Strategic Legal and Social Issues

The Board of Directors of a corporation are vested with the authority to exercise corporate powers, conduct all business and control and hold all properties of the corporation. The supreme authority insofar as the management of the business regular and ordinary affairs of the corporation is vested with the Board of Directors. With great power however comes great responsibility. Directors act as fiduciaries to the corporation, and once elected they must serve the best interests of the corporation and the shareholders. This fiduciary duty arises out of the board’s fiduciary relationship with the corporation and shareholders. (Saboor H. Abduljaami p2) The following are the three-fold duties of a director: duty of obedience; duty of diligence and duty of loyalty. Duty of Obedience The duty of obedience mandates that every director of the corporation must do and perform only those acts designed to achieve its mission. The mission and goals of the corporation are indicated in the articles of incorporation. Thus, the director must constantly check whether his action is within the scope of his authority and in pursuance of the goals of the company as indicated in its articles of incorporation. (â€Å"Role Playing: When do Board Members Step Over the Line†p2) Further, obedience does not only mean compliance with the rules of the corporation but it also means informing the corporation of any act done in violation of the rules of the corporation. This means that every director is mandated to refrain from violating the internal rules of the corporation. As directors they are also required to inform the corporation of any wrongdoing committed by one director that seriously prejudices the interest of the corporation. Thus, a director who willfully and knowingly votes or assents to patently unlawful acts of another director renders him jointly and severally liable for any damage resulting to the corporation. Duty of Diligence The rule is that every director of the corporation is required to manage the corporate affairs and perform his functions with reasonable care and prudence. As an officer of the corporation, the responsibility of the director towards the corporation is not limited to willful breach of trust or excess of power but extends to negligence. This means that even if there was no unlawful intent or evil motive in performing a corporate act, he can still be held liable if it can be established that he acted negligently. This liability of a director for his negligent acts rests upon common law rule which renders the agent liable who violates his authority or neglects his duty to the damage of the principal. It must be stressed however that the degree of diligence required of a director is relative. The standard of diligence is that which an ordinary prudent director could reasonable be expected to exercise in a like position under similar circumstances. The directors are also bound to observe the limits placed upon their powers in accordance with the Articles of Incorporation or charter, and if they transcend such limit and cause such damage, they incur liability. (Ruben Ladia, p. 164) Thus, if a director willfully performs an act which he knows or ought to know to be unauthorized and beyond the scope of his authority, he is clearly liable for any injury. It is however essential to state that though directors are liable for their negligence which has caused serious prejudice to the corporation, they are not liable for losses due to the imprudence or honest error of judgment. This is the concept of business judgment rule which is a defense on the part of the director to escape any liability for his actions. In principle, this states that questions of policy and management are left solely to the honest decision of the board of directors and the courts are without authority to substitute its judgment as against the director. It is said that â€Å"business judgment rule is purely a case law derived concept whereby a court will not review the management decisions of a corporation’s board of directors absent some sort of showing that the board of directors violated their duty of care or loyalty. † (Jon Canfield 1) It must be stressed that directors are not insurers of the property of the corporation or guarantors of the success of the corporation. So long as the director exercised reasonable diligence in the performance of its function the courts will not interfere and render it liable for negligence. Duty of Loyalty It is a general knowledge that there exists a fiduciary relationship between the directors of the corporation and the corporation and its stockholders. As fiduciaries, they are expected to act with utmost candor and fair dealing for the interest of the corporation and without taint of selfish motives. Thus, the directors are not only required to act with reasonable diligence in managing the affairs of the corporation, they are also expected to act with utmost good faith. Thus, the directors of the corporation are expected to first serve the interest of the corporation and their interest later. They are enjoined not to manipulate the affairs of the corporation to the detriment and disregard of the standards of morality and decency. As corporate insiders, the director cannot utilize any inside information they have acquired for their own benefit. He cannot violate the requirements of fair play by doing indirectly what he cannot do directly. Further as directors of the corporation they are not allowed to obtain any personal profit, commissions, bonus or gain for their official actions. Lastly, a director is prohibited from seizing any business opportunity or developing it at the expense and with the facilities of the corporation. Thus, the duty of loyalty requires a fiduciary to act in the best interests of the corporation and in good faith. (Jiangyu Zhu 2) Thus, as corporate officers an undivided loyalty is expected of every director. This fiduciary relationship between the director and the corporation imposes a strict duty to act in accordance with the highest standard which a man of the finest honor and reputation might impose upon himself. It must be stressed that the duty to act with utmost good faith is imposed upon all the directors. The law imposes upon the director liability for violating this duty of loyalty regardless whether the director actually received profit from his undisclosed transaction. This was affirmed in the case of Item Software v. Fassihi. Case of Item Software v. Fassihi. Facts: Item Software entered into transaction with another company. Item Software has a managing director and a marketing director. It specifically provided in its contract with the marketing director that it cannot take advantage of any confidential information it has learned while employed with Item Software. It appears that while Item Software and the other company were engaged in negotiations, its marketing director had been visiting the other company informing it of his intention to form a new company and his intent to transact directly with the other company. The contract between the two companies did not materialize. Item Software later found out about the actuations of its marketing director. He was eventually summarily dismissed from employment and sued by his own company. Issue: whether the respondent should be held liable by the corporation for its act of disloyalty even if it did not profit from its misconduct. Held: It is immaterial whether the director profited from his misconduct. The sole factor to be determined here is that the director committed a breach of its duty when it failed to disclose its transactions with the other company. The duties of a director imposed by law are generally higher than those imposed on an employee because he is more than simply a general manager of the company, he is a fiduciary who, with his fellow directors, is responsible for the success of the company’s business. Section 317 of the Companies Act of 1985 states that: â€Å"it is the duty of the director of a company, who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the company to declare the nature of his interest at a meeting of the directors of the company. † (Section 317 Companies Act of 1985) Thus, the marketing director was in breach of his duties both as an employee and as a director and the Item Software was entitled to recover from him damages for breach of that duty suffered as a result of the termination of the contract.   

