Relationship Between CSR and FTSE 100 Companies

Relationship Between CSR and FTSE 100 Companies Chapter 1 INTRODUCTION In todays business world the phrase corporate social responsibility (CSR) has become a relevant and frequently discussed topic. By definition it is the non-profit activities engaged by a business concern that aids the society, economy and the environment. The World Business Council for Sustainable Development has defined CSR as â€Å"the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community, and the society at large.† (WBSCD, 2000) Modern business concerns place CSR in high priority. In the fifth global CEO survey conducted by PricewaterhouseCoopers World Economic Forum concluded that 70 per cent of chief executives around the world have the opinion that corporate social responsibility is fundamental in the process of profit making in the business. In the Western European region, 68 per cent of the big companies have joined the triple bottom-line performance namely the economic, social and environmental factors along with financial performance whereas in the United States, this figure is 41 per cent (PricewaterhouseCoopers/BSI Global Research Inc, 2002). However 80 per cent of the company managers in the US are of the opinion that CEOs status is a factor of major influence on corporate reputation, although interestingly this value is just 56 per cent in the UK. According to Business in the Community, more than 70 per cent of business leaders believe that incorporating responsible business activities makes busin ess concerns more competitive and profitable. (Hancock, 2006) 1.1 Why was this topic selected? If the topic doing research to find out if there is a relationship between corporate social responsibility (CSR) and the corporate financial performance (CFP) of a company is able to find out with positive outcome and relationship between the two, then it may be an eye opener to various entrepreneurs to the various financial benefits CSR can bring about to business. This is so especially in the medium and small scale industries, which are yet to fully utilise the CSR in their business routines. From a common person point of view, when large corporations and business concerns take part in community relief and environment friendly activities, it makes a whole lot of difference to the society and the environment. So it is greatly beneficial for humankind to explore and bring out to light the relationship between corporate social responsibility and the firms financial performance. 1.2 Background of CSR: Many of the ideals and customs of the corporate social responsibility have references dating back to the 19th century. But it was during the 1960s and 1970s in the United States that there was resurgence in the mindset of people towards this phenomenon. It was during this period that various modern policies of civil regulation were invented. This includes the social audits, social investment funds, voluntary codes of conduct, recognitions for social and environmental activities and more commonly the use of corporations as potential places for political activity. During that period there were many protests and demonstrations like the boycott of Dow Chemical in 1970. There was also a campus-led movement pressuring firms to retract from South Africa in the 1970s which was similar to the challenges faced by the corporations having investments in countries like Burma and Sudan. Since the 1990s many companies form America and Europe that have headquarters either in the United States or Europe have taken aboard some voluntary standards for employment states, environmental activities and also regarding human rights. These fresh measures have since then became standardised in many companies, corporations and other agencies. These new measures have been monitored and reported. These initiatives that were not heavily legal have since been the standard setter for what is known today as corporate social responsibility. Some of the fresh changes that were brought about by this civil regulation were: (1) A positive reduction in the amount of children hired for labour every year. A massive improvement in health and safety in various factories around the world which provide the large firms with products including shoes, clothes, toys, etc. (2) A cut down in the production of wood from endangered forests and animal habitats, which were used to manufacture furniture for United States and Europe. (3) Providing reasonable prices for some agricultural producers like coffee growers for their products. (4) A considerable decrease in the emission of greenhouse gases especially in the wake of the greenhouse effect. (5) A withdrawal of firms from Burma in the wake of the human rights abuse in that country. (6) Some more recent examples are the lowering of prices of drugs for AIDS and other diseases. After that companies have come forward and set examples of CSR initiatives for other companies to follow, even when there is no restriction on them in the countries concerned to limit their activities. For example Home Depots policies regarding environment have helped in the sustaining of some of the rainforests in the South America. The government of Chad cannot be trusted in handling their oil reserves properly. So ExxonMobils efforts to keep an eye on its royalty payments means that at least some of the money is not wasted. Indonesia does not have adequate policies to protect the environment. Therefore Chevron Texacos activities have protected the fragile ecosystem in Papa New Guinea. Having discussed that, it must also be said that the effectiveness of codes, such as the UN Global Compact, Voluntary Principle on Security and Human Rights, the Equator Principles, etc, are not very effective. The improvements are likely to happen, particularly if the monitoring and other measures are effectively carried out. One of the most outstanding obstacle standing in the way of these social changes is of course the cost factor. Many corporations do keep cost aside for these activities, but most of them have not found to be adequate. This is one of the reason researches have to be carried out that point to the connection between CSR and CFP, because CEOs and managers should be aware of the possibilities created by CSR on the firms reputation and financial activities. So that firms can spend more time and money on their CSR and hence create good value for them, their stakeholders and ultimately the society. Today even countries in the developing world have started to demand bet ter working conditions and environmental safety for their environment. In countries like India people have been protesting against big companies for their discrimination. For example there has been a recent outbreak of protests in India against soft drink manufacturer Coca Cola for their indiscriminate usage of underground water and also its contamination, since underground water is a major source of drinking water through wells in many parts of India. CSR is also a factor that is good for a society regardless of it being located in developed or underdeveloped countries. It is a universal phenomenon that is advantageous. This contributes to its popularity and prominence. Some countries practise CSR ideally in their manufacturing hubs located in developing and underdeveloped countries. Some others stick to bringing about local changes and prosperity. For example the constructing of a school, university or a hospital is considered as a valuable contribution to the society. The company benefits from these activities because they indeed sow the seeds for future graduates who may become skilled employees for them. Also environmental activities earn sympathy and support from local authorities who may reduce taxes and other duties for the company on the basis of their humanitarian concerns. Later on in the 1990s there were protest against companies like Nike and Shell, and since then the importance of CSR has grown significantly. In 2005 a search on Google for â€Å"corporate social responsibility† would yield 30000 sites. There are more the 15 million pages on the internet with address dimensions of CSR. This is including 100,000 pages based on corporate websites. In 2005 Amazon had more than 600 books on the subject. More than 1000 business concerns have created and adapted signed codes of conduct which clearly states their individual stand on issues such social, environmental, animal rights and human rights. The numbers of firms that issue reports on CSR initiatives have gone up to 2000 in the year 2005.in the country of United States there were more that 200 social mutual funds in 2005, and they saw their revenues increase tenfold over a span of 10 years. Global organizations, such as the United Nations, the European Union and the World Bank and the Organizat ion for Economic Cooperation and Development (OECD), vigorously endorse the phenomenon of CSR. These governing bodies regularly monitor, advice, and award the efforts and initiatives taken by the companies every year. In the last two decades various charitable organisations have also sprung up, which work together with companies, and aids in their activities. Previously CSR was used only to address internal business ethics and policies. Nowadays this narrow view of CSR has changed and evolved into a variety of issue. Today a companys social venture could include initiatives to uplift education, poverty, unemployment, animal rights and other basic needs for community development. Some companies pursue more specific goals like aids relief, cancer research, disability support etc. For example firms established in the automobile industry may come up with safety programmes for motorists. Today in many countries, households have the chance to invest their money in various non-monetary savings and investments. In many countries, which are listed in OECD (Organisation for Economic Co-operation and Development), special banks offer facilities in savings account where the customers are assured that the money will be used for environmental sustainability programmes, or to help some entrepreneurs, who find it hard to get money from other institutions. The target group for these investments have generally been women and minorities. Today the impact of CSR has grown so much that people even in countries like South Africa and Brazil has the opportunity to invest their savings in socially responsible initiatives that checks the CSR of the firms in which they invest (International Finance Corporation (IFC), 2003). Many companies contribute for the conservation of the environment by finding new methods for recycling and elimination of non-biodegradable compounds etc. Therefore modern businesses have realised the increasing acceptance of socially responsible companies in the minds of people, so much so that it has become a trend to undertake social initiatives by the business enterprises. 