Human Resources in Healthcare - Discussion for online class Essay

Human Resources in Healthcare - Discussion for online class - Essay Example Along with this, organizations should attempt to make appointments by promoting current competent employees, so that they can save the cost of hiring and training new employees. As a second option, request the existing employees to refer the individuals with relevant skills and experience. In this way, organizations can economically select appropriate talent without bearing the cost of advertising a job (Siddique, 2004). As a last resort, organizations nowadays go through the conventional method of hiring. Integration of HR with the strategic management of the organization is a prerequisite of the business success because, it is the human factor which will utilize the infrastructure of the company to transform the intended organizational goals and objectives into a reality. Therefore, it is a must for the organization to develop the objectives in accordance with the current and developable competencies of its employees. (Marler, 2009) Strategic integration of human resource management requires a firm to recruit and select those employees with strategically aligned skill set, so that they can help the organization in attaining the goals set by the top management (Siddique, 2004). At the same time, human resource managers should performed job need analysis, to develop a list for the jobs that required to be filled. No, strategic management is not an HR function. But it is the collection of various functions, because the fundamental purpose of strategic management is to determine the long term goals of an organization (Marler, 2009), then divide them into number of short term ones. At last top management integrates all the departmental effort in order to achieve a common goals set during the first

Learning and perception Essay Example for Free

Learning and perception Essay Learning and perception can be related regarding the sensory abilities of the human mind to understand, calculate, and assign learning experiences to our sensory motors. For instance, a child will stay away from a stove if he/she is burned by an eye. At this typical age, a child is unaware of the concept of heat or hot but they can register thousands of experiences through their use of touch. In perceptional learning, human instincts are the accomplices in discovering new and exciting experiences through sensory (Freeman, 1991). According to Freeman (1991), learning has an impact on our ability to perceive experiences accurately. As an example, a child that views domestic violence on a daily basis may assume it is natural. This child could develop an ineffective sensory to pain by observing and experiencing it from a violent adult. In turn, the child may develop an innocent perception that pain is equal to normal. His or her learning of domestic violence is different from others so his or her perception of violence may not affect their judgment during a violent occurrence with others (Perception, 2006). Another obvious connection of learning and perception is the human’s ability to adjust oneself to the visual make up of others in a social surrounding. Debutants contribute to the development of young women and men. Their intentions are to teach social etiquette for proper associations mainly available in higher social classes. For instance, a debutant from a wealthy family may see a debutant from an underprivileged home as an equal if financial status was not a factor. The visual perception of the reality is seen only superficially. As the learning of the financial status of both debutants are known, the image might change one’s perception of the underprivileged Debutant. The relationship between perception and learning is evident in every day life in which people learn of their surroundings and act accordingly (Freeman, 1991). Works Cited Freeman, Walter J. â€Å"The Physiology of Perception† Scientific American, Vol. 264 (2) 78-85. Perception. Accessed on December 15, 2008 at http://www. a2zpsychology. com/PSYCHOLOGY_GUIDE/Perception. htm.

Factors Affecting Quality Of Higher Education Education Essay

Factors Affecting Quality Of Higher Education Education Essay The higher education sector is very crucial in education and has a leading role in all walks of life. When providing for quality education quality products can be produced. Higher education provided by the public sector in Mauritius is unable to meet the demands for a seat at the university. Private sector institutions are competing with the public sector institutions in education. The number of higher education institutions in both sectors in Mauritius is increasing. Thus, the study is aimed at analysing the quality of education offered at the University of Mauritius. The purposes of the study were; (a) To analyze the quality of services offered by the University of Mauritius. (b) To investigate the quality of students of the University of Mauritius. (c) To understand the level of increasing demands for courses at the University of Mauritius. The population of study was students from the different faculties of the University of Mauritius. The sample was two hundred full-time students; all attending a degree programme from the five faculties of the university. Data were tabulated, the amount of variables was reduced using the principal component analysis (factor analysis) and then analyzed using a logistic regression. Chapter 1: Introduction Higher education usually includes advanced education consisting of three to seven years after graduation leading to some specialisation to qualify for a professional activity or for employment in executive positions in business, industry, or government service. In Mauritius, higher education is the top most level of three sector education system. Higher education is the most important level of education because it develops the manpower for the country that leads the nation in giving insight into its future ideals, resources, problems and its solutions. The future of a nation depends largely on the quality of people groomed in the institution of higher education. Higher education in Mauritius can be traced back to the establishment of the School of Agriculture within the Department of Agriculture in 1914, which became integrated into the UoM when it was established in 1965.After that, many institutions have been established in the private and public sector that are providing higher education in the fields of medical, engineering, information technology, computer sciences, business studies and commerce. With the growing role of private institutions in catering higher education, the need was felt to evaluate the quality of education and services offered at the University of Mauritius which is a public sector institution. All over the world the universities are recognised as centres of higher learning, which are considered as expedients agents of development in the nation building. Universities generate, disseminate and utilise knowledge. As primary contributors to economic growth, they produce scientists, engineers, professionals, technicians, scholars, managers and men of exquisite capabilities. The capacity of a nation to develop economically, socially, politically and culturally derives largely from the power to develop and utilize the capabilities of its people. Chapter 2: Literature Review Higher Education The term higher education is usually used to distinguish courses of study, which result in the award of a degree, Diploma or similar advanced qualification, for various kinds of further education (Lawton and Gordon. 1993). Higher education constitutes the stage of education which starts after 15 years of schooling for the intellectual work and advanced training of students for their effective leadership role in all walks of national life. Tertiary education level is higher than that attainable on completion of a full secondary education. An accepted definition of higher education is that higher education requi res as minimum requirements for admission, the successful completion of secondary education or evidence of the acquisition of an equivalent level of knowledge (Terry and Thomas, 1979). Higher education includes all education above level of the secondary school given in Colleges, Universities Graduate Schools, Professional Schools, Technical Colleges and Normal Schools (Good, 1973). Higher education is simply the highest part of the education system, in terms of students progression, the acquisition of education qualifications, its status and its influence over the rest of the educational system. Higher education is said to impart the deepest understanding in the minds of students, rather than the relatively superficial grasp that might be acceptable elsewhere in the system. In higher education, nothing can be taken on trust and the students have to think for themselves so as to be able to stand on their own feet, intellectually speaking (Barnett, 1997). Higher education is thought to advance students to the frontiers of knowledge through their being taught by those who are working in that difficult territory. Sanyal (1982) says that in order to achieve the new international order, there is the need for integrating socio-economic policies with educational policies in each country, as stronger co-operation amongst the third world countries in field of higher education. Development of higher education should not only be contingent upon economic development to achieve the new international order but should promote the development of culture in view often fact that role of science and technology, the life-style and the very sense and value of life under-go changes in the future. Objectives of higher education All over the world the universities are recognised as centres of higher learning, which are considered as expedient agents of development in the nation building. Universities generate, disseminate and utilise knowledge. As primary contributors to economic growth, they produce scientists, engineers, professionals, technicians, scholars, managers and men of exquisite capabilities. The goal of higher education is to meet two principal needs: socio-cultural and developmental of a country. Higher education is an opportunity for individuals to develop their potential. It fulfils the needs for high-level manpower in a society. Its objectives include cultural and material development. It produces individuals who are morally sound and capable of multifarious roles in the society. It is a medium and vehicle for achieving an objective of higher vision, should endeavours, with commitment and larger spending, in higher education (Govt. Of Pakistan, 1999). A countrys social and economic development depends on the nature and level of higher education. This fact is revealed by the statements and findings concluded by the prominent educationists and decision-makers. In the developed countries, the role of higher education in production of high quality human capital is quite evident. The Governor of the State of Kentucky, Paul Patten, once said, I have staked my success as governor on changing the way we deliver higher education to our people. Education and economic development are the twin rails that will lead us to a higher plateau and help us achieve our goal of raising the standard of living in our state. My experience in creating jobs, as the secretary of the economic development, during my term as lieutenant governor, has helped me focus on the needs of our businesses. Those businesses are the customers of our product: the graduates in higher education. Increased technology and global competition demand that we develop our students s kills and mental capacity so they can share in the tremendous prosperity of our nation. He further emphasized on the quality of higher education and the need for its improvement. He commented, higher education is in trouble. The warning signs could not be clear. Its users (students and families) think it charges a premium price for an increasingly mediocre service. Its primary suppliers (secondary schools) often fail to deliver material that meets minimum standards, and its beneficiaries (employers) often are frustrated by the quality of the finished product (McGill,1992). Factors affecting Quality of Higher Education The quality of higher education may be enhanced through providing proper professional training to the teachers by revising the existing curricula. Higher education is the most important level of education because it develops the manpower for the country that leads the nation in giving insight into its future ideals, resources, problems, and its solutions. The future of a nation depends largely on the quality of people groomed in the institution of higher education. Factors that contribute the most are the level of competency of teachers, curricula and the standards of students intake, in the deteriorating quality of higher education. Nevertheless inappropriate funding for student support services, libraries, journals, books, ill equipped laboratories and lack of repair facilities for equipment and non qualified staff are crucial factors in education. Salaries and other allowances consume the university budget, thus, little is left for the items so essential for raising the quality of education. Budgetary constraints, particularly for operation, adversely affect the quality of teaching, especially practical training. 