A Clean Well-lighted Place by Ernest Hemingway Essay

â€Å"A Clean, Well-Lighted Place† by Ernest Hemingway â€Å"A Days Wait† by Ernest Hemingway â€Å"The Short Happy Life of Francis Macomber† by Ernest Hemingway â€Å"Indian Camp† by Ernest Hemingway â€Å"Soldier’s Home† by Ernest Hemingway Ernest Hemingway has presented us with some of the best literature of the 20th century. He has been recognized in recent times as one of the greatest writers of all time, and the effect his work has left upon us is compared with that of Shakespeare’s. His great success could be due, in part, to the fact that characters in his literature lead lives which mirror his own in many ways. Literary critics have dubbed these parallels â€Å"code heroes,† and have presented guidelines as to what lifestyles they lead in Hemingway’s stories. I wish to show similarities in the presence of these certain, uniform traits that are common among Hemingway’s code hero in the stories, â€Å"A Cle an Well-Lighted Place† and â€Å"A Day’s Wait,† both by Ernest Hemingway. The specific elements that make up a code hero are as follows: (1) â€Å"Eat, drink, and be merry, because tomorrow you may die.† (2) â€Å"When you’re dead, you’re dead.† (3) â€Å"Avoid death at all cost, but don’t be afraid to die.† (4) â€Å"Always be disciplined, never show emotion.† (5) â€Å"Grace under pressure.† (6) Nada concept – a code hero is not comfortable at night. They become most active during darkness, because they fear it and try to avoid it at all times. In the short story, â€Å"A Day’s Wait,† the presence of code hero traits is evident in the thoughts, words, and actions of Schatz, the main character in the story. Schatz is a small child who believes that he is going to die, yet he does not fear it. Instead, the boy lies in bed and takes it. He understands that death is an accepted reality rather than a worrisome end for a code hero. Schatz forces himself to be strong for his father. He tells him, â€Å"You don’t have to stay in here with me, Papa, if it bothers you.† Schatz continues to prove himself as a code hero by constantly stifling any emotion that he is feeling. He never once shares with his father the immense turmoil that is present within himself. When his father asks him how he feels, he simply replies, â€Å"Just the same, so far.† This is an adequate reply for a Hemingway code hero because he always feels the presence of an undying peace that is control. He knows that he must exhibit an unyielding grace  under pressure. Schatz epitomizes all of these characteristics, and not only because his coded behavior is undeniable, but because he is not a soldier at the front or a man with a crippling injury which no longer allows him to enjoy life, he is only a boy of nine years. Schatz displays a grace that most adults can not fathom. He is determined to show an emotional strength that is beyond his years. As with most of Hemingway’s code heroes, Schatz is aware of the awkward feeling in which darkness presents. His father tells him to go to bed several times, but Schatz knows that he must remain conscious and enjoy his last hours of life. If he allows himself to pass onto a vulnerable state that is sleep, he knows that he may not wake up. â€Å"I’d rather stay awake,† he tells his father in the uneventful way in which only a code hero can. The old man in the short story â€Å"A Clean Well-Lighted Place† also understands what it takes to be one of Hemingway’s elite. He drinks every night until he is drunk, because he knows that tonight may be his last. He knows that the world is a constant struggle and that he must be victor, lest he lose the game. For once the game is lost, it is not an easy task to play again. In the world of a code hero, there are no rewards for second place. Once the old man is done, he knows that he can never return in the glory which he once enjoyed. But he does not fear this. That would not be the style which suits him. In fact, we learn that the old man welcomes death, â€Å"He hung himself with a rope.† He possesses an advantage above those who fear death. He feels that he would be happier in death than in life. The old man proves to us that he is unhappy, but he cannot show this. He remains dignified in his agony and understands that it would not be â€Å"sporting† to end the game this way. His respect comes from playing the game well, for he is a code hero. Even in the drunken stagger that he must fight every night during his long walk home, he is collected, a decorated soldier who proudly fights the good battle. â€Å"The waiter watched him go down the street, a very old man walking unsteadily but with dignity.† The old man, as all code heroes must, also denies the presence of darkness. Hemingway uses particular code elements more than others in certain stories, and this is no  exception. The short story â€Å"A Clean Well-Lighted Place† is completely based on the nada concept. The narrator explains the old man’s need for a lighted place in order to somehow prevent the unbearable loneliness in which he refuses to succumb to. Hemingway, in his genius, understands this need in all of us. In his representation of this light, he triggers the same feeling of warmth that the old man has grown to depend on. The old man goes to that place in his childhood in which he remembers the freshly washed countertop, the warm, fluorescent glow of a grandmother’s kitchen at night just before bedtime. Just like all of us, he does not want to go to bed. He longs to be awake and in the presence of that security. Many similarities are seen between the code heroes of Schatz, in â€Å"A Day’s Wait,† and the old man from â€Å"A Clean Well-Lighted Place.† Both possess a quality which allows them to view death differently. They are able to see a larger picture in which they play the game well, but when they are through they must accept the fact that they cannot go back. This ability to view death is what allows Schatz to accept an early end, and also what gives the old man the strength to stare his maker in the eyes and kick the chair out from underneath himself. Both Schatz and the old man are able to eliminate the emotions which complicate all of our lives. In the possession of this trait, both characters are able to focus completely on the task which is at hand. Schatz knows that he must be strong for his father, so he can waste no time on feelings. The old man also knows that he has another purpose in life than to promote charity. He is called to live a life worthy of a code hero’s recognition. He is called to play the game better than anyone else until the end no longer permits him to. These characters both force themselves to carry on a dignified existence. Schatz knows that wailing and carrying-on do not exist in the world of a code hero. He knows that the only way he can face death is with the same attitude that he faced each day of his existence. To give up now would be losing the battle. The old man also knows how to lead a life of dignity. â€Å"I wouldn’t want to be that old. An old man is a nasty thing. Not always. This old man is clean. He drinks without spilling. Even now, drunk. Look at him.† It is evident to the waiter that the old man is somehow controlled by an invisible force, an internal force, which does not allow him to give any impression except one of control, one of grace. Lastly, these two code heroes share a respect for darkness. This respect incorporates everything that darkness represents. They cannot fear darkness, for it is not in the nature of a code hero to fear anything, but they also cannot forget the feeling that darkness gives them. In the short story â€Å"A Day’s Wait,† the obvious observation must be made that the boy never once allows himself to become vulnerable in the unreadiness which is sleep. The old man is so uncomfortable with this vulnerability that he lives out darkness underneath a ceiling light in a cafÃÆ' © booth. Schatz and the old man are examples of Hemingway code heroes at their best. In each short story that Hemingway’s pen has graced, we see a character who can be considered heroic in a way specific to themselves and to Ernest Hemingway. However, it is when these single characters are presented in the light of a comparison that it is possible to see just exactly what Hemingway was trying to accomplish in developing each of them.

American Revolution Essay

After the American Revolution, Americans, who had just broken free from the British, completely changed their politics, economy and society. The Founders decided to change how they wanted to run their society, even though, in the end, they went back to a more powerful federal government like Britain. Most people’s daily lives didn’t change much but the principles from the revolution made some try to look for better financial opportunities. Women, slaves, and loyalists were changed a lot in society. Women had more freedoms, some of the slaves were set free, and many loyalists left America. America did not go through much economic change, but it did experience social and political change. Since they had just fought a war to gain their freedom from them, Americans wanted their government not to be similar to Britain’s at all. This is why they implemented the Articles of Confederation that greatly limited federal power. But this government couldn’t raise taxes, or do a plethora of other tasks that were desperately needed, so the people realized their need for a more centralized government. While the new Constitution was still being created and ratified, Alexander Hamilton, James Madison, and John Jay were writing the Federalist Papers in hopes of convincing states to support it. James Madison, in number 51 of the papers wrote â€Å"Ambition must be made to counteract ambition† (Doc I). He was referring to the idea of checks and balances that would be used to ensure that anyone in the federal government would not be able to have too much power, which the people were very wary of. When it was finally ratified, the Constitution was similar to Britain’s government but also different because of their system of checks and balances. There was not much economic change in America after the revolution. The Philadelphia Society for the Promotion of Agriculture in 1786 gave out a medal, which said, â€Å"Venerate the plough† (Doc F). This exhibits how the elite were still trying to help the common people who weren’t financially better off than before the revolution, but it didn’t make much difference. Similarly, in Shay’s Rebellion, Yeoman farmers in Massachusetts, according to Abigail Adams’ letter to Thomas Jefferson, â€Å"were crying out for a paper currency, some for an equal distribution of property† (Doc G). Shay’s Rebellion symbolizes the economic troubles that the poor had to deal with. The social change was the biggest change that happened in America. After the Revolution, the place of women, slaves, and loyalists in society was greatly altered. In order to teach justice and liberty to their children, women were educated in the ideals of Republican Motherhood. In a woodcut of a patriot woman made in 1779, a woman is shown with a rifle and gunpowder horn (Doc A). Some women did play bigger roles in society by going with the fighting soldiers and sometimes even fighting with them in the revolution. However, not all women were satisfied to just go back to the earlier place in society they were at before the war as shown by Molly Wallace who said during her valedictory address in 1792, â€Å"if [taught] to read, why not to speak? † (Doc J). Many American women, like Wallace, sought after advancing their roles in society. But sadly, women suffrage didn’t happen for 140 years. For slaves in some regions, there was a lot of social change. In the years after the revolution, the slave owners in the North practiced manumission, and freed many slaves there. In the South, however, it would take many more years and a Civil War for the slaves to gain their freedom. There were more actions against slavery, though. The Northwest Ordinance in 1787 stated, â€Å"There shall be neither slavery nor involuntary servitude in said territory† (Doc H), outlawing the spread of slavery in new states in hopes that eventually, states without slavery would exceed the states with it and be able to abolish it everywhere. The loyalists or â€Å"Tories† also went through significant change in society. Since they had favored Britain during the way, after it, they were became a widely hated. The Pennsylvania Packet says â€Å"Never let [the Tories] return to this happy land† (Doc B). They went through so much change in society that countless loyalists left America, never to return. Politically, Americans underwent some change by creating a new government even though they still altered it in the end. Economically, there were still elites who ruled over the lower, poor class of people. And socially, a large amount of change occurred for women, slaves and loyalists, although the change in the place of loyalists was extremely negative. In these ways, American society was changed in respect to political and social life, but not economically.

