Author: chris

Article Review

Question 1) on page 61 toward the bottom in the paragraph that starts with “as such, GAAP could no longer be regarded…..” Do you agree with this position? Why or why not? Do you think this is fair to managers who simply want to follow GAAP? Why or why not

I agree with the statement that the author makes. This is because the flexibility that GAAP allows may present a moral hazard for managers to engage in earnings management in an effort to present results that show a favorable position of the entity. A study by McVay presents an example of imprudent practices that GAAP may allow. In the study, McVay argues that managers may misclassify items in the income statement thus leading to the presentation of a performance that is more favorable than the entity’s actual performance. Such misclassification arises from the discretion that managers are allowed to classify expenses. A second type of earnings management also cited by McVay (2006) and McEnroe (2010) is using their discretionary judgment allowed in GAAP to manipulate real activities. An example of these activities would be to reduce the expenditures on R&D, leading to an increase in the reported income. Such instances indicate that GAAP may make it possible for managers to provide misleading financial statements and thus it fails to offer assurances to the users of financial statements that the statements are a true reflection of the entity’s state of affairs.

McEnroe’s opinion that GAAP does not offer assurances to the accuracy of the financial statements is fair even to managers who simply want to follow GAAP. This is because such managers, when not inclined to inflate the performance of the entity, will still adopt a conservative approach under GAAP. By recognizing the weaknesses in GAAP and adopting corrective action, the resultant accountability will safeguard the reputation of the accounting profession. As such, even the managers who are honest in their use of GAAP will benefit from increase in users’ trust of the statements that the accounting officers prepare.

Question 2: The author states “auditors will not use the audit opinion to police bad business practices, even if they involve earnings management”. How do you explain that? Do you agree with the auditors’ position? Why or why not?

McEnroe’s observation that auditors are unlikely to “use an audit opinion to police bad business practices even if they involve earnings management” (2010, p. 65) can be explained by auditor’s fear of losing business when they offer qualified opinions. A study by Stefanik et al. (2009) for instance found out that clients are likely to switch auditors when the auditors offer a qualified opinion (as cited in Habib, 2013, p. 185). As such, since auditors can still find recourse by arguing that the statements were prepared in accordance with accounting principles espoused by the GAAP, they may be hesitant to provide an opinion that could injure their relationship with the client.

I, however, do not agree with the auditors’ position. This is because by disregarding bad accounting practices, auditors would be escaping from their moral duty to encourage fair reporting by the clients. When auditors offer an unqualified opinion for reports that are subsequently found to be misleading, they stand a risk of damaging their reputation and thus losing the business they were initially trying to preserve (Habib, 2013). Additionally, by assuming their moral duty to offer a statement that indicates the extent to which the financial statements are a representation of the entity’s state of affairs, both the auditors and the clients would benefit in the long term. For example, DeFond, Lim and Zang (2012) observe that when auditors encourage clients to be conservative in activities that involve manager’s discretion, benefits such as lower incidences of accounting restatements, lower audit fees, fewer opinions concerning the ‘going concern’ status of the entity, and less likelihood for the auditor to resign accrue. Thus, my opinion is that auditors should offer qualified opinions where they encounter imprudent practices to manage earnings during their audits.

 

References

DeFond, M. L., Lim, C. Y., & Zang, Y. (2012). Do auditors value client conservatism? Retrieved from http://leeds-faculty.colorado.edu/zeyun/workshop11-12_files/DLZ%20Jan%2018%202012.pdf

Habib, A. (2013). A meta-analysis of the determinants of modified audit opinion decisions Managerial Auditing Journal, 28(3), 184-216. Doi:10.1108/02686901311304349

McEnroe, J. E. (2010). Public accountants’ perceptions of the acceptability of earnings management practices through the employment of GAAP in the post-Sox period. Journal of Applied Business Research, 26(1), 59-72.

McVay, S. E. (2006). Earnings management using classification shifting: an examination of core earnings and special items. The Accounting Review, 18(3), 501-531.

 

 

Course Title: Visualizing Extra Credit

Ch. 1 Pg.: Do you think current worldwide population growth and economic growth are sustainable? Why or why not?

Word Count: 247

Sustainability refers to the ability to meet the requirements of the present population without limiting the ability of the future generation to satisfy their own requirements (p. 5). Although this is the conventional way of viewing sustainability, there are questions regarding what needs sustenance, the reason for sustenance, and the present prevailing values. Some experts attach value on the future while others only consider the present. On reasons for sustenability, there are various dimensions, and these include environmental, social, and economic dimensions. The world population currently exerts a lot of pressure on natural resources, ecosystems, and thus reduces the quality of your environment. Population increase also creates competition that brings inequity, poor health conditions, and low living standards. Unless the trends on resource extraction are checked, most experts believe the earth will run out of resources. However, issues of sustainability elicit more questions than answers, and in most cases tend to conflict. Firstly, preserving the present environment harms a section of the present population. Limiting the raw materials going to the industries reduces production output, leading to higher cost of production. The higher cost of production leads to higher prices of various products that are not affordable to greater majority. Low production levels also reduce the available job opportunities. With very few jobs, it is not possible to alleviate poverty. From this perspective, even the Millennium Development Goals appear untenable and conflicting. Instead, the idea of poverty should receive more attention compared to environmental conservation and preservation.

 

Ch. 2 Pg.: How forest destruction related to declining biological diversity?

Word Count: 285

 

Forests destruction contributes to declining biological diversity. From the perspective of Ecological Worldviews, human beings should respect life and equality of all species. The view demands respect for nature and all the living organisms therein, forests included. This Worldview hinges on the fact that forests provide cover for most wild animals and even forest people. Moreover, forests also enhance the level of precipitation in an area. Other numerous uses such as timber harvesting, recycling of carbon dioxide in the atmosphere, and provision of herbs or fruits are also vital. In this regard, the reduction in forest cover is associated with numerous consequences. These consequences include extinction of rare species, reduction in amount of precipitation, rising cost of paper materials, desertification, and green house effect (p.2). Some of these concerns are so urgent that most nations have launched campaigns aimed restoring forest cover. The nations on earth continue to bear the pain of forest degradation; however, countries with advanced technology and more affluent populations contribute more to the forest destruction. Moreover, more consumption means these countries produce more wastes such as oil spills and acidic rain from the toxic industrial waste gases that lead to the destruction of various plant species. However, the Traditional or Western Worldview differs diametrically from the previous Ecological Worldview. The Western Worldview concentrates more on superiority of human beings over nature, and exploitation of nature for wealth creation. This line of thought generally suggests that human beings should exploit the various resources available to their own advantage without conservational limitations. Further, this view reinforces the idea that exploitation of nature should aim at meeting the increasing production and consumption levels. It totally disregards the limited and non-renewable nature of most resources.