2.3.1 Students Experiences Students experiences of their learning and the teaching in the subjects they are studying are one of the more ubiquitous sources of information about the quality of teaching for institutions and individual academics. 2.3.2 Student to Staff Ratios While at the level of the institution student: staff ratios (SSRs) may seem to be a direct consequence of funding levels, institutions in practice spend funds on buildings, on administration, on central services, on marketing, on teachers undertaking research, and so on, to very varying extents, rather than spending it all on teaching time. Low SSRs offer the potential to arrange educational practices that are known to improve educational outcomes. First, close contact with teachers is a good predictor of educational outcomes (Pascarella and Terenzini, 2005) and close contact is more easily possible when there are not too many students for each teacher to make close contact with. Second, the volume, quality and timeliness of teachers feedback on students assignments are also good predictors of educational outcomes and again this requires that teachers do not have so many assignments to mark that they cannot provide enough, high-quality feedback, promptly. A gain, low SSRs do not guar antee good feedback or feedback from experienced teachers. 2.3.3 Classroom-Size Meta-analysis of large numbers of studies of class-size effects has shown that the more students there are in a class, the lower the level of student achievement (Glass and Smith, 1978, 1979). Other important variables are also negatively affected by class size, such as the quality of the educational process in class (what teachers do), the quality of the physical learning environment, the extent to which student attitudes are positive and the extent of them exhibiting behaviour conducive to learning (Smith and Glass, 1979). These negative class-size effects are greatest for younger students and smallest for students 18 or over (ibid.), but the effects are still quite substantial in higher education. Lindsay and Paton-Saltzberg (1987) found in an English polytechnic that the probability of gaining an A grade is less than half in a module enrolling 50-60 than it is in a module enrolling less than 20. Large classes have negative effects not only on performance but also on the quality o f student engagement: students are more likely to adopt a surface approach in a large class (Lucas et al., 1996) and so to only try to memorise rather than attempt to understand. 2.3.4 Class Contact Hours The number of class contact hours has very little to do with educational quality, independently of what happens in those hours, what the pedagogical model is, and what the consequences are for the quantity and quality of independent study hours. Independent study hours, to a large extent, reflect class contact hours: if there is less teaching then students study more and if there is more teaching students study less, making up total hours to similar totals regardless of the ratio of teaching to study hours (Vos, 1991). However, some pedagogic systems use class contact in ways that are very much more effective than others at generating effective independent study hours. A review of data from a number of studies by Gardiner (1997) found an average of only 0.7 hours of out-of-class studying for each hour in class, in US colleges. I n contrast each hour of the University of Oxfords tutorials generate on average 11 hours of independent study (Trigwell and Ashwin, 2004). 2.3.5 Teaching Qualifications Teachers who have teaching qualifications (normally a Postgraduate Certificate in Higher Education, or something similar) have been found to be rated more highly by their students than teachers who have no such qualification (Nasr et al., 1996). This finding was in a context where obtaining such a qualification was largely voluntary, and those who have the qualification might be considered to be different in some way from those who have not, and this could be argued to invalidate the comparison. The difference might concern the extent of professionalism or commitment to teaching, but nevertheless there was no control group in the study. A longitudinal study that overcomes this objection has examined the impact over time on students ratings of their teachers, and on teachers thinking about teaching, of (mainly) compulsory initial training during their first year of university teaching, in eight countries. It found improvements on every scale of the Student E valuation of Educational Q uality, a questionnaire developed in the US (Marsh, 1982) and tested for use in the U K (Coffey and Gibbs, 2000), and improvements in the sophistication of teachers thinking (as measured by the Approaches to Teaching Inventory, a measure of teaching that predicts the quality of student learning, Trigwell et al., 2004). This improvement in measures of teaching quality could not be attributed to mere maturation or experience as teachers in a control group in institutions without any initial training were found to get worse over their first year, on the same measures (Gibbs and Coffey, 2004). Functions of higher education The capacity of a nation to develop economically, socially, politically and culturally derives largely from the power to develop and utilise the capabilities of its people. Higher education thus is considered sine qua non of national development, for it produces the highest level of manpower. In all advanced countries, the universities constitute the main spring of human capital. The most successful discharge of the universities role as a change agent is in the area of science and technology. The training of high-level scientific manpower is a matter of vital national concern. Higher education is today recognised as a capital investment in education. It is considered investment of human capital which increases labour productivity furthers technological innovation and produces a rate of return markedly higher than that of physical capital. Today we find the world divided into developed and developing countries. The dividing line between them is the capacity of educational and scientific attainments and its application for economic progress and prosperity (The World Bank, 1990). In modern times, higher education is considered as a means of human resource development in a society. In advanced countries, universities constitute the main spring of knowledge, ideas and innovations. Today, the most successful discharge of a university as an agent of change is in the area of science and technology. The priming and grooming of high-level professional manpower is a matter of vital concern. As a pathway to socio-economic development in a country, higher education cannot be ignored or given low priority. Higher education in a state of rapid development everywhere in the world as its benefits to the social, economic and cultural life of different communities is realisable. This has led to worldwide exponential expansion of universities and colleges; as many more people are encouraged remaining in education. However there are problems. First, higher education is expensive, and its expansion requires ample resources. Second, rapid expansion raises problems of quality ass urance and control, as increased numbers could so easily lead to a decline in standards. Third, expansion in the developing world often draws upon the resources, ideas and expertise of the developed world, even though these may not always be appropriate for every different economic and social system (North, 1997). Higher education plays a vital role in the development of a society. For centuries, tertiary institutions had the important role of educating our future political leaders, professionals of tomorrow, businessmen, religious and social philosophers, who serve the community, enrich its values and develop its resources. Universities are complex organisations with multiple missions and a myriad of roles. A university has the roles of providing of theoretical education and professional training, a developer and a disseminator of new knowledge, a catalyst to shape the practice of management and business and a contributor to the community and the national economy (Khurshid, 1998). 2.5 The Education system in Mauritius Mauritius educational system has for root the British one, as the island was a British colony long ago. After independence in 1968, the new government invested considerably in human and material resources for the education sector and progress has been noticed and reached in terms of a per capita grant to children of 3+ and 4+, primary education was free, as well as textbooks, compulsory secondary education up to 16. Higher education courses were offered at University of Mauritius and the University of Technology for affordable fees. Since 1977, secondary education has been free. As for full time undergraduate level at the University of Mauritius, it was free since 1988. Free education is funded by the State which strain huge budgets and subsidize a big part of the grant aided secondary schools expenses. With universal primary education being achieved in the 1970s, free education in 1977, and legislation making education up to 16 years of age compulsory, the challenges policyà ¢Ã¢â€š ¬Ã‚ makers have had to face have related to broadening access at the higher education level, improving quality, and strengthening the management of the sector (while ensuring equity). The financing of higher education is basically via the government and students/parents. Students enrolled in public higher educational institutions are funded to a very large extent by the government. Students enrolled in local private higher education institutions and those in overseas institutions pay the full cost of their education. The key factors influencing the quality of higher education are the quality of faculty, curriculum standards, technological infrastructure available, research environment, accreditation regime and the administrative policies and procedures implemented in institutions of higher learning. The overall vision of government was spelt out in the New Economic Agenda formulated in 2000. The main challenge was to move gradually away from traditional sectors to the services sector. The objective was to diversify manufacturing into higher valueà ¢Ã¢â€š ¬Ã‚ added markets and to consolidate services (financial, ICT, etc.) as a fourth pillar of economic development. To attract new investment and to maintain the countrys competitiveness, a highly productive skilled workforce was seen as imperative. With a view to setting Mauritius on a higher growth path, the country has recognised the importance of developing higher education as a regional hub for high quality education and training, to ensure that the knowledge industry acts as a catalyst in broadening the Mauritian economy, and in providing the necessary support to the existing and upcoming sectors. There has been a dramatic paradigm shift in the development strategy mooted by the government. In summary, it has been accepted by government that the education system, especially higher education, needs to be reà ¢Ã¢â€š ¬Ã‚ orientated to respond more effectively. Higher education in Mauritius can be traced back to the establishment of the School of Agriculture within the Department of Agriculture in 1914, which became integrated into the UoM when it was established in 1965. However, it was only in postà ¢Ã¢â€š ¬Ã‚ independent Mauritius that several public higher education institutions were created, which were complementary to UoM. Over the years the higher education sector has become increasingly diversified. 