Organizational Innovation and Change D5 Essay Example | Topics and Well Written Essays - 250 words

Organizational Innovation and Change D5 - Essay Example In an aim of expanding the organization and giving it a global image the bank has invested realized its social responsibility. It has invested in charity events and in the effort of improving the needless in society it has vented into Africa and Asia (Zell, 2008). The bank has been involved in the motivation of their employees. The bank has developed a culture in which the welfare of the employees is paramount. They have end month fan fairs and they pay their employees well. All employees are insured and housed or given house allowances. This intern increases the employees’ commitment (Tushman, 2006). The customers get satisfied due to good public relation; it is able to expand due to a large client base. The bank has also has also invested into technology and allows great idea this is there reason to its expansion. There are regulations that drive the financial sector consolidates is the result of 60 percent growth in terms of shares and asset. There banks vision statement has been realized to a percentage. The success is due to an organized team. The bank has portrayed the essence of the vision statement and how it’s used to drive the company forward. The bank has invested heavily and employed expertise to enable their success (Beerman, 2005). The vision statement should be the one driving a company towards the

Scientific Management †Frederick Taylor Essay Example for Free

Scientific Management – Frederick Taylor Essay Abstract Frederic Taylor was one of the pioneers of management theory. His work was a product of the Industrial Revolution and the strict societal views and class structures of that day. Although scientific management is often criticized today, its key principles are still applicable in many areas of work and life. Scientific Management- Fredrick Taylor Employee management techniques and procedures are central to the effectiveness of a business. Every business must find a way to complete the tasks necessary for it to provide its goods and services to the marketplace. Because a business is unable to act unless all of its employees, from interns to the chief executive officer, act as a single team to achieve the goals the business has established, it is essential for a business to determine how it can affect these employees to have them produce the results the business needs. Today many management techniques and theories tend to center on the personality or character of employees and how best to affect people based on their psychology or personalities. For example, some theories center on the motivations that can drive a person to take action, others on how persons react to different management styles. Management theories today recognize that employees are a key part of a company and that management theories are not just about controlling employees. Management theories must consider how to motivate and encourage workers to perform their jobs. Management theories, however, must also consider the value of employees and that employees have different personalities and goals. There also is an understanding that there cannot be one management theory that works on all employees equally, on all types of businesses, or for all managers all of the time. The differences in setting, work, employer, manager, and employee must all be considered today. The most effective management theories of today are not meant to apply to all situations. Their developers understand that different situations and people require different  methods and techniques because today society understands that all people have individual needs and offer different potential. At the time of the industrial revolution, however, there was a belief that laborers and managers were different classes of people. The thought was that people should be treated differently based on their social status. Management techniques were not concerned with â€Å"who† an employe e was. Instead, management techniques were more concerned with assuring managers had order and control over employees, similar to the way a parent has over a child. While the goal was the same as it is today, to achieve company goals, the belief was that labor had no role to play other than to follow orders. There was no thought or expectation that a laborer could have any knowledge or character that the employer may benefit from. At that time it was the role of management to train or convert a person into what the company needed. When management though of employee or labor training, what it thought about was not training that would benefit the person the employee was. Instead, training was thought to be geared to improving the production of the employee for the benefit of the employee (Berdayes). The management style that was developed in this society, which remains one whose principles are still relevant today, was â€Å"Scientific Management†. It was a style geared to determining the best methods management could require employees to follow so that work was done most efficiently and productively (Berdayes). In fact, Taylor once indicated that managers/employer had to understand that: It is only when we fully realize that our duty, as well as our opportunity, lies in systematically cooperating to train and to make this competent man, instead of in hunting for a man whom someone else has trained, that we shall be on the road to national efficiency. This statement clearly indicates the view that any man could be trained to simply follow a procedure and that would lead to great results. However, to fully understand scientific management it is important to understand the mind of the man from whom it originated: Frederick Winslow Taylor (Roper). Frederick Winslow Taylor was a member of the middle or upper middle classes of his time (Guru). He was born in 1856 into a family of Quakers, who believed in â€Å"plain living,† (Guru). His father was an attorney and Taylor graduated with a degree in industrial engineering from Stevens Institute of Technology in New Jersey (Guru). As can be expected, based on this resume, Taylor was a part of management. In fact, while he worked his way through school, his jobs were those of a skilled worker, not a laborer (Guru). He worked in a metal products factory as a machinist where he eventually became a foreman (Guru). Then, he was promoted into the role of a research director and â€Å"finally achieved the position of chief engineer.† (Guru). The fact that Taylor was born into a family headed by an attorney and his ability to attend college, even though he worked, seems to attest to the fact that he was from the higher classes of the time. Student loans and programs by the government were not available at the time to assure that students could afford an education if their families were unable to pay for them. Taylor’s jobs, although he worked as a machinist for years, also indicate that he was never a laborer on an assembly line or a member of that class of workers that was lowest in the society of the time. Taylor’s views, therefore, can be seen to more closely aligned to those of managers and employers than to labor. A person’s view point is greatly shaped by their upbringing and life experiences. Taylor’s life is almost empty of any contact with, or connection to, an average laborer. Taylor’s father was very successful as an attorney. Taylor spent his early teen years in private schoo ls in France and Germany (Stearns). He then attended the famous Phillips Exeter Academy in New Hampshire and was set to attend Harvard University Law School (Stearns). Society at the time of Taylor’s life was very different from the democratic and accepting society of today. Those who lived in Taylor’s circles did not associate or interact with those in the lower classes (Stearns). People were expected to be born in a certain class and die in that class. People obtained the education expected for their class members to have, they worked in jobs their class was expected to obtain, and