Evaluate the effectiveness of speech, language and communicate Essay

Explain each of the terms: speech, language, communication, speech , language and communication needs. Speech , language and communication are closely tied to other areas of development, this learning outcome requires you to understand and be able to explain links between speech and development and the likely impact of any difficulties that children may have in acquiring speech, communication and language. Some children may not be able to understand the words being spoken to them and/or the grammatical rules of sentence construction. Therefore, when their teacher tells the class what they need to do, or explains a new idea or concept,9 they may struggle to understand what is being said. Having inappropriate vocabulary is essential for the learning process, however learning vocabulary has been identified as one of the most significant difficulties for some children with SLCN,10 11 leading to much of their teacher’s talk being inaccessible. The ability and confidence to ask questions is a vital skill for provoking and shaping new thinking.12 The Primary Strategy recognizes the importance of language for thinking and encourages paired talk and discussion among pupils as a way to enhance learning.13 This is hugely difficult for children with SLCN, so vital learning and opportunities to talk with peers can be missed. They may struggle with developing an age appropriate vocabulary, formulating sentences, using the right words in the right order and with following grammatical rule to understand or make it clear to others what has happened in space and time. Communication Communication is about the way that people send signals to one another. Communication can be seen as an umbrella term because it encompasses both language and speech and also includes facial expression, gesture and body  language. Language Language is something very specific, it is a set of symbols-spoken, written or signed- that can be used and understood between people. Language can be quite abstract and we often forget this. a child has to learn that when the sounds of c-a-t are made, the speaker is referring to a cat even if there is not one in the room. Linguistsd also suggest that the main feature of language is a series of rules that users have to understand and use, but once mastered allow a user to convey anything they wish. At first children cannot use the rules. Toddlers begin by just pointing at objects and saying one word, but after a while they learn how to construct sentences. Speech Speech is essentially vocalized language. It is usually learnt before the written form of the language, in speech, the symbols are not written of signed, but spoken as sounds. The number of sounds that children need to master will depend on the language that they are bing exposed. English has over 40 different sounds or phonemes. Listening Listening is about being able to hear and more importantly understand the speech of others. It is sometimes referred to as ‘receptive speech.’ Babies begin the journey of learning to speak by gaining some ‘receptive speech’ and learning what specific words and phrases mean. Speech, language and communication needs This term is used to refer to any difficulty that a child has in any of the three areas; for example a child might have difficulty in producing certain sounds and so have a difficulty with speech, while a child who does not make eye contact or enjoy being with others may have a more global communication needs. 1.2  Explain how speech, language and communication skills support each of the following areas in children’s development. Learning, emotional, behavior, social. Being able to communicate and, better still, being able to use and understand speech- opens doors in terms of children’s overall development. Learning There are many debates as to what is ‘learning’ but for our purpose we will limit this to children’s overall cognition. The term condition covers a multitude of different tasks, but is mainly about out ability to process and use information that we have gained. For example, A child might see that leaves are falling off tress and get told that this is because it is autumn. The child might then see more leaves falling off a tree. She may remember and make a connection between what she saw earlier on and what she is seeing now. The work autumn may also remember and so she might point and say proudly to the adult with her. ‘ Look those leaves are falling too! Is that because its autumn?’ Later on in that day while having tea, she may tell her mother that in the park leaves are falling off the trees because it is autumn. This example illustrates the way in which for learning to take place, the child has to remember what they have seen earlier, make connections to what they are now seeing or hearing and then come to some conclusion. The ability of the child to ‘label’ it as autumn will help her enormously and she is likely from this point on to notice falling leaves and make the association  over and over again. She can also talk and think about ‘ autumn’ without needing to be in the park. At this point we can begin to understand the limitations of body language, facial expression and gesture when language is not available. Although they allow for instant communication they cannot help a child to understand what is being seen or provide a way in which afterwards the child can communicate what she has seen. This means that children who only have the basic communication skills of body language, gesture and facial expression find it difficult to communicate concepts Emotional development Being able to control your own emotional is a major part of emotional development. Babies and toddlers struggle with his, but as language develops they find it easier because they can express their needs. Tantrums and other outbursts linked to frustration, jealousy or anger tent to diminish as children find ways of talking through how they are feeling. This is one reason why it is thought good practice to ‘name’ emotions when working with young children, so that they begin to understand what they are feeling and have ways of expressing it other than through physical reactions alone. Behavior Being able to manage your own behavior is about self-control. Young children are very impulsive and find it hard to control their behavior but, once language is mastered, children’s behavior changes. It would seem that the acquisition of language helps children to think things over. They focus more on the consequences of their actions and they also internally begin to remind themselves of what they need to do or what they should not do. Interestingly, the start of this process can be observed when a toddler goes up to something that they have been told not to touch, points to it and says ‘no’. Social development Emotional development is linked to being able to control your own emotions and social development builds on this, as it is about being able to recognize emotions in others and learning to adjust your behavior accordingly. It also about understands what the social codes are in any situation and behaving appropriately. This means that good communication and language skills are important. Children need to read the faces and body language of others and respond appropriately. Because play is the main medium of socialization with other children, language skills also become important from around the age of 3 years, as children tent to use speech to talk about what they are doing or, as they get older. Describe the potential impact of speech, language and communication difficulties on the overall development of a child, both currently and in the longer term. Young people with speech, language and communication needs have poor conversational kills, poor non-verbal skills and poor social perception, all of which can hinder their ability to form friendships with their peers and may lead to them becoming marginalized. Those who become isolated in this way often experience anxiety and depression, which can affect their mental health. These problems can become exacerbated with age if they remain unidentified and untreated, and are likely to result in poorer outcomes for the individuals concerned. Speech, language and communication difficulties can erode self-esteem and affect educational achievement, social integration and general behavior. In addition, they increase the probability of offending behavior and early disengagement from school (children with these problems are much less likely to continue in education beyond 16 years of age). Children have difficulties, there are likely to be many effects on their  development, although the extent to which children are affected will very much depend on the nature of their difficulty, its severity and how the child is supported. Short-term effects on development Frustration Anger Withdrawal Low levels of confidence Difficulties in making friends Difficulties in learning new information Difficulties in applying information to new situations Find it hard to make themselves understood The longer term developable consequences in children who have difficulties with their communication, speech and language are in some ways harder to predict but again, in general terms, we may find that children later on have: Lower self-esteem Not achieved their potential Found it hard to make and maintain relationships Become isolated Not reached independence Developed antisocial behavior in some cases. Explain the ways in which adults can effectively support and extend the speech, language and communication development of children during the early years. There are many ways in which adults can effectively support and extend speech, language and communication development in children during early years, Firstly, it is important for the adult to adapt language according to the child’s needs and abilities, some children who have English as a second language may require the adult to point to objects. For example when speaking to a baby or toddler they would simplify the sentences for them to understand where as the older the child gets the more hard sentences can begin to be used. For example to a 1 year old you may hold out a biscuit and say the word where as an older child you would say would you like a biscuit. Secondly; giving children the time and opportunity to communicate, it’s important to give children time to think about what has been said to them and if they don’t answer straight away and not answering for them, allowing them time to respond. Some children would require you to sound them all out but then you must get them to copy you and blend the sounds together whilst giving them time to process what you are telling them. Explain the relevant positive effects of adult support for the children and their careers. Positive adult support: Emotional development Speech, language and communication skills Social interaction Behavior Speech, language and communication skills Very quickly, if high-quality support is given, children can show progress in their speech, language and communication skills. This means that working with children can be very rewarding and parents often delight in the improvement that their children are showing. Social interaction At the heart of social interaction is children’s ability to communicate. This means that positive support can quickly make children more outgoing and also confident in their interactions. Many practitioners report that once children have more speech and language, they are able to play more easily with other children. Behavior Many children who are finding it difficult to communicate and speak will show aggressive, uncooperative and frustrated behavior. Being able to communicate effectively can make an enormous difference to children’s behavior. Parents also note that when they are spending more time communicating with their children, their children show less attention-seeking behavior. Emotional development Positive adult support also helps children’s emotional development. Not only do children become more confident, they also find through works ways of controlling their emotions and expressing their needs. Explain how levels of speech and language development vary between children entering early years provision and need to be taken into account during setting in and planning. Children of the same age will often have different levels of language. This clearly means that we need to identify children whose language is atypical in order that they can gain additional support, but we also need to think about how our practices and procedures support children. For children who do not have spoken language, either because of their age or because of an additional need. It is essential that time is taken for them to get to know their key person before any separation takes place. The key person also needs to find out from the child’s parents how they communicate  with the child and to learn these skills. Children who are speaking well and can understand us still need a similar level of care and attention, but they may find it easier to settle in as they can articulate their feelings. Grouping children Many group care settings will have moments when children are put into groups at lunchtime or for a story. It is important that thought is given to ensuring that children who have language needs are grouped sensitively and carefully so they have the opportunity to interact and be involved. Activities When activities and play opportunities are planned, children’s level of language needs to be considered. Certain activities require a high level of language and so may not be appropriate for a child whose language is still developing, for example ’20 questions’ or ‘I spy’. Language is also needed for role play and so it is important to think about whether children who want to join in role play need support. The ability to process language also means some activities which require children to listen need to be carefully thought about, particularly it there are no visual stimuli which will help children to work out the meaning.

A View on the Mozarts Symphony No. 41 in C Major, K. 551 as Explained by Woody Allen

A View on the Mozart's Symphony No. 41 in C Major, K. 551 as Explained by Woody Allen Woody Allen describes Mozart’s Symphony No. 41 in C Major, K. 551 as a composition that proved the existence of God. There is a reason that Allen, several other scholars of the classical period, and the majority of music lovers alike consider Mozart’s â€Å"Jupiter† Symphony to be one of extremes. The innovative and artistic mastery which make up the framework of the symphony creates an experience where a complexity of emotions could take place in this piece. The amount of several differing expressive and compositional contrasts which take place in this single symphonic work have astounded audiences for hundreds of years and is considered to be a work fifty years ahead of its time. The most prolific reason as to why this symphony is so highly regarded in the classical repertoire would have to the be what Mozart accomplishes in the finale of this work. At the end of the movement Mozart is able to successfully take the style of late 18th century instrumental practice, with exceptionally involved counterpoint creating a style of music transcending both of the styles into one of pure and exhilarating originality. This transcendence which Mozart achieved is due in part to a five-part fugato representing five different themes which occur throughout the finale of the work. Mozart takes the five themes and interlays each theme in unity among one another across the whole ensemble. This contrapuntal mastery which takes place has been deemed as one of the greatest finales of music preceding the scientific revolution. However, the significance of the symphony as a whole in terms of the historical context make the reputation of the symphony quite reputable among scholarâ₠¬â„¢s due to the commission of and inspiration of the â€Å"Jupiter† Symphony. No one is exactly sure as to the reason why Mozart wrote this symphony and whether he ever listened to a performance of this symphony as well. Mozart wrote the Symphony No. 41 along with his 39th and 40th symphonies during a period of six weeks in the summer of 1788. During this time Mozart was in serious debt and had to move to the suburb of Alsergrund in order to avoid paying high rental expenses. Some scholars believe that this symphony was composed only for the purpose of making Mozart money so that he could no longer struggle in order to pay his rent. Others believe that Mozart knew that the â€Å"Jupiter† symphony would be his last as he put everything in terms of style, contrast, and emotion into this final symphony. The first movement begins brilliantly in the key of C major. This movement happens to be in sonata allegro form which was traditional of the time. The second movement of this piece is marked Andante cantabile and is known to create dissonance and drama signifying some internal struggle. The third movement of the piece is a minuet that contains an allegretto and trio. This movement features an Austrian folk-dance form and contains interesting instances of imitative texture. Although these movements may not be as highly regarded as the fourth movement, the first three movements also contain innovative and symphonic mastery which only someone like Mozart could succeed in doing. Only Mozart could compose a symphony in less than six weeks and have the symphony contain a legacy spanning generations of musicians. The significance of final symphony of the Austrian composer will continue to baffle listeners young and old as no other composer could imitate the craft of composition and symphoni c art to which Mozart dedicated much of his life to.

Research the principles of insulin production via genetic engineering Essay

Research the principles of insulin production via genetic engineering - Essay Example Today, however, insulin is commercially produced through genetic engineering, a process that makes available to diabetic patients worldwide massive quantities of the hormone without difficulty. Despite its evident usefulness, genetic engineering remains continuously haunted by ethical issues and considerations. II Homeostasis of Blood Sugar Level The human body maintains a consistent internal environment and one of the factors subject to this homeostasis is blood sugar, or glucose, level. At normal level, blood sugar in the body must be within 80 mg for every 100 cm3 blood. In the event that blood sugar falls below or rises above that level spurs the body mechanism to make corrective measures, a process called negative feedback, so as to restitute glucose to homeostatic level (Givens and Reiss 2002, p. 56). The homeostasis of glucose primarily involves the organs of pancreas and liver. As blood sugar level rises, such as after a high carbohydrate meal, the pancreas secretes insulin t o correct that level. Insulin is a hormone whose presence in the bloodstream indicates to the liver to start converting glucose into glycogen and store it. The amount of insulin in the bloodstream indicates the amount of glucose to be converted and stored. ... 56-57). III Diabetes Mellitus Diabetes mellitus (DM hereafter), the most common type of diabetes, is a disease caused by a metabolism disorder related to insulin function. Diabetes mellitus is defined by the World Health Organisation in 1980 as â€Å"a state of chronic hyperglycemia which may result from many environmental and genetic factors often acting jointly† (Ekoe 2008, pp. 5-6). There are four types of diabetes mellitus: type 1, which is insulin-dependent (IDDM); type 2, which is non-insulin dependent (NIDDM); diabetes secondary to other diseases, and; gestational diabetes, all of which have the common factor of hyperglycemia or high blood glucose. IDDM account for 5% to 10% of diabetes cases and NIDDM for 90% to 95%; the last two types account for remaining insignificant cases (Poretsky 2010, pp. 108, 116). Aside from hyperglycemia, the clinical symptoms of the disease usually include polyuria or the tendency for frequent passing of urine, polydipsia or excessive thirs t, polyphagia or excessive desire to eat, weight loss despite polyphagia, glycosuria or presence of glucose in the urine, ketoacidosis, visual changes, skin infections, sepsis and pruritus. However, except for hypoglycemia, not all patients suffer from all or the same symptoms and not all persons who suffer from any of such symptoms are necessarily afflicted with diabetes (Ekoe 2008, pp. 5-6). DM is widely thought to be caused by genetic factors, although the mechanism has not been exactly pinpointed. The etiological explanation, however, of the disease is autoimmunity in which ?-cells producing insulin are being destroyed resulting in insulin deficiency. The consequence is homeostatic failure of blood sugar level. Aside from genetic predisposition, infection and environmental