2.5.1 Pre-Primary Sector This sector caters for children 4+ and since a few years for 3+. The State provides a grant of R 200 per child. The private institutions occupy 80% of the educational provision in the sector. The following measures are part of policy developments to consolidate the sector: Strengthening the institutional and regulatory framework for the provision of Early Childhood Care and Education. Reduction of disparity among pre-schools. Addressing the problem of out-of-schools pre-primary children due to absolute poverty. Developing a National Curriculum Framework for the pre-primary subsector. Ensuring readiness of all pre-primary school children for primary school. Construction of pre-primary units in disadvantaged areas Strengthening partnerships with parents through a Parent Empowerment Program. 2.5.2 Primary sector The enrolment in primary school takes effect at the age of five and enters the Standard I and moves gradually up to Standard VI. The CPE is an examination carried out at national level in all schools and follows a grading system. There are five compulsory subjects: English, French, Mathematics, Science and History and Geography. The grading process works on the five best grades along with Asian/Arabic languages. Several initiatives have been implemented in primary institutions to improve the CPE results. This gave rise to the Zones d Education Prioritaires (Z.E.P.). This targets those schools with low performance over 5 consecutive years. Later on in 2011, Enhancement Programme was introduced for STD III and IV. Moreover, the Sankorà © project was one where STD IV classes were equipped with interactive wall fixed projectors. 2.5.3 Secondary sector For a child to be admitted to a secondary college, it all depends on the CPE results. There are three categories of secondary schools: State owned grant-aided private schools, and fully private fee-paying schools. The secondary school experience begins with Form 1 up to Form VI, an achievement of seven years. Since 2010, a national curriculum has been set up for Forms I-III. The curriculum encloses all subjects up to Form III including English, French, Mathematics and the Social and Hard Sciences. When reaching Form IV, students are offered option form where they have to choose at least six major subjects for O-level exams in Form V. Later, for A Level examination, students will have to specialize in 3 main subjects and 2 subsidiary subjects. These two important examinations are undertaken by the University of Cambridge through the University of Cambridge International Examinations which sets up the syllabus, prepares the examination papers and undertakes correction for most subjects. 2.5.4 TVET (Technical and Vocational Education and Training) The Mauritius Institute of Training and Development (MITD) is the main provider of the TVET program. Its purpose is to offer a variety of technical programs to students willing to meet the needs of the world of work at a middle professional level. Courses at the National Diploma are also provided at the MITD. The TVET sector is monitored and regulated by the Mauritius Qualifications Authority. 2.5.5 Tertiary sector It was in 1924 that tertiary education started with the College of Agriculture. It has developed and diversified; it now composes of public, private, regional and overseas institutions offering for a wide choice of courses and programmes. Through years, this education sector has given rise to other institutions with different characteristics and disciplines. Distance education has also been part of the sector. Some important institutions of the public sector are the University of Mauritius (UoM), the University of Technology (UTM), the Mauritius Institute of Education (MIE), the Mahatma Gandhi Institute (MGI), the Mauritius Institute of Training and Development (MITD) and the Open University of Mauritius (OUM). Besides all these, the Tertiary Education Commission (TEC) is responsible for the allocation of public funds, planning, and coordination of post-secondary education and training as well. In addition, private institutions are more and more present in the tertiary education sector where they are proposing courses in areas like Information Technology, Law, Accountancy and Finance, and Management. 2.6 The University of Mauritius The University of Mauritius (UOM) is a national University of Mauritius. It is the oldest and largest Mauritian university in terms of student enrollment and curriculum offered. It is situated at Rà ©duit, Moka. The University was inaugurated on 24th March 1972 by Her Majesty Queen Elizabeth II accompanied by His Royal Highness the Duke of Edinburgh. Over the past decades, in response to the contemporaneous and emergent needs of the various sectors of the Mauritian economy, the university now has progressed from being a mostly in-service training institution to a fully-fledged university, concentrating increasingly on bachelors degrees, postgraduate programmes, research and consultancy. The universitys current strategic plan, Strategic Directions 2006-2015, has the following six strategic directions: Knowledge creation Knowledge diffusion Investing in resources Quality culture and good governance National, regional and international collaborations Community outreach The University of Mauritius has committed itself to continuous improvement and quality management. These are the actions that the university is trying to cater for: Ensuring relevance interact proactively with the world of work and the community to cater for emergent requirements while inculcating a wider sense of belonging to the university. Ensuring quality of teaching and learning enhance existing provisions for continuous improvement in the quality of teaching and learning, and work progressively towards the implementation of best practice. Strengthen research develop further the universitys research capacity and research management plan. Internationalize the university improve the international standing of the university and expand its role and programme of activities. Amongst Mauritian universities the UoM stands out both in terms of its dominance with regard to enrolment and it numerous pockets of excellence with regard to research. The UoM is the largest supplier of tertiary education locally, accounting for 22.2% of total higher education enrolment. Faculties Originally, the university had three schools, namely Agriculture, Administration and Industrial Technology. It has since expanded to comprise five faculties, namely Faculty Of Agriculture, Faculty Of Engineering, Faculty Of Law and Management, Faculty Of Science, and Faculty Of Social Studies Humanities. The faculties are involved in teaching, research and consultancy. It has also a Centre for Medical Research and Studies, a Centre for Distance Education, a Centre for Information Technology and Systems, and a Consultancy Centre. Following these on-campus developments and expansions, it resulted in a simultaneous increase in the number and in the diversity of programmes being offered, and the number of students enrolled. The programmes of the University are internationally recognized and include quality assurance mechanisms such as the external examiner system and affiliated with renowned Universities worldwide. There is a Quality Assurance Office which helps the University in maintaining and improving the quality of all its activities. There are various exchange agreements that have been established between the UOM and overseas universities. Students Union The Students Union, established in 1971, is run by and for the students. It work in the interest of students and regularly organize various activities. All students are members, the membership fee being included in the registration. Students are very dynamic in organizing extracurricular activities supported by the Public Relations Office. Chapter 3: Research Methodology 3.1 Problem Statement and Research Objectives When the problem has been clearly defined and the objectives of the research precisely stated the research can be designed properly. As it is often said, a problem well defined is a solved one. The problem statement for this study is that there is each year a high level of demand for a seat at University of Mauritius though there are other tertiary institutions in Mauritius. This study tries to find out the reasons behind this high demand. For this dissertation the research objectives are: To analyze the quality of services offered by the University of Mauritius. To investigate the quality of students of the University of Mauritius. To understand the level of increasing demands for courses at the University of Mauritius. To achieve the objectives mentioned above, a questionnaire has been administered to the different students in the form of face to face interview to collect information about the different factors affecting their learning experience at the University of Mauritius and hence facilitating the analysis of the information gathered. 3.2 Determine Research Design Research design can be considered as the basic plan which guides the data collection and analysis phases of the research project. There are three main types of research used in projects: Descriptive research Causal research Exploratory research Exploratory research is unstructured, informal research undertaken to have background information when the researcher does not know much about the problem. On the other hand in the descriptive method, research problem is well defined and structured and can be used to answer questions such as who, why, where, what and how (Burns and Bush, 2003), whereas causal research examines the effect of one variable on another one. The research undertaken in this study is descriptive in nature. The purpose of the research is to investigate, analyse and evaluate the student learning experience at the University of Mauritius. Data sources and Data Collection Primary data The only steps involved in collecting data is to look for primary data which consists of information collected for the first time to meet the specific needs of the investigation of the researcher. These can be in the form of letters, e-mails and interviews. Primary sources are more supportive, they address directly the requirements of the researcher though it might be costly.

