Relationship Between Corporate Governance Score And Firm Performance - Free Essay Example

Sample details Pages: 21 Words: 6323 Downloads: 7 Date added: 2017/06/26 Category Management Essay Type Essay any type Did you like this example? Limited liability company structure is the most preferred structure for a large business. In this structure, a large number of investors provide the risk capital. They are called shareholders, the deemed owners of the company. Don’t waste time! Our writers will create an original "Relationship Between Corporate Governance Score And Firm Performance" essay for you Create order They delegate the power to manage the company to board of directors. The board delegates the same to managers while retaining its role to monitor and control the executive management. Shareholders are viewed as the principal and the manager as their agents and this relationship is described as à ¢Ã¢â€š ¬Ã‹Å"principal-agent relationshipà ¢Ã¢â€š ¬Ã¢â€ž ¢. The shareholders, of a widely held firm, practically do not have any control on the managers. They are only informed of the financial results on a periodical basis while the managers controls the firmsà ¢Ã¢â€š ¬Ã¢â€ž ¢ assets. This structure provides an opportunity to the managers to expropriate shareholdersà ¢Ã¢â€š ¬Ã¢â€ž ¢ wealth and misappropriate the funds by way of transfer of money as loans to his own companies, or sale of the company assets to themselves at a lesser price or pay themselves more perks. The divergence of interest between the owners and the managers, due to the separation of ownership from control, results in the agency costs. It is not just separation of ownership and control that gives rise to the agency problem between shareholders and managers; but also the atomistic or diffused nature of corporate ownership, which is characterized by a large number of small shareholders. In such ownership structure, there is no incentive for any one owner to monitor corporate management, because the individual owner would bear the entire monitoring costs, yet all shareholders would enjoy the benefits. Thus, both the magnitude and nature of agency problems are directly related to ownership structures. The fundamental theoretical basis of corporate governance is agency costs. The core of corporate governance is designing and putting in place disclosures, monitoring, oversight and corrective systems that can align the objectives of the shareholders and managers as closely as possible and hence, minimize agency costs. It deals with conducting the affairs of a company such that there is fairness to all stakeholders and that its actions benefit the greatest number of stakeholders. There are two kinds of mechanisms to overcome the agency problem and hence, improve corporate governance viz., the internal control mechanisms and the external control mechanisms. Internal control mechanisms are internal to the functioning of a company and broadly consist of the board composition, the board size, the leadership structure and the managerial compensation. External control mechanisms are the mechanisms that are external to the functioning of the firm over which the firm has no control. An increasingly important external control mechanism affecting governance worldwide is the emergence of institutional investors as equity owners. Although the role that the institutional investors can play in the corporate governance system of a company is a controversial question and a subject of continuing debate. While some believe that the institutional investors must interfere in the corporate governance system of a company, others believe that these investors have other investment objectives to follow. The group of observers who believe that institutional investors need not play a role in the corporate governance system of a company, argue that the investment objectives and the compensation system in the institutional investing companies often discourage their active participation in the corporate governance system of the companies. Institutional investors are answerable to their investors the way the companies (in which they have invested) are answerable to their shareholders. And the shareholders do invest their funds with the institutional investors expecting higher returns. The primary responsibility of the institutional investors is therefore to invest the money of the investors in companies, which are expected to generate the maximum possible return rather than in companies with good corporate governance records. While the other group strongly believes that if t he corporate governance system in the companies has to succeed then the institutional investors must play an active role in the entire process. By virtue of their large stockholdings, they have the opportunity, resources, and ability to monitor, discipline and influence managers, which can force them to focus more on corporate performance and less on self-serving behavior. Most of the reports on corporate governance have also emphasized the role that the institutional investors have to play in the entire system. Given the increasing presence of institutional investors in financial markets, it is not surprising that they have become more active in their role as shareholders. Activism by institutional investors has been both private and public, with the public activism being most visible in many countries. The role of institutional investors is visualized in two perspectives, the corporate governance and the firm performance. 7.2 Objectives of Study In light of the above discussion, the present study attempts to achieve the following objectives: To construct the corporate governance score To establish relationship between institutional holdings and corporate governance score To establish relationship between institutional holdings and firm performance To establish relationship between corporate governance score and firm performance In order to achieve the objectives stated above, the present study conceptualized the following null hypotheses for the validation of positive relationship between institutional holdings, corporate governance and firm performance 7.3 Hypotheses: H01: Institutional/its components Holdings and Corporate Governance score are very closely related in a manner as to depict a positive relationship between the two H02: Corporate Governance Score and Institutional/its components Holdings are also very closely related in a manner as to depict positive relationship between the two H03: Institutional/its components Holdings and various measures of firm performance are very closely related in a manner as to depict positive relationship between the two H04: Corporate Governance Score and various measures of firm performance are very closely related in a manner as to depict positive relationship between the two 7.4 The Sample Design and Data: To achieve the above objectives, a sample of 200 companies has been taken. The present study is based on the secondary data. It covers a period of five financial years from 1st April 2004 to 31st March 2008. Institutional holdings are further segregated into three constituents. The mutual funds being the first one. The second constituent includes various public and private sector banks, all the developmental financial institutions (like IFCI, ICICI, IDBI, SFC) and insurance companies like the LIC, GIC, and their subsidiaries. The last constituent comprise of foreign institutional investors. Data has been collected on the institutional holdings in total as well as on different constituents of institutional holdings from nseindia.com. The secondary data regarding annual reports to construct the corporate governance score have been collected from respective company websites and sebiedifar.com. . The firm performance measures have been divided into two categories, one being the account ing measures while others are based on market returns. The accounting return measures include (%) return on networth, (%) return on capital employed, Profit After Tax, (%) Return on Assets, Net Profit Margin and Earning Per Share. Whereas, market return based measures include Tobinà ¢Ã¢â€š ¬Ã¢â€ž ¢s Q, (%) Risk Adjusted Excess Return and (%) Dividend Yield. Data for the study period on financial performance measures have been collected from Prowess Database. 7.5 Statistical Tools: Simple linear regression analysis has been used as a statistical tool to investigate the relationship between different variables. An attempt has been made to ascertain the causal effect of one variable upon another. Data has been assembled on the variables of interest and employed regression to estimate the quantitative effect of the causal variables upon the variable that they influence. The study also typically assesses the à ¢Ã¢â€š ¬Ã…“statistical significanceà ¢Ã¢â€š ¬? at 5 percent level of the estimated relationships, that is, the degree of confidence that the true relationship is close to the estimated relationship. Section A 7.6 Construction of Corporate Governance Score Review of Literature Some researchers have used board characteristics as an effective measure of corporate governance as Hermalin and Weisbach (1998, 2003) have used board independence, Bhagat, Carey and Elson (1999) have used stock ownership of board members and Brickley, Coles and Jarrell (1997) have used the occupation of Chairman and CEO positions by the same or two different individuals. Whereas, Gompers, Ishii and Metrick (2003) have constructed a governance measure comprising of an equally weighted index of 24 corporate governance provisions compiled by the Investor Responsibility Research Center (IRRC), such as, poison pills, golden parachutes, classified boards, cumulative voting, and supermajority rules to approve mergers. Bebchuk, Cohen and Ferrell (BCF, 2004) created an à ¢Ã¢â€š ¬Ã…“entrenchment indexà ¢Ã¢â€š ¬? comprising of six provisions à ¢Ã¢â€š ¬Ã¢â‚¬Å" four provisions that limit Shareholder rights and two that make potential hostile takeovers more difficult. While the above noted studies use IRRC data, Brown and Caylor (2004) used Institutional Shareholder Services (ISS) data to create their governance index. This index considered 51corporate governance features encompassing eight corporate governance categories: audit, board of directors, charter/bylaws, director education, executive and director compensation, ownership, progressive practices, and state of incorporation. In the present study, Corporate Governance Score has been developed on the basis of key characteristics of Standard and Poorà ¢Ã¢â€š ¬Ã¢â€ž ¢s Transparency and Disclosure Benchmark. Standard and Poorà ¢Ã¢â€š ¬Ã¢â€ž ¢s provides a range of corporate governance analyses and services, the crux of which is the Corporate Governance Score. Corporate Governance Scores are based on an assessment of the qualitative aspects of corporate governance practices of a company. Information has been collected on the attributes from the latest available annual reports of sample companies. The methodology , with 98 questions in three categories and 12 sub-categories, is designed to balance the conflicting requirements of the range of issues analyzed and the tractability of the analysis. Transparency and Disclosure is evaluated by searching company annual reports for the 98 possible attributes broadly divided into the following three broad categories: Ownership structure and investor rights (28 attributes) Financial transparency and information disclosure (35 attributes) Board and management structure and process (35 attributes) Resume Various researchers have considered alternate measures of corporate governance. Some of them have used single measure, while others have used the multiple measures in the form of indices. In the present study, Corporate Governance Score has been developed on the basis of key characteristics of Standard and Poorà ¢Ã¢â€š ¬Ã¢â€ž ¢s Transparency and Disclosure Benchmark because two broad instruments that reduce agency costs and hence improve corporate governance are financial and non-financial disclosures and independent oversight of management. Improving the quality of financial and non-financial disclosures not only ensures corporate transparency among a wide group of investors, analysts and the informed intelligentsia, but also persuades companies to minimize value-destroying deviant behavior. This is precisely why law insists that companies prepare their audited annual accounts, and that these be provided to all shareholders is deposited with the Registrar of Companies. This is al so why a good deal of effort in global corporate governance reform has been directed to improve the quality and frequency of disclosures. Section B Relationship between Institutional Holdings and Corporate Governance: Review of Literature Coombes and Watson (2000) on the basis of a survey of more