 

 

Community Health Risks: Bergen County

Bergen County has the highest population in New Jersey State. This assessment seeks to find out the factors affecting the health of Bergen community residents. According to the US Census Bureau (2014), the population of Bergen County in the 2010 census was 905,116, with 2012 estimates noting an increase in population to 918,888. As this Census Bureau report further highlights, in 2012, 60.7% residents were Caucasian, 6.7% were African Americans, 0.4% were American Indians, 15.5% were Asians, 0.1% were native Hawaiians and 17.3% were Hispanics. Further, 28.5% of Bergen County population was foreign-born in 2010, while 36.7% of the residents did not speak English at home (Community Health Improvement Partnership (CHIP; 2013). The number of Korean-born individuals in this county is higher than in any other county in the United States at 6.4% (CHIP, 2013). As the report by the Census Bureau further notes, between 2008 and 2012, the median household income in Bergen County was $84,255 and the individuals living below poverty level in the same period were 6.6%. The county has a high median household income but some residents live in poverty. For instance, compared to other counties in the US, as highlighted by Population Health Institute (PHI; 2012), Bergen was among the top forty counties in median household incomes in 2011. The county’s unemployment rate is also not as high as that of the entire state. For example, in 2012, Bergen County’s unemployment rate was 7.7% while that of New Jersey State was 9.3% (US Bureau of Labor Statistics, 2014). Further, 83% of the residents have health insurance but those from low-income households and ethnic minority groups are not likely to be insured (PHI, 2012). Most of those who are insured are enrolled in Medicare and Medicaid programs.

The rate of air pollution is low in Bergen County. For instance, in 2012, the median air quality index reported by the US Environmental Protection Agency (EPA; 2013) in the County was 32. This was the lowest index in the State of New Jersey with highest value being recorded in Essex County. Throughout the year 2012, as the EPA report further shows, Bergen County did not record a day when the air quality was unhealthy for the general population, only recording four days when the air quality was unhealthy for sensitive individuals such as those with respiratory problems. The community residents get water from United Water. Water may be contaminated by microbial contaminants, pesticides, organic chemicals and inorganic and radioactive contaminants (United Water New Jersey, 2013). However, the water is treated and filtered before distribution to homes (United Water New Jersey, 2013). Therefore, the residents have access to safe water.

Weather conditions in Bergen County, however, pose serious health problems to the residents. Cold weather can cause hypothermia and frostbite. Furthermore, ice and snow during winter can cause falls and car accidents.  Moreover, there are drowning hazards in the community since there are streams, lakes and rivers in the county. Deer ticks found in the county also spread Lyme disease through bites. These ticks feed on wild animals such as deer and mice but can also be found on livestock and humans. Some of the poisonous plants found in Bergen include poison sumac, poison ivy and poison oak. In Bergen County, building codes are enforced to ensure the safety of the residents. Moreover, the county has waste disposal programs to enhance sanitation. Residents face the risk of road accidents. The number of fatal accidents in 2008 was 24 with 9,009 injuries from car accidents being recorded (City-Data, 2012). Bergen county residents have a high sense of security. The rates of crime are lower compared to other counties and the entire New Jersey State.  In 2010, the rates of violent crimes and property crimes per 100,000 residents in Bergen County were 101 and 1, 276 respectively in comparison to 299 and 1,972 respectively in New Jersey (FBI, 2010).

According to the 2010 census, individuals aged between 60-64 years in Bergen County were 52,989, 65-69 years were 38,357, 70-74 years were 29,503, 75-79 years were 25,237, 80-84 years were 21,727 and those aged 85 years and above were 22,279 (US Census Bureau, 2014). Generally, the attitudes towards aging are positive and there are numerous services to help adults who are 60 years and above to live longer and with dignity and independence. Compared to the entire New Jersey state, the Bergen County population is older. Individuals aged over 65 years were 15.1% of the county population in 2010 while the percentage of individuals in this age group in the New Jersey state was 13.5%. In the same year, the number of households with an individual aged 65 years or above was 29% in Bergen County, compared to the entire state with 26% (CHIP, 2013). According to the 2010 census, 469, 154 Bergen County residents were female while 435, 962 were male. There are efforts in the community to raise awareness about mental health. Homosexuality is allowed in the county and homosexuals are allowed to adopt children. Bergen county residents mainly seek treatment from health centers and hospitals and they take medication prescribed by professional healthcare providers. In Bergen County, high school graduation rates are high. In comparison to the nation’s 87.3% individuals with a high school diploma, the percentage in Bergen County was 90.9% in 2010 (Population Health Institute, 2012). Bergen County is one of the richest communities in the US and its population is mainly non-Hispanic White. Moreover, the county has the largest percentage of older individuals than any other county in New Jersey State or the entire nation (CHIP, 2013). Residents in this county are also more likely to be employed and well-educated. Furthermore, most individuals have access to recreational facilities and healthy food. The rate of crime in Bergen County is lower compared to the state (FBI, 2010). As a result of these factors, Bergen County has a good health status in comparison to the state and the entire nation. It is one of the healthiest counties in New Jersey. However, not every area in the county has good health indicators. In some parts of the county, residents, mainly ethnic minorities, have low incomes and face cultural barriers (New Jersey Department of Labor and Workforce Development, 2013). They also have poor access to recreational facilities and healthy foods. Individuals in these areas experience higher rates of crime and unemployment. As a result of these factors, these individuals’ social, financial and health status is complicated and consequently, they face challenges in access to healthcare services.