1.3 Reason for doing good: There are many opinions that reason the indulgence of business companies in non profit initiatives. But the commonplace one would be that the companies perform good activities because good things and image are preferred by the masses. The public argue that these activities impress the investors, business analysts, business partners and the potential customers. The whole picture will look good in the companys annual reports and maybe even the company may have some luck in the courtroom and the parliament. This ultimately gives a vital boost to the companys brand image and reputation. There are many distinct and underlying advantages for business concerns. The distinct advantages clearly give the business a boost in monetary terms, hence being a direct contributor to financial performance. The underlying advantages may not directly save money for business, but they indirectly become advantageous to the business and eventually bring about financial gains thereby affecting its performance. For example Chiquita a global leader in the manufacturing of bananas decided to follow an environment friendly approach which saved them more that $5 million in 2002 compared to the year 1997. The trick behind this was the implementation of smaller quantity of agrichemicals and the adoption of a paller recycling program which actually saved them more than $3 million a year. This however was only the tip of the iceberg. Chiquita had bigger, but much more discreet advantages, by adopting a more socially responsible image. The company which was previously a target of media backlash w as going through a period of damaged company reputation which was a threat to its business functioning. They turned this around with their environment friendly approach and activities. This change in policy also created a sense of pride among the employees and helped in developing a more open and clear communication with the media. These developments will ultimately increase the financial performance of the companies by ensuring their smooth functionality. A frequently referenced study is by the University of Southwestern Louisiana, called â€Å"the effect of published reports on unethical conduct on stock prices† confirmed that publicity about unethical corporate conduct reduces stock prices for a minimum period of six months. From a truly customers point of view, it can be said that in todays marketplace there are a lot of alternative choices for customers when deciding to by a product in the criteria of product, price and distribution channels. Researchers have shown that consumers base their purchase on reputed companies, that indulge in fair trade and other sustainable business practices including concerned about the society in which they operate, provided the price and quality of the products remains similar. As an example if a consumer had an option of two products that have similar qualities and price tags, the consumer would prefer the product that was produced by a ‘greener company (green being symbolic of the community welfare and environmental efforts of the company). 1.4 Aims of the project: This project aims to answer the following issues: 1) Is there a relationship between corporate social responsibility and financial performance of a company? In addition the relation between the size of a company and the CSR is observed. 2) If there is a relationship, is the relationship positive or negative? 3) Discuss the various relationships between corporate social responsibility and financial performance. (CSR is measured by the value taken from the Business in the Communitys Corporate Index ratings and CFP is measured by the changes in stock prices before and after being rated in the Index ratings). 4) Evaluate the relationship between CSR and CFP in the FTSE 100 companies. 1.5 Structure of the dissertation: The introduction part of this dissertation includes a description about the aims and objectives of the research and the reasons for choosing this topic. It also contains a brief insight into the background of CSR and some of the previous researches conducted on this topic. Chapter 2 discusses in detail the various studies and researches conducted on this topic from the period between 1977 until recent times. The literature review also tries to bring out various points of view of different researchers and lays the foundation for this study. Chapter 3 or the methodology section discusses the various modes of data collection used in this research to arrive at the appropriate conclusion. This research utilises the share prices of a sample of 20 companies in the FTSE-100 for representing CFP and also their comparative ratings in the BITCs Corporate Index ratings to show the value of CSR. Alternatively questionnaires were distributed to obtain some qualitative data. Then in chapter 4 comes the primary research section which uses first hand data available regarding the companies to try to find a solution to the questions imposed in this study. It also discusses the 2 styles of data collection namely positivist and phenomenological styles. Chapter 5 consists of the discussion and conclusion section to analyse and compare the previous information collected in literature review and primary data research to arrive at a final conclusion regarding the topic. The result maybe positive or negative, nevertheless a result should be arrived at as per the available information and also so that possible recommendations can be given for further references and studies. Chapter 2 LITERATURE REVIEW 2.1 Studies explaining the different aspects of CSR-CFP relationship: According to Peloza (2006), the CSR and CFP can be analyzed from four perspectives In the above figure show the conflicting side against the knack of CSR as a provider to the firms financial ambitions. The far left depicts the antagonists of CSR who are of the opinion that any money spend by the firm on CSR are a complete negation to the firms economic gains, whereas in the extreme right are the supporters of CSR who claims it as a supporter of the firms financial goals. In the vertical axis separates the above two different views of CSR on the basis of a long term and short term approach. The long term managerial viewpoint on CSR involves a longitudinal approach to the evaluation of the effect of social schemes and the short term is for a static, cross-sectional perspectives that directs more on immediate effect or do not openly consider the time aspect. There are various arguments against CSR that can be shown on the 1st quadrant. Margolis and Walsh projected three main categories of these objections to CSR on the basis that it clashes with the business financial motives. According to them one of the explanations that opponents of CSR give is that the firms benefit society more when they create maximum profits for their shareholders. Another opinion was that individual shareholders should be the deciders of investing in social initiatives; the firms should only focus on achieving maximum profits for its shareholders. Finally they express concern that many shareholders are not aware of the social initiatives of the firm and are not given opportunities to have their say in them. The antagonists claim that the firms may make wrong decisions regarding the allocation of resources for social responsibility and hence they are not eligible to perform it. In quick contrast to all this, quadrant 2 depicts the protagonists of CSR claiming that it helps in the realization of the firms financial objectives. Various studies were conducted in relating to this quadrant. At first a value or positive CSR is paired with a firms performance indicator such as the stock price. Then a negative amount of CSR (for example harmful waste disposal) is paired with an amount of firms financial performance. The result in each of these cases was a positive relationship between the two. This is supported by a meta-analysis conducted by Orlitzky et. al in 2003 and other various studies conducted over the past 30 years, which generally discovered a positive connection between CSR and CFP. Also negative CSR has been associated with negative impacts on share prices. For example Shell Oil Company suffered a setback in share prices after an oil spill in 2001 in Nigeria. This is caused due to the negative CSR. A large number of researchers have favoured a short- te rm view of the time factor. They argue that majority of the firms expect to get positive returns on their investments in the same year. Former Chrysler CEO Bob Eaton once said that the organizations have a common goal of getting constant year-in and year-out profits from their companies in their portfolios. They do this because the shareholders everywhere follow a common rule: â€Å"if they are not satisfied, they sell† (Reich, 1998). According to Werbel and Wortman (2000) suggest that firms use these initiatives to temporarily ward off negative media coverage. However when we consider the ability of CSR to affect CFP in a bad way, several investigators are of the opinion in extending the short term perspective to a long term one. Taking the case of quadrant 3, even though the impact of environmental regulations on the business is only a limited one, still there would be a long term effect in the form of productivity slowdown Stavins (1994). Also there is an argument that when a firm takes up a social initiative, its competitors will start to match its actions and hence it will result in a competition which will prove to be costly and a subsequent decrease in profits. The researchers say that nowadays it has become a trend among big companies so much that every large companies are expected to do some investments in socially responsible activities by their customers; hence making it as a sort of tax. Nowadays researchers are beginning to consider CSR as complimentary to CFP taking into consideration the long term perspective as depicted in quadrant 4 in the According to the researchers the social objectives need not necessarily be in conflict to the economic objectives, but rather be a supplement to it. For example if a company funds a school or university in its locality, it actually paves the way for future employees that are well educated and support and develop the companys cause and also at the same time changing the social climate in the locality for the better. Another long term advantage that companies can muster by indulging in social responsibilities is the building up of reputation. A good reputation has always been associated with positive financial returns. Bhattacharya and Sen (2004) are of the idea that CSR builds a large pool of goodwill that firms can rely upon in times of crisis. Similarly McWilliams and Siegel (2001) say that positive CSR produces a reputation that a company is reliable and honest. 2.2 CSR in stakeholder theory: Stakeholder theory suggests that a company must not only try to meet the demands of its shareholders, but also those with the lesser explicit, or implicit claims (Gornell and Shapiro, 1987). Stakeholder theory also brings to light that implicit claims like product quality are actually less costly to a firm than the demands of its shareholders which are more explicit. The low social responsibility of the company may place doubt in the minds of its shareholders about the ability of the company to fulfill its implicit claims, and hence the shareholders may demand more explicit claims which may prove costly to the company. For example if the firms manage to evade from its environmental responsibilities (dumping of waste, usage of recyclable materials, etc), the government agencies and officials may impose strict regulations like duty, fines etc on the company. These circumstances may raise doubts in the minds of implicit stakeholders, who may question its efficiency. On the contrary soci ally responsible and environmentally friendly companies may be favored by the government and they might even get a reduction or exemption from certain taxes and duties on account of their actions. 