than 200 institutional investors with investments across the world showed that governance is a significant factor in their investment decision. McCahery, Sautner and Starks (2009) have relied on the survey data to investigate governance preference of 118 institutional investors in U.S. and Netherlands. The study found that the majority of institutions that responded to the survey take into account firm governance in portfolio weighting decisions and are willing to engage in activities that can improve the governance of their portfolio firms. Chung, Firth, and Kim (2002) hypothesized that there will be less opportunistic earnings management in firms with more institutional investor ownership because the institutions will either put pressure on the firms to adopt better accounting policies. Hartzell and Starks (2003) provided empirical evidence suggesting institutional investors serve a monitoring role with regard to executiv e compensation contracts. One implication of these results, consistent with the theoretical literature regarding the role of the large shareholder, is that institutions have greater influence when they have larger proportional stakes in firms. . Denis and Denis (1994) found no evidence to suggest that there is any relationship between institutional holdings and corporate governance. They stated that if companies that create shareholders wealth are the ones with poor corporate governance practices, and then one really cannot blame the institutional investors for having invested in such companies. For, after all, a fund manager will be evaluated on the basis of stock returns he creates for the unit holders and not on the basis of the corporate governance records of the company he invests the money in. If however, one finds that companies with poor corporate governance practices are the ones, which have consistently destroyed shareholders wealth, then the contention that the institu tional investors need not look at corporate governance records cannot be justified. David and Kochhar (1996) provided empirical evidence regarding impact of institutional investors on firm behaviour and performance is mixed and that no definite conclusions can be drawn. They argued that various institutional obstacles, such as barriers stemming from business relationships, the regulatory environment and information processing limitations, might prevent institutional investors from effectively exercising their corporate governance function. Almazan, Hartzell and Starks (2003) provided evidence both theoretical and empirical that the monitoring influence of institutional investors on executive compensation can depend on the current or prospective business relation between the institution and the corporation. They concluded that the monitoring influence of institutions is associated more with potentially active institutions (investment companies and pension fund managers who would b e less sensitive to pressure from corporate management due to lack of potential business relations) than with potentially passive institutions (banks and insurance companies who would be more pressure-sensitive). Davis and Kim (2006) found that mutual funds with conflicts of interest (based on management of pension assets) more often vote with management in general. On the other hand, mutual funds have more incentive and power to oppose management in firms in which they have a larger stake. Marsh (1997) has argued that short-term performance measurement does work against the active monitoring by institutional investors. The performance of fund managers is evaluated over a shorter time period. Hence, they act under tremendous pressure to beat some index. So, when they find a case of bad governance, they find it economical to sell the stock rather than interfere in the functioning of the company and incur monitoring costs. Ashraf and Jayaman (2007) examined mutual fundsà ¢Ã¢â€š ¬Ã ¢â€ž ¢ trading behavior after the release of voting records. The study found that funds that support shareholder proposals reduce holdings after the release of voting records. Since the time of releasing voting records could be very far from the shareholder meeting date, mutual fundsà ¢Ã¢â€š ¬Ã¢â€ž ¢ trading behavior after the release of voting records may be unrelated to the votes cast in the meeting. Aggarwal, Klapper and Wysocki (2003) found that U.S. mutual funds tend to invest greater amounts in countries with stronger shareholder rights and legal frameworks (controlling for the countryà ¢Ã¢â€š ¬Ã¢â€ž ¢s economic development). In addition, within the countries, the mutual funds also discriminate on the basis of governance in that they allocate more of their assets to firms with better corporate governance structures. Payne, Millar, and Glezen (1996) focussed on banks as one type of institutional investor that would be expected to have business relations with the firmà ¢Ã¢ ‚ ¬Ã¢â€ž ¢s in which they invest. They examined interlocking directorships and income-related relationships, and noticed that when such relations exist; banks tend to vote in favor of management anti-takeover amendment proposals. When such relations donà ¢Ã¢â€š ¬Ã¢â€ž ¢t exist, banks tend to vote against the management proposals. Brickley, Lease and Smith (1988) found evidence supporting the hypothesis that firms with greater holdings by pressure-sensitive shareholders (banks and insurance companies) have more proxy votes cast in favor of managementà ¢Ã¢â€š ¬Ã¢â€ž ¢s recommendations. Moreover, firms with greater holdings by pressure-insensitive shareholders (pension funds and mutual funds) have more proxy votes against managementà ¢Ã¢â€š ¬Ã¢â€ž ¢s recommendations. The authors differentiated between the different types of institutional investors, noting the difference between pressure-sensitive and pressure-insensitive institutional shareholders and arguing that pressure-sensiti ve institutions are more likely to à ¢Ã¢â€š ¬Ã…“go alongà ¢Ã¢â€š ¬? with management decisions. Dahlquist et al. (2003) analyzed foreign ownership and firm characteristics for the Swedish market. The study found that foreigners have greater presence in large firms, firms paying low dividends and in firms with large cash holdings. Haw, Hu, Hwang and Wu (2004) found that firm level factors cause information asymmetry problems to FII. It found evidence that US investment is lower in firms where managers do not have effective control. Foreign investment in firms that appear to engage in more earnings management is lower in countries with poor information framework. Choe, Kho, Stulz (2005) found that US investors do indeed hold fewer shares in firms with ownership structures that are more conducive to expropriation by controlling insiders. In companies where insiders are dominating information access and availability to the shareholders will be limited. With less information, forei gn investors face an adverse selection problem. So they under invest in such stocks. Leuz, Lins, and Warnock (2008) found that foreign institutional investors prefer to invest in firms with better governance practices. In the present study, the analysis has been conducted in three perspectives: Dynamics of institutional holdings and its composition (2) Relationship between Institutional Holdings (explanatory variable) and the Corporate Governance Score (dependent variable) (3) Relationship between the Corporate Governance Score (explanatory variable) and Institutional Holdings (dependent variable) The major findings of the present study on the above aspects are summarized as under: The results outputs of the first segment depict that the institutional investors have increased their proportional holdings in the companies over the years. The number of sampled companies with higher institutional holdings has increased where as the number of companies with lower proportions of institutional holdings has decreased over the study period. Hence, institutional holdings have shown an increasing trend of investment in the sampled companies over the study period. As far as the dynamics of components of institutional investors is concerned, no specific trend is obse rved in investments of mutual funds. On the other hand Banks, Financial Institutions and Insurance Companies have shown declining trends of investments over the same period. Where as, foreign institutional investors have shown the increasing trends of investments in line with institutional holdings. The results outputs pertaining to the analysis of relationship between institutional holdings and corporate governance state that the larger proportions of institutional holdings have higher corporate governance scores in sampled companies and the smaller proportions of institutional holdings have lower governance scores in the sampled companies over the study period. Thus, very strong and positive relationship is established between institutional holdings and corporate governance. Hence, H01 is accepted. The results outputs of the section analyzing the relationship between corporate governance score and institutional holdings describe that the companies with higher governance scores have larger proportions of investments from institutional investors than the companies with lower governance scores. Therefore, very strong and positive relationship also exists between corporate governance score and institutional holdings. Hence, H02 is accepted. The inference can be drawn that institutional holdings pre-empts good corporate governance still at other times, good corporate governance endues institutional investment in the firm. The results outputs pertaining to the analysis of relationship between mutual funds and corporate governance reveal out that smaller proportions of mutual funds holdings have higher governance score in the sampled companies and larger proportions of mutual funds holdings have lower governance scores in the sampled companies over the study period. Therefore, weak relationship exists between mutual funds holdings and corporate governance score. Hence, H01 is rejected. Alternatively, the results outputs pertaining to the analysis of relations hip between corporate governance and components of institutional holdings reveal out that the companies with lower governance scores have larger proportions of mutual funds holdings to the companies with higher governance scores over the study period. Hence, weak relationship also exists between corporate governance score and mutual funds holdings. Hence, H02 is rejected. It can be inferred from the above outcomes that mutual funds companies do not observe good governance practices in companies and simultaneously, good governed companies also do not attract higher mutual funds investments. The results outputs as to the relationship between Banks, FIs and ICs and corporate governance depict that larger proportions of Banks, Financial Institutions and Insurance Companies holdings have higher governance score and smaller proportions of holdings have lower governance score in the sampled companies over the study period. Therefore, very strong and positive relationship is established between Banks, Financial Institutions and Insurance Companies holdings and corporate governance score. Hence, H01 is accepted. Similarly, the sampled companies with higher governance scores have larger proportions of Banks, FIs and ICs holdings to the companies with lower governance scores. Thus, very strong and positive relationship also exists between corporate governance score and Banks, FIs and ICs holdings. Hence, H02 is also accepted. The inference can be drawn on the basis of above results that Banks, FIs and ICs consider governance practices in companies while taking investment decision and alternatively, good governed companies also attract these investments. The results outputs pertaining to the relationship between FII holdings and corporate governance reveal out that the companies in which FIIs have larger proportions of holdings have higher governance score to the companies in which FIIs have smaller proportions of holdings. Therefore, very strong and positive relati onship is observed between FII holdings and corporate governance score. Hence, H01 is accepted. Likewise, the sampled companies with higher governance scores have also larger proportions of Foreign Institutional Investors holdings. Thus, very strong and positive relationship also exists between corporate governance score and FII holdings. Hence, H02 is accepted. It can be inferred on the basis of above result that foreign institutional investors prefer to invest in firms with better governance practices and their investment do improve the governance practices in the companies. Resume The theoretical and empirical literature provides mixed evidence as to the relationship between institutional holdings and corporate governance. Some of