Management of Occupational Health & Safety Essay

Management of Occupational Health & Safety - Essay Example The incident was caused by the night crew putting a condensate injection pump into service, that earlier in the day had been taken out of service for maintenance. Additionally, the magnitude of the disaster was multiplied since a pressure safety valve had been removed for recertification. Such non-routine work increases risk of a catastrophic accident taking place (AICE, 2007: 287). Primarily, operator errors should have been prevented. Written, standardized procedures and permits applying to the entire facility or to the equipment, are a practical necessity for effectively and consistently controlling non-routine work related to high-risk activities. This includes two-way communication through checklists or permits to authorize the work, which highlight particular hazards that might be encountered and specify appropriate safeguards. Permits for non-routine work should be issued and reviewed by a trained person. Additionally, a preventive system of maintenance department locks should be in place (AICE, 2007: 293-295, 298). Further, the offshore installation manager (OIM) at the Piper Alpha was untrained to cope with the emergency. He did not communicate or take crucial decisions to cut off oil production, block supply of gas to the pipelines from the neighbouring facility, call for helicopters for rescue work, delegate authority or alleviate stress in the men (Flin et al, 1996: 262). Engineering design of the different components in the facility was faulty, such as interdependent couplings and linkages among the components of the facility, and with neighbouring installations. Hence, there was no provision for automatic shutdown of production, or for alarm, public address, and other critical systems. The mutual proximity of control room, radio room, electric generators, diesel room, with production modules caused a chain action of component failures due to fire propagation and explosions. The design of fire protection such as

Reference Citation Worksheet Essay Example | Topics and Well Written Essays - 250 words

Reference Citation Worksheet - Essay Example you need assistance completing this worksheet please visit the Center for Writing Excellence within the University Library where you will find numerous Writing & Style Guidelines as well as the Reference and Citation Generator. 1. The paragraph below is an excerpt from the Principled Autonomy and Plagiarism article. Please extract a sentence from the paragraph and create a direct quote and proper in-text citation in the space provided below the paragraph. Every semester, professors grapple with the possibility that the assignments submitted by their students have been plagiarized. The question all professors face is whether they are obligated to check for plagiarized papers. Even with the help of Google and turnitin.com, checking for plagiarized papers is an often-odious task. It is time-consuming. It can take hours to find one plagiarized paper, especially if the professor is manually typing in sentences using Google. Students can slightly alter sentences just e enough to where it is nearly impossible to trace online. It can be emotionally draining for the professor as well. There are papers that seem to have been plagiarized, but there is no solid evidence to corroborate the professor’s suspicion. Some students who are caught plagiarizing aggressively deny any wrongdoing. They file appeals in an attempt to convince a committee that Aristotle actually plagiarized them. â€Å"They file appeals in an attempt to convince a comm ittee that Aristotle actually plagiarized them† (Rosenberg, 2011). 2. The paragraph below is a second excerpt from the Principled Autonomy and Plagiarism article. Please paraphrase this information in your own words including proper in-text citations in the space provided below the paragraph. 3. One could argue that any professor who checks for plagiarized papers is inveterately untrusting. Should we assume that every student is a potential cheater? Trust indeed forms the foundation for every relationship. The professor/student

Climate change and Emission Trading Essay Example | Topics and Well Written Essays - 2000 words

Climate change and Emission Trading - Essay Example In October 2006, Nicholas Stern, head of the United Kingdom's government economics services presented his report on the economics of climate change to the British Government [Stern, 2007]. The stern Report estimates that "if we don't act, the overall costs and risks of climate change will be equivalent to loosing at least 5% of global gross domestic product (GDP) each year, now and forever. If a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20% of GDP or more. "In contrast, the cost of action-reducing GHG emissions to avoid the worst impacts of climate change-can be limited to around 1% of global GDP each year". These conclusions are in sharp contrast to the implicit assumptions in public statements on climate change. The stern report finds that climate change is not just a nuisance, but can significantly reduce economic growth. And that mitigating climate change is not all that expensive. The stern report concludes, "The benefits of st rong, early action considerably outweigh the costs". The impacts of climate change are, not evenly distributed. The poorest countries and people will, suffer earlier and most. And if when the damages it will be too late to reverse the process. Thus we have to look ahead. This is because the countries which have less resources to counter their impact of climate change and also because developing countries are often heavily dependent on agriculture-the most climate sensitive of economic sectors. The stern report finds that while "emission have been, and continue to be driven by economic growth; yet stabilization of GHG concentration in the atmosphere is feasible and consistent with continued growth". The report recognizes that achieving large emission reductions will have a cost. The estimated annual cost of stabilization at 500-550 PPM CO2 will be around 1% of GDP by 2050- a level that is significant but manageable. Climate change mitigation normally involves reducing GHG emissions. Mitigation can also involve removing CO2 from the atmosphere, usually through a forestation and reforestation; such activities are called CO2 sinks. Improved efficiency in the use of fossil fuels and increased use of renewable energy sources are among the most promising option for reducing CO2 emissions. The lowest cost mitigation options generally involve energy efficiency improvement. Energy saving opportunities is often higher in developing countries and is especially large for buildings and in transport (Enqvist, Naucler & Rosander, 2007). Climate change first gained significance in 1988. Not long afterwards, the United Nations Framework Convention on Climate Change (UNFCCC) was adopted by various governments in May 1992, and came into force, in 1994, (UNFCCC, 1994). Today the UNFCCC is one of the widely supported international environmental agreements ratified by 188 states and the European community. The ultimate aim of the UNFCCC is to achieve stabilization of GHG concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate

Online clothing Business Plan Essay Example | Topics and Well Written Essays - 3250 words

Online clothing Business Plan - Essay Example House of Stella will employ the best managers to handle the various interdependent departments. It will capitalize on the internet and e-business by creating a website that will cater to the needs of the target market. It will further highlight customer service, with highly trained online customer service specialists to handle online queries and providing fashion inputs among the target market. This is the company’s key to getting personal with the client base. Since House of Stella will utilize the online business, it will tie up with other companies having the same business interests. Partnerships with media entities such TV and Magazine Publications will prove to be the driving force for the company’s success. Efforts such as this will spark interest in the market and establish word of mouth and referral among viewers and patrons alike. House of Stella will run under sole proprietorship, with its owner and Chief Operating Officer also one of the principal designers who will create different product lines for the company. Its Headquarters and Manufacturing Hub shall be located in Los Angeles, California. The aim of the company is to provide a wide array of product choices to its target market, which are primarily working women whose age ranges from 21 to 45 years old. The product lines range from the hip-casual, vogue corporate to chic glam. There will be items for all occasions, from everyday wear to formal gowns and apparel. The company will employ the services of the new and upcoming fashion designers fresh from school and just starting out their career. It will tie up with top universities to employ top student designers to undergo on-the-job trainee and apprenticeship with House of Stella, for them to collaborate on designs fit for the target market. 70% of the designers will come from this roster, while the rest will be its in house fashion designers who have already established brands and have their

Genetically Modified Food Essay Example | Topics and Well Written Essays - 2000 words

Genetically Modified Food - Essay Example Other studies resist wide spread and implementation of the technology because of concerns that GMO foods can cross biological boundaries and cause harm to humans and the environment. Besides safety and environmental aspects, the topic draws a lot of socio-economic concerns, public knowledge and attitude, confidence in decision-making institutions and ethical concerns that shape consumer perceptions of the risks posed by GM foods. Public opinion is a force that should have been taken into account if gene engineering needed to be successful in developing new product especially the controversial GM foods. The issue of GM food is made complex by the various interested groups, the different perceptions of risk and reward as well as the conflicting perceptions regarding the benefits and costs associated with the controversial products. The answers behind the controversy are complicated ranging from ethical to religious to even potential health and safety impacts posed by the technology in GM foods. Supporters of the genetic modification in foods highlight the premise that the technology is capable of meeting not only the basic food needs of the society but also achieving nutritional, environmental and economic benefits to the consumers. Sceptics of GM foods consider this to an unnecessary interference with nature that poses unknown and potentially catastrophic consequences. According to Hossain et al (2003), regardless of the potential of GM foods, they have received mixed regulatory and public acceptance within the US and other parts of the world. Moreover, regardless of the prevailing technological challenges, consumer acceptance of GM foods remains an essential factor that determines the future of the technology. This stems from the scarcity of reliable information regarding consumer awareness and perception concerning the significant subject. Based on a sample population of students, Hossain et al (2003) found the students were reluctant to consume food with GM

Panama and suez canals Essay Example | Topics and Well Written Essays - 2000 words

Panama and suez canals - Essay Example The Suez Canal is an important route for the transportation of oil from the Gulf Countries to around the globe. Primarily, the most important reason for the construction of the Panama Canal was to facilitate the voyage of ships travelling from Pacific Ocean to the Atlantic Ocean and vice versa. Voyages prior to the construction of the canal took a long time. Alessandro Malaspina during his expedition of 1788-1793 expressed the need for the construction of a canal which would prove beneficial for trade. He also produced a detailed outline for the construction of the canal. US interests in creating the Panama Canal were sparked during the Spanish American War. On the other hand, the Suez Canal was not the first attempt to connect the Egyptian Nile to the Mediterranean Sea and the Red Sea. The first canal to connect Nile delta and the Red Sea was constructed approximately in the 13th century for the economic development of the area. The construction of a modern canal on the Suez isthmus was first proposed by Napoleon Bonaparte during the late 1700s, in an attempt to create trade problems for the British. According to Napoleon, the construction of the canal controlled by French would force British to either pay dues or transport their goods via the route involving southern Africa. However, due to various reasons including miscalculation of measurements, Napoleon’s ideas never materialized and the construction was stopped. Attempts to construct a canal on the Suez isthmus began again in mid 1800s. In 1858, the construction of the Suez Canal was started by The Universal Suez Ship Canal Company. The major aim of the construction was to provide an easy and short route for the transportation of goods and oil around the world. Secondly, oil is the major export product of most Gulf Countries and a speedy route was required to transport the oil from these countries to the world. The strategic

