Pci, Case Study, Mia Case Study

INTRODUCTION The issue started on February 2008 when the new appointed Managing Director of PCI Sdn Bhd, En Ghani reviewed 2007 Financial Report and found out there were recent increases in costs of goods sold and inventories. The rate of increase in costs of goods sold had been disproportionate with growth of sales. En Ghani was informed that one of the reasons for the increase in cost was because of the current purchasing system that contributes to redundant purchasing and high inventory holding costs.Siti Aminah, the Chief of Financial Officer was asked to review the current purchasing system and suggested the need to implement a new computerized purchasing system that would help relieve some of its manual operations and at the same time would ensure it has the proper controls in place. En Ghani requested a formal report on current purchasing system and suggestion for a new system before the next management meeting which would be in two weeks time. En Ghani assigned Siti Aminah on the special task instead of the senior Chief Production Officer and she did not have any experience in system and technology.The new system must be able to reduce costs, enhance control and provide easy management of users and services in qualitative and quantitative ways. CHARACTERS En Ghani : as the new appointed Managing Director of Penda Cable Industry Berhad, who reviewed past year Financial Report and asked for formal report from Siti Aminah. Siti Aminah : the Chief of Financial Officer that being asked to make formal report instead of the Senior Chief of Financial Officer. CURRENT PURCHASING SYSTEM IN PCIPurpose : to ensure the purchase of raw material (exclude external Aluminium cable scap) that was required for the manufacturing of cable, conductors and associated products. 1) Monthly Raw Material Summary Cik Lim General Manager of Material Resources and Planning En Razi Assistant Purchasing Manager (MRMS) Review 1st week of Forecasted Monthly Every month Material Requirem ent En Sam General Manager Purchasing (MMR)MRMS Planning Section En Razi 2) Cik Anne Purchasing Clerk >RM100 000 En Ghani Filing En Min Raw Material Storekeeper

Human Capital Theory

To what extent can Human Capital Theory provide a plausible explanation for inequalities in the labour market? Illustrate your answer with examples of labour-market segmentation tied to race or gender or social class. Introduction: Human capital theory can be identified as studies of organisations, individuals or nations which accumulates stock of productive skills and technical knowledge from study of investments (Becker, 1964). By following the judgement of human capital theory it can be said that it represents a path for the individual to develop his or her charisma to the labour market . Human capital theory is used as a analysis of theoretical frame , development of competence , formal education and job tenure probably are the crucial aspects for the individual’s perceived employability. As a result investment of individuals in these respects would be essential factors in identifying their perceptions of the possibilities that exist for gaining new employment (Judge and Bretz, 1994 et al, 1995). Efficiency losses and Gender differences: In recent times around 50 % of woman around the world are in the labour force officially, approximately 1/3rd of all workers are constituted by women’s. Work unpaid performed by females most of them because following the tradition of division of labour within nature of employment on family farms . Although it attracts pay, men’s work is valued more than women’s. Earnings of women is normally average around 2/3rd of men’s . In general, simply 1/5th of world’s wages accrue to women partly because they are engaged usually in low paying-jobs. Still in these jobs, payment is less usually to women compare to men instead doing comparable work (Bergmann, 1971), the result of discrimination and exclusion of women are solely the gender differences in labour market, to evaluate a method the output and wage are affected under conditions of discrimination it has been projected in the context of racial segregation, According to (Tzannatos, 1988) this method can be extended to apply in context of gender on the basis of assumption that men and women have same human capital and preference. This exercise is preceded in two steps, in beginning it estimate the output in present conditions, namely, when differences occupational and wage within industries. Secondly, output is re-estimated assuming within industries are eliminated due to occupational differences, Therefore differences between two estimates of output provided when there is maximum welfare gains indicated it can be achieved, but characteristic and preferences are same of women as compare to men and equally treated in labour market. For Example: UNESCO 1999 In India , women around 88 % in higher education opted to majors in arts and commerce but 1 % of women choose occupations like engineering . low paying jobs are choose by majority of women in Kerala like nurses , clerks , school teachers and typists. Dreze and Sen, 1996) Kerala which ranks first within states of India in Gender development and Human development Index, In fact female in Kerala enjoyed a better status in society than other females in rest of the part of India and although a male child is considered to be more valuable compare to female in India but in Kerala it is different case, women exceeds 1000 to males Except districts such as Wayanad and Idukki. According to census conducted in India, Kerala outnumbered men, the independence and pride among the women in Kerala has instilled in them (Jeffrey, 1987). In Some countries, women who are married are prevented from working due to law or by strong social customs, in late 1970s and early 1980s it was true in Korea and Japan in which women had to left their jobs due to marriage (Horton, 1994), although in Korea it is no longer to discriminate against women married in dismissal and promotion, hiring in discrimination is still un punishable due to law and remained sex stereotyped in Japan ,Discrimination against married women is still carried and permitted in Indonesia and due to the law husband is identified as the household head. Provisions such as results in working women or women workers being left with the last option that is into dead-end jobs, although first to lay off but still paid low wages, This overcome women’s incentive to remain in labour force to human capital. Treatment for the married workers in the family can be strengthen the traditional specialization of labour with in the statistical discrimination and household . From the perspective of Cigno (1994) there is existence of gender biases in various forms, more often in family treatment as a tax creates disincentives to work for women and taxation due to joint tends women to stay at home rather than separate taxation due to the higher marginal taxes that the earnings of worker which is considered secondary or usually, the wife attract . axation if separated may increase incentives of women while working and might result in greater participation as compare to the husband in domestic activities. Apart from this area Gustaffson (1995) believed that divorce laws not to oblige fathers to support their children. Additionally, the financial ability was lacked by women to access the courts . hile enabled legal provisions that equal sharing of responsibilities and child care among parents, on work constraints women’s are relaxed and eased so poverty declined among mothers for an example authorities in Sweden serious attempts are made to identify th e fathers to make them share the cost of finance for the child rearing die to this there is increase in price of children to men and indirectly there is reduction in the fertility which results in beneficial effects to welfare of women and work . Trzcinski and Alpert, 1994) maternity leave deals with which is physically demanded by new mothers and pregnant mothers and there is variation in the provisions maternity legislation among the developed countries for example in Canada there is 15 weeks leave where as in U. S. A only 6 weeks and provisions of maternity also differs such as private one or national system . here as in Philippines and Thailand the family extended has enables women to work after the family formation by giving the day care facility and in some South Asian countries and African Countries children are not constituted as a major barrier for female in labour force participation and neither there is reduction of potential duration of working life compare to men . Ther e are two types of legislations:- 1. Equity promoting legislations It is known as the requirement that women and men are paid equal wages or have equal opportunities. 2. Protective legislations In short it consist of maternity , hazardous and night work it is seen that this legislation is more valuable to women than was legislation to ensure the conditions exploited women faced during the industrialization. (Goldin, 1990) According Mason (1988) Protective legislation to women can lead to discrimination statistical against the group deem to benefit such kind of regulation usually helps out who are already working but hampers which are seeking for a job in the protected sector or it can create blockage between both covered and un covered sectors . For example restriction on night work from specific work can excessively reduce ability of women to compete effectively in the labour market. In countries like Britain, New Zealand, Canada and Greece female pay used to be prescribed as reference to male pay underpayment of women was depended in two things and first thing is man was considered usually to look after and support a family and be paid family wage by which he can support him and his family, secondly it was considered women working for her own as single and married for additional family income. MacDonald, 1994) Wage setting of this kind refection of existing norms. This type of wage setting was suitable for employers on the basis of short run-minimization of cost considerations. while the differential pay rates for men and women workers was removed from law and single wage rate was added in the law due to this gender pay gap was reduced in some of the cases. Previously female and male wage rates were replaced by rates for l ight and heavy work . According Ehrenberg and Smith, (1987) in the case of gender differences of pay by employment segregation instead of unequal pay in the same job or employment and overt wage is illegal and discriminative, Schemes such as job evaluation can be undertaken to check a cook or carpenter is worth in comparison, although it is true that both work requires same level of training , esponsibility and effort, possibly cook are mostly women’s and carpenter are men’s in this case labour market will first assign lower wage to cook than carpenter . It is not fair as two comparable workers in terms of human capital characteristics will be awarded differently and it has been proved by having a glance at evidence in U. S. A that it has adverse effects on employment by following the comparable worth principle. Conclusion: This concludes that a labour market perspective, and most important recommendations of this is that policies should treat reproduction and unpaid work as recognized economic activities, secondly the legislations are important timely but not be over designed and case of economies indicates that women workers faces risk of poverty that were traditionally borne by enterprises are now lost such family leave, day care, child allowances. It also explains the discrimination faced by women and inequality done in labour market segmentation tied to gender and race and also due to the unfair law followed in earlier times by many countries but in these some legislations proved to be successful such as equal payment to men and women in developed countries and facts such as comparison of labour resulted in unfair wage distribution found by evidence from U. S. A We also know that how women are considered less valuable in some countries in comparison to men and how it affects the women society and indirectly the human capital of women workers and moreover it can be seen that it is male dominated, certain action plan worked in developed countries but not in other countries and from example of India we can see the selection of work of women that is the low wage work selection due to this women are lacking behind because of decision-making ability compare to men ,Thus from the above essay we can see the inequalities and problems faced by women while surviving in the human capital labour market . References:- Becker, G. S. (1964). Investment in human capital: A theoretical analysis. Journal of Political Economy, 70, 9-49 Bergmann, B. (1971) The effect on white incomes of discrimination in employment. Journal of Political Economy 79(2), 294–313 Tzannatos, Z. (1988) The long run effects of the sex integration of the British labour market. Journal of Economic Studies. 15(1), 1–18 Judge, T. A. and R. D. Bretz (1994) ‘Political Influence Behavior and Career Success’, Journal of Management 20(1): 43–65 . Judge, T. A. , D. M. Cable, J. W. Boudreau and R. D. Bretz (1995) ‘An Empirical Inves- tigation of the Predictors of Executive Career Success’, Personnel Psychology 48(3): 485–519 UNESCO. Report of Expert Group Meeting on Training of Women Graduates in the Development Process, Thailand, February 1999 Dreze, Jean, and Amartya Sen. India: Economic Development and Social Opportunity. Delhi: Oxford University Press, 1996 Jeffrey, Robin. â€Å"Governments and Culture: How Women Made Kerala Literate. † Pacific Affairs 60 (Autumn 1987): 447–472 Cigno, A. (1994) Social security, the tax treatment of couples and the position of women. Paper presented at the Gender Symposium, World Bank, Poverty and Social Policy Department, World Bank, Washington, DC Horton, S. (1994) Women and Industrialization in Asia, Routledge, London Gustaffson, R. (1995) Single mothers in Sweden: Why is poverty less severe. In: Katherine McFate, Roger Lawson and William Julius Wilson (Eds. ), Poverty, Inequality and the Future of Social Policy: Western States in the New World Order, Russell Sage Foundation, New York Trzcinski, E. , Alpert, W. T. (1994) Pregnancy and parental leave benefits in the United States and Canada: Judicial decisions and legislation. Journal of Human Resources. 29(2), 535–555 Mason, M. A. (1988) The Equality Trap: Why Working Women Should Not be Treated Like Men. New York MacDonald, M. (1994) Social security policy and gender, Paper presented at the Gender Symposium, World Bank, Poverty and Social Policy Department, Washington DC Goldin, C. (1990) Understanding the Gender Gap: An Economic History of American Women. Cambridge University Press, Cambridge Ehrenberg, R. , Smith, R. (1987) Comparable worth wage adjustments and female employment in the state and local sector. Journal of Labor Economics 5(1), 43–62