2.3 CSR as insurance cover: Another important aspect that consolidates the positive relationship between CSR and the financial outcome of a company is the conceptualization of CSR as kind of insurance for the business which is especially helpful in the time of a crisis. CSR may help the company to create a good impression among the government authorities and helps the company to evade government impositions. This is difficult to evaluate when examining the relationship between CSR and financial performance, even though it indirectly affects the financial outcome. Davidson and Worrell (1992) advocated that the losses incurred by the firm due to a dent in their reputation is much higher than the physical costs incurred from actual event itself, such as product recall. Also in the same manner Blacconiere (1997) and his co-workers conducted various studies, and found out that firms with active environmental activities had a lower reduction in market value. A research carried out around the Seattle riots in 1999 against the WTO meetings came up with two conclusions. The research was conducted on 400 firms across a cross section of firms and found out that firstly there is a noticeable industry effect where companies with negative CSR ratings suffered incrementally over companies from neutral industries. They also concluded that once the industry effect has been removed, the positive outcome of the CSR ‘insurance is distinct. Specifically companies that had negative CSR had to undergo a stock market decline of double the times that of companies that were known for the CSR activities. Researchers have previously argued that firms with good name and status can overcome crises. For example is the Tylenol tampering in the 1980s, were Johnson Johnson suffered lesser economic problems, when compared with companies with bad reputation (Fombrun, et al. 1996). Fombrun (2001) also says that reputations have considerable concealed value that acts as a storage house of goodwill. During the time of crises they act to minimise the moral and financial damage to the company. Jones et al. (2000) have conducted a study taking taken a large number of companies to find out if their reputations can help them during a crisis. They discovered that firms in the better part of the Fortune Magazines annual survey of the ‘Most Admires Firms in America experienced lower market valuation losses in the stock market plunge that took place in 1983(SP 500 went down 7 per cent on that day), than the companies that were in lower part of Fortunes ratings. The capital in socially responsible investment funds have greatly increased in the last ten years. In 1990, only seven US firms issued their annual reports citing their social performance. But by 2004, 745 of these reports were release due to the increasing pressure on the corporate managers to do so. (corporateregister.com) These developments clearly brings to light not only the incremental profits by increasing sales, but also the capability of CSR to maintain sales and stock prices in the time of crisis. 2.4 Major studies done to evaluate CSR-CFP relationship: Researchers Sandra Waddock and Samuel Graves (1997) of Boston College made a study on two aspects of the topic: (1) Whether there is a positive or negative relationship between corporate social responsibility and financial performance of a company, or if no relationship exists at all between them. (2) If the exists a relationship then, whether the financial performance was due to the previous practises of CSR or if CSR was a succession as a result of high financial performance. Waddock and Graves (1997) utilised the data collected from and independent research organization. The data was collected of all the companies in the SP 500. The data was calculated for each companys CSR performance based on a rating scale that integrated eight important attributes of CSR namely environment performance, staff diversity, staff relations, community relations, product features, military contracts and involvement in South Africa. The above attributes were then ranked according to their relative significance. This scaling method involving eight aspects of community welfare solved the problem of measuring the largely diverse CSR activities, which was faced by previous researchers. Waddock and Graves studied the links between CSR and CFP of 469 firms during the year 1989 through 1990. The firms were from different sectors of business industries including hospitals, aerospace, mining, publishing and utilities. The study made use of different figures of finance like return on assets (ROA), return on sales (ROS) and return on equity (ROE). The analysing of data from two consecutive years meant that the duo researchers could test the slack resources theory, which tests if better CFP leads to a better CSR in the consecutive year. The theory which finds out if a good CSR leads to improved financial performance, was called the good management theory. This theory was studied with CSR data in the year 1990 and compared with the CFP figures of 1991, therefore with a time lag of one year. The following results were unearthed from the survey: (1) The slack resources theory was found to be true. CSR of the firms were increased by the precedent financial success of the firms. (2) The good management theory was also proved as fine CSR activities contributed to the firms financial performance when measured using ROS and ROA. They came to the conclusion that the correlation between CSR and CFP can be attributed to a virtuous circle, in which both of them are mutually correlated. It is difficult to predict whether the cycle starts with CSR or CFP, but it is evident in the investigation that they are mutually correlated. Meta-Analysis: A prominent study conducted by Marc Orlitzky and Frank L. Schmidt titled â€Å"Corporate Social and Financial Performance: A Meta-Analysis,† was awarded the Moskowitz Price by the Social Investment Forum. The aim of the study was to establish the relationship between corporate social responsibility and corporate social performance. The research was conducted by examining 52 studies that were published between 1972 and 1997, that contained a total of 33,878 observations. This Meta analysis utilises statistics to evaluate results of each different studies and adjust for the statistical errors. The Orlitzky Meta analysis concentrates on four major hypotheses: (1) In various industries and study contexts, CSR and CFP are normally positively linked. (2) Between CSR and CFP there is a bi-directional causality. (3) CSR is positively connected with CFP because of two reasons: (i) CSR boosts managerial proficiencies and organizational efficiency and supplies to knowledge about the companys political, technological, social, market, and other environments. (ii) A positive status and goodwill is created among the companys external stakeholders through CSR. (4) Most of the differences in results of some studies are due to statistical or methodological errors. The researchers then selected studies that carried out a quantitative assessment of the connection between CFP and CSR by taking into account at least one characteristic of firms economic performance, and met the given description of CSR. The CFP in this study is calculated by dividing into three forms namely accounting based, where accounting outcomes determine a firms efficiency; market-based where the investors returns are the determinant of market value and finally the survey results that shows the subjective estimates of a firms current position. While CSR is normally measured from CSR rating indexes, social audits, CSR disclosures and the organizations codes and values. The findings of the research were phenomenal. The researchers claimed that there exists a positive relationship between CSR and CFP across various industries and other study contexts. The following were their conclusions: (1) CSR had a stronger connection with CFP when using the accounting measures of analysis than when market-based measures where used. (2) Environmental development as CSR affects CFP of a company to a lesser extent when compared with other aspects of CSR. (3) The relation between CSR and CFP could be described as a virtuous circle in which a higher CFP motivates the companies to spend more on CSR, and a good spending on CSR will allow the firms to become more successful, hence increasing their CFP. The message of the research to the managers of companies were that money spend CSR is a good investment for the development of CFP. The research also found out that the managers use CSR as a tool for building reputation as previous studies have established that there is scope for reputation development through CSR. The disadva Relationship Between CSR and FTSE 100 Companies Relationship Between CSR and FTSE 100 Companies Chapter 1 INTRODUCTION In todays business world the phrase corporate social responsibility (CSR) has become a relevant and frequently discussed topic. By definition it is the non-profit activities engaged by a business concern that aids the society, economy and the environment. The World Business Council for Sustainable Development has defined CSR as â€Å"the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community, and the society at large.† (WBSCD, 2000) Modern business concerns place CSR in high priority. In the fifth global CEO survey conducted by PricewaterhouseCoopers World Economic Forum concluded that 70 per cent of chief executives around the world have the opinion that corporate social responsibility is fundamental in the process of profit making in the business. In the Western European region, 68 per cent of the big companies have joined the triple bottom-line performance namely the economic, social and environmental factors along with financial performance whereas in the United States, this figure is 41 per cent (PricewaterhouseCoopers/BSI Global Research Inc, 2002). However 80 per cent of the company managers in the US are of the opinion that CEOs status is a factor of major influence on corporate reputation, although interestingly this value is just 56 per cent in the UK. According to Business in the Community, more than 70 per cent of business leaders believe that incorporating responsible business activities makes busin ess concerns more competitive and profitable. (Hancock, 2006) 1.1 Why was this topic selected? If the topic doing research to find out if there is a relationship between corporate social responsibility (CSR) and the corporate financial performance (CFP) of a company is able to find out with positive outcome and relationship between the two, then it may be an eye opener to various entrepreneurs to the various financial benefits CSR can bring about to business. This is so especially in the medium and small scale industries, which are yet to fully utilise the CSR in their business routines. From a common person point of view, when large corporations and business concerns take part in community relief and environment friendly activities, it makes a whole lot of difference to the society and the environment. So it is greatly beneficial for humankind to explore and bring out to light the relationship between corporate social responsibility and the firms financial performance. 