There is a high risk of natural disasters in the county. Residents are at a risk for earthquakes, tornados, volcanoes, cold weather and floods (City-Data, 2012). The elderly and individuals with disabilities are more likely to be affected by disasters because their response may be slow. Some of the communicable diseases that occur as a result of a disaster are waterborne diseases, measles, acute respiratory infections, malaria, dengue and tetanus. People with HIV and TB in Bergen County may make disaster recovery difficult in case of emergencies. The county is well prepared for disasters such as Hurricane Sandy which occurred in 2012. Some of Hurricane sandy victims were traumatized and their mental health is at risk. Many victims lost their properties, especially homes. Bergen residents are at a higher risk of earthquakes than the entire state and nation (City-Data, 2012). The Bergen county community is cohesive and there is no potential for conflicts which may cause disasters such as war. Among the low-income community members, cases of mental health problems, depression and anxiety are high. Drug abuse is also prevalent in the community (PHI, 2012). A number of members of all ethnic groups were found to be binge drinkers and they were mainly young adults. A number of residents used marijuana and prescription drugs. Driving under the influence of drugs is also common.

Data Interpretation

Individuals from low-income, minority background or those who were unemployed had higher rates of health problems and mortality than the rest. The rate of births in Bergen County per 1000 population was 11.7 as from 2000 to 2006 (City-Data, 2012).The rate of infant death from 1000 live births during the same periods was 3.9. In 2013, HIV prevalence in the county was 231 while in the entire New Jersey state it was 497. Infant mortality was 337 and 549 in Bergen county and New Jersey respectively (City-Data, 2012). Child mortality was 25 in the county and 42 in the state. Uninsured adults comprised of 18% in the county and 19% in the state. The rate of chronic conditions increased with age and older adults were at a higher risk.

Bergen County Community Genogram

 

Genogram Interpretation

Bergen county community comprises of families with different characteristics and connected in different ways. The genogram represents four different families in the community. Grace’s and John’s families are neighbors. Matthew’s family is connected to John’s family through James’ very close friendship with Tom. Matthew’s and Grace’s families are connected through Michelle’s friendship with Paul and also because Joyce and Mark work together at the community hospital. Francis’ and Matthew’s families are connected because Francis’ granddaughter is Joyce’s babysitter. Grace’s, John’s and Matthew’s families are connected because they all visit the same adult care center.

The community has the largest proportion of the older population. People in their late seventies and eighties such as Mary, John, Grace, Matthew, Elizabeth and Jane are still alive. The attitudes towards the elderly are good and there are services for them such as adult day care centers. Chronic conditions in the community increase with age. Grace, Matthew and Elizabeth are suffering from hypertension, diabetes and Alzheimer’s disease respectively. Matthew and Elizabeth are divorced.

There is a problem of drug abuse and alcoholism and it causes many problems in families. George is an alcoholic and he physically abuses his wife Jennifer. As a result, Jennifer is suffering from depression. Alex has an alcoholism problem and consequently, he is estranged from his wife and has neglected his two children. Substance abuse is more common among the youth. Paul and Michelle are students and close friends and they take drugs and alcohol.

The employment rate in the community is high and this means the educational levels are also high. Mark and Joyce work in the community hospital where communicable diseases and other conditions affecting the community are treated. Tom works in the office of emergency services in Bergen County. Therefore, the community is well prepared for natural disasters. Diana works for United Water where the water is treated before it is distributed to the community. Few individuals are unemployed and their living standards are low.

Infant mortality is common among the poor. For example, George’s younger child, Amber, is deceased. Unemployment and drug abuse problems are more rampant in poor households such as Francis’ family. Francis is an alcoholic and his son Mason has serious mental problems and drug abuse and is also unemployed. As a result, Mason’s daughter has not been able to pursue education and she is working as Joyce’s babysitter. Mason’s daughter is also involved in a sexually abusive love affair with Arnold who abuses drugs, and they have a daughter. People in the poor regions also have no access to the social facilities in the community. For example, Francis and his wife are elderly but they are not visiting the adult day care center.

Community Diagnosis

Even though Bergen county is generally wealthier and healthier than most of the counties in New Jersey, some of the community residents face a number of health risks. Low-income earners as well as those who are unemployed are limited by finances and are unable to access healthcare. Moreover, most of these individuals do not have health insurance. Ethnic minorities also face language barriers and this hinders their access to care. Substance abuse and mental health are also common in the community and they expose the community to more health risks. Air pollution also exposes residents to respiratory illnesses. The growing number of elderly individuals needs improved care to be able to manage their chronic conditions. Lack of access to healthy food and recreational facilities among low-income individuals can cause nutritional problems such as obesity. The homeless individuals are also exposed to health problems. There is a high risk to natural disasters in the county and proper structures need to be established to withstand them and protect residents from communicable diseases. Residents are also faced with the problem of road accidents mainly due to bad weather and driving under the influence of drugs. Therefore, there is a need to implement effective interventions to address the community health problems identified during this assessment.

 

References

City-Data. (2012). Bergen County, New Jersey. Retrieved from http://www.city-data.com/county/Bergen_County-NJ.html

Community Health Improvement Partnership (CHIP). (2013). Bergen County Community Health Needs Assessment 2013. Retrieved 5 March 2012 from http://www.cityofenglewood.org/filestorage/1441/1468/2265/1487/BC_2013_Community_Health_Needs_Assessment.pdf

New Jersey Department of Labor and Workforce Development (NJDLWD). (2013). County community fact book: Bergen County Edition. Retrieved 5 March 2014 from http://lwd.dol.state.nj.us/labor/lpa/pub/factbook/berfct.pdf

Population Health Institute. (2012). County Health Rankings and roadmaps: a healthier nation, county by county. Retrieved 5 March 2014 from http://www.countyhealthrankings.org/sites/default/files/states/CHR2012_NJ.pdf

The Federal Bureau of Investigation (FBI). 2010. Crime in the United States. Retrieved 5 March 2014 from http://www.fbi.gov/about-us/cjis/ucr/crime-in-the-u.s/2010/crime-in-the-u.s.-2010

