Corporate Governance Score and Firm Performance

Corporate Governance Score and Firm Performance Limited liability company structure is the most preferred structure for a large business. In this structure, a large number of investors provide the risk capital. They are called shareholders, the deemed owners of the company. They delegate the power to manage the company to board of directors. The board delegates the same to managers while retaining its role to monitor and control the executive management. Shareholders are viewed as the principal and the manager as their agents and this relationship is described as principal-agent relationship. The shareholders, of a widely held firm, practically do not have any control on the managers. They are only informed of the financial results on a periodical basis while the managers controls the firms assets. This structure provides an opportunity to the managers to expropriate shareholders wealth and misappropriate the funds by way of transfer of money as loans to his own companies, or sale of the company assets to themselves at a lesser pr ice or pay themselves more perks. The divergence of interest between the owners and the managers, due to the separation of ownership from control, results in the agency costs. It is not just separation of ownership and control that gives rise to the agency problem between shareholders and managers; but also the atomistic or diffused nature of corporate ownership, which is characterized by a large number of small shareholders. In such ownership structure, there is no incentive for any one owner to monitor corporate management, because the individual owner would bear the entire monitoring costs, yet all shareholders would enjoy the benefits. Thus, both the magnitude and nature of agency problems are directly related to ownership structures. The fundamental theoretical basis of corporate governance is agency costs. The core of corporate governance is designing and putting in place disclosures, monitoring, oversight and corrective systems that can align the objectives of the shareholders and managers as closely as possible and hence, minimize agency costs. It deals with conducting the affairs of a company such that there is fairness to all stakeholders and that its actions benefit the greatest number of stakeholders. There are two kinds of mechanisms to overcome the agency problem and hence, improve corporate governance viz., the internal control mechanisms and the external control mechanisms. Internal control mechanisms are internal to the functioning of a company and broadly consist of the board composition, the board size, the leadership structure and the managerial compensation. External control mechanisms are the mechanisms that are external to the functioning of the firm over which the firm has no control. An increasingly important external control mechanism affecting governance worldwide is the emergence of institutional investors as equity owners. Although the role that the institutional investors can play in the corporate governance system of a company is a controversial question and a subject of continuing debate. While some believe that the institutional investors must interfere in the corporate governance system of a company, others believe that these investors have other investment objectives to follow. The group of observers who believe that institutional investors need not play a role in the corporate governance system of a company, argue that the investment objectives and the compensation system in the institutional investing companies often discourage their active participation in the corporate governance system of the companies. Institutional investors are answerable to their investors the way the companies (in which they have invested) are answerable to their shareholders. And the shareholders do invest their funds with the institutional investors expecting higher returns. The primary responsibility of the instituti onal investors is therefore to invest the money of the investors in companies, which are expected to generate the maximum possible return rather than in companies with good corporate governance records. While the other group strongly believes that if the corporate governance system in the companies has to succeed then the institutional investors must play an active role in the entire process. By virtue of their large stockholdings, they have the opportunity, resources, and ability to monitor, discipline and influence managers, which can force them to focus more on corporate performance and less on self-serving behavior. Most of the reports on corporate governance have also emphasized the role that the institutional investors have to play in the entire system. Given the increasing presence of institutional investors in financial markets, it is not surprising that they have become more active in their role as shareholders. Activism by institutional investors has been both private and public, with the public activism being most visible in many countries. The role of institutional investors is visualized in two perspectives, the corporate governance and the firm performance. 7.2 Objectives of Study In light of the above discussion, the present study attempts to achieve the following objectives: To construct the corporate governance score To establish relationship between institutional holdings and corporate  governance score To establish relationship between institutional holdings and firm performance To establish relationship between corporate governance score and  firm performance In order to achieve the objectives stated above, the present study conceptualized the following null hypotheses for the validation of positive relationship between institutional holdings, corporate governance and firm performance 7.3 Hypotheses: H01: Institutional/its components Holdings and Corporate Governance score are  very closely related in a manner as to depict a positive relationship between  the two H02: Corporate Governance Score and Institutional/its components Holdings are  also very closely related in a manner as to depict positive relationship  between the two H03: Institutional/its components Holdings and various measures of firm  performance are very closely related in a manner as to depict  positive relationship between the two H04: Corporate Governance Score and various measures of firm performance  are very closely related in a manner as to depict positive relationship between  the two 7.4 The Sample Design and Data: To achieve the above objectives, a sample of 200 companies has been taken. The present study is based on the secondary data. It covers a period of five financial years from 1st April 2004 to 31st March 2008. Institutional holdings are further segregated into three constituents. The mutual funds being the first one. The second constituent includes various public and private sector banks, all the developmental financial institutions (like IFCI, ICICI, IDBI, SFC) and insurance companies like the LIC, GIC, and their subsidiaries. The last constituent comprise of foreign institutional investors. Data has been collected on the institutional holdings in total as well as on different constituents of institutional holdings from nseindia.com. The secondary data regarding annual reports to construct the corporate governance score have been collected from respective company websites and sebiedifar.com. . The firm performance measures have been divided into two categories, one being the accountin g measures while others are based on market returns. The accounting return measures include (%) return on networth, (%) return on capital employed, Profit After Tax, (%) Return on Assets, Net Profit Margin and Earning Per Share. Whereas, market return based measures include Tobins Q, (%) Risk Adjusted Excess Return and (%) Dividend Yield. Data for the study period on financial performance measures have been collected from Prowess Database. 7.5 Statistical Tools: Simple linear regression analysis has been used as a statistical tool to investigate the relationship between different variables. An attempt has been made to ascertain the causal effect of one variable upon another. Data has been assembled on the variables of interest and employed regression to estimate the quantitative effect of the causal variables upon the variable that they influence. The study also typically assesses the statistical significance at 5 percent level of the estimated relationships, that is, the degree of confidence that the true relationship is close to the estimated relationship. Section A 7.6 Construction of Corporate Governance Score Review of Literature Some researchers have used board characteristics as an effective measure of corporate governance as Hermalin and Weisbach (1998, 2003) have used board independence, Bhagat, Carey and Elson (1999) have used stock ownership of board members and Brickley, Coles and Jarrell (1997) have used the occupation of Chairman and CEO positions by the same or two different individuals. Whereas, Gompers, Ishii and Metrick (2003) have constructed a governance measure comprising of an equally weighted index of 24 corporate governance provisions compiled by the Investor Responsibility Research Center (IRRC), such as, poison pills, golden parachutes, classified boards, cumulative voting, and supermajority rules to approve mergers. Bebchuk, Cohen and Ferrell (BCF, 2004) created an entrenchment index comprising of six provisions – four provisions that limit Shareholder rights and two that make potential hostile takeovers more difficult. While the above noted studies use IRRC data, Brown and Caylor (2004) used Institutional Shareholder Services (ISS) data to create their governance index. This index considered 51corporate governance features encompassing eight corporate governance categories: audit, board of directors, charter/bylaws, director education, executive and director compensation, ownership, progressive practices, and state of incorporation. In the present study, Corporate Governance Score has been developed on the basis of key characteristics of Standard and Poors Transparency and Disclosure Benchmark. Standard and Poors provides a range of corporate governance analyses and services, the crux of which is the Corporate Governance Score. Corporate Governance Scores are based on an assessment of the qualitative aspects of corporate governance practices of a company. Information has been collected on the attributes from the latest available annual reports of sample companies. The methodology, with 98 questions in three categories and 12 sub-categories, is designed to balance the conflicting requirements of the range of issues analyzed and the tractability of the analysis. Transparency and Disclosure is evaluated by searching company annual reports for the 98  possible attributes broadly divided into the following three broad categories: Ownership structure and investor rights (28 attributes) Financial transparency and information disclosure (35 attributes) Board and management structure and process (35 attributes) Resume Various researchers have considered alternate measures of corporate governance. Some of them have used single measure, while others have used the multiple measures in the form of indices. In the present study, Corporate Governance Score has been developed on the basis of key characteristics of Standard and Poors Transparency and Disclosure Benchmark because two broad instruments that reduce agency costs and hence improve corporate governance are financial and non-financial disclosures and independent oversight of management. Improving the quality of financial and non-financial disclosures not only ensures corporate transparency among a wide group of investors, analysts and the informed intelligentsia, but also persuades companies to minimize value-destroying deviant behavior. This is precisely why law insists that companies prepare their audited annual accounts, and that these be provided to all shareholders is deposited with the Registrar of Companies. This is also why a good deal o f effort in global corporate governance reform has been directed to improve the quality and frequency of disclosures. Section B Relationship between Institutional Holdings and Corporate Governance: Review of Literature Coombes and Watson (2000) on the basis of a survey of more than 200 institutional investors with investments across the world showed that governance is a significant factor in their investment decision. McCahery, Sautner and Starks (2009) have relied on the survey data to investigate governance