Literature Review on Mergers And Acquisitions

Literature Review on Mergers And Acquisitions 1. Introduction: Mergers and Acquisitions refer to buying; selling and combining of different companies that can help a growing company in a given industry grow rapidly without having to create another business entity (Virani, 2007). Traditionally, exploiting economies of scope and scale or taking advantage of market imperfections has been a dominant way of gaining competitive advantage by firms. However, as economies are becoming more and more integrated due to the forces of globalisation, there is an increasing realisation that these ways of competition offer limited profitability for firms. As a result, mergers and acquisitions have become increasingly popular as companies look for higher returns and dominant market position in the global market. Mergers and acquisitions provide means to acquire expertise, technology and products. Over the past two decades, mergers and acquisitions have become a global phenomenon and a popular strategic choice for company growth and expansion (Hansen and Nohria, 2 004). Despite the increasing popularity of mergers and acquisitions, unfortunately, the performance of merger and acquisitions has not been satisfactory. Research studies reported that more than two-thirds of large merger and acquisition deals fail to create value for shareholders. Mergers and acquisitions fail to meet the anticipated goals, as mentioned by Carleton (1997), who noted that the rate of mergers and acquisitions failure range from 55 to 70 percent. These failed mergers constitute a waste of human and financial resources. Given the popularity of this strategic alternative, there is a strong need to learn how to manage mergers better and to make them more successful (Gopinath, 2003). Numbers of studies are quick to point out numerous reasons behind this poor performance of mergers and acquisitions and specifically assert that lack of strategic fit and poor management of the integrative process appear to be the main causes of unsatisfactory performance. Infect, an exhaustive list containing possible causes of poor performance, can be made with reference to the numerous research studies conducted over the last two decades (Epstein, 2004). These research studies have examined the bad performance of the mergers and acquisitions from various aspects. The very observable aspects like finance, stock market and legal issues were given importance and were considered the most sensitive areas for mergers. However, with the growing rates of failure, researchers and business analysts started acknowledging the fact that this poor performance of mergers and acquisitions does not simply has its roots in financial and operational issues or other legal conflicts. The research was then diverted to examine human and cultural aspects of MAs and it was noted that the real problem is not financial but the lack of intercultural synergy between the organizations. The organizational cultural issues create communication breakdowns and therefore act as a barrier for successful integration of the two organizations. On the other hand, Cartwright Cooper (1993) reinforced the previous findings by stating that the financial and other strategic ben efits expected from mergers and acquisitions are undermined by the cultural conflicts. Moreover, the organization who addressed cultural issues properly during merger and acquisitions experienced good results as compare to other organization who neglected this aspect (Epstein, 2004). Hence there exists a strong need to consider the cultural issues as critical during the mergers and acquisitions and address them properly. The focus of this research is to explore and analyse the organizational cultural issues as the major potential threat for the success of mergers and acquisitions. In other words, to highlight the cultural issues as the most import among all other possible causes that affect the performance of mergers and acquisitions. The discussion will cover the effects of cultural issues on the performance of mergers and acquisitions. 2. Literature Review: Growth is an essential aspect of organizational success. It is something for which most of the companies strive for. It is observed commonly that small companies want to grow big and big firms want to grow bigger. Indeed companies have to grow and the reasons behind are almost same for every organization. However, different companies adopt different strategies for this purpose and the most suitable strategy is the one that supports the company to move progressively towards accomplishing its stated goals (Greiner, 1991).The ultimate objective of most companies is profit, therefore whatever strategy is adopted, profit remains at the heart. Although, growth is considered to be one of the key points of reference of success by business analysts and is mandated by investors. However, researchers have also argued that, although, growth is essential for firms, but every growth strategy is not successful in terms of value creation. Not all the growth strategies are values adding, that could result in an improved performance of a firm (Olsen Chathoth, 2007; Slevin Covin 1997). Olsen Chathoth (2007) further argued that it is the firms performance on a long term basis that determines the sustainability of the growth strategy that was implemented in the first place. Companies choose growth strategies that suits best to them in a frame work of market and competitors. The best route to growth varies depending on the market and the nature of business (Churchill Lewis, 1983). 