Contemporary Issues in Eastern Religion - Jainism Research Paper

Contemporary Issues in Eastern Religion - Jainism - Research Paper Example 1). The core beliefs of Jainism focus on the existence of the soul for every living being, karmas, and the concept of non-violence, among others. These beliefs were deeply rooted in Indian traditions and belief in reincarnation and karma. As closely related to Hinduism, Marett indicated that â€Å"in many ways the Jain community has been influenced by the customs and traditions of the larger Hindu community. Jain influence on Hinduism must include non-violence and vegetarianism Mahatma Gandhi, as is well-known, was deeply influenced, particularly in his attitude to non-violence by the Jains† (n.d., par. 5). In contrast to the predominant religions of the West, like Judaism, Christianity, and Islam, Jainism’s interaction with them are manifested in ways of communal living. As opposed to Christianity and Islam, religions that believe in a supreme being, Judaism and Jainism, â€Å"is both a religion and a community, a close-knit community with a way of life and worship which keeps religion in a central place in society. Unlike Jainism the religion of Judaism centers around the worship of a single all-powerful creator God. The code of right and wrong is strict but Judaism pays less attention to life after death than almost any other religion† (Marett, n.d., par. 7). Likewise, as averred by Ahmad (2010), â€Å"through various  interactions in India, Jainism had an influence on Hinduism and Buddhism, and they share concepts such as the seeking of freedom from  worldly life and reincarnation of the soul. Some scholars suggest that Hinduism adopted vegetarianism through strong Jain influence across India† (par.6). In the modern world, Jainism’s influence could be exemplified by the practices of monks and nuns who believe in celibacy and adhering to austere lifestyle. By living in a community committed to peace and non-violence, the traditions of Jainism are manifested. Further, devotees of Jainism are known to be vegetarians

Expository writing Essay Example | Topics and Well Written Essays - 1000 words

Expository writing - Essay Example The book also challenges our values and the social system which labels people and does precious little to help them to rise above their tragedy of life. The author has sensitively explored the delicate but extremely important issues of drug addiction and prostitution that affect our youngsters today. Set against Australian background, this global issue is successfully exposed through this story. The opening paragraph deliberately, describes in detail the role of each of his television crew so as to maximise the impact of the subject. The empathetic attitude of various crew members adds to the seriousness of the problems that has infiltrated our society. The inclusion of women crew members has provided a sensitivity that has been able to win the confidence and trust of the affected people who have willingly talked about their circumstance that has driven them towards this. The information and the facts of the real life situation have successfully drawn the seedy atmosphere that can be found within our well organized society. The author has exposed the galleries in the busy market place that provide safe way of taking the heroin or drug or even facilitating prostitution for the addicts. The rooms behind and above the shops of the market seem to serve the dual purpose of safe haven for addicts while at the same time sex provides a quick way of earning more money for the drug. The irony of the situation is that though the gallery owner denies providing the drugs, he accepts providing the needles (for injection) and a place where they can safely take it at a price! The price goes up if the prostitution or sex is involved. The simple words used by the author to describe the scene where girls and boys come just for this purpose and then leave the place normally, jolts the reader with much more impact. ‘The rest of Australia might be shocked by what went on

Compare between two websites Essay Example | Topics and Well Written Essays - 500 words

Compare between two websites - Essay Example These websites provide various services and software products for business management. Halogensoftware’s products are more focused towards talent management part of the business, whereas, Successfactors’ solutions are related to execution of business. Halogensoftware provides following major product package: performance appraisal, goal management, competency management, career development and planning, integrated talent profile, employee on boarding, activity tracker, easy HRIS integration, job description builder and real0time reporting etc. On the other hand, product and service package of successfactors include, business alignment, people performance and integrated business-execution software solutions. Both organizations provide more or less similar range of software products. Halogen provides money back guarantee for its services where as successfactors display Deloitte’s rating for its products. Analysis indicated that the successfactors has better described and marketed their products. For example, both firms offer a product 360-degree feedback; however, successfactors has given a brief comparison of 360 degree and a regular manager feedback to show how 360-degree feedback is better and why should it is adapted. Then, a visual presentation, including snap shots of the software product is available for the buyer. The product consists of three broad sections of information: employee information, employee feedback, and overall rating. A section of â€Å"legal scan† is also provided to serve legal purpos es. On the other hand, Halogen has provided a brief overview about the features, results, and affordability of its 360-degree rater. For another product, Succession planning, halogen has emphasized its cost effectiveness and affordability. The â€Å"talent pool model† is the base for this product. Its implementation is in three phases: First, the firm understands its workforce potential. Second, it develops internal

Population resource environment - need in 12 hours Essay

Population resource environment - need in 12 hours - Essay Example Without the environment, humans and all other living things will find it hard to exist. Sustainable development is meeting the needs of the present generation and progressing economically without compromising the needs of the future generation (Reinhardt p.153). This makes sure that the resources, both humans and the natural environment alike, are used and developed in a way that will maintain both the present and future society. Without sustainability, natural resources will be depleted that it will compromise the future generations and endanger their very existence. This shows how important environmental protection is. Without economic progress, the nation will not be able to produce enough to maintain the growing population. But it is exactly because of the growing population that the carrying capacity of the land is jeopardized (Seitz pp.59-61). While maintaining economic progress, it is important to consider the different factors that it impacts, particularly the environment. Land and natural resources cannot be multiplied or created overnight. The growing population eats up land resources while the development and industrialization eats up the rest of the land and other natural resources in order to maintain the existence of the society. Environmental crisis exists because of the excessive use of the natural resources to the point of depletion. Other environmental costs of development are increase of harmful chemicals and toxic gases that pollutes the environment and affects humans gravely, global warming and more (Byrne and Rich pp.55-63). Though there are always new technologies and research es to find other resources that could provide the needs of the world, it continues to jeopardize the rest of the environment. Aside from that, industrialization continues to create technologies harmful not only for the natural environment but also for

The effectiveness of Polymer reinforced Concrete Masonry (CMU) Walls Essay

The effectiveness of Polymer reinforced Concrete Masonry (CMU) Walls as Compared to unreinforced CMU Walls - Essay Example Using of FRP composites have been viewed as a suitable and cost-effective way for strengthening URM. Seismic design in the USA is nearly completely grounded on the consideration that the structural system gives a flexible failure mode. Masonry walls strengthened by FRP actually have fragile failure modes as a result of the nature of the strengthening system itself. The idea explored in our research paper is the introduction of flexibility using some kind of hybrid strengthening system. We based our investigation on the experiments held by J.J. Myers and P. Carney (cited in Tumialan, 2005). The research study investigated the practicability of developing continuity between the FRP and the surrounding reinforced concrete frame system. In the paper, we evaluated strengthened URM wall's functioning using static tests as tools for our investigation. The authors whose works we used for the examination utilized 2 strengthening methods including the application of glass FRP (GFRP) laminates to the wall's surface and the installation of near surface mounted (NSM) GFRP rods. In both methods, the strengthening material was anchored to boundary members above and below the wall on some of the specimens in the research program. A shear retrofit, the effects of bond pattern, and the effects of FRP laminate strip width were also investigated in our paper. The development of continuity between the FRP materials and the surrounding framing system is important to improving the blast resistance of URM infill walls. Keywords: FRP strengthening; blast resistance; masonry wall retrofits; masonry wall connections. 1. INTRODUCTION 1.1. BACKGROUND Recent events in the world have attracted attention to the vulnerability and sustainability of buildings and infrastructure to acts of terrorism. Our infrastructure is vital to this nation's economy and way of life. Any damage to it would and has had drastic effects on our culture. Attacks may cause a variety of results ranging from minor building damage to complete structural failure and considerable loss of life. Some examples within the United States include the bombing of the Murrah Federal Building in Oklahoma City (1995) and the bombing and attacks on the World Trade Center in New York City (1993, 2001). Abroad, numerous attacks have been directed toward embassies, and suicide car bombers have been used to targetpopulated areas. In the cases where complete structural failure is not an issue, the dangers of flying debris have resulted in loss of life or injury to numerous civilians. Of particular concern are unreinforced masonry (URM) infill walls. Structural sys tems composed of a reinforced concrete (RC) framing system with URM infill walls makes up a significant portion of the building inventory in the United States and around the world. Since there is no reinforcement within these walls, they have little resistance to out-of-plane loads such as a blast load. As a result, an effort has been undertaken to examine retrofit methods that are feasible to enhance their out-of-plane resistance. One method of strengthening URM walls is the application of fiber reinforced polymers (FRP) to the surface of the wall to improve their performance. Today, FRP is considered an emerging technology. Its use began becoming

Essay On the Lynch Speech ( Full Text Provided )

