Iraq Backlash

The main argument in this article is that the continued involvement of the United States in the war in Iraq will lead to unforeseen and even disastrous consequences such as a civil war or even global war given the fact that the United States is ill equipped at dealing with the insurgents and in properly identifying its role in the conflict and the impact of its continued involvement in the war.The writer presents his views by first defining what backlash is and proceeding to show the escalating death toll and skirmishes that have happened in Iraq since the United States has gotten involved. The writer then paints a grim picture of future that lies ahead if the United States continues its policies and involvement in the conflicts in the Middle East and the war in Iraq.The view presented by the writer is correct to the extent that the continued involvement of the United States could indeed make them the victim of unforeseen and disastrous consequences such a rising casualties of the ar med forces currently stationed there and of the civilians. The continued involvement in Iraq could also be detrimental to the United States economy as any conflict in the Middle East causes the price of oil to rise and directly affects the economic output of any country.A prolonged war, as in this case, caused by continued United States involvement will definitely affect its economy in the long run. The writer however is too quick to point out that global war will be the direct effect of such actions. There is no substantial evidence to show that this will indeed result to a world war III or a world war IV. The other world leaders have been quick to show that the United States is acting on its own accord and have refused to lend any aid in the war in Iraq.

Conception and Ethics of Attire in Puritans of Elizabeth and Jacob Era Essay

In English literature, importance of religion can not be denied at any cost. Two thoughts had emerged up since yet in Elizabeth England therefore their believes, faith and conviction became solid in nature. A thing is mandatory in distinct dimensions initial in esteem of nature for the safeguarding of being healthy. Next would be honor for place, calling and clause for the repairs and maintenance therefore human literature talks about ethics and tradition which normally is being prevailed inside particular place. [ ] Catholic and puritan is two distinctive segment of religion in England. England’s Golden Age The mainly fabulous era of English literature, called the Elizabethan Age. It was started in the later years of Elizabeth’s mortality. Francis Bacon wrote on ‘The Faerie Queene’ in her honor. Shakes came before her but at the time of her casualty he had not yet written most of his great tragedies. Elizabeth enjoyed plays, but there is no verification that she appraised Shakespeare’s genius in Golden age, catholic were more in number than puritans [ ] In 1500, transformational phase was being proceeded as believes, thoughts and faith had been getting shape therefore official religion was that one which king or queen personally liked and brought it into limelight by teaching this particular religion. But some people had to adhere the fact if they fell in wrong religion therefore they treated like bull shit. They had remained risk of losing their wealth and property in any case of mishap. Puritans were basically invention of martin Luther who made this particular segment for the sake of abstaining comment from outside. Like in transformational period, people started to question on the Roman Catholic practitioner and followers. Generically term puritan narrates to protestant infect people who accused to protest against the set pattern of catholic terms. The major code of Puritanism was God’s supreme power on human contact therefore inside the church and particularly as spoken in the Bible. This view put them to request jointly to person and shared conformance to the training of the Bibl, and it put them to pursue both ethical clarity down to the nominal feature as well as church transparency to the maximum level. Puritan community really gave prestigious value both man and woman as if defined their roles in society. puritan had many conflicting points with catholic as portents didn’t believe in hierarchical relation of religious servers in church but this side of people like father who used to deliver indispensable services to people but catholic after passage of time replaced this idea therefore conflicts in believe a raised which made distribution among people. Eventually two groups of people arise. The basic of social classification exerted authority of husband on wife, parents over children and owner on servants in social context. Puritan wedding preferences were prejudiced by juvenile people’s leaning, by parents by the social ranks [ ]. Which have cavernous touch to puritan method of bandage because family setup talks about personal liking and disliking that’s why this key influencing factor always have some imposed thinking in the mind of individual who is usually pertaining entitlement of that community.