they were presumed to have intelligence, feelings, and thoughts which their â€Å"class† was stereotyped as having (Stearns). Taylor is often perceived as looking â€Å"down† on the lower classes and the laborers of his day (Schachter). This was the era of the Industrial Revolution, where people were being looked at by employers and those who were building the American industrial complex, as machines (Stearns). Just as a motor’s part can be replaced, employers thought of employees are interchangeable parts of the machinery of the assembly line (Stearns). Indeed, there are several  documented instances where Taylor speaks of workers as lacking in intelligence or being lazy in their work (Schachter). In particular, there is one instance in which he observes a German bricklayer doing his job and describes him as lazy and unintelligent due to the way he performs his work (Schachter). However, in reality this â€Å"simple† man, was not only working full time as a bricklayer, but had also managed to purchase a parcel of land and was in the process of building his own home, on which he would work after his normal twelve hour day was over (Schachter). This was the stereotypical view of laborers, that they had no purpose, role, or life, nor could they benefit society in any other way than as labor, or a part of the â€Å"industrial machine†. In fact, it is this view of so much of humanity as being nothing more than parts of a large industrial machine that people such as Max Weber began to look at the way in which society was devaluing humanity (SJSUIE). It is interesting, however, that while Weber’s management theories were meant to humanize production, in the areas of sociology, his theory of management was one that also can be seen as evolving out of a fixed view of class and social structure. Weber’s â€Å"ideal bureaucracy† formulated a system of management in which a firm hierarchy was put in place (SJSUIE). Through this system all involved were to firmly know and understand their responsibilities and duties (SJSUIE). Another system of â€Å"rules† for the new industrial complexes that were developing came from Henri Fayol (Holmblad). Fayol’s work went beyond that of Weber to provide more guidance for management as to their roles (Holmblad). Fayol established the five principle roles of management at this time: to forecast and plan; to organize; to command; to coordinate; and to control (Holmblad). Both of Weber’s and Fayol’s theories are interesting concerned only with the structure of management or the role of those in management (Holmblad). The viewpoint taken by both of these theories is that the important part of management is the managers and labor merely has to follow their managers’ orders. This is perfectly in li ne with the view taken of labor at the time period. It is in this society that the theory of scientific management developed. Taylor was convinced that efficiency and productivity could be obtained through the use of study of motion and the use of that work to develop efficient production methods (Wrege). As Taylor argued, the techniques of science, so respected in society, could be applied to labor  (Salvendy). This would permit the discovery of the most productive means of building a product or completing a process in the production of that product (Salvendy). Taylor believed people needed to be observed to understand the movements involved in their work (Salvendy; Wrege). These individual movements then could be further broken down to help identify the procedures necessary to accomplish them (Salvendy). In the end, Taylor would develop a production method, similar to the way machines are now designed, that would produce the most units in the least amount of time (Berdayes; Guru). Workers were instructed on exactly how to accomplish a task and were not to deviate from the procedures designed by Taylor ( Salvendy). Taylor’s scientific management was a great success during Taylor’s lifetime (Schacter). Because the term â€Å"scientific† was associated with the work, and as Taylor devised human body diagrams to â€Å"prove† how its movements were the most efficient, the theory gained great respect and generated great debate (Berdayes). One commentator argued that scientific management was a process in which â€Å"the person’s activity is thereby reduced to repeating a fractional operation at the tempo of the machine. At the extreme of this approach the person is simply subsumed as one more mechanized component of production with precisely specifiable fuel, cooling, and other operational requirements,† (Berdayes). Throughout the study the laborer in scientific management was reduced to a laboratory animal that was observed in its environment and after the study was reduced to a machine part in how they were required to work. The method was not loved by all or praised by all, regardless of its success. Interestingly, however, unlike Weber or Fayol, Taylor f ocused his improvements for the industrial complex at the level of the labor pool, not that of management. His theory appealed to management because it provided clear cut order and direction for workers, but it was based on the need to have workers follow a certain order. This too meant the theory worked on a principle of hierarchy, in which management controlled, but at least Taylor saw that labor also played a role in production. It has been said that Taylor’s methods were driven only for the benefit of management, but Taylor did not feel this way (Schachter). There is some evidence that Taylor’s deep devotion to labor studies and motions to find the most efficient work process may have been a way to help keep management from taking advantage of workers (Schachter). During the industrial revolution  managers would pay many laborers by the piece, say at a rate of $0.02 per nut or bolt produced (Schachter). Often, to earn more, workers would quickly develop faster means of production (Schachter). When that happened, however, management would then change the piece rate they paid because, they told their workers, their fast rate of production meant the work was too simple and should not be so highly paid (Schachter). Taylor may have wanted to keep management honest and felt that by developing a clear work process management could not harm labor for efficiency improvements (Schachter). If this view point is correct, then Taylor’s scientific management may have been a way to help labor (Schacter). He may have believed that through scientific management labor would have a proven way to show management that they were acting as best as they could, hence avoiding any arbitrary actions by managers (Schacter). Taylor’s insistence on the use of written instructions, training, and incentive payments to workers can also be said to signify his belief in the fact that scientific management was a benefit to both employees and management (Guru). Unfortunately, however, that is not how Taylor’s work is remembered today, even though his work is still a part of current management studies (Wagner). Even as the Twentieth Century dawned people were disdainful of Taylor’s scientific management (Roper). The theory was believed to be too dehumanizing (Roper). However, scientific management’s worker efficiency and work processes were still valued, but th ere was a demand for theories that also involved human relations (Roper). For the first time consideration was given to humans who worked at all levels in a company or firm. Workers were looked at as â€Å"sentient† beings, not just as â€Å"tools† who were part of an industrial machine. Finally, it seems, management and workers were viewed as mutual participants in work and the managerial process. This was the main problem with scientific management, and the reason for its disfavor as the Twentieth Century continued (Roper). Society also changed and labor itself placed demand on management and wanted to participate in how their work was to be structured and performed (Roper). In fact, scientific management was once so looked down upon that it was considered a form of slavery (Roper). Detractors