1.2 Background of CSR: Many of the ideals and customs of the corporate social responsibility have references dating back to the 19th century. But it was during the 1960s and 1970s in the United States that there was resurgence in the mindset of people towards this phenomenon. It was during this period that various modern policies of civil regulation were invented. This includes the social audits, social investment funds, voluntary codes of conduct, recognitions for social and environmental activities and more commonly the use of corporations as potential places for political activity. During that period there were many protests and demonstrations like the boycott of Dow Chemical in 1970. There was also a campus-led movement pressuring firms to retract from South Africa in the 1970s which was similar to the challenges faced by the corporations having investments in countries like Burma and Sudan. Since the 1990s many companies form America and Europe that have headquarters either in the United States or Europe have taken aboard some voluntary standards for employment states, environmental activities and also regarding human rights. These fresh measures have since then became standardised in many companies, corporations and other agencies. These new measures have been monitored and reported. These initiatives that were not heavily legal have since been the standard setter for what is known today as corporate social responsibility. Some of the fresh changes that were brought about by this civil regulation were: (1) A positive reduction in the amount of children hired for labour every year. A massive improvement in health and safety in various factories around the world which provide the large firms with products including shoes, clothes, toys, etc. (2) A cut down in the production of wood from endangered forests and animal habitats, which were used to manufacture furniture for United States and Europe. (3) Providing reasonable prices for some agricultural producers like coffee growers for their products. (4) A considerable decrease in the emission of greenhouse gases especially in the wake of the greenhouse effect. (5) A withdrawal of firms from Burma in the wake of the human rights abuse in that country. (6) Some more recent examples are the lowering of prices of drugs for AIDS and other diseases. After that companies have come forward and set examples of CSR initiatives for other companies to follow, even when there is no restriction on them in the countries concerned to limit their activities. For example Home Depots policies regarding environment have helped in the sustaining of some of the rainforests in the South America. The government of Chad cannot be trusted in handling their oil reserves properly. So ExxonMobils efforts to keep an eye on its royalty payments means that at least some of the money is not wasted. Indonesia does not have adequate policies to protect the environment. Therefore Chevron Texacos activities have protected the fragile ecosystem in Papa New Guinea. Having discussed that, it must also be said that the effectiveness of codes, such as the UN Global Compact, Voluntary Principle on Security and Human Rights, the Equator Principles, etc, are not very effective. The improvements are likely to happen, particularly if the monitoring and other measures are effectively carried out. One of the most outstanding obstacle standing in the way of these social changes is of course the cost factor. Many corporations do keep cost aside for these activities, but most of them have not found to be adequate. This is one of the reason researches have to be carried out that point to the connection between CSR and CFP, because CEOs and managers should be aware of the possibilities created by CSR on the firms reputation and financial activities. So that firms can spend more time and money on their CSR and hence create good value for them, their stakeholders and ultimately the society. Today even countries in the developing world have started to demand bet ter working conditions and environmental safety for their environment. In countries like India people have been protesting against big companies for their discrimination. For example there has been a recent outbreak of protests in India against soft drink manufacturer Coca Cola for their indiscriminate usage of underground water and also its contamination, since underground water is a major source of drinking water through wells in many parts of India. CSR is also a factor that is good for a society regardless of it being located in developed or underdeveloped countries. It is a universal phenomenon that is advantageous. This contributes to its popularity and prominence. Some countries practise CSR ideally in their manufacturing hubs located in developing and underdeveloped countries. Some others stick to bringing about local changes and prosperity. For example the constructing of a school, university or a hospital is considered as a valuable contribution to the society. The company benefits from these activities because they indeed sow the seeds for future graduates who may become skilled employees for them. Also environmental activities earn sympathy and support from local authorities who may reduce taxes and other duties for the company on the basis of their humanitarian concerns. Later on in the 1990s there were protest against companies like Nike and Shell, and since then the importance of CSR has grown significantly. In 2005 a search on Google for â€Å"corporate social responsibility† would yield 30000 sites. There are more the 15 million pages on the internet with address dimensions of CSR. This is including 100,000 pages based on corporate websites. In 2005 Amazon had more than 600 books on the subject. More than 1000 business concerns have created and adapted signed codes of conduct which clearly states their individual stand on issues such social, environmental, animal rights and human rights. The numbers of firms that issue reports on CSR initiatives have gone up to 2000 in the year 2005.in the country of United States there were more that 200 social mutual funds in 2005, and they saw their revenues increase tenfold over a span of 10 years. Global organizations, such as the United Nations, the European Union and the World Bank and the Organizat ion for Economic Cooperation and Development (OECD), vigorously endorse the phenomenon of CSR. These governing bodies regularly monitor, advice, and award the efforts and initiatives taken by the companies every year. In the last two decades various charitable organisations have also sprung up, which work together with companies, and aids in their activities. Previously CSR was used only to address internal business ethics and policies. Nowadays this narrow view of CSR has changed and evolved into a variety of issue. Today a companys social venture could include initiatives to uplift education, poverty, unemployment, animal rights and other basic needs for community development. Some companies pursue more specific goals like aids relief, cancer research, disability support etc. For example firms established in the automobile industry may come up with safety programmes for motorists. Today in many countries, households have the chance to invest their money in various non-monetary savings and investments. In many countries, which are listed in OECD (Organisation for Economic Co-operation and Development), special banks offer facilities in savings account where the customers are assured that the money will be used for environmental sustainability programmes, or to help some entrepreneurs, who find it hard to get money from other institutions. The target group for these investments have generally been women and minorities. Today the impact of CSR has grown so much that people even in countries like South Africa and Brazil has the opportunity to invest their savings in socially responsible initiatives that checks the CSR of the firms in which they invest (International Finance Corporation (IFC), 2003). Many companies contribute for the conservation of the environment by finding new methods for recycling and elimination of non-biodegradable compounds etc. Therefore modern businesses have realised the increasing acceptance of socially responsible companies in the minds of people, so much so that it has become a trend to undertake social initiatives by the business enterprises. 1.3 Reason for doing good: There are many opinions that reason the indulgence of business companies in non profit initiatives. But the commonplace one would be that the companies perform good activities because good things and image are preferred by the masses. The public argue that these activities impress the investors, business analysts, business partners and the potential customers. The whole picture will look good in the companys annual reports and maybe even the company may have some luck in the courtroom and the parliament. This ultimately gives a vital boost to the companys brand image and reputation. There are many distinct and underlying advantages for business concerns. The distinct advantages clearly give the business a boost in monetary terms, hence being a direct contributor to financial performance. The underlying advantages may not directly save money for business, but they indirectly become advantageous to the business and eventually bring about financial gains thereby affecting its performance. For example Chiquita a global leader in the manufacturing of bananas decided to follow an environment friendly approach which saved them more that $5 million in 2002 compared to the year 1997. The trick behind this was the implementation of smaller quantity of agrichemicals and the adoption of a paller recycling program which actually saved them more than $3 million a year. This however was only the tip of the iceberg. Chiquita had bigger, but much more discreet advantages, by adopting a more socially responsible image. The company which was previously a target of media backlash w as going through a period of damaged company reputation which was a threat to its business functioning. They turned this around with their environment friendly approach and activities. This change in policy also created a sense of pride among the employees and helped in developing a more open and clear communication with the media. These developments will ultimately increase the financial performance of the companies by ensuring their smooth functionality. A frequently referenced study is by the University of Southwestern Louisiana, called â€Å"the effect of published reports on unethical conduct on stock prices† confirmed that publicity about unethical corporate conduct reduces stock prices for a minimum period of six months. From a truly customers point of view, it can be said that in todays marketplace there are a lot of alternative choices for customers when deciding to by a product in the criteria of product, price and distribution channels. Researchers have shown that consumers base their purchase on reputed companies, that indulge in fair trade and other sustainable business practices including concerned about the society in which they operate, provided the price and quality of the products remains similar. As an example if a consumer had an option of two products that have similar qualities and price tags, the consumer would prefer the product that was produced by a ‘greener company (green being symbolic of the community welfare and environmental efforts of the company). 1.4 Aims of the project: This project aims to answer the following issues: 1) Is there a relationship between corporate social responsibility and financial performance of a company? In addition the relation between the size of a company and the CSR is observed. 2) If there is a relationship, is the relationship positive or negative? 3) Discuss the various relationships between corporate social responsibility and financial performance. (CSR is measured by the value taken from the Business in the Communitys Corporate Index ratings and CFP is measured by the changes in stock prices before and after being rated in the Index ratings). 4) Evaluate the relationship between CSR and CFP in the FTSE 100 companies. 