the studies put forth the evidence that corporate governance is the significant factor for institutional investment decision and their significant investment improve the governance practices in companies, while the other studies state otherwise. Where as the research findings of the present study further validate, support and enrich the literature on positive association between institutional holdings and corporate governance. Likewise, the studies provide inconclusive evidence as to the relationship between mutual funds holdings and corporate governance. But the findings of present study state that neither the mutual funds care about the governance practices of companies or their presence improve them. Similarly, the empirical literature provides indeterminate evidence on the relationship between Banks, FIs and ICs and corporat e governance. But the findings of present study observe very strong and positive relationship between the two. The empirical studies observe consistent results as to foreign institutional investors invest in better-governed companies but lacks evidence that their significant presence result in better governance. The findings of present study indicate that FIIs do not care for the corporate governance only, rather their higher stake ensure better governance too. Section C 7.8 Relationship between Institutional Holdings and Firm Performance: Review of Literature Pound (1988) explored the influence of institutional ownerships on firm performance and proposed three hypotheses on the relation between institutional shareholders and firm performance: efficient-monitoring hypothesis, conflict-of-interest hypothesis, and strategic-alignment hypothesis. The efficient-monitoring hypothesis says that institutional investors have greater expertise and can monitor management at lower cost than the small atomistic shareholders. Consequently, this argument predicts a positive relationship between institutional shareholding and firm performance. Holderness and Sheehan (1988) found that for a sample of 114 US firms controlled by a majority shareholder with more than 50% of shares, both Tobinà ¢Ã¢â€š ¬Ã¢â€ž ¢s Q and accounting profits are significantly lower for firms with individual majority owners than for firms with corporate majority owners. McConnell and Servaes (1990) found a strong positive relationship between the value of the firm and the fractio n of shares held by institutional investors. They found that performance increases significantly with institutional ownership. Majumdar and Nagarajan (1994) found that levels of institutional investment are positively related to the current performance levels of firms. However, a less-stronger, though positive, effect is established between changes in performance levels and changes in institutional ownership. The results are based on a study investigating U.S. institutional investors investment strategy. Han and Suk (1998) found (for a sample of US firms) that stock returns are positively related to ownership by institutional investors, thus implying that these corporate owners are actively involved in the monitoring of incumbent management. Douma, Rejie and Kabir (2006) investigated the impact of foreign institutional investment on the performance of emerging market firms and found that there is positive effect of foreign ownership on firm performance. They also found impact of foreign investment on the business group affiliation of firms. Investor protection is poor in case of firms with controlling shareholders who have ability to expropriate assets. The block shareholders affect the value of the firm and influence the private benefits they receive from the firm. Companies with such shareholders find it expensive to raise external funds. Studies examining the relationship between institutional holdings and firm performance in different countries (mainly OECD countries) have produced mixed results. Chaganti and Damanpour (1991) and Lowenstein (1991) find little evidence that institutional ownership is correlated with firm performance. Seifert, Gonenc and Wright (2005) study does not find a consistent relationship across countries. They conclude that their inconsistent results may reflect the fact that the influence of institutional investors on firm performance is location specific. The above studies generally consider institutional investors as a mono lithic group. However, Shleifer and Vishnyà ¢Ã¢â€š ¬Ã¢â€ž ¢s (1986) as well as Poundà ¢Ã¢â€š ¬Ã¢â€ž ¢s (1988) theorizations and later empirical examinations by McConnell and Servaes (1990) suggest that shareholders are differentiable and pursue different agendas. Jensen and Merkling (1976) also show that equity ownerships by different groups have different effects on the firm performance. Agrawal and Knoeber (1996), Karpoff et al. (1996), Duggal and Miller (1999) and Faccio and Lasfer (2000) find no such significant relation between institutional holdings and firm performance. In the present study, the analysis has been conducted in two perspectives: Institutional Holdings and Firm performance (b) Constituents of institutional holdings and Firm performance The major findings of the present study on the above aspects are summarized as under: The results outputs of the first segment indicate that there is no conclusive evidence as to larger proportions of institutional holdings in sampled companies have higher average return on networth or average net profit margin and smaller proportions of institutional holdings in sampled companies have lower average return on networth or average net profit margin over the study period. To the contrary, strong and positive relationship is observed between institutional holdings and return on capital employed as well as institutional holdings and earning per share. As the average return on capital employed and average earning per share are higher in the sampled companies with higher proportions of institutional holdings and lower in the sampled companies with lower proportions of insti tutional holdings over the study period. Therefore, it is stated that institutional holdings and two accounting returns (return on capital employed and earning per share) are significantly correlated where as institutional holdings and other two accounting returns (return on networth and net profit margin) are not related. Hence, there is no clear evidence that institutional holdings and accounting returns are related. Likewise, strong and positive relationship is observed between institutional holdings and Tobinà ¢Ã¢â€š ¬Ã¢â€ž ¢s q. But on the other hand, weak relationship is observed between institutional holdings and risk adjusted excess return. Therefore, institutional holdings and one market-based return are significantly correlated while the institutional holdings and another market-based return are not. Thus, the findings depict contradictory results as to the relationship between institutional holdings and market-based return too. In nutshell, strong and positive relatio nship has been observed between institutional holdings and only three (return on capital employed, earning per share and Tobinà ¢Ã¢â€š ¬Ã¢â€ž ¢s Q) out of six measures of financial performance. Hence, the results are mixed as to establish the relationship between institutional holdings and firm performance. The results outputs of the second section exhibit that there is no relationship between mutual funds holdings and none of the accounting or market-based return. Hence, mutual funds holdings and firm performance are not related at all. Results outputs pertaining to the analysis of relationship between Banks, FIs and ICs holdings and firm performance come out with the similar findings. There has not been found strong and positive relationship between the above holdings and any of the returns except for earning per share. The findings as to the relationship between FII holdings and firm performance are consistent with the other components as FII holdings do not observe strong an d positive relation with none but one of the performance measures. Hence, there is no relation between components of institutional holdings and firm performance. Resume Various studies have focused on different aspects/levels of ownership and their effects on firm performance. Similarly, different performance measures have also been taken as some of them have considered accounting measures but others, stock market indicators. As a result, various arguments have been put forward both in support and against the notion of the effects of ownership structure on the firm performance. While some researchers denied the direct correlation between ownership structure and firmsà ¢Ã¢â€š ¬Ã¢â€ž ¢ economic performance while the others argued that there exists such a relationship for certain. Amongst those who establish such causality, some provide evidence that there is a negative relationship, while others plead a positive relationship between the two. The present study focused on shareholdings of institutional investors as whole and also of its different components. Various accounting returns and market-based returns performance measures have been conside red. The findings of present study are indeterminate as to the relationship between institutional holdings and firm performance but strongly plead a negative relationship between constituents of institutional holdings and firm performance. Relationship between Corporate Governance and Firm Performance: Review of Literature Lipton and Lorsch (1992) found that limiting board size improves firm performance because the benefits by larger boards of increased monitoring are outweighed by the poorer communication and decision-making of larger groups. Eisenberg et al. (1998) found negative correlation between board size and profitability when using sample of small and midsize Finnish firms, which suggests that board-size effects can exist even when there is less separation of ownership and control in these smaller firms. Vafeas (1999) found that the annual number of board meeting increases following share price declines and operating performance of firms improves following years of increased board meetings. This suggests meeting frequency is an important dimension of an effective board. Core, Holthausen and Larcker (1999) observed that CEO compensation is lower when the CEO and board chair positions are separate. It is further shown that firms are more valuable when the CEO and board chair positions are s eparate. Fich and Shivdasani (2004) based on Fortune 1000 firms, asserted that firms with director stock option plans have higher market to book ratios, higher profitability (as proxied by operating return on assets, return on sales and asset turnover), and they document a positive stock market reaction when firms announce stock option plans for their directors. Gompers et al. (2003) examined the ways in which shareholder rights vary across firms. They constructed a à ¢Ã¢â€š ¬Ã‹Å"Governance Indexà ¢Ã¢â€š ¬Ã¢â€ž ¢ to proxy for the level of shareholder rights in approximately 1500 large firms during the 1990s. They found that firms with stronger shareholder rights had higher firm value, higher profits, higher sales growth, lower capital expenditures, and made fewer corporate acquisitions. Brown, Robinson and Caylor (2004) created a broad measure of corporate governance, Gov-Score. Gov-Score is related to operating performance, valuation, and shareholder payout for 2,327 firms, and found that better-governed firms are relatively more profitable, more valuable, and pay out more cash to their shareholders. All the eight categories underlying Gov-Score are most highly associated with firm performance. It is evidenced that good governance, as measured using executive and director compensation, is most highly associated with good performance. Bhagat and Bolton (2007) contributed to the literature as the consistent estimation of the relationship between corporate governance and performance, by taking into account the inter-relationships among corporate governance, corporate performance, corporate capital structure, and corporate ownership structure. The study found that better governance as measured by the GIM and BCF indices, stock ownership of board members, and CEO-Chair separation is significantly positively correlated with better contemporaneous and subsequent operating performance. Board independence is negatively correlated with contemporaneous and subse quent operating performance. Klein (1998) studied whether the existence and staffing of board committees affects the firm performance. She found little evidence that monitoring committees-audit, compensation, and nominating committees, usually dominated by independent directors-affect performance, regardless of how they are staffed. Bhagat and Black (1997) undertook the first large sample study (957 large public US corporations), with long time-horizon (1983-95), of whether the proportion of independent or inside directors affect firm performance and found no consistent evidence that the proportion of independent directors affects future firm performance, across a wide variety of stock price and accounting measures of performance. Dalton et al. (1998) showed that board composition had virtually no effect on firm performance, and that there was no relationship between leadership structure (CEO/Chairman) and firm performance. Ellstand and Johnson (1999) indicated that board comp osition-whether measured by proportion of inside directors, affiliated directors or interdependent directors-is unrelated to corporate financial performance. The results are invariant when moderated by firm size. Moreover, these results are invariant when moderated by the nature of performance indicators, that is, accounting returns (for e.g. return on equity, return on investment, return on assets) as compared to market returns (a series of measures all based on share value). Bhagat and Black (2002) found no linkage between the proportion of outsider directors and Tobinà ¢Ã¢â€š ¬Ã¢â€ž ¢s Q, return on assets, asset turnover and stock returns. In the present study, the analysis has been conducted in two perspectives: i) Corporate Governance Score and accounting measures of firm performance ii) Corporate Governance Score and market-based return measures of firm performance The major findings of the present study on the above aspects are summarized as under: The results outputs of first segment state that the sampled companies with lower governance scores have higher average return on networth and with higher governance scores have lower average return on networth in most of the years of study period. Hence, corporate governance score and return on networth are not correlated. Similarly, corporate governance score and net profit margin are also not related. Likewise, no relationship is evident between corporate governance score and earning per share. The average earning per share is higher in the sampled companies with lower governance scores and lower in the sampled companies with higher governance scores. To the contrary, strong and positive relationship is observed between corporate g overnance score and return on capital employed. The average return on capital employed is higher for the sampled companies with higher average corporate governance scores and lower for the sampled companies with lower average corporate governance scores over the study period. Similarly, the average profit after tax is also higher for the sample companies with higher average corporate governance scores and lower for the sample companies with lower average corporate governance scores. Hence, there also exists very strong and positive relationship between corporate governance score and profit after tax. The research findings observe the same strong and positive relationship between corporate governance score and return on assets as well. In nutshell, it is found that corporate governance score and three accounting return measures (return on capital employed, profit after tax and return on assets) are correlated whereas corporate governance scores and the other three accounting return m easures (return on networth, net profit margin and earning per share) are not related. Thus, the findings are mixed as to establish the relationship between corporate governance scores and accounting return measures of firm performance. The result outputs of the second section are rather more inconclusive as to the relationship between corporate governance and firm performance. Strong and positive relationship is observed between corporate governance score and Tobinà ¢Ã¢â€š ¬Ã¢â€ž ¢s q. Hence, the companies with greater governance scores have higher Tobinà ¢Ã¢â€š ¬Ã¢â€ž ¢s q and the companies with lower governance scores have lower Tobinà ¢Ã¢â€š ¬Ã¢â€ž ¢s Q. But on the other hand, weak relationship is observed between corporate governance score and dividend yield inferring that companies with higher governance scores do not always have higher dividend yield and the companies with lower governance scores do not always have lower dividend yield. No relationship has been observed between corporate governance score and risk adjusted excess return as well. The results outputs show that sampled companies with lower governance scores have higher risk adjusted risk return to the returns of sampled companies with lower governance scores. Thus corporate governance score and Tobinà ¢Ã¢â€š ¬Ã¢â€ž ¢s Q are related where as corporate governance score and dividend yield as well as risk adjusted excess return are not related. Hence, the findings of results outputs are mixed as to establish the relationship between corporate governance scores and market-based return measures of firm performance. Resume The empirical studies have considered limited board size, frequent board meeting, independent board committees and CEO compensation as the proxies of corporate governance where as others constructed governance index or score comprising of comprehensive measures. Similarly, various measures of firm performance has been considered as proxied by Tobinà ¢Ã¢â€š ¬Ã¢â€ž ¢s q, market to book ratios, operating return on assets, return on sales and asset turnover, sales growth, accounting returns (for e.g. return on equity, return on investment, return on assets) and market returns (a series of measures all based on share value). The literature on the relationship between corporate governance and firm performance provide mixed and inconclusive evidence as some studies observed strong relationship between the two variables and the others lack that evidence. The present study constructed corporate governance score on the basis of key characteristics of Standard and Poorà ¢Ã¢â€š ¬Ã¢â€ž ¢s Transparency and Disclosure Benchmark. Proxies for firm performance consist of accounting return and market-based return measures. The findings convey the mixed results as strong and positive relationship is observed between governance score and some of the accounting and market-based return measures (return on capital employed, profit after tax, return on assets and Tobinà ¢Ã¢â€š ¬Ã¢â€ž ¢s q) where as no relationship is observed between governance score and other measures (return on networth, net profit margin, earning per share, risk adjusted excess return and dividend yield). Hence, the results fail to achieve the objective of establishing relationship between corporate governance and firm performance. ********

My Life - Original Writing - 1116 Words

My friends cheerfully laugh as they start piling into Brett’s car. Today is my eighteenth birthday, and because now everyone in our friend group has hit this milestone, they decided that we should all go get tattoos. Brett wants and eagle on his arm, Jessica wants a butterfly on her back, and Ashley wants the word â€Å"Love† around her ankle. But as for me, I have absolutely no clue what I want. I’m staring at a wall, lost in my thoughts, when I hear Brett remark, â€Å"Yo Chris, let’s go man!† I quickly snap out of my stupor and hike over to Ashley’s car. The girls are playfully giggling on the inside as I climb into the back and shut the door. The girls start conversing as Brett starts driving, and I gaze out the window, trying desperately to†¦show more content†¦So this meant I had to go to a new school. The first day of school came, and because I was on anti-depressants; I was more lethargic and drowsy than usual. I crawled through the morning classes, simply trying to push my way through the day. Lunch came, and I couldn’t manage to find an empty table, so I sat on the floor up against the wall. But then, Brett, Ashley, and Jessica noticed me sitting on the ground, and they invited me to their table. I sat down with them, and began pulling out the contents of my lunchbox as they asked me my name and what grade I was. I answere d politely, but then I started to bite into my sandwich. Suddenly, a wave of sorrow overtook me. My mom used to make my sandwiches. This was the first time in my life that my mom had not made my lunch for me. I started to cry; big, manly sobs in the middle of the cafeteria. It caught them off guard. Ashley asked me what was wrong and I told them the whole story. I half expected them to get up and leave me, but they stayed. They’ve stayed for the last two years. They helped me through my depression, and now they’re my closest friends. I suddenly snap out of my flashback to the sound of the GPS telling us that we are set to arrive in five minutes. I quickly start thinking about what to get, rushed by this new deadline. Then, it hits me. I know exactly what I’m going to get. I want a bass clef, which is the clef where lower notes are written, followed by a sixteenth note to represent the lowShow MoreRelatedMy Life - Original Writing1267 Words   |  6 PagesI yawn and arch my back in a big stretch. I could see my breath in the air. It would be getting colder from now on. I take a look around the small hut we call home. Adam is still curled up on the old mattress, a bundle of blankets wrapped around him. Mom isn’t sleeping next to him, probably out tending the garden. It seems that’s all she’s been doing these past few months. I stand up and walk over to Adam. He is sound asleep, a small amount of drool collecting on his chin. I smile at this and grabRead MoreMy Life - Original Writing977 Words   |  4 PagesWhen my son was ten years old, he asked me if I had ever been bullied before, or if I’d ever bullied anyone. I told him no! Not me! He said, â€Å"Mom, Nana told me that you were bullied, and you bullied people before, too.† I wondered if I should tell him the truth in that moment, that yes, when I was your age and younger, I was bullied, and yes, I bullied others, too. The thought that I could jeopardize my relationship with my son scared me. I could see it dwindling. The actions from my past might makeRead MoreMy Life - Original Writing850 Words   |  4 Pagesto go!† My sister vanessa yelled at me as I was packing the last of my things . I was fifteen and I had just arrived to my new home in Garland. I had just moved form Plainview and I was leaving my friends and family that I had grown up with behind. Moving to Garland while still in High School was one experience that changed my life. I had just finished my freshman year In high school when I had gotten the news that my mom decided to move. She decided that it was best for her and my step dadRead MoreMy Life - Original Writing1463 Words   |  6 Pagesgrim gossip about my old babysitter which made me think of a particular summer morning, bookmarked in my long-term memory. During the school holidays in my ninth summer, I was lying under the garden tree, staring at a singular leaf that was eclipsing the summer sun as the zephyr tenderly blew it back and forth; giving it a seductive allure, while thinking about the previous night. Mother and father were having an agitated discussion downstairs in the living room. Sitting on my bed not able to sleep;Read MoreMy Life - Original Writing1725 Words   |  7 Pagesheavy cry, the physical cracking of my innocent heart. All things that I felt, but hid, in the summer of 2013. This was the day that my family, my world, fell apart for good. Everything was a lie, or so I was told by one party and by the other half, there were no lies. Forced to choose sides between my loved ones, I broke down and grew up in a matter of hours. The day was hot, in June or maybe even July. I had just returned from a fantastic vacation with one of my best childhood friends. We had goneRead MoreMy Life - Original Writing978 Words   |  4 PagesThen my world fell apart. A piercing scream filled the air, one that I will never forget. It was my mother’s... Then everything went black. All the memories poured back, the hospital, hearing the words, â€Å"dear your mother and father are gone. They didn’t make it, I’m so sorry.† And now... The rain washed down my red face along with my tears. Without any sympathy the thunder and lightning bolted down on the damp earth. There I stood my black shoes sinking into the muddy ground. I lifted my blurredRead MoreMy Life - Original Writing1236 Words   |  5 Pagesmoney my dad gave me for ice cream, tight in my hand. I saw the group sitting outside getting ready to go.I could see myself sitting in the back on the porch, eating the delicious flurry that I was soon to order. My brother,my best friend Cassie and her two brothers along with her dad and I were going to ride our bikes through a trail off in the woods and go to Whistlestop Park and then cut through town and head to Houseman s, an ice cream shop near our house. I quickly finished tying my shoe andRead MoreMy Life - Original Writing912 Words   |  4 Pagesfinally decided to have the have the guts and ask my mom the question I had been wanting to ask her. Growing up I had strict parents but not that strict as if I were a prisoner in my own home. Almost every parent appear to be strict others on the other hand are not strict. Entering high school would be the most scariest chapter in my life, I going to meet several new people in my life. Biting my nails as I’m walking in on my first day of highschool, I turn my head left and right as if I were an owl. SeeingRead MoreMy Life - Original Writing1319 Words   |  6 Pageschild, I always used to think that my parents were indestructible. I n my eyes, there was absolutely nothing that could hurt them. Obviously, there is no logic behind this preposterous belief, yet I still felt that way for almost a decade of my life. Unfortunately, my idealistic views came to an end when I was nine years old. My father, who was always some sort of superhero in my life, was diagnosed with end stage renal failure in the summer of 2006. All of a sudden, my super hero didn’t seem so indestructibleRead MoreMy Life - Original Writing1046 Words   |  5 PagesI’m about 13 years old, married to a 35 year old man, and pregnant with the son of God while I’m still a virgin. Yes, my life’s going great. I was a Jewish girl getting ready to marry a well-established carpenter, then a man came to me in my house and told me I was pregnant. I was shocked, because I’m only 13 and was still a virgin. Well, it happened. I conceived when the angel told me I would, went into labor on the way to Bethlehem, and gave birth in a stable because the innkeeper didn’t have any

