their employees by proper job with many opportunities to learn, to develop, and above all of them, the job has to be durable and security. When downsizing occurs, survivors feel like the promise of organization has broken down, they see their colleagues lose their job and they fear of losing their jobs at anytime, fear of instability of income, loss of status or self esteem. They believe that their work will no longer be safe, if the organization was willing to let the employees go in the past, they would be willing to do it again i n the future. Job insecurity leads to dissatisfaction, people intent to leave the organization and come to a safer place; it also leads to greater absenteeism, higher turnovers and disability claims (Boroson and Burgess, 1992; Koco. 1996; Mishra and Spreitzer. 1998; Tombaugh and White. 1990). Previous studies such as Moore, Grunberg Greenberg (2006); Ashford, Lee Bobko (1989); Brockner et al. (1992) or Hellgren Sverke (2003) have concluded that job insecurity are related with organizational downsizing both in short and long term perspective and the worried about future job loss is associated with impaired work attitudes and well-being. Theorists have emphasized that job insecurity is a multidimensional phenomenon (Ashford, Lee Bobko, 1989; Greenhalgh Rosenblatt, 1984; Jacobson, 1991). The first dimension, called severity of threat, consists of the range of work features at risk, the valence of these features, probabilities of losing each feature, and the number of sources of threat. The second dimension is perceived powerlessness, or ones ability to respond to risks. Job insecurity can also be thought of in terms of expectancy (i.e. probability of loss) and valence (i.e. value of job features) from expectancy theory (Jacobson, 1991). Job insecurity is a broad concept , including threats to any desired work features including opportunities for career development or wages. perceptions of job insecurity also can be considered as stress inducing, so reports of worry and stress are sometimes used as proxies for perception of job insecurity. Results showed that perceived job insecurity increased over time as layoffs unfolded but no new information arrived. Job insecurity was lowest among those employees who had no contact with workforce downsizing, with higher insecurity among those who had friends or co-workers laid off, and the highest insecurity among those who had been warned that they would be laid off or who had been laid off and then rehired. Hypothesis Many organization managers apply workforce downsizing strategy for their organization, often focus their attention and effort for those employees who be laid off and pay little attention to those who remain with organization As the large bank in Vietnam, VietinBank is also applying workforce downsizing like many other organizations to overcome the current difficulties. Get to know the survivors syndrome is very important not only for VietinBank but also for many other organizations. The future of the organization can be at stake if these warning signs take hold and start to have a long-term effect. Organizations that understand and combat the causes of survivor syndrome at an early stage have a far better chance of weathering the storm and moving forward after the period of unsettling change. Based on the previous studies, in the scope of this research, researcher would like to find out the impact of workforce downsizing to the behavior such as trust, commitment, and stress and job insecurity of Vietinbanks staffs to see how they were affected by downsizing and which elements of fours will be the most impacted by downsizing. Through this research, researcher hopes to put some help for VietinBank managers in order to have a better understanding about their employees so that they can looking for an appropriate direction as well as specific plan to minimize the harmful impacted may arises from downsizing. Based on the above theory discussion, the Hypothesis is formulated as following: (H1) There is a significant relationship between downsizing and VietinBank survivors trust. (H2) There is a significant relationship between downsizing and VietinBank survivors stress. (H3) There is a significant relationship between downsizing and VietinBank survivors commitment. (H4) There is a significant relationship between downsizing and VietinBank survivors job insecurity. (H5) There is a survivors symptom that be strongest impacted by downsizing in VietinBank Chapter Summary Through out the chapter, researcher give a deeped review of previous research on downsizing and its impacted on survivors. There are many different opinions about the effects of downsizing on organizations, somes indicated that downsizing is an effective stratefy for organization, which may lead to increase innovation, human resource focusing. However, numerous previous studies have concluded that there are adverse effects of downsizing on organizations, especially for survivors, who is considered to be lucky one for remaining their job. Previous researchs have come up with a term survivors syndrome to describe the behaviors or attitudes of survivors during and after the workforce downsizing occurs. And by understanding the attitudes, emotions and viewpoints of the survivors, a clear perspective on the true short and long term benefits, gains or losses of downsizing for corporations can be derived. Even in early survivor syndrome literature there was some evidence that effective mana gement of downsizing can control for negative effects on the survivors (Brockner, 1990; Brockner et al., 1992) The next section of the research studied further the impact of downsizing on trust, stress, commitment and job insecurity of VietinBanks survivors. This research enables better understanding about the perspective and behavior of VietinBanks survivor when downsizing situation occurs.