argued that management was supposed to be more concerned with the humanity of the people who were being managed than with management needs or desires to â€Å"slave drive† people into production (Roper). Some argued that it  would be better t o motivate and encourage workers to product through the establishment of more humanitarian wages, working conditions, work hours, and job security (Roper). This is one of the times when there were a great number of people convinced of the need for a communist revolution and it was often workers, who suffered the worst working and living conditions society had to offer, even through the First World War, that championed such movements (Roper). The theory of scientific management, as society developed, has been strongly disfavored (Wagner). As society moved away from the conditions that existed during the industrial revolution and left behind the strict beliefs in social class and a person’s proper place in society, the belief that labor had to be â€Å"instructed† into how to perform each minute step of their jobs was seen as insulting (Roper). The view that the lowest level employee would not understand how best to accomplish a task, and that, indeed, there was only â€Å"one best way† to perform a task, was discredited (Roper). However, parts of scientific management are still recognized for the work Taylor completed in the principle of efficiency (Taylor). Seen as a social philosophy, instead of a management theory, scientific management does have application, at the personal level, to everyone who needs to complete a task, from a baker to a zoologist (Roper). Scientific management can be viewed as an early introduction of the principle of efficiency in labor and society. The idea that through thought and observation a person could perform regular tasks faster and more easily remains a very important part of work and life in our busy world. References Berdayes, V. (2002). Traditional Management Theory as Panoptic Discourse: Language and the Constitution of Somatic Flows. Culture and Organization, Vol. 8(1), pp. 35–49. Guros on Managing People. (NA). Fredrick Winslow Taylor: (1856-1915). Kerns, D. (2008). History of Management Theory. San Jose State University Industrial Engineering, SJSU ISE. 250. Retrieved September 23, 2008, from http://www.kernsanalysis.com/sjsu/ise250/history.doc Holmblad, K. (2008). Some effects of Fayolism. International Studies of Management Organization, Spring 2008, Vol. 38, No. 1, pp. 30 – 49. Roper, M. (2001). Masculinity and the Biographical Meanings of Management Theory: Lyndall Urwick and the Making of Scientific Management in Inter-war Britain. Gender, Work and Organization, Vol. 8, No. 2, April 2001. Salvendy, G. (2004). Classification of Human Motions. Theoretical Issues in Ergonomic Science, March–April 2004, Vol. 5, No. 2, pp. 169–178. Schachter, H. L. (1989). Frederick Taylor and the Public Administration Community: A Reevaluation. (Albany: State University of New York Press). Stearns, P.N. (2007). The Industrial Revolution in World History, Third Edition. New York: Westview Press). Wagner, T.S. (2007). An Institutional Economic Reconstruction of Scientific Management: on the Lost Theoretical Logic of Taylorism. Emerald Management Review, Vol. 32, No. 1, pp. 105 – 118. Wrege, C.D. (2008). F.W. Taylors Lecture on Management, June 4, 1907: an Introduction. Journal of Management History, Vol. 14, No. 3, pp. 209 – 213.

Shareholder Activism Business

Shareholder Activism Business This paper looks at the issue of shareholder activism from an Irish and International perspective, in the context of understanding agency theory and corporate governance which acts as catalysts to this new phenomenon. This is done by looking at past and current published papers that revolve around the subject matter. Theoretical concepts within the business and finance literature are explained in relation to how agency theory and corporate governance are practised worldwide. Three countries namely, the OECD countries (European Union as one whole entity), Ireland, and China, are assessed to identify how these concepts are practiced to gain a better insight into this new problem known as shareholder activism. Finally a critical review of matches and mismatches is used to compare and contrast similarities between the theoretical concepts and the empirical evidence within the literature review that is gathered for this paper to identify whether this problem is a worldwide problem or it is at the growth stage of becoming a worldwide phenomenon. Chapter 1: The Concept of Shareholder Activism Shareholder activism has begun to play a role in reshaping the corporate governance in companies all across the globe. In industrialised or advanced countries, institutional investors or financial intermediaries serve the function of active shareholders. In general, shareholder activism has become one of the most important and highly debated issues of the 21st century. The issue of shareholder activism (shareholder revolt against management objectives) can be said to have arisen due to the recent collapse of huge international organisations; in theoretical terms it is known as Corporate Governance. Now, Corporate governance refers to structures and processes for directly and controlling companies. Collectively, these constitute a set of rules that govern the relationships among management, company shareholders, and other stakeholders including consumers, creditors, employees, the general public, neighbouring people and suppliers. The rules of corporate governance aim to ensure that managers act in the best interests of their shareholders rather than simply acting in their own interests or those of a majority shareholder. Good corporate governance can provide companies in emerging markets in particular, better access to outside capital by making them more attractive targets for portfolio investment. The impact of recent corporate scandals, which has opened the debate as to the validity of corporate governance, has been felt all across the world and Ireland is no exception. Domestic scandals such as the fallout from the Inquiry into no-collection by certain banks of applicable tax on deposit accounts prompted a report on auditing standards which eventually resulted in the Companies (Auditing and Accounting) Act (2003), essentially is Irelands Sarbanes- Oxley Act. Until relatively recently, meanwhile, there was scant compliance with corporate governance and companies legislation which led to government committee report on the matter in 1997 and ultimately to the enactment of company Law Enforcement Act, 2001. This Act established the Office of Director of Corporate Enforcement, which now has responsibility for ensuring compliance with the Companies Acts (1963 -2003) in Ireland. This government body has significant powers of investigation and prosecution, which are being exercised vigorously. In the European Union (OECD), although this had been a subject of thought for over a decade, it was originally developed in response to a call by the OECD council meeting at ministerial level in 1998, to develop, in conjunction with national governments, other relevant international organisations and the private sector, a set of corporate governance standards and guidelines. Since the principles were agreed in 1999, they have formed the basis for corporate governance initiatives in both OECD and non-OECD countries alike. Accordingly, they form the basis of the corporate governance component of the World/IMF Reports on the Observance of Standards and Codes (ROSC). Aims and Objectives The aim of this paper is to address the issue of aligning management objectives with the objectives of shareholders and help identify why this has not been successful. I.e. this genesis has led to shareholder activism at annual general meetings, which management have found it very unpleasant to bear with within organisations all across the globe. The objective of this research paper is to first look at the genesis (beginnings) of this problem pertaining agency theory and corporate