Talent Management In Abu Dhabi Aircraft Technologies Dissertation

Talent Management In Abu Dhabi Aircraft Technologies - Dissertation Example In the global business environment where competition is intense and a large number of multinational organizations compete with each other for the same markets, it is important that organizations value their competitive resources and make try to differentiate themselves from competition (Sandler, 2006). In most cases, the concept of competitive advantage means having a resource that is valuable and unique and which the other organization cannot easily emulate, thus having the benefit over our competition. This resource could be in the form of access to the scarce raw materials, innovative operational processes or having unique competencies in market distribution systems. However, more recently, human resources are too being recognized as a source of competitive advantage (Sullivan, 2004). Pre-established theories like organizational theory and agency theory help in reaching an understanding that human resources can provide a distinct and unique advantage to an organization, not only o n the basis of their skills and abilities, but also as a result of their commitment and engagement with their organizations (Romans, 2005). Worldwide surveys i.e. annual national surveys conducted by U.S. office of personnel management and other global organization like deloitte and CIPD etc, have revealed that organizations that have satisfied and happy employees were able to be more effective and perform better on indices like sales, revenue generation, customer satisfaction and customer loyalty.

Contemporary Policy Environmental Economics Essay

Contemporary Policy Environmental Economics - Essay Example Russian then President Putin ordered to stop supply of gas by Russian government owned Gas Company namely â€Å"Gazprom† to Ukraine. This had sent shock waves to EU’s administration. Putin’s move was politically motivated as Ukraine wanted to free from Russia and to align with the West. Putin’s action clearly demonstrated bully-boy political manoeuvres to put pressure on Ukraine’s Prime Minister Victor Yushchenko to realign with Russia again. Some critics argued that move was based on fiscal reasons to put force on Ukraine to defer market price for the gas supplied from Russia and to shell out the lion’s share of revenue it generating from key European- Russian pipeline system it operates. Though , the supplies were resumed within few days due to pressure exerted by EU on Russia , the loss of about 40% of gas during peak winter season and this made France and Germany to summon emergency EU ministerial meetings . The fact is that Europe is hea vily relying on Russian gas whereas Russia is heavily relying on European market, technology and goods. Realising the significance of the issue, EU immediately revealed its â€Å"European Energy Policy† to tackle the future energy supply crisis. As a result, EU announced obligatory renewable energy target for each EU nation and hence, the overall EU will get 20% of its renewable source energy including for transport, electricity, aviation, cooling and heating and for UK, the target has been set at 15% by 2020. This research essay is going to analyse how UK government is going to achieve this target. It also suggests measures to be taken by UK government to achieve this target by discussing the various aspect of the research subject. Total power consumption in UK in the year 2004 amounted to 325,000 GWh which had been mainly manufactured from power plants using fuels like coal, gas and nuclear. In 2004, renewable

Louis V. Gerstner Jr Research Paper Example | Topics and Well Written Essays - 1000 words

Louis V. Gerstner Jr - Research Paper Example Question is: Is leadership is different from management? Since the answer is yes, was Gerstner an effective leader? In his book â€Å" Elephants Can’t Dance â€Å", Gerstner during his first day at IBM stated the following â€Å" I’d like to say to all of you is that the last thing IBM needs right now is a vision†¦what IBM needs right now is a series of very tough-minded, market driven, highly effective strategies for each of its businesses† (Gerstner, 2002, p.68). After his speech, he began putting his hands on the dirty job which included letting go of no less than thousands of employees. He was serious about the business of keeping IBM afloat and popularity of his decisions was the least of his concerns. IBM learned a painful lesson in management and leadership from Gertsner but it was able to go back to its feet and survive tougher circumstances like the recession today. A study published in the journal Industrial Management identified practical qualities of effective leaders. Gerstner has at least two practical qualities that made him an effective leader, namely: â€Å"lead by example and read situations and people well â€Å"( qtd. from Enterprenuer.com). Gerstner employed these three practical qualities when he read IBM’s situation clearly because he knew what has to be done despite the surmounting odds way back then. This is not definitely pure luck as this quality was honed by years of experience at a previous company – American Express. It is possible that good instincts and lessons learned from mistakes developed Gertner’s keen observation of situations and people in a business environment. When he was hired as consultant for the fledgling Sony, Gerstner again read the situation as he said†   "The cultural issues, as I found at IBM, are the most fundamental, the most difficult."( Gunther, cnnmoney ,2006) In shor t, he mentored Stringer through

Ralph K. Andrist's The Long Death Essay Example | Topics and Well Written Essays - 1250 words

Ralph K. Andrist's The Long Death - Essay Example achinery, the railroad, concepts of private property, and the capitalist economic system all served to further isolate the Indians both geographically and economically. By 1864, the Native territory had been shrunk and was on a path to the coming reservation system that would be the death knell for the Indian culture and way of life. The violence that began at Sand Creek in 1864 culminated in the 1890 Wounded Knee massacre and signaled the passing of the great North American Indian civilizations. While the violence against the Native Americans did not begin at Sand Creek in 1864, it was the most egregious violation of human rights that had been perpetrated on the Indians to that date. In the early morning hours of November 29, 1864 US soldiers from the Colorado Territory militia and cavalry brutally attacked a Cheyenne settlement that was occupied by some 700 unarmed inhabitants, mostly women and children (Andrist 91). The Indians had been isolated on a small tract of land to make their territory available to the Gold Rush. Estimates vary on the number killed, but may have been as high as 500 fatalities. This was a peaceful village that had been led to believe that they were under the protection of the Army. In the summer of 1864 John Evans, Governor of Colorado, issued a proclamation of safety for all Plains Indians that demonstrated their peaceful intentions by placing themselves in the custody of the Army (Keenan 104). The Indians were told to fly an American flag as a sh ow of their loyalty as a means of protection. However, the American flag and a subsequent white flag both went unheeded as the troops attacked. The commanding officer at Sand Creek, Colonel Chivington, ordered the attack and was personally responsible for the degree of brutality exhibited. Prior to the onslaught Colonel Chivington "believed it to be right and honorable to use any means under Gods heaven to kill Indians that would kill women and children and damn any man that was in sympathy

Identity Theft Essay Example | Topics and Well Written Essays - 2000 words

Identity Theft - Essay Example In the given paper we will consider the Identity Theft as one of topic related to the ethics in computing, will examine the nature of the given problem, methods of its investigation and prevention. Information explosion, supported by this period of easy credit, has resulted in the expansion of a crime that is fed by the inability of consumers to trace who has access to their private information and how it is protected. This crime is called identity theft and it refers to the act of stealing victims’ personal information such as name, birth date, Social Security number, credit card number, passport, address, with the aim of impersonating them typically for one’s own financial gain by gaining access to their finances or with an aim of framing the clients’ for a crime. (United States Department of Justice, 2006). It can also be used to facilitate illegal immigration, unauthorized phone or utility services’ use, terrorism, espionage or a permanent change of identity, to obtain medical treatment, or for evading criminal prosecution. Identity theft is sometimes also referred to as â€Å"identity fraud† since the criminal personates rather than dele tes the victim’s identity. It is usually used to refer to credit card fraud, mortgage fraud and other kinds of financial frauds. Identity theft occurs in different ways, ranging from negligent sharing of personal information, to deliberate theft of wallets, mail, purses or digital information. For instance, in public places brigands engage in "shoulder surfing" observing you from a close location as you punch in your phone card or credit card number or listen in on your dialogue with somebody if you dictate your credit card number over the telephone. Inside your home, thieves may get information from your personal computer while you are on-line and they are secretly sitting in their own houses. Outside your home, thieves filch your mail, recycling, or garbage.