Taboo Free Essays

What is taboo? Taboo is human activity that is forbidden based on moral judgment. Anything that is not accepted by society or by your peers is considered taboo. This perfectly awful word has so many meanings ,yet no matter what race, religion, or culture your in it means forbidden or banned. We will write a custom essay sample on Taboo or any similar topic only for you Order Now No matter how hard you try not to be taboo you are. So is being taboo part of human nature, or is it how we try to stand out from everybody else and show individuality? Are you taboo, do you know someone who is taboo? There is no taboo that is universal, but some occur in the majority of societies. The dietary practices of some people are considered taboo, for instance some are vegetarians, kosher diets, cannibalism, or meat-eaters. Judaism prohibits the eating of bats, frogs, crocodiles, or snakes. Cow or beef is taboo to be eaten by vegetarian, Hindus, or Zoroastrians. Dog meat is taboo in the United States, they are considered part of the family. While in China dogs are bred for their meat, one example of this is the Chow Chow. Prince Philip of the United Kingdom once said â€Å"If it has four legs and is not a chair, has wings and is not an aero plane, or swims and is not a submarine, the Cantonese will eat it. † Once again everybody is taboo. I personally love to eat frog and beef. It is taboo in my eyes not to eat meat ,but that is because I am a meat-eater. The way people show or deal with their body function, such as burping, flatulence, defecating, and urinating are all forms of taboo. In the United States it is considered taboo to defecate or urinate in public. While in India, they teach to drink cow urine and eat cow feces. We all try to avoid doing things we think are taboo. People deal with things they think are different in different ways. Some turn their heads when they are faced with something or someone they find ugly or repulsive. The way people stare with added expressions when they see something different then what they consider normal, anything from a personal choice to birth defects. Even in relationships there is and will always be taboos. Sex outside of arriage, adultery, miscegenation, and incest are all forms of taboos in relationships. In the United States adultery and incest are very taboo, but in Wodaabe ,men of Niger steal each others wives even if they already have one. So adultery is taboo here over there it is accepted and condoned. Miscegenation was taboo in the United States until 1967 when they said it was unconstitutional. Taboo is in the politics of everyday living. For the United States fascism, communism, and a narchism are all taboo. While in China and Vietnam both accept and have a communism government. In early German the Nazism was taboo because of the fascism. Taboo was brought to the English language by Captain James Cook, and English explorer who visited Tonga. A famous American author Henry Miller said â€Å" whenever a taboo is broken, something good happens, something vitalizing. Taboos after all are only hangovers, the product of diseased minds, you might say, of fearsome people who hadn’t the courage to live and who under the guise of morality and religion have imposed these things upon us. So do not shun or avoid , accept everybody’s taboos because when they look at you they see all your taboos to them. Taboos are everywhere and in everything, because if there wasn’t then this would be a boring world to live. Could you imagine if everybody was doing the same thing, everything going the same direction ,no disorder, or no rebellion it would be very bland. In the end no one is perfe ct, and even if it might be considered taboo, whatever it is. The taboos we have or don’t have make us all unique and special. How to cite Taboo, Papers

This part of the play is very tense and emotional Essay Example For Students

This part of the play is very tense and emotional Essay This part of the play is very tense and emotional. It is crucial to the order of the play. It tells us a lot about the writer and the characters in the play. The actors should be sharp and alert. The acting should be quick and responsive, because if the mood of the play is not relayed properly it will look stupid. The intension of the director is to tell the audience of the nurse being two faced to Juliet by telling her Romeo is best for her one minute and then telling her that Paris is best for her the next. Also to show that the parents dont care what Juliet thinks of her future husband just as long as they approve of him. It is meant to portray the mother as being out of touch with her daughter and a bit clueless, also to signify the dramatic irony that is what Juliet is saying. Old Capulet should come across as a bit of an ogre being the baddie of the scene. The idea the actors have to try and get across is the tension now in the family because of Juliets newfound love. We will write a custom essay on This part of the play is very tense and emotional specifically for you for only $16.38 $13.9/page Order now Lady Capulet You are meant to be chirpy and pretending to care about Juliets sorrow. You say all the normal how do you dos Dont really take any notice of Juliet because this will signify to the audience that you dont really care your just being nice. You should prance about the stage to give the impression that everything is nice and happy. Example, Juliet says that she is not well. Lady Capulet says jumps to the conclusion that it is Tybalts death you are crying about. Evermore weeping for your cousins death? this is meant to be said with a bit of bounce in your voice as if it were a normal every day question. But as the scene evolves you are meant to take it a bit more seriously. You should start to think more about Juliets well being and trying to look more concerned. You also should start to get into the lines and start to really start to feel the lines. You should also when old Capulet starts to get aggressive towards yourself, Juliet and the nurse get very emotional. Still act intimidated b ut stand your ground and try and overcome Capulet. When you leave the lines talk not with me, for Ill not speak a word. Do as thou wilt, I have done with thee. This is meant to be said apologetically but also in disgust. Old Capulet You walk into the seen almost singing the first couple of lines you are so happy. You should dance a about the room like its your birthday to show that you are really exited about next weeks activities. The next lines Soft! Take me with you, wife. These are almost said in disbelief but the more you talk the more aggressive you should sound and become. You should get louder and dominate the stage. Line 160 on hang thee, young disobedient wretch! you should physically grab Juliet and shake her. The nurse will try and get you off Juliet but just throw her off and have a go at the nurse instead, (still hold Juliet). When lady Capulet has a go at you let go of Juliet and cool down slightly but still say your lines firmly. Exit the stage with some sort of spiteful act. This will show you are leaving but this is not over. Maybe knock a vase off a shelf or something. .ub10b5b230645c44e726c97a67a35774b , .ub10b5b230645c44e726c97a67a35774b .postImageUrl , .ub10b5b230645c44e726c97a67a35774b .centered-text-area { min-height: 80px; position: relative; } .ub10b5b230645c44e726c97a67a35774b , .ub10b5b230645c44e726c97a67a35774b:hover , .ub10b5b230645c44e726c97a67a35774b:visited , .ub10b5b230645c44e726c97a67a35774b:active { border:0!important; } .ub10b5b230645c44e726c97a67a35774b .clearfix:after { content: ""; display: table; clear: both; } .ub10b5b230645c44e726c97a67a35774b { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .ub10b5b230645c44e726c97a67a35774b:active , .ub10b5b230645c44e726c97a67a35774b:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .ub10b5b230645c44e726c97a67a35774b .centered-text-area { width: 100%; position: relative ; } .ub10b5b230645c44e726c97a67a35774b .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .ub10b5b230645c44e726c97a67a35774b .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .ub10b5b230645c44e726c97a67a35774b .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .ub10b5b230645c44e726c97a67a35774b:hover .ctaButton { background-color: #34495E!important; } .ub10b5b230645c44e726c97a67a35774b .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .ub10b5b230645c44e726c97a67a35774b .ub10b5b230645c44e726c97a67a35774b-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .ub10b5b230645c44e726c97a67a35774b:after { content: ""; display: block; clear: both; } READ: Macbeth: Tragic HeroIn The Play Macbeth By William Shakespeare, We Dis EssayNurse When Lady Capulet and Juliet are conversing about Tybalts death try look concerned but dont let your eyes stray from them or it will look as if you are uninterested. But as soon as Lady Capulet mentions Romeo look away so that Juliet dosent notice you listening. When old Capulet walks in look normal and smiling. Try to look bothered about old Capulet shouting but dont get involved until old Capulet gets physical with Juliet. You should leap up and start tugging on old Capulets arm to try and stop him from hurting her. God in heaven bless her! You are to blame, my lord, to rate her so. Should be said with force but with a pleading tone. When you are arguing with Old Capulet start to get more confident but dont get aggressive. When you are talking to Juliet after the ordeal put your arm around her and try to persuade her that Paris is better for her than Romeo. Juliet When you are talking to Lady Capulet you are agreeing with her but as a double meaning. Nodding simultaneously to show that you understand what she is saying. Until we get to the line Indeed, I never shall be satisfied with Romeo, till I behold him (PAUSE) dead this is when Juliet really starts to act the part. But you have to say those lines with anger to really befall lady Capulet. When Capulet starts to have a go at you try fight back, but when he grabs you burst into tears and say your line in sort of blubbering talk this will tell the audience you are still a little girl and you are not used to having this pressure. When he leaves still feel sorry for yourself but cheer up slightly. When Lady Capulet leaves try and please the Nurse but dont give in. Sound understanding about what then nurse has to say but dont put your arm round her, or this will look as if you are best friends with the nurse again. Dont trust her because she is saying the better choice is Paris and before she s aid it was for Romeo. I could of cut out bits of this scene because it would get boring but if the acting is good enough it will be okay. The parts of the play where old Capulet starts getting angry go quickly that in a professional film I saw they cut out huge chunks out of this scene and if you listen to the lines carefully they dont make sense. Also actors words were slurred. I dont know if this was the quality of the acting or if it was the actor was trying to show real anger. The actors for Juliet and Old Capulet have to be good because their part in this scene are the most vital.