On the Lynch Speech ( Full Text Provided ) - Essay Example (1). The alleged speech focuses on solving the problem that slave owners of Virginia in maintaining control over their slaves, through the methods that William Lynch had refined through their use on slaves in his plantations in the West Indies. (2). In essence the advice given to the slave owners of Virginia to maintain control over their slaves is based on the divide and rule policy used successfully by the Romans in the past, and the British in more recent times, to maintain control over their much larger colonies. The basis of the divide and rule policy lies in enlarging the differences within the targeted set of people to such an extent that they act as divisive forces to rend the people apart such that they hate those that are marginally different through color, caste, or religion and look more favorably on those subjugating them. This is the advice found in the text of the alleged William Lynch speech â€Å"I have outlined a number of differences among the slaves: and I take these differences and make them bigger. I use fear, distrust, and envy for control purposes†. (2). The advice given in the speech is not restricted to just the masters of the houses of the white slave owners, but also for the women and children, such that there is no area among the white slave owners from where respite is offered on this strategy. The speech contains the self-belief that indoctrinating the black slaves to look upon even the slight variances among themselves including color, age, and sex with â€Å"fear, distrust and envy† or social reengineering as the cure all for retaining control and dominating the black slaves, not just in the immediate times, but extending for hundreds of years. (2). The alleged speech reflects the manner in which the black slaves were subjugated into slavery. Following the advice was supposed to keep the blacks enslaved for centuries, but in about

Propaganda, P.R., and the News Essay Example | Topics and Well Written Essays - 1000 words

Propaganda, P.R., and the News - Essay Example It will also explain the propaganda techniques used by the U.S government in post war 1 and discuss why some techniques were too arrogant towards government’s action. The First World War popularized the word propaganda and provided it with a negative implication; since all the key nations participated in the war used new approaches of modern propaganda to organize their populations for the conflict. In the US, the effort was chaired by President Woodrow Wilson in the development of the CPI (Committee on Public Information) as a key propaganda ministry. The major theme of the Committee on Public Information was to improve the United States involvement into the war with the aim of establishing a world which is secure for democracy. This notion was particularly established by the leading scholar of the period, Walter Lippmann, who was 25 years old by then. Lippmann was interested majorly with the upholding of the nation’s capitalist system in the face of increased resistan ce, ideological opposition, and unrest, feeling that the field of science would require being employed to democracy, where social scientist and social engineers would give the current with a background upon which a latest stability might be achieved. Because of this, Lippmann proposed the need for information and intelligence control in what he referred the development of consent. The major intellectual of the period then became mainly concerned with the matter of propaganda during time of peace, having experienced its success during war. According to Lippmann, propaganda has desirable and legitimate role to play in the democratic system. He further noted that public was a confused herd of meddlesome and ignorant outsiders, who must be maintained as interested spectators of activities, and separated from the actors and the powerful themselves. Edward Bernays, the founder of public relations got his beginning with Wilson’s Committee on Public Information during the First World War, asserted that the intelligent and conscious manipulation of the organized opinions and habits of the masses is a crucial element in the democratic society. According to him, those who control this unseen approach of society form an imperceptible government that is the true proper ruling power of the nation. Bernays pointed out that modern society was conquered by few number of individual who understand the social patterns and mental processes of the masses. This was consistent with the Lippmann assertion of a sequential result of the manner in which the current democratic society s arranged. Hence Barneys borrowed from Lippmann the concept of engineering of consent. According to Lippmann, influencing nations thinking with propaganda is not an easy task; it takes a higher ability concerning how public opinion works and how such opinions can be made to unite beliefs. Therefore, the political leaders should use the propanda techniques to achieve their political desires the same w ay American did. During the First World War, the CPI (Communication on Public Opinion) attained this through making planned emotional appeals, demonizing Germany by connecting the warfare to the aims of different social groups and through lying outright. The CPI propaganda naturally appeals to the heart but not mind. Emotional protest is a preferred technique of propagandist, since every emotion