Pancreatitis Essay Example | Topics and Well Written Essays - 250 words

Pancreatitis - Essay Example In serious cases, acute pancreatitis leads to bleeding into glands as well as tissue damage. It leads also not only to cyst formation, but also to infection. Severe pancreatitis has also the potential of harming other essential organs like the heart, kidneys and lungs. According to Digestive Disorders Health Center, â€Å"chronic pancreatitis is long-lasting inflammation of the pancreas† (Digestive Disorders Health Center 1). In most occasions it results from acute pancreatitis. Heavy consumption of alcohol has also been associated with its causation. Damage to the pancreas as a result of heavy consumption of alcohol occasionally leads to no symptoms for many years. However, the victim of heavy consumption of alcohol may develop serious pancreatic symptoms. Symptoms of acute pancreatitis include nausea and vomiting, fever, and increased heart rate. The disease also leads to upper abdominal pain that spreads to the back as well as swollen and tender abdomen. The symptoms of chronic pancreatitis include all symptoms of acute pancreatitis in addition to weight loss as a result of malabsorption and diabetes if the cells involved in producing insulin are destroyed (Buchler 108). Treatment for acute pancreatitis obliges one to spend some days in hospital in order to access intravenous (IV) fluids, medication for relieving pain, and antibiotics. During the healing process, an individual is required not to eat in order to allow the pancreas to rest. Performance of Therapeutic Endoscopic Retrograde Cholangiopancreatography aid in the healing of chronic pancreatitis; it enhances the admission of sphincterotomy, gallstone removal, stent placement, and balloon

An Analysis of Space and Place in Cinema Essay Example | Topics and Well Written Essays - 4500 words

An Analysis of Space and Place in Cinema - Essay Example The essay "An Analysis of Space and Place in Cinema" presents an overview of film space and place definitions considering their role in the aesthetic perfection of a film. Space and place in cinema is a topic worth on the go discussion. Film space is not a topic that can be glanced at untailored. Space in cinema is determined by the director, who is the first viewer when the angles which are not relevant for creating the space are screened out by him. Film space is a term that can be interpreted in various perspectives. In a film, space is used in a set design that is both literal and metaphorical. As an extension to this particular point, it can be stated that when conceptions of space are re-orientated it is not simply within a particular scene, but its significance is extended through the entire film. More specifically, an object on the wall shown in the first scene may not be brought into the film again; in spite of this, its significance stays behind. Actor’s body in space is the next level of significance. This idea can be expanded, the actor’s dimensions and negotiations of space and filmmaker’s skill to represent a movement through space. The concept space can be comprehended only by moving through spaces. In such an outlook the acting body is recognized as the site of transference between the viewer and the actual site of the film. Apart from this, the manipulation and creation of the space are by the camera eye. And in cinema, dissimilar pieces are put into place.

Rogers Chocolates Essay Example for Free

Rogers Chocolates Essay What is competition like in the premium chocolate industry? Which of the five competitive forces is strongest? Which is weakest? What competitive forces seem to have the greatest effect on industry attractiveness and the potential profitability of new entrants? The premium chocolate industry is having an intensive competition in Canada with the strong growth potential. Industry growth opportunity imposes increasing competition from rivals and threats of new entrance that adds pressure on overall profitability. Even though Roger’s has been able to establish its place in the chocolate industry with its strong brand recognition and products’ quality, it still needs to be on top of ever- going market changes, by continuously monitoring, crafting and updating its marketing and packaging strategies. Only then it can sustain its competitiveness from the front line rivals. For that, intensity of rivalry among competitors and the threat of new entrants are considered the strongest competitive force, given the fact that the premium chocolate market was growing at 20 percent annually. Given that Rogers’ Chocolates has successfully targeted market niche by its strategy based on differentiation, and by concentrating on narrow consumers segment comprising of affluent customers looking for a luxury experience with a superior taste or an elegant, prestigious and uncommon product, it can be said that the weakest competitive force for Rogers’ is the bargaining power of buyers and the suppliers. Differentiation and niche market remedies the opportunity of price fixing. The threat of substitute products is also at the weakest point, given the fact that Rogers’ chocolates are fairly expensive relative to others in market. Their distinctive hand-packaging process and quality ingredients are not much appealing for others to copy and imitate. The rapid growth and profit prospects factors are attractive enough to induce additional entry to this industry. For that, every chocolate producer is challenged to craft a successful strategy that is strong enough to fight for its profit in competition battle. The competition of the premium chocolate industry is strong. There are some regional brand businesses and some large companies. The key market competitors that are Rogers’s direct rivals are summarized in the table: Company Name| Price| Quality| Packaging| Distribution| Advertising| Godiva| 15 % High than Rogers on standard products and double/triple price on premium chocolate| Not as high as Rogers| Strong; glitzy, sleek modern. Chocolates of various colors molding| Retailers of gift items| Strong| Bernard Callebaut| Similar to Godiva| Good , excelled in new flavour introductions| Superior could be customized at the store| 32 stores across the West, US and Ontario| Great seasonal displays| Lindt| 90% of Rogers| Mid-range| Mid-range| Broad : mass merchandisers, drug grocery retailers| Strong| Purdys| 35% lower than Rogers| Lower than Rogers| Good| 50 locations based in malls , strongest presence in BC| Good, offers discounts on volume purchase| Rogers| Premium price, however low than Godivas Bernard Callebauts| High| hand packaging, old fashioned, not appealing to young consumers| Company owned stores; online mail orders, wholesaling, Sams Deli| Limited to Victorias area| Question 2 How is the premium chocolate industry changing? What are the underlying drivers of change and how might those driving forces individually or collectively change competition in the industry? The premium chocolate industry is showing its shift towards healthy nutrition trend and consumers’ market that is more health conscious about their diet. Purchasers are also demanding more from chocolate than its taste. In line with a broad social trend for healthier diets, the demand for organic products, including organic chocolates, is growing. Consumers are looking for products with no trans-fats, as well. Demand for dark chocolate, traditionally less popular than milk chocolate in North America is growing in part because of its heart-healthy anti-oxidant properties. With the increasing trend in healthy diet preference, the underlying drivers of change of competition in premium chocolate industry at the strongest level are the buyers’ preferences for differentiated, refined products, instead of standardized ordinary products that are no longer demanded. In addition, baby boomers generation with their disposable income are spending a lot on high quality premium chocolates. Moreover, consumers and employees are also demanding chocolate companies to follow good corporate social responsibility practices in addressing the environmental concerns in terms of how to design its packaging, procurement and operational decisions. Human rights concerns are also high in terms of consumer expectations of chocolate companies with respect of forced child labour in West Africa. All of these driving forces societal concerns, attitudes and change in lifestyles, are strong enough to shape up the competition and impose the constraint on chocolate industry profitability and competitive survival. One important underlying driver of change in the chocolate industry is the large manufacturers lobbying to change the definition of the term chocolate under USFDA guidelines, if they are successful in doing this then this could potentially have a dramatic impact on the competitive environment, with lots of cheaper products flooding the market. If lots of cheaper brands of chocolates suddenly become available and prices start dropping this could creep into the premium brand segment of the market and force companies like Rogers to lower their prices. Question 3 What key factors determine success for producers of premium chocolates? Rogers’ customers are attracted to the company because of its superior quality. Customers who tasted Rogers’ chocolate are willing to pay its high price because of Rogers’ superior quality, â€Å"Ooooh , Rogers’ That is the best chocolate I’ve ever tested. † (pg. C-185) Key factors that determine success for producers of premium chocolates, looking only at the quality and the product characteristics prospective are: * Taste and quality * Quality ingredients * Price * Package * Advertising * Distribution. The key factors that determine success for producers at the functional levels are: * Marketing – The appeal and quality of the packaging has a big impact on the sales of chocolate and a good advertising campaign to make the brand name well known * Distribution – Having a good distribution network to get product to market in a timely manner and favourable display space * Technology – The use of new technology to reduce labour intensive production methods to reduce production costs * Manufacturing- The availability of labour, ability to produce quality product and achieving economies of scale * Skills Capability- Having talented employees with knowledge of chocolate to continue product innovation, required production management and supply chain management skills and software for accurate decision making * Other- Location of retail stores are also important. * Strong leader and management team who agree on the companies strategic vision and are able to communicate it successfully to all employees Question 4 What does a SWOT analysis of Rogers Chocolates reveal about the prospects for companys future success? What are its key resources strengths and competitive