Spanish Christmas Essay Example For Students

Spanish Christmas Essay Throughout Mexico kids get together each afternoon to reenact the holy familys journey for a place to stay in Bethlehem. The procession is headed by a small Virgen MarÃÆ' ­a, often perched on a live burro, led by a equally tiny San JosÃÆ' ©. They are followed by other children protraying angels, the Santos Reyes, and a host of pastores y pastoras, all usually decked out in colorful handmade costumes and carrying brightly decorated bÃÆ' ¡culos or faroles. LAS PASTORELAS Pastorelas are staged throughout the holiday season by both amateur and professional groups. The Pastorelas tell of the shepherds respect of Baby Jesus. First they are visited in the fields by an angel who announces the holy birth. As the shepherds attempt to follow the great star leading them to Bethlehem they are plagued by a series of evils and misadventures provoked by the Devil. But in the end all ends well. We will write a custom essay on Spanish Christmas specifically for you for only $16.38 $13.9/page Order now EL NACIMIENTO In most Mexican homes the principal holiday adornment is el Nacimiento. The focal point, naturally, is a stable where clay or plaster figurines of the Holy Family are sheltered. It is not unusual to also find the forces of evil represented by a serpent and a grotesque Lucifer lurking in the shadows. The figures may be simply positioned in a bed of hena, or scattered throughout an elaborate landscape. Nowadays a decorated Christmas tree may be incorporated in the Nacimiento or set up elsewhere in the home. As purchase of a natural pine represents a luxury commodity to most Mexican families, the typical arbolito is often an artificial one, a bare branch cut from a copal tree Bursera microphylla or some type of shrub collected from the countryside. NOCHE BUENA Holiday festivities culminate on Noche Buena with the celebration of a late-night Misa de Gallo. After that families head home for a traditional Christmas supper which may feature a simple meal of homemade tamales and atole or other regional dishes. Roast turkey, ham or suckling pig are other popular menu items for those who can afford it. Ponche, sidra or other spirits are served for the holiday brindis . The evening is rounded out with the opening of gifts and, for the children, piÃÆ' ±atas and luces de Belen. As these happy family gatherings generally last into the wee hours, December 25th is set aside as a day to rest and enjoy el recalentado . Incidentally, Santa Claus and the clatter of reindeer hooves on the roof do not generally figure in the scheme of Navidad. A Mexican youngsters holiday wishlist is directed instead to el NiÃÆ' ±o Dios for Christmas Eve and the Reyes Magos for Three Kings Day. LOS REYES MAGOS The Christmas season continues full throttle in Mexico through Epiphany, which is called DÃÆ' ­a de los Reyes. Echoing the arrival in Bethlehem of Wise Men bearing gifts for the baby Jesus, children throughout Mexico anxiously await waking up January  6 to find toys and gifts left by the Reyes Magos. In some regions it is customary to leave out shoes where treasures may be deposited by the visiting Wise Men.

Earning Minimum Wage as a Single Parent Essays

Earning Minimum Wage as a Single Parent Essays Earning Minimum Wage as a Single Parent Essay Earning Minimum Wage as a Single Parent Essay â€Å"Americans people value work, and the work people should have a certain minimum value. That value is the minimum wage. In a company employers have more power than individual workers, especially workers without the skills needed to demand higher wages. This imbalance in bargaining power leaves workers with limited skills at the mercy of the employers. The minimum wage board helps balance the skills of each employee (â€Å"Increase the Minimum Wage, uaw.org/resrch/05/)†.â€Å"The proposed increase in the minimum wage to $7.25 an hour would move a single parent with one child above the poverty line but it would still leave that small family struggling to get by. If a minimum wage worker had more than one child or lived in an expensive area it would be even harder to make meet it ends.† Renormalizing the poor and giving those higher aspirations is the answer to their plight† (Toynbee, 2006),In line of the increasing cost of living, it is the least we can do is t o minimize the number of working families who are living in poverty (â€Å"Minimum Wage Increase, www.uaw.org|†.As a single parent who receiving minimum wage, it is not easy to meet the needs of their children, especially nowadays that all the prime commodities is increasing. Minimum wage was not a solution to the problem but it only show that minimum wage is only a threshold which is below poverty line.This paper will discuss about the earning minimum wage as a single parent, the problems behind it, the disadvantages of receiving minimum wage of being a single parent, and the need of an increase of the minimum wage,The federal minimum wage is a wage floor of $5.15 an hour that applies to almost all workers. It is applied in twenty-one place in the states including the District of Columbia that have set a minimum wage that is higher than the federal minimum wage. A living wage is a term often used by the people to point out that the federal minimum wage is not high enough to support a family.â€Å"We also find that the minimum wages tend to boost the incomes of poor families that remain below the poverty line†. (Bernstein, 1999).And the problems about the minimum wage are, some have attempted to calculate a living wage based on an income that would provide for a familys basic needs. How Much is enough? (Addison, 4). Focus on a discussion of basic family budget those measures if the minimum wage received by the employees is enough for their needs.   And† living wages† are generally much higher than the minimum wage. living wages was commonly refer to wages set by local ordinances that cover a specific set of workers, usually government workers or workers hired by businesses that have received a government contract or subsidy.Some disadvantages of receiving minimum wages and not receiving minimum wage stated as follows:A full-time worker earning the minimum wage would have an income but below the federal poverty line. And there are se veral factors that complicate this analysis. First, not all workers can find full-time work and they are not receiving minimum wage, same as the others that are unable to balance full-time work with family responsibilities. Second, federal programs such as the Earned Income Tax Credit and food stamps boost the reported incomes of working families. And third, the federal poverty line is viewed by many as an inadequate measure of the income needed to support a family.In America it is the duty of â€Å"The federal Earned Income Tax Credit (EITC) combined with the minimum wage board to help reduce the poverty, even though that (EITC) is not a replacement for a minimum wage increase. But the Earned Income Tax Credit is a popular federal anti-poverty program and has an important piece of the ongoing strategy to make work pay equally. And one reason for the Edict’s popularity is that it is based on family income and its concern is therefore well-targeted to the poor families (Minim um Wage frequently ask question, epinet.org/content.cfm/issueguides)†Ã¢â‚¬Å"Due to both change in welfare policy and the growing economy, welfare caseloads have fallen precipitously since 1996, when the minimum wage was increased. But, in the context of the job loss critique and the relevant increase made it tougher for the women to enter the labor market. In fact, the employment rates of single mothers, after stagnating for many years, rose steeply from 62% in 1995 to 69% by 1998, directly over the period when the minimum was increased. And not all single mothers are on welfare, but among those receiving welfare, employment rates grew from 40% to 49% in 1997, so far the highest level on record (â€Å"Minimum Wage and Poverty, epinet.org/content.cfm/)’.In addition, it encourages employees especially the single parent to work efficiently because the wage subsidy increases if the earnings also increases small (Bernstein, 1999), until it reaches to the maximum credit leve l. The EITC and minimum wage work in tandem to raise a familys income. The effectiveness of the EITC in raising the incomes of the working poor above the poverty line depending on the regular increases of the minimum wage. The EITC and the poverty threshold both rise each year to reflect increases in the cost of living. And. the EITC alone is not enough to keep a family rise above the poverty line, but with the help of the federal government so that a minimum wage worker gets further away from the poverty line each year and the minimum wage is increased now and then.â€Å"Finally, from the perspective of the working poor, the minimum wage is a useful anti-poverty tool. But it cannot and should not; however, it is viewed as a sole solution against poverty. And this is primarily due to the fact that many employable poor persons have only marginal attachments to the labor market. As the literature evaluating minimum wages and poverty reveals, as well as some new findings it will prese nt regarding the last increase, raising the minimum wage is associated with small decreases in the poverty rate, but the poor need some other income supports, such as the EITC and food stamps to uplift their income (â€Å"Economic Policy Institute, epinet.or)†.Conclusion:Therefore, any increases in the minimum wage are based solely on the political climate and congressional agreement that an increase is needed. The frequency of minimum wage increases has varied depending on its capability of funds. And earnings minimum wages as a single parent it encountered hardships and problems. But if the members of the family will work hand in hand to face the trials in life it will become easy.