preference of 118 institutional investors in U.S. and Netherlands. The study found that the majority of institutions that responded to the survey take into account firm governance in portfolio weighting decisions and are willing to engage in activities that can improve the governance of their portfolio firms. Chung, Firth, and Kim (2002) hypothesized that there will be less opportunistic earnings management in firms with more institutional investor ownership because the institutions will either put pressure on the firms to adopt better accounting policies. Hartzell and Starks (2003) provided empirical evidence suggesting institutional investors serve a monitoring role with regard to executive compensation contracts. One implication of these results, consistent with the theoretical literature regarding the role of the large shareholder, is that institutions have greater influence when they have larger proportional stakes in firms. . Denis and Denis (1994) found no evidence to suggest that there is any relationship between institutional holdings and corporate governance. They stated that if companies that create shareholders wealth are the ones with poor corporate governance practices, and then one really cannot blame the institutional investors for having invested in such companies. For, after all, a fund manager will be evaluated on the basis of stock returns he creates for the unit holders and not on the basis of the corporate governance records of the company he invests the money in. If however, one finds that companies with poor corporate governance practices are the ones, which have consistently destroyed shareholders wealth, then the contention that the institutional investors need not look at corporate governance records cannot be justified. David and Kochhar (1996) provided empirical evidence regarding impact of institutional investors on firm behaviour and performance is mixed and that no definite concl usions can be drawn. They argued that various institutional obstacles, such as barriers stemming from business relationships, the regulatory environment and information processing limitations, might prevent institutional investors from effectively exercising their corporate governance function. Almazan, Hartzell and Starks (2003) provided evidence both theoretical and empirical that the monitoring influence of institutional investors on executive compensation can depend on the current or prospective business relation between the institution and the corporation. They concluded that the monitoring influence of institutions is associated more with potentially active institutions (investment companies and pension fund managers who would be less sensitive to pressure from corporate management due to lack of potential business relations) than with potentially passive institutions (banks and insurance companies who would be more pressure-sensitive). Davis and Kim (2006) found that mutual funds with conflicts of interest (based on management of pension assets) more often vote with management in general. On the other hand, mutual funds have more incentive and power to oppose management in firms in which they have a larger stake. Marsh (1997) has argued that short-term performance measurement does work against the active monitoring by institutional investors. The performance of fund managers is evaluated over a shorter time period. Hence, they act under tremendous pressure to beat some index. So, when they find a case of bad governance, they find it economical to sell the stock rather than interfere in the functioning of the company and incur monitoring costs. Ashraf and Jayaman (2007) examined mutual funds trading behavior after the release of voting records. The study found that funds that support shareholder proposals reduce holdings after the release of voting records. Since the time of releasing voting records could be very far from the shareholder meeting date, mutual funds trading behavior after the release of voting records may be unrelated to the votes cast in the meeting. Aggarwal, Klapper and Wysocki (2003) found that U.S. mutual funds tend to invest greater amounts in countries with stronger share holder rights and legal frameworks (controlling for the countrys economic development). In addition, within the countries, the mutual funds also discriminate on the basis of governance in that they allocate more of their assets to firms with better corporate governance structures. Payne, Millar, and Glezen (1996) focussed on banks as one type of institutional investor that would be expected to have business relations with the firms in which they invest. They examined interlocking directorships and income-related relationships, and noticed that when such relations exist; banks tend to vote in favor of management anti-takeover amendment proposals. When such relations dont exist, banks tend to vote against the management proposals. Brickley, Lease and Smith (1988) found evidence supporting the hypothesis that firms with greater holdings by pressure-sensitive shareholders (banks and insurance companies) have more proxy votes cast in favor of managements recommendations. Moreover, firms with greater holdings by pressure-insensitive shareholders (pension funds and mutual funds) have more proxy votes against managements recommendations. The authors differentiated between the different types of institutional investors, noting the difference between pressure-sensitive and pressure-insensitive institutional shareholders and arguing that pressure-sensitive institutions are more likely to go along with management decisions. Dahlquist et al. (2003) analyzed foreign ownership and firm characteristics for the Swedish market. The study found that foreigners have greater presence in large firms, firms paying low dividends and in firms with large cash holdings. Haw, Hu, Hwang and Wu (2004) found that firm level factors cause information asymmetry problems to FII. It found evidence that US investment is lower in firms where managers do not have effective control. Foreign investment in firms that appear to engage in more earnings management is lower in countries with poor information framework. Choe, Kho, Stulz (2005) found that US investors do indeed hold fewer shares in firms with ownership structures that are more conducive to expropriation by controlling insiders. In companies where insiders are dominating information access and availability to the shareholders will be limited. With less information, foreign investors face an adverse selection problem. So they under invest in such stocks. Leuz, Lins, and Wa rnock (2008) found that foreign institutional investors prefer to invest in firms with better governance practices. In the present study, the analysis has been conducted in three perspectives: Dynamics of institutional holdings and its composition (2) Relationship between Institutional Holdings (explanatory variable) and the Corporate Governance Score (dependent variable) (3) Relationship between the Corporate Governance Score (explanatory variable) and Institutional Holdings (dependent variable) The major findings of the present study on the above aspects are summarized as under: The results outputs of the first segment depict that the institutional investors have increased their proportional holdings in the companies over the years. The number of sampled companies with higher institutional holdings has increased where as the number of companies with lower proportions of institutional holdings has decreased over the study period. Hence, institutional holdings have shown an increasing trend of investment in the sampled companies over the study period. As far as the dynamics of components of institutional investors is concerned, no specific trend is observed in investments of mutual funds. On the other hand Banks, Financial Institutions and Insurance Companies have shown declining trends of investments over the same period. Where as, foreign institutional investors have shown the increasing trends of investments in line with institutional holdings. The results outputs pertaining to the analysis of relationship between institutional holdings and corporate governance state that the larger proportions of institutional holdings have higher corporate governance scores in sampled companies and the smaller proportions of institutional holdings have lower governance scores in the sampled companies over the study period. Thus, very strong and positive relationship is established between institutional holdings and corporate governance. Hence, H01 is accepted. The results outputs of the section analyzing the relationship between corporate governance score and institutional holdings describe that the companies with higher governance scores have larger proportions of investments from institutional investors than the companies with lower governance scores. Therefore, very strong and positive relationship also exists between corporate governance score and institutional holdings. Hence, H02 is accepted. The inference can be drawn that institut ional holdings pre-empts good corporate governance still at other times, good corporate governance endues institutional investment in the firm. The results outputs pertaining to the analysis of relationship between mutual funds and corporate governance reveal out that smaller proportions of mutual funds holdings have higher governance score in the sampled companies and larger proportions of mutual funds holdings have lower governance scores in the sampled companies over the study period. Therefore, weak relationship exists between mutual funds holdings and corporate governance score. Hence, H01 is rejected. Alternatively, the results outputs pertaining to the analysis of relationship between corporate governance and components of institutional holdings reveal out that the companies with lower governance scores have larger proportions of mutual funds holdings to the companies with higher governance scores over the study period. Hence, weak relationship also exists between corporate governance score and mutual funds holdings. Hence, H02 is rejected. It can be inferred from the above outcomes that mutual funds companies do not observe good governance practices in companies and simultaneously, good governed companies also do not attract higher mutual funds investments. The results outputs as to the relationship between Banks, FIs and ICs and corporate governance depict that larger proportions of Banks, Financial Institutions and Insurance Companies holdings have higher governance score and smaller proportions of holdings have lower governance score in the sampled companies over the study period. Therefore, very strong and positive relationship is established between Banks, Financial Institutions and Insurance Companies holdings and corporate governance score. Hence, H01 is accepted. Similarly, the sampled companies with higher governance scores have larger proportions of Banks, FIs and ICs holdings to the companies with lower governance scores. Thus, very strong and positive relationship also exists between corporate governance score and Banks, FIs and ICs holdings. Hence, H02 is also accepted. The inference can be drawn on the basis of above results that Banks, FIs and ICs consider governance practices in companies while taking investment decision and alternatively, good governed companies also attract these investments. The results outputs pertaining to the relationship between FII holdings and corporate governance reveal out that the companies in which FIIs have larger proportions of holdings have higher governance score to the companies in which FIIs have smaller proportions of holdings. Therefore, very strong and positive relationship is observed between FII holdings and corporate governance score. Hence, H01 is accepted. Likewise, the sampled companies with higher governance scores have also larger proportions of Foreign Institutional Investors holdings. Thus, very strong and positive relationship also exists between corporate governance score and FII holdings. Hence, H02 is accepted. It can be inferred on the basis of above result that foreign institutional investors prefer to invest in firms with better governance practices and their investment do improve the governance practices in the companies. Resume The theoretical and empirical literature provides mixed evidence as to the relationship between institutional holdings and corporate governance. Some of the studies put forth the evidence that corporate governance is the significant factor for institutional investment decision and their significant