2.1 Organisational Culture: The concept of culture is frequently being used by the experts in organizational behaviour field to describe how members of groups understand their world and their place in it. Organizational culture can be better understood as the pattern of actions, words, beliefs and behaviours that members of a business organization share (Able, 2007). Soroghan et al (1998) discussed culture as a unique set of values, attitudes and beliefs that creates a shared sense of reality and it has a powerful influence on company and employee behaviour. Handy C (1993) has put forwarded a simplified definition of organizational cultural which suits best to the way this work is oriented. The author has provided a number of aspects that shape the culture of an organization. According to Handy (1993), organizations have deepest set of beliefs about the way work should be organized, the authority should be exercised, people rewarded and people controlled. Similarly, other things like the degree of formalization required, how much planning and how far ahead? Degree of obedience expected from subordinates, do work hours matter or dress or personal eccentricities? Although, these definitions have provided a theoretical frame work to understand the organizational culture itself but the varied definitions have made it somehow difficult to understand the effects of culture on the organizational Performance (Weber Schweiger, 1992). 2.2 Impact of Culture on Organizational Performance: A highly productive business always has a high performing organizational culture that aligns well both internally and externally to support the overall objectives of the business. This organizational culture shapes the employee experience, which in turn impacts customer experience, business partner relationships and, ultimately shareholder value (Able, 2007 p11). Schraeder Self (2003), aptly put forward that the corporate culture can have a significant impact on a firms long term economic performance and will probably be an even more important factor in determining the success or failure of firms in the next decade (Schraeder Self (2003) Deal and Kennedy (1982) asserts that culture is the single most important factor responsible for success or failure in organizations. Kilman et al. (1985) took it further by reporting that strong culture can have a key impact on the success of the business due to its pervasive influence throughout any organization. In order to check the relationship between culture and performance, Denison (1984) studied a suitable sample of 34 firms representing 25 different industries. To validate the study the author used more refined sampling procedures not only for organizations but for the subjects within the organizations .According to him, two indices organization of work and decision making were found to be significantly correlated with financial performance. In addition, the author also found that the strength of the culture was predictive of short-term performance, when performance was defined with broad indicators like return on assets, return on investment and return on sales etc. 2.3 Impact of Cultural on the Performance of Mergers Acquisitions: Mergers and acquisitions are a popular strategy for growth and expansion. The mergers and acquisition activity is increasing and companies are joining together as never before. Also that this expansion process is hampered by certain obstacles and companies suffer from not handling those issues effectively. Among those difficulties, the lack of intercultural synergy between the two organizations has been reported as the most important issue which is affecting the MA performance greatly (Cartwright Cooper 1993). It is a new challenge for companies operating across the globe to understand the organizational culture and its effects on the organizational performance (Fralicx Bolster, 1997). Mergers and acquisitions are effected seriously by the cultural issues and several studies have been conducted till date to investigate culture and people issues as a reason of merger and acquisition failure. The results have shown that up to 65% of failed mergers and acquisitions are due to cultural and people issues. Studies explored that the intercultural differences cause communication breakdowns which affect the productivity of the whole organization (Chatterje et al 1992). Other researchers also supported this line of reasoning and suggested that incompatible cultures are the main causes of MAs failure. Considering cultural issue as a reason of poor success rates, Cartwright and cooper (1993) stated that the financial benefits that companies expect from mergers and acquisitions are often unrealized because of incompatible organizational cultures of the merging organizations. Lodorfos Boateng (2006) have presented a comprehensive overview of the role of culture in the merger an d acquisition process. They have provided a summary of previous research on this issue by concluding that the lack of intercultural synergy is at the heart of MA failure. According to them, Cultural fit is just as important as structural fit in the analysis and evaluation of potential partners and that poor cultural fit has contributed to the failure of several mergers and acquisitions that appeared to be suitable strategic partners. Huang Kleiner (2004) have mentioned that companies can not be integrated successfully if there exits a cultural incompatibility between the two partners and that the cultural incompatibility is consistently rated as the greatest barrier to success of mergers. 2.4 Conclusion: It can be concluded from the above made discussion that cultural problems lie at the heart of merger and acquisition failure. The management and leadership spend time and do efforts to make mergers work. Most of the time, they are busy with planning the strategic and financial aspects, that show negligence to the cultural and people issues. Conversely, in the log run, the cultural issues not only create trouble for the management but the financial benefits are also undermined by cultural clashes in the newly born organization (Cartwright Cooper 1993). The previous sections have provided enough evidence to consider cultural issues as one of the basic reasons behind the failure of MAs. Now it becomes rather necessary to point out some of the cultural related problems that MAs face and which are responsible for the value destruction in this business activity. 3. Research Topic: This research will explore the effects of cultural issues on the performance of merger and acquisitions on organizations around the world. 4. Research Objectives: This research work has the following individual objectives: To explore the strategic motives behind the mergers and acquisitions To evaluate the performance of mergers and acquisitions and identify the major factors affecting the performance. To analyse the effects of cultural issues on the performance of mergers and acquisitions. 