Diversification and Firm Performance

DIVERSIFICATION AND FIRM PERFORMANCE: AN EMPIRICAL EVALUATION Anil M. Pandya and Narendar V. Rao Abstract Diversification is a strategic option that many managers use to improve their firms’ performance. This interdisciplinary research attempts to verify whether firm level diversification has any impact on performance. The study finds that on average, diversified firms show better performance compared to undiversified firms on both risk and return dimensions. It also tests the robustness of these results by classifying firms by performance class.The results show that among the best performing class of firms, undiversified firms have higher returns, but these returns are accompanied by high variance. Whereas, highly diversified firms show lower returns, and much lower variance. Results further show that diversified firms perform better than undiversified firms on risk and return dimensions, in the low and average performance classes. The paper concludes that a dominant undivers ified firm may perform better than a highly diversified firm in terms of return but its riskiness will be much greater.If managers of such firms opt for diversification, their returns will decrease, but their riskiness will reduce proportionately more than the reduction in their returns. In such firms, there will be a tradeoff between risk and return. INTRODUCTION Two seemingly irreconcilable facts motivate this study: one, diversification continues to be an important strategy for corporate growth; and two, while Management and Marketing disciplines favor related diversification, Finance makes a strong case against corporate diversification.With the help of a large sample, this interdisciplinary study tries to address this contradiction in the associative relationship between diversification and firm performance. Diversification is a means by which a firm expands from its core business into other product markets (Aaker 1980, Andrews 1980, Berry 1975, Chandler 1962, Gluck 1985). Rese arch shows corporate management to be actively engaged in diversifying activities.Rumelt (1986) found that by 1974 only 14 percent of the Fortune 500 firms operated as single businesses and 86 percent operated as diversified businesses. Many researchers note a rise in diversified firms (Datta, Rajagopalan and Rasheed 1991, Hoskisson and Hitt 1990). European corporate managers according to a survey, not only favor it but actively pursue diversification (Kerin, Mahajan and Varadarajan 1990). Firms spend considerable sums acquiring other firms or bet heavily on internal R&D to diversify away from their core product/markets.Of late U. S. firms are beginning to moderate their zeal for diversification and are consolidating around their core businesses. But this trend has not affected large Asian corporations which continue to remain highly diversified. As in any economic activity there are costs and benefits associated with diversification, and ultimately, a firm's performance must depend on how managers achieve a balance between costs and benefits in each concrete case. Moreover, these benefits and costs may not fall equally on managers and investors.Management researchers argue that diversification prolongs the life of a firm. Researchers in finance argue diversification benefits managers because it buys them insurance, and shareholders usually bear all the costs of such insurance. Diversification can improve debt capacity, reduce the chances of bankruptcy by going into new product/ markets (Higgins and Schall 1975, Lewellen 1971), and improve asset deployment and profitability (Teece 1982, Williamson 1975).Skills developed in one business transferred to other businesses, can increase labor and capital productivity. A diversified firm can transfer funds from a cash surplus unit to a cash deficit unit without taxes or transaction costs (Bhide 1993). Diversified firms pool unsystematic risk and reduce the variability of operating cash flow and enjoy comparative adva ntage in hiring because key employees may have a greater sense of job security (Bhide 1993).These are some of the major benefits of diversification strategy. Diversification, firm size, and executive compensations are highly correlated, which may suggest that diversification provides benefits to managers that are unavailable to investors (Hoskisson and Hitt 1990), creating what economists call the agency problem (Fama 1980) and managers stand to lose if they become unemployed, either through poor firm performance or bankruptcy (Bhide 1993, Dutta, Rajagopalan and Rasheed 1991, Hoskisson and Hitt 1990).Diversification can also lead to the problem of moral hazard, the chance that people will alter behavior after entering into a contract-as in a conflict of interest by providing insurance for managers who have invested in firm specific skills, and have an interest in diversifying away a certain amount of firm specific risk and may look upon diversification as a form of compensation (Ami hud and Lev 1981, Bhide 1993).Although it may be necessary for a firm to reduce firm specific risk to build relations with suppliers and employees, only top managers can decide what is the right amount of diversification as insurance (Bhide 1993). Diversification can be expensive (Jones and Hill 1988, Porter 1985) and place considerable stress on top management (McDougall and Round 1984). These are the costs of diversification.In the final analysis, this situational argument regarding balancing costs and benefits can only explain the performance of individual firms but it cannot address the theoretical question about the veracity of diversification as a valid corporate strategy. Consequently, following the benefit-cost agreement, whether in general, diversification enhances firm performance becomes an empirical question. Further, recent reviews of the rather extensive literature do not find agreement about the direction of association between firm diversification and firm performanc e.This lack of a clear answer in the literature motivates the present study. The paper is organized in four sections. The first section briefly reviews the empirical literature and presents the research hypotheses. Section two describes the research methodology and operationalizes the dependent and independent variables. Section three presents the results of the study. The concluding section discusses the results and summarizes the findings. REVIEW OF EMPIRICAL LITERATURE AND HYPOTHESIS The impact of diversification on firm performance is mixed.Three recent reviewers (Datta, Rajagopalan and Rasheed 1991, Hoskisson and Hitt 1990, Kerin, Mahajan and Varadarajan 1990), broadly conclude: (a) the empirical evidence is inconclusive; (b) models, perspectives and results differ based on the disciplinary perspective chosen by the researcher; and  © the relationship between diversification and performance is complex and is affected by intervening and contingent variables such as related ver sus unrelated diversification, type of relatedness, the capability of top managers, industry structure, and the mode of diversification.Some studies claim diversifying into related product-markets produces higher returns than diversifying into unrelated product-markets and less diversified firms perform better than highly diversified firms (Christensen and Montgomery 1981, Keats 1990, Michel and Shaked 1984, Rumelt 1974, 1982, 1986). Some claim that the economies in integrating operations and core skills obtained in related diversification outweigh the costs of internal capital markets and the smaller variances in sales revenues generated by unrelated diversification (see Datta, Rajagopalan ; Rasheed 1991).While agreeing that related strategy is better than unrelated, Prahalad and Bettis (1986), clarify that it is the insight and the vision of the top managers in choosing the right strategy (how much and what kind of relatedness), rather than diversification per se, which is the key to successful diversification. Accordingly, it is not product-market diversity but the strategic logic that managers use that links firm diversification to performance; which implies that diversified firms without such logic may not perform as well.Markides and Williamson (1994) show that strategic relatedness is superior to market relatedness in predicting when diversifiers related outperform unrelated ones. Others however argue, it is not management conduct so much, but industry structure that governs firm performance (Christensen and Montgomery 1981, Montgomery 1985). Besides diversification types and industry structure, researchers have also looked at the ways firms diversify. Simmonds (1990) examined the combined effects of breadth (related vs. nrelated) and mode (internal R ; D versus Mergers ; Acquisitions) and found that relatedly diversified firms are better performers than unrelatedly diversified firms, and R ; D based product development is better than mergers and acquis ition- led diversification (Simmonds 1990, Lamont and Anderson 1985). Among studies of acquisitions the results are mixed. Some report that related acquisitions are better performers than unrelated ones (Kusewitt 1985), or there is no real difference among them (Montgomery and Singh 1984).Some studies on breadth and performance find relatedly diversified firms perform better than firms that are unrelatedly diversified (Rumelt 1974, 1982, 1986). Others show confounding effects in firm performance because of diversification category and industry (Christiansen and Montgomery 1981, Montgomery 1985). Recent studies suggest service firms should not diversify (Normann 1984), whereas, Nayyar (1993), shows that in the service industry diversification ased on information asymmetry is positively associated with performance, whereas diversification based on economies of scope is negatively associated with performance. A contradiction of Johnson and Thomas' (1987) confirmation of Rumelt's findin g that the appropriateness of product diversity is judged by a balance between economies of scope and diseconomies of scale. It also appears there is a limit on how much a firm can diversify; if a firm goes beyond this point its market value suffers and reduction in diversification by refocusing is associated with value creation (Markides 1992).Apart from the empirical evidence, the efficient market hypothesis (EMH) holds that competition among investors for information ensures that current prices of widely traded securities are the unbiased predictors of their future value, and that current prices represent the net present value of its future cash flow. Evidence supports the existence of weak, semi- and near-strong forms of market efficiency (Fama 1970). If this view of the market is true, then investors have the information necessary to construct portfolios of stocks to maximize their risk/return strategies for a given amount of resource.Consequently, a firm's management cannot do better for the investor by diversifying into different product markets and create a portfolio that will improve returns or better manage risk than investor’s stock portfolio. Stockholders also do not pay a premium for diversified firms (Brealey and Myers 1996); the market does not value risk/return trade-off positively for unrelated diversification (Lubatkin and O'Neil 1987), and acquiring firms only earn normal returns (Lehn and Mitchell 1993), and not economic rents.Finally, corporate takeovers discipline managers who waste shareholder resources and bust-ups promote economic efficiency by reallocating assets to higher valued uses or more efficient uses (Jensen and Ruback 1983, Lehn and Mitchell 1993). The review of empirical literature from Management/Marketing disciplines and the theoretical and empirical literature from Finance show that the relationship between diversification and performance is complex and is affected by intervening and contingent variables. Taken toge ther, the evidence and arguments presented above seems to suggest that diversified firms (i. . highly unrelatedly diversified firms) as a class, should perform less well than an optimal securities portfolio, and thus for our study we propose the following null hypothesis. Our null hypothesis (H0) is that: Highly diversified firms should perform less well than moderately diversified and single product firms. There are numerous arguments and findings against the null hypothesis proposed above. In certain markets, an investor may face assets constraint in constructing a portfolio, restricting diversification opportunities (Levy 1978).Farrelly, and Reichenstein (1984) show that total risk rather than systematic risk alone, better explains the expertly assessed risk of stocks. Jahera, Lloyd and Page (1987), find well-diversified firms have higher returns regardless of size. DeBondt and Thaler (1985, 1987), argue that the market as a whole overreacts to major events. Prices shoot up on go od economic news and decline sharply on bad news. According to Brown and Harlow (1988, 1993), investors hedge their bets and over react or under react to important news by pricing securities below their expected values.As uncertainties decrease, stock prices adjust upwards, regardless of the direction of the impact of the initial event. The post-event adjustment in prices tends to be greater in the case of bad news than in the case of good news. Haugen (1995) also casts doubts on the validity of the EMH. Finally, Fama and French (1992), changing their earlier stance, argue that the capital asset pricing model (CAPM) is incapable of describing the last fifty years of stock returns, and the beta is not an appropriate measure of risk.This implies that a stockholder may not be better positioned to diversify his portfolio of stocks as compared to a corporate manager as implied by the null hypothesis. On the basis of this discussion, we could argue that market inefficiency may not allow i nvestors to optimally allocate their resources. It can put managers, especially good ones, in a more advantageous position to diversify their product market portfolios and thereby improve firm performance. Thus, our alternate hypothesis (H1) is: that diversified firms perform better in terms of return and risk measures compared to less diversified firms.Thus, on average, diversified firms as a class should perform better than moderately diversified or single-product firms. STUDY DESIGN The availability of the Compustat database has made it possible to study a larger sample of firms over several years and approach the problem of diversification from a more macro perspective. The approach used in this study is akin to that of military historians who examine past battles and in the context of operational tactics conclude that combatants with greater orce (material and manpower) tend to win more often. Those with insufficient force need the advantage of mobility and surprise to neutrali ze superior force in order to win. These insights, based on outcomes of many battles, allow historians to disengage from contingencies and specificities of stewardship and terrain. This does not imply that situational specifics should be ignored in planning military campaigns. The finding only points out the general truth of certain tactics.Similarly, in the context of the conduct of business strategy, we could also first examine the performance of diversified firms without regard to specifics of strategy, like type, breadth, modality