Identity Theft Essay -- essays research papers

Introduction   Ã‚  Ã‚  Ã‚  Ã‚  There is currently a huge growing number of criminals that now do greater and more widespread damage to their victims without ever meeting them. Identity theft surfaced in the early 1990s and turned peoples everyday transactions into a data gathering game. Bits of personal information such as bankcards, credit card accounts, income, social security numbers or just someone name, address, and phone numbers are now collected and could be used illegally by these individuals without anyone’s knowledge.   Ã‚  Ã‚  Ã‚  Ã‚  The purpose of this study is to investigate what is being done to help control this growing crime in North Carolina. This includes the evaluation of the identity theft policies that the banks in North Carolina have in place. The study attempted to determine which bank had better and tougher policies as well as whether or not these security policies had helped reduce identity theft complaints in North Carolina since the date of it’s origin. Background of the study   Ã‚  Ã‚  Ã‚  Ã‚  Identity theft is whereby an individual obtains some piece of an unsuspecting victim’s sensitive information and uses it without their knowledge to commit fraud or theft. According to the Federal Trade Commission (FTC), â€Å"people whose identities have been stolen can spend months or years and their hard earned money trying to clean up the mess the thieves have made of their good name and credit record. Some victims have lost job opportunities, been refused loans for education, housing, cars or even arrested for crimes they didn’t commit.†   Ã‚  Ã‚  Ã‚  Ã‚  According to the FBI statistics, Identity Theft is the fastest growing crime in the U.S.’s (Tribune Business News, 2003). Identity theft thieves have perfected the art of collecting information of unsuspecting victims and now all the law enforcement agencies, as well as affected companies, are working hard to find ways to combat these issues.   Ã‚  Ã‚  Ã‚  Ã‚  There are several ways that identity theft thieves gain access to your personal information. Lost wallets, purses, stolen or lost mail used to be the main source of such private information. Mail, which sometime, includes bank statements, pre-approved credit cards, and tax papers are a source of a large amount of data. In recent years, many have been known to steal reco... ...g numbers of identity theft cases, since the late nineties, have become a growing concern for the law enforcement agency and the community as a whole. Involving the public in this warfare calls for all organizations, banks included, to get tighter policies in place and protect the integrity and security of their customer’s data. This study will show whether or not the implemented policies in the local banks have helped reduce identity theft cases overall. Research Questions and Hypothesis   Ã‚  Ã‚  Ã‚  Ã‚  To perform our research study, we attempted to get answers to these questions: How do North Carolina bank policies reduce the spread of identity theft? To what extenet are the policies of one bank better than the policies in the others in reducing identity theft occurrence? What role can N.C. bank consumers play in reducing the risk of becoming identity theft victims? We hoped that the responses would prove our hypoithesis: the banks that have tight security policies in place have less consumer complaints than those that do not. Literature Review   Ã‚  Ã‚  Ã‚  Ã‚  As stated earlier, the method of data collection was done using a survey

Bloodsucking Fiends: A Love Story Chapter 4~5

Chapter 4 Blooms and the City of Burned Clutches C. Thomas Flood (Tommy to his friends) was just reaching red-line in a wet dream, when he was awakened by the scurry and chatter of the five Wongs. Geishas in garters scampered off to dreamland, unsatisfied, leaving him staring at the slats of the bunk above. The room was little bigger than a walk-in closet. Bunks were stacked three high on either side of a narrow aisle where the five Wongs were competing for enough space to pull on their pants. Wong Two bent over Tommy's bunk, grinned apologetically, and said something in Cantonese. â€Å"No problem,† Tommy said. He rolled over on his side, careful not to scuff his morning erection on the wall, and pulled the blankets over his head. He thought, Privacy is a wonderful thing. Like love, privacy is most manifest in its absence. I should write a story about that – and work in lots of geisha girls in garters and red pumps. The Crowded Tea House of Almond-Eyed Tramps, by C. Thomas Flood. I'll write that today, after I rent a post-office box and look for a job. Or maybe I should just stay here today and see who's leaving the flowers†¦ Tommy had found fresh flowers on his bed for four days running and they were beginning to bother him. It wasn't the flowers themselves that bothered him: gladiolas, red roses, and two mixed bouquets with big pink ribbons. He sort of liked flowers, in a masculine and totally non-sissy way, of course. And it didn't bother him that he didn't own a vase, or a table to set it on. He'd just trotted down the hall to the communal bathroom, removed the lid of the toilet tank, and plopped the flowers in. The added color provided a pleasant counterpoint to the bathroom's filth – until rats ate the blossoms. But that didn't bother him either. What bothered him was that he had been in the City for less than a week and didn't know anyone. So who had sent the flowers? The five Wongs let loose with a barrage of bye-byes as they left the room. Wong Five pulled the door shut behind him. Tommy thought, I've got to speak to Wong One about the accommodations. Wong One wasn't one of the five Wongs with whom Tommy shared the room. Wong One was the landlord: older, wiser, and more sophisticated than Wongs Two through Six. Wong One spoke English, wore a threadbare suit thirty years out of style, and carried a cane with a brass dragon head. Tommy had met him on Columbus Avenue just after midnight, over the burning corpse of Rosinante, Tommy's 74 Volvo sedan. â€Å"I killed her,† Tommy said, watching black smoke roll out from under the hood. â€Å"Too bad,† Wong One said sympathetically, before continuing on his way. â€Å"Excuse me,† Tommy called after Wong. Tommy had just arrived from Indiana and had never been to a large city, so he did not recognize that Wong One had already stepped over the accepted metropolitan limit of involvement with a stranger. Wong turned and leaned on his dragon-headed cane. â€Å"Excuse me,† Tommy repeated, â€Å"but I'm new in town – would you know where I can find a place to stay around here?† Wong raised an eyebrow. â€Å"You have money?† â€Å"A little.† Wong looked at Tommy, standing there next to his burning car with a suitcase and a typewriter case. He looked at Tommy's open, hopeful smile, his thin face and mop of dark hair, and the English word  «victim » rose in his mind in twenty-point type – part of an item on page 3 of The Chronicle: â€Å"Victim Found in Tenderloin, Beaten to Death With Typewriter.† Wong sighed heavily. He liked reading The Chronicle each day, and he didn't want to skip page 3 until the tragedy had passed. â€Å"You come with me,† he said. Wong walked up Columbus into Chinatown. Tommy stumbled along behind, looking over his shoulder from time to time at the burning Volvo. â€Å"I really liked that car. I got five speeding tickets in that car. They're still in it.† â€Å"Too bad.† Wong stopped at a battered metal door between a grocery store and a fish market. â€Å"You have fifty bucks?† Tommy nodded and dug into the pocket of his jeans. â€Å"Fifty bucks, one week,† Wong said. â€Å"Two hundred fifty, one month.† â€Å"One week will be fine,† Tommy said, peeling two twenties and a ten off a thinning roll of bills. Wong opened the door and started up a narrow unlit staircase. Tommy bumped up the stairs behind him, nearly falling a couple of times. â€Å"My name is C. Thomas Flood. Well, actually that's the name I write under. People call me Tommy.† â€Å"Good,† Wong said. â€Å"And you are?† Tommy stopped at the top of the stairs and offered his hand to shake. Wong looked at Tommy's hand. â€Å"Wong,† he said. Tommy bowed. Wong watched him, wondering what in the hell he was doing. Fifty bucks is fifty bucks, he thought. â€Å"Bathroom down hall,† Wong said, throwing open a door and throwing a light switch. Five sleepy Chinese men looked up from their bunks. â€Å"Tommy,† Wong said, pointing to Tommy. â€Å"Tommy,† the Chinese men repeated in unison. â€Å"This Wong,† Wong said, pointing to the man on the bottom left bunk. Tommy nodded. â€Å"Wong.