5. Research Methodology: The main proposed research methodology is secondary research which is based on the critical and comprehensive analysis of the existing published literature related to the specific area of research. Books, published journal articles, published research reports, surveys, organizational records, qualitative research and internet will be used to collect secondary sources data. The secondary research method is very essential for my research work, because a lot of sources are there like books, journals and study articles, websites etc. Some search engines are very popular such as Google, Athens, Yahoo, etc. I think these sources will help me to complete my research work. I will use all the above mentioned secondary research methods for my research work and I am highly interested to use the deductive method because it is more logical and authentic way to prove your research. Moreover I will use both quantitative and qualitative techniques to critically analyze my collected data and to reach the conclusion. But in this research work, I will prefer to use more qualitative method of data collection. Because, according to Lincoln and Guba (1985) a qualitative method captures a more complete picture of individual lived experience instead of a narrow perspective of generalizations. Therefore, the study will be based on experience rich participants, who are able to offer insight a quantitative study would be unable to capture. The qualitative data provide me an opportunity to study the material of the recent or more distant past to gain the more insights information for methodological and theoretical purposes. 5.1 Advantages of secondary research methodology: This kind of research helps in examining large scale trend. It is easy to accessible so researcher can consume most of its time in critically analysing data rather than collecting it. Sometime primary data collection is not necessary for the research, because of the available secondary data is completely suitable to draw a conclusions and answers of the questions and sufficient for solving problem. The collection of secondary data is far cheaper than the collection of primary data. For the same level of research budget secondary research definitely gives relatively more information than the primary research can give. The time consumption is much less in the collection of data and conducting results in comparison with the primary research. The results obtain from secondary source of information may more precise than the result obtain from the primary data collection. It may not happens all the time but if research is about at large scale for example data taken from the surveys obtain by the government census department on large scale, this is likely yield more precise results than custom designed surveys weather these are based on the comparatively small size of sample. 5.2 Problems of Secondary Research: In secondary research the researches have to be careful about authenticity of secondary resources. Because at the same type of data or idea two different types of department or persons have different type of opinion, for example if researcher consult the data about the loss to the economy from the act of terrorism than their must two different type of responses available from the government prospective and non government interpreters. Some time material available for research is too old and out dated, so it may difficult for researcher to interpret results. The source of the data and material may not reliable each time, so it may impact the reliability and authenticity of results of the research. Sometimes secondary research has lack of firmness of perspective. If data and material collected from non authentic sources it is difficult to check its biasness and inaccuracies. The published material and statistics often raise more questions than answers. 5.3 Limitations: There are some limitations the data may have and the problems that could arise if these limitations are ignored. The verification of existing data is difficult. Secondary data can be general and vague and sometimes it may cause difficulties in decision making. It is possible that data could be out dated and the sample used to generate the secondary data maybe small. The data publisher company may not be reputable. While keeping in mind those limitations of secondary data, the data taken for this research is taken from reputable academic websites. 5.4 Conclusion: A use and search of secondary data should be preceding any primary research activity. Secondary data definitely helps to solve and understand the problem and gives valid answers. The process of collecting secondary data for research is far cheaper and quicker in compare with primary data at in some cases it could be more accurate. There is always a need of evaluation about data and its source before using it for research. Where possible it is better to take same data from different sources so the biasness and errors can be double check for the more accurate results. 6. Research Ethics: While carrying out the research, the most important thing to keep in mind and practice is the ethical considerations. And in my research work this is very critical and of prime consideration. I will follow all the ethical considerations and guidelines. As my research work is based on secondary research, so what ever the secondary data I will use to achieve my research objectives, I will follow the all terms and conditions of ethical considerations. Throughout my research I will practice honesty in processing and reporting all the data, this will be my own work and I will not copy the other researcher data or work, I will not be bias in my research while collecting or processing the data. I will try my utmost to avoid the omissions and errors while analysing the data and will keep all the record of the data and their valid sources. I am fully aware that the plagiarism is a serious academic crime, so I will not plagiarise my research. I will quote all the citations and that will be fully referenced. I will not copy other researchers work.