Set Up and Operate a Business in Foreign Country Essay Example for Free

Set Up and Operate a Business in Foreign Country Essay This paper deals with the international business. It emphasizes on the means to start the business and the cost associated with the initiation of the business. It also describes the most important aspect of managing human resource. Because of the competitive environment, the need to do the business internationally has increased. This paper provides the overview of the two countries i. e. china and South Africa. Broad description of the legal processes that were supposed to be followed by the company to initiate business in the China has been explained. Apart from this, the staffing of local and expatriate staff along with the labor organization and legislation of the foreign country has been described. Therefore, the paper provides detailed analysis of the conditions that should be kept in mind while establishing business in the foreign country. Introduction International business is a term, which is used collectively to describe issues relating to the firm’s operations with interests in numerous countries. These firms are sometimes referred as multinational corporations. The main area of concern in the international business is the cultural considerations. These considerations include dissimilarity in law and legal systems, living standards, language barriers, climate and many more (Cherunilam, 2005). All these issues need to be overcome for an MNC in order to obtain success in an overseas venture. Nationwide economic growth and globalization of the economy provide an outstanding background for businesses in China as compared to the South Africa. Nevertheless, the growth of the company and sustainability can be hampered by the factors like industry consolidation, economic reform and globalization. The project of building substantial companies and integrating them effectively into the global marketplace is a complicated task. Reasons: Why Company Going Global Many companies and businesses get into international selling because of the existence of competitive environment. This environment compels the company to move further rather than staying at the same stage and size by just focusing on the quality. Another reason of growth and expansion is the fear of loosing the customers. If the company would not show sustainable growth, competitors would move ahead and chances of loosing of customers will increase (Cherunilam, 2005). Other general reasons for going international are: political changes like changes in the regulation of work and safety and economic changes that include cost of production. If there is an increase in the cost of production at home, company looks for places where cost of production is reasonable. The four major objectives that compel the company to go for international business are: to enlarge the sales, to successfully get hold of the resources, to diversify the sources of sales and to look for the diversifying the supplies (Kazmi, 2002). Overview Population China: China is a socialist republic and the most populous country with population over 1. 3 billion. It is having 90. 9% literacy rate (male: 95. 1% female: 86. 5%). The average educational achievement in China is low. South Africa: South Africa is a nation of diverse origins, languages, cultures and beliefs with population over 47-million. It is having 86. 4% literacy rate (male 87% female 85. 7%) of total population. The average educational achievement in South Africa is very low. Geographical Location  China: China is located in Eastern Asia bordering the East China Sea, Korea Bay, Yellow Sea and South China Sea between North Korea and Vietnam. China has mountains, high plateaus, deserts in west and plains, deltas, and hills in eastern region. The geographic coordinates of China are 35 °00N, 105 °00E. The total area coverage of China is 9,596,960 square kilometers (land area is 9,326,410 square km and water is 270,550 square km). China is the worlds third-largest country in total area after Russia and Canada, and the second largest country by land area. The total land boundary is 22,117 km and the border countries are Afghanistan, Bhutan, Burma, India, Kazakhstan, North Korea, Kyrgyzstan, Laos, Mongolia, Nepal, Pakistan, Russia, Tajikistan and Vietnam. China’s coastline is 14,500 km (China, 2008). South Africa: South Africa is located at the southern region of Africa. The geographic coordinates of South Africa are 29 00 S, 24 00 E. The total area is 1,219,912 sq km. The total land boundary is 4,862 km and the border countries are Botswana, Lesotho, Mozambique, Namibia, Swaziland and Zimbabwe. Its coastline is 2,798 km. South Africa’s northwest region is desert and eastern is well watered. GDP, Per Capital Income, Current Inflation Rate, Unemployment Rate China: The GDP is $3. 42 trillion and officially recorded GDP growth rate is 11. 4% in 2007, per capital income is $ 2000, inflation rate is 7% in 2007 and it has jumped to 8. 7 percent in February after severe winter storms disrupted the economy and worsened food shortages (Chinas inflation at decade high, 2008). Unemployment rate in urban area is 8%-10% (China Unemployment rate, 2008). South Africa: The GDP is $283 billion, real GDP growth rate is 5. % in 2007, per capita income is $ 5700, inflation rate is 7. 1% and unemployment rate is 23% in Sep. 2007 (South Africa: Profile, 2008). Type of Legal System China: The legal system is based on civil law system. It is derived from Soviet and continental civil code legal principles. The legislature holds the power to interpret the acts. There are seven categories of laws in china’s legal system; these are: the constitution and related laws, civil and commercial laws, administrative laws, economic laws, social laws, criminal laws, and litigation and non-litigation procedural laws (The Constitution and Legal System, 2008). South Africa: The legal system is based on Roman-Dutch law and English common law. There is an independent judiciary in South Africa. Constitutional Court and Supreme Court are the highest court in the country. Constitutional Court deals with constitutional matters and Supreme Court deals with the final appeals of all the other matters. The bill of rights provides fundamental political and social rights to South Africas citizens (South Africa, 2008). Type of Economic System China: China is a major economic power and it has great potential of the development. Previously, the public sector was in dominant position, but after 2001, a socialistic market economy is taking place in China and the intensive mode is replacing the extensive mode of economic growth (Economic System, 2008). South Africa: The South African economy is an industrialized and productive economy. It has inadequate distribution of income wealth. Labor is divided into formal and informal sector. Formal sector is more developed, which is based on agriculture, manufacturing, services and mining. South Africa is looking forward for privatization along with free arket economy and favorable investment climate (Economy: South Africa, 2008). Type of Political System China: The National People Congress is the highest authority of state power in China. The people congress system is the fundamental political system in China. The representatives are elected by people at all levels. South Africa: The South African Republic is a federal state constituting of a national government and nine provincial governments. The constitution of South Africa was adopted in 1996 and implemented officially on 4 February, 1997. President of South Africa is the executive head of the state and leads the cabinet. He is elected for a two five year terms by the parliament (South Africa, 2008). Estimates of Future Economic Growth General Economic Projects China: China has become the world’s fastest growing economy after the economic reforms in 1979. It has achieved 11. 4% GDP growth rare in 2007. Industrial manufacturing expansion has contributed in China’s rapid economic growth. European Union, Japan, United States, Hong Kong and ASEAN are the major trading partner of China. Rapid economic growth of China results in an increase in income, which in turn makes China a huge market for a variety of goods and services. So it would be beneficial for any company to start operation in China. South Africa: In previous years, South African economy was not doing well. Government was facing the problem of unemployment and poverty. But in recent years, country is seeking to achieve stable growth rate. To promote economic growth, South Africa is making optimal use of available resources and reducing completer dependence on primary sector industries. South African companies are now investing in retail, banking services, telecommunication and shipping industry. Government is seeking to liberalize its economic policies to attract FDI and increase future economic growth and now outsider companies may think to start its operations in South Africa. Social and Cultural Factors Social factor in China: In China, the main focus of the business entities is on the corporate social responsibility. The Chinese region has become the region full of opportunities for MNC’s in these days because of the rapid rise, elaborating receptiveness and growing consumer market. The social factors reflect the true picture of society’s attitude towards the corporate. The symmetrical society structure stimulates forces on businesses for concentrating on corporate social responsibility (Kyoon, 2007). Cultural factors in China: Understanding the culture of a country is one of the important factors in front of modern organizations. The traditions and customs vary among towns, cities and provinces in China. The social network structures in China assist in understanding the information sharing between the people (Kyoon, 2007). The Chinese environment is now open for the outsiders. The cultural values include the belief in God, unity, optimism and readiness to work together according to the rules of law. Social factor in South Africa: The social environment of South Africa is highly imbalanced and not much developed. It suffers from the problems of increasing population, poverty, illiteracy and lack of resources. The population of South Africa was 40. 6 million in 1996, which is growing rapidly at the rate of 2% per year. If the same trend continues, then by the year 2035, the population of South Africa will be approximately 86 million. This will be a problematic situation as the country has limited resources to support its increasing population. There is already a pressure on the resources to meet the needs and requirements of the people (Social Environment, 1999). Many people in the country live in informal and inadequate houses and just half of the population lives in towns and cities. Many people living in rural as well as urban areas even do not have access to water supply, electricity, sanitation and other services. Nowadays, the urban population of South Africa is rapidly increasing because of factors like growing employment opportunities, land reform and restitution and immigration from other countries. Unemployment and poverty are the major problems in South Africa that affect the social life of the people. The poverty level is the highest among the Black population of South Africa. It has reached up to a level of 60%. The education level of the country has increased as compared to the previous year levels, as the country has reformed its educational system. Almost, all South Africans now have access to education but still about 7. 5 million people are functionally illiterate. Such factors contribute to high crime rates in the country that have noticeably increased in the urban areas. These and other factors contribute to the high crime rates currently experienced in many urban centers. To promote sustainable development and reduce social imbalances such as poverty, unemployment and pressure on natural resources, the Government has developed a number of policies and passed a number of laws aiming at some constructive work in this direction. These include the Reconstruction and Development Programme, a White Paper on Population Policy, and the National Crime Prevention Strategy (Social Environment, 1999). Cultural Factor in South Africa: Africa has a diverse cultural environment with about 800 languages spoken all over the continent. Among these, South Africa have 11 official languages of its own, i. e. English, Afrikaans, Tsonga, Xhosa, Ndebele, Southern Sotho, Zulu, Tswana, Venda, Northern Sotho, and Swati. There are many cross-cultural challenges that are critical to success and organizations should be prepared to face these challenges. Analysis  The company has chosen china for its operations as china has successfully emerged as the best suitable market for the consumer products, especially in terms of the growth rate, potential and the market size. China is providing huge benefits to attract the players from the United States. The growth graph of the china depicts that the market of the consumer electronics is growing with a CAGR of 11. 7 percent from the year 2002 to 2006. Future also shows the greater intensity of market growth. There is a greater possibility of bright future in Consumer Products. The Company is willing to start its operation. Another major factor for establishing operation in china is the population as it is regarded the driving factor for any business. Apart from this, there is a well established market of credit card, which has increased the popularity of the consumer products in the country (Windsor Jones, 1999). China is the highly populous country and demands for consumer products are fuelling with greater pace. In china, urban centers are emerging which are called secondary cities, which comprise of 8 to 10 million people. These cities have huge buying power and industrial development. These cities would be best for the company’s operations and are located interiorly away from the cost. Tsingtao is a city, which is suitable for the operation of the company because its urban area is quickly expanding. It is also having excellent connections with the countryside. The disposable income of the people is quite similar to the people in the bigger cities. Another reason for selecting this place is that the people in this city show greater likeability towards the product of the United States and relate the product with greater degree of integrity. People show positive view and experience towards the U. S consumer products. Operations In order to establish operation in china, company’s chairperson should visit these cities, must talk to the local officials and begin networking. Apart from this, the most important thing is to analyze the competitors’ working and strategies. Another step that the company can adopt is subcontracting, which can be done by forming joint ventures with the manufacturers of china. If the company doesn’t possess enough resources for joint venture, company can go for forming the partnership or consortium in the United States. This consortium acts as the legal entity, which can form partnership with the Chinese manufacturer. The advantage of the consortium is that it reduces risk and the cost for the company (Barron, 2006). While selecting the operations, evaluation should be made based on the analysis of cash accounting and not on absorption accounting. As in absorption accounting, the fixed costs are prorated over small volume of production and thus the number obtained can deter company from moving production to a subcontractor. The other operations include: integrity of product and trade safety, fair balanced economic development, financial sector reform, security energy efficiency, sustainability in environment and bilateral investment. All the above mentioned reforms would help the company to establish business opportunities in china. The agreement between the United States and China that relates to conduction of business with extensive cooperation covers the issue of climate change, environmental sustainability and energy security. This type of agreement would advance the innovation in the technology and the acceptance of extremely-efficient and clean energy technology will encourage the development of technology so as to address the changes in the climate and promoting natural resources. Three major factors, which can determine the success in the Chinese market and should be kept in mind, are: †¢Culture: Understanding of Chinese culture and behavior can provide better option to fulfill the demands of the customers. †¢Value Proposition: This includes having the knowledge of technical know how and understanding the level of competitiveness. †¢Negotiation: The Company should implement negotiation technique as per the way of Chinese. Success of doing business in China depends greatly on the extent of adoption to the requirements of he local customs instead of the value proposition of foreign investors. Legal processes In the process of starting a new business, Legal and regulatory processes play a very vital role. Legal processes include several restrictions, intrusive bureaucracy, dissimilar understanding of regulations from place to place even between authorities and recent formulations of policies that are aimed at safeguarding the domestic companies. Therefore, before starting any operation in the foreign country (china) the company should understand regulations and their applications before entering into any agreement. The company should look for legal proposals from experienced professional firms. Due attention should be given to the financial and legal background and also on the reputation of key partners. Apart from this, partners and employees should be educated on the protection of the intellectual property. If required, the rights can be enforced but for this, all the terms and conditions should be well known. Management Organization Structure Organization structure plays a vital role in determining the success of the company in the host country. Therefore, there is a requirement of change in the organization structure in order to accommodate a firm’s internationalization approach in answer to the worldwide competition. Significant research has shown that the structure of the firm must be conducive to the strategy implementation. In simple words, it can be said that the structure should â€Å"fit† the strategy. Managers should work towards achieving the fit between the structure and the strategy (Gupta, 2007). Management organizational structure refers to the representation of a formal structure, which describes relationship inside an organization. The level to which authorization is assigned ascertains centralization and decentralization. Most of the MNC’s in their initial phases of globalization utilized an international section traversing certain regions of the world to manage the functions in those regions. Matrix organizational structure is very effective for the business. The structure of the organization is decentralized, which merge the advantages of being large with the agility and concentration of smaller organizations. The small segments of the business assist in concentrating more on the needs and equirements of the customers and employees effectively. The company’s employees are associated with the goals and objectives for an established global enterprise. The organization is mainly focusing on the way in which the products and services are delivered to the customers. The development and marketing of products and services in an effective provision provide specialized and quality services to external and internal customers. The autonomous operating companies broaden the geographic reach of the associates around the world and provide larger marketplace and product focus. This way, the employees get closer to the customers and business. The employees would be able to gain more sensation of ownership in driving the business. The employees are authorized to aim their business to fulfill the varying needs of customers inside their regions (Mathew, 2003). The decentralized operating companies, associates and business sections are joined in the organization structure, which ensures that the activities are aligned with the overall strategic objectives. All the employees perform their work systematically with the high ethical standards. As the company rises, the structure also develops, assuring the effective growth of the business portfolio. In recent years, the business sections have constituted shared service groups that raise and confirm the capabilities of the individual companies in the elementary domains of responsibility. The corporate headquarters in the U. S. function with the family of companies for producing great synergism and efficiency by collaboration, dispersion of better patterns and organization of shared business information. The corporate headquarters render direction and services in different critical areas, which include human resources, finance, advertising, and law. The consequences of environmental circumstance (instability of technology), industrial circumstance (production technology) and organization structure on the involvement of customer in product development are the main areas of concentration in China (Windsor Jones, 1999). The earlier results demonstrate that for going through customer orientation in the firms at China, the company has to modulate towards market driven economic entities.

