FINDING THE CONCLUSION :: essays research papers

Background   Ã‚  Ã‚  Ã‚  Ã‚  Critical thinking can be used in certain aspects of problem solving and requires various types of skills. People must be motivated and not afraid to use their critical thinking skills to solve various troubles that can and will arise. Problem Statement What are the issues and the conclusion? We as readers and listeners in today’s society always seem to believe everything that we read and hear without digging a little deeper to actually find out if it is the truth. Analysis Critical thinking is a skill that we are not born with, but with some knowledge and practice it is a tool that can be used very effectively. Becoming a critical thinker takes time, practice and lots of thought. We as humans always try to force our view upon other people and of course we assume that we are always right. From the other perspective when we have an opinion forced upon us we naturally get defensive. We as critical thinkers need to be open to other people’s opinion but listen with caution to all of the facts before we make any assumptions or judgments. Recommendations 1.  Ã‚  Ã‚  Ã‚  Ã‚  Don’t always believe everything that you hear and always ask yourself what the issue is. 2.  Ã‚  Ã‚  Ã‚  Ã‚  Always try to find the conclusion and look for indicator words. 3.  Ã‚  Ã‚  Ã‚  Ã‚  Remember what the conclusion is not. Conclusions will not be any of the following: a.  Ã‚  Ã‚  Ã‚  Ã‚  Examples b.  Ã‚  Ã‚  Ã‚  Ã‚  Statistics c.  Ã‚  Ã‚  Ã‚  Ã‚  Definitions d.  Ã‚  Ã‚  Ã‚  Ã‚  Background Information e.  Ã‚  Ã‚  Ã‚  Ã‚  Evidence S.W.O.T My selected recommendation is: †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Don’t always believe everything that you hear and always ask yourself what the issue is. Strengths †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Understanding and listening will make you more aware of the real issue and will help you become a better critical thinker. †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Learning to listen will help you in many aspects of not only your personal life but it can be a very strong aide on your professional life. Weakness †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  We can become very skeptical about everything. Sometimes we need to sit back and ask ourselves when is critical thinking necessary. †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Critical thinking is a very powerful tool and used for the wrong purpose you can damage ones character. Opportunity †¢Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  We as critical thinkers have the opportunity to see things very clearly and realize when the wool is being pulled over our eyes.

Indicators of the Effectiveness of Marketing

An important task of marketing research is the evaluation of the effectiveness and efficiency of marketing activities. Management companies require marketers increasingly rigorous reporting and substantiation of expenses. Tired of the high and steadily increasing marketing costs, executives are naming the following as marketing : failed new products and failed advertising campaigns, too many phone calls and expensive campaign that are created to stimulate sales but fail to do so. Marketing research is partly able to solve the problem of accountability of marketing.Consider the basic approach to evaluating the effectiveness of marketing activities – a system of performance marketing. Performance indicators of marketing – the criteria by which companies quantify, compare, and interpret the results of its marketing activities. Brand managers are using these indicators, or metrics, program design, and top managers – in the allocation of financial resources. If the ma rketer can show how the money will give the effect of his proposed measures, which means he can no longer justify the allocation of appropriate resources to senior management.Performance indicators can be internal marketing, i. e. , refer to the company's internal environment and external, that is, relate to the external environment of the company. In turn, internal and external indicators are divided into: †¢Current – continuously varying parameters, which require continuous monitoring, and are often carried out with the help of a marketing information system. †¢Final – indicators that are used as marketing the company's goals and evaluated, as a rule, for the quarter, half, or year. Let’s consider the most popular domestic rates. Current domestic rates: †¢defect rate of products degree of knowledge of the company's goals of personnel †¢timeliness of delivery †¢errors in billing †¢inventory turnover It is advisable to keep in mind key indicators that are not directly related to marketing activities. For example, estimating the percentage of defective products and participating in the task to reduce the reject rate, the marketer, thus reducing production costs, which in turn can reduce the price of the product. A price control is one of the essential tasks of the marketer. Timeliness of delivery can improve customer loyalty and forms in their eyes the image of a reliable and punctual company.The degree of knowledge of the objectives of the company allows staff to make the right decisions in complex ambiguous situations. And, most often benefit from such solutions is primarily a consumer. The final internal indices: †¢net profit (income) †¢return on sales †¢margin per unit of output †¢return on assets These figures can be attributed to the financial. The marketer should be aware of the dynamics of their growth or decline. Financial performance could not be more eloquently and accurately desc ribed as the company's activities in general and the marketing department.Of course, to a direct relationship between the magnitude of these parameters and the degree of effectiveness of the marketing department can not, however, the negative trend indicators will clearly indicate the true chosen strategy of the company and, accordingly, a lack of effectiveness of the marketing department. The most popular external indicators include the following. 