1.5 Structure of the dissertation: The introduction part of this dissertation includes a description about the aims and objectives of the research and the reasons for choosing this topic. It also contains a brief insight into the background of CSR and some of the previous researches conducted on this topic. Chapter 2 discusses in detail the various studies and researches conducted on this topic from the period between 1977 until recent times. The literature review also tries to bring out various points of view of different researchers and lays the foundation for this study. Chapter 3 or the methodology section discusses the various modes of data collection used in this research to arrive at the appropriate conclusion. This research utilises the share prices of a sample of 20 companies in the FTSE-100 for representing CFP and also their comparative ratings in the BITCs Corporate Index ratings to show the value of CSR. Alternatively questionnaires were distributed to obtain some qualitative data. Then in chapter 4 comes the primary research section which uses first hand data available regarding the companies to try to find a solution to the questions imposed in this study. It also discusses the 2 styles of data collection namely positivist and phenomenological styles. Chapter 5 consists of the discussion and conclusion section to analyse and compare the previous information collected in literature review and primary data research to arrive at a final conclusion regarding the topic. The result maybe positive or negative, nevertheless a result should be arrived at as per the available information and also so that possible recommendations can be given for further references and studies. Chapter 2 LITERATURE REVIEW 2.1 Studies explaining the different aspects of CSR-CFP relationship: According to Peloza (2006), the CSR and CFP can be analyzed from four perspectives In the above figure show the conflicting side against the knack of CSR as a provider to the firms financial ambitions. The far left depicts the antagonists of CSR who are of the opinion that any money spend by the firm on CSR are a complete negation to the firms economic gains, whereas in the extreme right are the supporters of CSR who claims it as a supporter of the firms financial goals. In the vertical axis separates the above two different views of CSR on the basis of a long term and short term approach. The long term managerial viewpoint on CSR involves a longitudinal approach to the evaluation of the effect of social schemes and the short term is for a static, cross-sectional perspectives that directs more on immediate effect or do not openly consider the time aspect. There are various arguments against CSR that can be shown on the 1st quadrant. Margolis and Walsh projected three main categories of these objections to CSR on the basis that it clashes with the business financial motives. According to them one of the explanations that opponents of CSR give is that the firms benefit society more when they create maximum profits for their shareholders. Another opinion was that individual shareholders should be the deciders of investing in social initiatives; the firms should only focus on achieving maximum profits for its shareholders. Finally they express concern that many shareholders are not aware of the social initiatives of the firm and are not given opportunities to have their say in them. The antagonists claim that the firms may make wrong decisions regarding the allocation of resources for social responsibility and hence they are not eligible to perform it. In quick contrast to all this, quadrant 2 depicts the protagonists of CSR claiming that it helps in the realization of the firms financial objectives. Various studies were conducted in relating to this quadrant. At first a value or positive CSR is paired with a firms performance indicator such as the stock price. Then a negative amount of CSR (for example harmful waste disposal) is paired with an amount of firms financial performance. The result in each of these cases was a positive relationship between the two. This is supported by a meta-analysis conducted by Orlitzky et. al in 2003 and other various studies conducted over the past 30 years, which generally discovered a positive connection between CSR and CFP. Also negative CSR has been associated with negative impacts on share prices. For example Shell Oil Company suffered a setback in share prices after an oil spill in 2001 in Nigeria. This is caused due to the negative CSR. A large number of researchers have favoured a short- te rm view of the time factor. They argue that majority of the firms expect to get positive returns on their investments in the same year. Former Chrysler CEO Bob Eaton once said that the organizations have a common goal of getting constant year-in and year-out profits from their companies in their portfolios. They do this because the shareholders everywhere follow a common rule: â€Å"if they are not satisfied, they sell† (Reich, 1998). According to Werbel and Wortman (2000) suggest that firms use these initiatives to temporarily ward off negative media coverage. However when we consider the ability of CSR to affect CFP in a bad way, several investigators are of the opinion in extending the short term perspective to a long term one. Taking the case of quadrant 3, even though the impact of environmental regulations on the business is only a limited one, still there would be a long term effect in the form of productivity slowdown Stavins (1994). Also there is an argument that when a firm takes up a social initiative, its competitors will start to match its actions and hence it will result in a competition which will prove to be costly and a subsequent decrease in profits. The researchers say that nowadays it has become a trend among big companies so much that every large companies are expected to do some investments in socially responsible activities by their customers; hence making it as a sort of tax. Nowadays researchers are beginning to consider CSR as complimentary to CFP taking into consideration the long term perspective as depicted in quadrant 4 in the According to the researchers the social objectives need not necessarily be in conflict to the economic objectives, but rather be a supplement to it. For example if a company funds a school or university in its locality, it actually paves the way for future employees that are well educated and support and develop the companys cause and also at the same time changing the social climate in the locality for the better. Another long term advantage that companies can muster by indulging in social responsibilities is the building up of reputation. A good reputation has always been associated with positive financial returns. Bhattacharya and Sen (2004) are of the idea that CSR builds a large pool of goodwill that firms can rely upon in times of crisis. Similarly McWilliams and Siegel (2001) say that positive CSR produces a reputation that a company is reliable and honest. 2.2 CSR in stakeholder theory: Stakeholder theory suggests that a company must not only try to meet the demands of its shareholders, but also those with the lesser explicit, or implicit claims (Gornell and Shapiro, 1987). Stakeholder theory also brings to light that implicit claims like product quality are actually less costly to a firm than the demands of its shareholders which are more explicit. The low social responsibility of the company may place doubt in the minds of its shareholders about the ability of the company to fulfill its implicit claims, and hence the shareholders may demand more explicit claims which may prove costly to the company. For example if the firms manage to evade from its environmental responsibilities (dumping of waste, usage of recyclable materials, etc), the government agencies and officials may impose strict regulations like duty, fines etc on the company. These circumstances may raise doubts in the minds of implicit stakeholders, who may question its efficiency. On the contrary soci ally responsible and environmentally friendly companies may be favored by the government and they might even get a reduction or exemption from certain taxes and duties on account of their actions. 2.3 CSR as insurance cover: Another important aspect that consolidates the positive relationship between CSR and the financial outcome of a company is the conceptualization of CSR as kind of insurance for the business which is especially helpful in the time of a crisis. CSR may help the company to create a good impression among the government authorities and helps the company to evade government impositions. This is difficult to evaluate when examining the relationship between CSR and financial performance, even though it indirectly affects the financial outcome. Davidson and Worrell (1992) advocated that the losses incurred by the firm due to a dent in their reputation is much higher than the physical costs incurred from actual event itself, such as product recall. Also in the same manner Blacconiere (1997) and his co-workers conducted various studies, and found out that firms with active environmental activities had a lower reduction in market value. A research carried out around the Seattle riots in 1999 against the WTO meetings came up with two conclusions. The research was conducted on 400 firms across a cross section of firms and found out that firstly there is a noticeable industry effect where companies with negative CSR ratings suffered incrementally over companies from neutral industries. They also concluded that once the industry effect has been removed, the positive outcome of the CSR ‘insurance is distinct. Specifically companies that had negative CSR had to undergo a stock market decline of double the times that of companies that were known for the CSR activities. Researchers have previously argued that firms with good name and status can overcome crises. For example is the Tylenol tampering in the 1980s, were Johnson Johnson suffered lesser economic problems, when compared with companies with bad reputation (Fombrun, et al. 1996). Fombrun (2001) also says that reputations have considerable concealed value that acts as a storage house of goodwill. During the time of crises they act to minimise the moral and financial damage to the company. Jones et al. (2000) have conducted a study taking taken a large number of companies to find out if their reputations can help them during a crisis. They discovered that firms in the better part of the Fortune Magazines annual survey of the ‘Most Admires Firms in America experienced lower market valuation losses in the stock market plunge that took place in 1983(SP 500 went down 7 per cent on that day), than the companies that were in lower part of Fortunes ratings. The capital in socially responsible investment funds have greatly increased in the last ten years. In 1990, only seven US firms issued their annual reports citing their social performance. But by 2004, 745 of these reports were release due to the increasing pressure on the corporate managers to do so. (corporateregister.com) These developments clearly brings to light not only the incremental profits by increasing sales, but also the capability of CSR to maintain sales and stock prices in the time of crisis. 