investment improve the governance practices in companies, while the other studies state otherwise. Where as the research findings of the present study further validate, support and enrich the literature on positive association between institutional holdings and corporate governance. Likewise, the studies provide inconclusive evidence as to the relationship between mutual funds holdings and corporate governance. But the findings of present study state that neither the mutual funds care about the governance practices of companies or their presence improve them. Similarly, the empirical literature provides indeterminate evidence on the relationship between Banks, FIs and ICs and corporate governance. But the findings of present study observe very strong and positive relationship between the two. The empirical studies observe consistent results as to foreign institutional investors invest in better-governed companies but lacks evidence that their significant presence result in better governance. The findings of present study indicate that FIIs do not care for the corporate governance only, rather their higher stake ensure better governance too. Section C 7.8 Relationship between Institutional Holdings and Firm Performance: Review of Literature Pound (1988) explored the influence of institutional ownerships on firm performance and proposed three hypotheses on the relation between institutional shareholders and firm performance: efficient-monitoring hypothesis, conflict-of-interest hypothesis, and strategic-alignment hypothesis. The efficient-monitoring hypothesis says that institutional investors have greater expertise and can monitor management at lower cost than the small atomistic shareholders. Consequently, this argument predicts a positive relationship between institutional shareholding and firm performance. Holderness and Sheehan (1988) found that for a sample of 114 US firms controlled by a majority shareholder with more than 50% of shares, both Tobins Q and accounting profits are significantly lower for firms with individual majority owners than for firms with corporate majority owners. McConnell and Servaes (1990) found a strong positive relationship between the value of the firm and the fraction of shares held by institutional investors. They found that performance increases significantly with institutional ownership. Majumdar and Nagarajan (1994) found that levels of institutional investment are positively related to the current performance levels of firms. However, a less-stronger, though positive, effect is established between changes in performance levels and changes in institutional ownership. The results are based on a study investigating U.S. institutional investors investment strategy. Han and Suk (1998) found (for a sample of US firms) that stock returns are positively related to ownership by institutional investors, thus implying that these corporate owners are actively involved in the monitoring of incumbent management. Douma, Rejie and Kabir (2006) investigated the impact of foreign institutional investment on the performance of emerging market firms and found that there is positive effect of foreign ownership on firm performance. They also found impact of foreign investment on the business group affiliation of firms. Investor protection is poor in case of firms with controlling shareh olders who have ability to expropriate assets. The block shareholders affect the value of the firm and influence the private benefits they receive from the firm. Companies with such shareholders find it expensive to raise external funds. Studies examining the relationship between institutional holdings and firm performance in different countries (mainly OECD countries) have produced mixed results. Chaganti and Damanpour (1991) and Lowenstein (1991) find little evidence that institutional ownership is correlated with firm performance. Seifert, Gonenc and Wright (2005) study does not find a consistent relationship across countries. They conclude that their inconsistent results may reflect the fact that the influence of institutional investors on firm performance is location specific. The above studies generally consider institutional investors as a monolithic group. However, Shleifer and Vishnys (1986) as well as Pounds (1988) theorizations and later empirical examinations by McConnell and Servaes (1990) suggest that shareholders are differentiable and pursue different agendas. Jensen and Merkling (1976) also show that equity ownerships by different groups have different effects on the firm performance. Agrawal and Kno eber (1996), Karpoff et al. (1996), Duggal and Miller (1999) and Faccio and Lasfer (2000) find no such significant relation between institutional holdings and firm performance. In the present study, the analysis has been conducted in two perspectives: Institutional Holdings and Firm performance (b) Constituents of institutional holdings and Firm performance The major findings of the present study on the above aspects are summarized as under: The results outputs of the first segment indicate that there is no conclusive evidence as to larger proportions of institutional holdings in sampled companies have higher average return on networth or average net profit margin and smaller proportions of institutional holdings in sampled companies have lower average return on networth or average net profit margin over the study period. To the contrary, strong and positive relationship is observed between institutional holdings and return on capital employed as well as institutional holdings and earning per share. As the average return on capital employed and average earning per share are higher in the sampled companies with higher proportions of institutional holdings and lower in the sampled companies with lower proportions of institutional holdings over the study period. Therefore, it is stated that institutional holdings and two accounting returns (return on capital employed and earning per share) are significantly correlated where as institutional holdings and other two accounting returns (return on networth and net profit margin) are not related. Hence, there is no clear evidence that institutional holdings and accounting returns are related. Likewise, strong and positive relationship is observed between institutional holdings and Tobins q. But on the other hand, weak relationship is observed between institutional holdings and risk adjusted excess return. Therefore, institutional holdings and one market-based return are significantly correlated while the institutional holdings and another market-based return are not. Thus, the findings depict contradictory results as to the relationship between institutional holdings and market Corporate Governance Score and Firm Performance Corporate Governance Score and Firm Performance Limited liability company structure is the most preferred structure for a large business. In this structure, a large number of investors provide the risk capital. They are called shareholders, the deemed owners of the company. They delegate the power to manage the company to board of directors. The board delegates the same to managers while retaining its role to monitor and control the executive management. Shareholders are viewed as the principal and the manager as their agents and this relationship is described as principal-agent relationship. The shareholders, of a widely held firm, practically do not have any control on the managers. They are only informed of the financial results on a periodical basis while the managers controls the firms assets. This structure provides an opportunity to the managers to expropriate shareholders wealth and misappropriate the funds by way of transfer of money as loans to his own companies, or sale of the company assets to themselves at a lesser pr ice or pay themselves more perks. The divergence of interest between the owners and the managers, due to the separation of ownership from control, results in the agency costs. It is not just separation of ownership and control that gives rise to the agency problem between shareholders and managers; but also the atomistic or diffused nature of corporate ownership, which is characterized by a large number of small shareholders. In such ownership structure, there is no incentive for any one owner to monitor corporate management, because the individual owner would bear the entire monitoring costs, yet all shareholders would enjoy the benefits. Thus, both the magnitude and nature of agency problems are directly related to ownership structures. The fundamental theoretical basis of corporate governance is agency costs. The core of corporate governance is designing and putting in place disclosures, monitoring, oversight and corrective systems that can align the objectives of the shareholders and managers as closely as possible and hence, minimize agency costs. It deals with conducting the affairs of a company such that there is fairness to all stakeholders and that its actions benefit the greatest number of stakeholders. There are two kinds of mechanisms to overcome the agency problem and hence, improve corporate governance viz., the internal control mechanisms and the external control mechanisms. Internal control mechanisms are internal to the functioning of a company and broadly consist of the board composition, the board size, the leadership structure and the managerial compensation. External control mechanisms are the mechanisms that are external to the functioning of the firm over which the firm has no control. An increasingly important external control mechanism affecting governance worldwide is the emergence of institutional investors as equity owners. Although the role that the institutional investors can play in the corporate governance system of a company is a controversial question and a subject of continuing debate. While some believe that the institutional investors must interfere in the corporate governance system of a company, others believe that these investors have other investment objectives to follow. The group of observers who believe that institutional investors need not play a role in the corporate governance system of a company, argue that the investment objectives and the compensation system in the institutional investing companies often discourage their active participation in the corporate governance system of the companies. Institutional investors are answerable to their investors the way the companies (in which they have invested) are answerable to their shareholders. And the shareholders do invest their funds with the institutional investors expecting higher returns. The primary responsibility of the instituti onal investors is therefore to invest the money of the investors in companies, which are expected to generate the maximum possible return rather than in companies with good corporate governance records. While the other group strongly believes that if the corporate governance system in the companies has to succeed then the institutional investors must play an active role in the entire process. By virtue of their large stockholdings, they have the opportunity, resources, and ability to monitor, discipline and influence managers, which can force them to focus more on corporate performance and less on self-serving behavior. Most of the reports on corporate governance have also emphasized the role that the institutional investors have to play in the entire system. Given the increasing presence of institutional investors in financial markets, it is not surprising that they have become more active in their role as shareholders. Activism by institutional investors has been both private and public, with the public activism being most visible in many countries. The role of institutional investors is visualized in two perspectives, the corporate governance and the firm performance. 