1. Current external indicators: †¢degree of customer satisfaction †¢the number of complaints †¢the total number of customers †¢loyalty, retention rates †¢intention to buy †¢awareness of the productThe presented figures are difficult to translate into a financial equivalent. How, for example, brings the company's customer loyalty? Therefore, these parameters are estimated separately, according to a specific, produced for a specific company, the system scales. Also, the absolute values are used, for example, to measure the number of complaints or the total number of customers, and the relative values of, for example, the percentage of people who have the intention to purchase goods in the near future. 2. Final external indicators: †¢market share †¢size of the market comparative sales of new products †¢revenue per customer †¢market growth rate In fact, these figures constitute a group of industry and competitive rates. Industry indicators – a measure to assess the state of the industry – its rate of growth or size of the market. It is not possible to measure these indicators. But on the basis of these figures the company can make adjustments to the marketing communications plan or competitive strategy. Competitive rates, for example market share, company can assess its position in the market relative to competitors.Market share – one of the most important indicators of the effectiveness of marketing activities, and the dynamics of its growth has a d irect impact on sales growth. To ensure the maximization of the diversity metric can be done by the special organizational processes and systems. All materials used in the company's internal and external parameters can be represented as a marketing information system. As a source of data for marketing information system companies can use two systems of market valuation, reflecting the company's results and help to learn in advance about the possible impending problems.The evaluation system of consumers includes analysis of the following indicators: †¢percentage of new buyers from the average number of customers †¢percentage of dissatisfied customers of the average number of customers †¢percentage of customers who are able to return, the total number of customers †¢percentage of customers who declare their intention to re-purchase the product †¢percentage of customers who declare their intention to recommend a product to others †¢the average perception o f roduct quality in comparison with the main competitor †¢percentage of consumers who claim that the product is the most preferable in its category The evaluation of people that have interest. Companies need to continuously monitor the mood of the various groups interested in their work, or to affect it: employees, suppliers, banks, distributors, retailers and shareholders. It should also set standards for each group and take action as soon as one or more of them show an increased level of dissatisfaction. ExampleIn each division of the company  «Hewlett-Packard » evaluation system of customers is applied, which includes from 18 to 20 indicators. Some criteria (customer satisfaction and timely delivery) the same for all, while others depend on the specifics of each department. Analysis of these estimates allows company management to assess the effectiveness of marketing strategies, sales and profits and to identify areas in which improvements can achieve greater quantitativ e indicators. 9. 2. Methods for assessing the effectiveness of marketing activitiesEvaluating the effectiveness of marketing activities is very challenging and not always given the opportunity to express the quantitative effect obtained at the expense of marketing activities. Nevertheless, there are many different approaches for addressing this problem, which allows you to select the following classification of methods for evaluating the effectiveness of marketing. Qualitative methods involve the use of marketing audit, during which the comprehensive analysis of environmental organizations, as well as all the threats and opportunities.In this case there are two areas of marketing control: control of marketing results-oriented and marketing audit, i. e. analysis of the qualitative aspects of the organization. Quantitative methods for evaluating the effectiveness of marketing requires comparing the costs of marketing with the resulting gross profit and the cost of advertising to sales , and they characterize the final financial results for the organization. Analysis of the profitability and cost analysis can also be one of the options for the quantitative method of assessing the effectiveness of marketing.In evaluating marketing activities should be the parameters that characterize the activity of a particular business units – sales volumes, the organization of the market share, margin and net profit. The volume of sales (gross sales) is a complex indicator and reflects not only and not the success of efforts to implement the product, but also chosen the right price, and most importantly, how the goods â€Å"fell† in the target group of consumers. Dynamics of sales – an indicator of an organization's position in the market, its shares and trends.It should also be noted that independent place in the analysis of cost structures and evaluating the development potential of the organization is the analysis of break-even point. Break-even volume sh ows how many goods to be sold, that the resulting contribution margin covers all fixed costs. This volume is an indicator of the organization capabilities to maneuver in the market. Sociological methods for evaluating the effectiveness of marketing aimed at using the tools of applied sociology – the development of sociological research program and in accordance with its conduct of the study.In the use of tools of applied sociology also is oriented assessment of the effectiveness of marketing communications (advertising effectiveness, sales Tenths methods for assessing the effectiveness of marketing separating its effectiveness for each activity in compliance with the eligibility criteria of the list of structures and processes of the marketing concept of setting a specific score for each criterion. Nowadays, there is an increasing number of methods to assess the effectiveness of information marketing that are most widely discussed on the Internet.The essence of these methods is that in order to evaluate the effectiveness of marketing programs used by Sales Expert 2, Success, and others, which are software for marketing information systems. In fact, the evaluation of the effectiveness of marketing activities is one of the functions of a marketing information system. All the indicators needed to assess the effectiveness of marketing activities should be incorporated in the marketing information system. Marketer, the user of the system is only necessary to define the algorithm and the method of assessing effectiveness. 