Psychological research Essay

One of the main criticisms that have been levelled against psychology is that it does not produce objective, value-free science. The assumption here, of course, is that an absolute ‘truth’ actually exists and that psychologists should be pursuing it with vigour. The natural scientists such as biologists and chemists firmly believe in this positivist stance that an absolute truth exists and denial of this must weaken any science and scientist that ignores it. The importance of this question is central to the nature of bias in research because if a value-free science can be achieved, then, psychology should be able to embrace this and eradicate bias. However, the very real possibility that there is no such thing as a totally value-free knowledge (i.e. one without prejudice or personal bias) means that gender bias as well as cultural and other biases will be impossible to remove, which is not to say that psychologists condone such practice, only the realisation that value-free knowledge represents a ‘holy grail’.  Psychology before the 1970s was riddled with gender biases. Early male psychologists such as Stanley Hall claimed that women should not be allowed into higher education because education increases the blood flow to the brain and away from the uterus. With the rise of the feminist movement in the 1970s feminist psychologist began to challenge limiting and demeaning views of women. The classic paper written in 1971 by feminist psychologists Naomi Weisttein was a scathing attack on psychology’s theories about women. Psychology she said portrays women as inconsistent, emotionally unstable and intuitive rather than intelligent. In short the list adds up to a typical minority group stereotype of inferitory. She pointed out that these kind of psychological theories were used to keep women out of education and professional occupations, to confine women to the kitchen, the bedroom and the nursery, inferior to men in all aspects. Research examples of gender bias in psychology can be found where research only uses male participants and generalises results to women without question. This type of research makes it unclear as to whether findings for men are equally same to women. If women behaviour differs from men’s, the former is often judged to be pathologically, abnormal or deficient in some way (sexism). This is because men’s behaviour is taken (implicitly or explicitly) as the ‘standard’ or norm against which women’s behaviour is compared (andocentric – male centeredness, or the masculinity bias).  Psychological explanations of behaviour tend to emphasise biological (and other internal) causes as opposed to social (and other external) causes. This emphasis on internal causes is called individualism. This gives (and reinforces) the impression that psychological sex differences are inevitable and unchangeable. In turn this reinforces widely held stereotypes and women and men, contributing to the oppression of women (another example of sexism) Many feminist psychologists argue that scientific method is gender bias. For example, Nicolson (1995) identifies 2 major problems associated with the ‘objective’ study of behaviour for how claims are made about women and gender differences.  a) Experimental environment takes the individual ‘subjects’ behaviour, as opposed to the ‘subject’ herself. This ignores the behaviour’s meaning, including its social, personal and cultural contexts.  b) Experimental psychology takes place in a very specific context, which typically works to women’s disadvantage (eagly, 1987). In an experiment a women becomes anonymous. She is put in a strange environment and expected to respond to the needs of (invariably) a male experimenter, who is in charge of the situation. How does gender bias help  According to Kitzinger (1998) questions about sex differences (and similarities) aren’t just scientific questions they are also political.  Answers to some of these questions have been used to keep women out of universities, or to put them in mental hospitals. Others have been used to encourage women to go to assertiveness training courses, or to argue that women should have all the rights and opportunities as men. In other words science of sex differences research is always used for political reasons.  According to Gilligan (1993) at the core of her work on moral development in women and girls were the realisations that within psychology values were taken as facts. Psychologists have a responsibility to make their values explicit about important social and political issues. Failure to do so may contribute to prejudice, discrimination and oppression. Alpha bias  According to Travis, the belief that man is the norm and women is the opposite, lesser or deficient (the problem) constitutes one of the 3 alternative views regarding the mismeasure of women.  Alpha bias underlines the enormous self-help industry. Women consume many books advising on beauty, independence and so on†¦Men being ‘normal’ feel no need to correspond in the same way.  