† â€Å"This Wong. That Wong. Wong. Wong. Wong,† Wong said, ticking off each man as if he were flipping beads on an abacus, which, mentally, he was: fifty bucks, fifty bucks, fifty bucks. He pointed to the empty bunk on the bottom right. â€Å"You sleep there. Bye-bye.† â€Å"Bye-bye,† said the five Wongs. Tommy said, â€Å"Excuse me, Mr. Wong†¦Ã¢â‚¬  Wong turned. â€Å"When is rent due? I'm going job hunting tomorrow, but I don't have a lot of cash.† â€Å"Tuesday and Sunday,† Wong said. â€Å"Fifty bucks.† â€Å"But you said it was fifty dollars a week.† â€Å"Two fifty a month or fifty a week, due Tuesday and Sunday.† Wong walked away. Tommy stashed his duffel bag and typewriter under the bunk and crawled in. Before he could work up a good worry about his burning car, he was asleep. He had pushed the Volvo straight through from Incontinence, Indiana, to San Francisco, stopping only for fuel and bathroom breaks. He had watched the sun rise and set three times from behind the wheel – exhaustion finally caught him at the coast. Tommy was descended from two generations of line workers at the Incontinence Forklift Company. When he announced at fourteen that he was going to be a writer, his father, Thomas Flood, Sr., accepted the news with the tolerant incredulity a parent usually reserved for monsters under the bed and imaginary friends. When Tommy took a job in a grocery store instead of the factory, his father breathed a small sigh of relief – at least it was a union shop, the boy would have benefits and retirement. It was only when Tommy bought the old Volvo, and rumors that he was a budding Communist began circulating through town, that Tom senior began to worry. Father Flood's paternal angst continued to grow with each night that he spent listening to his only son tapping the nights away on the Olivetti portable, until one Wednesday night he tied one on at the Starlight Lanes and spilled his guts to his bowling buddies. â€Å"I found a copy of The New Yorker under the boy's mattress,† he slurred through a five-pitcher Budweiser haze. â€Å"I've got to face it; my son's a pansy.† The rest of the Bill's Radiator Bowling Team members bowed their heads in sympathy, all secretly thanking God that the bullet had hit the next soldier in line and that their sons were all safely obsessed with small block Chevys and big tits. Harley Businsky, who had recently been promoted to minor godhood by bowling a three hundred, threw a bearlike arm around Tom's shoulders. â€Å"Maybe he's just a little mixed up,† Harley offered. â€Å"Let's go talk to the boy.† When two triple-extra-large, electric-blue, embroidered bowling shirts burst into his room, full of two triple-extra-large, beer-oiled bowlers, Tommy went over backward in his chair. â€Å"Hi, Dad,† Tommy said from the floor. â€Å"Son, we need to talk.† Over the next half hour the two men ran Tommy through the fatherly version of good-cop-bad-cop, or perhaps Joe McCarthy versus Santa Claus. Their interrogation determined that: Yes, Tommy did like girls and cars. No, he was not, nor had he ever been, a member of the Communist party. And yes, he was going to pursue a career as a writer, regardless of the lack of AFL?CCIO affiliation. Tommy tried to plead the case for a life in letters, but found his arguments ineffective (due in no small part to the fact that both his inquisitors thought that Hamlet was a small pork portion served with eggs). He was breaking a sweat and beginning to accept defeat when he fired a desperation shot. â€Å"You know, somebody wrote Rambo?† Thomas Flood, Sr., and Harley Businsky exchanged a look of horrified realization. They were rocked, shaken, crumbling. Tommy pushed on. â€Å"And Patton – someone wrote Patton.† Tommy waited. The two men sat next to each other on his single bed, coughing and fidgeting and trying not to make eye contact with the boy. Everywhere they looked there were quotes carefully written in magic marker tacked on the walls; there were books, pens, and typing paper; there were poster-sized photos of authors. Ernest Hemingway stared down at them with a gleaming gaze that seemed to say, â€Å"You fuckers should have gone fishing.† Finally Harley said, â€Å"Well, if you're going to be a writer, you can't stay here.† â€Å"Pardon?† Tommy said. â€Å"You got to go to a city and starve. I don't know a Kafka from a nuance, but I know that if you're going to be a writer, you got to starve. You won't be any damn good if you don't starve.† â€Å"I don't know, Harley,† Tom Senior said, not sure that he liked the idea of his skinny son starving. â€Å"Who bowled a three hundred last Wednesday, Tom?† â€Å"You did.† â€Å"And I say the boy's got to go to the city and starve.† Tom Flood looked at Tommy as if the boy were standing on the trapdoor of the gallows. â€Å"You sure about this writer thing, son?† Tommy nodded. â€Å"Can I make you a sandwich?† If not for a particularly seedy television docudrama about the bombing of the World Trade Center, Tommy might, indeed, have starved in New York, but Tom senior was not going to allow his son to be â€Å"blowed up by a bunch of towel-headed terrorists.† And Tommy might have starved in Paris, if a cursory inspection of the Volvo had not revealed that it would not survive the dampness of the drive. So he ended up in San Francisco, and although he could use some breakfast, he was more worried about flowers than about food. He thought, I should just stick around and see who's leaving the flowers. Catch them in the act. But he had been unemployed for more than a week, and his midwestern work ethic forced him out of his bunk. He wore his sneakers in the shower so his feet wouldn't have to come in contact with the floor, then dressed in his best shirt and job-hunting jeans, grabbed a notebook, and sloshed down the steps into Chinatown. The sidewalk was awash with Asians – men and women moving doggedly past open markets selling live fish, barbecued meat, and thousands of vegetables that Tommy could put no name to. He passed one market where live snapping turtles, two feet across, were struggling to get out of plastic milk crates. In the next window, trays of duck feet and bills were arranged around smoked pig heads, while whole naked pheasants hung ripening above. The air was heavy with the smells of pressed humanity, soy sauce, sesame oil, licorice, and car exhaust – always car exhaust. Tommy walked up Grant and crossed Broadway into North Beach, where the crush of people thinned out and the smells changed to a miasma of baking bread, garlic, oregano, and more exhaust. No matter where he went in the City, there was an odoriferous mix of food and vehicles, like the alchemic concoctions of some mad gourmet mechanic: Kung Pao Saab Turbo, Buick Skylark Carbonara, Sweet-and-Sour Metro Bus, Honda Bolognese with Burning Clutch Sauce. Tommy was startled out of his olfactory reverie by a screeching war whoop. He looked up to see a Rollerblader in fluorescent pads and helmet closing on him at breakneck speed. An old man, who was sitting on the sidewalk ahead feeding croissants to his two dogs, looked up momentarily and threw a croissant across the sidewalk. The dogs shot after the treat, pulling their cotton-rope leashes tight. Tommy cringed. The Rollerblader hit the rope and went airborne, describing a ten-foot arc in the air before crashing in a violent tangle of padded limbs and wheels at Tommy's feet. â€Å"Are you okay?† Tommy offered a hand to the skater, who waved it away. â€Å"I'm fine.† Blood was dripping from a scrape on his chin, his Day-Glo wraparound sunglasses were twisted on his face. â€Å"Perhaps you should slow down on the sidewalks,† the old man called. The skater sat up and turned to the old man. â€Å"Oh, Your Majesty, I didn't know. I'm sorry.† â€Å"Safety first, son,† the old man said with a smile. â€Å"Yes, sir,† the skater said. â€Å"I'll be more careful.† He climbed to his feet and nodded to Tommy. â€Å"Sorry.† He straightened his shades and skated slowly away. Tommy stood staring at the old man, who had resumed feeding his dogs. â€Å"Your Majesty?† â€Å"Or Your Imperial Highness,† the Emperor said. â€Å"You're new to the City.† â€Å"Yes, but†¦Ã¢â‚¬  A young woman in fishnet stockings and red satin hot pants, who was swinging by, paused by the Emperor and bowed slightly. â€Å"Morning, Highness,† she said. â€Å"Safety first, my child,† the Emperor said. She smiled and walked on. Tommy watched her until she turned the corner, then turned back to the old man. â€Å"Welcome to my city,† the Emperor said. â€Å"How are you doing so far?† â€Å"I'm†¦ I'm†¦Ã¢â‚¬  Tommy was confused. â€Å"Who are you?