9. 3.Performance indicators of marketing – the criteria by which companies quantify, compare, and interpret the results of its marketing activities. Performance indicators can be internal marketing, i. e. , refer to the company's internal environment and external, that is, relate to the external environment of the company. In turn, internal and external indicators are divided into current – which should be continuous monitored and which are often carried out with the help of a marketing information system, and final – indicators that are used as marketing the company's goals and evaluated, usually on the basis of quarter, year.The following methods of evaluating the effectiveness of marketing activities: †¢Qualitative methods involve the use of marketing audit, during which the comprehensive analysis of environmental organizations, as well as all the threats and opportunities. †¢Quantitative methods are used for evaluating the effectiveness of marketing requires comparing the costs of marketing with the resulting gross profit, and advertising costs to sales. †¢Sociological methods – for evaluating the effectiveness of marketing aimed at using the tools of applied sociology – a program of sociological research and in accordance with its conduct of the study. Tenths methods for assessing the effectiveness of marketing â€Å"isolate† its effectiveness for each activ ity in compliance with the eligibility criteria of the list of structures and processes of the marketing concept of setting a specific score for each criterion. The essence of the method of information lies in the fact that the evaluation of the effectiveness of marketing programs used by Sales Expert 2, Success, and others, which are software for marketing information systems.Four tools for monitoring the implementation of the marketing plan. 1. Analysis of the distribution suggests a partition of the total sales data into categories such as products, end users, marketing intermediaries, sales territory, and the size of the order. The purpose of the analysis – to identify strengths and weaknesses of the area, for example, products with the highest and lowest sales, buyers, who account for a large portion of the proceeds, as well as sales agents and territory, demonstrating the highest and lowest quality of work. . Analysis of market share. Sales volume and market share are t he primary functions of a number of determining factors. For consumer goods, these factors include the efficient allocation, the relative price, retain or change the perception of one or more of the essential characteristics of the product to consumers in comparison with competitors' products and product placement on store shelves. 3. Itemized analysis of earnings and expenses.Data on sales – it is certainly not the only relevant information regarding the success of marketing activities. Need to monitor values of gross margin and profit margin, and to measure the efficiency and effectiveness of all marketing expenditure items. 4. Analysis of the ratio of marketing costs and sales volumes. Analysis of the annual plan requires ongoing monitoring to achieve the goals of expenditure. The main management measure is the ratio of marketing costs and sales volumes.

Hurricane Katrin A Devastating Storm - 1576 Words

Hurricane Katrina was a devastating storm that ravaged New Orleans, but it was more than just a natural disaster. The general public and even some top officials are quick to dismiss this great storm as an inevitable force of mother nature as if it was just another hurricane of the season. In doing so, they subscribe to a mindset that is actually a disservice to those who suffered Hurricane Katrina’s wrath. A myriad of publications like Come Hell or High Water, Overcoming Katrina, and There is No Such Thing as a Natural Disaster has exposed a startling light on how horrendously human systems can fail. It is no question that Hurricane Katrina was a natural disaster - it was a natural phenomenon - but Katrina was more-so a social disaster†¦show more content†¦In comparison, Hurricane Andrew had a central pressure of 922 mb (1), and â€Å"wiped out nearly 30,000 homes and damaged more than 100,000 others (Powers 23). Similarly, Katrina brought violent winds that decimat ed New Orleans with an estimated one-hundred billion dollars in repairs (Waple 6). According to scientists in the Nova ScienceNow episode â€Å"Hurricanes†, the immense damage is particularly due to the location of New Orleans, which is ten feet below sea level and is bordered by a lake and the sea. Areas below sea level or near a body of water, in this case two bodies of water, tend to require levees to prevent flooding. Having a town situated in a place where hurricanes are prone to occur can be considered a human disaster as they put themselves in harms way. This bad situation, however, cannot be helped due to the economic opportunities of its location, so in many ways a disaster was inevitable. Nonetheless, Katrina was a natural phenomenon that ravaged the coastal city of New Orleans. Of course Hurricane Katrina was a large storm, but there should have been measures in place to mitigate its damage. However, Michael DeWayne Brown, the director of FEMA of the time explained, â€Å"this storm is much bigger than anyone expected† (Dyson 77). Brown maintains that his or any other agencies did not expect Katrina to be of such great magnitude, hence why the agency was not adequately prepared. Nevertheless, Brown’s statement contradicts a report from FEMA, the agency heShow MoreRelatedRastafarian79520 Words   |  319 Pagesdevil-devised doctrine to the detriment of deluded mankind and which sinful shitsem [system] will therefore be destroyed in a predestined apocalyptic judgement of volcanic eruptions, earthquakes, lightening bolts, brimstone, molten lava, thunder, plagues, hurricanes, drought, famine, tidal waves, hail and heat waves . . . in short by what could be described as a supernaturally controlled ecological backlash.56 52 RASTAFARI Thus the cataclysmic destruction of Babylon will come by its own hands. Its