and industry, and figure out if in general, the average performance of diversified firms is better than that of undiversified firms. The diversification literature is unable to demonstrate that diversification type, breadth, modality, and industry have consistent and predictable impact on performance. We therefore treat these as situational contingencies and do not take them into account.Earlier studies of diversification use cross sectional data, smal l samples and single measures of performance. We on the other hand, examine a large sample of firms with data over a seven year period. We use about two thousand firms, and multiple performance measures. The starting point of our main study is 1984, the earliest data point for segment information available on the Compustat database. Specialization Ratio (revenue from a firm's largest segment divided by its total revenue) as the dependent variable measures the extent of diversification.Accounting and market returns, their variability, coefficient of variation, and the Sharpe Index are the independent performance variables. The study also tests the robustness of classification of firms based on SR ratios. For this part of the study, the data is available from 1981. It also tests the robustness of results based on the extent of performance and the degree of diversification. MEASUREMENT OF CONCEPTS Diversification is treated as the independent variable in this study. As a policy variabl e, managers can control the extent of diversification desired, and performance is the dependent variable.This section defines and operationalizes these concepts. Diversification This study uses Specialization Ratio (SR) to classify firms into three classes of diversification. Its logic reflects the importance of the firm's core product market to that of the rest of the firm (Rumelt, 1974, 1982; Shaikh ; Varadarajan, 1984). After we started this work some researchers have argued that the entropy measure of diversification is probably a better one. We leave it to future research to test the robustness of SR versus other measures of diversification.Operationally, SR is a ratio of the firm's annual revenues from its largest discrete, product-market activity to its total revenues. In the diversification literature, SR has been one of the methods of choice for measuring diversification. It is easy to understand and calculate. TABLE 1 Values of Specialization Ratios in Rumelt's and Our Cla ssification Schemes SR Values in Rumelt’s Scheme SR Values in Our Scheme Undiversified, Single Product Firms SR ? . 95 SR ? 0. 95 Moderately Diversified Firms 0. 95 ; SR ? 0. 7 0. 95 ; SR ? 0. 5 Highly Diversified Firms SR ; 0. 7 SR ; 0. 5 Performance Management researchers prefer accounting variables as performance measures such as return on equity (ROE), return on investment (ROI), and return on assets (ROA), along with their variability as measures of risk.Earlier studies typically measure accounting rates of return. These include: (ROI), return on capital (ROC), return on assets (ROA) and return on sales (ROS). The idea behind these measures is perhaps to evaluate managerial performance-how well is a firm's management using the assets (as measured in dollars) to generate accounting returns per dollar of investment, assets or sales. The problems with these measures are well known. Accounting returns include depreciation and inventory costs and affect the accurate reporting of earnings.Asset values are also recorded historically. Since accounting conventions make these variables unreliable, financial economists prefer market returns or discounted cash flows as measures of performance. For the sake of consistency, we use two accounting measures: ROE and ROA; along with market return to measure performance. Return on equity (ROE) is a frequently used variable in judging top management performance, and for making executive compensation decisions.We use ROE as a measure to judge performance and calculate the average return on equity (AROE) across all sampled firms and time periods, its standard deviation and also the coefficient of variation for each of the three diversification groups. ROE is defined as net income (income available to common stockholders) divided by stockholders equity. The coefficient of variation (CV) gives us the risk per unit of average return. ROA is the most frequently used performance measure in previous studies. It is defined as net income (income available to common stockholders), divided by the book value of total assets.We also calculate the average return on assets (AROA) across all sampled firms and time periods calculate its standard deviation and also the coefficient of variation for each of the three diversification groups. Market return (MKTRET), is the third dependent variable we use. MKTRET is computed for a calendar year by taking the difference between the current year's ending stock price, and the previous year's ending price, adding to it the dividends paid out for the year, and then dividing the result by the previous year's ending price.This study includes companies for which complete data to calculate the variances used is available on Compustat PC- Plus for the period 1984 through 1990. In addition, we calculate the average market return (AMKTRET) for each of the three groups, the standard deviation of AMKTRET, and the Sharpe Index (Sharpe, 1966), a commonly used risk-adjusted performance measure. It measures the risk premium earned per unit of risk exposure. RESULTS AND DISCUSSION As mentioned earlier, Table 1 presents comparison of breaks between Rumelt’s classification and the modified version.Using the Compustat database we then classified 2637 firms using Rumelt’s classification scheme for the years 1981-1990. Table 2 presents the AROE and its standard deviation using Rumelt’s classification. While we intended to calculate AROA and MKTRT for this data set we were unsuccessful because of the problem of missing data. The 1984 – 90 data set proved to be better and was used for the alternate classification scheme for all the three performance variables. Using the same Compustat database, we classified 2188 firms in three groups: Single Product Firms (SR ; 0. 5), Moderately Diversified Firms (0. 5 ? SR ? 0. 95), and Highly Diversified Firms (SR ; 0. 5), for each of the seven years, from 1984 to 1990, for which complete segmental data was available. We kept only those firms in the sample that remained in the same SR category for the entire seven year period, and had all the data for computing the variables. After classification, we calculated each of the three performance variables: return on equity (ROE), return on assets (ROA), and market return (MKTRET), for each firm in each of the three groups, for each year from 1984 to 1990.We also calculated the average ROE (AROE), average ROA (AROA), and average MKTRET (AMKTRET), first by averaging across the seven years for each firm, and then by averaging across firms by pooling across the years, along with their standard deviation, and coefficient of variation. Tables 3, 4 and 5 present the results. The number of firms in each performance group varies slightly because we had to ensure that the data was available for all variables, for all the seven years. Statistical ProcedureThe test of the null hypothesis requires a test of equality of means of each classification group , and for each performance variable. While the study may indicate one way analysis of variance (ANOVA), it is not a robust test. The application of ANOVA requires that the data set meet three critical assumptions: first, the test is extremely sensitive to departures from normality; second, the assumption of homogeneity of variance is necessary; and third, the errors should be independent of group mean.While for our study the first and the third assumptions checked out, the second assumption regarding the homogeneity of variance failed. We carried out Hartley's test of equality of variance for each performance variable. This test confirmed that variance of the three groups is unequal for each performance variable. We faced the Beherens-Fisher problem or checking for equality of means when variances of the underlying population are unequal. Such situations indicate Cochran's approximation test for hypotheses testing (Berenson and Levine 1992).This test requires us to test the null hyp othesis of equality of means, taken two at a time, and according to the test we must reject the null if the t (observed) exceeds t (critical) at chosen levels of significance. (Statistical information available from authors by request) TABLE 2 Performance Based on Rumelt's SR Classification Scheme: ROE-1981-1990 N AROE SD CV Undiversified Firms (SR ? 0. 95) 1663 3. 8 277. 73. 13 Moderately Diversified (. 95 < SR ? .7) 371 2. 3 181. 2 78. 78 Highly Diversified (SR < . 7) 603 9. 9 100. 9 10. 25 Results Classification Methods: Comparison and a Test of Robustness Table 1 compares the breaks in SR values. Table 2 reports the results using Rumelt's scheme with 1981-1990 data, and Table 3 reports the results using our scheme with 1984-1990 data.The first column in Table 2 shows the three categories of diversification based on SR values; N stands for the number of firms that remained in the same group for the period 1981-1990, and had performance data for the entire period under study; ARO E stands for the average of the ROE calculated over N firms; SD stands for the standard deviation of AROA; and CV represents the coefficient of variation, given by the ratio of SD divided by the AROE, representing the risk per unit average return. Tables 3 through 5 follow the same layout for ROE, TABLE 3 Performance As: Return On Equity (AROE)-1984-1990N AROE SD CV Undiversified 1844 -1. 6 323. 3 NA Moderately Diversified 315 32. 7 409. 4 12. 52 Highly Diversified 23 14. 6 9. 8 0. 67 N= Sample Size, AROE= Average Return on Equity, SD= Standard Deviation, CV= Coefficient of VariationROA and MKTRET. The highly diversified group in Table 2 has AROE of 9. , SD equal to 100. 9 and CV of 10. 25; the moderate group has AROE of 2. 3, SD equals 181. 2 and CV equals 78. 8. The Undiversified group AROE is 3. 8, SD 277. 9 and CV 73. 1. The highly diversified group has the highest AROE, the lowest Standard Deviation and the lowest Coefficient of variation. The results are in the expected direct ion. The results follow the expected path with the exception that AROE of the moderate group is less than that of the undiversified group but the mean values are not far apart and the difference is statistically insignificant.The result for the undiversified and the highly diversified groups are as expected. The SD values are also in the expected direction. Compare these results with results obtained in Table 3. Table 3 shows the relationship between the degree of diversification and group-wise performance measured by ROE. The sample consists of 1844 single product firms with SR greater or equal to 0. 95. The average ROE of these firms over the seven year period is -1. 6 percent, with a SD of 323. 3. The moderately diversified group with SR between 0. 95 and 0. , has 315 firms. The AROE of the group equals32. 7 percent and the SD equals 409. 4. While the AROE of this group is clearly superior to that of single productfirms, the group shows high ROE variability. Thus, the moderately diversified group shows an slightly improvedrisk-return profile. The third group with SR values of less than 0. 5, is the smallest, and includes only 23 firms. The average ROE of the group equals 14. 6 or about half that of the second group, with SD of 9. 8, which is much lower than the first and the second group.The CV is the lowest at 0. 67, which is about 1/20 of the moderate group. Table 3 shows that while highly diversified firms have lower risk than moderately diversified firms; moderately diversified firms have higher average ROE compared to highly diversified firms. It also shows that single product firms have lower risk than moderately diversified firms, but moderately diversified firms have much higher returns. When we combine the return and risk measures as given by the coefficient of variation CV, we do see consistent results, i. e. that highly diversified firms have better risk-return profile than moderately diversified firms; and moderately diversified firms perform be tter in risk-return terms when compared to single product firms. We find that the Tables 2 and 3 show results in expected direction. The highly diversified groups have higher AROE and lower SD compared to the other two groups. This comparison of the two classification schemes shows sufficient consistency especially in the two extreme groups to strongly suggest that performance tends to be invariant to classification breaks.The comparison also demonstrates the validity of using the more pronounced classification scheme used in this study. Performance as Return on Assets and its Variability Table 4 shows the relationship between the degree of diversification and group-wise performance based on ROA. The sample consists of 1848 single product firms with SR greater or equal to 0. 95. The AROA of these firms over the seven year period is – 1. 9 percent, with a SD of 38. 2. TABLE 4 Performance As: Return On Assets (AROA)-1984-1990 N AROA SD CV Undiversified 1848 -1. 38. 2 NA Moderat ely Diversified 316 4. 0 5. 0 1. 25 Highly Diversified 24 5. 8 2. 7 0. 47 N= Sample Size, AROA= Average Return on Assets, SD= Standard Deviation, CV= Coefficient of Variation The moderately diversified group with SR between 0. 95 and 0. 5 has 316 firms. Its AROA equals 4 percent with a5 percent SD. In absolute terms, the AROA of this group is higher than that of undiversified firms and has lower SDof 5. 0 percent, as compared to 38. percent of the first group. The CV is positive at 1. 25, which shows a much improved risk-return profile. The third group of the highly diversified firms includes 24 firms, with AROA of 5. 8 and SD of 2. 7. These values are lower than the first and the second group. The CV of this group is high at 0. 47, being 38 percent of the moderate group. Statistical results in Table 2 show that as we move from undiversified group of firms to the highly diversified group of firms, the average return on assets increases, and the variability of ROA as given by SD decr eases, and CV or the risk per unit return decreases.Statistically, according to Table 4, the above results are significant at the 1% level. Based on these findings reject the null hypothesis. Performance as Market Return Table 5 reports group-wise markets return performance. The sample consists of 1195 firms in the single product category, and 280 and 23 firms in the moderately and highly diversified groups. The sample for each group is smaller than it was for AROA and AROE because we eliminated firms that did not have complete information for the period under study.The average market return AMKTRET of the undiversified group over the study period is 8. 2 percent. The SD is 21. 1, the risk per unit of return as measured by the CV is 2. 57 and the Sharpe Index is 0. 0421. The moderately diversified group with SR between 0. 95 and 0. 5 has 280 firms. Their AMKTRET equals 13. 2 percent and the SD equals 40. 8 percent. Whereas, the average market return of this group is clearly superior to that of the single product firms, the group shows higher variability as compared to the first one. The CV, i. e. , the risk per unit return also is higher at 3. 