capabilities? its resource weaknesses and competitive liabilities? its external opportunities and threats? Roger’s Chocolates has a good base to succeed in the chocolate industry and increase their market share in Canada and internationally by revamping their brand image, improving their internal production process, increasing their online sales, building stronger management teams, investing in technology to improve their production schedule, forecasting and marketing. The SWOT analysis presented below highlights the company’s strengths, weaknesses, opportunities and threats: Strengths and Competitive Capabilities * One of the oldest chocolate companies in Canada with a wide range of the highest quality unique chocolate assortments including: an Ice cream line, specialty products, no-sugar added chocolates * Use of natural ingredients. * The company has an impressive loyal customers base around the world * Loyal employees that share company’s value for the higher quality of products * Superior quality of company’s products; in 2006 the company won prestigious Superior Taste award from the International Taste Quality Institute * Company provides excellent retail experience and in 2000 won the Innovative Retailer of the Year award Weaknesses and Competitive Deficiencies * Higher priced products * Labour intense and costly production process. * The company didn’t establish standards to measure its productivity or efficiency * Difficulties with the evaluation of seasonal customers demand, as a result the company carries large inventories * Seasonal problems with out-of stock items result in loss of sales, and production schedule chaos * Unreliable suppliers of art tins. * Unattractive packaging to younger consumers * Difficulty with the prediction of the required production volume of ice cream * Interruptions of the production process with the special orders commitments * Employees resistance to change * Lack of organic or fair trade capabilities Market Opportunities * Projected premium chocolate market’s growth at 20% annually, as baby boomers consume more premium chocolates. * Increased demand for organic and dark chocolates * Pre- Christmas sales demand is growing * Strong brand recognition in the Victoria area, and a â€Å"corporate gift of choice† * Possibilities of Increasing online orders * Cruise port travellers. * Become supplier to Butchart Garden’s gift shop and other tourist destinations on Vancouver Island * 2010 Olympics External Threats * Threat by Hershey’s and Cadbury companies which are growing their presence on the premium chocolate market by acquiring and taking over small companies. * Growing environmental concern * Growing customers concerns related to West Africa’s child labor rights * Some of the big corporate purchasers of Roger’s products such as Second Cup and the Bay switched to low cost providers and concentrate on developing their own line of products * Decline of the US dollars * Poor wholesale presentation of Rogers’ products * Poor Brand recognition outside of BC Question 5 How would you describe Rogers Chocolates competitive strategy? How is it positioned in the industry? What specific steps has management taken to implement this strategy? Do the companys functional strategies and tactics appear to be consistent with its competitive strategy? Rogers’ Chocolate functional strategies are consistent with their competitive strategy. Of the five generic competitive strategies (overall low-cost provider, broad differentiation, focused low-cost, focused differentiation and best-cost provider) the one that best aligns with Roger’s Chocolate competitive strategy is focused differentiation. A focused differentiation strategy means that the company concentrates on serving a narrow buyer segment or niche market. Roger’s Chocolates targets affluent customers with high disposable incomes specifically baby boomers, established families, middle-aged childless couples and empty nesters. Roger’s Chocolates is positioned in the industry as a manufacturer, distributor and retailer of premium chocolates, its main products being high quality, hand-wrapped chocolates. Specific steps Roger’s Chocolates’ management has taken to implement this focused differentiation strategy included * Setting a high price point for its products * Individually hand wrapping their products to give it an elegant, prestigious and uncommon look. * Targeting cruise ship visitors and tourists, as these people tend to have higher disposable income and fit the target demographic. * Advertising in guide magazines and Enroute magazine Air Canada flights to reach tourists as well as seasonal print, radio and TV advertising. The company’s functional strategies and tactics is consistent with its competitive strategy as demonstrated by the tight control it exerts over its brand image, it refuses to lower is prices to compete as this might cheapen its brand image, it also rejected the idea to franchise because it did not want to lose control over the brand and pricing, its manufacturing facility is labour intensive because the company places value on having hand wrapped chocolates. Question 6 How well is Rogers Chocolates strategy working in terms of the financial performance it is delivering? What is your assessment of its level of profitability, its degree of liquidity, and the extent of its leverage? | | | | 2006| 2005| Profitability Ratios| | | | | Growth Profit Margin| | 54. 56%| 55. 16%| Operating Margin| | | 9. 73%| 12. 68%| Net Profit Margin| | | 7. 52%| 8. 92%| Return on Total Assets| | 10. 62%| 12. 57%| Return on Equity| | | 15. 71%| 22. 36%| | | | | | | Liquidity Ratios| | | | | Current Ratio| | | 136. 66%| 124. 49%| Quick Ratio| | | 46. 12%| 57. 85%| Working Capital| | | 625,109| 569,876| | | | | | | Leverage Ratios| | | | | Debt-to-Assets Ratio| | 32. 43%| 43. 88%| Long-Term Debt-to-Capital Ratio| 15. 21%| 22. 79%| Debt-to-Equity Ratio| | 48. 00%| 78. 18%| Long-Term Debt-to-Equity Ratio| 17. 94%| 29. 51%| Times-Interest-Earned Ratio| | 12. 61| 17. 49| | | | | | | Activity Ratios| | | | | Days of Inventory| | | 104. 64| 105. 24| Inventory Turnover| | | 3. 49| 3. 47| Average Collection Period| | 11. 06| 22. 86| Although Rogers is profitable in 2006, their sales and profit are down slightly from 2005. Gross margin is consistent but all other profitability measures are down. ROE is reduced 6% from 2005. The company’s operating margin is reduced 3%, reducing profitability from operations. The company’s current ratio has increased from 1. 24 to 1. 37, but the quick ratio has decreased. The company increased their ability to pay the current debt. The working capital has also increased, giving the company more funds to purchase equipment and investment. The company is in a very good leverage position. The long-term debt –to capital ratio is 15% in 2006, giving them more capacity to borrow additional funds. All leverage ratios have improved from 2005 except times interest earned. In addition, due to Sam’s Deli $200k increase in salaries and benefits increase, the selling and administrative expense have increased, leaving cash at only $112,185 in 2006. The days of inventory are more than 100 days. Since the company spends a lot of cash on inventory and equipment, so there is a big concern that Rogers may not have enough cash and receivables to pay its payables and long term debt. Question 7 What specific actions should Steve Parkhill undertake to improve Rogers competitiveness in the Canadian Premium Chocolate Industry? How will the culture of the organization impact Parkhills decision? As a relatively new CEO, how would you suggest that Parkhill reconcile the competing growth suggestions championed by various members of the Board of Directors? Place Open a small location in Butchart Gardens to tap into the change in tourist travel patterns. Open franchising location outside of Victoria/Vancouver/BC area if they are profitable given ROI/NPV valuation, provided there is a good franchise agreement that can maintain the image of Rogers Chocolates. Boost efforts in capturing and creating a competitive advantage in the online store and corporate gift markets. Establish wholesale or reseller relationship with American companies, at least in the Seattle area due to its close proximity to BC/Vancouver, which will allow Rogers to better reach the affluent target market in the States. It should extend its wholesale distribution outside of British Columbia, especially to Ontario which is its second largest geographical market. Promotion Provide wholesalers/retailer with more incentives, such as sales promotions, especially in the important seasonal periods to improve the display of in-store Rogers products. Instead of obtaining more stores in the Vancouver or BC area, which is capital intensive, provide greater incentives, such as discounts or sales promotions, for more retail/wholesale channels to offer Rogers products, and to gain more prominent in-store displays to increase sales through the 2010 Olympics. Increase the advertising budget to include other provinces, and more mass marketing. Product Reduce the number of products offered to premium products that only have a history of selling well, and have good growth/profitability potential due to derived demand. Keep the brand identity/integrity, but update and standardize the packaging so that it is more modern, appealing and consistent. Operations Divest the ownership of Sams Deli, and concentrate on selling core products from a smaller retail space within Sams Deli. Rogers should improve production processes, lower labour costs, increase efficiency, lower lead-time and inventory on hand. Most of these can be achieved through computerization (ex. accounting, forecasting, scheduling), normalization of sales history, and better demand forecasts. If it can do this, then initially it does not need to increase capacity. If it cannot, then it should relocate off island where the production facilities are more modern, and transportation is cheaper. Improve the company’s management teams communication and change its silo mentality. The culture of Rogers is very good, and provides a strong resource that cannot be easily copied by competitors. Instead of changing it, the new CEO should communicate and educate the staff and board of directors that the changes implemented will improve the long-term outlook of the Rogers while maintaining its long roots, and keeping its core values and approach to business. Since the majority of the board of directors are owners of the business, and require the CEO to double or triple the business, they have vested interest in the long term outlook of Rogers Chocolates. As such, their concerns and varying strategies can be set aside if he effectively communicates that his chosen strategy, of refocusing on a niche differentiating strategy, will improve profitability and growth.