Porter Novelli Free Essay Example, 1500 words

Heckman (2011) points out that, effective leaders formulate competitive strategies that are implemented to make an organization competitive within the market place. Nonetheless, strategic leaders form part of executing strategy. Venkateswara (2004) argues that strategic leaders do not only formulate or craft policies, but they also set examples by executing them. Ideally, the leaders’ primary responsibility is to implement the chosen strategy and reveals the action plan to other employees. Primarily, the strategic leaders build an organizational culture that drives the realization of the formulated strategies. They direct the efforts of the employees towards achieving set high goals in the organization. In fact, the management team accomplishes competitive, distinctive capabilities that make organizations profitable consistently. Arguably, strategic leadership helps in choosing the right people that are best placed to execute strategies within organizations. They pick correct roles, and right people to suit such roles. Procedurally, the strategic leaders evaluate the performance of individuals within the organization and measure the performance of the organization in general. Karin Behrens (2008), posits that the organization’s leadership must always remain agile to ensure stakeholders pursue the formulated strategies effectively. We will write a custom essay sample on Porter Novelli or any topic specifically for you Only $17.96 $11.86/pageorder now Without performance evaluation, the enterprise is destined to failure. Strategic resilience makes the organization successful. The leaders evaluate their performance and measure the performance of others as a way of ensuring there is boosted performance at the firm. On the other hand, effective or strategic leaders nurture and utilize talents within and outside the organization. Talent management within an organization is quite critical. Karin Behrens (2008) believes that proper management ensures efficient utilization of skills that results in greater achievement to the organization. As such, talents must be identified and properly managed within the organization. However, the internal abilities must be aligned to meet both the long term and short term objectives of the organization. According to Bourne, Melnyk, and Faull (2007), this process entails building the needed talents from within the business as well as outside its in boundaries. There ar e five-point criteria used to evaluate the performance of individuals within the organization. I. Strategic congruence It is the evaluation of performance based on the alignment of the goals of the organizations to the strategies of the organization.

Stereotypes About Black People From The Times Of Slavery

Furthermore, the men sing the Roustabout song with the lyrics, â€Å"We work all day, we work all night, we have no life to read or write, we’re happy. We don’t know when we get our pay, and we do we throw our money away (Towbin et al. 32).† Not only are the lyrics are false, but also references negative stereotypes about black people from the era. Moreover, Joffe states that this scene subtly replication slaves singing on the plantation back in the times of slavery. Following these claims, Joffe connects negative stereotypes to racism. In her words, â€Å"[i]f those stereotypes are in regards to a certain race, generalizing their characteristics, abilities, or qualities specific to that group and distinguishing it as inferior or superior to another race, then those stereotypes cross the line into racism† (27). This means that negative stereotypes about the laborers in Dumbo are in fact racist. For the sake of the paper, racial, negative stereotypes will be synonymous with racism. The second scene that many scholars argue uses negative stereotypes is with the crows in the tree. To first understand why this scene is racist towards the black community, one must prove that the crows are black caricatures. Because one cannot tell ethnicity by physical appearance because they are crows, one must analyze the speech patterns to determine the animations are black embodiments Wainer uses line, â€Å"Uh, what’s all the rookus? C’mon, step aside brothuhs, uh, what’s cookin’ around heah? What new?Show MoreRelatedRacism And Racism1404 Words   |  6 PagesBeginning from the Western slavery, caused and created mostly for economics reasons, racism consequentially was promoted through law and social institutions. Using various means of dehumanization, marginalization of African Americans, and creating and legitimizing their image as a lower race, racism has been cultivated in society for hundreds of years. Gradually racism and racial stereotypes were woven into language, science, wide social opinion. The biological interpretation of the race has dividedRead MoreIn The United States, Not Only Are Latin Women Being Misunderstood,1508 Words   |  7 Pagesalso stereotyped by other people. Latin women are discriminated in their dressing and service occupations, while African American Americans are stereotyped in sexually promiscuous, caregiving role, and â€Å"welfare queens.