Animal Farm Retold Essay example -- Creative Writing Essays

Animal Farm Retold Night had fallen on the animal farm, though no animal was sleeping peacefully. Sleep was impossible that evening, for in the morning it would be known who was destroying the farm and who killed the old leader. Once before the farm was in shambles, and the animals looked to their new leader, Freud, to save them again as he had once before. Freud was a beautiful pig, a prize-winning pig with snow-white skin and a large round belly. One day a Raven flew to where Freud was napping on the MacKenzie farm and whispered atrocities to him, whispered that he would kill his father and have piglets with his mother...and Freud was afraid. So Freud left home to make his mark on the world. Upon his travels, he heard of a farm where the farmer spent too much money trying to raise prize-winning pigs, neglecting all the other animals. Animal Farm, it was called. Freud traveled to Animal Farm with a purpose to set things right, and set things right he did. He made a deal with the farmer (Farmer Brown, as he was called); Farmer Brown would use Freud as his prize-winning pig, but take care of the other animals as well. Well, soon Animal Farm was saved, and Freud became their new leader, since the old leader, a large boar named Capità ¡n, had been slaughtered one day in the slaughterhouse (or so the sheep gossiped). Freud met a pretty lit tle pig on Animal Farm named Amalie, Capità ¡n's "widow", and had two little piglets with her. So Freud, Amalie, and Amalie's brother Jakob all ran Animal Farm together. And so the entire farm waited and watched for dawn. All the animals knew in their hearts that once more Freud would make Animal Farm prosperous, turn barren fields plentiful, turn dry soil moist, and turn low spirits sky-hig... ...r color is symbolic of the tragic element to â€Å"Animal Farm Retold,† just as in Oedipus. "Animal Farm Retold† was written to try and reveal the many complex mysteries hidden within the text of Oedipus and Freud's theories. These mysteries are endless, and countless numbers can be found between the two that have not been discussed. The main point, however, is the main principle behind both Oedipus, Freud, and Animal Farm; Man, although he may think himself good, is not good at all. He is tragically flawed. In Oedipus, Man tries to escape Fate, and brings Fate upon himself. In Animal Farm, Snowball was tragically idealistic and naà ¯ve, leading to his downfall. And in Freud's theories? Well, maybe Freud's theories don't have an obvious tragic flaw, other than the idea of wanting to fornicate with one's mother; but that's just a psychological theory....isn't it?