Earnings Management and Accrual Accounting

Earnings Management and Accrual Accounting Contents (Jump to) Introduction Motivations for Earnings Management   Techniques 11 Groups to Manage Earnings Modified Jones Model   Limitations of the Earnings Management Models Implications and Application of Earnings Management References EARNINGS MANAGEMENT Introduction There has been significant attention placed on earnings management from regulators, the financial press, and academic researchers in recent years. Most are in agreement that earnings management does occur; however, there is no uniform definition for what it is or how to detect it. What are earnings and what is earnings management? Simply stated, earnings are the accounting profits of a company. Stakeholders (current or potential providers of debt and equity capital, employees, suppliers, customers, auditors, analysts, rating agencies, and regulators) use earnings to make important financial decisions. Many investors view earnings as value relevant data that is more informative than cash flow data. (Healy and Wahlen 1999) Others have suggested that current earnings are better predictors of future cash flows than are current cash flows. (Dechow 1994) In the US, these profits are derived using Generally Accepted Accounting Principles (GAAP) a system based on the accrual method, which measures the performance and position of a company by recognizing economic events regardless of when cash transactions occur. The generalidea is thateconomic events are recognized by matching revenues to expensesat the time in which the transactionoccurs rather than when payment is made (or received). This methodallows the current cashinflows/outflowsto be combined withfuture expected cash inflows/outflowsto give a more accurate picture of a companys current financial condition.The objectives of financial reporting and how these relate to the definition of accrual accounting, as laid out by the FASB in various Statement of Financial Accounting Concepts: The primary focus of financial reporting is information about an enterprises performance provided by measures of earnings and its components [CON1, para. 43]. Accrual accounting attempts to record the financial effects on an entity of transactions, events, and circumstances that have cash consequences for the entity in the periods in which those transactions, events, and circumstances occur rather than only in the periods in which cash is received or paid by the entity [CON6, para. 139]. It uses accrual, deferral, and allocation procedures whose goal is to relate revenues, expenses, gains, and losses to periods to reflect an entitys performance during a period instead of merely listing its cash receipts and outlays. Thus, recognition of revenues, expenses, gains, and losses and the related increments or decrements in assets and liabilities including matching of costs and revenues, allocation, and amortization is the essence of using accrual accounting to measure performance of enti ties [CON6, para. 145]. The principal goal of accrual accounting is to help investors assess the entitys economic performance during a period through the use of basic accounting principles such as revenue recognition and matching. There is evidence that as a result of the accruals process, reported earnings tend to be smoother than underlying cash flows (accruals tend to be negatively related to cash flows) and that earnings provide better information about economic performance to investors than cash flows (Dechow 1994) This idea raises the following key questions: What is the objective of accrual accounting? How far should management go in helping investors form rational expectations about the firms performance through their accruals choices and when does this activity become earnings management? To the extent that these accruals choices often operate to smooth reported earnings relative to the underlying cash flows, when does the appropriate exercise of managerial discretion become earnings management? Perhaps by its very nature, accrual accounting dampens the fluctuations in an entitys underlying cash flows to generate a number that is more useful to investors (for assessing economic performance and predicting future cash flows) than current-period operating cash flows. To characterize this as earnings management, we need to define the point at which managers accrual decisions result in too much smoothing and becomes earnings management. To think more generally about how earnings management is defined, consider the following representative definitions from the academic literature: a purposeful intervention in the external financial reporting process, with the intent of obtaining some private gain Schipper (1989) Earnings management occurs when managers use judgment in financial reporting and in structuring transactions to alter financial reports to either mislead some stakeholders about the underlying economic performance of the company, or to influence contractual outcomes that depend on reported accounting numbers. Healy and Wahlen (1999) Although widely accepted, these definitions are difficult to operationalize directly using attributes of reported accounting numbers since they center on managerial intent, which is unobservable. Turning to the professional literature, clear definitions of earnings management are just as difficult to discern from pronouncements, statements, and speeches by regulators. An extreme form of earnings management, financial fraud, is well-defined (again in terms of managerial intent) as: the deliberate misrepresentation of the financial condition of an enterprise accomplished through the intentional misstatement or omission of amounts or disclosures in the financial statements to deceive financial statement users. (Certified Fraud Examiners, 1993) In recent speeches and writings, regulators at the SEC seem to have a broader concept in mind than financial fraud when they talk about earnings management, although a strict definition has not been made explicit. In particular, while financial reporting choices that explicitly violate GAAP can clearly constitute both fraud and earnings management, it also seems that systematic choices made within GAAP can also constitute earnings management according to recent SEC discussions. The notion that earnings management can occur within the bounds of GAAP is consistent with the academic definitions described above but is somewhat startling if the idea is that this type of earnings management will lead to explicit adverse consequences for managers and firms (in the form of SEC enforcement activity) in the same way as financial fraud. This is an important point because of the question as to whether income smoothing and other similar processes constitute earnings management and whether they ar e to be treated in the same manner as fraud. Former SEC Chairman Levitt indicated that flexibility in accounting allows firms to keep pace with business innovations. Abuses such as earnings management occur when people exploit this pliancy. Trickery is employed to obscure actual financial volatility. This in turn, masks the true consequences of managements decisions. (1998). This implies that within-GAAP choices can be considered to be earnings management if they are used to obscure or mask true economic performance, bringing us back again to managerial intent. This idea is reinforced by our reading of SAB 99, which also points to the intent to deceive. As accounting researchers have discovered, implementing this type of definition requires a reliable measure of the true consequences of managements decisions that is, the earnings number that would have resulted from a neutral operation of the process (absent some form of managerial intent). The crucial issues seems to be why firms choose to manage earnings, how do firms manage their earnings, how do we measure earnings management given that implementing GAAP requires management to make judgments and estimates, and what are the implications of earnings management. Motivation Management can have many motivations for managing their earnings. The ultimate motive for earnings management, however, is to aesthetically enhance the performance of a company in the eyes of its stakeholders. The literature cites motives such as stock market incentives, signaling or concealing private information, political cost, internal motives, lending contracts, management compensation contracts, and regulatory issues. A primary purpose of earnings management is to enhance the wealth of its stakeholders such as owners since they are hired by the board of directors and the board of directors is hired by the owners.   To enhance the benefits of the owners of a firm, management may manage earnings in order to meet analyst forecasts for present and future periods (Burgstahler and Eames 1998). An owner of that firms stock may be rewarded by the appreciation of its stock value which directly relates to the owners wealth. Meeting earnings forecast is an important factor on the stocks price. The more consensuses among analysts forecasts, the stronger incentive management has to meet those forecasts (Payne and Robb 2000).   Moreover, the direction of analysts recommendation (buy or sell) about a company can bias managements decision to manage earnings. If the company misses its earnings this can have a negative impact on stock returns and negatively impact managements compensation (Matsunaga and Park 2001).   However, if management can meet or beat analyst expectations, then this can result in higher stock returns (Bartov et al., 2002). The management of earnings has also been seen prior to a firms equity offering such as seasoned equity offers (Teoh, Welch, and Wong 1998b), initial public offerings (Teoh, Welch, and Wong 1998a; Teoh, Wong, and Rao 1998), and stock financed acquisitions (Erickson and Wang 1999). Management may have the incentive to signal positive information or to conceal negative information.   If a firm is performing poorly or having financial struggles, management may conceal this performance using earnings management (Rosner 2003). On the other hand, management may want to signal the firms future performance by revealing more information about a companys future earnings and cash flow prospects (Tucker and Zarowin 2006). Earnings management can also be used to shift earnings to other periods for optimal tax planning (Shane and Stock 2006). The shifting of earnings for tax purposes can be a sign of strength. Other reasons to manage earnings can include meeting bank loan covenants. In order to maintain bank loan covenants, management may have to achieve a certain level of earnings. Failure to reach the requisite earnings can cause the lender to call the loans due, creating liquidity problems for the firm and signaling firm weakness to the bank and other creditors. The li terature finds that firms that have violated covenants are more likely to manage earnings, possibly to prevent future defaults (Sweeney 1994).   When earnings management is conducted, managers use it as a tool to enhance perception of their management capabilities during the current reporting period, implying that this type of performance will continue in future reporting periods. They expect to be compensated handsomely for their business acumen.   However, Guidry et al. (1998) found that divisional managers for large multinational firms are likely to defer income when the earnings target in their bonus plan will not be met. This indicates that management is willing to take a bath in the current period in order to reap the benefits in a future period.   Moreover, it was found in Murphy (2001) that management is more likely to smooth earnings when using internal performance standards (budget goals and prior year) than external standards. Another form of compensation manipulation happens when there is a cap on the bonus awards. Then management is more likely to report an accrual that defers income when the cap is reached ( Healy 1985 and Hotausen et al, 1995). Furthermore, management may manage earnings depending on whether they are joining or leaving the firm. A new CEO may be inclined to downwards earnings management (transferring the benefit to future periods), while a retiring CEO may use upward earnings management (reaping the benefits in the current period) (Godfrey et al., 2003). Certain businesses have regulatory requirements to stay in business. A popular study of earnings management in the literature is the application by banks to manage earnings in order to meet capital requirements and by insurance companies to manage earnings to meet risk regulatory requirements. The literature supports evidence that when banks are close to minimum capital requirements they overstate loan loss provisions, understate loan write-offs, and recognize abnormal realized gains on securities portfolios (Moyer 1990; Scholes et al. 1990; Beatty et al. 1995; Collins et al. 1995). Additionally, financially weak property casualty insurers that risk regulatory attention understate claim loss reserves (Petroni 1992). The literature has also shown that firms facing anti-trust or potential anti-trust scrutiny are likely to use earnings management. These firms or others vulnerable to adverse political consequences have incentives to manage earnings to appear less profitable (Watts and Zi mmerman 1978). Moreover, firms under investigation for anti-trust violations reported income decreasing abnormal accruals in investigation years (Cahan 1992). Techniques Earnings Management can take place by underestimating or overestimating either revenues or expenses. It can be done to affect future earnings as well as current earnings. There are two main types: Cosmetic Earnings Management using accounting choices from GAAP: also called accrual based earnings management. It happens when managers use their judgment and discretion to make choices related to accounting principles that can alter earnings in the current or a future period. An example is the modification of depreciation rates, where an increase (decrease) in the expense may occur in the current period leading to a decrease (increase) in the future (Nelson et. al. 2003). Real-Activity Earnings Management using operating decisions: this type of earnings management is when managers make decisions that affect the real operations in the firm. This type is more dangerous both to the firm and to the managers. Managers would be at a higher risk of being caught. As for the firms, real activities earnings management affects the cash flow, and consequently has a higher impact on the companys future. For example, a manager can give discounted sales prices in order to boost sales and consequently meet some target revenues (Roychowdhury 2006). The most popular and successful techniques used to manage earnings can be categorized into 11 groups: 1. Cookie jar (Cosmetic): managers create a reserve or a financial slack to boost earnings in future periods by recording more expenses in the present. For example, when the manager reports higher inventory cost in the current period, it will allow him to reduce this in the future. (Levitt 1998) 2. Big bath (Cosmetic): when the management decides to eliminate or restructure a subsidiary or an operation, GAAP permits the management to record an estimate charge against the income. Managers can record higher charges to dissimulate other charges. (Levitt 1998) 3. Big bet on the future (Cosmetic): when a company acquires another one, managers can get an immediate earnings boost by including the acquired companys earnings in consolidated earnings. On the other hand, to boost future earnings, managers can write-off the acquired in-progress RD costs against present earnings, and thus protecting future earnings from these charges. (Levitt 1998) 4. Flushing of investment portfolio (Real): passive investments (less than 20% ownership) can be classified as trading securities (reported in operating income) or available-for-sale securities (not reported in operating income until sold). Earnings can be managed by timing sales (sell securities that gained (lost) value to increase (decrease) earnings) or reclassifying the security portfolio (from trading security to available for sale to move gain or loss from or to the income statement) 5. Throw out a problem child (Real): When a subsidiary underperforms, it decreases the overall company earnings. It is usually expected to cause a bigger decrease in the future. Managers may act in several ways to counter that: sell the underperforming subsidiary and consequently report a gain or a loss (based on the managers discretion). Another way is to spin-off the subsidiary by distributing or exchanging the shares with current shareholders and in this way the burden is transferred to the latter. 