Research Study on Gender Bias in Education Essay Example for Free

Research Study on Gender Bias in Education Essay These instructions were used as a form of deception to prove my hypothesis. My hypothesis was that women would be more affected by this deception than would the men. My results proved otherwise. Results showed there was little difference in the way the women and men performed on these tests on either version. The ANOVA testing showed these clear results. Does Performance Reflect Success? Gender biases are present in the American culture. Women are put in a stereotype as the one to stay at home cleaning and cooking while men are believed to have to bring home the paychecks. How we live though is not the only area with gender biases. There are biases when it comes to sports, who can do what jobs and even education. Women are believed to be better at the education aspects having to do with words and comprehension while men are believed to be better at numbers or math. In the research world there is much controversy on whether the bias presented is true or not. Researchers have not been able to support this belief or disregard it due to the many conflicting results. A study done with the purpose of determining whether gender expectations still exist in present time, resulted in the idea that more and more genders are becoming equal in education (Jordan 2008). It was found that both sexes are more likely than ever to complete their high school education and even be able to obtain higher degree. The study also showed the gender gap in scores on the National Association of Education Progress becoming more and more narrow over time. Jordan does not refute the idea of gender bias in education but supported the idea that it is diminishing. These two researchers on the other hand, Fisher (2008) and Johnston (2005), have studies supporting their beliefs that gender biases in teaching are simply a myth. Both constructed research to support the idea that neither females nor males perform differently according to gender expectation or that these gender expectations are implemented at all. Fisher more, specifically, researching in math and Johnston in math and education. Chapman (2012) and Goetz (1996) though, both have studies that seem to prove otherwise. Chapman conducted a study, in Canada, which lead to the belief that gender discrepancies in teaching and education focus more positively on females. Chapman believes males are the ones taking losses in education expectancies. Goetz on the other hand, researched and came up with results which led him to believe American educators focus their attention more on males allowing them a positive advantage. After learning so much from previous research it can be accurately inferred that the gender bias in education does exist. A psychologist, Ghandi (2006) stated in his study the truth behind the bias. He used this truth to conduct a study in which he found that women not only believe the bias but are subject to it when they are told they will fail due to their gender. This particular study is what laid down the foundation for my research study. All of the above researchers knew the biased existed and all tried to support it or disprove it. This research project has one purpose; to find out not if gender biases exist but whether women are affected by these gender based expectations more than men. In many colleges and universities women are very comfortable with their gender; they are powerful, and successful. There are clubs devoted to women’s sexuality, success, and even fashion senses. There are awards given to women who have gotten superior grades, been offered great jobs, or are simply a success. Knowing this, what I want to learn is whether these women who are so highly praised and allowed the same success as men are still subjects to gender based expectations, more specifically in learning and education. In my study I will be deceiving the participants into thinking that only women will be successful in this study or to another group I will be saying only men will be successful. The way this will be done is by using simple high school level math tests. Before he test I will be falsely informing half of my participants (equal number of females and males) that only men will pass this test, and then I will repeat this with the other half of my participants but falsely informing them of the opposite. The fact that I will play on women’s vulnerability will allow me to learn whether these very empowered and successful women will still be so after being told th ey will fail before even trying. My hypothesis is that these women will be affected by such a statistic and depending on the false statistic they get, they will fulfill it. Methods Participants Forty eight undergraduate volunteers (24 males and 24 females) from Bryant University took part in this study. The average age of participants was recorded at 20. 22 years (SD=1. 13). No cultural or ethnic backgrounds were recorded. With help from different psychology professors a general description was given out within psychology classes and volunteers were recruited. To these participants in particular extra credit was allotted. The rest of the participants were recruited through word of mouth and e-mail in which they were once again given a general description of the study and asked whether they would be willing to volunteer. Each participant was tested individually and required approximately 15 minutes to complete study. Materials The study consisted of participants completing a standardized math test, four survey questions, and a deceptive article which can all be found in the appendix. The math test was found in an SAT math test practice site. This math test worked as the channel for the dependent variable (result on the test). The survey questions asked were simply used for collecting information. The questions did not ask sensitive information or anything that would put any participant at risk. Finally, the short article was written by myself and is completely fictional. It falsely informed the participants on information regarding SAT tests and reported false statistics on men outperforming women for half of the studies and the opposite for the other half. This was used as the deception part of the research which inconspicuously provided the participant with the independent variable (whether females or males pass this test) Procedures Forty eight students were recruited (24 females and 24 males) from Bryant University as the participants of my study. They were all recruited through psychology classes in which Professors gave a brief overview of what my study entailed and from there proceeded to recruit. The participants recruited in such a manner were rewarded with extra credit points in their class. The rest of the participants were recruited through word of mouth and group e-mails. With each participant recruited I have a brief explanation of what the study was comprised of, what it entailed, and more specifically what each participant would have to contribute. Once I recruited all participants which were necessary I began the research itself. At the start of their participation, each participant was handed a consent for in which they were asked to read thoroughly and if they agreed to the terms and conditions they were to sign and date. In the consent form participants were informed of their ability to leave the study at any time, their entitlement to any information and debriefing, on the confidentiality of the study and many more safety factors. To show the validity of the form I signed and dated on the same page each participant did right in front of them. Each participant agreed to the consent form allowing the study to continue. Once the consent form process was finished I would hand each participant the study packet. At this point they were told that each study was to be completed alone. The packet started off with an article which was entirely false and used to deceive each participant. On it there was made up information on the performance of genders on the SAT test throughout the past years. Each participant was informed that they would not be able to continue with the packet if they did not read these instructions. Once the instructions were read each participant could continue to the next section which consisted of the survey questions. These questions were purely used to collect data for analysis. Once the second part was completed each participant would continue on to the math portion of this study. The math portion of the test was a high school level standardized math test previously tested by college level participants. Each participant completed the math portion and would come to me to hand it in. when each individual would approach me I made sure to let them know the true nature of the study and informed them of the deceit. It was very important that no participant left the study with the false idea of one gender outperforming the other. I made sure each participant was thoroughly debriefed and had any questions they had answered. Results The data were analyzed using an ANOVA with the alpha level set at . 05. The main effect of gender participation was not significant, ? (1,44)=. 12, p=. 73, ? 2=. 003 and the main effect of gender test taking was not significant, ? (1,44)=. 00, p=1. 0, ? 2=. 00. However, the interaction between the gender participation and gender test was marginally significant, ? (1,44)=2. 97, p=. 9, ? 2=. 06. Figure 1 shows a cross-over interaction in which the two variables almost perfectly interact. My hypothesis stated that women’s scores would be more affected by the test gender and the deception then would the men’s. The results of the tests did not vary according to the gender of the participant or gender of the test. My hypothesis was not supported by the above da ta. There was, however, a notable factor in the results and the fact that they were similar in score for both genders. Discussion No significant main effect for test gender or participant gender occurred in this study. When taking a math test right after reading a deceitful article about the tendency of males or females to outperform the opposite sex, neither gender’s score seemed to be affected. This particular result is not what I predicted in my original hypothesis. Straying away from my belief that women would underperform the men once they were deceived into believing they would be outperformed, the results disproved my hypothesis. This outcome is consistent with the research of Fisher (2008) and Johnston (2005) in finding there is no significant gab in the performance of females and males in the subject of math. The results are not consistent though with those findings by Ghandi (2006) a researcher whose findings state that women do poorly on math when they are told their gender is to blame. Some factors which may have led to the inconsistency between my hypothesis and my results can be attributed to the limitation when conducting this research. Being part of such a small university, my research was very limited in the sample size it could use. Three thousand undergraduate students was a small population to choose just forty eight participants from. This also lead to what I believe was a biased sample since each and every participant was also my friend. The fact that the participants had a relationship with me could have caused an over performance level which would not usually happen. Some internal validity which should be looked at was the fact that many variables were simply not recorded. These factors include the race and ethnicity of the participant, whether English was their native language, if they understood the deceiving article in the start, and whether they understood every question asked in the math portion. Another internal validity factor is the way in which data was recorded. If this study were to be repeated, observation should definitely be an alternative way of recording data. There was so much happening as I observed each and every participant complete my study. Participants would get frustrated or smile the whole way through. Sometimes they would try to help each other out when I looked the other way or simply just guessed the answers since they did not want to be taking a math test. Using a standardized that does not give anything in return to these participants, should not have been my only source of data since it was not the best way to find results. Regardless of the limitations, new studies and research in the field of gender differences in education have resulted with outcomes very similar to mine. Although my hypothesis was not supported, the consistency it has with the studies of Fisher (2008) and Johnston (2005) only come to show that this study will be supporting much research in the psychology world. My results will be one more way to support the idea that there is little or no difference in gender performance in math. In addition to replicating my results, future research might extend the finding by examining other subjects in the world of education. Expanding the testing to be possibly in language, critical thinking, sciences and also math may give a better understanding on whether there is a discrepancy in women’s performance when they are told they are going to fail. Future research might also want to expand their sample by moving to younger generations in school, possibly in igh school, and older generations in and out of school. By doing so the outcome may result more accurately and allow a better understanding of the prediction. In conclusion, gender performance on standardized math tests do not have a direct link to the subject or the belief that one gender will outperform the other. After testing 48 participants (24 female and 24 male), giving each the same exact standardized math test but deceiving each to think they would outperform or underperform the opposite sex, no gender seemed to truly outperform. Each gender resulted close to equal. The results did not support my hypothesis but it led the way to a new hypothesis and a completely new approach to this study. References Goetz, J. (1996). In Education Expert: Classroom Gender Bias Persists. Cornell Cronicle. Retrieved from http://www. news. cornell. edu/chronicle/96/4. 25. 96/gender. html. Jordan, J (2008) The Myth of Gender Bias in School. Retrieved March 8, 2012. From http://www. parentdish. com/2008/05/20/the-myth-of-gender-bias-in-school/ Fisher, M (2008) Study: No gender differences in math performance. University of Wisconsin-Madison News. Retrieved from http://www. news. wisc. edu/15412 Johnston, T (2005) No evidence of innate gender differences in math and science, scholars assert. Stanford University News. Retrieved from http://news. stanford. edu/news/2005/february9/math-020905. html Gandhi, U. (2006) Gender bias in math skills doesn’t add up, scientists say. The Globe and Mail. Retrieved from http://www. theglobeandmail. com/news/technology/science/article197902. ece Chapman, A. (2012) Gender bias in education. Research Room. Retrieved from http://www. edchange. org/multicultural/papers/genderbias. html Table 1 Cross over interaction [pic] Appendix Survey questions Male/ Female (circle one) Date of Birth __________ Anticipated graduation year __________ Have you ever taken a standardized test (example: SAT) Math questions (standardized test) http://www. majortests. com/sat/problem-solving-test01 1. Of the following, which is greater than ? ? [pic]A. 2/5 [pic]B. 4/7 [pic]C. 4/9 [pic]D. 5/11 [pic]E. 6/13 2. If an object travels at five feet per second, how many feet does it travel in one hour? [pic]A. 30 [pic]B. 300 [pic]C. 720 [pic]D. 1800 [pic]E. 18000 3. What is the average (arithmetic mean) of all the multiples of ten from 10 to 190 inclusive? [pic]A. 90 [pic]B. 95 [pic]C. 100 [pic]D. 105 pic]E. 110 4. A cubical block of metal weighs 6 pounds. How much will another cube of the same metal weigh if its sides are twice as long? [pic]A. 48 [pic]B. 32 [pic]C. 24 [pic]D. 18 [pic]E. 12 5. In a class of 78 students 41 are taking French, 22 are taking German and 9 students are taking both French and German. How many students are not enrolled in either course? [pic]A. 6 [pic]B. 15 [pic]C. 24 [pic]D. 33 [pic]E. 54 6. If f(x) = Â ¦(x? – 50)Â ¦, what is the value of f(-5) ? [pic]A. 75 [pic]B. 25 [pic]C. 0 [pic]D. -25 [pic]E. -75 7. ( v2 v3 )? = [pic]A. 5 2v6 [pic]B. 5 v6 [pic]C. 1 2v6 [pic]D. 1 v2 pic]E. 1 8. 230 + 230 + 230 + 230 = [pic]A. 8120 [pic]B. 830 [pic]C. 232 [pic]D. 230 [pic]E. 226 [pic] 9. Amy has to visit towns B and C in any order. The roads connecting these towns with her home are shown on the diagram. How many different routes can she take starting from A and returning to A, going through both B and C (but not more than once through each) and not travelling any road twice on the same trip? [pic]A. 10 [pic]B. 8 [pic]C. 6 [pic]D. 4 [pic]E. 2 [pic] 10. In the figure above AD = 4, AB = 3 and CD = 9. What is the area of triangle AEC ? [pic]A. 18 [pic]B. 13. 5 [pic]C. 9 [pic]D. 4. 5 [pic]E. 3