7.2 Objectives of Study In light of the above discussion, the present study attempts to achieve the following objectives: To construct the corporate governance score To establish relationship between institutional holdings and corporate  governance score To establish relationship between institutional holdings and firm performance To establish relationship between corporate governance score and  firm performance In order to achieve the objectives stated above, the present study conceptualized the following null hypotheses for the validation of positive relationship between institutional holdings, corporate governance and firm performance 7.3 Hypotheses: H01: Institutional/its components Holdings and Corporate Governance score are  very closely related in a manner as to depict a positive relationship between  the two H02: Corporate Governance Score and Institutional/its components Holdings are  also very closely related in a manner as to depict positive relationship  between the two H03: Institutional/its components Holdings and various measures of firm  performance are very closely related in a manner as to depict  positive relationship between the two H04: Corporate Governance Score and various measures of firm performance  are very closely related in a manner as to depict positive relationship between  the two 7.4 The Sample Design and Data: To achieve the above objectives, a sample of 200 companies has been taken. The present study is based on the secondary data. It covers a period of five financial years from 1st April 2004 to 31st March 2008. Institutional holdings are further segregated into three constituents. The mutual funds being the first one. The second constituent includes various public and private sector banks, all the developmental financial institutions (like IFCI, ICICI, IDBI, SFC) and insurance companies like the LIC, GIC, and their subsidiaries. The last constituent comprise of foreign institutional investors. Data has been collected on the institutional holdings in total as well as on different constituents of institutional holdings from nseindia.com. The secondary data regarding annual reports to construct the corporate governance score have been collected from respective company websites and sebiedifar.com. . The firm performance measures have been divided into two categories, one being the accountin g measures while others are based on market returns. The accounting return measures include (%) return on networth, (%) return on capital employed, Profit After Tax, (%) Return on Assets, Net Profit Margin and Earning Per Share. Whereas, market return based measures include Tobins Q, (%) Risk Adjusted Excess Return and (%) Dividend Yield. Data for the study period on financial performance measures have been collected from Prowess Database. 7.5 Statistical Tools: Simple linear regression analysis has been used as a statistical tool to investigate the relationship between different variables. An attempt has been made to ascertain the causal effect of one variable upon another. Data has been assembled on the variables of interest and employed regression to estimate the quantitative effect of the causal variables upon the variable that they influence. The study also typically assesses the statistical significance at 5 percent level of the estimated relationships, that is, the degree of confidence that the true relationship is close to the estimated relationship. Section A 7.6 Construction of Corporate Governance Score Review of Literature Some researchers have used board characteristics as an effective measure of corporate governance as Hermalin and Weisbach (1998, 2003) have used board independence, Bhagat, Carey and Elson (1999) have used stock ownership of board members and Brickley, Coles and Jarrell (1997) have used the occupation of Chairman and CEO positions by the same or two different individuals. Whereas, Gompers, Ishii and Metrick (2003) have constructed a governance measure comprising of an equally weighted index of 24 corporate governance provisions compiled by the Investor Responsibility Research Center (IRRC), such as, poison pills, golden parachutes, classified boards, cumulative voting, and supermajority rules to approve mergers. Bebchuk, Cohen and Ferrell (BCF, 2004) created an entrenchment index comprising of six provisions – four provisions that limit Shareholder rights and two that make potential hostile takeovers more difficult. While the above noted studies use IRRC data, Brown and Caylor (2004) used Institutional Shareholder Services (ISS) data to create their governance index. This index considered 51corporate governance features encompassing eight corporate governance categories: audit, board of directors, charter/bylaws, director education, executive and director compensation, ownership, progressive practices, and state of incorporation. In the present study, Corporate Governance Score has been developed on the basis of key characteristics of Standard and Poors Transparency and Disclosure Benchmark. Standard and Poors provides a range of corporate governance analyses and services, the crux of which is the Corporate Governance Score. Corporate Governance Scores are based on an assessment of the qualitative aspects of corporate governance practices of a company. Information has been collected on the attributes from the latest available annual reports of sample companies. The methodology, with 98 questions in three categories and 12 sub-categories, is designed to balance the conflicting requirements of the range of issues analyzed and the tractability of the analysis. Transparency and Disclosure is evaluated by searching company annual reports for the 98  possible attributes broadly divided into the following three broad categories: Ownership structure and investor rights (28 attributes) Financial transparency and information disclosure (35 attributes) Board and management structure and process (35 attributes) Resume Various researchers have considered alternate measures of corporate governance. Some of them have used single measure, while others have used the multiple measures in the form of indices. In the present study, Corporate Governance Score has been developed on the basis of key characteristics of Standard and Poors Transparency and Disclosure Benchmark because two broad instruments that reduce agency costs and hence improve corporate governance are financial and non-financial disclosures and independent oversight of management. Improving the quality of financial and non-financial disclosures not only ensures corporate transparency among a wide group of investors, analysts and the informed intelligentsia, but also persuades companies to minimize value-destroying deviant behavior. This is precisely why law insists that companies prepare their audited annual accounts, and that these be provided to all shareholders is deposited with the Registrar of Companies. This is also why a good deal o f effort in global corporate governance reform has been directed to improve the quality and frequency of disclosures. Section B Relationship between Institutional Holdings and Corporate Governance: Review of Literature Coombes and Watson (2000) on the basis of a survey of more than 200 institutional investors with investments across the world showed that governance is a significant factor in their investment decision. McCahery, Sautner and Starks (2009) have relied on the survey data to investigate governance preference of 118 institutional investors in U.S. and Netherlands. The study found that the majority of institutions that responded to the survey take into account firm governance in portfolio weighting decisions and are willing to engage in activities that can improve the governance of their portfolio firms. Chung, Firth, and Kim (2002) hypothesized that there will be less opportunistic earnings management in firms with more institutional investor ownership because the institutions will either put pressure on the firms to adopt better accounting policies. Hartzell and Starks (2003) provided empirical evidence suggesting institutional investors serve a monitoring role with regard to executive compensation contracts. One implication of these results, consistent with the theoretical literature regarding the role of the large shareholder, is that institutions have greater influence when they have larger proportional stakes in firms. . Denis and Denis (1994) found no evidence to suggest that there is any relationship between institutional holdings and corporate governance. They stated that if companies that create shareholders wealth are the ones with poor corporate governance practices, and then one really cannot blame the institutional investors for having invested in such companies. For, after all, a fund manager will be evaluated on the basis of stock returns he creates for the unit holders and not on the basis of the corporate governance records of the company he invests the money in. If however, one finds that companies with poor corporate governance practices are the ones, which have consistently destroyed shareholders wealth, then the contention that the institutional investors need not look at corporate governance records cannot be justified. David and Kochhar (1996) provided empirical evidence regarding impact of institutional investors on firm behaviour and performance is mixed and that no definite concl usions can be drawn. They argued that various institutional obstacles, such as barriers stemming from business relationships, the regulatory environment and information processing limitations, might prevent institutional investors from effectively exercising their corporate governance function. Almazan, Hartzell and Starks (2003) provided evidence both theoretical and empirical that the monitoring influence of institutional investors on executive compensation can depend on the current or prospective business relation between the institution and the corporation. They concluded that the monitoring influence of institutions is associated more with potentially active institutions (investment companies and pension fund managers who would be less sensitive to pressure from corporate management due to lack of potential business relations) than with potentially passive institutions (banks and insurance companies who would be more pressure-sensitive). Davis and Kim (2006) found that mutual funds with conflicts of interest (based on management of pension assets) more often vote with management in general. On the other hand, mutual funds have more incentive and power to oppose management in firms in which they have a larger stake. Marsh (1997) has argued that short-term performance measurement does work against the active monitoring by institutional investors. The performance of fund managers is evaluated over a shorter time period. Hence, they act under tremendous pressure to beat some index. So, when they find a case of bad governance, they find it economical to sell the stock rather than interfere in the functioning of the company and incur monitoring costs. Ashraf and Jayaman (2007) examined mutual funds trading behavior after the release of voting records. The study found that funds that support shareholder proposals reduce holdings after the release of voting records. Since the time of releasing voting records could be very far from the shareholder meeting date, mutual funds trading behavior after the release of voting records may be unrelated to the votes cast in the meeting. Aggarwal, Klapper and Wysocki (2003) found that U.S. mutual funds tend to invest greater amounts in countries with stronger share holder rights and legal frameworks (controlling for the countrys economic development). In addition, within the countries, the mutual funds also discriminate on the basis of governance in that they allocate more of their assets to firms with better corporate governance structures. Payne, Millar, and Glezen (1996) focussed on banks as one type of institutional investor that would be expected to have business relations with the firms in which they invest. They examined interlocking directorships and income-related relationships, and noticed that when such relations exist; banks tend to vote in favor of management anti-takeover amendment proposals. When such relations dont exist, banks tend to vote against the management proposals. Brickley, Lease and Smith (1988) found evidence supporting the hypothesis that firms with greater holdings by pressure-sensitive shareholders (banks and insurance companies) have more proxy votes cast in favor of managements recommendations. Moreover, firms with greater holdings by pressure-insensitive shareholders (pension funds and mutual funds) have more proxy votes against managements recommendations. The authors differentiated between the different types of institutional investors, noting the difference between pressure-sensitive and pressure-insensitive institutional shareholders and arguing that pressure-sensitive institutions are more likely to go along with management decisions. Dahlquist et al. (2003) analyzed foreign ownership and firm characteristics for the Swedish market. The study found that foreigners have greater presence in large firms, firms paying low dividends and in firms with large cash holdings. Haw, Hu, Hwang and Wu (2004) found