governance with regard to their relevance in satisfying shareholder objectives. Secondly, to explain the current trend in relation to shareholder activism within organisations and also how companies are preparing and dealing with this phenomenon at AGMs. I.e. The right information is given to shareholders as to the accurate financial earnings and gains of the organisation which they were appointed to manage. This will be looked at from an Irish and International perspective. Finally, a critical appraisal of the validity of published material so far covering agency theory and corporate governance within organisations will be addressed. Chapter 2: Existing Literature Review The need to understand and deal with shareholder activism is one that has come of recent due to the collapse of major international organisations around the world within the past decade. According to Grace (2004), in Ireland, the role of the institutional shareholder and the extent of their responsibilities as such, insofar as these differ from those of individual shareholders, are governed by practice rather than legislation. In addition, she adds that in Irish incorporated companies the overall management function vests in a board of directors, although the directors may delegate functions to certain executives or committees of the board. There is no statutory limit on the number of directors (hence wasting company funds on management) that can comprise a board, although limits may be imposed in the Articles of Association. Current legislation (Companies Act 2003) in Ireland requires a minimum of two directors, both of whom must be natural persons and one of whom must be an Irish resident. Grace (2004) also argues that the Articles of Association set out the requirements for the convening and holding of board meetings, while the corporate governance requirements for listed companies ensure that regular meetings are held. Written notice is usually required, including an agenda and all relevant documents to be considered at the meeting. All minutes of board meetings must be kept in the register of minutes but these are not generally available to shareholders, a major reason for shareholder activism. Daily et al.(2003) suggest that the overwhelmingly dominant theoretical perspective applied in corporate governance studies is agency theory. This serves as an explanation of how the public corporation could exist, given the assumption that managers are self-interested, and a context in which those managers do not bear the full wealth effects of their decisions. The theory responds to the observation 70 years ago of some of the key problems inherent in the separation of ownership and control. Daily metal. (2003) also add that in nearly all-modern governance research, governance mechanisms are conceptualised as deterrents to managerial self-interest. Corporate governance mechanisms provide shareholders some assurance that managers will strive to achieve outcomes that are in the shareholders interests. Shareholders have available both internal and external governance mechanisms to help bring the interests of managers in line with their own. They also argue that internal mechanisms include an effectively structured board, compensation contracts that encourage a shareholder orientation, and concentrated ownership holdings that lead to active monitoring of executives. The market for corporate control serves as an external mechanism that is typically activated when internal mechanisms for controlling managerial opportunism have failed. Abelson (2001) argue with regard to the collapse of Enron, that what made the Enron case different is how sudden and final the companys fall was for its shareholders, i.e.it was the shareholders that lost out and not management, adding that how can someone (people on the board of directors in Enron) who cannot own stock in a company serve on its board. In Europe, the OECD principles of corporate governance (2004) state that corporate governance is one key element in improving economic efficiency and growth as well as enhancing investor confidence. Corporate governance involves a set of relationships between a companys management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined. Good corporate governance should provide proper incentives for the board and management to pursue objectives that are in the interests of the company and its shareholders and should facilitate effective monitoring. In addition the OECD (2004),also argue that while a multiplicity of factors affect the governance and decision making processes of firms, and are important to their long-term success, the principles focus on governance problems that result from the separation of ownership and control (agency theory). However, this is not simply an issue of relationship between shareholders and management, although that is indeed the central element. In some jurisdictions , governance issues also arise from the power of certain controlling shareholders over minority shareholders. In other countries, employees have important legal rights irrespective of their ownership rights. The OECD (2004) also suggests that corporate governance is affected by the relationships among participants in the governance system. Controlling shareholders, which maybe individuals, family holdings, bloc alliances, or other corporations acting through a holding company or cross shareholdings, can significantly influence corporate behaviour. As owners of equity, institutional investors are increasingly demanding a voice in corporate governance in some markets. Individual shareholders usually do not seek to exercise governance rights but may be highly concerned about obtaining fair treatment from controlling shareholders and management. Creditors according to the OECD (2004) play an important role in a number of governance systems and can serve as external monitors over corporate performance. Employees and other stakeholders play an important role in contributing to the long-term success and performance of the corporation, while governments establish the overall institutional and legal framework for corporate governance. The role of each of these participants, OECD (2004), and their interactions vary widely among OECD countries and among non-OECD countries well. Adding that these relationships are subject, in part, to law and regulation and, in part, to voluntary adaptation and, most importantly, to market forces. Bebchuk (2003) also argue that in theory, if directors fail to serve shareholders, or if they appear to lack the qualities necessary for doing so, shareholders have the power to replace them. This relates to a document presented to the securities exchange commission in New York, considering the improved rights of shareholders. Bebchuk (2003) also states that this shareholder power, in turn, provides incumbent directors with incentives to serve shareholders well, making directors accountable. He suggests that although shareholder power to replace directors is supposed to be an important element of corporate governance system, its largely a myth. Attempts to replace directors he states are extremely rare, even in firms that systematically underperform over a long period of time. By and large, directors nominated by the company run unopposed and their election is thus guaranteed. This varies from country to country. Hamid (2005) argues with regard to the International Financial Corporation, which is part of the World Bank in relation to corporate governance models in China. It states that corporate governance is a new concept in China and most managers and boards remain unaware of basic governance procedures, often confusing governance with general management. As a result, bridging the gap between rhetoric and reality is required. It adds that the private sector in China has clearly become the engine of growth, seemingly offering enormous investment opportunities. But the structures in place at private companies are often immature, reflecting the newness of the private sector. Most small and mid-sized enterprises in