8. The Sharpe Index of the moderate group is 0. 1443, about three times higher than the first group, and is in the expected direction. The third group includes 23 firms. Its AMKTRET equals 16. 3, with SD of 10. 1, which is much lower than the first and the second group. The CV is 0. 67, about a fourth of the first group. The Sharpe Index at 0. 89 is about six times higher than that of moderately diversified firms. Table 5 shows that the average market return for the highly diversified group is higher than the moderately diversified group, followed by the single product group.The variability of market returns of the highly diversified group is lower than firms in the single product group. Moderately diversified firms on average have a higher market return, but higher risk than single product firms. The Sharpe Index, the i nverse of which gives us risk per unit return, and is a better risk-return measure, shows that the performance of highly diversified firms is much better than the moderately diversified ones, and performance of moderately diversified firms is better than single product firms. TABLE 5 Performance As: Market Return (AMKTRET)-1984-1990N AMKTRET SD CV SI Undiversified 1195 8. 2 21. 1 2. 57 0. 0421 Moderately Diversified 280 13. 2 40. 8 3. 08 0. 1443 Highly Diversified 23 16. 3 10. 1 0. 67 0. 8900 N= Sample Size, AMKRET= Average Market Return, SD= Standard Deviation, CV= Coefficient of Variation, SI= Sharp’s Index Analysis of ResultsStatistical analysis of the results in Tables 3, 4 and 5 are reported in Table 6. These results look strong. They `show that performance of firms as measured by all the variables in the undiversified group is markedly below that of the firms in the highly diversified group and that these results are statistically significant. The results also show that the performance of firms in the moderately diversified group is better than that of the firms in the undiversified group. These results are also statistically significant.The performance difference between the moderate and highly diversified group however, is not always that clear. When measured on AROA, Sharpe Index and CV, the results are in the expected direction and significant, but when performance is measured by AROE and its SD, and AMKTRET and its SD, the results are not as clear. TABLE 6 Statistical Analysis of Performance Variables STATISTIC AROA AROE AMKTRET n 729. 33 727. 33 499. 3 F max (3,n) 20. 17* 1747. 78* 16. 32* F12 58. 37* 0. 67*+ 0. 27+ F23 3. 43* 1747. 78* 16. 32* F13 200. 17* 1088. 33* 4. 45* t’12 6. 29* 1. 41**** 1. 9** t’23 2. 91* 1. 86*** 0. 96*+ t’13 7. 38* 2. 08*** 3. 07* *Significant at 0. 01 or less; **Significant at 0. 025; ***Significant at 0. 05; ****Significant at 0. 1; *+Significant at 0. 25; +Not significant. The results sugge st that we can reject the null and accept the alternate hypothesis: that higher the degree of diversification, greater is the average performance, measured in risk-return terms.The following paragraphs analyze the results for each performance variable in greater detail. Analysis of Results by Performance Class We further massage our data by subdividing each diversification category: undiversified, moderately diversified, and highly diversified, into three performance classes by adding and subtracting one standard deviation from the average ROE. Thus, each category is divided into three performance subclasses: Average ROE + 1 Std. Dev. ; Average ROE; and Average ROE – 1 Std. Dev†¦ This gives rise to a total of nine performance classes, three for each level of diversification.If the hypothesis that the higher the degree of diversification, the higher the performance is robust, then we should expect it to hold when we compare performance across the performance sub-classes. That is; the high, average and below average ROE performance of highly diversified firms should be higher than the respective performance of the three moderately diversified groups, and each of the three moderate performance groups should have higher average ROE as compared to each of the three undiversified groups.If this relation holds then we can say with greater degree of confidence that diversification of firms leads to higher performance for all classes of firms. We, therefore, hypothesize that the best, the average and the medium performing groups demonstrate a consistent pattern of performance across the three diversification groups on both risk and return dimensions. Table 7 shows classification of firms based on degree of diversification and by performance class. These results are both in expected and unexpected directions.The performance for the low and average performing firms, both in terms of risk and return diversification is in expected directions. But the results fo r the high performance group is found to be in the expected direction only for risk, while for the return measure the performance is in the opposite direction. In the worst performance sub-class, the AROE of undiversified firms is -59. 53, and the SD is 103. 16. As we go toward increasing level of diversification, AROE performance increases to -5. 78 and SD drops down to 5. 58 for the moderate group. For the highly diversified group, AROE becomes +2 and SD falls to 0. 2. In the average performance sub-class, the AROE for the undiversified group is 2. 46, and SD is 6. 87. For the moderately diversified group, ROE increases to 4. 21 and SD falls to 2. 91. For the highly diversified group, AROE increases to 5. 27 and SD falls 1. 60. The results for these two performance sub-classes are consistent with the results obtained for the entire group as shown in Table 3. The results for the best performance sub-class show interesting results. The AROE for the undiversified group is 35. 28 and the SD is 36. 44. AROE for the moderately diversified group decreases to 12. 9. SD also decreases to 3. 3. For the highly diversified group, AROE drops to 9. 52, nearly a fourth of the undiversified group, and the SD decreases to 0. 87, one thirty sixth of the undiversified group. Clearly the results for the best performance class are contrary to earlier findings as far as ROE is concerned, but they are in expected direction as far as standard deviation is concerned. We are, however, able to reject the null hypothesis if we look at CV (Risk per unit return). The value of CV decreases as we move from undiversified to highly diversified group.These results suggest that dominant firms operating with core competencies and operating in less competitive environments are better off concentrating on one business segment. Our results show that such firms have superior returns but are unable to diversify away market risks. These firms may waste investor resources by diversifying into other bu sinesses. On the other hand, firms operating in markets where they face considerable competition and have fewer core competencies, or are unable to dominate their markets, they are likely to be better off diversifying, as it would reduce risk for such firms and increase average returns.SUMMARY AND CONCLUSIONS The study began with questions regarding discrepancies in empirical and theoretical investigations into the relationship between firm diversification and performance. Our results suggest that the average performance of diversified firms (especially highly diversified ones) perform well on a risk-return basis on accounting measures as well as market-based measures, when compared with group of firms that are not as highly diversified. Managers tend to judge performance using accounting measures such as ROE and ROA where as financial markets use market-based measures such as MKTRET.Our results show that on both types of performance measures, the group of diversified firms on avera ge tends to perform better. The data show that with an increasing degree of diversification, the average return on assets, average return on equity and average market return, increase and the average risk per average unit return decreases. The results are clearer when comparisons are made between the highly diversified and the undiversified group, and the moderate and undiversified groups. The results are not as sharp when we compare results between the moderately diversified and the highly diversified group.The implication of the finding is that in general diversification is helpful but it does not tell us how much of it is helpful. Additional research on economies of scope for these groups of firms may throw some light on this issue. The marginal ambiguity between the moderate and the highly diversified groups may also be the result of eliminating the contingent variables like type, modality and extent of diversification. Controlling these variables may provide greater insight and clarify the differences between the moderate and the highly diversified groups of firms and lend support to theory building.The most surprising finding of our study was about the class of â€Å"best performing† firms. The study found that AROE of undiversified firms was four times better than the highly diversified firms, but such firms had 36 times the volatility of the highly diversified firms. This result implies that the best performing firms, if they diversify, will reduce their earnings, but dampen the volatility of their returns. Managers of such firms therefore will be tempted to dampen the volatility of returns by diversification.Such actions, according to this study will lead to a reduction in returns, but the reduction in volatility of returns will be much greater. This is clearly beneficial to managers and employees of the firm, but a benefit of such insurance for the shareholders is not as clear. The implications for investors are that, if they risk such high pe rformance, they ought to stay in for the long haul, and have high tolerance for volatility. But even for this class of firms based on coefficient of variation, we feel that the average performance of highly diversified firms tends to be better than that of the undiversified firms.One must judge Jack Welch, the CEO of General Electric (GE) in this context. GE's top management group insists that each of their divisions must be either number one or number two in their specific product markets. Thus GE, a high performing conglomerate is trying to emulate characteristics of a dominant undiversified firm at the product market level in order to earn very high returns and concomitantly it practices the art of being an aggressive and active conglomerate at the corporate level to reduce the risk engendered by dominant firms.But not all high performing firms are as careful, well managed or lucky. The study echoes the belief of senior corporate executives who think diversification enhances firm value because it contributes to improvement of the firm's risk-return profile. The results also speak to the concerns of investors. Diversification, especially for the truly high performing firms reduces risk but at the cost of returns. There is undoubtedly a trade-off here between risk and return when managers of such single firms diversify from their core business.Thus diversification does buy insurance for the managers which may help managers and employees more than investors. But in the case of the average and the low performing single firms (most likely the non dominant firms), gain from diversification in return and risk terms, seem significant. The moderate and highly diversified groups also benefit from diversification on risk and return dimensions but their performance is not stellar by any stretch of the imagination. One can argue that diversification tends to reduce the already severe competitive threat faced by the majority of firms in these groups.The implications for investors follow suit. They are better off picking stocks of well-diversified firms as these deliver better returns over time as compared to moderately diversified or undiversified firms. The finding that on average, highly diversified firms, including conglomerates, show better performance than single product firms or moderately diversified firms, supports the belief of corporate executives but is contrary to the viewpoint of research in finance. A classification scheme by definition remains arbitrary, no matter how well we justify the scheme.The only safeguard against such arbitrariness is to demonstrate that the results of the study are invariant to changes in arbitrarily set classification boundaries. We were somewhat successful in showing that changing classification boundaries did not change the thrust of our results. Both methods showed that AROE of highly diversified group of firms was greater than that of the undiversified group. But this still is a fruitful direction for f uture research. We were able to examine ROE alone because of data limitations.The 1981-1990 data set was not consistent for all the variables and segments of businesses. Other variables need to be tested. Researchers may also want to know if, at what point, the results are no longer invariant to SR classification values. Our study has several other limitations. The research period (1984-1990) of this study does not match the time periods reported in earlier studies. If diversification matters as a strategy, then it ought to do so no matter what the time period. This study has examined pooled time series data and finds the results consistent with expectations.Subject to the availability of data, replication over different time periods will adequately address this issue. Economic arguments require that we measure performance in terms of cash flows. We do need to look at the net present value of cash flows to make strong statements about the usefulness of a diversification strategy in the capital budgeting sense. Market return may be a reasonable substitute but the examination of the net present value of cash flow may be necessary from the point of view of the stock market. This is left to future research.Although SR is an acceptable measure of diversification, the entropy measure (Hoskisson, et. al. , 1993) has become an important and probably a better measure of diversification. This study was extensive enough. Perhaps multiple measures of diversification in a future study will alleviate methodological concerns about the appropriateness of diversification measures. The research design of this study differs somewhat from similar earlier studies, and as stated at the outset, it does not address the question whether investor portfolios outperform diversified firms.Therefore, while addressing several possible objections, we urge caution in accepting these results, and suggest future research to verify the findings reported here. Finally, this study examines the ass ociation between corporate diversification and performance per se. It does not address the differences in performance caused by types of diversification, like related, or unrelated; nor does it use modifying variables like firm size and other firm-level factors, or modalities of diversification such as internal product development or mergers and acquisitions.The results of this study are interesting enough to warrant the inclusion of variables that control for industry structure and contingency variables such as interest rates or the state of the economy; or underlying managerial motivation like risk reduction, agency problem, or moral hazard. Such controls will provide greater insight into the diversification strategy, as a practice and as a phenomenon.