that firm level factors cause information asymmetry problems to FII. It found evidence that US investment is lower in firms where managers do not have effective control. Foreign investment in firms that appear to engage in more earnings management is lower in countries with poor information framework. Choe, Kho, Stulz (2005) found that US investors do indeed hold fewer shares in firms with ownership structures that are more conducive to expropriation by controlling insiders. In companies where insiders are dominating information access and availability to the shareholders will be limited. With less information, foreign investors face an adverse selection problem. So they under invest in such stocks. Leuz, Lins, and Wa rnock (2008) found that foreign institutional investors prefer to invest in firms with better governance practices. In the present study, the analysis has been conducted in three perspectives: Dynamics of institutional holdings and its composition (2) Relationship between Institutional Holdings (explanatory variable) and the Corporate Governance Score (dependent variable) (3) Relationship between the Corporate Governance Score (explanatory variable) and Institutional Holdings (dependent variable) The major findings of the present study on the above aspects are summarized as under: The results outputs of the first segment depict that the institutional investors have increased their proportional holdings in the companies over the years. The number of sampled companies with higher institutional holdings has increased where as the number of companies with lower proportions of institutional holdings has decreased over the study period. Hence, institutional holdings have shown an increasing trend of investment in the sampled companies over the study period. As far as the dynamics of components of institutional investors is concerned, no specific trend is observed in investments of mutual funds. On the other hand Banks, Financial Institutions and Insurance Companies have shown declining trends of investments over the same period. Where as, foreign institutional investors have shown the increasing trends of investments in line with institutional holdings. The results outputs pertaining to the analysis of relationship between institutional holdings and corporate governance state that the larger proportions of institutional holdings have higher corporate governance scores in sampled companies and the smaller proportions of institutional holdings have lower governance scores in the sampled companies over the study period. Thus, very strong and positive relationship is established between institutional holdings and corporate governance. Hence, H01 is accepted. The results outputs of the section analyzing the relationship between corporate governance score and institutional holdings describe that the companies with higher governance scores have larger proportions of investments from institutional investors than the companies with lower governance scores. Therefore, very strong and positive relationship also exists between corporate governance score and institutional holdings. Hence, H02 is accepted. The inference can be drawn that institut ional holdings pre-empts good corporate governance still at other times, good corporate governance endues institutional investment in the firm. The results outputs pertaining to the analysis of relationship between mutual funds and corporate governance reveal out that smaller proportions of mutual funds holdings have higher governance score in the sampled companies and larger proportions of mutual funds holdings have lower governance scores in the sampled companies over the study period. Therefore, weak relationship exists between mutual funds holdings and corporate governance score. Hence, H01 is rejected. Alternatively, the results outputs pertaining to the analysis of relationship between corporate governance and components of institutional holdings reveal out that the companies with lower governance scores have larger proportions of mutual funds holdings to the companies with higher governance scores over the study period. Hence, weak relationship also exists between corporate governance score and mutual funds holdings. Hence, H02 is rejected. It can be inferred from the above outcomes that mutual funds companies do not observe good governance practices in companies and simultaneously, good governed companies also do not attract higher mutual funds investments. The results outputs as to the relationship between Banks, FIs and ICs and corporate governance depict that larger proportions of Banks, Financial Institutions and Insurance Companies holdings have higher governance score and smaller proportions of holdings have lower governance score in the sampled companies over the study period. Therefore, very strong and positive relationship is established between Banks, Financial Institutions and Insurance Companies holdings and corporate governance score. Hence, H01 is accepted. Similarly, the sampled companies with higher governance scores have larger proportions of Banks, FIs and ICs holdings to the companies with lower governance scores. Thus, very strong and positive relationship also exists between corporate governance score and Banks, FIs and ICs holdings. Hence, H02 is also accepted. The inference can be drawn on the basis of above results that Banks, FIs and ICs consider governance practices in companies while taking investment decision and alternatively, good governed companies also attract these investments. The results outputs pertaining to the relationship between FII holdings and corporate governance reveal out that the companies in which FIIs have larger proportions of holdings have higher governance score to the companies in which FIIs have smaller proportions of holdings. Therefore, very strong and positive relationship is observed between FII holdings and corporate governance score. Hence, H01 is accepted. Likewise, the sampled companies with higher governance scores have also larger proportions of Foreign Institutional Investors holdings. Thus, very strong and positive relationship also exists between corporate governance score and FII holdings. Hence, H02 is accepted. It can be inferred on the basis of above result that foreign institutional investors prefer to invest in firms with better governance practices and their investment do improve the governance practices in the companies. Resume The theoretical and empirical literature provides mixed evidence as to the relationship between institutional holdings and corporate governance. Some of the studies put forth the evidence that corporate governance is the significant factor for institutional investment decision and their significant investment improve the governance practices in companies, while the other studies state otherwise. Where as the research findings of the present study further validate, support and enrich the literature on positive association between institutional holdings and corporate governance. Likewise, the studies provide inconclusive evidence as to the relationship between mutual funds holdings and corporate governance. But the findings of present study state that neither the mutual funds care about the governance practices of companies or their presence improve them. Similarly, the empirical literature provides indeterminate evidence on the relationship between Banks, FIs and ICs and corporate governance. But the findings of present study observe very strong and positive relationship between the two. The empirical studies observe consistent results as to foreign institutional investors invest in better-governed companies but lacks evidence that their significant presence result in better governance. The findings of present study indicate that FIIs do not care for the corporate governance only, rather their higher stake ensure better governance too. Section C 7.8 Relationship between Institutional Holdings and Firm Performance: Review of Literature Pound (1988) explored the influence of institutional ownerships on firm performance and proposed three hypotheses on the relation between institutional shareholders and firm performance: efficient-monitoring hypothesis, conflict-of-interest hypothesis, and strategic-alignment hypothesis. The efficient-monitoring hypothesis says that institutional investors have greater expertise and can monitor management at lower cost than the small atomistic shareholders. Consequently, this argument predicts a positive relationship between institutional shareholding and firm performance. Holderness and Sheehan (1988) found that for a sample of 114 US firms controlled by a majority shareholder with more than 50% of shares, both Tobins Q and accounting profits are significantly lower for firms with individual majority owners than for firms with corporate majority owners. McConnell and Servaes (1990) found a strong positive relationship between the value of the firm and the fraction of shares held by institutional investors. They found that performance increases significantly with institutional ownership. Majumdar and Nagarajan (1994) found that levels of institutional investment are positively related to the current performance levels of firms. However, a less-stronger, though positive, effect is established between changes in performance levels and changes in institutional ownership. The results are based on a study investigating U.S. institutional investors investment strategy. Han and Suk (1998) found (for a sample of US firms) that stock returns are positively related to ownership by institutional investors, thus implying that these corporate owners are actively involved in the monitoring of incumbent management. Douma, Rejie and Kabir (2006) investigated the impact of foreign institutional investment on the performance of emerging market firms and found that there is positive effect of foreign ownership on firm performance. They also found impact of foreign investment on the business group affiliation of firms. Investor protection is poor in case of firms with controlling shareh olders who have ability to expropriate assets. The block shareholders affect the value of the firm and influence the private benefits they receive from the firm. Companies with such shareholders find it expensive to raise external funds. Studies examining the relationship between institutional holdings and firm performance in different countries (mainly OECD countries) have produced mixed results. Chaganti and Damanpour (1991) and Lowenstein (1991) find little evidence that institutional ownership is correlated with firm performance. Seifert, Gonenc and Wright (2005) study does not find a consistent relationship across countries. They conclude that their inconsistent results may reflect the fact that the influence of institutional investors on firm performance is location specific. The above studies generally consider institutional investors as a monolithic group. However, Shleifer and Vishnys (1986) as well as Pounds (1988) theorizations and later empirical examinations by McConnell and Servaes (1990) suggest that shareholders are differentiable and pursue different agendas. Jensen and Merkling (1976) also show that equity ownerships by different groups have different effects on the firm performance. Agrawal and Kno eber (1996), Karpoff et al. (1996), Duggal and Miller (1999) and Faccio and Lasfer (2000) find no such significant relation between institutional holdings and firm performance. In the present study, the analysis has been conducted in two perspectives: Institutional Holdings and Firm performance (b) Constituents of institutional holdings and Firm performance The major findings of the present study on the above aspects are summarized as under: The results outputs of the first segment indicate that there is no conclusive evidence as to larger proportions of institutional holdings in sampled companies have higher average return on networth or average net profit margin and smaller proportions of institutional holdings in sampled companies have lower average return on networth or average net profit margin over the study period. To the contrary, strong and positive relationship is observed between institutional holdings and return on capital employed as well as institutional holdings and earning per share. As the average return on capital employed and average earning per share are higher in the sampled companies with higher proportions of institutional holdings and lower in the sampled companies with lower proportions of institutional holdings over the study period. Therefore, it is stated that institutional holdings and two accounting returns (return on capital employed and earning per share) are significantly correlated where as institutional holdings and other two accounting returns (return on networth and net profit margin) are not related. Hence, there is no clear evidence that institutional holdings and accounting returns are related. Likewise, strong and positive relationship is observed between institutional holdings and Tobins q. But on the other hand, weak relationship is observed between institutional holdings and risk adjusted excess return. Therefore, institutional holdings and one market-based return are significantly correlated while the institutional holdings and another market-based return are not. Thus, the findings depict contradictory results as to the relationship between institutional holdings and market