Chinaware run informally. They are family owned, they dont have checks and balances, and their financial reporting is not transparent. It goes on to argue that the state-owned enterprises on their way to becoming private enterprises suffer from a different set of governance problems. When these companies take on private ownership, they carry the legacy of the state-dominated decision making regime. They often have complex and opaque corporate ownership structures, overlapping new and traditional bodies of corporate control, and reporting practices that are focused on satisfying the information requirements of the authorities rather than the needs of investors. Stutchbury (2001) states that in Australia, when AMP handed down its 1999 results showing a $1.2 billion abnormal loss from the GIO takeover, the AMP chairman was nowhere to be seen. He did not deem it necessary to front up to the cameras or to face media questioning to explain himself to shareholders. He left it to the relatively new CEO, who was required to dead bat the many serious questions about the companys board, its relationship with top management, and the departure of its former CEO. These were questions, which the new CEO could not properly answer. They had to be answered by the Chairman, if they were to be answered at all. This shows across misconduct of rules and guidelines with regard to corporate governance. Although CSR has only become one of the most heated topics of the new millennium, its roots undoubtedly go back to some of the key philosophical debates over ethics, values, equity and equality, Smith(2003). However, the systematic treatment of business ethics has been neglected in most advanced economies, which directly relates to CSR. Hartley (1993), for example, suggests that the interests of a firm are actually best served by scrupulous attention to the public interest and by seeking a trusting relationship with the various stakeholders with which a firm is involved. In the process, society is also best served because the firm is forced to consider a whole range of competing objectives and to move away from activities, which are derived from short-term performance indicators. Hartley (1993) also adds that any philosophy or course of action that doesnt take the public interest into consideration is intolerable in todays society. Todays firms face more critical scrutiny from stakeholders and operate in a setting, which is becoming more regulatory and litigious. The Pensions and Investment Research Consultants (PIRC) (2000) in the UK, argue that the law should require all proxy votes are brought to bear on the business of a companys annual general meeting, which should encourage institutions to vote their proxies. Adding that they do not consider that abolishing the show of hands would act as a disincentive for small shareholders to attend and vote as they are aware of their lack of voting power under current UK law arrangements. The show of hands is largely symbolic. The PIRC (2000), also state that if the annual general meeting (AGM) is not made the focus of the decision making process, but merely one moment in the process, companies would be tempted to lobby shareholders after the AGM, thus undermining the value of the AGM. They emphasise that such a proposal gives companies an ability to evade accountability to their shareholders. The OECD (2004) states that shareholders have access in a number of countries to the companys proxy materials, which are sent to shareholders, although sometimes subject to conditions to prevent abuse. The OECD (2004) also states that co-operation among investors could also be used to manipulate markets prior to proxy voting, and to obtain control over a company without being subject to any takeover regulations. For this reason, in some countries, the ability of institutional investors to co-operate on their voting strategy is either limited or prohibited. Shareholder agreements may also be closely monitored. On the other hand although corporate governance around the world varies with regard to successes and failure, Reuters(2004) stated that News Corp, one of the worlds largest media empires, had a proxy vote, in which more than 90 present voted in favour of the Chairmans plan to reincorporate the organisation in the United States, where it generates more than 75 present of its earnings. This can be seen as very good reaction from the shareholders of the company, in which corporate governance in this case has been a success. It is worthwhile noting that the adherence and practice of corporate governance to avoid shareholder activism does vary from country to country and so the rules, guidelines, regulations, and procedures governing this concept are subject to different interpretations in companies around the world. Chapter 3: Theoretical Perspectives On Agency Problem, Corporate Social Responsibility and Corporate Governance It is often assumed that the role conflict between those who own firms(i.e., who want the firm to maximise the value of their stake in the business) and those who manage them (who want to maximise their own reward) will be detrimental to the pursuit of profit maximisation as an overriding objective. The significance of this separation of ownership and control and the potential problems it can cause is known as the agency problem. While, corporate governance deals with how an organisation establishes who it is there to serve, how this should be decided, and by whom. This relates to how managers deal with issues of ethics and corporate responsibility. The following is a detailed elaboration of the agency problem and corporate governance with regard to the concepts acting as a catalyst that leads to shareholder activism. The Agency Problem Potential conflict arises where ownership is separated from management. The ownership of most larger companies is widely spread, while the day-to-day control of the business rests in the hands of a new managers who usually have a relatively small proportion of the total shares issued. This can give rise to what is termed managerialism, self-serving behaviour by managers at the shareholders ‘expense. Examples of managerialism include pursuing more perquisites(splendid offices and company cars, etc.) and adopting low-risk survival strategies and satisficing behaviour. This conflict has been explored by Jensen and Mackling (1976), who developed a theory of the firm under agency arrangements. Managers are, in effect, agents forth shareholders and are required to act in their best interests. However, they have operational control of the business and the shareholders receive little information on whether the managers are acting in their best interests. A company can be viewed as simply a set of contracts, the most important of which is the contract between the firm and its shareholders. This contract describes the principal-agent relationship, where the shareholders are the principals and the management team the agents. An efficient agency contract allows full delegation of decision-making authority over use of invested capital to management without the risk of that authority being abused. However, left to themselves, managers cannot be expected to act in the shareholders best interests, but require appropriate incentives and controls to do so. Agency costs are the difference between the return expected from an efficient agency contract and the actual return, given that managers may act more in their own interests than the interests of shareholders. Managing the agency problem To attempt to deal with such agency problems, various incentives and controls have been recommended, all of which incur costs. Incentives frequently take the form of bonuses tied to profits (profit-related pay) and share options as part of a remuneration package scheme. Share options only have value when the actual share price exceeds the option price; managers are thereby encouraged to pursue policies that enhance long-term wealth-creation. In reality, the agency problem between investors and directors is more illusory than real for the