Schools and Relationship with Childhood Essay Example | Topics and Well Written Essays - 2250 words

Schools and Relationship with Childhood - Essay Example This essay "Schools and relationship with childhood" will explore the concept of society as well as the fundamental role education plays in developing the society. In the period 1780-1920, Britain transitioned from the agricultural to the industrial society. This transition introduced new set of challenges to the United Kingdom such as poverty, huge population density, and political concerns. Most assuredly, we can learn much from the past for the sake of improving the present and preparing for the future. Looking at the history of education, we can see that education has played a major role in the development of societies, starting with the ancient Greece. Plato had an idea that we have to educate our leaders to have the development we seek for our societies. His ideas correlate with the ideas of the eighteenth and nineteenth century philosophers for educating the masses in order to solve the encountered in England. This essay will also explore how the need for change in British soc iety influenced education and investigate the changes that applied to childhood. There will be mentioned three examples; Firstly, the `Monitorial School`, which was invented by Joseph Lancaster between 1778 and 1839. This will entail finding out more about the need for creating this school. Secondly, David Stow established the ‘Moral Training System’. Thirdly, we have the ‘Elementary Education Act’. Moreover, paper discusses how these institutions thought of pupils, in comparison with present views of childhood. School as a Solution for the New Social Problems In the years 1780-1920, the United Kingdom was transforming from an agricultural society to an industrial society. Alongside the change, people started to move from the countryside to live in cities. Consequently, new problems appeared in the society especially in the ‘laboring classes’. For instance, in the year 1806, London had witnessed new problems like population density and rise in crime. Hence, political ideas in the nation focused on finding solutions to issues of ‘

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Why is it important for Human Resource management to transform from being primarily administrative and operational to becoming more of a strategic partner - Research Paper Example Hence, many organizations strive to incorporate business strategy into HRM thereby giving it a strategic importance and perspective, especially from industrial relations and organizational behavior facets. This study focuses on understanding the evolution of HR function from basic administrative aspect to strategic integration as explained in literature and based on a specific organization’s adoption and contribution of strategic HRM before concluding with key findings. Personnel management has moved from mere care-taking function to strategic partner during last few decades, although this trend started post World War II according to the CIPD factsheet (2014). Throughout literature, the most probable triggering factor to this transformation has been associated with Hawthorne’s experiments leading to a new perspective of understanding related to human relations, which were reinforced by various other studies as shown in Table 2.1 (Armstrong, 2012). Strategic integration of HR function has been the next step that intensified its role in helping organizations gain a competitive advantage (Ulrich, 1997). Ulrich (1997) highlighted the key roles and responsibilities of HR department thereby underpinning HR department’s role in managing human resources, company infrastructure, and managing change and transformation as well as managing performance of employees and thereby the organization (pls see fig 2.2). Specifically, Ulrich (1997) has ide ntified that the HRM function in most of the successful organizations transformed from administrative function to more complex activities such as, strategic partner, employee advocate, change agent and administrative expert. Noe et al., (2007) point out many factors that could have triggered this transformation of HRM to strategic role such as challenges of sustainability and competition, changing expectations of customers, changes in markets, changes in economies etc. Owing to the factors highlighted by Noe et al.,

Descartes First Meditation paper and Moore's Certainty paper Essay

Descartes First Meditation paper and Moore's Certainty paper - Essay Example Descartes work was centered on the issues that challenge one’s ability to be certain about something. His path to establish certainty begins a state of doubt. It is this doubt that prompts him to choose to demolish all the knowledge he had in the past (Descartes 87). He will then start afresh through testing the validity of things before being certain of their existence. He searches to establish a foundation of philosophy that cannot be shaken. This is because much of the knowledge he obtained in the past was through senses that at times are deceptive. In this he highlights, it is somehow difficult to distinguish when one is asleep and when awake. He majors on meditation, which is regarded as a philosophical classic. However, he provocatively pursues the issues to do with these important matters. Provocatively, Moore challenges the argument concerning ones inability to know whether he is dreaming. In the logical inversion of Descartes argument, Moore argues that, if one knows not that he is dreaming, one knows not that he standing. Additionally, people is unsure of his standing and realize that he is not hallucinating, (Moore 30). This is logical since one can only dream when asleep. Additionally, one can be dreaming or think he is standing and in actual sense, he is standing. This is the only case where dreaming and thinking to standing and standing at the same time is consistent. Moore’s concern on external world’s existence is evident. Given the reality, it is impractical to prove its existence. According to him, so many oppositions can, be used to prove the existence of the external world. In his illustration to demonstrate the fact about the existence of the world, he uses his hands. For instance, when he holds up his hands, it is certain that he is holding up his hands. The conclusion from the above illustration shows it is true that he has hands. If it has truth in it, more illustrations are also true. About external world issue, similar proofs can be used to tell the existence of it (Kim and Sosa 30). While Descartes says that dreams have taken place, he not sure he is dreaming. This is to mean that he does not know that the dreaming has taken place. In evaluating Descartes ides, â€Å"doubt† and â€Å"thinking† brings inconsistency the ideas. Descartes is unsure of his existence, although he thinks he does. The reason validating his doubt is that he may be dreaming or is being deceived by a demon that he exists. The reason for him to think he exists is th at he is only thinking without any objective proof of his existence. The proof about his existence is only subjective. He is unable to convince others of his existence, (Moore 34). Descartes argument has weaknesses and strengthens. He says that all things he knew as truth in his childhood have been falsehoods. This is a weak argument because; lack of proof cannot guarantee one to assume it is false. He later justifies his attempt to ruin that entire truth he had known over years and started afresh. He wanted something that had a strong foundation that did not rest on mere assumptions and feelings (Descartes 87). This is quite right to be passionate to do away with former opinions unless tested to be true. Additionally, he says not all the ideas and information he has is false. He makes an excuse that, for the opinions that he is not certain with, he will not touch on them. This gives a loophole for doubt and uncertainty. To assess which opinions are not certain would be a tedious jo b; therefore, he will not go through

The European Intermodal Transport Operations Term Paper

The European Intermodal Transport Operations - Term Paper Example There are different types of shipping operations that include longterm charters, spot charters operations, and liner operations. Long term charters operations require that the shipowner knows the type of cargo to handle as well as the port that should be used for that purpose. Spot charter is an operation where an owner of a ship has a general idea of where the ship should be situated but does not have any knowledge about the type of goods to be used for the port. Liner operation states that the owner of a ship should have knowledge of the port or volumes of cargo to be used but the venue of the operation may change from one period to another. The shipping companies may approach the business by taking into account several issues such as the purchasing of vessels that are highly flexible, those that serve several markets and reduce the rate of risk from occurring. In addition, this may prompt an owner of a ship to use expensive open hold bulk carrier that handles containers as well as dry bulk cargo. Other ship owners may prefer to use ships that are designed for specific purposes, therefore more efficient and incur less operating cost during their operations. This system is used to create opportunities for its customers by availing the products to the market at the appropriate time and place. It is an information technology tool that is used for ensuring that there is efficient management and management of intermodal door to door transport operations using scientific tools such as logistic and communication systems appropriate for the organization. It was established so that it could help in the reduction of congestion as it was witnessed in the road network. The businessmen in the shipping industry opted to have the following factors into place so as to carry out their activities profitably.The factors include higher reliability, lower prices, more flexibility and quality service levels for the customers.

Corporate finance Essay Example | Topics and Well Written Essays - 4250 words

Corporate finance - Essay Example This analysis will include; A fundamental analysis and valuation of the British Airways using the free cash flow method. And a recommendation will follow suit. Valuation methods will be attended for the purpose of selecting equities for portfolio investments. Valuation methods though are used for proper valuation however, they do not fit all in one place some methods are used for specific companies, as we have inherent differences within firms, companies, industries, outlets etc. and method falls with each member. Some may take more than one, however, about tour valuation methods are to be used. Dividend capitalization goes in to baring out the real truth of a company, its history and ways of behaviour, e.g. Paying of dividends, expansion plans, paying history of business, operation cushion. It opens the investors eyes to see the risks of investment and take caution. Discussions concerning real option analysis in strategic investment decisions will be adequately attended to stressing and bringing out the use of real option analysis in strategic investment decisions. However in attempt to give a fundamental analysis of the British Airways, the examination of the subject will refer to it’s earnings, each flow, equity value and sales and other accounting statements of the airways will be critically analyzed and discussed. The financial record of the British Airways over the years has been quite interesting because for the past three years, its net profit has been appreciating steadily. Since the year 2003 the British Airways have seconded success at the recorded of every year. Below is a table showing the progress of the British Airways since 2003-2005. It is interesting and important to note the difference in the profit margin this clearly shows and suggests that some new policies or new managerial skills have been employed to rightly enhance such as steady progress without any break for