Examples of alpha bias in research  Wilison (1994) maintains that the reason 95 % of bank managers, professors etc†¦ in Britain are men is that men are more ‘competitive’ and because dominance is innate in a man. Wilson also argues that women in academic jobs are less productive than men ‘objectively speaking, women may already be over promoted’. Women who do achieve promotion to top management positions ‘may have brains that are ‘masculinised’.  The research cited by Wilson to support these claims comes partly from the psychometric testing industries. These provide ‘scientific’ evidence of women’s inadequacies, such as (compared to men) their ‘lack of mathematical and spatial abilities’. Even if women are considered to have the abilities to perform well in professional jobs, Wilson believes they have personality deficits (especially low self esteem and a lack of assertiveness) which impede performance.

Business Ethics Essay

Ethics is a collection of moral principles and rules of conduct accepted by part or all of the members of a society. Ethics guides behaviour based on beliefs about what is right and wrong. The source of these beliefs may be tradition, religion, or reasoned judgments about what is best for the individual and society as a whole. Business Ethics is the group of rules of conduct applied specifically to business situations. Ethics is not the same as law. Many ethical beliefs are formally reinforced by law, but many are not. Until recently, it was legal to fire almost any employee for any reason, regardless of the length of his or her service. Often the terminated employees was denied any provision for a company pension. Today, this practice is inhibited by federal law. In practice, ethics is expressed and felt as a combination of pressures that direct one to take or not to take certain actions. Decisions must be acceptable to many different elements of society. First, they must be acceptable to the conscience of the decision maker. A manager may legitimately think, â€Å" I could legally take this action, and I could probably get others to accept it, but I ought not do it because it is not right.† Managers must consider the potential effects of their decisions on the people and companies directly involved with the business operation: customers, suppliers, competitors, employees, investors, and creditors. In addition, manager must consider- and try to control- the possible effects of their decisions on the community at large. It is only recently that business has become aware of how it affects individuals and the whole society. The lassez-faire business environment of the nineteenth century promoted the belief that almost any practice that increased profits was, in the long run, good for the country. The result was cutthroat competition, fraud, deceptive marketing, price and market manipulation, worthless and dangerous products, exploitation of workers, and other practices that today are considered unethical. At the same time that so many harmful business activities were being carried on, some companies did abide by the fundamentals of good business ethics. At the height of the ruthless development of the nineteenth century, many managers still believed in producing high-quality products, honestly sold at a fair price. They felt success could be built on hardwork, creativity, and genuine customer satisfaction. It is the belief that high ethical standards are in the long run good for profits that is stressed in business today. In spite of improvements, however, there is evidence that managing a business may involve, at every level, a compromise with an individual’s ethical standards. In 1975, a major survey asked 238 managers whether they felt â€Å" pressured to compromise their personal standards to attain the company goals. â€Å" About 50 percent of the top-level executives said they did. Ethical Issues Ethical issues are not confined to court cases. All business people face them daily, and they stem from a variety of sources. Although some types of issues arise infrequently, others occur regularly. Let’s take a closer look at several ethical issues. Fairness and Honesty Fairness and honesty in business are two important ethical concerns. Besides obeying all laws and regulations, business persons are expected to refrain from knowingly deceiving, misrepresenting, or intimidating others. Organizational Relationships A business person may be tempted to place his or her personal welfare above the welfare of others or the welfare of the organization. Relationship with customers and coworkers often create ethical problems– since confidential information is expected to be kept secret and all obligation should be honoured. Unethical behaviour in these areas includes taking credit for others’ ideas or work, not meeting one’s obligation in a mutual agreement, and pressuring others to behave unethically. Conflict