Corporate Governance and Value Creation Relationship

Corporate Governance and Value Creation Relationship Department of Economics VALUE CREATION AND THE ROLE OF CORPORATE GOVERNANCE Abstract Corporate Governance is a subject of many professional and academic debates. Since there are many different research and contexts associated with corporate governance problem, then, this topic has continued to be an interesting topic under scrutiny. However, is has been observed that the relationship between corporate governance and value creation of corporation remains as an untapped area with enough consideration. This paper tends to investigate this linkage and using Enron case as critical analysis. TABLE OF CONTENTS (JUMP TO) 1. Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 2. Literature Review. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 3. Corporate governance and performance of the company . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3. 1. Definition and explanation of key concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3. 1. 1. The concept of corporate governance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3. 2. 2. The concept of value creation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3. 2. 2. 1. Definition of value creation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3. 2. 2. 2. The importance of value creation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3. 2. 2. 3. Measuring Value-creation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 3. 2. The impact of corporate governance in the Value Creation. . . . . . . . . . . . . . . . . . . . . . . . . . 17 4. The role of finance in creating value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 4. 1. The principles of management by the financial value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 4. 1. 1. The principle of double market. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 4. 1. 2. The principle of identifying financial levers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4. 1. 3. The principle of internal steering. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4. 2. The mechanisms and the extent of creating value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 4. 2. 1. The economic indicators. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 4. 2. 2. The indicators such as accounting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 4. 2. 3. The nature of stock market indicators. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 4. 3. The limits of management by the financial value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264. 3. 1. Scope limited and performance standards unrealistic. . . . . . . . . . . . . . . . . . . . 26 4. 3. 2. Transfer of risk to the employee shareholder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 4. 3. 3. Focus on short-term and limits the cost of capital. . . . . . . . . . . . . . . . . . . . . . . . 27 5. Critical approach to corporate governance: the case of Enron. . . . . . . . . . . . . . . . . . . . . . . . 29 5. 1. Introduction of the Enron affair. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 5. 2. Enrons scandal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 5. 3. The consequences of this scandal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 5. 4. The lesson from Enron Case. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 6. Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 7. Further study recommendation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 List of Abbreviations NGO Non- Governmental Organization US United State CEO Chief Executive Officer BOD Board of Directors COO Chief Operating Officer CFO Chief Financial Officer CRO Chief Risk Officer CFROI Cash Flow Return on Investment EVA Economic Value Added RCF Residual Cash Flow DCF Discounted Cash Flow CVA Cash Value Added RAN The Rainforest Action Network MFV Management by the Financial Value TSR Total Shareholder Return MVA Market Value Added NPV Net Present Value EPS Earnings per Share ROE Return on Equity EROR Economic Rate of Return PBR Price to Book Ratio 1. Introduction The successive industrial revolutions of the late eighteenth and nineteenth century were a major factor for the development of Western capitalism and gave gradually traits that characterize it today. In this movement, the company as a structure that brings together human beings who are organized to act on nature to obtain useful results and thus create value has always been at the heart of the capitalist system. However, in recent decades, many changes have affected the financial-market capitalism and gave new prominence to creating value for shareholders of the company. This has resulted in the emergence of a form of management oriented to advance the financial value and mobilize employees to that goal. This focus on value creation reflects a desire to meet the requirements of the shareholder because it has become in the current financial world a king increasingly adulated and increasingly capricious. Undoubtedly, this logic has largely influenced the conduct of the strategy of com panies that demonstrate ingenuity to cope with competition and remain competitive. However, it has undergone profound questioned at a number of scandals that have marked with an indelible history of finance and have been accompanied by strengthening institutional mechanisms for regulation of businesses and financial markets. In such a context of questioning, suspicion and doubt in respect of managerial practices, questions about the role of governance and firms value creation does it not absolute importance to apprehend the changes that occurring within the company? The aim of this paper is to answer this question. The structure of the paper is organized as follows. Section 1 provides a background of what has been done in the literature in the effort to capture relationship between corporate governance and value creation. Section 2 introduces the key concepts such as corporate governance and value creation. Section 3 illustrates the role of finance in creating value in firms. Empirical approach are presented and discussed in section 4, with special stress on the managerial behaviour in Enrons Company. Section 5 will conclude and propose further areas of research. 2. Literature review On the topic of relationship between corporate governance and value creation, there have been various researches and conclusions. Before examining about the relationship between corporate governance and value creation, many early studies has explored the linkage between Ownership and Value Creation as a beginning. Talking about owners who have been passionate about their ideas and visions to create the best value for their company, study named Ownership and Value creation of Carlsson. R. H (2001) gave a valuable historical review and illustration with case how active ownership has played an important role in company development. Through this book, we can see that ownership makes significant differences in corporate governance, it fulfils an indispensable role in the market and its quality made firm the best value. Later, in his research Corporate Governance and Value Creation, Jean-Paul Page (2005) has referred to the financial approach to corporate governance in his analysis. He has explored the connection between the foundation of power and decision making to create the large value for firms. In order to focus on an in-depth analysis of the links between value creation and governance, his research started with the assumption that regulation and laws exist to constrain corporate activities which could harm society as well as the economy, then corporate agreement is expected. Through a research, he tried to find the answers of who should hold the ultimate power which companies can create maximum value or how this power should be used. To do this, first, he discussed the delegation of shareholder power and a variety of standard to evaluate the performance of managers. Then, he presented a framework by which securities analysts can evaluate corporate governance system. As the result of his study , he strongly believed that directors of companies have the necessary judgment to discharge their value creation responsibility. Jean-Paul Page result is developed further in detail by Monks (2002) when he applied this theory into Volkswagen Company. After that, Huse (2007) successfully combines the behavioural of directors work and the value creation which contributes to both the practitioner and the academic debate. Huses book is based on two key ideas: the main task of a broad of director is to create value for company and looking inside board to understand the value creation process needs. His book provided a good discussion about governance effectiveness and value creation by an exploration of behavioural perspectives on governance and how various types of related factors influence governance as well as value creation. In addition, in his recent research named The Value Broad: Corporate governance and organizational behaviour in 2008, he aimed to go further and explore actual behaviour in creating value from entrepreneurial management perception throughout various European countries such as Netherlands, Italy. Beside, The differentiated Network: Organizing Multinational Corporation for value creation of Nohria. N and Ghoshal. S (1997) was successful to present the globally distributed capabilities of multinational corporations and organize these corporations for value creation. This study is built to develop these ideas of both authors above. Besides theoretical research and studies, many case studies were analysed to examine the implication of all theories in the real economic market. Case study in Finances: Managing for Corporate Value Creation of Bruner. R. F (1990) provided numerous financial analyses of the world famous and successful corporations such as Walt Disney, Atlantic Southeast Airlines, Morgan Stanley Group INC, Merit Marine Corporation. . . However, this analysis was published in 1990, it can not update with changes in the economy as well as financial scandals have been happened through recent years. Based on all these suggestions, an analysis of value creation and the role of corporate governance is an interesting paper. And Enrons scandal in 2001 is an updated illustration. 3. Corporate governance and performance of the company 3. 1. Definition and explanation of key concepts 3. 1. 1. The concept of corporate governance We can consider that the practices of corporate governance have ancient origins insofar as they are inseparable from the very concept of enterprise. Indeed, corporate governance problem was already in the eighteenth century. Adam Smith posed as soon as 1776, in the Wealth of Nations, the problem of separation of interests between managers and owners in companies per share. This question will take a new turn with the emergence in 1807 in France and then England with the Company Act and a little later the United States, the limited liability company. In general, governance refers to the governing relations between the leaders of a company more broadly, an organization and the parties concerned by the fate of the so-called organization, mainly those who hold legitimate rights - namely shareholders. Even if made generally and in order to illuminate our analysis, such a definition requires clarification. First, governance is focused on a category of actors of any organization: the lea ders of this organization, category sometimes reduced to a person, most often represented by a small group strongly hierarchical around the leader, sometimes expressed by semi-hierarchical and ill-defined contours. Whatever the difficulties of defining exactly and narrow, this category of actors always pay attention on a system of governance. Corporate governance can be seen as vast field and its works as regulatory body that includes (OECD, 2004): Chief Executive Officer (CEO) Board of Directors (BOD) Management of Organization Shareholders Stakeholders (Suppliers, Employees, Creditors, Clients and Social Communities) Then, the issue of governance is also the role and control of corporate officers in legal persons. The leaders of an organization finalized commercial, public . . . Speak and act on behalf of this organization: a title that they can buy, sells, hire, dismiss and so on. They have before it the financial, material, human, which can be considerable even excessive. Issues relating to their appointment as corporate officers, the conditions for exercising their mandates are, therefore, legitimate and make corporate governance a key point of management systems of the latter. Finally, the governance system includes various components that can be, simplifying, grouped into three sets of components: structures, procedures and behaviour. The structures involved in the governance system are varied. Some are specific to the organization concerned: general meeting, board of directors, ad hoc committees. Others are external and intervene on the basis of contractual missions (auditors, rating agencies) or as part of missions of general interest (regulatory authorities). The procedures are also very varied and more or less diversified in codes or codes imposed on the actors involved (chart of accounts, commercial code . . . ). They may involve both methods of collection and dissemination of information on the functioning of the entities concerned that ways and means to carry out such an operation such as changing the parameters of the structure or listing on the financial market. The behaviour complements the first two components by providing a dimension without which they would remain for the most formal. Such behaviour are those agents individuals is not the legal fiction made up by legal persons involved in the institutional and responsible to implement it and animate it. Therefore, their best practices, their ethics or, conversely, their lack of scruples and their departures were a major part in the effectiveness of governance systems like any human system. In their brilliant literature review of corporate governance topic, Shleifer and Vishny (1997) offered a definition of corporate governance: Corporate governance deals with the ways in which suppliers of finance to corporations assure themselves of getting a return on their investment (p. 737). This notion of governance seems rather simplistic. Because it is limited to the individual control worked out by shareholders and ignores the rights of all the other stakeholders in the company such as creditors, suppliers, customers, employees, and finally, the State and society in general. Indeed, the shareholder affects some form of power and imposes limits in varying degrees that affect value creation. Besides, this definition of governance fails to take into account the implicit rules and standard such as legislation, regulations and contracts. All these things actually have an important influence on final decision. In his book, Jean- Paul also gave the broad definition of corporate governance as follows: Corporate governance consists of the legal, contractual, and implicit frameworks that define the exercise of power within a company, that influence decision making, that allow the stakeholders to assume their responsibilities, and that ensure that their rights and privileges are respected. (pp. 2) To be successful in this notion, corporations must acquire the best resources such as: finance, material and human at the best if they want to create value or wealth. Good corporate governance is assessed in a book named Corporate Governance: Responsibilities, Risk and Remuneration, Keasey. K and Wright. M (1997) He defined a good corporate governance is as concerned with correctly motivating managerial behaviour towards improving the business, as directly controlling the behaviour of managers. They also analysed executive remuneration is one mean of motivating good behaviour. Illustrating the standard corporate governance frame work, both authors above indicated that the key elements concern the enhancement of corporate governance is via supervisors of management performance and ensuring the accountability of management to shareholder and other stakeholders. Analysis of a frame work of corporate governance was also carried by Hart (1995). He discussed the need for accountability and supervisor of director come up because there is a divorce between ownership and control power in large firms. According Harts study, supervision may take various forms ranging form system where shareholders are outsiders with little direct incentive to monitor management. Moreover, Whittington (1993) argued that is has to be noted that the accountability and supervision aspects take place within a wider regulatory framework which regulates relationship with external third party contractors. 3. 1. 2. The concept of value creation 3. 1. 2. 1. Definition of Value Creation As for value creation, it is an ambiguous concept because of the multiplicity of managerial practices associated with it: exchange value, book value or economic value partnership, value for the customer, and so on. In all case, the most important objective of every firm is to maximize resource allocation, to produce as much economic value as much as possible and to look up social well-being. Offering the best product and services at reasonable price is the way which firms can do to achieve these objective above. Jean-Paul Page (2005) examined economic value as creating wealth. Because the firms wealth is measured by the value of their product on the market, then, creating value for firm mean company will observe its prices and value increase as demand for its services and goods rises. Concisely, creating economic value means increasing in firms value, increasing in share price and creating wealth. As a result, corporate governance have to focus on decision that tend to maximize share price and then on the creation of economic value. This way will translate the wealth creation objective of firms into tangible results. 3. 1. 2. 2. The importance of value creation In his academic journal, Favaro. Khas proved that if firm puts their value creation as a first strategy, it will help a corporation growth in the greatest rate. First of all, by understanding how, why, where the value is created within your company; which is the market where your company perform best; identifying which of your companys activity and asset is distinctive enough to be a profitable growth will tell your company where and how to grow. The best example of this case, we have to mention about Coca -cola. Since the early of 1980s, Coca-colas leader discovered the value creation in their mix businesses and in the entire beverage system; then, this company have taken a major growth opportunity in their core business. Secondly, there are two advantages which putting value creation first can gives firms are: capital and talent. When firm set value creation first, they will never suffer from a capital shortage. Favaro gave explanation that, these companies which put value creation first will find sufficient capital for their investment needs and can attract a large capital from the market, and then they never miss any investment opportunities. In addition, knowing all important targets, these companies also understand how important the high standard and good qualification managers are. Therefore, over time, these firms will build a team of manager with better capabilities and standards. This will give company more managerial talent and help these companies achieve higher level of profitable and also sustainable growth than their competitors. Value creation enhances companys ability to grow up which requires perseverance Discipline and leadership skills. Through his experience, Favaro suggests that: By product, channel, customer, market and technology; skilled managers who always put value creation first will understand how or why value is created or destroyed. Then, they will know whatever cut will be the best reveal the truly capabilities or asset which their company have to do to get profitable and growth. Promoting, celebrating and rewarding managers who see growth is an outcome of their focus on value creation. Briefly, if a company put value creation first in the right way, their managers can identify how and where to grow, they will use capital better than others and build up more talents. Consequently, value creation will offer you a vast advantage to achieve profitable and long-term growth. It should be noted that these multiple approaches are experiencing varying degrees of success. Thus, while some of them are rather a fashion effect, others seem more rooted in the reality of management. This is particularly the case in the field of strategy with the general themes related to the competitive advantage that determines the value that a company can create for its customers and in the field of finance with the concept of maximizing the shareholder value. However, there are two themes refer to distinct managerial logic. In schematising, one can oppose a logic of financial reform dominated the creation of financial value and logic of integration that connects the various aspects of value creation. The financial approach emphasizes the idea that any asset is comparable, at least conceptually, a financial asset whose correct measure is the present value of expected flows of that asset, given the risk that it is linked. Thus, by analogy with financial assets, it is possible to buy or sell at any time comparable assets or reinvest the funds on other opportunities. The option is part of choice and is a factor of flexibility. The logic of integration recognizes the importance of value creation but the analysis as the result of a synthesis of different components of value, whether organizational aspects, competitive or institutional. It puts forward concepts such as basic skills, know-how of cooperation and coordination, competitive advantage. It requires a broader view of performance and the development of a scoreboard, including non-financial aspects. This concept of value creation is currently experiencing a revival and for several reasons. This renewal first undoubtedly result of the transformation of financial capitalism and its origin movements takeover carried out on companies that exploitation not effectively their asset base for shareholders. These practices have provided external visibility to market discipline that has prompted leaders to do more attention to creating value and bring back the shareholder at the centre of the strategy. In addition, development of globalization and the rise of new technologies of information and communication technologies have accelerated the process of internationalization of enterprises and networking complex and globalize. The result is a financial reform of the strategy based on the refocusing on the principal market and the pursuit of critical size. That is why the purchase of shares and options markets external growth is systematically privileged at the expense of endogenous development of the company. But for institutional investors, who control more companies using their power, the ability of business to create value is an essential criterion of assessment. Finally, another external factor that has boosted the value creation is the gradual disappearance of state monopolies especially in the case of France. The purpose of the public monopoly system based on the existence of cross-shareholdings is to ensure a stable partnership. The financial globalization has gradually reduce d the interest of a national shareholding making less essential closures capital that provides few resources. 3. 1. 2. 3. Measuring Value-creation: When evaluating value creation, there are three main measurements are: Cash Flow Return on Investment (CFROI), Economic Value Added (EVA), and Residual Cash Flow (RCF). G. Bennett Stewart III (1991). The Quest for Value. HarperCollins discussed Economic Value Added (EVA) as the heart and soul of Value planning. He described EVA is the one measure which properly accounts for all the complex trade-offs involved in creating value. EVA computed by taking the spread between the rate of return on capital r and the cost of capital c* and then multiplying by the economic book value of the capital committed to the business: EVA = (r-c*) x Capital EVA = (rate of return cost of capital) x capital EVA will increase when: The rate of return earned on the existing base of capital improves; that is, more operating profits are generated without tying up more funds in the business. Additional capital is invested in projects that return more the cost of obtaining the new capital Capital is liquidated from, or further investment is curtailed in, substandard operations when inadequate return being earned. These are the only way in which value can be created