Schweitzer and his Reverence for Life Philosophy Research Paper

Schweitzer and his Reverence for Life Philosophy - Research Paper Example Albert Schweitzer’s ‘Reverence for Life’ philosophy not only applies to human beings, but states the importance of applying love, compassion, and caring to plants and animals as well. This philosophy can be seen as related to early modern attempts to integrate the teachings of Eastern religions into the Western worldview. In the history of many ethical philosophies around the world, regarding all living things as being sacred and equal to human life is a viewpoint that has been excluded as a social foundation for morality and ethics. Schweitzer accepted the truth to be that all life is sacred and holy, and from this believed we can only inflict death on another living being out of necessity. For most people in the world, love, compassion, and kindness extends to human beings only as a basis for morality, and animals or plants are viewed as subservient life forms whose views are not important to consult in developing society or the progress of evolution. For Albert Schweitzer, the ‘Reverence for Life’ philosophy was seen as a means to reform or change this moral failure in the West based upon the view that all of life is holy and sacred. Schweitzer’s philosophy drew heavily on the principles of Eastern religions, particularly Buddhism, Jainism, and Hinduism.... er, Schweitzer tried to live his views at the highest level and has become a symbol of humanitarianism and altruism in the service of an expanded view of life in the universe and moral awareness. Schweitzer’s ‘Reverence for Life’ philosophy can be seen in many ways as similar to Gandhi’s ‘Satyagraha,’ yet scholars state that the two historical figures never met directly. (Isaacs, 2008) Schweitzer himself writes that the teachings of Buddhism were discovered by him in following the Schopenhauer-Nietzsche lineage, and that Nietzsche’s â€Å"Exaltation for Life† philosophy impressed him along with the moral, Unitarian, and compassionate basis of Eastern religion in building his personal views. (Isaacs, 2008) One aspect that shows Schweitzer’s sincerity in humanitarianism is the fact that he returned to education to study medicine after already being a famous and respected writer on humanitarian philosophy. (Joy, 1950) His choi ce of the medicine profession and example of service in Africa was meant to be a living example of his humanitarian philosophy, and it was, in the highest sense. In contrast to the racism, imperialism, and brutality of some Europeans during the Colonial era, Schweitzer’s path of action can be seen as consistent with Christianity, with Eastern religions, and also with the combined moral essence that is gathered from study of all religions in unity. Schweitzer’s philosophy related to Theosophy, Anthroposophy, Satyagraha and other attempts by modern thinkers, scholars, and leaders in Europe to introduce the profound truths of Eastern religion to the West. Yet, Schweitzer’s focus on the humanitarian aspects of service which overcame the racist and violent aspects of Imperialism through peaceful non-violence and loving kindness cannot

Why Is the Initial Consultation Important Essay Example for Free

Why Is the Initial Consultation Important Essay In this essay I intend to discuss why an initial consultation is so important, before delivering any hypnotherapy to a new client. I also will look at the ethical factors a therapist should cover at the time of the initial consultation. Prior to any course of hypnotherapy with a new client a reputable therapist would want to learn more about the person that has presented before them. This would be done with an initial consultation. It could be said that this initial consultation would be free of charge and last around half an hour. Some however, would say that you are giving half an hour of your time free of charge. Although my thoughts are that it would make clearer sense to not charge as a client would not feel that their time with a therapist was being wasted by a therapist just asking questions. (Although how this was advertised should be looked into very carefully as stated in (module 3 worksheet), the words â€Å"free consultations?† could be open to misinterpretation were the words â€Å"free initial consultation!† is clearer and states exactly what is offered). There are a number of aims of the initial consultation. The most obvious reason for this would be to give the chance to meet a client face to face. Also a therapist would at this time be able to ensure that the client would benefit from hypnotherapy and indeed that hypnotherapy is the right course of action for that individual case. Also this gives the opportunity to gather as much information as possible about the prospective clients and the reason they have decided to undertake hypnotherapy. It is important that the reasons they are there are fully understood for example someone that wishes to stop smoking must have an incentive to why they are seeking hypnotherapy to help them quit. This should be investigated fully! are they there because people are nagging them to stop? Are they there because they themselves have reasons to want to stop? Perhaps they see smoking as unhealthy for them and those around them partner, children etc. The therapist should always dig deeper perhaps find out if there are anytime’s that they smoke more cigarettes. It could be that when that person gets stressed for a particular reason they smo ke more as a  way of dealing with it. This will influence the hypnotic suggestion during the therapy. â€Å"A suggestion is a communication by the hypnotist to the subject and, as with any communication; it is intended to alter the recipient’s feelings, thoughts and behaviour in a specified way.†(Pg 3, Heap Dryden.) During this the therapist can also discover the reason why the client has thought that hypnotherapy will help them. In addition the therapist is also establishing if they themselves have the skills to help the client. A therapist would also have the opportunity during this consultation to gather other information such as medications? Are they on medication if so what and what is it for. Perhaps they suffer from depression! With such a condition it would be prudent if this has not already been sought to gain the permission of their doctor before a course of treatment commences. (This of course depends upon the skills and experience of the therapist. There are some mental illnesses that should not be treated by hypnotherapy such as Bi-polar disorders etc(Heap and Dryden) There are other conditions and illnesses that could also present an issue with using hypnotherapy as a treatment and again would probably need permission from a Dr before any commencement of treatment. Modality an individual’s modality can also be assessed at this time this would help with the selection of an appropriate style of screed for any treatment. There are many other avenues of questioning during this initial consultation. However, I would like us to assume that we have followed all lines of question that we feel appropriate during the initial consultation and all is well and a therapist decides that the client will benefit from hypnotherapy. Let us also assume that the client has presented to us with a very low self esteem issue! For the purpose of this Essay and descriptive demonstration we shall call our client Jane. During the initial consultation it was established that Jane is going for a new job that would mean a promotion and more responsibility and to her surprise she managed to get the job because it is with her existing employer and her immediate boss recommended her for the new post. Jane however feels she is not capable of fulfilling the new role and feels more secure doing what she is doing right now as she knows that job inside out and is good at it. The new job has more responsibility and she would also be in charge of other members of staff. During the consultation it was established that Jane feels that she is not much good at  anything. What Jane has shown a therapist is that she has learnt this behaviour from somewhere? A little bit of digging into her past may establish why Jane feels this way. This sort of feeling is trapped within the subconscious mind and is brought across to her conscious mind. During further questioning it is established that Jane when she was younger was the middle child of three. Her parents would show more attention to the other children and praise them for achievements more than they would Jane. Jane recalls them saying on many occasions that she is useless and should be more like her siblings as she won’t amount to anything!!! This has presented Jane with a negative belief in her subconscious that in turn has made her believe that she is indeed useless. With the prospect of the new job role and promotion she believes she won’t be able to do the new role. Despite her current boss believing she can. Jane’s conscious mind is hearing her boss say you would be ideal for the job therefore we have a conflict. We now thanks to the initial consultation know where we should begin to help Jane with her self-esteem. To work with the positive aspects such as her bosses confidence in her and the fact that she herself admits to being good at her present job. It can be safely assumed that Jane was not born doing that job and indeed had to learn to do it. Also to work at the root or the negative beliefs she has that where placed into her subconscious by her parents during her childhood experiences. None of this could have been achieved if we did not have an initial consultation. Had Jane had just come along to a therapist and said I have low self-esteem. The Therapist says ok â€Å"Now close your eyes† Well nothing would be achieved â€Å"unless a total fluke†. Therefore this demonstrates the importance of the initial consultation. An ethical Therapist during this consultation would also look at other factors while deciding if a course of hypnotherapy will benefit and what course of action to take. A client that presented to you although had unrealistic expectations. This is a client who would otherwise be a good subject for treatment, but has the view that Hypnotherapy is a magic cure all. A patient such as this may seek hypnosis as a form of treatment because he has already tried a series of unsuccessful therapies. He is looking for something quick and easy. Even though hypnosis often works more rapidly than other forms of treatment, it cannot be expected to accomplish the impossible. (pg 280 Hypnosis for change Hadley and Staudacher) To inform a client that  everything is possible when it would not be would be a lie and would shadow doubt on the ethics of a therapist. An example would be a therapist that is presented with a client and the client wants a therapist to get rid of the strong feelings she has for her ex boyfriend and believes that the therapist can make her hate him rather than love him. This would be impossible. Even if during hypnosis the client did hate her ex boyfriend it would not be possible to continue into waking Hypnosis and this is due to a separation between our subconscious and our conscious minds this is known as the CCF (Conscious Critical Faculty) The CCF is a sort of filter. For example I could say that the grass is blue but you actually know it is not blue it is indeed green. That is because your conscious mind has the ability to be critical of suggestion therefore I could say the grass is Blue until I was blue in the face. You however, would know it was Green. Although I could suggest this under hypnosis and you would probably think the grass was blue until you where no longer under hypnosis because you’re conscious mind and the CCF would say once again it is Green. Therefore we could not change or do the impossible and it would be totally un-ethical to even attempt to proclaim to be able to do this just to secure a client. The most important ethical consideration a therapist should bare mind to is to be realistic with the therapists own ability as to take on something that clearly is beyond the therapists skills or remit could lead to MISAPPLICATION That is using the wrong treatment stemming largely from failure to diagnose correctly during the initial consultation. For example, A common request for anyone who employs hypnotic techniques in therapy, is for help of chronic pain, pain suppression or pain management and increased tolerance is readily achieved with a good proportion of people who make such a request. The potential then exists for the sufferer to learn to mask the symptom of the disorder which if progressive or life threatening, may place him or her in danger- at least of not seeking appropriate diagnosis and treatment until the disorder is too advanced to be treated. (pg 187 Heap and Dryden). Therefore if the therapist is using a good ethical practice during the initial consultation He or She will know their limitation and abilities. Other ethical issues that should be adhered to not only at the time of the initial consultation are laid out by the National Hypnotherapy society and to cover some of these in brief. That a therapist should not hold  discrimination towards anyone based upon their Religion, gender, sexuality, politics, disability, age, marital status. It is important that when a client asks a question pertaining to their treatment and their goals that a therapist answers the question as fully and accurately as possible if an answer is not known then to make something up would be a big mistake that could hold serious consequences. Therefore a therapist should endeavour to find an accurate answer. This would not undermine the client’s faith in a therapist if done correctly. For example that is something I would have to investigate further however I should have an answer for you in a day or two perhaps I could call you or we can speak at our next session. No lies have been told and the client is still happy. An Ethical practice puts the clients Welfare at the forefront and offers a service with respect, dignity and understanding. (Code of Ethics the National Hypnotherapy Society). Bibliography. Hypnosis for Change. 3rd edit. Hadley and Staudacher. Hypnotherapy (a handbook) Heap and Dryden. National Hypnotherapy society (code of ethics) British association of counsellors and psychotherapists (code of Ethics)