United Water New Jersey. (2013). Water quality. Retrieved from http://www.unitedwater.com/uploadedfiles/localized_content/uw_new_jersey/20/w_m11_newjersey.pdf

US Bureau of Labor Statistics. (2014). Local area unemployment statistics. Retrieved 5 March 2014 from http://www.bls.gov/web/laus/laumstrk.htm

US Census Bureau (2014). State and county quickfacts: Bergen County, New Jersey. Retrieved from http://quickfacts.census.gov/qfd/states/34/34003.html

US Environmental Protection Agency. (2013). Air quality index report. Retrieved from http://www.epa.gov/airdata/ad_rep_aqi.html#area

 

 

 

 

Mergers, Acquisitions and International Strategies

Merge Between US Airways and American Airlines

The merger American Airlines and US Airways was one of the largest in the latest history of mergers and acquisitions. Prior to the merger, American Airlines had filed for bankruptcy, which prompted US Airways to stage an acquisition attempt. Several other factors facilitated the merger. During the bankruptcy filing, repercussions were bound to arise for the people who worked for the American Airlines. The unions representing various workers at American Airlines negotiated with the company about the job cuts and contract concessions. The direction of the discussions did not please the unions, which advocated for the merge. Experts have argued that the merger formed the biggest airline in the world and will change competition in the airline industry. Although the process seemed like a merger, it was actually an acquisition of American Airlines by US Airways. US Airways has been very strategic over the years and has seized every opportunity to improve its performance and control competition in the industry. Previously, it had attempted to take over Delta Airways when it filed for bankruptcy in 2006. However, Delta was able to hold off the hostile takeover. The merger between  American Airlines and US Airways was a strategy by the US Airways to control the market by getting access of its rivals’ market share. The move by US Airways will benefit the company immensely because American Airlines was actually bigger than US Airways. By acquiring a rival larger than itself, US Airways gained almost a larger portion of the air travel market share than it previously had.

Therefore, the strategy that led to the merger was wise and resulted in the formation of the largest carrier in the world. US Airways gained economies of scale through the acquisition. It can access all the resources previously owned by American Airlines, including its customer base. In the merger, the US Airways stand to be the biggest gainer because its shareholders will get 82% from the proceeds of the new Airline while the remaining percentage will be divided among American Airlines’ creditors and shareholders. Another benefit to the US Airways is becoming the market leader in almost all aspects. This means that it can influence major changes in the industry and be able to control the actions of its competitors. Another reason why the merger was a strategic win for US Airways is that it saved American Airlines shareholders. Although they are currently getting a low rate of return on their investment, they would have lost more if the merger failed and American Airlines was forced to cease its operations. Moreover, once debts owed to American Airlines creditors are settled, the earnings for the shareholders will increase. In addition, the shareholders of American Airlines may feel the urge to continue using the services of the new company to support it generate more profit because they stand to benefit. Therefore, the merger secured a customer base for the new company. The merger reduced the number of players in the airline industry. This means that passengers will have limited choices in terms of airlines to use, which will make the new company the airline of choice. Although the reduced number of airlines may create a monopoly to some extent, US Airways will gain strategically, which justifies the decision to merge

Business Level Strategy

For the newly formed company after the merger, the best business level strategy would be synchronizing systems from the two companies in the merge to reduce discomfort for the customers. When two different systems are merged, there is little congruence. As a result, service quality may drop because of the confusion created by the two systems. The airline industry is a service industry whose success depends on the quality of service rendered to customers. Some of the discomforts that are likely to arise before the two systems are synchronized include loss of luggage by customers and delayed flights. Therefore, merging the two systems should be prioritized. A bad reputation in the service industry can be catastrophic to the performance of an organization. In addition, the remaining competitors will try to take any available chance to snatch  customers from US Airways.  The best strategy for the company  would be providing excellent service to clients. No matter how big US Airlines is, if it provides poor quality services compared to its competitors, its customers will seek competitors’ services.

Corporate Level Strategy

A crucial corporate strategy for the new company would be purchasing new carriers to maximize the added routes and destinations. Since the merger was precipitated by a bankrupcy, it is possible that American Airlines could not purchase enough aircrafts to maximize the available market. Therefore, the beginning  of creating a new corporate strategy for the new company would be taking an audit of the available aircrafts and the available traffic. This would determine the number of carriers that need to be purchased to cover the available routes fully. Failure to have this corporate strategy would lead to competitors taking up the chance to meet the needs of the unsatisfied customers (Finlay, 2004). Therefore, evaluating all the routes served by the new company and their needs would ensure that the current market is fully served.

Boston Beer Company

The Boston Beer Company brews craft beer in the United States. The company was founded in 1984, and its headquarters are in Boston. The company manufactures its beer under different brands, which diversifies its product portfolios. Its market capitalization is $3.14 billion and has breweries located in three different states. This allows the company to serve a wide market. In the United States, the alcoholic beverage market is highly competitive, with large companies dominating the market. Multinational companies usually have economies of scale that allow them to play with product prices to fit in the market. In such a market, small players find it hard to compete and must make smart decisions in order to survive. For small companies, the best strategies involve actions that would increase economies of scale, which would eventually increase the ability of the company to acquire a new market share. One such strategy would be acquiring another company. Boston Beer has indicated its ability to compete as demonstrated by its market capitalization. However, for the company to become a major competitor in its industry, it must get involved in acquisitions of other firms. A suitable candidate for an acquisition by Boston Beer would be National Beverage Corp.