Patient and Professional Development Assignment Essay

There is considerable evidence that many of the new medical technologies are used inappropriately, to generate income. What patient protections against inappropriate diagnostic and other procedures should be considered? There is no doubt that the new diagnostic and therapeutic technology now available has vastly expanded the economic dimensions of medicine, there is evidence that new and expensive technologies are being used inappropriately to generate income. One example of this statement would be the use of magnetic resonance imaging or MRIs. The popularity of this testing has skyrocketed and has in turn been found to be very profitable for hospitals and outpatient facilities. Despite the swooping popularity and booming financial boost this testing has been found not to have changed patient outcomes. The testing gives providers a clear look at the disease or anatomy being scanned there are no controlled comparisons of diagnostic accuracy or changes in medical or therapeutic care for patients (Sultz and Young, 2011). Therefore this new and innovative testing only adds to the cost of the already terribly high dollar of health care. Physicians now have many choices to make and many opportunities to generate income through the use of these and many more new technologies both in the office and hospital settings. The issue is that medical indications for the use of much of the new technology are not precisely causing problems and susceptible influence by economic factors. The range of acceptable options in a given case is often wide enough to give the provider considerable latitude in his/her choice of procedures. It is in this gray zone that economic incentives have their greatest effect on medical behavior (Relman,  2011). I do not believe that providers make decisions based on economic consideration and outcome that they would not decide otherwise. I believe with all of my heart that for the most part providers do things the majority of the time to do right by the patient and the pocketbook. The problem is, however, â€Å"the right thing† is often a matter of opinion because many tests, procedures, and operations have not yet been fully evaluated or scientifically compared with other available measures for cost effectiveness. Is it possible though pressure of financial advantage often sways those good-hearted providers or is it simply to pacify or satisfy patients? To expand on pacification or satisfaction or patients I will use my area of expertise. I have worked in the area of women’s health most of my career so though I am sure there are other areas of specialty with patients such as ours I can only state from true experience that this is a very high-maintained population. This is a media savvy, device driven; patient population that often wants â€Å"drive-thru† service. The issues I see to often are the ordering of tests, labs, procedures that may be unnecessary or cause greater consequence. There are high-technology screenings for every atypical cell we could possibly have on a female reproductive organ. As soon as a pre-menopausal women with heavy bleeding hears that she may have a positive result she wants a hysterectomy. Though this may be the treatment for some, it is not for all a nd I see way too many women loose their uterus for reasons that were much more benign than the outcome. Being in healthcare for so many years I could give example after example of new high technology that may be used inappropriately for reasons that could be generating income, but done simply for the benefit of the patient and their satisfaction. Patient satisfaction brings a whole new topic of conversation to generating income. So how can we protect patients from potentially themselves or those that provide the ordering power that initiates this vicious cycle? I think first we have to mandate facilities and practices to put in place guidelines and protocols to stop unnecessary testing that has been shown not to change the patient outcome. Another intervention and protection to patients is that providers have to have conversations with patients honestly about what the issue is and that they do not need particular testing if asked for. They need to keep it real with patients. It is true that patient satisfaction is going to be at jeopardy  and that they may want to jump providers, but providers and facilities will need to seriously look at the risk benefit of doing procedures that will not weigh up in a court of law or a court of public opinion. In spite of nursing’s vital importance to hospitals, nurses face excessive paperwork, managerial responsibilities, and supervision of lesser-trained aides — tasks that require an inordinate amount of time spent in functions other than direct patient care. These frustrations, combined with long work hours, stagnant salaries, and other difficulties, have resulted in fewer entrants to schools of nursing and increasing numbers of nurses leaving the profession. Discuss possible solutions to this growing problem. Do providers in the health care system recognize a broader social mission than addressing the needs of only those individuals who achieve access to their services? Elaborate. Relman, A. (2011). Cost control, doctors’ ethics, and patient care. Retrieved from http://www.issues.org/19.4/updated/relman.pdf.