† Both of them are victims of racial stereotypes, which affect them negatively on their identities and characteristics. However, the differentiation of their cultures makes them being stereotyped in distinct aspects. Some of African American women’s stereotypes are caused by their historicalRead MoreThe United States1202 Words   |  5 Pageshistory of satirizing African Americans in books, television, and film. These stereotypes started with minstrel shows and still run rampant in today’s popular culture. Although numerous Americans find African American generalizations like the Sambo or Black Rambo harmless and entertaining, in reality they are the epitome of mortification and inequality for Black Community. The first black stereotype created was the Black Sambo. The moment Rice stepped on stage in blackface and tattered clothes doingRead MoreSlavery And The Black Race1526 Words   |  7 PagesSlavery and the black race in America cannot be separated since slavery is a big part of the history of African Americans from the 18th century to early 20th century. There are many issues to consider about slavery and the lives of the slaves at the period. One of those issues is the role played by women slaves in the societies of the time. Deborah White writes about how women slaves had a different life compared to the other white women and compared to the male slaves. However, it is the statementRead More The Character Message in The Conjure Tales of Charles W. Chesnutt1466 Words   |  6 Pagesearly black writers such as Chesnutt was their audience. The problem of the black experience in America arose from the refusal of the whites to perceive black experience accurately, and the artists task was not simply to present the truth to the white minds, but to change those minds so that they could perceive the humanity of the black and the inhumanities which he suffered in America (Chesnutt, 346). According to Baldwin, whites had to be trained to perceive black experience from the black pointRead MoreCharacteristics Of The Following Stereotypes1304 Words   |  6 Pagesthe following stereotypes? o Aunt Jemima/Mammy - Mammy represented as a defense to slavery. She was born in ante-bellum America and was portrayed as fat, pitch-black, and happily obedient to her master and mistress. Mammy was docile, loyal, and jovial, and understood her value of society. She was considered the antithesis of white ladies, white ladies being fragile and beautiful. She was also classified as sexual. In her own family, she was the leader, an indication that black people cannot make itRead MoreReasons For The Compromise Of 1877899 Words   |  4 PagesCompromise of 1877, many supporters of black rights, such as freed slaves or radical Republicans, believed that conditions for freed blacks were worse than they had been when they were enslaved. Though there were definitely upsides to freedom from slavery, many conditions blacks lived under either didn t change or got worse after the Compromise. For example, the removal of the military from the South allowed the southern government to pass laws limi ting blacks rights, meaning the social, politicalRead MoreRacism And Aversive Racism1618 Words   |  7 Pagesterm ‘aversive racism’ seeks to encompass the nuanced and profound experiences of prejudice faced by racialized peoples in societies whose values do not accommodate explicit discrimination based on race. This form of â€Å"subtle racism†, which in the words of Donald Glover in â€Å"Hold You Down†, you’d only understand through lived experience, is but one facet of a larger social problem: anti-black racism (Glover 2011). Personal understandings and experiences of aversive and explicit racism, detailed in musicRead MoreNo Sympathy for Slaves in Mark Twains Work980 Words   |  4 PagesMany writers on the African-American diaspora have attempted to capture the black experience in America, although some to no avail. Most Black authors like Zora Neal Hurston, Martin Delaney, and countless others have succeeded in painting the most accurate image of black people with the characters in their stories. Nevertheless, some authors fail in their portrayal of black people by using recycled economic stereotypes, highly metonymic based characters, and Fetishization. Questions often ariseRead MoreBlack Stereotypes in the Harlem Rennaissance1245 Words   |  5 Pagesdiscussed a variety of black stereotypes portrayed in the media during the Harlem Renaissance. During the 1920s, there were specific stereotypes associated with Classic Blues vocal performers-especially black female artists. These stereotypes were based on the â€Å"Mammy† figure, which dates back to slavery. Female classic blues artists were portrayed as buxom and â€Å"hyper sexualized.† The idea of sexually independent women was considered immoral, so it is of no surprise that the stereotypes were unfair and damaging

Reason and Scholarship free essay sample

Being able to live to see this day is an honor, but being able to apply for this scholarship is truly a blessing. There are many reasons why people choose to apply for scholarships. Some may even have pros and cons. Today, I’m applying for this scholarship for benefits and less worries. I have some many reason why I would apply for this scholarship but I will only list three. I believe I’m the candidate for this scholarship because I am a very persistent person, I am unique, and I am able to do anything that is possible. I think I should be chosen for this scholarship because I am persistent. If something needs done in one day, I’m determined to meet my goals. I truly believe I can do all things through Christ who strengthens me Another reason why I think I should be chosen for this scholarship is because I am unique. We will write a custom essay sample on Reason and Scholarship or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Everything I do is different and creative. I try to come up with creative things in creative ways. Most of all, I am one of a kind. Finally, I think I should be chosen for this scholarship is because I can overcome obstacles. Give me your hardest task, I will make a way to do it. Even during the hardest trials I will overcome them. Nothing can stop, block nor hinder me from overcoming my obstacle. Since I have made it obvious that I am persistent, unique, and able to overcome anything, it should also be obvious that I embody Philippians 4:13. Therefore, since I am the type of person who will succeed if give help to do so, I believe I am very deserving of the scholarship presented by Gadsden State Community College. After all, I am going to be a world changer so your instruction will be helping me fulfil my destiny.