National beverage Corp manufactures, markets and sells an assortment of soft drinks, specialty beverages, fresh juices and water. The company  has a market capitalization of $ 652 million. It is headquartered in Florida but sells its products throughout North America. By acquiring National Beverage Corp, Boston Beer stands to benefit from increased sales and profits. Market penetration in the beverage industry can be challenging, especially because of the presence of many players. By acquiring National Beverage Corp, Boston Beer will gain access to the company’s distribution channel and selling points. This means that the company will be able to cover an extra geographic area without incurring extra cost since it will use the established distribution channels by National Beverage Corp. The second advantage that will increase Boston Beer’s profits after the acquisition is diversification. Currently, the company deals with alcoholic drinks only. Acquiring National Beverage Corp will expand its portfolio to include the non-alcoholic drinks that were previously sold by National Beverage. Consequently, Boston Beer will be able to enter the soft drink market. It is advantageous for Boston Beer to diversify its portfolio because when one market is affected by economic conditions, the other market can stabilize the performance of the company. In addition, Boston Beer’s market capitalization will increase, which will improve its reputation. The number and performance of a company’s shares in the stock market are usually used as indicators of a healthy performance for  that firm. A good performing organization can earn the goodwill of investors (Orcullo, 2007). In addition, the good performance is crucial because it helps a firm to secure finances because the finance providers are more willing to extend assistance to good performing firms than low performing ones.

Business Level Strategy

To gain competitive advantage, the company requires a suitable business-level strategy that fits well with its business model. Since the company has well developed distribution channels and selling points at no extra cost, it can manage to lower the prices of its products to increase its sales volume. Therefore, the best business-level strategy for Boston Beer would be cost leadership strategy. Through cost leadership, the company will set low prices and attract large sales revenues, which will translate to increased profits compared with competitors. The competitors will be forced to set their prices using Boston Beer’s prices as the benchmark. Since Boston Beer has economies of scale, it will afford low prices and yet make profits  higher than competitors.

Corporate Level Strategy

The increased profits from the large business after the acquisition can help Boston Beer to create a corporate level strategy (Furrer, 2010). The best corporate level strategy for Boston Beer after the acquisition is to increase the number of brands for the alcoholic and soft drinks. The large distribution channel will facilitate their distribution and the enlarged company will have a reputation, which will increase the products’ preference by customers. In addition, the company can acquire patents from competitors to distribute their products. The Patents would allow the company to access to markets that were exclusive to its competitors. Once the brands increase, the company can create one holding company that will coordinate and run the operations of the company.  The holding company is crucial in creating synergy for the company so that its competencies can be enhanced. The penetration into the American market is the first step in preparing to enter the international market. Consequently, the company’s market share will increase and translate to increased profits.

 

 

References

Finlay, P.N. (2004). Strategic Management: An Introduction to Business and Corporate Strategy. New Jersey, NJ: Pearson Education.

Furrer, O. (2010). Corporate Level Strategy: Theory and Applications. New York: Taylor & Francis.

Orcullo, N. (2007). Fundamentals of Strategic Management. London: Rex Bookstore.

 

 

 

 

Professional Ethics

Through this module, I have encountered various concepts of making ethical decisions based on different theories. After the module, I am confident I can become a good accountant because I know how to make my decisions. I have learnt about the rule-based decision making and principle-based decision making. Before this module, it would have been difficult for me to differentiate the two because there is a very thin line between them. However, I understand that in the accounting profession, professionals are required to use the principle-based concept.

Among the many lessons I have learnt through this module, learning about the fundamental principles of accounting is the greatest lesson and will guide career and make me a better accountant. Those who have not encountered this module may not realize the importance of confidentiality, integrity, objectivity and professional competence. I have learnt that these principles form the basis upon which the accounting profession is built. Failure to respect confidentiality would lead to loss of confidence by clients about accountants. Objectivity allows accountants to focus on facts in their decision making, which lead to quality decisions (Jeffrey, 2005). Integrity helps accountants to be honest in their work so that the decisions they make can be relied upon by others. Professional competence allows accountants to take up only those tasks they are qualified to carry out, which ensures high quality outcomes for clients. Therefore, learning about professional ethics will help me to carry out by duties as an accountant using high moral standards.

 

 

Reference

Jeffrey, C. (2005). Research on Professional Responsibility and Ethics in Accounting. New York: John Wiley & Sons.

 

 

Classroom Management

Classroom management theories have been influential in setting a platform in which the teachers offer a classroom environment with an emotional touch useful in letting all learners concentrate with the class. The classroom foundation is attached to promoting self management, self awareness, self esteem, self efficacy, facilitate student interactions, manage routine misbehaviors, increase engagement and foster student motivation.

Classroom management in the modern era has become very difficult due to many disruptive technologies and behaviors displayed by the students. Teachers have a responsibility of making sure that all the processes within the classroom run efficiently and as scheduled (Marzano et al., 2003). Many teachers have admitted that classroom management is one of the difficult tasks in the teaching practice. Managing negative students discipline and attitudes has made some teachers in the profession quit (Sornson, 2005).

Teachers at any one time must have a full control of the classroom through developing a learning environment that is cooperative, and with a clear communication in issues of behaviors and communication in educational expectations. Classroom management works well with motivation, respect and discipline (Sornson, 2005). Many teachers set clear rules and expectation to the students that generate a concrete direction to be followed by the students.

Self management is part of classroom management. Students are allowed in actively and independently contribute to completing of tasks and in taking an active role in reinforcing and monitoring their individual behaviors. Self management fosters independence and self reliance among the students (Marzano et al., 2003). Teachers are capable of improving self management strategies that focus at high productivity, better educational performance, delivery of tasks on time and minimization of children misbehaviors in the school environment. Self management skills are critical to the students as the children experience growth from childhood to the future adults in the society.

Critical elements observed by self management are attached to self evaluation, self monitoring and self reinforcement. Self monitoring is critical as students observe own behaviors through the evaluation progress. The occurrence of the student’s behaviors is recorded in the forms and graphs that show the behaviors of the students (Sornson, 2005). Self evaluation strategies are critical in encouraging students to compare their actions with the preset goals. Self evaluation and self monitoring are useful in spearheading the right self management in the classroom environment.

Self efficacy in the school environment is critical in making the students belief in their abilities in achieving the desired outcomes and goals. Students embracing self efficacy have high chances of challenging themselves with doubting tasks since such students are intrinsically motivated. The students embracing self efficacy put effort as a way of developing success (Marzano et al., 2003). Students embracing self efficacy do not blame failure on external factors, but consider a failure as a chance of learning, such students have high chances of recovering from setbacks, which is critical in academic excellence.