Sjogren Syndrome Support Group Plan

Sjogren Syndrome Support Group Plan Punit Dave TABLE OF CONTENT (JUMP TO) INTRODUCTION Overview Challenges PROPOSED PLAN Leverage Points Effectiveness Success Metrics Future Planning Schedule Staff Budget CONCLUSION REFERENCES INTRODUCTION OVERVIEW In partnership with University of Houston Medicine and Technology department and American Association of Rheumatologist we are the only national nonprofit support group to provide education, awareness, regular checkup, and research for Sjogren syndrome. In autoimmune disease the immune system attack and destroys the monsieur producing glans throughout the person’s body. Sjogren is the second most common autoimmune disease in United States; which effecting estimated 5 million people in United State. The Sjogren is three times more common than related disease like, Lupus, Multiple sclerosis and it is more common among women then breast cancer. The nine out of the ten Sjogren patients are women. The Sjogren syndrome patients suffer from verity of symptoms that range from dry eye and dry mouth to chronic fatigue and muscling joint pain. This disease also effect internal organs and internal nerve systems. In anticipation of people become familiar with disease and its symptoms; it w ill remain difficult to diagnose everyone who suffering from Sjogren syndrome. That’s why our community continues to fight for patients who aren’t able to explain their diseases or confused by the many facets of the diseases. Our community dedicated to raising awareness, so some day the patient diagnoses with Sjogren then he or she will have heard of it and will know where to turn for support and guidance. CHALLENGES With Sjogren the correct diagnosed is often difficult to obtain. It will take around 4.7 years to correctly diagnose the Sjogren, because the Sjogren’s symptoms often mimic other condition and diseases. Sjogren is often overlooked or misdiagnosed. Patients will discuss dry eye with optometrist, dry mouth with their dentist or joint pain with their primary doctors. Each symptom alone wouldn’t suggest an autoimmune disease but couple symptoms together will lead physicians to suspect Sjogren. This is why increasing awareness among the general public is very important. We strongly recommend Sjogren’s patients get treatment form one doctor. Changing the doctors won’t cure Sjogren but it often creates confusions among the doctors and patients. Getting treatment from multiple doctors’ also lead to wrong medications, diagnostic and it will hurt patients financially and medically. With a help from university of Houston medicine department and AAR we provide many medical checkup, medical guideline and nutrition plans to our members so, they always get right advice and treatments. PROPOSED PLAN LEVERAGE POINTS Sjogren Syndrome support Group is the leading advocate for Sjogren’s patients. We have dynamic volunteers, medical, scientific advisory board and researchers who work in Sjogren’s and recognized nationwide. Together with this volunteers and healthcare professionals, our group has been able to implement programs such as the first ever clinical practice guidelines for Sjogren’s. This guideline gives Sjogren’s physicians a road map for how to treat, monitor and manage sjogren in their patients. This is just one example of our support group on how we achieving our mission and changing the life of sjogren patients. EFFECTIVENESS Sjogren Syndrome Support Group stands on our founding principal of putting the patients first. From our 10 plus patients run support groups to our hundreds technical volunteers we serve our members with an ability to connect with others who have Sjogren’s. Our programs of educations always involve our volunteers to help review our educational materials, conference topics and Sjogren’s content. Our research grants from our sponsors are also awarded based on innovations. It we will help us to change the field of Sjogren’s the fastest to estimate the greatest gain for sjogren patients. I believe our group is effective because of patient voice is never forgotten. SUCCESS METRICS What are the metrics of success for our group? The Sjogren Syndrome Support Group measures the impact and success by many variables. For example our support group manages over 50 support groups in Houston area. Prints many newsletters and distribute hundreds of brochures each year. The American association of rheumatologist distributes important guidelines to each patient and provides the advice to join our support group. It will give patients an opportunity to share their thoughts with others and help others to overcome from this situation. Most importantly our support group always uses metrics to gage the success of every campaign, every program and every project. We set goals, we set objectives and then we evaluate them against the simple questions of how do these impacts on life of Sjogren’s patients. FUTURE PLANNING Additional support from CCHP would help us expand our education and awareness programs. This support would enable us to attended more professional conferences to educate healthcare professionals. Additional reassures would also allowed our support group to distribute materials to more specialist which would ultimately assist us to reaching patients who may be suffering from particular symptoms, but didn’t realize the cause could be a systemic diseases such as Sjogren. Finally, for support the patient and cure of Sjogren, more funding needed that way our support group can produce national awareness campaign and reach the 3million penitents there are not yet diagnosed. SCHEDULE (May 10 2014 – August 30 2014) STAFF We excited about future of Sjogren and we really around pace for great discoveries, but in order to make Sjogren a household name we need everyone’s support and help for more awareness, raise funds and volunteers. We have hundreds of volunteers and volunteers board of directors to help and support our group. Along with that we have healthcare professionals from Medical and Scientific Advisory Board (MSAB) and American Association of Rheumatologist (AAR) to stands for the wide range of specialties involved in Sjogren’s diagnose treatment and research. BUDGET CONCLUSION It is a proud moment for us that, we are premier organization in Sjogren research and support group funding. However more funding is needed as more talented researchers are taking interest in Sjogren. Our support group’s goal is to finding an additional funding to support these groundbreaking projects. Without increase support from research we cannot fund this projects and thus thing must be turn away. Our hope is one day all Sjogrens research and support group adequately funded so patients can have the answers for their disease. Being a Sjogren’s patient is challenging, but neither having a therapy to treat your disease nor understating what causing it is heartbreaking. REFERENCES Autoimmune Disease Coordinating Committee. (n.d.).. Retrieved April 25, 2014, from http://autoimmune.pathology.jhmi.edu/adrp.pdf American Collage of Rheumatology. (n.d.).. Retrieved April 30, 2014, from http://www.rheumatology.org/ Grant Writing. (n.d.).Sample Budget and Narrative -. Retrieved May 1, 2014, from http://www.netplaces.com/grant-writing/developing-a-budget-and-budget-narrative/sample-budget-and-narrative.htm Sjà ¶grens Syndrome Foundation Scientific Initiatives. (n.d.).Sjà ¶grens Syndrome Foundation Scientific Initiatives. Retrieved April 28, 2014, from http://www.Sjogrens.org/home/research-programs/scientific-initiatives Sjogrens syndrome. (n.d.).Definition. Retrieved May 1, 2014, from http://www.mayoclinic.org/diseases-conditions/Sjogrens-syndrome/basics/definition/con-20020275 When an Autoimmune Disorder Forces You to Alter Your Life Plans Autoimmune Disorders Center Everyday Health. (n.d.).EverydayHealth.com. Retrieved April 28, 2014, from http://www.everydayhealth.com/autoimmune-disorders/when-an-autoimmune-disorder-alters-your-life-plans.aspx

Summary of Max Webers The Protestant Ethic and the Spirit of Capitalism

Summary of Max Webers The Protestant Ethic and the Spirit of Capitalism Max Weber's The Protestant Ethic and the Spirit of Capitalism is a study of the relationship between the ethics of ascetic Protestantism and the emergence of the spirit of modern capitalism. Weber argues that the religious ideas of groups such as the Calvinists played a role in creating the capitalistic spirit. Weber first observes a correlation between being Protestant and being involved in business, and declares his intent to explore religion as a potential cause of the modern economic conditions. He argues that the modern spirit of capitalism sees profit as an end in itself, and pursuing profit as virtuous. Weber's goal is to understand the source of this spirit. He turns to Protestantism for a potential expla...

The Night of the Scorpion and Vultures Poem Comparison Essay -- essay

Both poems manage to conjure up powerful pictures and emotions in the reader's mind. Many descriptions can be quite vivid and sinister, then suddenly the poet will lead the reader on an entirely different path changing their perception of the poem altogether. Leaving them wondering, ?How will the poems develop, thus rendering both poems rather impulsive and unpredictable. 'Night of the Scorpion' and 'Vultures', both have an abrupt change of scene, somewhere in the middle. For example, in `The Night of the Scorpion` you start off feeling strangely caring and sorry for the scorpion. Whereas, it turns out that the scorpion really isn?t that gentle when it fights back. Making you completely change your mind. The same feelings occur with the `Vultures` poem, at the start we feel that the vultures represent something dark and sinister and then they turn into two loving birds, and aswell with the commandant, who kills people for a living, yet clearly loves his children who he goes home to each night. It really shows how different people/animals can behave in different circumstances. In 'Vultures' the charnel house seems quite laid back, seeing as the poet doesn?t burst with emotion at the horrors of the place. In fact he altogether seems to give the impression he?s not all that bothered. It?s like he?s stepped back from his own views and opinions, so as to just put the relevant facts into the poem. What?s surprising, if a little weird, is the way two people seem to be in love actually in the charnel house itself. Even though, that place would usually cause images of death and violence to enter your mind. The stanza itself begins with the word 'strange' set alone on a line. Catching your attention from the very beginning making you t... ...ilderness. Finally, I think that the ending of 'Vultures' has two very twisted sides to it. The whole tone of the poem and the use of imagery are negative and depressing, yet the diabolical creatures can still have love between them. The same with the commandant, in stopping to buy sweets for his child, shows his care for his child no matter what atrocities he has had to accomplish throughout his day. In one way I think the poets believe there are some horrors that cannot be overcome in the world, but then again, these people making such acts of atrocity can share love and care amongst themselves. These contrive to make an overall impression, one that?s negative with an unexpected positive twist. The message of 'Night of the Scorpion' seems much simpler, it is one of love and loyalty. It also ends on a very positive note, which seems less thought provoking and vivid.

Mgt/521 Swot Analysis