Environmental And Economic Impacts Of Green Architecture

Environmental And Economic Impacts Of Green Architecture Green buildings, also known as sustainable buildings, are structures that have revolutionized the way we live. These assemblies are designed, built, renovated, operated, or re-used in an ecological and resource efficient manner. Its sustainable development is helping maintain a balance between the human need to improve its lifestyle and feeling of well-being, while preserving natural resources and ecosystems. Green Architecture has the objective of using energy, water and other resources more efficiently and reducing the overall impact to the environment. It protects an occupants health, improves an employees productivity, and offers an optimal environmental and economic performance. Among its many economic benefits, it reduces operating costs, has marketing advantages, increases building valuations, and optimizes life-cycle performance costs. Its health and safety benefits include the enhancement of an occupants comfort and health. Its community benefits help minimize the strain on local infrastructures and improve the quality of life. (Ken 1) Green Architecture can be defined as the restructuring and creation of buildings that are beneficial and have a minimal impact on the environment. They are several approaches to green construction that involve the responsibility of recycling existing resources, along with the efficient use of environmentally friendly systems that will provide power and water services to sustainable buildings. Throughout the past century, more people have become concerned and aware of the proper use of the planets resources. This is why the fundamental concepts and objectives of green architecture have gained both societys interest and acceptance. (Tatum 1) A green architects mission is to design buildings that will provide the necessary functions, without posing a threat to the surrounding environment. This implies the use of building materials that are composed of organic compounds instead of synthetics. Some of these materials include the use of wood, stones, bricks, or other elements that are harvested from older buildings scheduled for demolition. These materials are generally joined with newer technologies creating structures that fit into the surrounding landscape. Some of these newer technologies refer to the instalment of solar panels and modern rainwater collection systems. This will make best use of the available resources for heating, cooling, cooking, and supplying water to the building. (Tatum 1) The quality of air is a crucial factor in any living or working environment, which is why it is easy to exclude pollution as only an outdoor problem. Nevertheless, it can still be quite problematic indoors due to poor ventilation systems that can be potentially hazardous to human health. Conventional building materials and furnishings emit formaldehyde and other toxic chemicals. Paints, solvents and household cleaning products emit volatile organic compounds and other fumes. Stoves and fireplaces emit carbon monoxide and smoke particulates. Most buildings contain natural biological pollutants such as dust mites and moulds. Product manufacturers in the construction and building industry have been able to introduce products that reduce these emissions of formaldehyde, volatile organic compounds and other potentially harmful chemicals. (Grey 1) Fresh air is a critical factor for optimal health. Homes in the colder climates have a closer structure that heats up the air and constantly recirculates the only air that leaks through the envelope providing fresh air. Heat recovery ventilation is a good insurance policy against build-up of indoor air problems without paying an energy penalty for direct fresh air ventilation. It uses stale indoor air while providing fresh air with only a small energy cost. Green buildings reduce IAQ problems by providing good ventilation allowing the natural flow of fresh air through the house. They have exhaust systems for radon gas; avoid wood products that contain formaldehyde, use less or no volatile organic compounds (VOC) interior paints, solvent-free-finishes, and solvent-free construction adhesives. (GreenBuilding 1) Green buildings seek to reduce our dependency on energy sources that come from non-renewable sources. Instead, they pursue to turn that reliance to sourcing energy from renewable sources and change our lifestyle of dependence. Certain programmes such as the Low Carbon Buildings Programme, like to emphasize the importance of householders in meeting several criteria in the property. It states that the entire loft space of the property must be insulated, have cavity wall insulation if the property has cavity walls. There should be basic controls on the home heating system that include a timer and a thermostat; and the installment of low energy light bulbs in all the appropriate light fittings. (Murray- White 1). In countries such as Canada, it is reported that municipal water systems leak up to a quarter of demand during distribution. Even though the infrastructure weakens, the use has increased by 26.7% since the 1980s as reported by the Eco-research team at the University of Victoria. However, there is enough renewable fresh rainwater to satisfy the needs of families with low resources. Rainwater lessens the dependency on municipal services and saves money, making it more than just sustainable. Organizations such as Health Canada have shown concerns regarding the safety and purity of the water source. This is why they have met with the challenge of building a sustainable water use system. Rainwater harvesting consists on collecting, storing and treating rainwater for watering exterior plants, toilet and laundry use, with potential portable use. The degree of treatment varies depending on its final use. (Hugh 1) Gathering water can come from hard surfaces, such as metal roofs, which is simpler than the capturing of water on vegetable roofs. For example, Lawn water can be collected from the surface or below grade using drainage piping which utilizes the earth for filtering. Regarding the maintenance or cleaning of water, other than removing the solids likes leaves; no special cleaning is required when the water is used for landscaping, swimming pools, laundry and toilets. However, ultraviolet is a safety measure used for killing bacteria which relies on the use of electricity. When water is intended for direct contact with humans, such as showers and sinks, additional treatments will always be necessary. (Hugh 1) Green architecture produces less waste by using renewable plant materials such as bamboo due to its rapid growth, lumber from forests certified to be sustainably managed, recycled stones and metals. It also uses other products that are non-toxic, reusable, renewable, and/or recyclable; for example: sheep wool, adobe, baked earth, rammed earth, clay, cork, coconuts, wood fibre plates, flax linen, and others. The Canada Green Building Council suggests the use of recycled industrial goods, such as coal combustion products, foundry sand, and demolition debris in construction projects. For example, the use of polyurethane blocks reduces carbon emissions, provides more speed, cost less and is environmentally friendly. Building materials should be extracted and manufactured locally to the building site in order to minimize energy use through transportation. Building elements should be manufactured off-site and delivered to the building site, to maximise benefits of off-site manufacture incl uding minimizing waste, maximising recycling, high quality elements, better OHS (occupational health and safety) management, less noise and dust. (Environment 1) The most criticized issue about constructing green buildings is the price, claiming it to be too expensive to be considered economically possible. However, studies have shown that the costs of green buildings are not anymore higher than regular development projects. Higher construction costs can generally be avoided by the incorporation of green designs from the outset of the project. Green Value is the net additional value obtainable by a green building in the market. This study shows that green buildings can achieve greater value than their conventional equivalents. However, it was discovered that the green building industry and others may be failing to get the message across that the main beneficiaries are the occupants. For example, a lot of attention has been focused on energy savings making it easy to measure. However, these are usually less than 1% of business operating costs. By comparison, total annual real estate expenses are usually around 10% of such costs while staff cos ts can be high as 85%. This means that the biggest return on investments should arise when green buildings improve business productivity. (Green Value 2) Due to the high increase in fuel costs over recent years, more people are choosing to purchase green homes and business premises. Green homes have more effective insulation, take advantage of the suns solar power, minimise the effects of summer heat, and favour energy efficient appliances and water conservation features. Even though the costs of these items may take time to recoup, there are many available loans, grants and subsides that assist people in helping them go green. Certain known green building practices benefit its customers as well as the environment. They incorporate longer-lasting materials, careful construction assemblies and design features that can reduce maintenance and costs. Strict indoor air quality guidelines ensure a comfortable and healthy living and working environment. The overall result of green building and its economic impact is the enhanced value and better resale across the lifespan of a home and business. (Durham 1) Canada has been recognized as a global leader in the green building industry, with more than 770Â  certified green buildings in use across the entire country. Canadian companies have earned a worldwide reputation for their innovation and excellence in the construction, design and operation of green buildings. Helping the planet recover requires a firm commitment, and Green building will lessen the damage being caused to the environment making the world a healthier place for future generations. The essence and definition of green architecture is to build in a way that minimizes environmental impact and promote a healthier indoor environment for occupants. As energy prices continue to rise and more people become conscious of their personal impact on the environment, green building has become the mainstream of the construction industry. It has become a movement that will affect and influence builders, property owners, and insurers for many years to come. (Canada Mortgage HC. 1)