2.4 Major studies done to evaluate CSR-CFP relationship: Researchers Sandra Waddock and Samuel Graves (1997) of Boston College made a study on two aspects of the topic: (1) Whether there is a positive or negative relationship between corporate social responsibility and financial performance of a company, or if no relationship exists at all between them. (2) If the exists a relationship then, whether the financial performance was due to the previous practises of CSR or if CSR was a succession as a result of high financial performance. Waddock and Graves (1997) utilised the data collected from and independent research organization. The data was collected of all the companies in the SP 500. The data was calculated for each companys CSR performance based on a rating scale that integrated eight important attributes of CSR namely environment performance, staff diversity, staff relations, community relations, product features, military contracts and involvement in South Africa. The above attributes were then ranked according to their relative significance. This scaling method involving eight aspects of community welfare solved the problem of measuring the largely diverse CSR activities, which was faced by previous researchers. Waddock and Graves studied the links between CSR and CFP of 469 firms during the year 1989 through 1990. The firms were from different sectors of business industries including hospitals, aerospace, mining, publishing and utilities. The study made use of different figures of finance like return on assets (ROA), return on sales (ROS) and return on equity (ROE). The analysing of data from two consecutive years meant that the duo researchers could test the slack resources theory, which tests if better CFP leads to a better CSR in the consecutive year. The theory which finds out if a good CSR leads to improved financial performance, was called the good management theory. This theory was studied with CSR data in the year 1990 and compared with the CFP figures of 1991, therefore with a time lag of one year. The following results were unearthed from the survey: (1) The slack resources theory was found to be true. CSR of the firms were increased by the precedent financial success of the firms. (2) The good management theory was also proved as fine CSR activities contributed to the firms financial performance when measured using ROS and ROA. They came to the conclusion that the correlation between CSR and CFP can be attributed to a virtuous circle, in which both of them are mutually correlated. It is difficult to predict whether the cycle starts with CSR or CFP, but it is evident in the investigation that they are mutually correlated. Meta-Analysis: A prominent study conducted by Marc Orlitzky and Frank L. Schmidt titled â€Å"Corporate Social and Financial Performance: A Meta-Analysis,† was awarded the Moskowitz Price by the Social Investment Forum. The aim of the study was to establish the relationship between corporate social responsibility and corporate social performance. The research was conducted by examining 52 studies that were published between 1972 and 1997, that contained a total of 33,878 observations. This Meta analysis utilises statistics to evaluate results of each different studies and adjust for the statistical errors. The Orlitzky Meta analysis concentrates on four major hypotheses: (1) In various industries and study contexts, CSR and CFP are normally positively linked. (2) Between CSR and CFP there is a bi-directional causality. (3) CSR is positively connected with CFP because of two reasons: (i) CSR boosts managerial proficiencies and organizational efficiency and supplies to knowledge about the companys political, technological, social, market, and other environments. (ii) A positive status and goodwill is created among the companys external stakeholders through CSR. (4) Most of the differences in results of some studies are due to statistical or methodological errors. The researchers then selected studies that carried out a quantitative assessment of the connection between CFP and CSR by taking into account at least one characteristic of firms economic performance, and met the given description of CSR. The CFP in this study is calculated by dividing into three forms namely accounting based, where accounting outcomes determine a firms efficiency; market-based where the investors returns are the determinant of market value and finally the survey results that shows the subjective estimates of a firms current position. While CSR is normally measured from CSR rating indexes, social audits, CSR disclosures and the organizations codes and values. The findings of the research were phenomenal. The researchers claimed that there exists a positive relationship between CSR and CFP across various industries and other study contexts. The following were their conclusions: (1) CSR had a stronger connection with CFP when using the accounting measures of analysis than when market-based measures where used. (2) Environmental development as CSR affects CFP of a company to a lesser extent when compared with other aspects of CSR. (3) The relation between CSR and CFP could be described as a virtuous circle in which a higher CFP motivates the companies to spend more on CSR, and a good spending on CSR will allow the firms to become more successful, hence increasing their CFP. The message of the research to the managers of companies were that money spend CSR is a good investment for the development of CFP. The research also found out that the managers use CSR as a tool for building reputation as previous studies have established that there is scope for reputation development through CSR. The disadva

Child Labour Essay

INTRODUCTION GOD has given human beings the boon of wisdom and discreation to think upon the signs of the universe and to draw conclusions. That is the reasons why they disclose the hidden facts of it and its structure.Children are the flowers of heaven they are the most beautiful and purest creation.They are the beauty of this world.They are innocent.but there are such kind of students who cannot go to schooldue to financial problems.They only watch others go to school and can merely wish to seek knowledge.it is due to many difficulties,desperate conditions that they face in life DEFINATION Child labour can also be defined as the full time employment of children who are under a minimum legal age. Where does most child labour occur? OF an estimated 215 child labourers around the globe: approximately 115 million(53%) are in Asia and the pacific;14 million(7%) line in latin America; and 65 million (30%) live in Africa. Works on it. Many organizations like UNICEIF, ILO, whoes main object is to prevent child labour .These are the international organization which prevent child labour globaly. INTERVIEW I visited The Eatspot, a roadside restaurant , this weekend. No, this story is not a restaurant review about the dry biryani or hot lassi. It is not about the silly waiters dressed like nervous fresh MBA grads from a college, with white shirts and uncomfortable ties. It is about Nizamuddin. The little boy who poured water into my glass and cleared out my table. He was too small, skinny. His hairs were dry and rough and certainly would not have been oiled for months now.He was hardly four and a half feet tall, not a trace of facial hair. He couldn’t have been a day older than 12 .His shirt on his body was there for namesake and his trouser did not fit him. One of his hands used to hold it on his waist and he had the innovative technique of fastening it with a rope of brittle plastic threads. He was standing expressionless just like an old stuffed toy.He walked around nervously with a heavy jug of water. His eyes darted across the room like a scared rabbit, scanning the place for empty tumblers that needed a refill. . He caught me staring at him and looked back, wondering whether to smile, or look away. And then, with those wide innocent eyes filled with confusion, he gave me a slow, hesitant smile then he came to me started pouring water into jug. There was this c hild here pouring water and removing used plates from tables when he should have been kicking around a football on that hot Saturday afternoon. He was trying to satisfy strangers in that dark restaurant when should have been out with his friends, laughing and teasing his school teachers. The Eatspot was one of those dirty roadside eateries that gave a damn about the laws of the land, The dormant social activist in me got all fired up, and I summoned the boy and asked him What’s your age? (Twelve) he said. Then i said that you can’t work here.Because its against law listening to what I said that he cannot work any longer, tears started flowing from the young chap’s eyes. The little chap was looking at me still. (you do understand urdu, are not you?) I asked him do you have any problem. I don’t have any but the Government has Sir, it’s difficult at home. Dad committed  suicide, mom washes clothes for others, two sisters at home, I am studying by doing work at here, I get some money that is too critical for us†¦) I had no answers. Now, it was my turn to stand there blankly I understand your problem brother No!†¦) he interrupted  you wont understand my problem. I want to study, for that I am ready to work. But you force me to become a beggar. You are forcing me to beg. If your kids sing or dance in TV, they get money, fame and are appreciated in papers.. But if I wanted to work.nobody helps me How can you explain me this?) I never expected a kid t o talk like this but I realized that his experiences in life made him speak so. the restaurent owner called him so he walked away holding his trousers with both hands. All I could do is to stare at him silently, helplessly. I said to myself, â€Å"i should find out the definition for child labor. Reasons Lack of earning during learning. Unemployment. Excess population. Lack of laws against child oppression. Orphans. Drop outs of schools. Illiteracy and uneducated people. Large family size and unemployment people. Urbanization. Poverty. SUGGESTIONS Primary education. Get rid poverty. Our overseas aid. Ban the worst forms. Give the jobs of child workers to their adult relations could be build homes for those children that are living in the streets. Government should make laws to prevent child labour and find solutions. OUR POINT OF VIEW The present goverment has made elementry education compulsory along with this ,the goverment has distributed free books in primary schools so that parents,who cannot afford thier children ‘s school expenses,send their children to schools.The major point is that this decion must be acted upon at all levels.There is strict need to stop child labour in this country.Awareness must be raised and the attentionof parents ought to be diverted to the education of their children.Child labour laws should be put into practice strictly.The orphans and other deserving children must be helped financially on a prolonged basis. IF we suceed to act upon these principals,our country can easily get rid of this problem and that is child labour.

The Battle Against The Persian Empire - 1532 Words

Alexander the Great is one of the most celebrated military leaders in history. His campaigns against the Persian Empire began in 336 BC, when he and the Macedonian army crossed the Hellespont and began their invasion of Asia Minor. The Macedonians were victorious in their first major engagement against the Persians at the Battle of Granicus River in 334 BC. Less than a year later, in 333 BC, Alexander faced the Persian army again at the Battle of Issus, this time led personally by King Darius III. Alexander’s victory at Issus set the stage for the final battle against the Persian Empire at Gaugamela. On October 1, 331 BC, Alexander and his army met the Persian Empire in a final decisive battle that determined who would rule Asia. Contemporary historians place the strength of the Macedonian army at approximately 40,000-47,000 soldiers, while the Persian army was approximately 50,000-100,000 soldiers strong. While the Persians had the numerical advantage, their troops were larg ely comprised of conscripts from across their empire that possessed little stomach to fight. In contrast, the Macedonian army was made up of hardened professional soldiers. The battle occurred on carefully chosen terrain that was well suited to give the Persian army ample maneuver space, something they had lacked at Issus. Overall, the Persian army had a significant advantage at the onset of the battle in terms of terrain and numbers. Alexander achieved a decisive victory against the odds atShow MoreRelatedThe War Of The Persian Wars Essay1421 Words   |  6 Pagesbecoming what it is today. The Persian Wars were one of those unforgettable events that inspired not only our military structure but government as well. The Persian Wars lasted for almost half a decade from 498 BCE to 448 BCE between the Persian Empire, of course, and Greek poleis. 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History of the world in 6 glasses - 2699 Words