Business Analysis Part 1: Apple Inc. XXXXXX MGT/521 XXXXXX Business Analysis Part 1: Apple Inc. If an investor needs to decide whether to put money into a company, a careful analysis of that business is be the first step in making a decision. It is important to understand several factors that point to a company’s stability: the company’s place in the market, its future prospects, and its financial health, just to name a few. This business analysis will look at Apple Inc. to assess whether it would be a company worth investing in.First a SWOT analysis will be conducted and will identify what aspects of the analysis are most important in making the decision to invest. Secondly, the company’s internal and external stakeholders will be identified and examined, in order to see if the stakeholders’ needs are being met and how. By analyzing these two important overviews of Apple Inc. it will reveal whether the company is a sound home for investment. SWOT Analysis When deciding to invest in a company or not, a shrewd businessperson will begin with planning.Planning is a continuous process that is important because ever-changing markets require constant adjustments of goals and the processes to meet them. Key in planning is including a careful analysis of a company’s strengths, weaknesses, opportunities, and threats. This type of analysis is known as a SWOT analysis (Nickels, McHugh & McHugh, 2010). A SWOT analysis of Apple Inc. reveals some important facts about its popularity and opportunities in the market. Strengths Apple Inc. ’s most important tool in the market is its ability to leverage its strong brand image.Apple’s product designs are well recognized throughout all markets. This allows new products to rapidly gain a share of the market upon release. Released to the US in April of 2010, the iPad enjoyed unit sales of 7. 5 million, with a net of $5 billion in sales of iPads and related products (Datamonitor: Apple Inc. , 2011). This showcases how quickly the tech market reacts to new releases by the company. This strong brand image has been developed by iconic advertisements that have long set Apple apart in the personal computer market.This began with the company’s 1984 Superbowl ad, which positioned â€Å"IBM as the Orwellian Big Brother of the computer industry† and Mac users as those breaking free from that oppression (Kenney, 2007). This individual vs. corporation image has continued into their more recent advertisements. Benoit and Delbert (2010) analyzed a series of ads that began airing in May 2006. The â€Å"Get a Mac† campaign used actors Justin Long and John Hodgman to portray a Mac and a PC, showcasing Apple computers’ strengths over the market-dominating PC (Benoit & Delbert, 2010).By depicting their computers as easy-to-use, fun-loving and friendly, Apple further solidified its brand image in the market by being different from its competitors, allowin g its new products to quickly capture the market. Weaknesses Weaknesses of Apple Inc. are important in the decision to invest in the company because they point to internal issues that need to be shored up. One major weakness is Apple’s involvement in several patent infringement lawsuits. Nokia and Motorola Mobility have both filed suits with Apple claiming patent infringement (Datamonitor: Apple Inc. 2011). Cisco has also been involved in an ongoing suit about the trademark name of the iPhone and which company actually owns the name (Chumney & Cowart, 2010). The lawsuits create a weakness for Apple in a few ways. First there is the negative image associated with being sued. This will only detract from the company’s long-held image of being an individual fighting against the oppressive PC regime if the company is seen engaging in its own questionable legal practices. Second, lawsuits of this nature require time and money that could be better spent elsewhere.An unfavorab le verdict in any of these suits would affect the company’s financial health and operations (Datamonitor: Apple Inc. , 2010). Opportunities As it is shown that Apple’s popular image is its biggest strength, Apple has the opportunity to make this image multi-faceted by focusing on its commitment to safe environmental practices. Schultz and Helleloid (2010) relate a 2007 incident in which Greenpeace released a report criticizing Apple for is environmental practices and ranking it behind some of its major competitors like Hewlett-Packard and Dell Computers.Rather than respond positively to Greenpeace’s challenge to improve its practices, Apple merely released a statement that they were already environmentally aware and were meeting their own company standards. This played out poorly for Apple in the media, resulting in a direct challenge to Apple by Greenpeace at the Macworld expo in San Francisco in January 2007 (Schultz & Helleloid, 2010). Apple has the opportuni ty to showcase its environmental practices to enforce its brand image as a conscientious individual.Although the company publishes its environmental practices on its website, it could expand the exposure of this information in one of its savvy marketing campaigns (â€Å"Apple And The Environment†, 2011). Threats Although Apple’s brand image has put it at the forefront of smartphone and tablet design, it is facing the threat of losing its market share to Google Android-based products. With Google acquisition of Android Inc. in 2005, the market for smartphones has seen increasing competition for the iPhone from manufactures like HTC and Samsung (Datamonitor: Apple Inc. 010). This Apple vs. Android competition is also playing out in the tablet market. Castelluccio (2011) writes that in spring 2010, â€Å"the iPad owned 90% of the market† but â€Å"the Canaccord group estimates Apple’s share of the tablet market will be 56% this year† quickly crowded o ut by its competitors (p. 58). This growing threat to the tablet and smartphone markets that Apple had previously cornered will be a key battle as Apple works to contain this threat.Because Apple has made its name through its strong band image, and because that image has led them to pioneer new products in the smartphone and tablet markets, Apple’s branding is one of the most relevant factors in deciding to invest in the company. Apple’s steady popularity as the fun, easy-to-use choice for electronics equipment indicates its long-term strength as an investment. The other important factor is Apple’s opportunity to shore up this image by promoting its environmental practices.Because of the Greenpeace debacle in 2007, Apple has the chance to strengthen its important branding by introducing new marketing that will paint it as the responsible choice for environmentally concerned consumers. This too would add to the company’s longevity as an investment. Stakeho lder Analysis In order to determine if stakeholder needs are being met, the stakeholders must first be identified. Internal stakeholders include employees, marketers, internal retail stores, and executives. External stakeholders of Apple are customers, investors, media, third party retailers, local and national communities, and the environment.Apple is meeting the needs of their internal stakeholders, but has some shortcomings in meeting the needs of external stakeholders. Apple’s major internal stakeholders’ needs are being met; Apple has high employee satisfaction rates, and their retail branches are well known for successful promotion of the company’s ever-important brand. Employees of Apple are satisfied with the company’s management style with nearly 97 percent of employees approving of the general management of founder and CEO Steve Jobs just before he announced his resignation.In fact, during his tenure Jobs was known for being â€Å"adept at attr acting employees who share his vision and fierce sense of loyalty to Apple and is mission† (Steve Jobs, Beloved By Apple Employees? , para. 9, 2011). By attracting those who shared Jobs’ ideals, Jobs was able to create a cohesive employee base who could work together in reaching company goals. The other major internal stakeholders, Apple’s internal retail stores, are also doing well. Apple’s primary marketing strategy has been to focus on their retail stores and the inclusive community of Mac users represented there.The strategy of well-placed, beautifully designed retail stores draws in both Mac pros and newbies. Not only does Apple get one-seventh of its revenue from its retail branch, but the first-time buyers that are drawn in account for nearly half of Mac sales in the stores (Snell, 2004). Apple has decided to focus its energies and meet the needs of its retail branches and it has resulted in increased sales and presence in the electronics market. Th e strength of the retail stores and the loyalty of the company’s employees show that Apple pays close attention to internal stakeholder needs.External stakeholders, though, are not all faring so well. Apple’s major external stakeholders are customers, investors, the community and the environment. Of them, only investors and the community have needs as well-met as the company’s internal stakeholders. Apple has been a solid bet for its investors, even during the recent upset of Jobs’ stepping down as CEO. Ranked as BusinessWeek’s number one best performing company in 2006, Apple has long been a growing company and a safe bet for its investors (The Ranking, 2006). However, with the recent news of Jobs’ departure, there has een some question of the company’s stability (Morris, 2011). The company did a good job of quelling any speculation by immediately naming a successor, new CEO Time Cook, and assuring its investors with the news that Co ok has been running things for some time now, as Jobs battles personal health concerns (Robertson & Metz, 2011). This quick action assures that investors’ confidence in the company is well founded, and confidence is an important need for investors. As with any large company the community has a stake in Apple in the needs for charitable assistance from those who contribute to society.Apple has met the community’s needs by contributing matching donations to employee’s charitable giving, up to $10,000 per employees for qualified organizations (Apple to Match $10K in Charitable Contributions Per Employee, 2011), Giving matching contributions like this allows Apple’s employees to support the community through their chosen organizations, diversifying Apple’s support, and adding to customer satisfaction via Apple’s goodwill. Apple’s customers and the environment are two facets of Apple’s stakeholder needs that both need shoring up.Fri edman (2011) relates the history of customer issues with Apple’s design choices, but the company has rarely responded to that input. Poor customer relations have tarnished Apple’s stellar brand at times, Lee, Burrows, and Woyke (2007) demonstrate that the company’s fast growth contributes to this issue; as Apple expanded from computers into personal music players, laptops, phones and other hardware, it did not match that with growth in its technical services divisions. Because Apple’s major strength lies in its brand and image, it is important that the company have customer relations that support that image.Apple could better meet the needs of its customers by having better trained technical support and sales staff, to meet the growing demand for service. As mentioned earlier, one of Apple’s biggest opportunities is in meeting the needs of the environment and being environmentally aware. A recent report released by five environmental groups claims that one of Apple’s main suppliers is polluting the environment. The Chinese manufacturer of iPhone and iPad touchscreens is accused of poisoning some workers, too. (Apple to discuss suppliers' alleged pollution with NGO, 2011).This type of press shows that Apple still needs to make improvements in its environmental efforts, or it will spill over to affect the company’s goodwill in other areas, like community and customer relations. Apple could counteract this by seriously auditing each one of its suppliers for environmental standards and use its powerful marketing tools to showcase its new green initiatives. Conclusion Having examined Apple, it is clear the company has a strong brand image and place in the market. Is biggest opportunity lies in enhancing this image through improved environmental initiatives.Though there are some issues with the growing Android market and trademark lawsuits, Apple remains a strong prospect for its investors even during times of transit ion. Apple’s growth and clear self-image play large parts in making it a safe decision for its current and future investors. References Apple and the Environment. (2011). Retrieved from http://www. apple. com/environment/ Apple to discuss suppliers' alleged pollution with NGO. (2011, September 1). Business Daily Update. Retrieved from http://go. galegroup. com. ezproxy. apollolibrary. com/ps/i. do? amp;id=GALE%7CA265861417&v=2. 1&u=uphoenix&it=r&p=GPS&sw=w Benoit, W. L. , & Delbert, J. (2010). â€Å"Get A Mac†: Mac versus PC TV Spots. In , Relevant Rhetoric: A New Journal of Rhetorical Studies (pp. 1-12). Relevant Rhetoric: A New Journal of Rhetorical Studies. Retrieved from EBSCOhost. Castelluccio, M. (2011). The Tablet Horizon– An Update. Strategic Finance, 93(2), 57-58. Retrieved from EBSCOhost. Datamonitor: Apple Inc. (2011). Apple Computer, Inc. SWOT Analysis, 1-10. Retrieved from EBSCOhost. Friedman, L. (2011). The Customer Is Sometimes Right.Macworld, 28( 4), 100. Retrieved from EBSCOhost. Kenney, M. (2007). The apple way: 12 management lessons from the world's most innovative company. Journal of Applied Management and Entrepreneurship, 12(1), 113-113-115. Retrieved from http://search. proquest. com/docview/203919095? accountid=35812 Lee, L. , Burrows, P. , ; Woyke, E. (2007). A Bruise or Two On Apple's Reputation. BusinessWeek, (4055), 081-083. Retrieved from EBSCOhost. Nickels, W. G. , McHugh, J. M. , & McHugh, S. M. (2010). Understanding business (9th ed. ). New York, NY: McGraw-Hill/Irwin. Schultz, P. L. ,