Childhood Obesity Essay Introduction Essay Example for Free

Childhood Obesity Essay Introduction Essay Introduction Obesity is a serious and major health complication contributing to 112,000 deaths annually most of which are preventable. Obesity is to a condition where excess fat has collected in the body has to the level of adversely affecting one’s health. There is no general agreement on the lowest explanations of obesity in adolescents and children. Therefore, most professionals accept the guidelines published on body mass index (BMI) to measure cases of overweight in children and adolescents. The increase of obesity among children in 2008 increased from 5 percent to 17 percent in the same year. This paper will focus to explore the causes of obesity in children and give methods on how it can be prevented. One is considered as obese or overweight when his or her body mass index BMI exceeds 30 kg/m2) (Flegal, 2000). Body mass index is obtained by measuring an individual’s weight in kilograms relative to his or her height in meters. Presently obesity is the widest spread medical problem affecting children and teenagers in developed countries like the United States. Other measure of obesity include: a) Weight-to-height tables- These tables define being overweight and give ranges for a healthy weight based on the height of a teenager or child. b) Body fat percentage- Fat a percentage of body weight, is a strong indicator of obesity. Boys are regarded obese when their body fat is above 25 percent and girls over 32 percent. Obesity has profound effects on the life of a patient by increasing the possibility of contracting variety of diseases. The following are health consequences of obesity according to Center for Disease Control and Prevention (CDC). Cancers (breast, endometrial and colon) Coronary heart disease Hypertension Stroke Type 2 diabetes Dyslipidemia Osteoarthritis Gallbladder and liver and disease Gynecological problems (infertility, abnormal menses) In addition to the health consequences above, obesity can also create social, as well as, emotional problems to an individual or patient due to the stigma associated with one being overweight. Causes of obesity Physical exercise and dieting are among the best ways for treating obesity. One can improve his or her diet quality by reducing the intake foods rich in energy, e.g. those high in sugars and fat and increasing the consumption of dietary fiber. Drugs such as anti- obesity medication drugs may be taken to lower appetite or inhibit the absorption of fat. A gastric balloon may enable one lose weight if exercise, medication and diet are not effective. Surgery may also be performed to lower stomach volume and or bowel length. This leads to earlier satiation and reduced ability to absorb nutrients from food. Below are some of the major causes of obesity (Ferry, 2011). Physical inactivity- The increased use of computers, video games and televisions have largely contributed to an inactive lifestyle for many teenagers and children in developed countries like the U.S. On average, teenagers and children in the United States of America spend three hours daily watching television. This form of recreation not only uses little energy but also encourages eating of snacks. Only one-third of children in the United States have daily physical exercise education in school. Dietary habits- The eating habits of teenagers and children have shifted away from healthy foods such as vegetables and whole grains to enormous reliance on fast foods, sugary drinks and eating processed snacks. These foods tend to contain high levels of fat or calories but low in essential nutrients. Unhealthy eating habits include eating when not hungry, watching television while eating or eating while doing homework e.t.c. Genetic factors- Some families tend to have obesity. Parents who are obese tend to have obese children. It is very  crucial to note that obesity does not occur through genetics alone, but when one eats more calories than he or she uses. Socioeconomic status-Non working parents or families with low incomes are more likely to consume excess calories for a given level of activity. Specific medical conditions can cause obesity but are rare. This includes inherited disorders of metabolism, hormone or chemical imbalances. Certain medications can alter how the body stores fat or processes food, thus resulting to weight gain. There is limited evidence to support the fact that some people who are overweight eat little yet gain weight due to a slow metabolism. Obese people require more energy expenditure than people who are thin due to the energy required to maintain their massive body mass. Conclusion Obesity is considered a major cause of deaths worldwide with increasing prevalence in children, teenagers and adults. The American Heart Association has guidelines for healthy children and families. It recommends that one should eat adequate calories and eat a wide variety of foods to obtain adequate nutrition. It also recommends that the total cholesterol taken per day should be less than 300mg. These guidelines are only applicable to children above two years of age. It is necessary for everyone in the family to apply these guidelines and not just those who are obese. Schools should introduce anti bullying campaign to assist overweight children. The biggest responsibility falls on parents to ensure their children observe healthy eating tips. References American Heart Association. Dietary Recommendations for Healthy Children. Apr. 19, 2012. . Ferry Jr., R.J., ed. Nutrition and Health: Management of Pediatric Obesity and Diabetes. New York: Springer Science+Business Media, 2011: 416. United States. Centers for Disease Control and Prevention. Childhood Overweight and Obesity. Apr. 27, 2012. .