of interest Conflict of interest results when a business person takes advantage of a situation for his or her own interest rather than for the employer’s interest. Such conflict may occur when payments and gifts make their way into business deals. A wise rule to remember is that anything given to a person that might unfairly influence that person’s business decision is a bribe, and all bribes are unethical. Communications Business communications, especially advertising, can present ethical questions. False and misleading advertising is illegal and unethical, and it can infuriate customers. Sponsors of advertisements aimed at children must be especially careful to avoid misleading messages. Advertisers of health-related products must also take precautions to guard against deception when using such descriptive terms as â€Å" low fat,† â€Å" fat-free,† and â€Å" light.† Demand for Ethical Behaviour Businesses, governments, and the public are all paying more attention to business ethics. The Foreign Corrupt Practice Act (FCPA) of 1977 was enacted in response to disclosure that American corporations were paying bribes to high governmental officials in foreign countries. The bribes were used in an attempt to win contracts and sell products and services. In their defense, the companies argued that firms in other countries did the same thing; the American firms had to pay bribes or risk losing sales. Congress disagreed and passed the FCPA to outlaw the practice. Bribes and kickbacks have come under particularly close scrutiny lately. A kickback occurs when someome who has won a contract or made a sale through favourable treatement gives back part of the profits from the transaction to the party providing the favour. For example, a retailer hires a market researcher to find a good location for a new store. The retailer does not know that the researcher has previously agreed to recommend the property of a real estate developer. In return, the researcher will secretly receive a percentage of the first year’s rent on the property. A bribe is a payment made â€Å"up front’ to influence a transaction. Thus, a bribe occurs before a transaction and a kickback afterwards. Bribery is especially a problem in overseas dealings. Following a criminal investigation by the Justice Department, Lockheed Corporation pleaded guilty to charges of concealing payoffs to Japanese business and government officials. Lockheed was fined $647,000. In another instance, the Brunwick Corporation admitted to the Securities and Exchange Commission that it had paid bribes to two Latin American countries to win contracts. The Joseph Schlitz Brewing Company faced a 747-count federal indictment for giving kickbacks to beer retailers and distributors in exchange for their business. It later agreed to pay a $750,000 penalty. Most recently, General Dynamics, General Electric, and other large companies have been charged with defrauding the Pentagon. The illegal exploits of Ivan Boesky and other Wall Street traders sent shock waves through the Investment community in 1987. In December 1988, the Wall Street firm of Drexel Burham Lambert pleaded guilty to six felony counts of mail, wire, and security fraud and agreed to pay $650 million in fines and restitution. It subsequently filed for bankruptcy. Michael Milken, head of Drexel’s Beverly Hills junk bond office, agreed in 1990 to plead guilty to six felony counts and to pay $600 million in fines and restitution. Also in 1990, American Express publicly apologized for what it admitted was a â€Å"shameful† and â€Å"baseless† smear campaign against rival financier Edmund Safra. Among other things, the company had spread false rumours that Safra was connected to drug cartels. The company agreed to donate $8 million to charities selected by Safra. At about the same time, the Bank of Credit and Commerce International (BCCI) scandal was exploding. Finally shut down by regulators in mid-1991, Luxembourg-based BCCI had been under suspicion since the 1970s. The collapse of BCCI, which operated in 73 countries, revealed fraud of historic proportion, involving bribery, corruption, money laundering, gun running, drug smuggling, terrorism, amd more than $5 billion in lost and stolen assets. COMPANY POLICIES AND BUSINESS ETHICS Within the workplace, an additional factor— the company itself– can influence ethical behaviour, if not always beliefs. As illegal and/or unethical activities by managers have caused more problems for companies, many firms have taken steps to encourage their employees to practise more ethical behaviour. The Strategies for Success â€Å" Succeeding with Ethical Business Behaviour offers some guidelines. Perhaps the single most significant thing a company can do to influence its employees is to demonstrate top management’s support for ethical behaviour. During a recent scandal at Rockwell International ‘s Rocky Flat plutonium plant, for example, executives’ unwillingness to acknowledge wrongdoing