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According to Chinese tradition, the first cup of tea was brewed by the emperor S hen Nung. Before tea was a beverage, it was used for medicinal purposes and foodstuff. Tea became a daily drink in China around the third century A.D. As the Industrial Revolution of 18th and 19th centuries gained steam, tea provided some of the fuel. Factory workers stayed alert during long, monotonous shifts thanks to welcome tea breaks. The beverage also had unintended health benefits for rapidly growing urban areas. Chewing leaves and rubbing them on wounds were ways that tea was used for medicinal purposes. Coca-Cola- In May 1886 John Pemberton invented a drink, Coca-Cola, by accidentally stumbling on the right combination of ingredients while trying to devise a cure for headaches. Pemberton was an experienced maker of patient medicines, which were hugely popular in America in the late nineteenth century. The name was coined by one of Pemberton’s business associates, Frank Robinson. 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Argumentative Speech On Perfection - 766 Words

Remember the times where you assumed you weren t perfect or good enough. How about the times when you could never do anything right for once. Well, I completely relate. Perfection is something us humans want to cope in our daily lives. We see perfection as an ideal way for us to succeed and achieve in growth. Well, life is for us to learn from our failures. I stretch out to perfection because I feel like it’s the genuine way achieve our long-term purposes. As of today, we need to identify that no one is and will never be perfect, including me and that perfection doesn t exist. Just because if someone thinks they are better than you that doesn t mean they are perfect. Learning from our misunderstandings doesn t make us failures, it†¦show more content†¦I struggle with this because if I mess up or disobey my admin I will get the consequence now that I am the older one. I am a 13-year-old girl human being that will never get things right all the time. Sometimes I just wa nt to inform to my parents that I m not and will never do what they asked for, perfection. I dislike it when this happens because I get compared to the oldest because it makes me feel that I am not worthy of things I cannot handle. I also despise it when I end up laying in bed thinking, about how my parents don t understand me. I wish that if I d be perfect that there would be no difficulties in my life. This leads me to stress that interferes with my school and daily life. When I feel this I get distracted and drawn attention to how I can make myself a better person. I sometimes shed a tear because I feel like I have no one to talk to without having the word spread. I also think why do my feelings even matter, I mean clearly, no one thought about it. I also think what can perfection even do for me. Why do I need it? So I have recognized that my obstacles connect with the need for perfection. So overall I wish I d be perfect, at the same time I don t. I do because I think if I ever was, this would solve the all problems in my life that I wouldn t have to face anymore. However, I don t because I have realized that perfection isn t a need, it’s a want. In today s society, we need to know what s right, what’s wrong, and how can we makeShow MoreRelatedThe Film, Frida, By Salma Hayek1347 Words   |  6 Pagesheritage allows her to relate to the part in a way that someone who is not of that background would be unable to. She shared the same Mexican culture and societal values as Frida; her passionate and argumentative dialogue when standing up to Diego serve as evidence. 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All of the following principles of ethical communication are included in the National Communication Association s Credo for Ethical Communication EXCEPT a. We endorse freedom of speech only when the truth does not cause detrimental results or harm others. b. We advocate truthfulness, accuracy, honesty, and reason as essential to the integrity of communication. c. We strive to understand and respect other communicators before

How to Reduce Electricity Usage Free Essays

Electricity is one of primary needed of human being in this time; most of equipment in the world uses electricity . Now Indonesia is facing a serious problem because the over usage of electricity and the capacity of electricity is deficiency. The needs of electricity is increase every year, in this situation reduce usage of electricity is very important. We will write a custom essay sample on How to Reduce Electricity Usage or any similar topic only for you Order Now Most highest electricity usage time is between 5 pm to 10 pm , this time is the best time for reduce or avoid the usage of heavy electricity consuming equipments like water heater, computer, refrigerator and etc. There are several steps involved in reducing electricity usage. First, use the saver energy lamp. Lamp is absorbing more electricity power than other equipment; light has longer usage than other equipment, especially for incandescent lamp. Many people still using incandescent lamp at their house, particularly for villager.They use incandescent lamp because is cheaper than the saver energy lamp like Phillips lamp for example, maybe it is more expensive than incandescent lamp, but the saver energy lamp have longer usage lifetime than incandescent, and it is brighter than incandescent lamp. But actually incandescent lamps have bigger power consumed than other lamp, and 19% of electricity is absorbing by lamp. â€Å"Incandescent lamps are marketed in various forms and are available for voltage (voltage) of work that range from 1. 5 to 300 volts of electricity required volt. Incandescent lamp to produce a bright light is bigger than any other artificial light sources like fluorescent lamps and diode light, then gradually in some countries began to be restricted circulation of incandescent lamps† (1) Second, switch off all the electricity equipment when not in use. Many people forget for switch off the equipment went they leave, they just left it in the on condition and that really waste the electricity.The standby mode just decreases electricity usage of the device, but it still absorbing the electricity power. To avoid this happened, better if use automatically off timer on television, air conditioner, and etc, it will switch off the equipment automatically and reduce wasting electricity. Third, do not use the heavy electricity equipments from 5 pm until 10 pm. In this time, the user of electricity is the highest usage number. One of the wasting electricity causes is because using heavy electricity equipment.Like ironing or use washing machine. It can increase the usage of electricity, better if using this kind of equipment at the daylight and use it when the clothes already pile up and that is really save the electricity power. â€Å"If 10 million house users can save as big as 50 watt during 5 pm until 10 pm, we can save electricity power 2500 million watt hour (2500 MWh). If each 1 KWh electricity needs 0,3 liter diesel , that means we were saving 750 kiloliter diesel in 5 hour. † (2) Last, use sunlight and wind at daylight as useful as possible. Sunlight can dry laundry naturally without use dry machine, dry machine absorb twice time bigger electricity power than when washing clothes. And open all the windows in the house, so the sunlight can come in and we do not need lamp as the lighting. Sunlight also can be changed to the synthetic electricity with the solar panel, that why use sunlight is really useful. Besides that Turning off air conditioner or fan and use wind as the change, it will reduce much electricity power.By doing this several steps, the ways to save electricity usage will be easier. It also can help government to resolve the deficiency electricity problem. Besides that, it can decrease the electricity payment too. And many advantages can be reaching, like increase the lifetime of equipment (because it not use often) and reducing global warming. And this is really useful for the better future. How to cite How to Reduce Electricity Usage, Papers

Swissness Bill free essay sample

In the era of globalization, manufacturing processes are no longer confined to a single country. As a result, it is often challenging for consumers to know the true origin of the products that they buy. At the same time, a product’s country-of-origin can have significant influence on consumers’ perceptions of the products. Swiss products present an exceptionally good reputation around the world; consumers perceive Swiss products as highly reliable and with very high quality. In fact, stating their â€Å"Swiss origin† induces substantial economic value for the producers; products can be marked up by at least 20% 1 with the â€Å"Switzerland† country-of-origin label alone. Essentially, the â€Å"Swiss† origin acts as a brand on its own. As a result, the â€Å"Swiss† brand has attracted increasing number of â€Å"free-riders† and instances of wrongful uses. The Swiss officials are concerned about the potential damages that such wrongful uses can bring to the â€Å"Switzerland† brand. The deceptive usages of the â€Å"Switzerland† brand may mislead consumers and cause them to lose confidence to all other Swiss products; hence damaging the value of the â€Å"Switzerland† brand as a whole. As a result, the Federal Council of Switzerland proposed the Swissness Bill in an attempt to promote and strengthen the protection the â€Å"Swiss† brand. In this essay, I will explain why the Swissness Bill was proposed under globalization and the impacts of the Bill on local producers and consumers. 2. Why was the Swissness Bill proposed under globalization? 1 Stephan Feige, Benita Brockdorff, Karsten Sausen, Peter Mathias Fischer, Urs Jaermann, Sven Reinecke, 2008. Swissness Worldwide – International Study on the Perception of the Brand Switzerland, University of St. Gallen. 1 In this section, I will first analyze the â€Å"Switzerland† brand itself to explain why a brand, which is essentially just a country-of-origin label, requires protection. Secondly, I will explain how globalization addresses he need of such protection by looking at the influences from contemporary global production networks. Thirdly, I shall look at the current situation of statutory rules concerning the protection of â€Å"Switzerland† designations to explain the necessity of the Swissness Bill. 2. 1 â€Å"Swissness†- the â€Å"Switzerland† Brand The term â€Å"Swissness† has been used widely in anything that is typically Swiss since the late 1990s. In essence, the term refers to the application of Switzerland as a brand to Swiss products 2 . By applying â€Å"Swissness† to one’s brand, the positive attributes associated with Switzerland- such as efficiency, exclusivity, high quality, precision and reliability- can be transferred to the brand; this is commonly referred to as co-branding 2. Essentially, the Switzerland brand is a nation brand. Like all other nation brands, it is a common property. Unlike other ordinary product brands, it does not have a brand owner who can manage the brand. Ideally, a brand should provide consistent values across its products to generate a homogenous identity. However, the values that the â€Å"Switzerland† brand delivers can be rather inconsistent as it is a common property that can essentially be used by anyone. The management of the Switzerland brand is essentially carried out by all the brands which present themselves as Swiss. The activities and actions that these brands conduct can directly affect the Switzerland brand- if these actions are inconsistent with the values of the â€Å"Switzerland† brand, they can potentially weaken the brand. To avoid such 2 Regine Wieder Veronika Hubl, 2012. What is Swissness?. School of Management and Law, Zurich University. 