6. Change in GAAP (Cosmetic): Management can manage earnings by undergoing changes to the present accounting standards. For example, it may volunteer for early adoption of new accounting standards, such as the 1985s standard, which allowed companies whose pension assets exceeded their pension liabilities to count the difference as income (Lev 1989). This technique allows for improved revenue and improved expense recognition. 7. Amortization, Depreciation, and Depletion (Cosmetic): Writing-off long-term assets can be managed by selecting write-off method and period, estimating salvage value, or reclassifying as non-operating use. 8. Sale/Leaseback and asset exchange (Real): selling a long-term asset that has unrealized gain (loss) can be used to manage earnings. For example, selling a building, which is carried in the balance sheet at $25 million, for $40 million, will give a boost to the current earnings by $15 million (not considering tax and transaction costs). Another way is to sell the building and lease it back (recording gains or losses). However, if the management wishes not to record any gains or losses, the long-term asset could be exchanged with a similar one (for example for exchanging a warehouse for another one that is nearer to a production site) 9. Operating vs. Non-operating Income (Cosmetic): Income items can be classified as Operating income (recurring or core income, expected to continue in the future) or non-operating income (non-recurring, not expected to affect future). GAAP permits to management to classify an item as one or the other. The managers judgment will then affect the financial analysts forecasts, which are based on the operating or core earnings. For instance, disposition of a major manufacturing plant can be classified either as special charges (Operating income) or discontinued charges (non-operating income) based on the managers discretion. 10.Early Retirement of Corporate Debt (Real): Managers may decide to prematurely sell long-term corporate debts (bonds) which are usually recorded at an amortized value. The timing of the sale may lead to gains or losses due to the difference between the amortized value and the book value. 11.Stock buybacks (Real): This technique does not affect earnings, however it does affect earnings per share. By repurchasing their own shares, an act that is considered internal and thus not required to be reported under GAAP, companies will report higher EPS. Consider a company with 1 million shares. If the earnings are $4 million, EPS = $4 million/1million shares = $4 per share. Now if the company buys back 100,000 shares, the same earnings would have to be divided by 900,000 shares, the reported EPS would be $4.44 per share. Earnings Management Models and The Accrual Generation Process Accruals have the desirable traits of giving summary measures of firms income and accounting choice.   In earnings management research, accruals are divided into discretionary (DA) and non-discretionary (NDA). Most research has focused on the detection of DA. It is customary to start earnings management studies with the study of behavior of sales over time. First, in the budgeting process, sales determine the firms production and inventory levels, which in turn determine cost of goods sold, operating expenses, and investment decisions. Second, sales have the highest persistence of any component of the income statement. Therefore, sales are an efficient statistic for describing the characteristics of the firm. The fundamental element of any test for earnings management is a measure of management discretion over earnings. Most studies use DA as a proxy for earnings management. Because DA cannot be observed directly from the financial statement, they have to be estimated using some kind of model. The literature has followed different approaches. According to McNichols (2000), the models can be broadly classified into 3 groups: aggregate accrual models, specific accrual models, and frequency distribution models.   Because of their wide use, we discuss the aggregate accrual models as follows: Models Starting with the first and simplest models, both Healy (1985) and DeAngelo (1986) used total accruals (TA) as the proxy for DA to test earnings management in the context of bonus and management buyouts respectively. However, DeAngelo (1986) used first differencing to correct for serial correlation, therefore his NDA will be less contaminated by past accruals that are irrelevant in estimating current DA. The most popular earnings management model is the Jones Model (1991). It has model has been modified in several ways. Analysis is conducted in 2 stages. In the estimation stage, the DA is assumed to be zero and firm specific coefficients of NDA will be determined. These coefficients are assumed to be stationary and are used to in the event period to determine the DA. In her model, unlike the previous models, NDA are expected to vary with the level of business activity, and revenues and property, plant, and equipment (PPE) are used as proxies to control for NDA. All the variables are deflated by lagged total assets to correct for heteroskedasticity. Dechow et al (1995) argued that earnings can be managed by inflating revenue via receivables. As a result, revenue should be adjusted for change in receivables. This adjusted model is known as the Modified Jones Model. The Modified Jones Model (1995) is: The Industry Model (1991) was developed by Deschow and Sloan when they dealt with RD spending during the last year of the tenure of an outgoing CEO. They assumed that the variation in NDA is common across all firms in the same industry and formulated a model of how the normal item under investigation behaves. However, this model applies only to event studies in which not all firms experience the same event and it cannot capture firm specific characteristics. The Industry Model is: NDA t+1 = ?1 + ? Median (TA t+1) Limitations All models come with limitations. The limitations of the earnings management models are: Strong assumptions that may not hold. These include the absence of earnings management in the estimation period, stationarity of firm specific characteristics over such a longer time horizon, and orthogonality of NDA with the error term (i.e.DA). All the models assume that abnormal accruals are discretionary. Variation in accrual could be the result of performance or business strategy. The consequence is that it produces a Type II error. The solution is to add variables to control for performance and business strategy (Hansen 1999), however, some performance and growth variables may have non-linear properties. Small samples sizes. Small samples generate higher standard error which can weaken the power for the tests (type II errors). Measurement error. Since DA cannot be observed, it has to be estimated. This produces biased estimate of coefficients. The Balance Sheet approach generates more measurement error than the Cash Flow approach. (Hirbar and Collins 2002) Omission of variables. Most models miss some important variables and this induces a bias on the included variables and higher standard errors. The obviously omitted variable is an expense. This can cause an accrual conundrum (Ronen et al, 2007). Efficiency of the existing models. Research has shown that most of these models wrongly identify abnormal but NDA as DA (Type I error) and fail to identify higher amount of induced earnings management (Type II errors). This is partly due to the linearity of the models and the non-linear behavior of the variables studied. Moreover, there are many endogenous factors that affect earnings management and it may not be captured by single equations. As a result, a shift to linear specification and non-linear specification of the models could improve the efficiency of the earnings management models. Further decomposition of accruals. The starting point for most earnings management studies is decomposition of TA and most studies decomposed TA into NDA and DA. However, accruals have reversal property that ensures the change in accrued balance to add up to zero. Therefore, reversal of accrued balance limits the opportunity of managed earnings. As a result, further decomposition of TA accrual could provide more information on the exact change in TA. Implications and Application of Earnings Management Literature related to earnings management implies that earnings management could not be completely eliminated. As long as managements can benefit from managing earnings, they would attempt to expand use of it. Earnings management could be reduced while public eyes such as regulators spend many resources to detect it. However, if they lower guard due to lack of perfect restriction methods, earnings management could be re-flourished since it is surely useful for management to achieve their goals. Therefore, firms earnings management activities continually are reiterated. This continued action without a complete elimination can cause various effects on our society. Firms which purposefully manage their earnings for their own good could negatively impact public well-fare. According to Beaver (1998), financial reporting can generate different kinds of economic consequences, mostly related to resource allocation such as wealth distribution, aggregate consumption and aggregate production, a nd resources devoted to private search for information. Since earnings management could affect the quality of information by producing less reliable financial statement, eventually it could cause various negative economic results. In other words, less reliable information produced because of earnings management may not only make the public worse-off, but may also make the overall economy less stable. For example, because of earnings management, if many investors believe that financial reporting has poor quality and less reliability, they would spend more of their resources to search for better information or private information. It could mean that society wastes resources or re-allocates them to inappropriate places. Several studies provide evidences of earnings management by testing various types of accruals. Teoh, Wong, and Rao (1998) found that depreciation estimates and bad debt provisions are used for earnings management surrounding initial public offers. Many other studies found proof of earnings management through bank loan loss provisions (Beaver, et al., 1989; Moyer, 1990; Scholes, et al., 1990; Wahlen, 1994; Beatty et al. (1995), Collins et al. (1995), Beaver and Engel (1996), Liu and Ryan (1995), Liu et al. (1997). Studies of insurance claim loss reserves, including Petroni (1992), Anthony and Petroni (1992), Beaver and McNichols (1998), Penalva (1998), Petroni et al. (1999), have provided evidence of earnings management among insurers. Visvanathan (1998), Miller and Skinner (1998), Ayers (1998) test the use of deferred tax assets as a tool of earnings management, but they only present little evidence of it. While research indicates evidence of earnings management in a few accruals, numerous studies suggest different methods which could contribute to reduce pervasiveness of earnings management. Such restriction methods could be broadly cauterized in three parts. The first proposed way is to restrict earnings management through the regulatory process. Tan and Jamal (2006) found that strict accounting standards relating to discretionary accruals may reduce earnings management through. However, they also emphasize that too much restriction for cosmetic earnings management could increase real activity earnings management. As such, restriction through regulation would not completely eliminate earnings management because there are trade-offs. Secondly, another method is an appropriate and effective audit procedure. Past studies have shown evidence that various factors related to audit procedure can help constrain earnings management (Krishnan, 2003; Van Caneghem, 2004; Van Caneghem, 2004; Vand er Bauwhede Whillekens, 2004; Kim, et al., 2003; Frankel, 2002; Ferguson, 2004; Carey Simnet, 2006). According to Kim, et al. (2003), Big 5 auditors were more effective in deterring earnings management when there was an income increasing accrual choice. The last suggested restriction method is effective and efficient corporate governance. This is associated with the firms structure. For example, if a firm is inclined to highlight effective corporate governance, this firm could make an effort to prohibit earnings management.   It is important to understand that these three methods correlate with each other. For instance, by requiring additional audit procedures or firm policies, regulation would affect audit procedure or corporate governance and would reduce earnings management. On the other hand, auditors or firms could propose new regulations to reduce earnings management. Hence, earnings management could possibly be reduced not through one method but through a combination of a ll three methods. References: Ayers, B. C. 1998. Deferred tax accounting under SFAS No. 109: An empirical investigation of its incremental value-relevance relative to APB No. 11. The Accounting Review 73 (2): 195-212 Bartov, E., Givoly, D. Hayn, C. (2002) The rewards to meeting or beating earnings expectations.  Journal of Accounting and Economics, 33,173-204 Beatty, A., S. Chamberlain, and J. Magliolo. 1995. Managing financial reports of commercial banks: The influence of taxes, regulatory capital and earnings. Journal of Accounting Research 33 (2): 231-261 Beaver, W., C. Eger, S. Ryan, and M. Wolfson. 1989. Financial reporting, supplemental disclosures and bank share prices. Journal of Accounting Research (Autumn): 157-178 Beaver, W., and E. Engel. 1996. Discretionary behavior with respect to allowances for loan losses and the behavior of security prices. Journal of Accounting and Economics 22: 177-206 Beaver, and M. McNichols. 1998. The characteristics and valuation of loss reserves of property-casualty insurers. Working paper, Stanford University. Burgstahl