Students are encouraged to gain self efficacy through verbal persuasion, mastery experiences, emotional state and vicarious experiences. Teachers must understand that students are different in many ways, and the way to mentor one student is different from the way of mentoring other students. The type of teaching method and learning environment offered by the teacher has a capability of influencing self efficacy (Sornson, 2005).

Teachers are encouraged to offer a contributive learning environment, in encouraging self management and self efficiency among the students. There are teaching practices to be avoided by the teachers, particularly the practices that foster a dull learning environment. Teachers are expected to use tasks that are moderately difficult, use peer models, capitalize on the interests of the students, allow students to contribute and make choices, encourage students to try, offer timely feedback and form teams among the students.

 

References

Marzano, R., Marzano, J., & Pickering, D. (2003). Classroom Management That Works: Research-Based Strategies for Every Teacher. Beaufort, South Carolina: Association for Supervision & Curriculum Deve.

Sornson, B. (2005). Creating Classrooms Where Teachers Love to Teach and Students Love to Learn. New York: Love and Logic Press.

 

 

 

 

An inclusive growth strategy can be better than alternative strategy for reducing inequality

The issue of unequal distribution of economic and social resources have recently become an issue of concern among policy makers. Although there exist many policies put in place to address the economic challenge and poverty in modern society, inclusive growth strategy has emerged as one of the most effective economic means of addressing inequality issues in modern society (Andersen and Tina 21). So far, numerous developing countries have embarked on inclusive growth strategy as a reliable alternative for reducing social and economic inequality.

Contrary to other economic development initiatives, the modern inclusive growth strategy upholds the principle of equity, equality, and human dignity. According to the inclusive growth strategy principles, economic development unreal if the available resources are distributed unequally. The idea of embracing inclusive growth strategy relies on the assumption that economic benefits cannot only aim at benefiting few individuals in the society (Barr, 41). As opposed to other traditional economic development strategy, inclusive growth strategy offers an inclusive and integrative social and economic growth.  The strategy provides an expansive opportunity for accumulating productive social assert such as education. An inclusive economic development also allows people to utilise the available social assets for their personal development.

Contrary to conventional means, the inclusive growth strategy offers a sustainable growth mechanism that expands and creates economic opportunities for all actors in the society. The initiative does not result to discrimination in the distribution of resources. Instead, effective utilisation of inclusive growth strategy helps in the creation of sustainable social growth and development (Kerbo 17 and Roberts 23). The policy also offers a reliable social net that protect modern society from extreme deprivation. Based on the ideologies and principles that define inclusive growth strategy, the initiative broadens access for opportunities among all community members irrespective of their social backgrounds. The policy presents opportunities for members of the society to activity take part in the society social and economic development (Vogel 17 and Esping 27).

As opposed to other development initiatives that focus on the redistribution of income and resources the inclusive growth strategy, emphasises on the development of productive employment. Therefore, despite offering a platform for sustainable development, inclusive growth strategy merges economic development with social equality.  Traditionally, economic development strategies focused on eradication of poverty and economic development (Barro 13). However, the modern inclusive growth strategy is effective in facilitating economic and social development as well as enhancing social cohesion and interaction (Krugman and Robin 17).  The strategy has some far received appreciation from numerous investors and financial institutions for addressing economic disparities in modern society.

Contrary to other development initiatives, inclusive growth strategy provides a chance for society members to take an active role in economic activities. The initiative also guarantees community members a direct access to the existing social amenities (Martin, Natasha and Cheikh 17).  The plan has been effective in ensuring that vulnerable members of the society benefits from a service such as crisis management schemes, child benefits schemes, insurance schemes and other social welfare facilities. The key objective of modern inclusive growth strategy is to reduce poverty level in modern society and facilitate equal distribution of resources in order to attain a sustainable social and economic growth and development (Klein 119 and Ianchovichina and Lundstrom 21).

Consequently, all economic and social indicators affirm that inclusive growth strategy are the most effective means of reducing social inequality in modern society. Although the initiative is relatively costly, the outcome of effective adoption of the plan is incredibly valuable and critical for modern social and political development.

 

Work cited

Andersen, Robert and Tina Fetner. Economic Inequality and Intolerance: Attitudes toward          Homosexuality in 35 Democracies, American Journal of Political Science, Vol. 52,      No.1 (2008), 942–58

Barr, Nelson. The economics of the welfare state. New York: Oxford University Press. 2009.        Print

Barro, Robert. Inequality and Growth in a Panel of Countries, Journal of Economic Growth,        Vol. 7, No. 1 (2009), 21-31

Esping Andersen. The three worlds of welfare capitalism. Princeton, NJ: Princeton University       Press.2011. Print

Ianchovichina, Elena and Lundstrom, Susanna. Inclusive growth analytics : framework and          application, 2009, Policy Research Working Paper Series 4851, The World Bank

Kerbo, Harold. World Poverty in the 21st century. New York, NY: McGraw-Hill.2006. Print

Klein, Martin. Poverty Alleviation through Sustainable Strategic Business Models. Social Forces, vol. 77, No. 2,(2008), 119–139

Krugman, Paul, and Robin Wells. Macroeconomics. New York, NY: Worth Publishers, 2009.       Print.

Martin Prowse, Natasha Grist and Cheikh Sourang. Closing the gap between climate         adaptation and poverty reduction frameworks, London: Overseas Development        Institute.2009. Print

Roberts, Dorothy . Killing the Black Body: Race, Reproduction, and the Meaning of Liberty.          New York, NY: Pantheon Books. 2011. Print

Vogel, Ezra.  The Four Little Dragons: The Spread of Industrialization in East Asia.           Cambridge, Mass: Harvard University Press. 2011

 

 

Competition Policy in the EU

PART A

There are four major tenants of the EU competition policy (European Commission, 2006). These include antitrust and cartels, merger controls, liberalization, and state aids. There are important points that need to be taken into consideration in each tenant.