â€Å"Single parent families become more interdependent, finding that working together helps solve problems. Because single parents rely heavily on the voluntary cooperation of their children and it is a good idea to involve them with the decision-making and problem-solving processes. As of this time young people tend to feel more needed and valued as contributing members of the household and are more likely to carry out decisions they played and a part in decision making. In single-parent families, each childs should help and cooperation is needed on daily basis situations (â€Å"Strengths of Single Parent Families, metlife.com/Applica)†In most industrialized countries they have laws setting a minimum wage, but these laws vary greatly by who is covered, and how strictly the law is enforced. In some countries, the minimum wage is not universal for the whole country, but varies according to the industrial sector or the workers age, gender, and qualifications.Overall, individuals working at or below the minimum wage were likely to be women, young people, students and part-time workers. Some were working to finance their education or support their families, while others were older workers looking to supplement their pension. However, it is also important to keep in mind that while the minimum wage is a crucial tool in the effort to end poverty, it is only one part of a larger anti-poverty strategy.Finally, In America, single parent being paid with the minimum wages was sufferings hardships especially if they have children’s more than three. They can’t meet the basic needs of their children; because their income is below poverty line. It is the work of the government to look to the needs of the people especially to that single parent who are receiving minimum wages and to give them an increase so that they can suffice their daily needs.References:Barro Robert J. (Hoover Institution), Workfare Still Beats Welfare, Wall Street Journal, May 21, 1996.Bernstein, Jared.  Ã‚   We also find that the minimum wages tend to boost the incomes of poor families that remain below the poverty line. Another Modest Minimum Wage Increase. Economic Policy Institute, 1999, Retrieved December 17, 2006 from. [epinet.org/content.cfm/webfeatures_viewpoints_ minwagetestimony].Bernstein, Jared, Make work pay,† Minimum Wages and Poverty.   Economic Policy Institute, 1 Bernstein, Jared, Heidi Hartmann, and John Schmitt. The Minimum Wage Increase: A Working Womans Issue. Washington, D.C.: Economic Policy Institute, 1999.Bernstein, Jared, and Chinua Brecht. 2000. The Next Step: The New Minimum Wage Proposals and the Old Opposition. Washington, D.C.: Economic Policy Institute. 999. Retrieved from [epinet.org/content.cfm/webfeatures_viewpoints_minwage].Hederman, Rea S. Jr. et al, Who Earns the Minimum Wage, Retrieved December 17, 2006 from heritage.org/Research/Economy/wm1186.cfmIncrease Minimum Wage Retrieved December 17, 2006 from [uaw.org/resrch/05/minimum_wage_aug2005.pdf]Lift Families out of Poverty, â€Å"living wage† Retrieved December 17, 2006 from [senate.gov/~rpc/releases/1998/minwage-crs.htm]Minimum Wage, Frequently Asked Questions, Retrieved December 17, 2006 from[epinet.org/content.cfm/issueguides_minwage_minwagefaq ];Strengths of Single Parent Families, Retrieved December 17, 2006 from [metlife.com/Applications/Corporate];Toynbee, Polly,† Renormalizing the poor and giving them higher aspirations is the answer to their plight†. A return to Tory terra firma, December 17, 2006. [http://politics.guardian.co.uk/columnist/story].;;

Present a case study based on a current news story which illustrates Essay

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A Case Study Of Telenor Management Essay

A Case Study Of Telenor Management Essay 1. Introduction This study endeavors to develop comprehension of how transformational leadership style of top management affects innovation at the organizational level. The topic is of paramount importance because of the ever increasing pressures of modernization and innovation on todays global economy. It has become indispensable to practice a leadership style that makes firms innovative and adaptive to change. Firms are shifting their focus from knowledge economy to creative economy, where corporations will compete on the basis of imagination, innovation and creativity (Oke, Munshi Walumbwa, 2009) Boston Consulting Group Inc surveyed over 900 senior executives and identified innovation as the key driver of top-line revenue. Analysis of firms transforming due to innovation provides evidence for this statement. For example, the highly successful iPod of Apple Inc.s, that earned devastating revenues for the company; the role of Blackberrys success in the transformation and emergence of Research in Motion; process innovation at Southwest Airlines Co. that transformed it as an economical and triumphant airline; and Procter Gamble Co. outperforming its competitors by focusing on design innovation. Innovation aims at bringing about change in the status quo. It can be defined as discovering (creative thinking ideas) and commercializing those discoveries (implementing the creative ideas). Creativity new idea generation alone are insufficient for innovation; implementation is also a cornerstone of the innovation process. (Oke, Munshi, Walumbwa, 2009) Plentiful studies have led to the identification of factors that can stimulate innovation at the organizational level. In broad terms, innovation is the adoption or execution of unaccustomed and convenient ideas by individuals in organizations (Amabile Conti 1999) p.360). Factors that are known to have an influence on innovation include leadership (Mumford Gustafson, 1998; Amabile, 1998), a work environment that is conducive for innovation (Amabile, 1998; Oke, Munshi Walumbwa, 2009), CEO salary (Markman, Balkin and Gomez-Mejia, 2000), organizational culture and climate (Mumford Gustafson, 1998; Jung, Wu Chow, 2008; Oke, Munshi Walumbwa, 2009), environmental attributes (Jung, Wu Chow, 2008), learning capability and intra-organizational networks (Tsai, 2001) and job complexity type of supervision (Oldham Cummings, 1996). Among these abundant factors, the leadership behavior of managers has been spotted as one of the most important of all (Amabile, 1998; Jung, 2001; Mumford, Sc ott, Gaddis Strange, 2002). Leadership was merely a concept before the 19th century and it was in the start of the 19th century that it emerged as a word in English language (Davis Cushing). Over the years, leaders and leadership have been distinctly defined by various scholars. Leadership is a process whereby a leader changes the course of action of another group, due to the interaction of his personality characteristics and those of the group (Bogardus, 1934). Leadership is the direction of human collaborators for the accomplishment of a goal. A leader successfully guides his human assistants for the achievement of particular ends. (Prentice, W.C.H. 1961). Leadership is a goal directed endeavor with the aim to influence the activities of followers through communication process. (Donelly, J.H. Ivancevich, J. M. Gibson, J.L. 1985 Leadership is the situational effort towards goal achievement by the process of influencing the individual or group activities. (Hersey, P. Blanchard, K, 1988). Leadership is the f ormulation of a transparent and complete system of expectations for the purpose of identification, arousal and utilization of strengths of all the resources of an organization, the most important of which is human resource (Batten, J.D. 1989). Leadership is the art of influencing individuals to yield their best output/ performance for the accomplishment of a goal, project or objective. (Cohen, W.A. 1990). Leaders are the people who obtain commitment from a working group of individuals and then motivate them to accomplish the outcomes of a pre-planned direction. (Conger, J.A.1992). Leadership is a process in which a leader sets the goal for an individual or group of individuals and takes all of them together with him or her with proficiency and devotion (Jacques E. Clement, S.D. 1994). Leadership is an unrealizable trait that cannot be distinctly defined. This in fact is a good phenomenon, because if the followers were aware of the definition of leadership, they would probably overr un their leaders. (Scott Adams, 1996). Effective leadership is about enabling ordinary people to deliver extraordinary results in the face of challenge and change and to constantly turn in superior performance to the long-term benefit of all concerned (Charlton, 1993). The more recent definitions conceive leadership in terms of influence relationships, power differentials, persuasion, influence on goal achievement, reinforcement, role differentiation, initiation of structure, and perceived attributions of behavior that are consistent with what the perceivers spotted leadership to be. Recently, many management scholars and gurus have identified adaptive leadership as the key enabler to cope with the ever increasing challenges of the corporate world. (Bass, Avolio, Jung Berson, 2003). So the adaptive leadership behaviors that have proved to be more effective than other leadership styles in organizational innovation have been labeled as transformational. (Lowe, Kroek, Sivasubramaniam, 1996; Gardner Avolio, 1998; Howell Avolio, 1993). Transformational leadership capabilities continue to be the hallmark of innovative firms. Successful leaders like J.R. Immelt, CEO of General Electric; A.G.Lafley, CEO of P&G; Ratan Tata, chairman of Tata Motors Tata Group and Steve Jobs of Apple are the prominent figures who have fostered innovation by their adaptive behaviors. Transformational leadership holds four theoretically discrete dimensions: charisma or idealized influence, inspirational motivation, intellectual stimulation and individual consideration. Idealized influence reflects the degree to which followers admire and hold their leaders as role models. Leaders exhibiting idealized influence are ethical, consistent, share risks with followers and prefer the needs of their followers above their own needs. Inspirational motivation points to the degree motivation of followers by delineating new opportunities, providing meaning and challenge to followers work and articulating a strong, realistic and shared vision of the future. Intellectual stimulation refers to the ability of a leader to question the assumptions and thinking of followers, reframe problems, stimulate intellectual curiosity, approaching problems in new ways, soliciting creativity and innovation from followers through novel approaches and avoiding open criticism for individual errors. Finally, leaders who provide individualized consideration pay attention to individual needs for growth, development, support and achievement. They act as coaches or mentors and establish a favorable environment for innovation; where values are diversified and learning opportunities are created (Bass Avolio, 1993) (Some versions of Bass Full-Range Leadership Theory identify 5 components of transformational leadership by breaking down idealized influence/ charisma into idealized influence or attributed charisma. For the sake of simplifying this research, idealized influence and charisma have been grouped together in this study). 