Prayer - The Most Important Part of our Life Essay -- Prayer Praying

  Ã‚  Ã‚  Ã‚  Ã‚  We need to look at prayer with deeper thoughts. Prayer isn’t just closing your eyes, folding your hands and speaking. Prayer is a much more meaningful part of religion. We all need to pray, God himself demands us to pray. Prayer is defined as an act of God, a god or another object of worship, such as in devotion, confession, praise, or thanksgiving. When most people pray, they just say the same prayer, like the Lord’s prayer for example. Saying the same prayer isn’t really such a bad thing, its more about the meaning and the time that you spend praying. Prayer shouldn’t just be looked at as a routine or habit, but as more of a love poem to express ones self to God. Questions such as: why do we need to pray? What is this prayer?, and What does God command us to pray for? Are what we should be asking ourselves before we come to God in prayer.   Ã‚  Ã‚  Ã‚  Ã‚  Prayer is a very important action in all of us as Christians. We should know why we pray and why it is important. We should also know that prayer cant just come from our mouths but from our hearts as well. Our affections cling to self and to worldly objectives; our prayer cannot rise above their level no matter what words we use. In Luke 11:1 it says â€Å" Lord, teach us to pray, as John also taught his disciples.† we should be taught to pray either from the church or from the people around us. Taught in a sense of listening, not actually taking lessons on it. We need to pray because prayer is the most important part of the thank...

Violent Video Games Dont Lead to Increases In Violent Behavior Essay

A young, blonde woman stands with her fists raised. She shifts her weight back and forth, staying in constant motion. Her jaw is set and her blue eyes dangerous. She faces her opponent with no fear. Her fellow combatant is a skilled warrior and a member of a Shirai Ryu clan. He’s spent years mastering his own special style of martial arts. The woman observes him carefully. He’s muscular and, no doubt, fast. She cannot see most of his face, as a gold and black mask obscures it, but she can see his eyes. They’re merciless. She eyes the harpoon at his hip. He’ll probably go for that first and try to stun her with it. The cue is given and, sure enough, he grabbed his harpoon and aimed it at her, snarling, â€Å"Get over here!† She’d anticipated his moves well and she sidestepped his harpoon. He figured out that she knew his obvious attacks, he began to use more quick attacks, moving quickly in the shadows, confusing her. He soon overpowers her. Dazed and dizzy, she is at his mercy. Unfortunately, mercy is a quality he lacks. He wraps his harpoon around her neck and opens a portal. She’s pulled into it and he holds onto his chain tightly. Another portal opens above and her body dangles from it, strung up by his chain. The announcer’s voice lets out in a deep grumbling voice, â€Å"Fatality†. Meanwhile, in a living room, the gruesome scene fades to black and two friends laugh at each other for the graphic execution and go on playing the newest release of the Mortal Kombat series. While today’s games are ridiculously violent, can one honestly believe they can open a portal to hang their enemies? Do video games really warp the mind and cause players to be aggressive? Recent studies say no. It is not the game’s fault for a player to react viol... ...While there are violent games out there, children could, with the help of their parents, play cleaner games such as The Legend of Zelda or any game in the Mario series, and in the end, be benefited from it. Whether their stress is relieved, their brains stronger, or their connections with their families made unbreakable, video games can truly be a good thing for kids. Works Cited Hanna, Patrick. â€Å"Players. Not Games, Cause video game violence.† New Zealand Herald. New Zealand Herald, 27 July 2010. Web. 24 October 2011. Jayson, Sharon. â€Å"Study the Player, Not the Game.† USA Today. USA Today, 15 September 2011. Web. 24 October 2011. Jayson, Sharon. â€Å"Video Games Tied to Aggression.† USA Today. USA Today, 1 March 2010. Web. 24 October 2011. Paulson, Ken. â€Å"How obscene is video game violence?† USA Today. USA Today, 2 November 2010. Web. 24 October 2011.