† â€Å"Emperor of San Francisco, Protector of Mexico, at your service. Croissant?† The Emperor held open a white paper bag to Tommy, who shook his head. â€Å"This impetuous fellow,† the Emperor said, pointing to his Boston terrier, â€Å"is Bummer. A bit of a rascal, he, but the best bug-eyed rat dog in the City.† The little dog growled. â€Å"And this,† the Emperor continued, â€Å"is Lazarus, found dead on Geary Street after an unfortunate encounter with a French tour bus and snatched back from the brink by the mystical curative scent of a slightly used beef jerky.† The golden retriever offered his paw. Feeling stupid, Tommy took it and shook. â€Å"Pleased to meet you.† â€Å"And you are?† the Emperor asked. â€Å"C. Thomas Flood.† â€Å"And the ‘C' stands for?† â€Å"Well, it doesn't really stand for anything. I'm a writer. I just added the ‘C' to my pen name.† â€Å"And a fine affectation it is.† The Emperor paused to gnaw the end of a croissant. â€Å"So, C, how is the City treating you so far?† Tommy thought that he might have just been insulted, but he found he was enjoying talking to the old man. He hadn't had a conversation of more than a few words since he arrived in the City. â€Å"I like the City, but I'm having some problems.† He told the Emperor about the destruction of his car, about his subsequent meeting of Wong One, of his cramped, filthy quarters, and ended his story with the mystery of the flowers on his bed. The Emperor sighed sympathetically and scratched his scruffy graying beard. â€Å"I'm afraid that I am unable to assist you with your accommodation problem; the men and I are fortunate enough to count the entire City as our home. But I may have a lead on a job for you, and perhaps a clue to the conundrum of the flowers.† The Emperor paused and motioned for Tommy to move closer. Tommy crouched down and cocked an ear to the Emperor. â€Å"Yes?† â€Å"I've seen him,† the Emperor whispered. â€Å"It's a vampire.† Tommy recoiled as if he'd been spit on. â€Å"A vampire florist?† â€Å"Well, once you accept the vampire part, the florist part is a pretty easy leap, don't you think?† Chapter 5 Undead and Somewhat Slightly Dazed French people were fucking in the room next door; Jody could hear every groan, giggle, and bed spring squeak. In the room above, a television spewed game-show prattle: â€Å"I'll take Bestiality for five hundred, Alex.† Jody pulled a pillow over her head. It wasn't exactly like waking up. There was no slow skate from dreamland to reality, no pleasant dawning of consciousness in the cozy twilight of sleepiness. No, it was as if someone had just switched on the world, full volume, like a clock radio playing reality's top forty irritating hits. â€Å"Criminal Presidents for a hundred, Alex.† Jody flipped onto her back and stared at the ceiling. I always thought that sex and game shows ended at death, she thought. They always say â€Å"Rest in peace,† don't they? â€Å"Vas – y plus fort, mon petit cochon d'amour!†* * â€Å"Do it harder, my little love pig!† She wanted to complain to someone, anyone. She hated waking up alone – and going to sleep alone, for that matter. She had lived with ten different men in five years. Serial monogamy. It was a problem she had been getting around to working on before she died. She crawled out of bed and opened the rubber-lined motel draperies. Light from streetlights and neon signs filled the room. Now what? Normally she would go to the bathroom. But she didn't feel the need to. I haven't peed in two days. I may never pee again. She went into the bathroom and sat on the stool to test her theory. Nothing. She unwrapped one of the plastic glasses, filled it with water and gulped it down. Her stomach lurched and she vomited the water in a stream against the mirror. Okay, no water. A shower? Change clothes and go out on the town? To do what? Hunt? She recoiled at the thought. Am I going to have to kill people? Oh my God, Kurt. What if he changes? What if he already has? She dressed quickly in her clothes from the night before, grabbed her flight bag and the room key and left the room. She waved to the night clerk as she passed the motel office and he winked and waved back. A hundred bucks had made them friends. She walked around the corner and up Chestnut, resisting the urge to break into a run. Outside her building she paused and focused on the apartment window. The lights were on, and with concentration she could hear Kurt talking on the phone. â€Å"Yeah, the crazy bitch knocked me out with a potted plant. No, threw it at me. I was two hours late for work. I don't know, she said something about being attacked. She hasn't been to work for a couple of days. No, she doesn't have a key; I had to buzz her in†¦Ã¢â‚¬  So I didn't kill him. He didn't change or he wouldn't have been able to go to work at all in the daylight. He sounds fine. Pissed, but fine. I wonder if I just apologize and explain what happened†¦ â€Å"No,† Kurt said into the phone. â€Å"I took her name off the mailbox. I don't really care, she didn't fit the image I'm trying to build anyway. I was thinking about asking out Susan Badistone: Stanford, family money, Republican. I know, but that's why God made implants†¦Ã¢â‚¬  Jody turned and walked back to the motel. She stopped in the office and paid the clerk for two more days, then went to her room, sat down on the bed and tried to cry. No tears would come. In another time she would have called a girlfriend and spent the evening on the phone being comforted. She would have eaten a half gallon of ice cream and stayed up all night thinking about what she was going to do with her life. In the morning she would have called in sick to work, then called her mother in Carmel to borrow enough money for a deposit on a new apartment. But that was another time, when she had still been a person. The little confidence that she had felt the night before was gone. Now she was just confused and afraid. She tried to remember everything she had ever seen or heard about vampires. It wasn't much. She didn't like scary books or movies. Much of what she could remember didn't seem true. She didn't have to sleep in a coffin, that was obvious. But it was also obvious that she couldn't go out in the daylight. She didn't have to kill every night, and if she did bite someone, he or she didn't necessarily have to turn into a vampire – an asshole, maybe, but not a vampire. But then again, Kurt had been an asshole before, so how could you tell? Why had she turned? She was going to have to get to a library. She thought, I've got to get my car back. And I need a new apartment. It's just a matter of time before a maid comes in during the day and burns me to a crisp. I need someone who can move around during the day. I need a friend. She had lost her address book with her purse, but it didn't really matter. All of her friends were currently in relationships, and although any of them would offer sympathy about her breakup with Kurt, they were too self-involved to be of any real help. She and her friends were only close when they were single. I need a man. The thought depressed her. Why does it always come to that? I'm a modern woman. I can open jars and kill spiders on my own. I can balance a checkbook and check the oil in my car. I can support myself. Then again, maybe not. How am I going to support myself? She threw her flight bag on the bed and pulled out the white bakery bag full of money and emptied it on the bed. She counted the bills in one stack, then counted the stacks. There were thirty-five stacks of twenty one-hundred dollar bills. Minus the five hundred she had spent on the hotel: almost seventy thousand dollars. She felt a sudden and deep-seated urge to go shopping. Whoever had attacked her had known she would need money. It hadn't been an accident that she had turned. And it probably hadn't been an accident that he had left her hand in the sunlight to burn. How else would she have known to go to ground before sunup? But if he wanted to help her, wanted her to survive, why didn't he just tell her what she was supposed to do? She gathered up the money and was stuffing it back in the flight bag when the phone rang. She looked at it, watched the orange light strobing in rhythm to the bell. No one knew where she was. It must be the front desk. After four rings she picked up. Before she could say hello, a gravelly calm male voice said, â€Å"By the way, you're not immortal. You can still be killed.† There was a click and Jody hung up the phone. He said, be killed, not you can still die. Be killed. She grabbed her bag and ran out into the night.