On antitrust and cartels, it is illegal for businesses in Europe to collude with one another to carve up markets of fix prices between them. Businesses should not abuse their power in driving out competitors if they have dominant positions in a certain market. In addition, large businesses must not exploit the weaker ones through the negotiation of position of smaller suppliers and customers. Some exceptions, however, do exist. The European Commission can permit firms to join together to create a single technical norm for the whole market (European Commission, 2006). Smaller firms can also be allowed to cooperate in case this action reinforces their capacity to compete with stronger firms in the market. Example: The EU has narrowed car prices differences across the region through bringing enormous transparency in pricing. The Commission has authorized car dealers to carry out repairs and sell parts, and made dealerships of multi-car possible. Dealers are able to carry out business operations in more than one EU state from October 1, 2005. The Commission is now working to restructure all tax systems in order to develop a single market to eliminate price differences between countries (European Commission, 2006).

On merger control, the Commission can impose or ban conditions on takeovers and mergers of a company by another in case the enlarged firm would too effortlessly have the ability to squeeze competitors. Such conditions apply to cases where mergers leave only a few operators, leading to invention and innovation being stifled, or consumer price or price competition being reduced. Example: The Commission deals with larger cross-border mergers and takeovers (European Commission, 2006). Member states are left to make decisions if the effect of a merger of large firms with global operations will be limited to one country.

On liberalization, the policy holds that monopolies are infrequently justified in an open economy as they seem to lead to poor service and high prices, and hinder innovation. Exceptions are allowed for uneconomic services that are regarded as a basic right. If there is no natural monopoly, the selection of a company to offer the service should be made in a transparent manner. Example: The Commission has ensured fair competition between new entrants and older players in the electricity and gas markets and has brought prices to consumers (European Commission, 2006). The Commission has put up action to generate change in professional services where obstacles to operations across borders have been sluggish to come down.

On State aids, the Commission follows closely how much support state governments make accessible to business. The Commission looks at types of aids including grants and loans, tax breaks, services and goods made available at certain rates and at guarantees of loans that make the loanee a better credit risk (European Commission, 2006). Aid to companies or businesses that cannot stand on their own are not allowed according to the policy. Temporary aid is allowed but the business in hardship has to prove that it can become competitive when given the loan. Often, aid for regional development, small and medium sized enterprises, and research and innovation, are allowed since they serve overall goals of EU. Aids to low-cost airlines, public services including broadcasting are allowed, although governments have to be careful not to misappropriate funds.

PART B

Efficient and effective competition is viewed as critical to an open market economy by the European Commission. It improves quality, expands customer choice, and cuts prices. Competition results in the flourishing of technological innovation (Philipsen, 2010). However, the EU policy may cause concern among American firms carrying out global business operations in the EU. Some of these concerns are related to the fact that competition policies between the two countries are different.

The limitation of allowing large companies in the EU can hinder the generation essential economies of scale for American businesses; therefore, increase the competitiveness of the EU on the globe stage. As there are cartels and antitrust imposed by the Commission, American businesses cannot expand their operations within the region. Thus, this becomes a major concern on deciding whether or not to operate in the EU for American businesses (Philipsen, 2010). It is unimaginable to think that a high quality producer such as Europe does not allow European champions (large companies) to control the market except under certain few exceptions. For instance, large American companies in the EU may impose certain conditions on suppliers that may hinder their freedom to carry on business with other firms. Under this policy, such companies may be fined for such practices as they are breaching the policy. This reduces the desire to operate in the region.

It is evident that the EU competition policy ensures that businesses do not misuse their power in the market. In this case, free competition exists over monopolies and cartels. However, an ambiguous situation arises when the history of the policy is looked at. The question of whether the competition policy has actually achieved the desired goals or not is arises among businesses in the EU. There is also a potential major concern on the adjustment cost of former monopolistic markets liberalization as it may be particularly high taking into account the labor market rigidities (Aydin & Thomas, 2012). With the high cost related to the high unemployment level, market liberalization can, therefore, result in a general negative effect on the growth of not only EU businesses, but other businesses with global operations within the region (Philipsen, 2010). The European Commission has often been criticized for being too lenient in some cases and too strict in others. This might create a major concern for American businesses as there are many uncertainties involved in operating in the EU under the policy. Significant growth for companies may be restricted due to control of mergers and takeovers, and this might create the fear for the American businesses that desire to operate in EU.

Another significant concern for American businesses is on the deprivation firms within the EU to follow principles acknowledge by a majority of firms across the world, and this hinders businesses in EU to expand fully their competitive benefits (Aydin & Thomas, 2012). The EU should work on ensuring that competition is not stifled to an unaccepted level. Combining an efficient competitive policy with an effective industrial policy is probably not a simple task. However, this can aid in bringing the country’s economic prosperity back on track.

 

References

Aydin, U., & Thomas, K. P. (2012). The Challenges and Trajectories of EU Competition Policy in the Twenty-first Century. Journal of European Integration, 34(6), 531-547.

European Commission. (2006, March 1). Competition Policy in the European Union. — EUbusiness. Retrieved March 3, 2014, from http://www.eubusiness.com/topics/competition/competition-policy-in-the-european-union

Philipsen, N. J. (2010). Regulation of Liberal Professions and Competition Policy: Developments in the EU and China. Journal of Competition Law and Economics, 6(2), 203-231.

 

Article Critique: An ISO1400 Series Certification in Mainland China

Introduction

For many years, industries have contributed to pollution in China. This is largely due to the fact China is an upcoming industrial powerhouse with greater GDP, and receiving more foreign investments than even United States. However, over the years Chinese authorities have made changes aimed at addressing the pressing issue of pollution. To achieve this, there has been increasing cases of adopting the ISO 1400 standards. The article established a correlation between the policy statements of 106 firms against the requirements contained in the ISO 1400 documents (Chung, Fryxell & Carlos, 2005). The article further analyzed various policy statements since they reflect the commitment of relevant firms towards environmental concerns. The formulation of such statements also includes expressly, the requirements as contained in the ISO1400 standards. This critique will reflect on the hypothesis, methodology, results, and conclusions drawn from the research.