The National Patient Safety Goals Are Effective Essay -- Nursing, Heal

There are a large number of professional organizations specific to healthcare. One such organization The Joint Commission, is a non-profit independent organization that certifies and accredits over 19,000 healthcare organizations in the United States. [Their mission statement is] â€Å"to continuously improve health care for the public, in collaboration with other stakeholders, by evaluating health care organizations and inspiring them to excel in providing safe and effective care of the highest quality and value† (The Joint Commission, 2011). The National Patient Safety Goals were implemented 2002. The goals later became effective January 1, 2003 to address specific areas of concern in regards to patient safety. Upon implementation, these goals have been effective in reducing the number of medication errors, improving communication between healthcare providers, and reducing hospital-acquired infections in patients. Thousands of individuals are admitted each year and require medication in the hospital setting. With the increasing number of admissions due to disease and illness affecting today’s society leads to the likelihood of nurses committing medication errors. Over the years errors resulting from medication have been the leading cause of injury in hospitalized patients. Forty six percent of these medication errors occurred at the time of admission, time of discharge or while transferring patients between units. [After reviewing these events], â€Å"The Joint Commission identified â€Å"Improve the Safety of Using Medications† as one of the 2009 National Patient Safety Goals (Cleveland Clinic, 2009, p.1). In relation to this safety goal, hospitals created a medication reconciliation form that resides in the patient’s ch... ...before a procedure, shaving is avoided and clippers are used to trim the hair. This reduces the risks of breaks in the skin. In addition, one hour before surgery the patient is administered antibiotics before the incision and discontinued within twenty-four hours. The National Patient Safety Goals are a key when it comes to patient safety. Implementing safety goals helps reduce the number of medication errors, improves communication between members of the healthcare team and reduces the number of infections patients acquire while under the hospital’s care. In addition, The Joint Commission reviews and publishes these goals each year. Depending on the occurrence of sentinel events, the goals are re-evaluated or revised accordingly. It is important that The Joint Commission reinforce the practice of patient safety goals in that they help improve patient care.

Female foeticide Essay

This is the cry of an unborn girl. Female foeticide means killing an unborn girl. Man has covered a long distance from prehistoric ages to 21stcentury, during this long period of time; women had to face different eras. There was a time when worshipping god was considered incomplete without a female presence and there come such a time when she was kept behind† pardah† ,bounded within the boundaries of her own home, many evils surrounding her and much more. she was tortured to the fullest but despite of all those difficulties, women came ahead. She fought and won. Now a days a new trend of female foeticide id evident, by killing her, before she opens her eyes to see this beautiful world. This practice is more in villages. It may be because of the illiteracy, fond for male child and most important reason of female foeticide is poverty because a handsome amount is to be given to the family-in-laws at the time of marriage and secondly increasing evils against women like rapes, eve teasing, kidnapping etc. â€Å"AS A BIRD CANNOT FLY WITH ONE WING A FAMILY CANNOT RUN WITH A MALE ALONE† No one can neglect the contribution of women in the society. Today, whatever height man has achieved, women workout as a ladder For man. Infact,man is on the sky, sitting on the shoulder of woman . she is the foundation of every small to big task being undertaken. Female foeticide is an evil. Even god doesn’t forgive the persons involved in this crime. Eradicating this evil is not a one hand clap!! GOVT., NGO’S and the society have to make out the rule ant then strictly implement it.mother herself has to come ahead and avoid evil practices. A female can give a ray of life to the parents and a ray of hope to the society.what we have to do is to observe inform and prevent female foeticide. always remember : â€Å"GOD RECEIDES WHERE FEMALE IS WORSHIPPED†

Wall Street: Money Never Sleeps

The movie response that will be covered in this essay will be on the film â€Å"Wall Street Money Never Sleeps †. It was directed by Oliver Stone, released during 2010 and is the sequel to the 1987 film â€Å"Wall Street†. The film starts with the release from jail of Michael Douglas' Gordon Gekko before cutting to a rather elaborate plot involving Shia LaBeouf as the young trader with (some) scruples, who's rising in a world that just happens to be collapsing at the same time, as investment banks run by the likes of Frank Langella and Josh Brolin teeter under the weight of the 2008 financial crisis. The story then carefully weaves in more and more to Gekko (who, conveniently, also happens to be LaBeouf's future father-in-law, a dad to LaBeouf's on-screen fiancee, Carey Mulligan) (Zeitchik, 2010). Greed seems to be Wall Street: Money Never Sleeps theme, reckless and over the top risky behaviour has lead to the bubble in the housing prices to burst due to the actions of Wall Street firms. Shia Labouf played by Jake Moore works for the Lehman Brothers-esque Keller Zabel and is mentored by managing director Lewis Zabel. He receives a bonus of $1,450,000, before a late-night treasury meeting, which reveals that Keller Zabel is on the verge of collapse. This brings up an important ethical issue on how much bankers and traders receive in bonuses, irrelevant of the financial climate. After the collapse of several large banks during the financial crises of 2008, many are still paying their employees substantial bonuses. Many argue that the UK government have pumped billions of pounds into the banking sector, and has bailed out both Royal Bank of Scotland and Loyds Banking Group. As a result they should have greater say in how much the banks pay out in bonuses, however the banks argue that they cannot dramatically reduce bonuses without the risk of losing top staff to banks based overseas, which are under less pressure to cut payments. Even if bonuses are cut, salaries have risen significantly to compensate, by up to 40% in some cases. This is one of the many flaws, which has been allowed to occur within the banking industry, to the point where it has become the norm (Peston, 2011). One of the most prominent ethical issues presented in this movie is the idea of insider trading, which is the trading of stock with hidden information that the general publics is not informed about. It began with rumours being spread on â€Å"Zabel† by Bretton James who runs the rival bank Churchill Schwartz, which caused the rumours to become true, and Keller Zabel to be on the verge of collapse. Bretton James then insults Lewis Zabel by offering him $3/share when the firm was trading the previous week at $75/share. Zabel claims that this was revenge for letting Jame’s company go under eight years ago. These series of events causes Zabel to commit suicide by throwing himself under a subway. To avenge his mentor Shia Labouf releases rumours on Churchil Shwartz, which caused their shares to drop down 8% in pre market trading costing them $120million. Insider trading can be a very powerful tool within the financial sector; it can be used to make large profits as well as destroying others. As illustrated in the movie, Lewis Zabel took his life due to the results of Insider trading. It’s a criminal offence in most countries, however as Shia Labouf said it’s â€Å"hard to prove†, this is due to the difficulty of trying to prove what a person has heard via word of mouth. Because Insider trading is illegal, insiders who wish to exploit price sensitive information collaborate with other traders to make it harder to trace the trades back to the person who is known to have access to the information. This is called an Insider Ring. The term â€Å"moral hazard† is mentioned several times throughout Wall Street: Money Never Sleeps. It’s first mentioned during the treasury meeting, when they are deciding whether to bail out Keller Zabel, if they bail them out what’s to say it wont occur again. Moral hazard is the idea that an individual can alter their behaviour if they know they are insured against some of the outcomes, for example if a car is not insured you would take more care than if it was. The reason moral hazard comes up several times throughout the movie is because it’s often used within the context of banks and sub prime mortgages. This is due to the fact that before the 2008 financial crises sub prime mortgage lenders were making reckless lending decisions, they lent many mortgages to people who were unlikely to be able to pay them back. This led to large-scale mortgage defaulting, which caused many banks to go under and cause the economy to suffer. However many banks were bailed out by governments in order to reduce the economy suffering further, which is effectively rewarding them for bad economic decisions (What is Moral Hazard, 2007). The issue of lack of corporate governance is apparent in the movie, its connected to the reasons why Keller Zabel and the other banks began to fail. A definition of Corporate Governance is a â€Å"set of relationships between a company’s directors, its shareholders and other stakeholders. It also provides a structure through which the objectives of a company are set, and the means of achieving those objectives and monitoring performance, are determined† (OECD). Events such as soaring pay packages for top bank executives which are often driven by extraordinary risk taking rather than real sustainable profits, weaknesses in risk management, board oversight, understatement of bad loans can all be linked to poor corporate governance (Corporate Governance failure to blame for banking crises, 2009). Money laundering is another un-ethical issue, which Wall Street brings about. Gordon Gekko reveals to Shia LaBeouf that he has $100million in a Swiss account under his daughter’s name, which she will be entitled to when she turns 25. Gordon suggests that him and his daughter travel to Switzerland sign the account over to LaBeouf’s name and he in return gives Gordon the money so that he brings it to the States in order to avoid the RAS getting involved, which is Money Laundering. To conclude there are many ethical layers within Wall Street: Money Never Sleeps, such as unjustified salaries, poor corporate governance, insider trading, moral hazard and money laundering. These issues are very real, and still go on in our daily lives. We continue to inflate these â€Å"bubbles† until eventually they will burst, and repeat the process. Albert Einstein said, â€Å"The definition of insanity is doing the same thing over and over again and expecting different results†. This seems to be very true of the banking industry and the lack of thought of the consequences to their actions. Gordon Gekko presented us with a question, â€Å"Is Greed Good? † I believe Greed can never be good.Bibliography †¢ Corporate Governance failure to blame for banking crises. (2009, 02 24). Retrieved 05 2011 from Professional Pensions: http://www.professionalpensions.com/professional-pensions/news/1441283/corporate-governance-failure-blame-banking-crisis †¢ DREA. (2010, 10 30). Movie Review of Wall Street: Money Never Sleeps. Retrieved 05 2011 from Businesspundit: http://www.businesspundit.com/movie-review-of-wall-street-money-never-sleeps/ †¢ Insider Trading. (n.d.). Retrieved 05 2011 from Moneyterms: http://moneyterms.co.uk/insider-trading/ †¢ Kenny, J. (2009, 02 25). Corporate governance failure driving banking crises. Retrieved 05 2011 from FTadviser: http://www.ftadviser.com/InvestmentAdviser/Investments/AssetClass/Equities/News/article/20090225/2d2a7d74-034c-11de-a6db-00144f2af8e8/Corporate-governance-failure-driving-banking-crisis.jsp †¢ Peston, R. (2011, 01 07). Bank bonuses ‘to run to billions in 2011†². Retrieved 05 2011 from BBC NEWS: http://www.bbc.co.uk/news/business-12131092 †¢ What is Moral Hazard. (2007, 12 11). Retrieved 05 2011 from Economicshelp: http://www.economicshelp.org/blog/economics/what-is-moral-hazard/ †¢ Zeitchik, S. (2010, 05 14). Cannes 2010: â€Å"Wall Street: Money Never Sleeps' issues its wake-up call. Retrieved 05 2011 from Los Angelese Times: http://latimesblogs.latimes.com/movies/2010/05/wall-street-money-never-sleeps-cannes-oliver-stone.html