2 inconsistencies, it is crucial for the Swiss officials to take actions to coordinate and manage the â€Å"Switzerland† brand. 2. 2 Global Production Network Consumers are willing to pay premiums for the â€Å"Switzerland† country-oforigin label because of the positive attributes associated with conventional Swiss products and Switzerland itself. According to studies conducted by the University of St. Gallen, the premium can amount to 20% of the original sales price; and even up to 50% for luxury products 3. However, consumers are willing to pay this premium because they expect these â€Å"Swiss† products to be Swiss both inside as well as outside; they expect the â€Å"Swiss† products to be actually made in Switzerland. They expect goods that are produced in Switzerland to have higher quality. In fact, over 80% of Swiss products consumers expect food products that are produced in Switzerland to have stricter controls than those produced elsewhere 4 ; hence they expect food products from Switzerland to have better quality. However, a product under a Swiss brand may not necessarily be fully produced in Switzerland anymore in today’s world of globalization. Therefore, can we still associate the Switzerland attributes to these products even when they are no longer produced in Switzerland? 3 Stephan Feige/Benita Brockdorff/Karsten Sausen/Peter Mathias Fischer/Urs Jaermann/Sven Reinecke: Swissness Worldwide – International Study on the Perception of the Brand Switzerland, University of St. Gallen et al St. Gallen et al. 2008 4 Bern 2007. Origin of Agricultural Products. Demoscope Research Marketing, Federal Office of Agricultural. 3 Transnational Corporations (TNCs) are now able to coordinate and control their production networks across national boundaries, to take advantage of the geographical differences between their factors of production. Many products nowadays consist of parts from all over the world and are produced in more than one country. This raises the question of how much of a production process should a product have in order for it to be considered â€Å"made in Switzerland†. Therefore, it is crucial for Swiss officials to determine the criteria required for such internationally produced products to be considered as â€Å"Swiss†; so that the â€Å"Switzerland† brand can be preserved in the long term. 2. 3 Current Situation The contemporary conditions for the use of â€Å"Switzerland†, â€Å"Swiss made† or other designations are imprecise and thus lead to legal uncertainty. According to the Federal Act on the Protection of Coats of Arms, the â€Å"Swiss coat of arms† may not be registered as a trademark for goods and may not be affixed to goods for commercial purposes† 5 . Using the Swiss cross to indicate a product’s origin is regarded as a commercial purpose and hence is considered illegal. However, non-commercial and decorative uses are considered legal. Yet, in actual situation, distinguishing between the legal decorative usages and the illegal commercial usages can be difficult. It is clear that firms have been exploiting this ambiguity. Similarly, the conditions for the use of â€Å"Switzerland† and â€Å"Swiss† are very general in the Federal Law on the Protection of Trademarks and Indication of Source6. It states that â€Å"the origin of goods shall be determined by the place of manufacture or 5 Federal Law on the Protection of Coats of Arms and Other Public Insignia of 5 June 1931 (WSchG; SR 232. 21) 6 Federal Law on the Protection of Emblems and the Name of the Red Cross of 25 March 1954 (SR 232. 22). 4 by the origin of the basic materials and components used† 7 . However, there is a lack of judicature on the specifications of such conditions; the decision of the commercial court of St. Gallen is one of the very few. It specifies that the manufacturing costs of a product must be at least 50% and the essential manufacturing process must be conducted in Switzerland. However, what is considered â€Å"essential manufacturing process† remains vague and unclear. Moreover, in the international context, the Federal Institute of Intellectual Property often has to forgo litigations against illegal uses of â€Å"Switzerland† designations because of the nature of the â€Å"Switzerland† brand as mentioned above- it is a common property and hence it does not exist in legal sense. Therefore, a legitimate plaintiff cannot be assigned to any â€Å"Switzerland† designations. Consequently, there is no clear legitimacy for the Swiss officials to file any actions against the illegal uses internationally. They can merely â€Å"notify† the illegal parties involved. The current statutory rules and their implementations are inadequate to protect the â€Å"Switzerland† brand. More precise, clearly defined statutory rules should be proposed in order to preserve the â€Å"Switzerland† brand in the long term. 3. The Swissness Bill The existing statutory rule provides very general regulations on the use of â€Å"Switzerland† designations and the conditions of using geographical indications. The proposed legislations, under the Swissness Bill, strives to strengthen the protection of the â€Å"Switzerland† designations by imposing more precise criteria when determining the geographical origin of products and services. It defines precisely how much 7 Article 48, para. 1 Trademark Law 5 â€Å"Switzerland† a product has to be for it to be labeled as â€Å"made in Switzerland†. The specific criteria are summarized below: Natural products must be harvested in Switzerland for them to be considered â€Å"Swiss†. For processed natural products, at least 80 percent of the weight of the raw materials composing the product must be from Switzerland. Moreover, the production process that gives a product its unique characteristic must be conducted in Switzerland. For industrial goods, at least 60 percent of the manufacturing costs must be incurred in Switzerland, including research and development costs. Moreover, at least one essential manufacturing procedure must be conducted in Switzerland. For a service provider, its headquarter and an administrative centre must be located in Switzerland for it to be considered â€Å"Swiss† 4. Impacts on local companies We may now look at how these proposed changes in the statutory rules regarding the designation of Swiss origin affect the local producers. Opposing views are likely to occur between smaller Swiss companies and the larger transnational Swiss companies. 4. 1 Smaller Swiss companies Smaller Swiss companies are likely to welcome the new amendments because most of their productions are located domestically. They are likely to prefer more restrictive statutory rules because they are the ones who have been following the rules and are particularly vulnerable to the damages brought by the free-riders. Free-riders who present their products as â€Å"Swiss†- but are not originated from Switzerland in 6 actual fact- may carry contradicting attributes that damage the â€Å"Switzerland† brand as a whole. Their qualities are often inferior to those of the authentic Swiss products. This causes damages to the â€Å"Switzerland† brand as a whole because consumers are deceived and are led to perceive Swiss products as having deteriorating quality. The damage of the â€Å"Switzerland† brand is likely to affect small Swiss companies more significantly because their branding strategy are much more reliant on the co-branding effect from the â€Å"Switzerland† brand. They do not have the resources that the large companies have to develop extensive marketing campaigns to induce a strong brand image themselves. Consumers generally place more weight on the country-of-origin when they are faced with the weaker brands. 4. 2 Large Swiss Companies On the other hand, large Swiss companies are likely to oppose the new amendments because of their global production network. In most of the cases, these large companies were able to grow to such an extent in the first place because they were able to internationalize their value chain activities to grab hold of the comparative advantages of different countries. These locational-specific advantages are superior features of a country- such as natural resources, land, labour and climatethat create competitive advantages for the companies. However, with the new amendments, they may have to abandon some of these comparative advantages to keep hold of their â€Å"Swissness† competitive advantage. Consequently, they may become less competitive in the international market. 4. 3 Local companies as a whole Despite the potential opposing views from different companies, I believe the Swissness Bill can be beneficial to local companies overall. The Bill protects those 7 who are truly â€Å"Swiss†, barring against the free-riders who do not carry the â€Å"Swissness† attributes but are trying to take advantages from presenting themselves as â€Å"Swiss†. It protects the core competitive advantage of many â€Å"Swiss† brands by ensuring the delivery of consistent â€Å"Swiss† values to consumers. Large transnational Swiss companies should not lose sight of their core competitive advantage when they internationalize. The â€Å"Switzerland† brand is a common property that requires collaborative efforts from all its stakeholders to manage and protect against inconsistent usages. At the same time, the values of the â€Å"Switzerland† brand that they are able to preserve and create can be shared by all the stakeholders. 5. Impacts on Consumers It is apparent that consumers can benefit from the Bill. The â€Å"Swiss† products that they purchase under the Bill are truly â€Å"Swiss† both inside and outside. The products are ensured to deliver consistent â€Å"Swiss† attributes to consumers. Consumers are promised to enjoy these â€Å"Swiss† attributes in return for the premium they pay on the â€Å"Swiss† products. However, there is a possibility that the extra costs of production, as a result of large transnational companies having to relocate some of their value-chain activities back to Switzerland, will be borne by the consumers. Therefore, consumers may have to pay even higher premiums for â€Å"Swiss† products in the future. Nevertheless, despite the possibility of higher premiums incurred by the â€Å"Switzerland† brand, consumers will no longer be deceived by the wrongful uses of the â€Å"Switzerland† brand, which I believe is the more important issue. 6. Conclusion 8 In the contemporary era of globalization, distinguishing a product’s countryof-origin can be challenging due to the complexity of the global production networks nowadays. This issue poses significant threats to genuine Swiss products specifically because of the special co-branding effect derived from â€Å"Switzerland† as a brand itself on the Swiss products. As a result, the Swissness Bill was proposed and it aims to protect the â€Å"Switzerland† brand by imposing stricter criteria for determining whether a product can be considered as being â€Å"Swiss†. The impacts of the Bill on local producers can vary according to their specific circumstances but I believe a well-managed and consistent â€Å"Switzerland† brand can strengthen the core competitive advantages of most Swiss products. In turn, consumers also benefit from the certainty about the value that the â€Å"Swiss† products deliver. Therefore, the Swiss Bill will be a beneficial decision for Switzerland to implement fully in the future.