Share Holder Wealth Maximization Vis a Vis Social Responsibility

Introduction Limited information is found on how economic enterprises can incorporate business ethics and social responsibility as a means through which their primary objective of shareholder wealth maximization is achieved (Hawley 1991, p. 714).Advertising We will write a custom essay sample on Share Holder Wealth Maximization Vis a Vis Social Responsibility specifically for you for only $16.05 $11/page Learn More This lack of ethical considerations seems to be not only confined within the academic sphere but there is evidence of it taking a toll in the realm of corporate practice in the economy. Enterprises have ignored the ethical concerns in strategizing on how they will achieve their goal of wealth maximization. Through their total disregard of ethical issues, corporates are assuming that the mere pursuit of the wealth maximization goal meets the social responsibilities that could possibly be expected from any entity. However, there has been limited research and analysis of the ethical foundations and the perceived implications of the goal of shareholder wealth maximization. This paper seeks to analyze to what extent the corporate world incorporates business ethics and social responsibility in pursuing their primary objective of maximizing the shareholders’ wealth and how this pays back in terms of increased returns to the shareholders. It highlights the main differences between the goal of profit maximization and that of wealth maximization and the role played by market forces in the pricing of stocks within the shareholder wealth maximization paradigm. It argues that empirical and theoretical evidence on this subject will most usually lead to overlapping interpretations (Smith 2003, p. 58). Share Holder Wealth Maximization Since Milton Friedman’s largely criticized position that â€Å"the social responsibility of business is to increase its profits†, the ethical aspect in the maximization of shareholder wealth has been given a wide consideration. In order to build a logical analysis of this notion, it is of paramount that we understand the crucial link between the two distinct goals of a corporation, i.e. Wealth maximization and profit maximization. While the two may share some similarities, they are also characterized by various inconsistencies as analysed by Solomon in his work, (Solomon 1963, p. 2). For instance, profit maximization as an objective best suits a traditional macroeconomic market which is characterized by minimal uncertainties; the entrepreneur is the main decision-maker, the shareholding is fixed and determines within a given period.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More This kind of business structure is especially of great utility in analyzing the variables, i.e. Prices of raw materials and end products, production level etc., which occupies a central position for any corporate whole. According to Winch (1971, p. 14), profit maximization goes hand in hand with the ethical goal of the utilitarian mode of resource allocation. Contrary to the microeconomic world, proper allocation of resources is very integral to a corporate entity in regard to its financial dealings (Beurden Gossling 2008, p. 412). This difference in terms of the central focus of each establishes new fundamentals which the profit maximization paradigm declines to involve itself with. For example, this whole new structure separates the entity’s decision making from its ownership and places it in the hands of a separate and distinct management body. As this happens, uncertainties on the future earning capability of the firm sets-in when capital stock features in as a variable to be determined too. The goal of wealth maximization is developed by maximally utilizing the utility maximization strategy, i.e. management, being agents of the shareholders are required to max imize the projected utility of the shareholders’ wealth. If for instance wealth is the main argument in the utility of the shareholder, maximizing the anticipated utility of the wealth of the shareholder reduces the core objective of the entity as maximization of shareholder wealth. To this end, the ethical concept of a corporate finance adopts the same approach as that of microeconomics as use of utility maximization incorporates characteristics of the utilitarian ethic (Shaw 2009, p. 569). Conversely, the introduction of an element of the future, uncertainty, separated decision making structure creates complications in utilitarian allocation of resources. When even this basic objective cannot be achieved, it only holds strong for the argument that wealth maximization is incapable of providing a feasible ethical foundation for a corporate entity.Advertising We will write a custom essay sample on Share Holder Wealth Maximization Vis a Vis Social Responsibility specifical ly for you for only $16.05 $11/page Learn More Nevertheless, some essential features of wealth maximization are not included in the utilitarian resource allocation framework. For instance, the wealth of the shareholder is directly linked to the price of capital stock and in extension, the mode through which marketing for ownership claims contains elements of ethical concerns by the entity (Wilcke 2004, p. 198). Working on the assumption that the main objective of an entity is wealth maximization, various issues can be identified. For instance, since wealth maximization is completely dependent on market forces in order to create a strong value for the ownership of the firm, a question arises whether these market forces bring about stock prices incorporating the value of the social responsibility of the firm. To answer this question, we need to determine to what extent security prices reflects information on a firm’s ethical concern. Unfortunately, if t his debate continues, it will take us to the more irresolvable question of what the world perceives as constituting proper ethical behaviour. It even gets more complex when management, as the agents of shareholders, gets into the picture and we are faced with the question of whether shareholders would count management actions as constituting acceptable ethical behaviour (Cosans 2009, p. 396). Determining Share Prices Determination of security prices is a fundamental concern of corporate finance. Through efficient market hypothesis, the price of securities is a reflection of the information available to investors when making investment decisions. Through the market hypothesis, we can attempt to analyze the ethical impacts of the wealth maximization goal. For example, if wealth maximization is to meet a specified ethical standard, the price of securities should incorporate information containing ethical elements. In order to succeed in this, we need to first set an ethical standard. T hen empirical tests will be carried out based on the changes in prices of securities and determine the impact of ethical issues on the market prices.