Types of Organization

LESSON 2: ORGANIZATIONAL INFORMATION SYSTEMS An introductory topic on Management Information System Organizations are formal social units devoted to the attainment of specific goals. The success of any organizations is premise on the efficient use and management of resources which traditionally comprises human, financial, and material resources. Information is now recognized as a crucial resource of an organization. Examples of organizations are business firms, banks, government agencies, hospitals, educational institutions, insurance companies, airlines, and utilities.Organizations and information systems have a mutual influence on each other. The information needs of an organization affect the design of information systems and an organization must be open itself to the influences of information systems in order to more fully benefit from new technologies. [pic] This complex two-way relationship is mediated by many factors, not the least of which are the decisions made—or not made—by managers. Other factors mediating the relationship are the organizational culture, bureaucracy, politics, business fashion, and pure chance. 1. Organizations and environments Organizations reside in environments from which they draw resources and to which they supply goods and services. Organizations and environments have a reciprocal relationship. †¢ Organizations are open to, and dependent on, the social and physical environment that surrounds them. Without financial and human resources—people willing to work reliably and consistently for a set wage or revenue from customers—organizations could not exist. †¢ Organizations must respond to legislative and other requirements imposed by government, as well as the actions of customers and competitors. On the other hand, organizations can influence their environments. Organizations form alliances with others to influence the political process; they advertise to influence customer acceptance of the ir products. Information systems are key instruments for environmental scanning, helping managers identify external changes that might require an organizational response. New technologies, new products, and changing public tastes and values (many of which result in new government regulations) put strains on any organization’s culture, politics, and people. | 2. Standard operating procedures (SOPs) Precise rules, procedures, and practices developed by organizations to cope with virtually all expected situations. These standard operating procedures have a great deal to do with the efficiency that modern organizations attain. 3. Organizational Politics People in organizations occupy different positions with different specialties, concerns, and perspectives.As a result, they naturally have divergent viewpoints about how resources, rewards, and punishments should be distributed. These differences matter to both managers and employees, and they result in political struggle, compet ition, and conflict within every organization. Political resistance is one of the great difficulties of bringing about organizational change—especially the development of new information systems. Virtually all information systems that bring about significant changes in goals, procedures, productivity, and personnel are politically charged and elicit serious political opposition. . Organizational culture Organizational culture describes the psychology, attitudes, experiences, beliefs and values (personal and cultural values) of an organization. It has been defined as â€Å"the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization. †¢ It is the set of fundamental assumptions about what products the organization should produce, how and where it should produce them, and for whom they should be produced. It is a powerful unifying for ce that restrains political conflict and promotes common understanding, agreement on procedures, and common practices †¢ organizational culture is a powerful restraint on change, especially technological change. Most organizations will do almost anything to avoid making changes in basic assumptions. Any technological change that threatens commonly held cultural assumptions usually meets a great deal of resistance.However, there are times when the only sensible way for a firm to move forward is to employ a new technology that directly opposes an existing organizational culture. Types of Organizational Information systems Decision making is often a manager’s most challenging role. Information systems have helped managers communicate and distribute information and provide assistance for management decision making. No single system provides all the information needed by the different organizational levels, functions and business processes.Organizations can be divided into st rategic, management, and operational levels. 1. Operational-level systems support operational managers' needs for current, accurate and easily accessible information primarily used to keep track of the elementary activities and transactions of the organization. Decision making for operational control determines how to carry out the specific tasks set forth by strategic and middle management decisions. 2. Management-level systems are designed to serve the monitoring, controlling, decision-making, and administrative activities of middle managers.Decision making for management control focuses on efficiency and effective use of resources. It requires knowledge of operational decision making and task completion. 