following reasons: †¢ The principal in the business relationship is the company rather than the shareholder and the directors set the priorities and goals forth business, not the shareholders. †¢ Because directors, in most firms, invariably own shares in their business they will benefit in the same way as the ordinary shareholders from the activities of the firm. Chief executives in a number of large companies have recently come under fire for their outrageously high pay resulting from such schemes. Executive compensation schemes, such as those outlined above, are imperfect, but useful, mechanisms for retaining able managers and encouraging them to pursue goals that promote shareholder value. Another way of attempting to minimise the agency problem is by setting up and monitoring managers behaviour. Examples of these include: †¢ Audited accounts of the company †¢ Management audits and additional reporting requirements, and †¢ Restrictive covenants imposed by lenders, such as ceilings on the dividend payable or the maximum borrowings. To what extent does the agency theory problem invalidate the goal of maximising the value of the firm? In an efficient, highly competitive stock market, the share price is a fair reflection of investors ‘perceptions of the companys expected future performance. So agency problems in a large publicly quoted company will, before long, be reflected in a lower than expected share price. This could lead to an internal response, the shareholders replacing the board of directors with others more committed to their goals, or an external response, the company being acquired by a better-performing company where shareholder interests are pursued more vigorously. Corporate Social Responsibility Corporate social responsibility (CSR) is now on the global policy agenda, with the last 20 years having seen great strides forward inks. Domestically and internationally governmental, business and other organisations are getting involved with CSR initiatives. This relates to the fact that independent legal entities such as pension fund managers, institutional investors, private investors, green peace, and Christian churches are leading the way in attending annual general meetings of organisations, to ask tough and environmental questions concerning the conduct and performance of management within organisations. This has proved difficult to comprehend with in recent times for major organisations such as the Shell, Financial Times(1997), facing its shareholders on the grounds of its ethical approach on human rights grounds in the Niger Delta region of Nigeria. At the European and UK domestic levels, the European Commission in 2002adopted a new strategy on CSR, and in the same year the UK government published its second national CSR report. The UK government has now also appointed a minister for CSR. Internationally, organisations such as the United Nations, the International Labour Organisation (ILO), and the Organisation for Economic Co-operation and Development (OECD) have also taken the lead. Initiatives such as the UN Global Compact, theology Declaration on Fundamental Principles and Rights at Work and the Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy, and the OECD voluntary guidelines for multinational enterprises now dominate the corporate agenda, thus making CSR important for organisations of all kinds, large and small alike Hopkins (2003). The emergence of business ethics and responsible action on the corporate agenda is, however, more a function of the growing awareness of the social, political, and environmental impact of the modern industrial enterprise. Many of the shifts in political attitudes towards firms, for example, reflect serious abuse by specific companies and specific business leaders. The misappropriation of pension funds, repression of workers in the Third World, environmental incidents, and even the bribery and corruption associated with deals to gain large government contracts is all issues which have hit the headlines over the last few years. One of the major sticking points with regard to the rise in shareholder activism is the fact that corporate decisions are linked to a set of business ethics, and that by considering the structures and procedures which define the ethics of an organisation we ought to be able to say something about the prospects and preconditions for corporate performance. These v arious stakeholders, whom the firm must consider, are its customers, suppliers, values on which stakeholders requirement are based can be, in themselves, contradictory. The traditional way of resolving these issues is for the organisation to assume primacy over individuals, allowing it to pursue objectives dictated by senior management subject to financial constraints imposed by owners and lenders. The notion of public trust is also becoming more important. A clear measure of how far we have come towards a more responsive and responsible business climate is indicates by the fact that if a firm violates public trust, then it is likely to be surpassed by its competitors, who will be eager to please customers by addressing their wants more accurately. Moreover, while the overwhelming majority of business dealings arena-controversial, any abuses increasingly receive considerable publicity, harming the image of business. Once a companys image has been damaged, it often takes a long time to reverse that damage. In order to remain economically active, organisations need to learn from their mistakes or from those of other organisations. They need to take care to avoid situations and actions that might harm their relationship with their various stakeholders. In the worst of all cases, where an organisation faces a catastrophe, suddenly and without warning, its whole market image and business strategy can be destroyed. Examples of such events are increasingly commonplace. For example, in the case of Union Carbide, when one of its chemical plants in Bhopal, India leaked 40 tons of toxic chemicals, the event had (and continues to have) a profound effect on the reputation of that company. Although the company quickly rushed aid to the victims, it was bitterly condemned for complacency and the loose controls that permitted the accident to happen in the first place. Environmental considerations are only one of many issues, which might be included under the umbrella of business ethics. They nevertheless constitute an issue, which has grown in importance. As a result of them any accidents and growing environmental damage caused by organisations, there have been increasing demands from consumers for firms to operate more ethically in this area. The consumer movement has fundamentally shaped and contributed to the significant increase in legislation and regulation at all levels of government. This has been aimed at preventing abuses in the marketplace and in the environment and, therefore, environmental management strategies are increasingly commonplace in leading organisations around the world. To date, however, environmental considerations have not been given enough attention within the framework of business ethics, because dominant ideologies are being shaped more by short-term financial considerations than by the need to do business in a sustain able way. Ethics also vary internationally, due to cultural differences that exist across borders. The Corporate Governance In recent years, there has been considerable concern in the UK and around the world about standards of corporate governance, the system by which companies are directed and controlled. While, in company law, directors are obliged to act in the best interests of shareholders, there have been many instances of boardroom behaviour difficult to reconcile with this ideal. There have been numerous examples of spectacular collapses of companies, often the result of excessive debt financing in order to finance ill-advised takeovers, and sometimes laced with fraud. Many companies have been criticised for the generosity with which they reward their leading executives. The procedures for