Load Balancing as an Optimization Problem: GSO Solution

Load Balancing as an Optimization Problem: GSO Solution METHODOLOGY INTRODUCTION In this chapter, we presented a novel methodology which considers load balancing as an optimization problem. A stochastic approach, Glowworm swarm optimization (GSO) is employed to solve the above mentioned optimization problem. In the proposed method, excellent features of various existing load balancing algorithms as discussed chapter 2 are also integrated. PROPOSED METHODOLOGY There are numerous cloud computing categories. This work mainly focuses on a public cloud. A public cloud is based on the typical cloud computing model, and its services provided by service provider [42]. A public cloud will comprises of several nodes and the nodes are in different physical locations. Cloud is partitioned to manage this large cloud. A cloud consists of several cloud partition with each partition having its own load balancer and there is a main controller which manage all these partition. 3.2.1 Job Assignment Strategy Algorithm for assigning the jobs to cloud partition as shown in Fig. 2 Step 1: jobs arrive at the main controller Step 2: choosing the cloud partition Step 3: if cloud partition state is idle or normal state then Step 4: jobs arrive at the cloud partition balancer. Step 5: assigning the jobs to particular nodes based on the strategy. Figure 3.1: Flowchart of Proposed Job Assignment Strategy. Load Balancing Strategy In cloud, Load Balancing is a technique to allocate workload over one or more servers, network boundary, hard drives, or other total resources. Representative datacenter implementations depends on massive, significant computing hardware and network communications, which are subject to the common risks linked with any physical device, including hardware failure, power interruptions and resource limits in case of high demand. High-quality of load balance will increase the performance of the entire cloud.Though, there is no general procedure that can work in all possible different conditions. There are several method have been employed to solve existing problem. Each specific method has its merit in a specific area but not in all circumstances. Hence, proposed model combines various methods and interchanges between appropriate load balance methods as per system status. Here, the idle status uses an Fuzzy Logic while the normal status uses a global swarm optimization based load balancing strategy. Load Balancing using Fuzzy Logic When the status of cloud partition is idle, several computing resources are free and comparatively few jobs are receiving. In these circumstances, this cloud partition has the capability to process jobs as fast as possible so an effortless load balancing method can be used. Zadeh [12] proposed a fuzzy set theory in which the set boundaries were not precisely defined, but in fact boundaries were gradational. Such a set is characterized by continuum of grades of membership function which allocates to each object a membership grade ranging from zero to one [12]. A new load balancing algorithm based on Fuzzy Logic in Virtualized environment of cloud computing is implemented to achieve better processing and response time. The load balancing algorithm is implemented before it outstretch the processing servers the job is programmed based on various input parameters like assigned load of Virtual Machine (VM) and processor speed. It contains the information in each Virtual machine (VM) and numbers of request currently assigned to VM of the system. Therefore, It recognize the least loaded machine, when a user request come to process its job then it identified the first least loaded machine and process user request but in case of more than one least loaded machine available, In that case, we tried to implement the new Fuzzy logic based load balancing technique, where the fuzzy logic is very natural like human language by which we can formulate the load balancing problem. The fuzzification process is carried out by fuzzifier that transforms two types of input data like assigned load and processor speed of Virtual Machine (VM) and one output as balanced load which are required in the inference system shown in figure 3.2, figure 3.3 and figure 3.4 respectively. By evaluating the load and processor speed in virtual machine in our proposed work like two input parameters to produce the better value to equalize the load in cloud environment, fuzzy logic is used. These parameters are taken for inputs to the fuzzifier, which are needed to estimate the balanced load as output as shown in figure 3.4. Figure 3.2: Membership input function of Processor Speed Figure 3.3: Membership input function of Assigned Load Figure 3.3: Membership output function of Balanced Load To affiliate the outputs of the inferential rules [13] , low-high inference method is employed. A number of IF-THEN rules are determined by making use of the rule-based fuzzy logic to get the output response with given input conditions, here the rule is comprised from a set of semantic control rules and the supporting control objectives in the system. If (processor_speed is low) and (assigned_load is least) then (balanced_load is medium) If (processor_speed is low) and (assigned_load is medium) then (balanced_load is low) If (processor_speed is low) and (assigned_load is high) then (balanced_load is low) If (processor_speed is Medium) and (assigned_load is least) then (balanced_load is high) If (processor_speed is Medium) and (assigned_load is medium) then (balanced_load is medium) If (processor_speed is Medium) and (assigned_load is high) then (balanced_load is low) If (processor_speed is high) and (assigned_load is least) then (balanced_load is high) If (processor_speed is high) and (assigned_load is medium) then (balanced_load is medium) If (processor_speed is high) and (assigned_load is high) then (balanced_load is medium) If (processor_speed is very_high) and (assigned_load is least) then (balanced_load is high) If (processor_speed is very_high) and (assigned_load is medium) then (balanced_load is high) If (processor_speed is very_high) and (assigned_load is high) then (balanced_load is medium) As shown above, there are 12 potential logical output response conclusions in our proposed work. The Defuzzification is the method of changing fuzzy output set into a single value and the smallest of minimum (SOM) procedure is employed for the defuzzification. The total sum of a fuzzy set comprises a range of output values that are defuzzified in order to decode a single output value. Defuzzifier embraces the accumulated semantic values from the latent fuzzy control action and produces a non-fuzzy control output, which enacts the balanced load associated to load conditions. The defuzzification process is used to evaluate the membership function for the accumulated output. The algorithm-1 is defined to manage the load in Virtual machine of cloud computing as follows: Begin Request_to_resource() L1 If (resource free) Begin Estimate connection_string() Select fuzzy_rulebase() Return resource End Else Begin If (Anymore resource found) Select_next_resource() Go to L1 Else Exit End End The proposed algorithm starts with request a connection to resource. It tests for availability of resource. It Calculate the connection strength if the resource found. Then select the connection, which is used to access the resource as per processor speed and load in virtual machine using fuzzy logic. Load Balancing using GSO (Glowworm Swarm Optimization) When the status of cloud partition is normal, tasks arrives with faster rate compare to idle state and the condition becomes more complex, thus a novel strategy is deployed for load balancing. Each user desired his job in the shortest time; as a result the public cloud requires a strategy that can finish the job of all users with adequate response. In this optimization algorithm, each glowworm i is distributed in the objective function definition space [14]. These glowworms transfer own luciferin values and have the respective scope called local-decision range . As the glow searches in the local-decision range for the neighbor set, in the neighbor set, glow attracted to the neighbor with brightest glow. That is glow selects neighbor whose luciferin value greater than its own, and the flight direction will change each time different will change with change in selected neighbor. Each glowworm encodes the object function value at its current location into luciferin value and advertises the same within its neighborhood. The neighbor’s set of glowworm comprises of those glowworms that have comparatively a higher luciferin value and that are situated within a dynamic decision range and their movements are updated by equation (8) at each iteration. Local-decision range update: (8) and is the glowworm local-decision range at the iteration, is the sensor range, is the neighbourhood threshold, the parameter generates the rate of change of the neighborhood range. Local-decision range consist of the following number of glow: (9) and, is the glowworm position at the t iteration, is the glowworm luciferin at the iteration.; the set of neighbours of glowworm comprises of those glowworms that have a comparatively higher luciferin value and that are situated within a dynamic decision range whose range is defined above by a circular sensor range Each glowworm as given in equation (10), i elects a neighbor j with a probability and process toward it as: Probability distribution used to select a neighbor: (10) Movement update: (11) Luciferin-update: (12) and is a luciferin value of glowworm at each iteration, leads to the reflection of the accumulative goodness of the path . This path is followed by the glowworms in their ongoing luciferin values, the parameter only ascends the function fitness values, is the value of test function. In this optimization algorithm, each glowworm is distributed in the objective function definition space [43]. These glowworms transfer own luciferin values and have the respective scope called local-decision range . As the glow searches in the local-decision range for the neighbor set, in the neighbor set, glow attracted to the neighbor with brightest glow. That is glow selects neighbor whose luciferin value greater than its own, and the flight direction will change each time different will change with change in selected neighbor. Figure 3.4 shows the flowchart of GSO algorithm. In the context of load balancing for cloud computing GSO algorithm check the status of the server simultaneously if it is free. For example a user wants to download a file size of 50 MB. It checks by iteration if user gets entered in server, it gets the message as achieve target. Figure 3.4: Flowchart of GSO Analysis of the Accrual Anomaly | Accounting Dissertation Analysis of the Accrual Anomaly | Accounting Dissertation Sloan (1996), in a determinative paper, added the accrual anomaly in the list of the market imperfections. Since then, academics have focused on the empirical investigation of the anomaly and the connection it has with other misspricing phenomena. The accrual anomaly is still at an embryonic stage and further research is needed to confirm the profitability of an accruals based strategy net of transaction costs. The current study investigates the accrual anomaly while taking into consideration a UK sample from 1991 to 2008. In addition, the predictive power of the Fama and French (1996) factors HML and SMB is being tested along with the industrial production growth, the dividend yield and the term structure of the interest rates. Chapter 1 Introduction Since the introduction of the random walk theory which formed the basis for the evolvement of the Efficient Market Hypothesis (EMH hereafter) proposed by Fama (1965), the financial literature has made many advances but a piece of the puzzle that is still missing is whether the EMH holds. Undoubtedly, the aforementioned debate can be considered as one of the most fruitful and fast progressing financial debates of the last two decades. The Efficient Market Hypothesis has met many challenges regardless of which of its three forms are being investigated. However, the weak form and semi strong hypothesis have been the most controversial. A literally vast collection of academic papers discuss, explore and argue for phenomena that seem to reject that the financial markets are efficient. The famous label of â€Å"anomaly† has taken several forms. Many well-known anomalies such as the contrarian investment, the post announcement drift, the accruals anomaly and many others are just the beginning of an endless trip. There is absolutely no doubt that many more are going to be introduced and evidence for the ability for the investors to earn abnormal returns will be documented. Recently, academics try to expand their investigation on whether these well-documented anomalies are actually profitable due to several limitations (transaction costs etc) and whether the anomalies are connected. Many papers are exploring the connection of the anomalies with each other proposing the existence of a â€Å"principal† misspricing that is documented into several forms. The current study tries to look into the anomaly that was initially documented by Sloan (1996) and has been labelled as the â€Å"accrual anomaly†. The accrual anomaly can be characterised as being at an embryonic stage if the basis for comparison is the amount of publications and the dimensions of the anomaly that light has been shed on. The facts for the accrual anomaly suggest the existence of the opportunity for investors to earn abnormal returns by taking advantage of simple publicly available information. On the other hand, accruals comprising an accounting figure have been approached from different points of view with consequences visible in the results of the academic papers. Furthermore, Stark et al (2009) challenge the actual profitability of the accrual anomaly by simply taking transaction costs into consideration. The present paper employs an accrual strategy for a sample comprising of UK firms during 1991-2008. The aim is to empirically investigate the profitability of such strategies during the whole data sample. The methodology for the calculation of accruals is largely based on the paper of Hardouvelis et al (2009). Stark et al (2009) propose that the positive excess returns of the accruals’ strategy are based on the profitability of small stock. In order to investigate the aforementioned claim, the current study employs an additional strategy by constructing intersecting portfolios based on accruals and size. Finally, five variables are being investigating at the second part of the study for their predictive power on the excess returns of the constructed portfolios. The monumental paper of Fama and French (1996) documented an impressive performance of two constructed variables (the returns of portfolios named HML and SMB). In addition, the dividend yield of the FTSE all share index, the industrial production growth and the term structure of the interest rates will be investigated as they are considered as potential candidates for the prediction of stock returns. Chapter 2 Literature review 2.1. Introduction During the last century the financial world has offered many substantial advances. From the Portfolio Theory of Markowitz (1952) to the development of the Capital Asset Pricing Model of Sharpe (1964) and Lintner (1965), and from the market Efficient Market Hypothesis (hereafter EMH), developed by Fama (1965), to the recent literature that challenges both the CAPM and the EMH, they all seem to be a chain reaction.   