2. Research Design 2.1 Main Objectives The aim of this study is to probe the following objectives: To discuss the philosophy, attributes and elements of transformational leadership and innovation To spot the existence of transformational leadership style at Telenor Pakistan To the asses the level of organizational innovation Telenor Pakistan To identify the effect transformational leadership style on organizational innovation 2.2 Hypotheses to be tested The objective of this study is to spot the presence of attributes of transformational leadership i.e. idealized influence, inspirational motivation, individualized consideration and intellectual stimulation, estimate the level of organizational innovation and examine the effect of transformational leadership on organizational innovation. The working hypothesis within this context will be as under: H0: Transformational leadership has no effect on organizational innovation. H1: Transformational leadership has strong effect on organizational innovation. 2.3 Scope of the study The range of application of this study is limited to the telecommunication sector in Pakistan with specific focus on Telenor (Peshawar). Transformational leadership style will be judged on the basis of four dimensions, that is, charisma or idealized influence, inspirational motivation, intellectual stimulation and individualized consideration. Furthermore, the effect of transformational leadership on organizational innovation will be analyzed. 3. Review of Literature (Burns, 1978) stated that transformational leaders stand above the common place. They indulge in a mutual interaction with their followers that raises the understanding, goals and mission that results in the ultimate arousal and transformation of both the leader and the followers. (Bass, 1985) At the other end to transformational leadership lies transactional leadership; where the leaders try to maintain the status quo. Followers are motivated on the base of extrinsic rewards, such as promotion and monetary benefits. It is an everyday terrestrial transaction of value, where leaders only provide needed value to individuals in exchange for their services. (Jane. M. Howell, Christopher A. Higgins, 1990) The most successful leaders are gifted with qualities of transformational leadership and charisma. They are far more influential and innovative than the leaders having style other than transformational. (David A. Waldman, Bernard M. Bass, 1991) linked the themes of nurturant and persistent leadership with transformational leadership theory. Furthermore, the role of transformational leadership behavior in various stages of successful innovations was clarified and implications were presented regarding the proposed model. (Dougherty Hardy, 1996) Transformational leaders intellectually stimulate their followers. This fosters unaccustomed and creative thinking and working processes that pave the way for new technology and knowledge, which are necessary for organizational innovation. Amabile, Conti, Coon, Lazenby, and Herron (1996) have spotted the damaging effects of transactional leadership on creativity. Bono Judge (2004) have supported this proposition in their recent meta-analysis. (Sosik, Avolio Kahali, 1997) Transformational leaders easily adapt to exploitative and exploratory thinking processes which in turn yield creative ideas and effective solutions to problems. The effectiveness of transformational leadership at stimulating unconventional and innovative thinking of followers is far greater than that of other leadership styles. (Bass, 1985; Gardner Avolio, 1998) proposed that transformational leaders have the ability to create personal and professional commitment from their followers towards satisfying upper-level needs like self-actualization and self esteem. (Oldham Cummings, 1996; Amabile, 1998; Zhou, 2003) added to this research finding by suggesting that this commitment boosts the inherent motivation of followers, which is considered to be an essential driver of individual creativity and organizational innovation. (House Shamir, 1993; Jung Avolio, 2000; Mumford et.al, 2000) Leaders possessing transformational attributes have the ability to regroup the values and norms of their followers in a better way. They encourage the progress of personal and organizational changes and facilitate their followers to go beyond their initial performance expectations. (A.Oke, 2002) was part of a study carried out on the organizational innovation of AXA insurance, Ireland. It was revealed that due to the transformational leadership style of John. ONeil, the CEO, a non-innovative firm was transmuted into an innovative one. To achieve this level of creativity, the physical spaces were decorated with eye catching colors and employees from all levels and functions were made to work together in order to stimulate creativity. The results of this transformational behavior were soon evident in the form of 150 new business ideas during 6 months. (Shin Zhou 2003) found that positive relation was discovered between transformational leadership and creativity of subordinates on the basis of a study conducted on 290 employees and their supervisors belonging to 46 Korean companies. (Jung, Wu, Chow, 2008) concluded in their research that a positive relation has existence between the transformational leadership of CEO and organizational innovation. This effect is moderated by variables such as organizational structure, culture and external environment. These results are agreed upon after testing multi-sourced data from 50 Taiwanese electronics and telecommunications companies. (Oke, Munshi, Walumbwa, 2009) found that transformational style of leadership strongly enhances creativity and innovation regarding exploratory (creating something of a totally new and radical nature) and exploitative innovation activities (incremental improvements and refinements to something that already exists). These leaders have the ability to transform or change, which makes them the main drivers for innovative processes. (Lale Gumusluoglu, Arzu IIsev, 2009) suggested that transformational leadership style has strong influence on both the individual and organizational innovation. Individually, transformational leadership is positively related to the creativity of employees. Furthermore, transformational leadership and organizational innovation are spotted to have a positive association between them. These results are the outcome of a study conducted on 163 managers and RD personnel from 43 Micro and small sized software development companies from Turkey. (Khan, Rehman and Fatima, 2009) studied managers from telecommunication sector in Pakistan and explored the positive effects of transformational leadership on organizational innovation. (Mariana Makri, Terri A.Scandura, 2010) identified the strong relation of operational leadership (the dimension of leadership which reflects the ability of a CEO to refine the existing paths to growth or tapping new paths by reframing and extending the boundaries of the firm to products and markets) and creative leadership (the ability of a leader to contribute to the social, human and knowledge capital of his firm) with the quantity and resonance of innovation. The hypothesis was tested over a sample of 77 high technology firms. 4. Research Methodology 4.1 Sources of data This research will make use of both primary and secondary data. Transformational leadership style will be judged on the basis of primary data obtained through interview and questionnaire. The level of organizational innovation will be assessed by primary data obtained through questionnaire and secondary data gathered from the companys publicly disclosed financial statements. 4.2 Research instruments Questionnaires and structured interviews will serve as instruments of this research. The extent of transformational leadership will be measured using Multifactor Leadership Questionnaire (Bass and Avolio, 1995) (Annexure-A). MLQ is a well validated measure of transformational leadership and has been used extensively in prior research (Awamleh and Gardner, 1999). Each respondent will be asked to rate five aspects of his/her leaders/ top-managers behavior related to each of the four dimensions of transformational leadership (idealized influence/charisma, inspirational motivation, individualized consideration, intellectual stimulation). The responses will be anchored by a 5-point response scale (1-not at all, 2-once in a while, 3-sometimes, 4-fairly often, 5-frequently, if not always). While measuring organizational innovation, a composite measure will be used to capture the broad aspects of innovative activities (Balkin et als, 2000). Two measures will be used to tap into different aspects of innovation. First is the annual RD expenditure as a percentage of sales revenue over three years prior to this study (i.e.2008-2010). This ratio indicates a firms emphasis on innovation (Hitt, Hoskisson and Kim, 1997; Balkin et al, 2000). These figures will be obtained from the companys publicly disclosed financial statements. Second, different respondents actively following the telecommunication industry will be contacted. The reason is to include different fruits of innovation such as process and service improvements. Each respondent will be offered two sets of questions about the sample firm. The first set includes a single question regarding his/her familiarity with the company. The possible answers will be 1-not familiar with the company at all, 2-somewhat familiar with the company, 3-very familiar with the company. Only the respondents with responses 2 and 3 will be considered. The second set comprises of 20 questions (4 questions each for scanning five types of innovative activities i.e. product innovation, process innovation, marketing innovation, strategic innovation and organizational climate innovation) in order to rate the level of organizational innovation (Annexure B). The 5-point Likerts Scale (1-strongly disagree, 2-disagree, 3-neither agree nor disagree, 4-agree, 5-strongly agree) will be used to anchor the responses. 4.3 Sampling design (a) Universe / population There are many national and multinational telecommunication companies operating in Pakistan. All these national and multinational firms collectively form the population/ universe of this research. Results will be generalized and recommendations will be forwarded considering all these firms. (b) Sample size and selection This research will adopt a case study approach by focusing on Telenor (Peshawar) as the sample firm. A simple random sample of 30 employees of low, middle and top-management of the company will be selected with the aim of assessing transformational leadership. Furthermore, organizational innovation will be judged by studying a random sample of 30 respondents that are directly or indirectly associated with the telecommunication industry in Pakistan.