Ford Motor Company Essay

Strengths Ford Motor Company is a Multi international Company with 90 plant and facilities selling vehicles in 200 markets. It is the second biggest plant in the world, with approximately 345,000 employees The Ford Motor Company is the Fifth largest vehicle manufacturer in the world and the second in the U.S. with a total (Sales 2010) of 4,988,031 vehicles manufactured including Cars, land craft vehicles (LCV), Heavy Commercial Vehicles (HCV) and Heavy Buses. Ford Motor merges with Hertz Rent-A-Car, the world’s leading vehicle renting organization, operates from approximately 8,100 locations in 143 countries worldwide. Ford Motor Company is in ten place in 2011 Fortune 500 list (Us), with Revenues of (Millions) 128,954.0 and Profits of (Millions) 6,561.0 and in the 2011 Global 500 list, Ford Motors in twenty fifth place. †¢ Ford is a Household name brand †¢ Has physical presence in all major continents †¢ Ford motor credit company helps finance, lease and sell insurance customers †¢14,400 international patents, copyrights and trademarks †¢2nd highest market share in truck sales †¢Sponsor special-rate financing programs available only through Ford Credit Programs increase Ford Credit’s financing volume and share of financing sales of their vehicles Weaknesses Ford Motors doesn’t have a fuel efficient stander pickup or cargo van, compared to Chevrolet Silverado (Pickup) that gives 20mpg in city and 23mpg in highway and the Chevrolet Express (Van) that gives a 15mpg in city and 20mpg in highway. †¢ Durable good- in rough economical times it is not necessary to replace †¢ If consumers continue to demand vehicles that are relatively large, have high performance, and/or are feature-laden, while regulatory standards require the production of vehicles that are smaller and more economical, the mismatch of supply and demand would have a negative  effect on profitability †¢ Market share has declined in many regions of the world over the last year. Overall market share in the United States, including PAG-brand vehicles, has declined in each of the past five years, from 20.5% in 2003 to 15.6% in 2007 †¢Stock shares have declined, resulting with volume reductions have had an adverse impact on our results of operations Ford Motor warned its European operations may lose $500 million to $600 million this year. Opportunities Innovation technologies, Sync with My ford touch is a combine technology, that help and assists drivers for a more comfortable drive experience. The Sync technology consist in integrating Bluetooth- enable cell phones and Mp3 players in to the car, providing hand free call and music selection capabilities using voice activate commands. My ford touch replaces many traditional buttons with clear, colorful and user friendly LCD screens. †¢ Block Exemption Regulation (Europe) – Makes it easier for a dealer to display and sell multiple brands in one store (Ford, Lincoln, Mercury) without the need to maintain separate facilities †¢Increasing presence in China, with more investment in manufacturing capacity, introduction of new products and expansion of distribution channel †¢Opened a second assembly plant and new engine plant located in Nanjing, China Initial capacity of the plant was approximately 160,000 units annually, boosting total annual passenger car production capacity in China to more than 410,000 vehicles Operates a purchasing office in China to procure components for operations outside of China Threats †¢ Decline in overall market share due to Including increased competition Industry shift away from traditionally stronger segments (e.g., traditional SUVs and full-size pickups) Reduced vehicle sales to daily rental companies †¢Decrease in commercial fleet sales reflected lower industry volume †¢Japanese and Korean manufacturers are increasing their production capacity in Europe Strength †¢ Ford Motor Company is a Multi international Company with 90 plant and facilities selling vehicles in 200 markets. It is the second biggest plant in the world, with approximately 345,000 employees. (http://www.freeonlineresearchpapers.com/ford-diversity-commitment) , (http://media.ford.com/article_display.cfm?article_id=7670) †¢ The Ford Motor Company is the Fifth largest vehicle manufacturer in the world and the second in the U.S. with a total (Sales 2010) of 4,988,031 vehicles manufactured including Cars, land craft vehicles (LCV), Heavy Commercial Vehicles (HCV) and Heavy Buses. (Oica.net, 2011) (http://oica.net/wp-content/uploads/ranking-2010.pdf) †¢ Ford Motor diversity in Ford Credit is a subsidiary of The Ford Motor Company that finance vehicles to customer and dealers to support Ford Motor Company sales. They also provide financing on Lincoln vehicles, offering: competitive rates, innovative products, flexible terms (http://www.fordcredit.com/companyInfo/prof ile.jhtml) †¢ Ford Motor merges with Hertz Rent-A-Car, the world’s leading vehicle renting organization, operates from approximately 8,100 locations in 143 countries worldwide. †¢ Ford Motor Company is in ten place in 2011 Fortune 500 list (Us), with Revenues of (Millions) 128,954.0 and Profits of (Millions) 6,561.0 (http://money.cnn.com/magazines/fortune/fortune500/2011/full_list/index.html) and in the 2011 Global 500 list, Ford Motors in twenty fifth place. (http://money.cnn.com/magazines/fortune/global500/2011/full_list/index.html) Weakness †¢ Ford Explores rollover and firestone tires recalls controversy announced on August, 2000, approximately 14.4 million tires contain a safety-related defect. Harmed Ford brand image. (http://www.nhtsa.gov/PR/FirestoneRecall) †¢ Ford Motors doesn’t have a fuel efficient stander pickup or cargo van, compared to Chevrolet Silverado (Pickup) that gives 20mpg in city and 23mpg in highway and the Chevrolet Express (Van) that gives a 15mpg in city and 20mpg in highway. (http://www.fueleconomy.gov/feg/bestworstepatrucks.htm) †¢ Ford Motors only has seven subsidiaries, Lincoln, mercury, Mazda, Volvo, Jaguar, Land Rover, Aston Martin. Opportunities †¢ Fuel efficient cars, Ford Motor Company is launching the most fuel-efficient cars in the market. The All-new 2012 Ford Focus will be powered by a fuel-efficient 2.0-liter DOHC four-cylinder engine with twin independent variable camshaft timing (Ti-VCT) and direct gasoline injection that will deliver up to a projected 40 mpg highway. The combinations of these technologies helps to lower gas emission but, still have horse power. For a 4 cylinder 2.0 liter engines it is rated at 160 horse power and 146lbs of torque. (http://media.ford.com/article_display.cfm?article_id=33438) †¢ Big donator to charity and victims of natural disasters. October 27, 2000 – Ford Motor Company will donate $1.4 million to the San Diego Environmental Foundation (SDEF) for the preservation, protection and enhancement of the San Eliot Lagoon Ecological Reserve, which is one of San Diego’s and Southern California’s most precious and unique natural resources. (http://media.ford.co m/article_display.cfm?article_id=6425) †¢ Innovation technologies, Sync with My ford touch is a combine technology, that help and assists drivers for a more comfortable drive experience. The Sync technology consist in integrating Bluetooth- enable cell phones and Mp3 players in to the car, providing hand free call and music selection capabilities using voice activate commands. My ford touch replaces many traditional buttons with clear, colorful and user friendly LCD screens. (http://media.ford.com/images/10031/Drive_Smart_HR.pdf) †¢ Driving Technology, Blind Spot Information System (BLIS) gives out three warnings when a vehicle not visible or enters ones blinds spot. The signals consists in a Yellow light appears in the corresponding side view mirror, an audio alert and a message warning displayed.  (http://media.ford.com/images/10031/Drive_Smart_HR.pdf) †¢ Rear view camera and Forward Sensing System, helps drives to see on screen when parking in reverse. The Forward Sensing System helps to determine how close are the objects form the vehicle. (http://media.ford.com/images/10031/Drive_Smart_HR.pdf) †¢ Electric Power-Assisted Steering (EPAS). This technology consists in adapting to the road conditions and help drivers to compensate directional shifts caused by crowned roads surface or steady crosswinds. (http://media.ford.com/images/10031/Drive_Smart_HR.pdf) †¢ Active Park Assistants uses ultrasonic based sensing system and EPAS for parallel parking. (http://media.ford.com/images/10031/Drive_Smart_HR.pdf) †¢ Rain-Sensing Wipes has a optical sensor that auto adjust to the climate conditions. (http://media.ford.com/images/10031/Drive_Smart_HR.pdf) Power train and convenience †¢ Adaptive cruise control allows the vehicle to set and mating speed without using the pedals. It also has a radar- based system that’s can monitor the vehicle in front up to 600 feet. (http://media.ford.com/images/10031/Drive_Smart_HR.pdf) †¢ Easy fuel or cap less system helps drives when filling the car with gasoline a hassle-free, odor free, and have a more consistent seal compared to traditional manual cap.( http://media.ford.com/images/10031/Drive_Smart_HR.pdf) †¢ Eco-Boost gains of up to 20 percent and reduction of CO2 emissions by as much as 15 percent compared with larger, less efficient engines. (http://media.ford.com/images/10031/Drive_Smart_HR.pdf) †¢ Dual-clutch Power Shift six-speed transmission combines the responsive performance and fuel economy of a manual gearbox with the convenience of a traditional automatic transmission. (http://media.ford.com/images/10031/Drive_Smart_HR.pdf) Threats †¢ Government regulations. Do to the pollution and the Global warming caused by the Co2, car manufactures are trying to develop fuel efficient cars. In Jul 29,2011 Major car developers and manufactures joined President  Obama to discusses the further in fuel economy and proposed a new Fuel-efficiency standers. Today’s stander is 27.3mpg by 2025 the stander should be at 54.5 mpg. Its estimated that this new â€Å"stander† will save a average of $8,000 on fuel bill per vehicle, and will reduce U.S. oil consumption by 2.2 billion barrels per day. (http://news.consumerreports.org/cars/2011/07/government-raises-fuel-economy-standards-to-545-mpg-by-2025.html) †¢ Change of oil price, is one of the most volatile components oil, is very heretical as it prices increases and decreases. Consumer are more aware that fuel efficient vehicle can guarantee more performance for their money. In 26-07-2011 oil crude open at $99.0 an close$99.6 (http://www.livecharts.co.uk/futures_commodities/oil_prices_historical.php) †¢ Increase of raw materials. This effects the manufacturing of the automobile if the steel components raises then the car will have to be a lot more expensive. According to the World Carbon Steel Transaction Prices in Mar,2011 medium steel sections were $719/Ton in April,2011 it was 926/Ton. (http://www.steelonthenet.com/price_info.html) †¢ Recession is another factor that Ford Motor Company has to battle. As the economy declines in activity, more people are not investing or spending their incomes in new vehicles. It is estimate that the US unemployment rates is at 13.9 million persons a (9.1 percent) http://www.bls.gov/news.release/empsit.nr0.htm)