led to greater problems. If Rockwell executives had responded more openly, the company might not have lost its right to operate the Rocky Flats plant. To demonstrate their commitment to ethical business practices, many companies have adopted written codes of ethics that formally acknowledge the firm’s intent to conduct its business ethically. An excellent illustration of the power of business ethics occurred a few years ago at Johnson & Johnson. On two different occasions, several of the company’s Tylenol capsules were found to be laced with cyanide. Such a disaster would have ruined many companies. Managers at Johnson & Johnson, however, quickly recalled all of the Tylenol capsules still on retailer’s shelves and offered fortright and candid information whenever asked. The highly ethical practices exemplified by Johnson & Johnson allowed both the firm and the Tylenol brand to bounce back much more quickly than anyone thought possible. A lively current debate concerns the degree to which business ethics can be â€Å"taught â€Å" in schools. Not surprisingly, business schools have been important participants in such debates. But companies also need to educate their employees. More and more firms are taking this route by offering ethics training to their managers. Such training helps employees to assess situations in which they might have to make reasoned, ethical decisions. ETHICS AS A PRACTICAL MATTER A message from David R. Whitwam Chairman of the Board Whirpool corporation The question of ethics in business conduct has become one of the most serious challenges to the business community in modern times. At Whirpool, we share with millions of other Americans, a deep concern over recent relationships of unethical and othen illegal conduct on the part of some of this nation’s most prominant business people and corporation. The purpose of this message is not to pass judgement on any of these occurrence; each must and will be judged on its own merits by those charged with that responsibility. Rather this message is intended to place firmly on record the position of Whirpool Corporation regarding business ethics and the conduct of every Whirpool employee. It represents an irrevocable commitment to our customers and stockholders that our actions will be governed by the highest personal and professional standards in all activities relating to the operation of this business. Over the years, circumstances have prompted us to develop a number of specific policies dealing with such critical elements of ethical business practice as conflict of interest, gifts, political activities, entertainment, and substantiation of claims We aslo have a basic statement of ethics which places the ultimate responsibility for ethical behaviour precisely where it belongs in any organization†¦. on the shoulders of the person in charge: â€Å" No employee of this company will ever be called upon to do anything in the line of duty that is morally, ethically or legally wrong. Furthermore, if in the operation of this complex enterprise, an employee should come upon circumstances of which he or she cannot be personally proud, it should be that person’s duty to bring it to the attention of the top management if unable to correct the matter in any other way.† Every Whirpool manager carries the dual responsibility implicit in this policy statement, including the chairman of the board. Our written policies deals with nearly all facets of business experience. We review, revise and recommunicate them to our managers on a regular basis†¦. and we see that our managers carry on the communication throughout the company. But as a practical matter, there is no way to assure ethical behaviour with written policies and policies statements. In the final analysis, â€Å" ethical behaviour â€Å" must be an integral part of the organization, a way of life that is deeply ingrained in the collective corporate body. I believe this condition exists at Whirpool, and that it constitutes our greatest single assurance that htis company’s employees will conduct the affairs of this business in a manner consistent with the highest standards of ehtical behaviour. At Whirpool we have certain ways of doing things. They are commonly accepted practices, enforced not by edict, but rather by a mutual conviction that they will, in the long term, work in the best interest of our customers, our stockholders, the company and all its employees. In any business enterprise, ethical behaviour must be a tradition, a way of conducting one’s affairs that is passed on from generation to generation of employees at all levels of the organization. It is the responsibility of management , starting at the very top. to both set the examples by personall conduct and create an environment that not only encourages and rewards ethical behaviour, but which also makes anything less totally unacceptable. I believe this has been achieved at Whirpool. The men who founded this company back in 1911 