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The analysis will be made based on the assumption the main goal of the management is maximization of shareholder’s wealth (Husted Salazar 2006, p. 83). The hypothesis could also test on separate aspects, for example when a certain firm has been known to exhibit differing degrees of adherent to ethical issues. But this latter hypothesis will present various challenges. For example, there may be a situation whereby an organization allows management to engage in both socially acceptable behaviour as well as unethical acts which are perceived to result into positive effects. This may occur where the returns of the illegal acts are significant as compared to the costs to be suffered when such acts come to light such as litigation costs, fines and other penalties, reduced goodwill, etc. there could also be other mitigating factors such as the ability to keep the illegal activities as well hidden company secrets or by putting up strategies for timely damage control when such activi ties come to light. Besides, even when using efficient market hypothesis, it is hard to tell whether if an alternative course of action was taken it would have resulted in a different price change pattern. For example, it would be difficult to determine whether the unethical behaviour was a reflection of the ethical failures of the wealth maximization goal or that management diverted from practices consistent with wealth maximization objectives. This debate is premised on the idea that the efficient market hypothesis, by its very nature is characterized by joint hypothesis, i.e. price determination models are usually implied. Such an assumed model of price determination if it dictates that we assess a particular ethical issue, then a null hypothesis of the efficient market hypothesis requires that unethical act would violate the primary goal of wealth maximization. According to Treynor (1981, p. 7), management should address financial demands of the different factions within the org anization if it is to emerge as a successful entity. These factions include customers, employees, suppliers and other stakeholders. The wealth maximization goal requires that in pursuing its objectives, a corporation should take into consideration the interests of all the stakeholders of the organization, not just the shareholders. Thus we can use this argument to say that wealth maximization encourages the adoption of socially responsible business behaviour. The crucial connection between wealth maximization and the efficient market hypothesis can be well illustrated using the classical corporate theory. This theory proposes that a firm would most likely invest in a project projecting positive net present value. The variables used to calculate the projected cash flows is based on the performance of the firm which has been theorized by the management where it may have or may have not incorporated ethical behaviour. Here, the price of securities will be based on the managementâ€℠¢s assessment of the market. Including social responsibility and ethical behaviour in calculating the projected cash flows will be in line with wealth maximization where such considerations are reflected on the prices of securities. Empirical Considerations As we have noted above, empirical evidence does not help us determine whether pursuing wealth maximization will amount to a socially responsible and ethical managerial behaviour. It requires us to define what constitutes proper ethical behaviour and since ethical issues are complex in themselves, it will create conflicting opinions on the subject. Nevertheless, we can draw from the few theoretical and empirical studies relating to the impact of socially responsible behaviour on the price of stocks. In this light, it has been argued that price fixing has the potential to increase new entrants into the market industry leading to higher competition and thus diminishing returns (Waldman 1988, p. 78). Therefore, if the wealth maximiza tion is the main objective, price-fixing is aimed at offsetting losses in profit by offering a lower discount rate facilitated by a reduced business risk leading to a higher net profit margin. Yet, if this is not the end result, then price fixing will ultimately have the effect of reducing shareholders’ wealth. Research has shown that disclosing a legal action intended to correct corporate price fixing has resulted in significant negative returns (Skantz et al. 1990, p. 159). On this basis, while the reduced returns could be the market’s punitive costs for behaving unethically, it could also have arisen from a perceived increased business risk which has nothing to do with ethical issues. This is further evidence of the difficulties encountered in attempting to use market data to determine whether pursuing wealth maximization leads to ethical outcomes. Since the reduced returns arose because the market became aware of the unethical behaviour and not because of engaging in the actual price fixing, a question arises as to what information was originally included in the prices. If the original share price were impacted by information on the firm’s engagement in price fixing, then the reduced returns could mean that the entity needs to adopt a risky, highly competitive, reduced profit margin business policy. Here, the anticipated litigation costs arising from court cases will be expected to have been discounted into the stock prices. However, if price fixing was done in secrecy, then news on a legal action would lead to price adjustment to reflect the resulting costs of unethical act, which would include the lost goodwill. For this, the costs that would be involved in adopting a more competitive strategy are already reflected in the price. The probability of reaching different conclusions using the same piece of evidence has been found in other areas of our present concern. There is evidence that in making investment decisions, investors do ind eed rely on the information available on social responsibility (Patten 1990, p. 581). Other sources reveal superior investment performance of previously divested portfolios, though these results