The financial academic world aims to give difficult but important answers on whether markets are efficient and on how investors should allocate their funds. During the last two decades, many researchers have documented that there exist strategies that challenge the claim of the supporters of the efficient and complete markets. In this chapter, the effort will be focused on reviewing the financial literature from the birth of the idea of the EMH until the recent publications that confirm, reject or challenge it. In a determinative paper, Fama (1970) defined efficient markets and categorised them according to the type of information used by investors. Since then, the finance literature has offered a plethora of studies that aim to test or prove whether markets are indeed efficient or not. Well known anomalies such as the post announcement drift, the value-growth anomaly or the accruals anomaly have been the theme of many articles ever since. 2.2. Review of the value-growth anomaly We consider as helpful to review the literature for the value growth-anomaly since it was one of the first anomalies to be investigated in such an extent. In addition, the research for the value-growth anomaly has yielded a largely productive debate on whether the documented returns are due to higher risk or other source of mispricing. Basu (1970) concluded that stocks with high Earnings to Price ratio tend to outperform stocks with low E/P. Lakonishok, Shleifer and Vishny (1994) documented that stocks that appear to have low price to a fundamental (book value, earnings, dividends etc) can outperform stocks with high price to a fundamental measure of value. Lakonishok, Shleifer and Vishny (1994) initiated a productive period that aimed to settle the dispute on the EMH and investigate the causes of such â€Å"anomalies†. Thus, the aforementioned researchers sparked the debate not only on the market efficiency hypothesis but also on what are the sources for these phenomena. Fama and French (1992) supported the idea that certain stocks outperform their counterparts due to the larger risk that the investors bear. Lakonishok, Shleifer and Vishny (1994) supported the idea that investors fail to correctly react to information that is available to them. The same idea was supported by many researchers such as Piotroski (2001). The latter also constructed a score in order to categorise stocks with high B/M that can yield positive abnormal returns (namely, the F Score). Additionally, the â€Å"market efficiency debate â€Å"drove behavioural finance to rise in popularity. The value-growth phenomenon has yielded many articles that aim to find evidence that a profitable strategy is feasible or trace the sources of these profits but, at the same time, the main approach adopted in each study varies significantly. Asness (1997) and Daniel and Titman (1999) examine the price momentum, while Lakonishok, Sougiannis and Chan (2001) examine the impact of the value of intangible assets on security returns. In addition, researchers have found evidence that the value-growth strategies tend to be successful worldwide, as their results suggest. To name a few, Chan, Hamao and Lakonishok (1991) focused on the Japanese market, Put and Veld (1995) based their research on France, Germany and the Netherlands and Gregory, Harris and Michou (2001) examined the UK stock market. It is worth mentioning that solely the evidence of such profitable strategies could be sufficient to draw the attention of practitioners, but academics are additionally interested in exploring the main cause of these arising opportunities as well as the relationship between the aforementioned phenomena (namely, the value growth, post announcement drift and the accrual anomaly). In general, two schools of thought have been developed: the one that supports the risk based explanation or, in other words, that stocks yield higher returns simply because they are riskier, and the one that supports that investors fail to recognise the correct signs included in the available information. 2.3. The accruals anomaly 2.3.1. Introduction of the accrual anomaly. Sloan (1996) documented that firms with high (low) accruals tend to earn negative (positive) returns in the following year. Based on this strategy, a profitable portfolio that has a long position on stocks with low accruals and short position on stocks with high accruals yields approximately 10% abnormal returns. According to Sloan (1996) investors tend to overreact to information on current earnings. Sloan’s (1996) seminar paper has been characterised as a productive work that initiated an interesting to follow debate during the last decade. It is worth noting that even the very recent literature on the accrual anomaly has not reached reconciling conclusion about the main causes of this particular phenomenon and about whether a trading strategy (net of transaction costs) based solely on the mispricing of accruals can be systematically profitable. At this point it is worth mentioning that the accruals have been found to be statistically significant and negative to predict future stock returns. On the other hand, there are papers that examine the accruals and its relations with the aggregate market. A simple example is the paper published by Hirshleifer, Hou and Teoh (2007), who aim to identify the relation of the accruals, if any, with the aggregate stock market. Their findings support that while the operating accruals have been found to be a statistical significant and a negative predictor of the stock returns, the relation with the market portfolio is strong and positive. They support that the sign of the accruals coefficient varies from industry to industry reaching a peek when the High Tech industry is taken into account (1.15), and taking a negative value for the Communication and Beer/Liquor industry. 2.3.2 Evidence for the international presence of the phenomenon. Researchers that investigated the accruals anomaly followed different approaches. At this point, it is worth noting that the evidence shows the accrual anomaly (although it was first found to be present in the US market) to exist worldwide. Leippold and Lohre (2008) examine the accrual anomaly within an international framework. The researchers document that the accrual anomaly is a fact for a plethora of markets. The contribution of the paper though, is the large and â€Å"complete† number of tests used, so that the possibility of pure randomness would be eliminated. Although, similar tests showed that momentum strategies can be profitable, recent methodologies used by the researchers and proposed by Romano and Wolf (2005) and Romano, Shaikh and Wolf (2008), suggest that the accruals anomaly can be partially â€Å"random†. It is noteworthy that the additional tests make the â€Å"anomaly† to fade out for almost all the samples apart from the markets of US, Australia and Denmark. Kaserer and Klingler (2008) examine how the over-reaction of the accrual information is connected with the accounting standards applied. The researchers constructed their sample by solely German firms and their findings document that the anomaly is present in Germany too. We should mention at this point that, interestingly, prior to 2000, that is prior to the adoption of the international accounting standards by Germany, the evidence did not support the existence of the accrual anomaly. However, during 2000-2002, Kaserer and Klingler (2008) found that the market overreacted to accrual information. Hence, the authors support the idea that an additional cause of the anomaly is the lack of legal mechanisms to enforce the preparation of the financial statements according to the international accounting standards which might gave the opportunity to the firms to â€Å"manipulate† their earnings. Another paper that focuses on the worldwide presence of the accruals mispricing is that of Rajgopal and Venkatachalam (2007). Rajgopal and Venkatachalam examined a total of 19 markets and found that the particular market anomaly exists in Australia, UK, Canada and the US. The authors’ primal goal was to identify the key drivers that can distinguish the markets where the anomaly was documented. Their evidence supports the idea that an accrual strategy is favoured in countries where there is a common law tradition, an extensive accrual accounting and a low concentration of firms’ ownership combined with weak shareholders’ rights. LaFond (2005) also considers the existence of the phenomenon within a global framework. The author’s findings support the notion that the accrual anomaly is present worldwide. In addition, LaFond argues that there is not a unique driving factor responsible for the phenomenon across the markets. It is worth noting that LaFond (2005) documented that this particular market imperfection is present in markets with diverse methodology of accrual accounting. Findings are against the idea that the accrual anomaly has any relation with the level of the shareholders protection or a common law tradition, as suggested by Rajgopal and Venkatachalam (2007). Finally, the author suggests that, if any, it is not the different method of accrual accounting (measurement issues) that favours or eliminates the accrual anomaly, but the accrual accounting itself. 2.3.3. Further Evidence for the roots of the accruals anomaly. Additionally, papers such as those of Thomas and Zang (2002) or Hribar (2000) decompose accruals into changes in different items (such as inventory, accounts payable etc). The findings catholically suggest that extreme changes in inventory affect returns the most. On the other hand, many articles connect the accruals with information used by investors, such as the behaviour of insiders or analysts, as the latter can be considered a major signal to the investors for a potential manipulation of the firms’ figures. In particular, Beneish and Vargus (2002) documented that firms with high accruals and significant insider selling have substantial negative returns.  Bradshaw (2001) and Barth and Hutton (2001) examine the analysts’ reports and their relation with the accruals anomaly. Their findings support that the analysts’ forecasting error tends to be larger for firms with high accruals, while analysts do not revise their forecasts when new information for accruals is available. Gu and Jain (2006) decompose accruals into changes in inventory, changes in accounts receivable and payable and depreciation expenses and try to identify the impact of the individual components to the anomaly. Consistent with Sloan (1996), Gu and Jain (2006) document that the accrual anomaly exists at the components level. The findings are important since Desai et al (2004) supported the connection of the accrual anomaly with a single variable (cash flows from operations). The researchers suggest that the results yielded by Desai et al (2004) were highly dependent on the methodology used and thus, suggested that the accruals anomaly is â€Å"alive and well†. Moreover, other articles try to confirm whether the anomaly is mainly caused by the wrong interpretation of the information contained in accruals. Ali et al. (2000), investigate whether the naà ¯ve investors’ hypothesis holds. Following the methodology introduced by Hand (1990) and Walther (1997), they found that for smaller firms, which are more likely to be followed by sophisticated investors, the relation between accruals and negative future returns is weaker compared to larger firms, which are followed by many analysts. Therefore, the researchers suggest that, if anything, the naà ¯ve investors’ hypothesis does not hold. In contrast to other market anomalies where findings suggest that the naà ¯ve investors hypothesis holds, the accruals anomaly is suggested as unique. Shi and Zhang (2007) investigate the earnings fixation hypothesis suggesting that the accruals anomaly is based on the investors â€Å"fixation† or â€Å"obsession† on earnings. Their primal hypothesis is that if investors are highly based on the reports about earnings and misprice the value-relevant earnings, then the returns should be dependent not only on the accruals but also on how the stock’s price changes according to reported earnings.  The researchers’ hypothesis is confirmed and finding support that an accrual strategy for firms whose stocks’ price highly fluctuates according to earnings yields a 37% annual return. Sawicki and Shrestha (2009) aim to examine two possible explanations for the accruals anomaly. Sloan (1996) proposed the fixation theory under which investors fixate on earnings and thus overvalue or undervalue information for accruals. Kothari et al. (2006) proposed the â€Å"agency theory of overvalued equity† according to which managers of overvalued firms try to prolong the period of this overvaluation which causes accruals to increase.  