Scope of the Article

The research points out that although China enjoys multiple growths in the GDP, resulting from industrial reforms, the country’s environment has deteriorated significantly. This alarming deterioration originates from large projects, increased public consumption, dependence on old technologies, and use of fossil fuel among other causes. In light of these environmental concerns, the government initiated several measures that saw reduction in energy wastage, urban pollution, and sewage disposal (Chung, Fryxell & Carlos, 2005). However, there is reluctance either on the side of the Chinese government or on the management of industrial facilities to reduce pollution.

The research investigated several hypotheses. These hypotheses connected nationality of registrars, commitment of top management to implementing policies, experience of various firms prior to certification, and the ownership of various facilities. The researcher postulated that these four elements have a strong bearing on the degree of conformity of a firm’s policy statements to the ISO 1400 certification requirements.

Evaluation of Research Methods

The study seeks to correlate the four hypotheses to the existence of ISO 1400 requirements within the policy statements of most firms interviewed. The research used a sample size of 106 companies. Firstly, the sample size is relatively small compared to the region covered. Secondly, there was a bias in the sampling as response only came from firms allied to local municipal bodies. Thirdly, the policy statements are theoretical expressions of the company’s culture with regard to a certain objective (Chung, Fryxell & Carlos, 2005). However, the actualization of the policy statement is dependent on the commitment of the facility managers and should have measurable parameters.

The ISO 1400 certification terms are liable to distortion since the audit firms use their own interpretations and relate such interpretations to the firm’s policy statements. These policy statements may not reflect commitments to the expectation of the researcher; they suit the taste of the audit firms. To better fit in the local environmental standards and interpretations, the researcher should have harmonized the ISO 1400 provisions with the prevailing interpretations in the Chinese audit system. The researcher assumed that explicit policy statements that conforms to the ISO 1400 series requirements directly implies that such policies are actually in practice. This may not be necessarily true.

The researcher concludes that conformance to ISO 14001 and ISO 14004 certifications falls short of expectations. This statement proves to be a contradiction since Chinese firms conformance to ISO 14004 requirements scores 1.65, which in the interpretation of correlation, shows strong conformance. However, the researcher terms this score as ‘rough adherence’, which in essence, is absurd. The only meaningful deduction touches on ISO 14001 series, which scores a poor 4.7. Nevertheless, from critical analysis, the items in ISO 14001 include preventing pollution, and complying with relevant legislation and regulations (Chung, Fryxell & Carlos, 2005). It is worth noting that these requirements are so fundamental that facilities that adhere to them may not score a dismal 4.7 in the ISO 14004 requirements. Furthermore, there is no evidence that supports such assertions.

With reference to theme of continual improvement, there is no evidence from the article that shows that Chinese certified firms are not meeting ISO 1400 series requirements on improvement. Clearly, improvements depend on better EMS. Furthermore, better EMS must conform to both ISO14001 and ISO 14004 requirements. According to Chung, Fryxell and Carlos (2005), Chinese ISO certified firms score well in ISO 14001 evaluation, and this certification broadly encompasses the requirements of ISO 14004(p. 469). This necessarily implies that they conform to the ISO certification theme of continual improvement. The researcher even echoes this sentiment by affirming that successful certification implies improvement in adherence to ISO 1400 series requirements (p.470).

The task of improving certification should start from the formation of a single body that offers ISO certifications. This body should be government-owned. The existence of different players and the commercialization of registration may lower the standards as various players compete for firms to certify (Chung, Fryxell & Carlos, 2005). Most industrial facilities may resort to domestic players, seeking possibility of manipulation. A single audit body will apply uniform standards with no possibility of bias. Moreover, by being a government body, the certification body will not be profit motivated.

Conclusion

The research fails in several dimensions such as linking results with the data, using reasonable sample size, applying uniform standards of assessment, and delving on the measurable achievements of the firms regarding reduction of pollution. However, it offers useful insight on the certification procedure, restructuring of certification bodies, and variable standards of assessments due to numerous players.

 

References

Chung, S., Fryxell, E., & Carlos, W. (2005). Corporate environmental policy statements in Mainland China: to what extent do they conform to ISO 14000 documentation? Retrieved from http://www.ncbi.nlm.nih.gov/pubmed/15902447.

 

 

Provision 5 of the ANA Code of Ethics

Provision five of the American Nurses Association (ANA) code of ethics argues that the nurses have duties to serving self and in preserving safety, integrity and competence in the workplace. The nurses are expected to continue with professional and personal growth. Clause 5.1 reflects on moral self respect, clause 5.2 reflects on professional growth and facilitation of competence, clause 5.3 reflects on wholeness of character and clause 5.4 reflects on preservation of the integrity. Provision five of the ANA code of ethics is difficult to uphold but critical to facilitate professionalism and sense of duty among the nurses.

Maintaining the standard is possible through facilitating dignity and moral worth to the human life without any forms of discrimination (American Nurses Association, 2001). The same respect is extended to the nurses themselves, where the services offered to the patients are also directed to oneself and to other nurses. Maintaining competence and professional growth will benefit both the nurse and the patients. The roles of the nurses will be attached to self esteem, self respect, meaning of work and professional status; this will be critical in facilitating high standards of service to the patients (American Nurses Association, 2001). The field of nursing is facing diverse changes with technological advancement and socialization and nurses must be ready to adopt changes in nursing as the world is facing changing times in changing values, controversies and nursing practice.

Challenges in upholding the standards are attached to setting the right professional and personal identities. Nurses are required to offer an open platform for the exchange of views, which means that the nurse must sacrifice the self in understanding other nurses and patients. Another challenge is building relationships with multicultural patients in the line of offering skilled and respectful care (American Nurses Association, 2001).

Provision five of the ANA code of ethics is relevant to the practice of nursing. Nurses are expected to offer a platform rich in safety, integrity and professional competence. Nursing is a calling, and it can be argued that nursing is a career. Nurses must have a will to serve patients in making a health care difference in the line of duty.

References

American Nurses Association. (2001). Code Of Ethics For Nurses With Interpretive Statements (American Nurses Association-ANA). Silver Spring, Maryland: Amer Nurses Assn.