could have resulted from a combination of factors as opposed to mere social concerns. This may be explained in a number of ways. For example, following the net profit value method, the corporate financial theory holds that slight changes in either the projected net cash flows or the perceived discount rate impacts on the returns of capital stocks. Therefore, the grand performance of the divested funds may have resulted from a continuing increased risk or a weakening expected corporate performance as opposed to any ethical issues concerned. This argument can also be applied to the impact of ethical behaviour on investment in the nuclear industry. It has been found that markets place a lower value on nuclear firms at 20% as compared to other industries (Fuller at al. 1990, p. 124). On careful consideration, the results reveal that perceived risk changes could have contributed to the valuations observed. Thus this leaves us with the option that social responsibility concerns could have had a positive effect on the whole affair. As witnessed above, untangling the effect of a certain activity on the prices of stock has its own complexities. Besides, we have to give room for the possible assumption that management may not be pursuing wealth maximization. There is significant evidence that often times, management has been known to unethically chase their own selfish ends especially if they are in conflict with shareholder wealth maximization (Findlay Whitmore 1974, p. 28). This will give rise to additional agency costs which the shareholders will incur to monitor management activity and in effect, will lead to reduced returns. When agency costs are involved the equation becomes even more complicated as we need to now to assess the effect of agency costs on the security price s. Evidence of price fixing can be used to explain how agency costs bring-out a whole new interpretation of the empirical data. For example, working on the assumption that there is no diverging information, the stock market values its own stocks from the assumption that wealth maximization is the main objective of the firm. On this basis, announcement of a legal action could produce reduced returns because of the additional costs incurred in monitoring the activities of the management and not because of the unethical behaviour. Therefore, without a way of determining what kind of information was included in the original share price, major difficulties arise in trying to assess whether a certain pricing activity was impacted on by social responsibility behaviour. This raises the requirement for exercise of caution in interpreting the results of any given Empirical Study. The effect of agency costs may also help in the analysis of study results obtained for other perceived unethical a ctivities, more so in the area of mergers and acquisition whereby there are insider dealings by the management. Of particular relevance is the case of hostile takeovers. Drawing from debates on what constitutes ethical behaviour (Jones Hunt 1991, 839), we can base our argument on the assumption that hostile takeovers are unethical. As such, it would appear that, ethical behaviour is being rewarded in this scenario. This is because, ordinarily, the returns of the target group increase significantly while those of the hostile bidders become negative to zero following the announcement of the intended takeover, (Franks Harris 1989, p. 238). Further, due to the existence of agency costs, the use of ‘poison pills’ or ‘shark repellants’ by target management will most probably result in negative returns on the part of the target shareholders (Meulbroek et al. 1990, p. 1113). So do these results support the argument that ethical considerations on hostile takeovers are evidenced in stock prices? Unfortunately, this evidence raises even more questions rather than answering them. For instance, given the potentially negative returns suffered by bidding shareholders, it would not be appropriate to say that the management bidders are pursuing wealth maximization for their shareholders, thus increasing the likelihood of incurring agency costs. On the other hand, it is likely that the bidding management only pays high prices to the target group innocently since the target bid premium payable is in most cases given back through wage concessions. Besides, the ‘unethical’ bidders will most likely be the targets in the future other than the bidders who helped increase the firm value. Thus from this conflicting evidence, it is only the unethical takeover activities that are properly reflected in the ultimate prices of stock. Undoubtedly, this is as a result of the obvious reduction in firm value that is a unique feature of the anti-takeover strategies. Conclusions This paper has argued that wealth maximization as an objective will naturally adopt the ethical expectations inherent in its particular niche of operation. The best indicator of management’s performance is the price changes of the entity’s stocks in the capital market. Though management decisions could incorporate ethical concerns, it is the security market to determine whether these decisions are in accordance with wealth maximization goal through a valuation of stocks. Thus, this raises the question of to what degree is ethical behaviours reflected in the prices of securities? This question requires a careful study on the implications of unethical behaviour to the ultimate stock prices. But this presents a problem in that there is no established procedure on how to determine what does or does not constitute ethical behaviour, among other difficulties. For instance, assuming that stock markets rewards certain business ethical behaviour through attractive prices of securities, it does not automatically follow that when one pursues wealth maximization it will result into a socially responsible corporate behaviour. However, enterprises would most likely choose this path by choosing to believe that as long as actions are geared towards wealth maximization, then they are ethical and, therefore, justifiable. With this, changing management policy may become a big challenge since even reduced securities prices may not be adequate market sanctions. Thus even if it was determined that managerial decisions need to incorporate ethical considerations, market forces will not be sufficient to induce this. From this we can conclude that pursuing wealth maximization for the shareholders will definitely not result to a socially responsible corporate behaviour. 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