Latin American History Essay

According to Chasteen (2006), Latin America can be regarded as either having a single history or not. The twenty countries can be said to have a common history due to them being similar in more ways than one. When looked at from a different perspective, they can also be said not to have a single history because these countries’ history cannot be accurately and fully described in one story. This article will explore Chasteens’ views with the aim of establishing if his views are accurate. Jose Maria Caicedo was the first one to refer to this geographical region as ‘Latin America† The introduction of this name encompassed both the Spaniards and French speaking people occupying the lands. Latin America is comprised of countries found in the south of the United States of America and maybe sub-divided into regions namely; Carribean, Central America, South America and North America. Latin America is the 4th largest Continent on planet Earth. History shows that the entry and exit of regions into and out of Latin America was a gradual transition that cannot be traced to specific dates. One common feature of these countries is the European conquest and colonization. Christopher Columbus arrived there in 1942, consequently opening them up to the world. Eventually, the region was taken over by European powers comprised of Portugal and Spain, who introduced diseases such as small pox in order to weaken the indigenous populace. Many died, while the survivors were subjected to forced labor. Eventually independence was attained between 1810 and 1830 through a string of freedom fighters. The Latin American republics also share a religion because during the period of colonization, the Roman Catholic Church was introduced in order to override the traditions of the natives. It became the major economic – political power and the authorized religion of the land. Most of the republics of Latin America, spoke the languages of romance, which were French and Spanish, with Spanish being the main dialect. Another language that was spoken is Portuguese. These dialects existed because these countries were colonized by Spain and Portugal. Some countries e. g. Guyane speak English, Suriname speaks Dutch and Brasilia speaks Portuguese. The Latin American nations possess a rich ethnicity in the make-up of the populace. We find the Amerindians who are the Aborigins, then there are the Blacks who were slaves brought in from Africa, the Asians who were traders from Japan and China, Mestizos were as a result of inter-marriage between the Europeans and the Amerindians and the Mulattoes from marriages between Europeans and Africans. The Whites were composed of the Spaniards and French and last but not least were the Zambos who came up as a result of mixed marriages between Africans and Amerindians. Another common trait was the signing of the International Human Rights Treaties by the 20 Latin American countries and the 28 Post Communist countries. The treaties addressed civil liberties, freedoms of speech, assembly, association, movement, religion and the independence of courts. Civil liberties of Latin American countries had been smothered by the Communist rule, which eventually collapsed between 1989 and 1991. Human rights and democratic self governance rights significantly improved across the countries after the fall of communism. This improvement was triggered by the increased shining of the spotlight on conduction of open and just elections. Personal integrity privileges remained explosive as they were for the most part affected by the struggle involving government and guerrilla movements. Crowley (1993) says the rights experienced a stunted improvement but nevertheless started showing progress as from 1991. The Latin American countries went through a state of dependency and neo-colonialism. Grandin (2004) wrote that in order to safeguard its economic interest, USA provided fiscal, military and moral support to the non-independent countries. Liberalization was initiated from 1989, though the Soviet and Yugoslav conflict continuously hindered growth. However, progress could by 1993 because there were more liberal and semi-liberal countries, and an increased show of respect for individuals’ rights to own property. In conclusion, it can be said that not only are the Latin American countries unified geographically, but across the cultural, economic, religious and historical background. Their masters without knowing united these countries, creating a wealthy people, empowered to transform their continent into a resourceful and culturally rich continent. References Chasteen J. C. (2006). Born in Blood and Fire: A Concise History of Latin America. New York: W. W. Norton & Co. Crowley, W. and Timothy P. (1991). Guerrillas and Revolution in Latin America: A Comparative Study of Insurgents and Regimes since 1956. New Jersey: Princeton: Princeton University Press. Grandin, G. (2004). The Last Colonial Massacre: Latin America in the Cold War. Chicago: Chicago University Press.

Chapter 12 Taxation and Income Distribution

Chapter 12 Taxation and Income Distribution I. Impact of taxes on income distribution hard to determine because of tax incidence II. Tax Incidence a. Who actually pays a tax b. Legal Incidence – who is legally responsible for paying a tax c. Economic Incidence – who actually pays the tax d. Example – tax of $1 is placed on $10 item how is income distribution affected i. Price stays at $10 – income of seller reduced ii. Prices rises to $11 – income of buyers reduced iii. Price rises to $10. 30 – buyers pay $. 30 and sellers pay $. 70 e.To the extent taxes affect quantity sold and produced, tax affects income of suppliers of inputs for the product. i. Example: tax on gasoline reduces gasoline consumption it reduces income of gasoline tanker truck owners and drivers. ii. May reduce the income of furnace manufactures by reducing the price of heating fuel. III. Tax Incidence Perspectives a. People pay taxes not corporations b. How to group people for purposes of tax incidence i. Often think of producers and consumers 1. But consumers are also producers and producers are also consumers 2. 0 of households own stock directly, others own stock indirectly ii. By income Rich, Middle Class, Poor 1. How do you define these categories? c. Tax affect both suppliers of inputs and consumers of a product. i. In practice tend to ignore one side and do analysis on the other 1. Tax in commodity ignore impacts on inputs 2. Tax on inputs, ignore impact on consumers d. Incidence depends on how prices are determined i. How taxes change prices determine who pays the taxes ii. Amount of time is important – more time more adjustment to taxes e. Tax incidence depends on how tax revenues are spend . Progressiveness of tax system i. Policy says tax system should be progressive. ii. Higher income pay a higher percentage of taxes 1. Usually measured as increase in average tax rate taxes/income 2. Exemptions, deductions and marginal rate structur e affect average tax rate iii. 2 measures 1. Percentage change in tax rate divided by percentage change in income 2. Percentage change in taxes divided by the percentage change in income 3. Measures can produce different results IV. Partial Equilibrium Models of Tax Incidence a. Analyzes impact of tax on the market in which tax was imposed b.Ignore impact of market change on other markets i. Appropriate if tax is small ii. Appropriate if market is small iii. Otherwise need general equilibrium analysis c. Tax incidence of a unit tax – tax per unit of the good i. Legal incidence on buyers – figure 12. 2 1. Tax reduces the demand curve for the product from the supplier’s point of view since at each price the consumer buys less of the product. [pic] ii. Legal incidence on seller – figure 12. 3 1. Tax reduces the supply curve for the product from the consumer’s point of view since at each price the suppliers supply less of the product pic] iii. Economic incidence is independent of legal incidence 1. Arrive at same Price, Quantity, and tax split regardless of whether tax is on producer or supplier. a. Sales tax example iv. Tax incidence depends on relative elasticities of demand and supply v. Example Qd = 1,000 – 5P and Qs = 4P – 80 Tax $45 per unit [pic] [pic] d. Tax incidence of an ad valorem tax – tax per unit of the good i. A percentage tax rather than a unit tax ii. Sales tax as compared to gasoline tax iii. More difficult to calculate but shifts demand as shown in figure 12. V. Payroll Tax Controversy a. Legal incidence 7. 5% paid by employer and 7. 5% paid by employee b. Statutory distinction between employer and employee is irrelevant c. Economic split depends on elasticity of supply of labor d. Logical that the labor supply is fairly inelastic i. Household provides certain amount of labor regardless of wage ii. May not be true in long run VI. Tax on Capital a. Increasingly capital perfectly mobile b. M oved to where return is highest after adjusting for risk c. Rate of return on capital same everywhere in world d.No single country can make suppliers of capital bear any portion of a tax on capital VII. Taxes in markets with monopoly power a. Impact of taxes same as in competitive markets b. Consumers and monopolist share tax depending on the elasticity of demand c. Figure 12. 10 VIII. Taxes in oligopoly markets a. Impact of taxes difficult to determine b. Price increase resulting from reduction in output resulting from the tax may make a company more profitable IX. Tax on profits a. Tax on normal profits reduce investment because profit is return on capital and risk b.Tax on economic profits born entirely by company with change in behavior c. Seemly ideal tax but not very operational X. Tax Incidence and Capitalization a. Tax increase on real estate is capitalized into PV of property b. Borne entirely owners at time tax is levied c. May be reimbursed if public expenditures increase property values XI. General Equilibrium Models a. Read first paragraph P 271 b. Generally not operational [pic] ———————– Po Pg Pn Q0 Q1 Supply ConsumerDemand Supplier Perceived Demand Tax paid by Consumers Tax paid by SuppliersDeadweight Loss from Tax Consumer Losses and Producers losses Po Pg Pn Q0 Q1 Supply Demand Consumer Perceived Supply Tax paid by Consumers Tax paid by Suppliers Deadweight Loss Consumer Losses and Producer losses Deadweight Loss Consumer Losses and Producer losses Tax paid by Suppliers Tax paid by Consumers Consumer Perceived Supply Demand Supply 300 400 95 140 120 Deadweight Loss from Tax Consumer Losses and Producers losses Tax paid by Suppliers Tax paid by Consumers Supplier Perceived Demand ConsumerDemand Supply 300 400 95 20 200 120 140