remunerating executives have been less than transparent, and many compensation schemes involve payment by results in one direction alone. Many chief executives have been criticised for receiving pay increases several times greater than the increases awarded to less exalted staff. In the train of these corporate collapses and scandals, a number of committees have reported on the accountability of the board of directors to their stakeholders and risk management procedures. The principles of Good Governance and Code of Best Practice, which apply to all listed companies from 1999 onwards within the OECD countries, are mentioned below: †¢ Directors and the Board An effective board is required to lead and control the company. It should have a balance of executive and non-executive directors; no individual or group must dominate the board; running the board and running the business are separate activities; no individual has unfettered powers; timely and quality information is given to the board; clear procedures for appointments; re-election at least every three years. †¢ Directors remuneration Executive remuneration is linked to corporate and individual performance; directors are not involved in deciding their own remuneration. †¢ Relations with shareholders Encourage dialogue on objectives with institutional shareholders; seams to communicate with shareholders and encourage participation. †¢ Accountability Reports influencing share price to give a balanced, understandable assessment of the companys position and prospects; a sound system of internal control to safeguard shareholders interests and company assets. Chapter 4: Critical Analysis of Theoretical Perspectives and the Empirical Evidence Gathered In The Literature Review The critical analysis in this chapter covers all aspects relating the theoretical perspectives of agency theory, corporate social responsibility and corporate governance from published books and articles. An analysis is made as to whether there is any consistency from the published material as far gathered and the already established theories. Due to the lack of time attached to this paper the empirical evidence used is one that has been covered in the literature review. One could say that the issue from shareholder activism from an international perspective is one that has come about of recent. Thesis rectified by the new guidelines, which only came into effect in1999, within the OECD countries including Ireland, and in China, it is still seen as a very new concept. The issue of agency theory with regard to the objectives of management and shareholders still varies from country to country. It can be

OHare International Airport :: Chicago Airport

A plan to expand O'Hare International Airport has begun to look more promising, but backers of a proposed airport near Peotone said last week they don't expect the plan to change the debate over a third airport. "It's still not going to add air capacity, and won't solve their long-range problem," said Don Goff, chairman of the Third Airport Alliance. "I don't see it as any setback," he said of the plan to build more terminals and gates. Goff said that even if O'Hare expansion proponents later use the World Gateway project to justify building more runways, a third airport will still be needed. "They're still going to have to build another airport," Goff said. But those who hope plans for an airport near rural Peotone will be scrapped see the plan as a sign of hope. "I'm very happy about that," said Jill Holzaepfel of Peotone, who said she hopes the planes and traffic stay close to the city. "I chose to live out here on the farmland," she said, adding that those who are impacted by more noise and pollution at an expanding O'Hare chose to live near the airport. Some Peotone opponents propose expanding the airport in Gary, Ind., or building at another site. The major airlines that serve O'Hare International Airport and city officials reached a tentative agreement to move ahead with a $3.2 billion renovation at the world's second busiest airport, a city spokeswoman said. Mayor Richard Daley has called the project the "World Gateway Program." It has involved months of negotiations between the city and the two major carriers that serve O'Hare — United Airlines and American Airlines. "Right now, we have an agreement in principle," Chicago Department of Aviation spokeswoman Monique Bond said Friday night. "We feel confident that we're moving forward and we are pretty optimistic about the finality of the agreement." The renovation, which is expected to take eight years to complete, is expected to increase the number of boarding gates by at least 25 percent. It is also intended to increase the number of flights and make connections in and out of the airport smoother. "This is basically what we are doing to better use the existing facility with more efficiency," Bond said. She said the redesign will help accommodate the airlines' increased use of larger planes, such as the Boeing 777. While Bond would not confirm the number of new gates involved, a report appearing in next week's Crain's Chicago Business cites sources familiar with the negotiations saying

Develop a stock market Essay

(a) Dependable law and regulations The existence of dependable laws and regulations, not only from the government but also from the enterprises themselves is a necessary conditions since these all the organizations to compete and cooperate with the oversea and worldwide companies. (b) Resolution of policy risk Investor confidence in reliable property right and stable, market-oriented policies are a necessary condition for financial integration and the development of emerging stock markets. Announced market-oriented policies may be reversed, however, and are initially not fully credible. We argue that sustained privatization and liberalization programmes represent a major test of political commitment to safer private property rights, successful privatization has a significant effect on emerging stock market development through the resolution of policy risk, i.e. the risk of ex post policy changes with redistributive impact on investment returns. The evidence showed the progress in privatization gradually leads to increased confidence. (c) Promoting healthy financial institutions Healthy financial institutions especially banks, is a crucial prerequisite for financial stability. The largest number of crises still arise, be it in emerging market economies or industrial countries, from financial institutions overextending themselves when times seem good and then retrenching violently afterwards. Governance would first benefit from a greater internal focus on risk-adjusted rates of return, particularly when rewarding traders and credit officers. The relentless pursuit of shareholder value, without this crucial adjustment, could prove a very dangerous strategy. (d) Developing worldwide acceptable accounting and audit standard It is recommended profession should be is self-regulated through accounting  standard board instead of regulate by government, improve the credible of accounting and auditing report up to international accounting system (IAS) standards.

General Aspects Of Calcium Looping Environmental Sciences Essay