3. Strategic- level systems help senior managers with long-range planning needed to meet changes in the external and internal business environment. Strategic decision determines the long-term objectives, resources and policies of the organization. Decisions at every level of the organization can also be classified as unstructured, structured and semi-structured. Unstructured decisions involve judgment, evaluation, and insight into the problem definition. They are novel, important, and nonroutine. †¢ Structured decisions are routine †¢ Semi-structured decisions involve cases where only part of the problem can be answered by an accepted procedure. Modern information systems have been most successful with structured, operational and management control decisions. But now most of the exciting applications are occurring at the management knowledge and strategic levels where problems are either semi-structured or unstructured.TYPES OF ORGANIZATIONAL INFORMATION SYSTEM Following are the different types on information systems that support the needs of the organization: Executive information systems (EIS), Decision support systems (DSS), Management Information Systems(MIS), and Transaction Processing Systems (TPS). A. Executive information systems (EIS) pro vide top management with ready access to a variety of summarized company data against a background of general information on the industry and the economy at large.ESS provides a generalized computing and communications environment for senior managers at the strategic level of the organization. Top management of any organization need to be able to track the performance of their company and of its various units, assess the opportunities and threats, and develop strategic directions for the company’s future. Executive information systems have these characteristics: 1. EIS provide immediate and easy access to information reflecting the key success factors of the company and of its units. 2. User-seductive† interfaces, such as color graphics and video, allow the EIS user to grasp trends at a glance. Users’ time is at a high premium here. 3. EIS provide access to a variety of databases, both internal and external, through a uniform interface — the fact that the system consults multiple databases should be transparent to the users. 4. Both current status and projections should be available from EIS. It is frequently desirable to investigate different projections; in particular, planned projections may be compared with the projections derived from actual results. . An EIS should allow easy tailoring to the prefaces of the particular user or group of users (such as the chief executive’s cabinet or the corporate board). 6. EIS should offer the capability to â€Å"drill down† into the data: it should be possible to see increasingly detailed the summaries. Critical Success factors for achieving a successful EIS 1. A committed and informed executive sponsor. A top level executive, preferably the CEO, should serve as the executive sponsor of the EIS by encouraging its implementation. 2. An operating sponsor.The executive sponsor will most likely be too busy to devote much time to implementation. That task should be given to another t op-level executive, such as the executive vice-president. The operating sponsor works with both the user executives and the information specialists to ensure that the work gets done. 3. Appropriate information services staff. Information specialists should be available who understand not only the information technology but also how the executive will use the system. 4. Appropriate information technology.EIS implementers should not get carried away and incorporate unnecessary hardware or software. The system must be kept as simple as possible and should give the executive exactly what him or her wants-nothing more and nothing less. 5. Data Management. It is not sufficient to simply display data or information. The executive should have some idea of how current the data is. This can be accomplished by identifying the day and ideally the time of the day the data was entered. The executive should be able to follow data analysis. . A clear link to business objectives. Most successful EIS s are designed to solve specific problems or meet needs that can be addressed with information technology. 7. Management of organizational resistance. When an executive resists the EIS, efforts should be taken to gain support. A good strategy is to identify a single problem that the executive faces and then quickly implement an EIS, using prototyping to address that problem. Care must be taken to select a problem that will enable the EIS to make a good showing. . Management of the spread and evolution of the system. Experience has shown that when upper-level management begins receiving information from the EIS, lower level managers want to receive the same output. Care must be taken to add users only when they can be given the attention they need. B. Management information systems (MIS) – serve the management level of the organization, providing managers with reports and, in some cases, with online access to the organization’s current performance and historical records .Typically, they are oriented almost exclusively to internal, not environmental or external, events. MIS primarily serve the functions of planning, controlling, and decision making at the management level. Generally, they depend on underlying transaction processing systems for their data C. Decision support systems (DSS), is a type of MIS expressly developed to support the decision-making process in non-routine task. DSS assist middle managers with analytical decisions, and able to address semistructured problems drawing on both internal and external sources of data 1.It is an interactive computer-based system intended to help managers retrieve, summarize, analyze decision relevant data and make decisions. 2. DSS facilitate a dialogue between the user, who is considering alternative problem solutions, and the system, with its built-in models and access to the database. 3. DSS are interactive, and in a typical session, the manager using a DSS can evaluate a number of possible â€Å" what if† scenarios by using a model or a simulation of a real life system. Two major categories of DSS 1. Enterprise-wide DSS are linked to large, data warehouse and serve many managers in a company.Enterprise wide DSS can range from fairly simple systems to complex data intensive and analytically sophisticated executive information system. 