Star Appliance Company Essays

Star Appliance Company Essays Star Appliance Company Essay Star Appliance Company Essay This paper will discuss how Star Appliance Company managed its cost of capital and plan for future investments. The paper will reveal corporate problems and present relevant management theories to lead the company into a solution. The underlying problems consist of choosing a new and more efficient financing strategy, and designing more accurate method of evaluating investment projects. Previously, the company was having positive sales performances which indirectly cause the problem to be hard to identify. However, as the company needed to expand their business, the new financial officer discovered several inefficiencies in managing corporate financing strategies and evaluating future investment. The condition was described by the WACC method.   The paper will present alternatives of solutions for the problem and in the end choose the most beneficial one for the case. The company must adopt a new financing strategy which incorporates a balanced proportion between debt and equity financing instruments. The company must also design a new evaluation strategy for the new investment projects which incorporate risks premiums, additional cost of investments and a margin of error in forecasting future cash flow. The financial department has obtained increasing roles in the corporate management concept. In previous times, marketing department projects sales, production department determined the necessary amount of assets required in order to meet the projections, and the financial department’s function was only to provide funds for providing other department with their requirements. However, this model of management is obsolete and replaced by more coordinated types of decision making, where financial managers are responsible for planning as well as controlling activities. This reflects the increasing importance of good financial considerations in each decision of the corporation. According to Weston and Brigham (1996), there are several detailed activities related to financial management. One of them is the activity of making investment and financing decisions. In line with corporate long term strategy, financial managers must provide funds to support growth. Successful companies usually have high rate of sales, which required additional factory investment, equipment and current assets to produce goods and services. In the more coordinated decision making activities, financial managers must help determining the optimum sales level and make decisions on specific investment that will be performed. Within those activities, there are also questions of whether to use internal or external financing, debt or equity financing, and short or long term debts. These are important aspects of corporate management that could determine whether the company is heading to success or financial failure. Within this paper, I am discussing the importance of considering cost of assets in corporate financial management. The case study will be the Star Appliance Company in 1977. In this paper, I will describe the problems within Star Appliance Company financial management and offer recommendation to solve existing problems within the company. II.  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Problems Within the Star Company II.1  Ã‚  Ã‚  Ã‚  Ã‚   Corporate Background The Star Appliance Company is a successful business of manufacturing home appliances, especially electric stoves and ovens. Soon after the company was established in 1922, it receives a warm welcome from the growing market for home appliances. The company focuses on providing its customers with premium types of home appliances with a slightly higher margin than its competitors. In a short time, the company managed to gather significant market share due to its reputation of providing high quality appliances. Corporate financial strategy –to use equities instead of debts- has seemed to be working splendidly as The Company was able to survive the great depression and maintain its existence with smaller-based operations but strong financial structure within the company. However, management has become aware that there are problems in maintaining profitable operations with existing lines. The company plans to enrich its product lines, but there are some concerns regarding how the company managed its cost of capital. Without strong financial management capabilities, investments in new product lines could destroy corporate profitability instead of developing it. Therefore, these problems must be addressed first. II.2  Ã‚  Ã‚  Ã‚  Ã‚   Hurdle Rates In simple understanding, hurdle rate means the minimum acceptable rate of return on a capital investment project. It is required to measure the limitation of when an investment is no longer considered profitable. The calculation has the basic logic of requiring returns to be higher than the cost of investment. However it also incorporate several factors such as the cost of risk, inflation, etc. It is a comprehensive look on how an investment will increase the wealth of the shareholders. Mathematically, the hurdle rate consists of the cost of the capital plus the project’s risk premium (‘The Hurdle Rate, 2006). II.2.1  Ã‚   Corporate Hurdle Rates The company seemed lacked logical reasoning to determine its hurdle rate. Corporate hurdle rate is based only by an experience on previous return of equity. According to the elaboration above, this policy is vulnerable to risks and provides low assurance for profit. The company must determine a new and more reasonable hurdle rate by incorporating factors such as cost of capital and risk premium (‘The Hurdle Rate’, 2006) II.2.2  Ã‚   Cost of Capital The cost of capital must be included within an investment calculation simply because we do not want to invest where we it provides us with no profit what so ever. Nevertheless, because obtaining money results additional costs, the concept cost of capital must include two things: the project cost and the financing cost. To be acceptable, a project must have a rate of return that exceeds the project cost plus the financing cost (‘The Hurdle Rate’, 2006) II.2.3  Ã‚   Risk Premium Nevertheless, cost of capital itself still does not provide a logical measurement toward a good financing decision. This is because every return from different sets of investment has a different degree of assurance. If the investment has less than 100% assurance for the return, then a risk premium must be included in the calculation of financing decision. However, the rate of risk premium must be set very in a very careful manner. Inadequate amount of risk premium will put our investment if jeopardy, on the other hand, over assuming the amount of risk premium will eliminate some profitable projects from consideration (‘The Hurdle Rate, 2006). II.3  Ã‚  Ã‚  Ã‚  Ã‚   Financing Alternatives and Inflation II.3.1  Ã‚   Corporate Financing Strategy As mentioned in the case study, the company ha a unique strategy of financing. The company depends on equity financing methods a lot more than debt financing methods. On other words, the company survived through its years mostly by selling corporate equities. According to the case study, this is possible because the company has a remarkable reputation as a premium producer of household appliances and able to maintain good relationship with its affiliates. Nevertheless, Arthur Foster, the financial president of the company seemed confuse about corporate unwillingness to use debt instruments. Debt instruments have a considerably lower cost than equity, especially after incorporating tax into the calculation. The company might want to reconsider its policies of financing instruments. Furthermore, he argues that a proper additional margin must also be incorporated into the calculation to offset the effect of inflation. II.3.2  Ã‚   Debt and Equity Instruments The company prefers the equity financing because it has lower cost and smaller legal risk. However, due to corporate policy of increasing dividend rate, the alternative is no longer providing more efficiency compare to debt instruments. Generally, debt instruments will result a slightly higher capital cost and they would require monthly payment, nevertheless, they do not have the risk of loosing corporate control to shareholders. Moreover, if the company is able to maintain the good credibility toward creditors, after some time they would be more than happy to facilitate the company with debt extensions. On the other hand, the equity instruments are a tool of obtaining additional funds through affiliates or partners. These means management will loose more of the corporate control as the equity instruments build sups inside the company. Generally, the best option is to keep the proper balance between debt and equity financing instruments. Because the good balance differs among industry, the Star Appliance Company must put some effort in finding its own financing balance (‘Financing’, 2006). II.3.3  Ã‚   Inflation As stated by many economists in the late 1970’s, inflation was a significant factor influencing the cost of capital. A study by Cohen (1997) however, revealed that until today, inflation is still a significant influence for cost of capital. Inflation, even at its low rates, increases the user cost of capital significantly. If the rate of inflation decreases, the marginal gain in investment is greater compare to the rate of the decrease. This reflects the stronger effect of inflation toward cost of capital. Therefore, inflation should be incorporated in every investment analysis. II.4.  