The extenuation of CO2 emanations by power workss is without a uncertainty a precedence, nevertheless some of the engineerings available impose important energy punishments [ 1 ] . Calcium iteration is engineering for the phase of CO2 gaining control, which is usually the most dearly-won phase in the CSS procedure [ 2 ] . This engineering has the potency to extinguish up to 90 per centum of the emanations generated by coal-burning power Stationss, which could farther be improved by combination with biomass-fired power Stationss [ 2 ] . It has gained great attending due to the comparatively little extra energy that requires to run ( estimated at 6 to 8 per centum ) compared to other CO2 gaining control engineerings and the usage of crushed limestone as a sorbent which is unusually inexpensive [ 1 ] .General facets of calcium-loopingThe engineering is based on the reversible gas-solid reaction of Ca oxide ( CaO ) and C dioxide ( CO2 ) to bring forth Ca carbonate ( CaCO3 ) [ 3 ] . This is used to bring forth a pure watercourse of CO2 available for geological segregation [ 1 ] . Calcium iteration has a figure of advantages compared to closer to-market gaining control strategies, including: the usage of go arounding fluidized bed reactors ( a mature engineering at big graduated table ) ; sorbent derived from abundant and environmentally benign limestone and dolomite precursors [ 2 ] . Another cardinal advantage is the synergism with the cement industry which allows potentially to decarbonise both cement production and electricity coevals [ 2 ] . A low punishment is achieved partly because portion of the energy is recovered in the signifier of hot sorbent stuff and the hot CO2 can besides be used to power an extra steam rhythm [ 3 ] . The reversible reaction once described can be expressed as it follows: CaO ( s ) + CO2 ( g ) a† Ã¢â‚¬  CaCO3 ( s ) I†Hr,298K = – 178 kJ/mol One of the cardinal restrictions is the ability of the limestone to respond lessenings with the figure of rhythms and hence much of the research for this engineering is aimed at methods to optimise the long-run responsiveness or to reactivate it [ 1 ] . There are important similarities between the post-combustion and pre-combustion procedures ; since both use CaO ( calcium oxide ) as a sorbent and this non entirely, but normally derived from limestone [ 1 ] . This sorbent is repeatedly cycled between two vass: in one of them the carbonation of CaO occurs by depriving the fluke gas from the CO2 it contains, the first vas is called the carbonator [ 1 ] . At this point Ca carbonate ( CaCO3 ) is formed and it is transferred to the 2nd vas ( calciner ) in which calcination takes topographic point [ 1 ] . The CaO is transferred back to the carbonator vas go forthing pure CO2 available for segregation [ 1 ] .Pre-combustionThe overall reaction that takes topographic point in the gasifier can be described by the undermentioned equation: CO ( g ) + H2O ( g ) + CaO ( s ) = CaCO3 + H2 ( g ) I†Hr,298K = -219 kJ/mol In the gasifier, it is desired to utilize calcium oxide as a sorbent for CO2 since it removes CO2, generates H2 as a merchandise and the carbonation of calcium hydroxide generates utile heat that can be used to drive farther reactions. A extremely promising procedure has been developed by the ZECA ( Zero Emission Coal Alliance ) that involves the usage of Solid Oxide Fuel Cells ( SOFC ) . Pre-combustion applications of calcium-looping are particularly assuring for H2 production. There are nevertheless, important barriers that are yet to be resolved [ 1 ] . Most of the restrictions are derived from the fuel cell itself, since it must be able to work at temperatures over 1370 K and digest sulfur compounds. The procedure is described by figure 2 and the reactions that take topographic point in each measure of the procedure can be found in table 1. Figure 1. Flow diagram of the ZEC procedure [ 6 ] Figure 1. Flow diagram of the ZEC procedure [ 6 ] . Gasification vas C ( s ) A +A 2H2 ( g ) A a† Ã¢â‚¬â„¢A CH4 ( g ) C ( s ) A +A 2H2O ( g ) A a† Ã¢â‚¬â„¢A CO ( g ) A +A H2 ( g ) A +A H2O ( g ) A a† Ã¢â‚¬â„¢A CO2 ( g ) A +A 2H2 ( g ) Carbonation and reforming vas ( s ) ( integrated heat transportation ) CH4 ( g ) A +A 2H2O ( g ) A a† Ã¢â‚¬â„¢A CO2 ( g ) A +A 4H2 ( g ) CaO ( s ) A +A CO2 ( g ) A a† Ã¢â‚¬â„¢A CaCO3 ( s ) Calcination vas CaCO3 ( s ) A a† Ã¢â‚¬â„¢A CaO ( s ) A +A CO2 ( g ) Fuel cell 2H2 ( g ) A +A O2 ( g ) A a† Ã¢â‚¬â„¢A 2H2O ( g ) Table 1.A Reactions involved in the ZEC procedure.Post-combustionPost burning calcium-looping is a extremely promising engineering since it offers an obvious chemical compatibility with cement production that will be discussed farther. There is a figure of procedures that are presently traveling from pilot to demonstration scale [ 1 ] , nevertheless for a general overview a general procedure will be described ; in this instance the one used by Shimizu et al [ 4 ] . For this procedure, a sorbent derived from limestone is used to capture the CO2 contained in the fluke gas produced by an bing power works [ 1 ] . The fluke gas is passed through a fluidised bed carbonator runing at temperatures between 873 and 923 K [ 1 ] . The limestone-derived dissolver is so inserted into the calciner ; a 2nd fluidised bed that operates at temperatures between 1173 and 1223K [ 1 ] . Coal is one time more burnt in the calciner to supply extra heat for calcination, but coal at this phase is burnt in a O2 and CO2 atmosphere in order to keep concentrations of CO2 every bit high as possible [ 1 ] . Most of the heat produced at this phase can be used to run a hi-efficiency steam rhythm. Abanades et Al. [ 5 ] estimations an overall energy punishment that ranges from 6 to 8 per centum for the overall procedure. Figure 2: Potential burning procedure utilizing Ca iteration ( post burning ) [ 1 ] . Although Post-combustion gaining control has become a precedence merely late, it has been used for a considerable sum of clip for H production, in this manner it can still be used as an extra beginning of energy that can add considerable advantages to the overall procedure.Synergy with cement industryThe high environmental impact of cement fabrication has for a long clip been capable of concern, furthermore, calcination of CaCO3 histories for about 50 per centum of the CO2 emanations of cement industry [ 1 ] . If the engineering were to be applied at a really big graduated table, the purging rate could and should be optimised to guarantee that disposal of the waste merchandises are non debatable [ 1 ] . Since the sorbent used in Ca iteration can merely be used for a limited figure of rhythms, it has been proposed that it could be used for cement industry alternatively of CaCO3 that is usually used [ 7 ] . The cement industry can avoid CaCO3 calcification and hence the antecedently me ntioned emanations can be avoided. In this manner the â€Å" waste † sorbent that would be otherwise wasted by the gaining control of CO2 utilizing calcium-looping, can be used by the cement industry. While this is in rule true, there is a demand to carry on farther experiments in order to specify how other constituents introduced into the CaO behave during the cement fabrication procedure, prior to continue to large-scale operations [ 7 ] .Figure 3: Main flows of the proposed system incorporating a CO2-intensive industrial procedure ( e.g. power coevals ) , calcium-looping CO2 gaining control and cement industry. The flecked line represents the watercourse of involvement in this work [ 1 ] .Sorbent ResponsivenessAs discussed before the decrease of the responsiveness in the sorbent is one of the chief restrictions that is presently under extended research. It is likely that for different types of limestone there will be different optimum solutions, since each type of stone ha ve different grain sizes, drosss, construction and other features [ 1 ] . Thermal pre-activation is a solution based on the premiss that a stone will non needfully go more reactive compared to an untreated one, but over a figure of rhythms it remains reactive for a longer period of clip [ 8 ] . The experiments were conducted by Manovic and Anthony [ 1 ] by heating the sorbent at a temperature of 1273 K repeatedly [ 1 ] . Hydration of the sorbent is presently another assuring method of keeping responsiveness, which is frequently used in SO4 gaining control, nevertheless the force per unit area in the vas is required to increase in order for the hydration to take topographic point [ 1 ] . Experiments by Manovic and Anthony [ 9 ] and Fennel et Al were conducted under different temperatures and force per unit areas, but both concluded that responsiveness for sorbents can be doubled by agencies of hydration. Biamey et Al. provinces that if hydration is to be used as a reactivation scheme for CO2 gaining control, lessons should be learned from its application to SO2 gaining control [ 1 ] .