Wellmans Community :: essays research papers

In the article, â€Å"The Community Question Re-Evaluated†, the author Barry Wellman suggests that the change in nature of community is inevitable. Many people are stressful about changes their communities are going through such as loneliness, alienation leading to a â€Å"war of all against all.† They would often compare their modern times community to of their pre-industrial predecessors. However, inhabitants of contemporary societies should have less to worry about than their ancestors with ‘respect to the basics of human life.’ Instead comparing contemporary crime and political violence rates with the past, we should seek to gain deeper understand of how our community changes- â€Å"how the large-scale structure of social systems reciprocally affects the small-scale structure and contents of interpersonal relations within them.† The social changes in large-scale systems are suggested to be associated with the Industrial Revolution which affected the structure and operations of the community. Social commentators suggested that large-scales faced the impacts of industrialization, capitalism, imperialism, bureaucratization and technological developments which then dripped down onto the interpersonal relations. They noted that the large-scale reorganization of production has created new opportunities for community relations. For example, industrialization had reduced poverty and that working-class home ownership would heighten neighborhood communal bonds. Although the analyses are well debatable, Wellman believes that community may have changed in response to the pressure, opportunities and constraints of large-scale forces. The complexities in the discovery of past and present communities led analysts to realize that the term community, often demonstrated in a neighborhood, is not confined to neighborhoods. By 1970s, analysts had expanded the definition of community beyond the boundaries of neighborhood and kinship solidarity and argued that the ‘essence of community was its social structure and not its spatial structure. They then began to treat â€Å"community† as â€Å"personal community† and defined as a network of significant, informal community ties. The transmutation of community into social network has helped the persistence of communities even when the neighborhood traces are faint.

The Boston Massacre Essay -- Boston Massacre Essays

On March 5, 1770 a fight broke out in the streets of Boston, Massachusetts between a patriot mob and British soldiers. Citizens attacked a squad of soldiers by throwing snowballs, stones and sticks. British Army soldiers in turn killed five civilians and injured six others. The presence of British troops had been stationed in Boston, the capital of Province of Massachusetts Bay since 17681. The British existence was increasingly unwelcome. The British troops were sent to Boston in order to protect and support the crown-appointed colonial officials attempting to enforce unpopular Parliamentary legislation. Boston, the capital of the Province of Massachusetts Bay and important shipping town, was a major center of resistance to unpopular acts of taxation by the British Parliament in the 1760s2. In 1768, the Townshend Acts were placed upon the colonists, by which a variety of common items that were manufactured in Britain and exported to the colonies were subjected to import tariffs3. The Massachusetts House of Representatives began a campaign against the Townshend Acts by sending a petition to King George III asking for the repeal of the act. The House also sent what became known as the Massachusetts Circular Letter to other colonial assemblies, asking them to join the resistance movement, and called for a boycott of merchants importing the affected goods. As a response, Lord Hillsborough, who was the leader of the office of Colonial Secretary, was forced to take action. In April 1768, Hillsborough sent a letter to the colonial governors in America instructing them to dissolve the coloni al assemblies responsible for the repeal4. When the house of colonial governors refused to comply and rescind the letter. Hillsborough then stated... ...An Account.† Accessed 05, 2001. http://law2.umkc.edu/faculty/projects/ftrials/bostonmassacre/bostonmassacre.html. 14. Allison, Robert. The Boston Massacre. Beverly, MA: Applewood Books, 2006. â€Å"The Boston Massacre Trials: An Account.† Accessed 05, 2001. http://law2.umkc.edu/faculty/projects/ftrials/bostonmassacre/bostonmassacre.html. 15. Allison, Robert. The Boston Massacre. Beverly, MA: Applewood Books, 2006. â€Å"The Boston Massacre Trials: An Account.† Accessed 05, 2001. http://law2.umkc.edu/faculty/projects/ftrials/bostonmassacre/bostonmassacre.html. 16. Allison, Robert. The Boston Massacre. Beverly, MA: Applewood Books, 2006. â€Å"The Boston Massacre Trials: An Account.† Accessed 05, 2001. 17. Kidder, Frederic. History of the Boston Massacre. Munsell, 1870. 18. Zinn, Howard. A People’s History of the United States. New York: HarperCollins, 1999. The Boston Massacre Essay -- Boston Massacre Essays On March 5, 1770 a fight broke out in the streets of Boston, Massachusetts between a patriot mob and British soldiers. Citizens attacked a squad of soldiers by throwing snowballs, stones and sticks. British Army soldiers in turn killed five civilians and injured six others. The presence of British troops had been stationed in Boston, the capital of Province of Massachusetts Bay since 17681. The British existence was increasingly unwelcome. The British troops were sent to Boston in order to protect and support the crown-appointed colonial officials attempting to enforce unpopular Parliamentary legislation. Boston, the capital of the Province of Massachusetts Bay and important shipping town, was a major center of resistance to unpopular acts of taxation by the British Parliament in the 1760s2. In 1768, the Townshend Acts were placed upon the colonists, by which a variety of common items that were manufactured in Britain and exported to the colonies were subjected to import tariffs3. The Massachusetts House of Representatives began a campaign against the Townshend Acts by sending a petition to King George III asking for the repeal of the act. The House also sent what became known as the Massachusetts Circular Letter to other colonial assemblies, asking them to join the resistance movement, and called for a boycott of merchants importing the affected goods. As a response, Lord Hillsborough, who was the leader of the office of Colonial Secretary, was forced to take action. In April 1768, Hillsborough sent a letter to the colonial governors in America instructing them to dissolve the coloni al assemblies responsible for the repeal4. When the house of colonial governors refused to comply and rescind the letter. Hillsborough then stated... ...An Account.† Accessed 05, 2001. http://law2.umkc.edu/faculty/projects/ftrials/bostonmassacre/bostonmassacre.html. 14. Allison, Robert. The Boston Massacre. Beverly, MA: Applewood Books, 2006. â€Å"The Boston Massacre Trials: An Account.† Accessed 05, 2001. http://law2.umkc.edu/faculty/projects/ftrials/bostonmassacre/bostonmassacre.html. 15. Allison, Robert. The Boston Massacre. Beverly, MA: Applewood Books, 2006. â€Å"The Boston Massacre Trials: An Account.† Accessed 05, 2001. http://law2.umkc.edu/faculty/projects/ftrials/bostonmassacre/bostonmassacre.html. 16. Allison, Robert. The Boston Massacre. Beverly, MA: Applewood Books, 2006. â€Å"The Boston Massacre Trials: An Account.† Accessed 05, 2001. 17. Kidder, Frederic. History of the Boston Massacre. Munsell, 1870. 18. Zinn, Howard. A People’s History of the United States. New York: HarperCollins, 1999.

Americas Segregation Essay -- essays research papers

America Segregation how has it been affecting the society of Americans for so long? Well according to American Apartheid there just hasn’t been enough time for the 1960s civil rights laws to work themselves out. How long will this take, and will it ever just work itself out? Why are there ghettos and how did they come about. Why are most ghettos in towns and cities in parts that are usually run down? Well if we can remember back in time when immigrants started to enter the United States the different cultures established in the same neighborhoods and communities. Why did they do this? Because they were around people that made them comfortable they were around their cultures and communities that they were accustomed to. They were around a society that was their own. So how did minorities end up in the ghetto? I don’t think they ever got out. When commerce was booming in the city most people lived in the city because that’s where the action was. The jobs, schools, bakeries whatever you needed was in the city. Back in the day when there was no cars or a form of transportation people had to walk or ride horses to where they were going and by being in a place that was condensed with all of these things it made it easy to live there. I think it was a case of a couple different ideas that all had an effect on minorities but primarily I think that the major ingredient was that the elites of the community prevented minorities for exiting the poverty stricken lifestyles and here is how they did it. Education, transportation and flat out racism. These three factors play a major role in why there is segregation today in the U.S. let’s start with transportation.   Ã‚  Ã‚  Ã‚  Ã‚  I started with transportation because with transportation came elites moving out of the city to the suburbs. When this happened only people with some kind of money could afford a car to commute to and from the city. These people were the ones who had good jobs and power. Mostly whites had cars at the time and few blacks. These elites moved from the city to establish communities of their own and I am pretty sure that minorities were not welcome. Without transportation minorities were forced to stay in the city and as the suburbs grew larger and larger jobs and commerce that at were one time in the city had now left for the booming suburbs. Business was better in the suburbs and mone... ...re afraid of educated minorities running the country or educating their children. Political power this will come with education. If you are educated and can get your part of the community to support you then you have a great shot of being elected. How do you maintain your power? You keep the people that supported you happy and you don’t upset the other side to bad while you do it. Who doesn’t want you to have to power anyone else who wants it and the ones that you are not giving the benefits too. For instance politician gives tax breaks to elites while struggling citizens still pay high taxes this is not good and destroys a community. I don’t care if your white or black on this issue you will still have major problems.   Ã‚  Ã‚  Ã‚  Ã‚  I believe that changes have been made and are being made to desegregate I do believe that there will always be a ghetto. Today cities and towns all have them and have to deal with the crime and poverty that comes along with them. I do believe that education will help these communities somehow but a little self-help in these communities is also needed. Lets face it some people like the ghetto and couldn’t think of a better place to live.