Intellectual Property Rights

Intellectual Property Rights Intellectual Property Rights Intellectual property can be instrumental to the value of any business. The ability to protect a business or an individuals ideas, inventions and original processes is something that is considered essential to many establishments, particularly those that rely on innovative ideas and products as their unique selling point. Intellectual property rights span a wide range of situations and products, although the most common rights are designs, copyright, patents and trade marks. Each of these intellectual property rights aims to protect a different area of invention. Copyright protects works such as art or music; design protects the physical appearance of a product; trade marks protect the way in which a trader separates himself from his competitors; and patents protect the method by which a product is technically made up and functions. This latter category of intellectual property right can cause considerable difficulty to those applying for protection and those attempting to enforce existing rights. Technology and the associated functions are changing constantly and often being tweaked or altered to meet a new requirement. At what point does this become patentable and distinct from the original technology? This requirement to be innovative in some way is the subject of much debate. Determining when that extra step results in a new protectable technological item is the key to ensuring that the correct items are offered protection. Courts have grappled with the relevant issues in determining whether or not a patent should be protected and when an attack on validity should be successful. Throughout the years, various tests have been forwarded by the courts; however, consistency in relation to obviousness and the concept of novelty and invention have proved particularly troublesome and are often hotly debated in court proceedings. Elements of Patent Law Before determining the way in which the courts deal with the issues surrounding obviousness and novelty, it is first important to gain an understanding of what must be established in order to establish a valid patent, successfully. The basic definition of what is patentable is contained in Section 1(1) of the Patent Act 1977 (the Act). This Act states that in order to be patentable the invention must be new, must involve an inventive step and be capable of industrial application. The Act then goes on to consider each of these requirements, in more detail. Section 2 deals with the requirement that the invention is new. This requirement is commonly referred to as the novelty requirement. Section 2(1) states that for an invention to be novel or new it must not form part of the state of the art. Section 2(2) goes on to consider what state of the art actually encompasses. It defines state of the art as any matter (i.e. product, process, etc. ) that has previously been made available to the public by either a written or oral description. Simply put, if the invention has already been made available to the public, it is not going to be eligible for patent protection. When determining whether or not an invention is new or novel, the issue of whether or not it has been made available to the public will become central. The invention, in order to be considered in the public domain, must have been disclosed to at least one member of the public, who could if he wished use the information freely and the disclosure had to be sufficiently enabling. Sufficiently enabling means that the information contained must be such that someone who has a reasonable level of skill in the area to which the invention relates would be able to implement and make use of the disclosure. The disclosure must be in relation to one document (or one document with several others interlinked) and cannot simply be disclosure obtained from a mosaic of documents. There are exceptions to this rule in relation to disclosure that allow a patent still to be established where the disclosure has been made within six months of the patent application and has been done in confidence. Pulling these factors together, it is clear that the need for novelty insists on the patent being completely new and innovative. Although, based on the mosaic rule, the collection of previous documents and information to create a new invention will not be barred from receiving patent protection. The Issue of Novelty From looking at the above breakdown of what an individual has to prove in order to establish a valid patent, it is clear to see that the issue of novelty is central to most patent decisions. The Section 2 requirement for novelty contained in the Act is a corresponding provision of Articles 54 and 55 of the European Patents Convention (1973) (EPC). As a general rule, an invention is not novel if the amalgamation of features has already been anticipated in a previous disclosure. This point was considered in detail in the case of SmithKline Beecham Plcs Patent [2006] RPC 10. In this case, it was held that for there to have been that degree of anticipation, there must firstly have been a disclosure and there must secondly have been the element of enablement. That is, based on the disclosure, the suitably skilled individual receiving the details of the process would have been able to replicate the process disclosed. Pulling together both of these elements will allow the court to decide whether or not the patent before them is novel or not. Let us first consider the element of disclosure. When it comes to determining whether or not the specific invention has been previously disclosed, the question is not whether the prior disclosure was for an item of similar utility, i.e. it does not necessarily have to solve exactly the same problem as the current invention. In deciding this matter, courts have stated that in order to be a conflicting patent, the situation previously disclosed must be so close to the new invention that the utility gained by the new invention would be a practical certainty. This suggests that in order to establish a valid objection to a patent application on the basis of a prior disclosure, it would have to be shown that the prior invention was inextricably linked in terms of function to the new invention. Therefore, even if something similar has been previously disclosed, provided it is not close with the degree of inevitability that is required, the patent application will not necessarily fail on the basis of not being novel. A general disclosure of a possible process does not impact on the novelty of an invention; however, where there is a series of processes, each individual process could be the reason for a future patent application failing, due to lack of novelty. Secondly, there is the element of enablement. This means that whatever has been disclosed must be sufficient for a person, skilled in the relevant art, to copy or replicate the process or invention. This enablement provision should be thought of separately to the disclosure, as in the case of disclosure the information must be sufficient for a skilled individual to understand the disclosure. For the purpose of enablement, the skilled person must be capable of actually utilising or at least trying to utilise the relevant invention. When it comes to determining whether or not the invention is novel, therefore, several issues need to be considered. It is not simply a matter of determining if something similar has ever been made public. It must have been made public with sufficient clarity as to allow the invention to have been understood and put into effect by another third party. The patent, therefore, in order to gain protection, must offer a solution to a situation that has not been possible to achieve before and not simply a fanciful possibility of a solution given enough further experimentation. As stated in the case of General Tire Rubber Co. v Firestone Tyre Rubber Co. Ltd, the disclosure must contain clear and unmistakable directions to do what the patentee claims to have invented. Pharmaceutical Application The pharmaceutical industry as a whole has been one of the most litigated and dynamic areas in relation to the test of novelty. The recent case of Actavis UK Limited v Merck Co. Inc changed the way in which UK courts look at the test of novelty in relation to medical products. Prior to the Actavis case, it was thought that a new dosage or way of taking a particular drug could not be seen as novel; this has now been reversed by the Court of Appeal. In this case, it was held that a new regime for taking medicine could constitute a novel invention for the purpose of obtaining a valid patent. Furthermore, the court dealt with the issue of obviousness, stating that it had to be obvious at the date of priority, not before or after, to defeat the patent, on this basis. The leading case of Merrell Dow v. Norton and Penn, commonly referred to as the Terfenadine decision, held that when looking at a pharmaceutical process the definition of new had to be applied to the actual processes and not to a new result or outcome. In this case, it was held that although Merrell had discovered a new reaction from Terfenadine, it was not novel as the composition had previously been disclosed to the public (albeit not for that specific purpose). This produces an interesting position. Based on this judgment, it would seem that whether or not the process or invention produces a solution for a previously unsolvable issue is irrelevant; the issue is whether the actual matter itself has been disclosed. The focus of the test is on the physical items and not on the resulting outcome. Bearing this decision in mind and the way in which the courts have chosen to deal with pharmaceutical claims, it would seem impossible to conclude that the issue of patentability is based purely on finding a solution for a technical problem that could not be solved before. Obviousness This leads us on to consider how important the actual resulting process or invention is to the determination of whether or not it is patentable. Aside from the requirement of novelty, the process or invention must involve and innovative step. This has been interpreted to mean that the invention would not be obvious to someone skilled in the art when presented with the relevant matter. One of the ways in which this test has been interpreted is to consider whether or not it fills a gap in the market, thus becoming an immediate business success. If this is the case, it is more likely that the invention would be seen as non-obvious and, therefore, patentable. The requirement for this inventive step is contained in Section 3 of the Act. Deciding on what exactly is obvious and what is not has been a matter for the courts. In the case of Windsurfing International Inc. v Tabur Marine (Great Britain) Ltd, the main test for obviousness was laid down and remains the starting point for judges when deciding whether or not the invention is obvious. It was held that the court should take a four stage approach. Firstly, it should look at the inventive step itself in isolation, i.e. separating it from any supplementary aspects of the invention. Secondly, once the court is clear what the inventive step in question actually is, it should put itself in the position of the common person, skilled in the relevant art with the knowledge that was available at the date of priority. Thirdly, the court needs to consider the difference between what is known by the common man and what the invention professes to display. Finally, the court needs to determine whethe r the step between what is known and the invention would have been obvious to the common man. For example, in the case of Sabaf SpA v. MFI Furniture Centres Limited and others, the House of Lords considered the issue of whether the gas burner in question was obvious. In this case, the argument that Sabaf was presenting to the court was that its patent for a gas burner had been infringed. The respondents (MFI and others) claimed that they were using a new invention as it was, in fact, the combination of two inventions that had generated their specific gas burner. The crucial point here was that it was not possible to take two existing inventions and put them together to establish a new invention, where this new invention would be the obvious product of the two original inventions. The test for being obvious seems to be reasonably wide with the court requiring a definite inventive step and not simply a natural progression, even if the natural progression is novel. Conclusions The area of patent law and, in particular, determining whether or not an invention is novel and / or obvious is by no means clear. The courts take a very individual approach to each case as it is presented to them based on the individual facts. Despite this, it seems that both elements, i.e. novelty and obviousness, remain instrumental. It is not true to say that provided an invention is novel it does not matter whether or not it is obvious. The courts have widened their view of obviousness but not so far as to remove it entirely. Therefore, if the patent in front of the court fails the test of obviousness and a person skilled in that specific area could have also established the invention it would fail, regardless of how novel the invention turns out to be. Both tests must be suitably established in order to gain patent protection. Producing a solution to a problem is highly important to the decision, but it is not the only deciding factor. The issue of obviousness simply cannot be ignored. Bibliography (14 required) Bagley, Margo A. , Patent First, Ask Questions Later: Morality and Biotechnology in Patent Law, William and Mary Law Review, Vol. 45, 2003 Bainbridge, David I. , Intellectual Property, Pearson Education, 2006, Pages 374 407 Colston, Catherine, Principles of Intellectual Property Law, Cavendish Publishing, 1999, Pages 86 105 Cornish, William Rodolph, Vaver, D. , Bently, Lionel, Intellectual Property in the New Millennium: Essays in Honour of William R. Cornish, Cambridge University Press, 2004, Pages 91 95 Grubb, Philip W. , Patents for Chemicals, Pharmaceuticals, and Biotechnology: Fundamentals of Global Law, Practice, and Strategy, Oxford University Press, 1999 Hodkinson, Keith, Protecting and Exploiting New Technology and Designs, Taylor Francis, 1988, Pages 32 71 Johnston, Josephine, Wasunna, Angela A. , Patents, Biomedical Research. And Treatments: Examining Concerns, Canvassing Solutions, The Hastings Center Report, Vol. 37, 2007 Karet, Novelty under English Law. Appeal in Merrell Dow v Norton 16(5) European Intellectual Property Review 204, 1994 Muir, Ian, Brandi-Dohrn, Matthias, Gruber, Stephan, European Patent Law: Law and Procedure under the EPC and PCT, Oxford University Press, 1999 Patterson, Mark R. , Contractual Expansion of the Scope of Patent Infringement through Field-of-Use Licensing, William and Mary Law Review, Vol. 49, 2007 Pressman, David, Patent It Yourself, Nolo, 2008, Pages 15 20 Taylor, Christopher Thomas, Silberston, Aubrey, The Economic Impact of the Patent System: A Study of the British Experience, CUP Archive, 1973, Pages 12 23 Thomas, John R. , Litigation beyond the Technological Frontier: Comparative Approaches to Multinational Patent Enforcement, Law and Policy in International Business, Vol. 27, 1996 White, The Novelty-Destroying Disclosure: Some Recent Decisions 9 European Intellectual Property Review 315, 1987