Ã‚  Ã‚  Ã‚   Risk, Legal Fees and margin of Error The last of Foster’s concerns is about how the company accounts for investment risks that are significantly larger than the others. There are opinions that riskier information should be evaluated using higher hurdle rates. Furthermore, Foster believed that there should be a margin to account for the existence of legal fees such as safety, and environmental costs. This margin is required to prevent the additional costs to eat away corporate profit from the investment. Finally, the investments must also calculate a margin of error, in order to account for unexpected disturbance in the forecasting process. In case of using different hurdle rates for different projects, management theories favor the opposite. According to several management theories, investment and financing consideration has different factors that must not be brought together. Investment decisions are based on the consideration of which project are the most profitable, while financing decisions should focus on supporting investment decision and not altering it. III.  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Star Company Cost of Equity Cost of Equity is measured by various indicators. However, one of the most utilized is the Weighted Average Cost of Capital ratio. A firm’s WACC is the overall required return on the firm as a whole. In simple terms, the ratio accounts for every possibility of financing a corporation. According to the WACC concept, a corporation can either be financed by debt, preferen stock or common stock. The WACC put all of these factors into equation that resulted the average interest the company must pay for every dollar it finances. The calculation is as follows: WACC = w1k1(1-T) + w2k2 + w3k3 W1   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = percentage of debt K1  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = the rate of interest W2  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = percentage of preferen stock K2  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = cost of preferen stock W3  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = percentage of common equity K3  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = cost of common equity (Weston Brigham, 1996) According to existing data, the company financed most of its investments using retained earnings. The company did not have any long-term debt, which means that the w1 and k1 equals to 0. The case study also reveals that the company did not have any preferred stock within corporate balances sheet, which mean that the w2 and k2 equals to 0. Thus, the only variable exist within Star Appliance Company’s WACC is the common stock variable. Without the presence of debt and preferred stock, If we calculate the number of dividend paid and divide the result with total common stock of the company, then we will obtain a very high number of WACC. nbsp; Calculation : WACC (1978)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = percentage of common stock * (dividend paid/ total value of common stock) WACC (1978)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = 100% * [(dividend/share * total shares common stock)/total value of common stock] WACC (1978)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = 100% * [(1.52 * 13,414,268)/ 27,835,000] WACC (1978)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   = 73% nbsp; The number means that on the period that ended December 31, 1978, the company paid as much as 73% for equity financing instruments. This is due to corporate operation to increase the rate of dividend paid, in order to satisfy shareholders. Despite corporate ability to sustain corporate operations and investment activities, the number is extremely high. Observing corporate financial structure, the company could easily obtain additional funding from debt instruments. Debts would have a much lower capital cost compare to the ‘sky-reaching’ dividend rate. nbsp; IV.  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Recommendation From the case study, we are able to capture two main problems of the Star Appliance Company. The first point is the problem of choosing from alternatives financing instrument. Arthur Foster believed that despite the acceptable state of corporate financial performance at the time, the company could be a lot more efficient by altering its financing strategy. The second issue is that of choosing between different methods of evaluating alternative investments. There are several alternatives of solution forth both problems. nbsp; IV.1   Ã‚  Ã‚   Choosing Financing Instruments The first choice is to maintain corporate policy of using retained earnings and equity instruments in financing. This alternative will not create a problem for the company in the short-run. However, in the long-run, the company would need to expand its business by performing investment activities that require large amount of funds. This condition has been described in the case study as the company is trying to finance three projects with existing resource. In order to move forward with this project, the company needs to increase the efficiency of its financial structure. Maintaining current financing strategy will deny the company from further profitable investments using the projects. The second choice is to use debt instruments to cover the needs for investment. This alternative could provide the company with large amount of funds, considering the company did not yet have a balance of long-term debt. However, debt instruments are known for its slightly higher cost compare to standard equity instrument’s cost. It also requires a monthly payment that could be a burden if occurred in large proportions. Furthermore, companies overburdened with debts generally less favored by shareholders and future investors. The third alternative is to maintain a balance between debt and equity financing. This can be achieved by observing the debt-to-equity ratio and maintaining it within the proper balance. Some companies believe that a good company would not have a debt-to-equity ratio of more than 3 to 1. However, a good balance for debt-to-equity financing differs within each industry and the company must benchmark to other sin the industry to find the right balance. nbsp; IV.2  Ã‚  Ã‚   Methods of Choosing Investment Projects Within this issue, foster emphasizes several important points: methods of determining the proper hurdle rate, incorporating inflation, incorporating legal cost and a margin of error. The first alternative is to remain practicing existing investment evaluation method: using 10% hurdle rate, with little consideration of inflation cost, legal cost and a margin of error. This method will result all three projects to be acceptable alternatives. The company might be able to successfully financed all three projects if it apply for further external financing instruments, however,   the level of accuracy within the calculation will be low and there will be no certainty of the real cash flow that will be received in following years. The second alternative would be to incorporate financing costs, risk premium, inflation, legal cost and a margin of error. There is no sufficient data to perform these types of calculation within this paper. However, it can be estimated that the second alternative will not be acceptable according to the new hurdle rate and the new evaluation standard. The third alternative is to incorporate financing costs, risk premium, inflation, legal cost, margin of error and additional margin for riskier investments that require additional asset. This alternative will present a more accurate calculation of existing projects, but it will influence investment decisions with consideration of financing, something that will reduce investment activities considerably. nbsp; V.  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Solution In choosing financing alternatives, the best solution for Star Appliance Company is to start using considerable debt instrument. The target is to balance the proportion between debt and equity. The company should have no difficulties in obtaining additional funds from debt instruments because of its good reputation and zero balance of long term debt. The balanced proportion between debt and equity instruments will lead to efficient financial management and resulted optimum capacity for further investment activities. In designing methods of evaluating investment projects, the company should choose to incorporate inflation, legal fees and margin of error, but should not choose to make additional margins for relatively riskier projects. Each project should be calculated using similar percentage of hurdle rate plus additional costs mentioned previously. nbsp; VI.  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Conclusion Unlike most companies, the company seemed to have no problem in marketing and selling its premium product. However, the premium profits caused management to neglect efficiency concerns in managing its operations and investment decisions. The problem became visible as the company appointed new financial officer and tried to plan for further investment. Despite previous success, company’s WACC displayed that corporate cost of capital is significantly higher than average. The new financial officer mentioned problems such as the lack consideration of inflation, legal fees and margin of error in evaluating new projects. These factors are important in providing managers with accurate investment decisions and accurate predictions of cash flow. For example, according to a study by Cohen (1997) inflation has a significant effect in cost of capital. Furthermore, not incorporating legal fees and margin of error will eat away the profit of the investment. The solution presented for the company is to redesign its financing strategy into a balanced proportion between debt and equity. In terms of evaluating investment activities, the company should incorporate additional fees and a margin of error.