Chicken Run Camera Angles

Run has many uses of camera angles. Camera angles can be used in many different ways, (low, high or mid angles), especially in Chicken Run. In Chicken Run camera angles are used to give the viewer a sense of what is going on and influence the viewer on how a character is regarded e. g. if the camera angle is gazing directly upwards towards a character this would usually indicate that the character in question has a lot of power or they are in charge.Camera angles can be used to show effects such as panic and calm on characters epending on what is taking place around them. A great example of this effect takes place as Ginger and the other chickens are being chased through the chicken yard by guard dogs. The camera angle in this scene flickers backwards and forwards constantly, keeping in tempo with what is taking place at present throughout the chase. As the chase comes to a climax Mrs Tweedy appears in front of Ginger and the camera angle changes to a low angled shot and stays fixed, this proves that all is calm again and The very first shot is of the moon.This instantly implies the genre and sets the tone f the film: the shot is very typical of the horror movie genre of films from the 20th century (which is also when the film is set). 3. The first shot pans down across to where Mr Tweedy and his two dogs are walking. The view of the fence surrounding the farm closely resembles the prisoner-of-war films which inspired the film itself. There is almost no sound and the music is quiet and mysterious to effect. He has dogs with him, most likely for protection, with fierce expressions, showing the mood of the scene. 4. Match-on-action shot of Mr Tweedys hand checking the lock on the gate.This suggests that he does not want anything or anyone getting in or out, and that he may be hiding something. Cut to an extreme low-angle close-up of his feet walking away. We never see his face in the first part of this sequence. This creates a sense of mystery as to who he is. It could mean that he is the main antagonist of the film because of this. 5. A fgure emerges and tries not to be noticed. This further suggests the first character we see (Mr Tweedy) is the antagonist since a character wants to hide from him, but we still don't fully understand why the fgure is hiding rom him.There is mystery surrounding the fgure as well as we cannot see (yet) who it is. Foot emerges before the rest of the body, suggests the figure is nervous of showing him/herself. 6. The water tower in the background connotes a guard tower in a typical prisoner-of-war film, so again there is reference to films such as ‘The Great Escape' which the film closely parodies, and also that there is a greater force on Mr Tweedys side. 7. The shadow (Ginger) makes a run for it, again trying not to be caught. The way the dog hears Ginger first suggests the danger is nearer; she is about o be caught. . Ginger is nearly caught; an example of a false alarm' where we believe the character has been caught but hasn't. 9. Match-on-action shot shows her frustration as she digs. Shot of the spoon being thrown back onto the floor; she is forced to leave everything but herself behind. 10. We are misled to believe she is sately across and all the danger is over, but in the next snot more chickens arrive. These two shots echo the previous shots of Ginger running across, so the risk of danger is repeated. 12.Cutting between the two actions of the chickens trying to scape and the dogs running towards them; again this shows frustrationand pressure for the chickens and a sense of danger. The sound and music both add to this effect by suddenly increasing dramatically, rising as the dogs near. 13. The sound and music have now increased to their full volume as Ginger turns to run. We finally see the face of the character we saw at the beginning, albeit for two brief seconds. The camera zooms in sharply on his triumphant expression. 14.Short, sharp cuts between shots, as well as the camera following the dogs, creates a feel of speed and shows the impact of the chase. Ginger stops and turns back in this shot; she has nowhere to turn. 15. Shot-reverse-shot between Ginger and the dogs is used to show she is trapped. The camera also backs away with Ginger; there is a slow zoom out on this shot of the dogs closing in. 16. The dog eating the gnome head (that Ginger tries to force them away with) shows her helplessness and what is destined for her. We don't see the impact of the head being eaten, implying violence. 17. Close-up shot of her head, slowly panning in.The attention is on her terrified expression, as the camera zooming in slowly shows how her ‘doom' is coming nearer nd nearer. 18. Both Ginger and the dogs turn at the light from behind her. The lighting has changed and is like a light from heaven' as if Ginger is being called or summoned, as if everything has already happened. The music has also stopped suddenly. 19. Cutting back to the curious faces o f the chickens. There is no music and very quiet sound; everyone has stopped to look, creating suspense of what they are looking at. 20. The camera pans up revealing the true main antagonist, with a short piece of dramatic music for this shot.

My Writing Career

In my life, I had different events that have affected my personality and way of viewing stuff. Each category of events can be arranged from oldest to recent and put in a timeline. The timeline is a way to view your history in one part of your life. Writing skills are one of the major events that can be perfect for a timeline. This is because writing starts with you from an early age and keeps improving. Hence, this essay will be laying out my history in writing. I was born in Abu Dhabi in December 28, 2000. Actually, this was my birth date, but my writer was born in my first academic years. Everyone has a writer inside him that starts small and weak then grows big and strong. In kindergarten, I first learned how to write the English alphabets. The idea was to trace the alphabets until we know how to draw them. In grade one, the English teacher used to give us handwriting workbook to practice writing and improve the looking of our words. These workbooks used written examples. Under these examples, we should trace these words, and under the tracing, there was two lines for copying the sentences. In addition, teachers taught us how to write our names in both Arabic and English. From grade 3 to 5, were introduced to the idea of spelling tests and dictation. The procedure was that the teacher gives us a list of words to practice on. Then on the test day, she/he examines us on these words. Sometimes it is a paragraph instead of independent words. At first, I got average marks, and then I improved a lot. I remember that when I got some words spelled wrong, I was punished to write that word tens of times. It was annoying at that stage but now I realized that it was so beneficial for me. It made me have less spelling mistake onward. In grade 5, I started the real writing. I started to write short paragraphs and connect them, in order to make a good essay. In grade 6, we learned how to write narrative essays and stories. I remember that I had nearly the same events when I wrote stories. It was all about going to a place with my family and not following my uncle's rules, which lead to problems and dangers for us. At the end of my story, I used to put somehow an advice to follow the rules and not be reckless. I started to write independent texts away from school starting from grade 7. At that year, I started to write my own diaries. I record what happened in my day and what experience I learned. The idea came to me when I was watching a cartoon and I saw that a character is writing diaries. He was looking after his diary always and take care of it. He influenced me to try that type of writing, but unfortunately, that did not last for a long time. In grades 8 and 9 we went in more serious types of writing. I learned how to write a persuasive essay for convincing people. I remember that one of the subjects to write about was why we should change the food in the school's canteen. Then in grade 11, we were taught how to analyze both novels and movies. We used to extract the theme and the timeline in addition to vocabulary analysis. In my final high school year, argumentative essay was our assigned type of writing. One topic we studied in this field was whether spending a lot of money in space researches is beneficial or not. Some people say yes and the other say no, because other people can actually benefit from this wasted money including poor families. Also in 2017, I started to write both formal and informal email messages. It was a new way of writing. The year next I was learning the way of writing essays for English proficiency tests. Now in the time being I am learning how to write a secondary research paper by using data from reliable sources. In conclusion, everyone has a writer inside him that he should improve and work on. As you read, my writer was born when I was in my early academic stage and still working on it now. My real start was in grade 4 to 7. Then I went to a stage that is more serious from grade 8 to freshman year of university. I will try my best to learn from other experts and improve until I get the mastery level.

Mother and Twin Brothers Eli Essay

In The Droughtlanders, by Carrie Mac, Twin brothers Eli and Seth, both Keylanders, live inside a privileged and protected city surrounded by huge walls to protect them from the filthy, sick Droughlanders. Eli’s mother teaches him to view Droughtlanders sympathetically and Eli changes his opinion about them. As a result Eli joins a rebellion group against the Keylands. Initially Seth is furious about Eli’s decision and attempts to hunt Eli and kill him but ultimately realizes the truth and joins his brother. At the beginning Eli and Seth have a bitter hate for each other which intensifies due to their different view points regarding the Droughtlanders. In the end, they make up and the hate they had between them fades away. Right from the start Eli and Seth do not get along, this relationship soon turns into hate and distrust between them. Near the end Seth also changes his mind about Droughtlanders and they get along. From the beginning Eli and Seth dislike each other because of Seth’s constant harassment. Seth is constantly making harsh jokes about Eli’s bladder problem, â€Å"do you have to sit down like a girl?† (36). This quote shows how Seth bullies Eli. Seth and Eli get in a lot of fights and Seth says mean thinks like â€Å"If father wasn’t in the room I’d kick your face in† (44). Seth bullies Eli because he thinks that he is weak and pathetic. After getting in yet another fight Seth says to Eli â€Å"You really are a baby. Get a diaper, Eliza† (55). Eli hates Seth’s bullying and they never get along. They have always had a poor relationship, but it becomes worse once Eli sympathizes with the Droughtlanders. Seth and Eli’s relationship and distrust gets even worse. When the explosion goes off where their mother is, Eli cries â€Å"Maman. She was in there, Seth† (45). Eli had a very strong connection with his mom, but Seth not so much. Eli tells Seth how their father killed their mother and Seth whispers into his ear â€Å"Say that one more time, or to anyone else, ever, and I will kill you† (54). This quote demonstrates how seriously angry they are with each other. Eli tries to tell Seth that their mother was a rebel but Seth responds â€Å"That is the stupidest thing I have ever heard you say† (56). This quote illustrates how much distrust they have between them. When Eli secretly leaves to look for the Droughtlander rebels, Seth views him as a traitor and this betrayal leads to Seth hunting Eli. When Seth finally catches up with Eli, he tells Seth the truth about their mother’s death and how their father was responsible. Seth also comes to accept the Droughtlanders for the decent and ill-treated people they are. Eli and Seth find each other in a forest. â€Å"When Eli heard the name he’s not been called in so long, he felt some thing snap with a sharp, invigorating pain. Keenly aware of his intentions, he brought out his own knife and in one fluid motion flicked the wider blade open, turned and plunged the knife through Seth’s pants and as deep as it would go† (300). It is this moment that Seth gains respect for Eli and starts to question his own beliefs. After Seth is captured he does his sin inventory and comes to realize how horrible of a person he was. Although Eli is still very angry with Seth, Seth says, â€Å"I’m sorry, Eli, for being such a terrible brother† (317). This is the start to their relationship reuniting. They discuss and finally agree about the tragic events that lead to their mother’s death. Sabine, their triplet sister, is also there and for the first time they all connect peacefully. During the circus they all collapse and are sent to the infirmary. â€Å"They speculated on why only now they felt a connection† (323). They figured it was because this was the first time they were all happy together. In the end, Seth and Eli are no longer enemies and can be happy. The relationship between Seth and Eli started with mutual hostility and ended in admiration. It is a unique relationship between Seth and Eli in search of the truth. Eli pursues the truth of his mothers legacy as Seth searches for the truth about Eli’s defection.