were individually possessed of great integrity and honour. They forstered a tradition of ethical conduct in their business practices, and they perpetuated that tradition through careful selection of the people who would one day fall heir to leadership of the company. The system works. Time and time again I have witnessed its efficacy. It shows no hospitality whatsoever to those not willing to abide by its standards, and unerringly identifies and purges them. Unfortunately, the system is not automatically self-sustaining. It must be constantly reaffirmed by each new generation of leaders. In the position I now occupy, I view this as one of my most important responsibilities. As this company grows, and as the pressures upon it increase, maintaining our tradition of ethicial conduct become an increasingly difficult task. But I am confident it will be maintained, because it is necessary for continued growth, profitability and success. Sincerely, Remark: Business ethics: the study of moral behaviour, character, guiding beliefs, standards, or ideas that pervade a group, a community, a person; it deals with what is right and wrong, good and bad. The question of ethics- the branch of philosophy that deals with the â€Å" right† and â€Å" wrong† of human behaviour- has been connected with business since the beginning of commerce. In business, what determines the line between honest and dishonest methods? What is ethical business conduct? What is unethical business conduct? Answers to these questions may not be consistent because they depend upon the ethical standards of the person passing judgment, and the basic moral and beliefs of society. The guides to business ethics in our society derive primarily from religion and law. – Religious teaching spell out the requirements for moral responsibility. – Law provides codes for governing business behaviour.

A Countrys Shape Can Impact Its Fortunes and Destiny

A countrys boundaries, as well as the shape of the land it encompasses, can present problems or help to unify the nation. The morphology of most countries can be divided into five main categories: compact, fragmented, elongated, perforated, and protruded. Read on to learn how the configurations of nation-states have impacted their destinies. Compact A compact state with a circular shape is the easiest to manage.  Belgium  is an example because of the cultural division between Flanders and Wallonia. Belgiums population is divided into two distinct groups: The Flemings, the larger of the two, live in the northern region—called Flanders—and speak Flemish, a language closely related to Dutch. The second group lives in Wallonia, a region in the south, and consists of the Walloons who speak French.   The government long ago divided the country into these two regions, giving each control over its cultural, linguistic, and educational matters.  Despite this division, Belgiums compact form has helped to keep the country together despite numerous European wars and attacks by neighboring countries. Fragmented Nations such as Indonesia, which is composed of more than 13,000 islands, are known as fragmented or archipelagic states because they are composed of archipelagos. Governing such a country is difficult. Denmark  and  the Philippines  are also archipelagic countries separated by water. As you might expect, the Philippines has been attacked, invaded, and occupied numerous times over the centuries due to its fragmented shape, starting in 1521 when Ferdinand Magellan  claimed the islands for Spain.   Elongated An elongated or attenuated nation such as  Chile  makes for difficult governance of peripheral areas in the north and south, which are from the central capital of Santiago. Vietnam is also an elongated state, which has battled numerous attempts by other countries to divide it, such as the 20-year  Vietnam War, where first French and then U.S. forces tried unsuccessfully to keep the southern part of the nation separated from the north. Perforated South Africa  is a classic example of a perforated state, which surrounds  Lesotho. The surrounded nation of Lesotho can only be reached by going through South Africa. If the two nations are hostile, access to the surrounded nation can be difficult. Italy is also a perforated state. Vatican City  and  San Marino—both independent countries—are surrounded by Italy. Protruded A protruded, or panhandle country such as  Myanmar (Burma)  or Thailand has an extended arm of territory. Like an elongated state, the panhandle complicates the management of the country. Myanmar has existed in one form or another for thousands of years, for example, but the countrys shape has made it an easy target for many other nations and people, dating to the  Nanzhao kingdom in the mid-800s  to the Khmer  and  Mongol  empires. Though its not a nation, you can get an idea of how hard it would be to defend a protruded country if you picture the state of Oklahoma, which has a prominent panhandle.