2. Desk-top DSS such as spreadsheets, accounting and financial models can be implemented in Microsoft Excel. Another DSS tool, simulation, is usually implemented in desktop packages. D. Transaction processing systems (TPS) is the core of IT applications in business since it serves the operational level of the organization by recording the daily transactions required to conduct business.Most mission- critical information systems for both large and small organizations are essentially transaction processing systems for operational data processing that is needed, for example, to register customer orders and to produce invoices and payroll check s. This system keeps track of money paid to employees, generating employee paychecks and other reports. A symbolic representation for a payroll TPS Typical applications of TPS There are five functional categories of TPS: sales/marketing, manufacturing/production, finance/accounting, human resources, and other types of systems specific to a particular industry.Within each of these major functions are subfunctions. For each of these subfunctions (e. g. , sales management) there is a major application system. [pic] The various types of systems in the organization exchange data with one another. TPS are a major source of data for other systems, especially MIS and DSS. ESS is primarily a recipient of data from lower-level systems. Systems from a Functional Perspective There are four major functional areas in an organization: sales and marketing, manufacturing and production, finance and accounting, and human resources. . Sales and Marketing Systems The sales and marketing function is res ponsible for selling the organization’s product or service. Sales function is concerned with contacting customers, selling the products and services, taking orders, and following up on sales. Marketing is concerned with identifying the customers for the firm’s products or services, determining what customers need or want, planning and developing products and services to meet their needs, and advertising and promoting these products and services.Sales and marketing information systems support these activities and help the firm identify customers for the firm’s products or services, develop products and services to meet customers’ needs, promote these products and services, sell the products and services, and provide ongoing customer support. Examples of Sales and Marketing information systems are Order processing, pricing Analysis and sales Trend Forecasting. 2. Manufacturing and Production Systems The manufacturing and production function is responsible f or actually producing the firm’s goods and services.Manufacturing and production systems deal with the planning, development, and maintenance of production facilities; the establishment of production goals; the acquisition, storage, and availability of production materials; and the scheduling of equipment, facilities, materials, and labor required to fashion finished products. Manufacturing and production information systems support these activities, it deal with the planning, development, and production of products and services, and with controlling the flow of production. 3. Finance and Accounting SystemsThe finance function is responsible for managing the firm’s financial assets, such as cash, stocks, bonds, and other investments, in order to maximize the return on these financial assets. The finance function is also in charge of managing the capitalization of the firm (finding new financial assets in stocks, bonds, or other forms of debt). In order to determine whe ther the firm is getting the best return on its investments, the finance function must obtain a considerable amount of information from sources external to the firm.The accounting function is responsible for maintaining and managing the firm’s financial records—receipts, disbursements, depreciation, payroll—to account for the flow of funds in a firm. Finance and accounting share related problems—how to keep track of a firm’s financial assets and fund flows. They provide answers to questions such as these: What is the current inventory of financial assets? What records exist for disbursements, receipts, payroll, and other fund flows? Examples of Finance and Accounting Systems : Accounts receivable, Budgeting, Profit Planning. 4. Human Resources SystemsThe human resources function is responsible for attracting, developing, and maintaining the firm’s workforce. Human resources information systems support activities, such as identifying potentia l employees, maintaining complete records on existing employees, and creating programs to develop employees’ talents and skills Examples of Human resources information systems: training and development, compensation analysis, and Human Resources Planning. Management Challenges Businesses need different types of information systems to support decision making and work activities for various organizational levels and functions.Well-conceived systems linking the entire enterprise typically require a significant amount of organizational and management change and raise the following management challenges: 1. Integration. Although it is necessary to design different systems serving different levels and functions in the firm, more and more firms are finding advantages in integrating systems. However, integrating systems for different organizational levels and functions to freely exchange information can be technologically difficult and costly.Managers need to determine what level of system integration is required and how much it is worth in dollars. 2. Enlarging the scope of management thinking. Most managers are trained to manage a product line, a division, or an office. They are rarely trained to optimize the performance of the organization as a whole and often are not given the means to do so. But enterprise systems and industrial networks require managers to take a much larger view of their own behavior, including other products, divisions, departments, and even outside business firms. ———————- Objectives : At the end of the lesson, the students should be able to: †¢ Illustrate the relationship between organizations and information systems †¢ Explain the factors mediating the relationship between organizations and information systems †¢ Discuss the different types of information systems in the organization. †¢ Explain how information supports the different levels of an organization †¢ Give examples of the information systems that are being used to support business functional areas