The paper uses the insider trading and other firm characteristics and tries to compare and contrast the two major explanations. Evidence produces bd Sawicki and Shrestha (2009) support the Kothari et al. (2006) explanation for the accrual anomaly. In a relatively different in motif paper, Wu and Zhang (2008) examine the role that the discount rates play in the accrual anomaly. They argue that if anything, the anomaly is not caused by irrationality from the investors’side but by the rationality of firms as it is proposed by the q-theory of investment. They argue that since the discount rates fall and more projects become profitable (which makes accruals to increase) future stock returns should decline. In other words, if the capital investment correctly adjusts to the current discount rates, the accruals should be negatively correlated with the future returns and positively correlated with the current returns. The evidence of Wu and Zhang (2008) support that the accruals are negatively correlated with the future stock returns but the contribution of the paper is in that they document that current stock returns are positively correlated with the accruals. 2.3.4. The relation of the accrual anomaly with other market imperfections. Many papers examine the relation between the accruals anomaly and other well-known anomalies such as the post announcement drift or the value-growth phenomenon. Desai et al. (2002), suggest that the â€Å"value-growth† anomaly and the accruals anomaly basically interact and conclude that the  ¨accruals strategy and the C/P reflect the same underlying phenomena†. Collins and Hribar (2000) suggest that there in no link between the accruals anomaly and the â€Å"PAD†, while Fairfield et al. (2001) support that the accruals anomaly is a sub-category of an anomaly caused by the mistaken interpretation of the information about growth by the investors. Cheng and Thomas (2006) examine the claim that the accrual anomaly is a part of a broader anomaly (and more specifically, the value-glamour anomaly). Prior literature suggested that the operating cash flows to price ratio subordinates accruals in explaining future stock returns (Deshai et al (2004)). Their evidence suggests that the Operating CF to price ratio does not subsume neither abnormal nor total accruals in future announcement returns. This particular result does not confirm the claim that the accrual anomaly is a part of a broad value-glamour anomaly. Atwood and Xie (2005) focus on the relation of the accrual anomaly and the mispricing of the special items first documented by Burgstahler, Jiambalvo and Shevlin (2002). Their hypothesis that the two phenomena are highly related is confirmed since the researchers found that special items and accruals are positively correlated. Additionally, further tests yielded results that suggest that the two imperfections are not distinct, while the special items have an impact on how the market misprices the accruals. Louis and Sun (2008) aim to assess the relation between the abnormal accrual anomaly and the post earnings announcement drift anomaly. The authors hypothesize that both anomalies are related to the management of the earnings and thus, they aim to find whether the two are closely connected. The findings are consistent with the primal hypothesis, as they found that â€Å"firms with large positive change of earnings that were least likely to have manipulated earning downwards† did not suffer from PEAD, while the same result was yielded for firms that had large negative change of earnings that were least likely to have managed their earnings upwards. As supported by many researchers the value-growth anomaly and accruals anomaly might be closely related or they might even be caused by the similar or even identical roots.  Fama and French (1996) support that the book to market factor captures the risk of default, while Khan (2008) suggests that in a similar pattern firms with low accruals have a larger possibility to bankrupt. Therefore, many researchers try to connect the two phenomena or to answer whether a strategy based on the accruals can offer more than what the value growth strategy offers. Hardouvelis, Papanastopoulos, Thomakos and Wang (2009) connect the two anomalies by assessing the profitability of interacting portfolios based on the accruals and value-growth measures. Their findings support that positive returns are obtainable and magnified when a long position is held for a portfolio with low accruals while combined with stocks that are characterised as high market to book. The difference of a risked-based explanation or an imperfection of the markets is considered to be a major debate, as it can challenge the market efficiency hypothesis. Many researchers, such as Fama and French (1996) noted that any potential profitable strategy is simply due to the higher risk that the investors have to bear by holding such portfolios. In a similar way, the profitable accruals strategies are considered as a compensation for a higher risk. Stocks that yield larger returns are compared or labelled as stocks of firms that are close to a financial distress. Khan (2000) aims to confirm or reject the risk-based explanation of the accruals anomaly. The researcher uses the ICAPM in order to test if the risk captured by the model can explain the anomaly first documented by Sloan (1996). It is worth noting that the descriptive statistics results for the sample used showed that firms that had low accruals also had high bankruptcy risk.  The contribution of the paper is that, by proposing a four factor model enhanced by recent asset pricing advances, it showed that a great portion of the mispricing that results in the accrual anomaly can be explained within a risk-based framework. Furthermore, Jeffrey Ng (2005) examines the risk based explanation for the accrual anomaly which proposes that accruals include information for financial distress. As proposed by many papers, the accrual anomaly is simply based on the fact that investors bare more risk and thus low accrual firms have positive abnormal returns. The researcher tries to examine how and if the abnormal returns of a portfolio which is short on low accruals stocks and long on high accrual firms changes when controlling for distress risk. Evidence supports that at least a part of the abnormal returns are a compensation for bearing additional risk. Finally, the results support that the big portion of the high abnormal returns of the accrual strategy used in the particular paper is due to stocks that have high distress risk. 2.3.5. The accruals anomaly and its relation with firms’ characteristics. A noteworthy part of the academic literature examines the existence of some key characteristics or drivers that are highly correlated with the accruals anomaly. Many researchers have published papers that aim to identify the impact of firm characteristics such as the size of the firm, characteristics that belong to the broader environment of the firms such as the accounting standards or the power of the minority shareholders. Zhang (2007) investigates whether the accrual anomaly varies cross-sectionally while being related with firms’ specific characteristics. The researcher primarily aims to explain which the main reason for the accrual anomaly is. As Zhang (2007) mentions, Sloan (1996) attributes the accrual anomaly to the overestimation of the persistence of accruals by investors, while Fairfield (2003) argues that the accrual anomaly is a â€Å"special case of a wider anomaly based on growth†. The evidence supports the researcher’s hypothesis that characteristics such as the covariance of the employee growth with the accruals have an impact on the future stock returns. Finally, Zhang (2007) documents that that accruals co-vary with investment in fixed assets and external financing. Louis, Robinson and Sbaraglia (2006) examine whether the non-disclosure of accruals information can have an impact on the accruals anomaly. The researchers, dividing their sample into firms that disclose accruals information on the earnings announcement and firms that do not, investigate whether there exists accruals’ mispricing. The evidence supports that for firms that disclose accruals information, the market manages to correctly understand the discretionary part of the change of the earnings. On the contrary, firms that do not disclose accruals information are found to experience â€Å"a correction† on their stock price. Chambers and Payne’s (2008) primal aim is to examine the relation of the accrual anomaly and the auditing quality. The researchers’ hypothesis is that the accruals mispricing is related with the quality of auditing.  Additionally, their findings support that the stock prices do not reflect the accruals persistence characterising the lower-quality audit firms. Finally, their empirical work finds that the returns are greater for the lower-quality audit portfolio of firms. Palmon, Sudit and Yezegel (2008) examine the relation of the accruals mispricing and the company size. Evidence shows that company size affects the returns and, as the researchers documented, the negative abnormal returns are mostly due to larger firms while the positive abnormal returns come from the relatively small firms. Particularly, as the strategy with the highest profits they found the one that had a short position in the largest-top-accrual decile and a long position in the smallest-low-accrual decile. Bjojraj, Sengupta and Zhang (2009) examine the introduction of the Sarbanes-Oxley Act and the FAS 146 and how these two changes affected the accrual anomaly. FAS 146 (liabilities are recognized only when they are incurred) reduced the company’s ability to â€Å"manipulate† earnings while the SOX aims to enhance the credibility of the financial statements. The evidence recognises a change on how the market conceives information about restructurings charges. The authors propose that a possible explanation is that before the introduction of SOX and the FAS 146, the market was reluctant due to the ability of the firms to manage earnings. Finally, Bjojraj, Sengupta and Zhang (2009) document that post to the FAS 146 and the SOX act, low accrual portfolios do not generate positive abnormal returns. 2.4. The applications of the accruals phenomenon and reasons why it is not arbitraged away. The importance of the analysis of the anomalies is substantial for two reasons. Firstly, the profitability of a costless strategy challenges the EMH, especially if the strategy is based on bearing no additional risk. Secondly, managers’ incentives to manipulate the financial statements and consequently the accruals would be obvious if a profitable strategy based on such widely available information existed. Chen and Cheng (2002) find that the managers’ incentive to record abnormal accruals is highly correlated with the accrual anomaly. The hypothesis of the researchers, which their findings support, was that the investors fail to detect when the managers aim to record abnormal accruals and that may contribute to the accruals anomaly. Richardson’s (2000) main objective is to examine whether the information contained in the accruals is utilized by short sellers. As the researcher mentions, previous articles such as that of Teoh and Wong (1999) found that sell side analysts were unable to correctly â€Å"exploit† the information contained in accruals for future returns. Richardson suggests that short sellers are considered as sophisticated enough to utilize the accruals information. Findings confirm previous work, such as that of Sloan (2000), who suggests that even short sellers do not correctly utilize the information contained into accruals. Ali, Chen, Yao and Yu (2007) examine whether and how equity funds benefit from the accrual anomaly by taking long position into low accruals firms. The researchers aim to identify how exposed are the equity firms to such a well known anomaly and what characteristics these funds share. By constructing a measure called â€Å"accruals investing measure† (AIM), they try to document the portion of the low accruals firms into the actively managed funds. The evidence shows that generally funds are not widely exposed to low accruals firms but when they do so, they have an average of 2.83% annual return. It is worth noting that the annual return is net of transaction costs. Finally, the side-effects of high volatility in returns and in fund flows of the equity funds that are partially based on the accrual anomaly might be the reason behind the reluctance of the managers. Soares and Stark (2009) used UK firms to test whether a profitable accrual strategy is feasible net of transactions costs. Their findings support that indeed the accrual anomaly is present in the UK market. The authors suggest that for such a strategy to be profitable, someone is required to trade on firms with small market capitalization. They also suggest that although the accruals’ mispricing seems to exist also in the UK, the transaction costs limit the profits to such an extent that the accrual anomaly could be difficult characterised as a challenge to the semi strong form of the efficient market hypothesis. Finally, we should not neglect to mention two papers that discourse on why the markets do not simply correct the accruals anomaly. According to the classical theory, markets are so imperfect that can produce the incentive to the market to correct the â€Å"anomalies† at any point of time. Mashruwala, Rajgopal and Shevlin (2006) examined the transactions costs and the idiosyncratic risk as possible reasons of why the accrual anomaly is not arbitraged away. The researchers aimed to investigate why the market does not correct the anomaly, but also to identify whether the low accruals firms are riskier. The paper poses the question of what stops the informed investors from taking long positions into profitable stocks according to the accrual anomaly so that they can arbitrage it away. The paper examines the practical difficulty of finding substitutes so that the risk can be minimized and its relation with the accrual anomaly. Additionally, the paper investigates the transaction co sts and findings support that according to the accrual anomaly, the profitable stocks tend to be the ones with low stock prices and low trading volume. Lev and Nissim (2004) focus on the persistence of the accr